European and External Relations Committee

Meeting date: Tuesday, September 21, 2010

Official Report 418KB pdf

---

Presidency of the Council of the European Union

We welcome to the committee His Excellency Johan Verbeke, ambassador for Belgium to the United Kingdom, and Mr Geert de Proost, representative of the Flemish Government. As members know, Belgium took over the rotating presidency on 1 July. The ambassador and the Flemish Government’s representative are here to address the committee on the key priorities for the Belgian presidency. We hope that we will also have the opportunity today to reflect on some issues that are of concern to Scotland and to take the ambassador’s advice on how to take forward those issues in relation to the presidency’s priorities. We are here today to pick his brains a little—to use a Scottish phrase. I understand that the ambassador will make a short opening statement.

Thank you. It is a privilege for us to be here in Edinburgh today in our capacity as representatives of the Belgian presidency. I am joined by the representative of the Flemish region, who is also a member of the Belgian embassy, so that we can address some specific issues, given also that there are many parallels between Scotland and Flanders. My colleague Geert De Proost will focus specifically on questions related to fisheries, agriculture and structural funds.

I will give you a quick overview of what the Belgian presidency means, starting with a few institutional considerations. You may know that the presidency today is not what it was until recently. With the entry into force on 1 December last year of the Lisbon treaty, the so-called six-month rotating presidency has taken on a totally different nature and identity. We now have two new institutions: the permanent President of the European Council, who happens to be a Belgian citizen, Mr Van Rompuy; and the permanent High Representative for Foreign Affairs and Security Policy, who is a United Kingdom citizen, Baroness Ashton. Baroness Ashton is also the vice-president of the Commission. Those elements of stability, continuity and, therefore, coherence are meant in time to bring more continuity to the activities of the European Union. They have been substituted for the rotating presidencies of the past, which meant that every six months another country was in charge. I start with that point because it is important to understand that today a rotating presidency means less than it meant in the past.

We are still in a transitional stage. As you know, Baroness Ashton does not yet have her office and Mr Van Rompuy still has to find his proper place in the complex institutional network of the European Union. That means that the rotating presidency continues to assume certain responsibilities that, at a later stage, should no longer be its responsibilities. I stress that point because we in Belgium prefer no longer to speak about a Belgian programme or Belgian priorities as such for the six months of our presidency. The programme and priorities are being set by Mr Van Rompuy and Baroness Ashton; we are just a member state, like the 26 others. However, because the Union is in transition, we are there to give the necessary impulsions and support to enable the new institutions to find their way.

It is also important to know that, even under the old system, we did not reinvent Europe every six months. There is a lot of continuity in European Union business. First, there are the Commission’s legislative proposals—we have known what they are since they came out in spring this year. Secondly, there is the trio programme, which is also a novelty of the Lisbon treaty and involves three successive rotating presidencies sitting together to work out a programme for the entire 1.5-year period. We have done that with the Spanish, who preceded us, and the Hungarians, who will follow us. Thirdly, there is what we call in our jargon the legacy programme—basically, we are expected to do whatever our predecessor could not achieve. In our case, the Spanish presidency was not in a position to do everything that it had expected to do, which is quite normal. We have taken over that business as a legacy and will continue to work on it.

This is the 12th time that Belgium has held the rotating presidency of the European Union. We have always taken a pragmatic, no-nonsense approach. You may have seen that we are not trying to use the presidency for self-promotion or to bring Belgium to the fore, with photo opportunities for our Prime Minister and so on. We are focusing just on the real business that we should do.

I will say a few words about the main points that are not part of the programme but about which we care a great deal. I will not say much now about the establishment of the European external action service—the little ministry that Baroness Ashton will have within the European Administration—but members may question me about it. There was a lot of work to be done. I just want to tell you that we had thorough negotiations with the European Parliament and the matter is now settled. The main decision has been taken and we saw that, last week, Baroness Ashton proceeded to make the first 27 appointments of heads and deputy heads of delegation. I can come back to that if you like.

By the way, as I am talking about the interaction with the European Parliament, there is one point where a rotating presidency continues to have an important role, whether in the old system or in the new system, and that is the interaction between the Council of Ministers, which represents the member states and is therefore essentially an intergovernmental organ, and the European Parliament. As you know, since Lisbon, the European Parliament has become a full, genuine co-legislator with the Council. Whenever the Parliament has different opinions from the Council in one way or another, those positions have to be brought into a common line, and it is the job of the rotating presidency to do that.

If you were to ask me what added value the rotating presidency brings in the new system, in which we have permanent presidencies, I would say that the answer lies in what we call the trialogue—the continuing discussions between the Commission, the Council and the Parliament to smooth out whatever differences exist. I mention that in the context of the external action service, because that is basically what we used in that case. We also used it in relation to financial regulations, which I will come back to.

I will give a broad overview of our main accents. The first point, of course, is the need to address the economic situation, which is a rather difficult situation for us all, both as nation states and as regions. In that respect, I mention the Europe 2020 agenda. I will be brief, because questions will come later. The principle of the Europe 2020 agenda was agreed at the June meeting of the European Council, with the five objectives that you know about. I just want to point out one of the objectives—the fourth one, which is that 3 per cent of gross domestic product should be dedicated to research and development. I mention that because it is one of the priorities of the Belgian presidency. We are going to lift that out of the package of five objectives.

What will happen next is the implementation of Europe 2020. It will be a 10-year implementation, so the part that will come to us is just one twentieth of what is to come—10 years divided by two presidencies a year gives us one twentieth of the responsibility. We are going to focus on research and development. Next month, the member states will have to deliver their own national priorities to fit into the five targets, and they will be called the national targets. The Commission is going to sit down with the member states in the coming weeks in order to finish the job by the end of the year.

The second point is that, as you know, the internal market should be strengthened. I know that that is important for the UK in general and for Scotland specifically. In general, the Monti report, which came out two or three months ago, has been well received by all capitals, including yours here in the UK. Our expectation is that we should work maximally on the implementation of the internal market proposals. We cannot do much at this stage because we are waiting for the Commission to come out with its proposals, which will indeed strengthen the internal market.

In the meantime, however, the specific point that I stress is that we are working hard on the European Union patent. Some of you might know that discussions about that have been continuing for more than 10 years. I was closely associated with the former Belgian presidencies in 1993 and 2001. At that time, we had to deal with the European Parliament and we did not make progress with the European patent. Now, the Belgians are very much pushing for that; it is the language regime that is a big problem. A European patent would be very important in enabling industry to take off again here in Europe. That is one area—the Europe 2020 agenda, with its focus on research and development, and the strengthening of the internal market.

10:45

Another big topic is the strengthening of European economic co-ordination. I will listen to whatever questions you may have on that. You may know that, at the beginning of the year, in the spring, the President of the European Union set up a task force on economic governance. Mr van Rompuy has attended six meetings and, at every European Council, he has reported on progress. He did so just last week—I have the points that he made in front of me and can go into them in more detail if you wish.

Given the economic and financial crisis that we have seen, we have identified some major weaknesses in budgetary discipline. The whole stability and growth pact that we entered into when we set up our work under the Maastricht treaty must be strengthened by more budgetary discipline, which requires more economic governance. Basically, the idea is that we should go beyond the purely budgetary questions and have a look at the underlying issues, such as competitiveness. The Commission is now working on indicators to measure exactly the degree of competitiveness of the different economies and the underlying imbalances in the balance of payment deficits and current account balance deficits. That is the work that Mr van Rompuy is doing right now.

In the context of setting up a more stringent budgetary framework, we are also discussing the setting up of a sanctions regime. The sanctions may be political, affecting the voting rights of members that do not conform to the required disciplines, or financial, such as withholding structural and cohesion funds from member states that do not comply with the requirements. However, that is still under discussion, and no consensus has been reached yet.

That is all that I will say on economic governance; I now turn to financial regulation. Scotland has important financial centres in Edinburgh and Glasgow.

We now have financial supervision. You will have seen that the financial supervision package has been decided on, in principle, by both the Council and the European Parliament, so it can come into force on 1 January. You have the details of the package. There will be a European supervisory board to assess systemic risks to the system as a whole and so-called European supervisory authorities for three specific sectors—banking, insurance and securities markets. Agreeing all of that was a delicate exercise in which the real political question was the relationship between the new European supervisory authorities and the existing national authorities. The right balance has been struck, proof of which is the fact that both the Council and the European Parliament have agreed on what is proposed. I spoke about the role of the presidency specifically in ensuring that the Council and the European Parliament think along the same lines, and the financial supervision package is an example of how the Belgian presidency could make a useful contribution to the discussion.

Another package is the alternative investment fund management directive, which is rather important for the regulation of hedge funds and private equity firms. It is still under discussion, and Belgium is trying to reconcile the positions of the European Parliament and the Council members. In general, it is less contentious than the supervision question, except for one issue that is still under discussion: the so-called passport for non-European Union firms to enter the European market.

Another package that is under discussion is the regulation of over-the-counter trading in derivatives, and Commission proposals on that are to be expected in the coming days. The proposal on the supervision of credit ratings agencies is still to come; I will skip over the Basel III rules on capital and liquidity requirements.

I will briefly address the issue of enlargement, on which the Belgian presidency is sticking to the basic principles. We have commitments to the countries to which we promised the prospect of joining the EU, as was stated clearly at the European Council of 2006. We will honour that political commitment. However, accessions and approximations to the European Union are conditional on the country complying with the benchmarks. That is the global philosophy, and it can be applied to the different cases that are out for discussion right now.

We are very close, as you know, to finishing the negotiations with Croatia. The process will not be completed under the Belgian presidency because there is one tricky chapter—the justice chapter—on which we are not yet ready, but accession will be a done deal at the beginning of next year.

Turkey is a very difficult case; I can return to that later if you wish. It looks like we will reach an impasse by the end of the year, which we definitely want to avoid given the strategic importance of Turkey as a partner of the EU.

On Iceland, which I think is more of a concern for the committee, the accession negotiations were opened at the June European Council. The Council uses some language of conditionality in its written conclusions in relation to the outstanding issues between Iceland and the UK, and Iceland and the Netherlands. Those negotiations will, I presume, be followed attentively by the committee and the Scottish delegation, given that the fisheries chapter will be very important for Scotland. The former Yugoslav republics of Macedonia, Montenegro, Serbia and Bosnia and Herzegovina, and Albania are all in the pipeline—albeit at different stages—and are coming closer to the EU.

On justice and home affairs, I will be brief. We are, as our predecessor was and our successors will be, faced with implementing the multi-annual Stockholm programme, of which we are all aware. We have a whole list of legislative proposals, some of which are extremely technical. One example is the recognition of judgments on separation and divorce issues; all such things are part of the programme. We must also undertake an internal security strategy follow-up of the Schengen information system, which again is rather technical, although of course other items involve more political questions such as asylum procedure and the fight against terrorism.

I have mentioned most of the important things; I will say a brief word on climate change and energy. On climate change, as you know, we are heading towards COP—the conference of the parties—16 in Cancún, and we must prepare for that as best we can. Our basic reasoning is that we will distil all the elements that were agreed as part of the Copenhagen declaration to provide a firm basis on which we can work towards Cancún. We know, however, that Cancún is not the end of the road.

The summit at which we will have to agree on a long-term project for the future will be next year’s summit in Johannesburg. We must try to ensure that we speak with one voice. That is important because one of the drawbacks, or weak points, of Copenhagen was that we did not speak with one voice to a great enough extent. We need to be able to speak on the basis of a clear but flexible mandate, and that is basically what the Presidency of the European Council is in charge of.

A lot of things are happening on energy. In November, we will have the Commission’s energy plan. The real stuff will be dealt with under the Hungarian presidency next year rather than under the Belgian presidency, given that energy will be discussed on 4 February next year at European Council level, when issues such as energy infrastructure, the internal market for energy, the liberalisation of the market and external energy policy, including energy security, will be tackled.

I will leave it at that, as I see that time is going faster than I thought, but perhaps my colleague should say a few words on agriculture and fisheries.

Absolutely.

Good morning and thank you.

First, I will say a few words about my role here in the UK. I am the representative of the Flemish Government in the UK, so my role is to put Flanders on the map in the UK and its different countries: Scotland, Wales, Northern Ireland and England. The Flemish Government has 10 representatives abroad, including one in London. My role is to deal with the devolved responsibilities of Flanders, which are quite similar to those of Scotland and the Scottish Parliament. We do that in close co-operation with the embassy, as my office is part of the Belgian embassy.

I must admit that I am not an expert on agriculture and fisheries, as my role is more of a general one. However, from time to time I attend briefings at the Department for Environment, Food and Rural Affairs and listen to the UK position on topics on the agenda of the agriculture and fisheries council. As part of my role, together with a colleague at the Belgian embassy, I brief my authorities in Brussels on what is going on in agriculture and fisheries.

As you probably know, there will be five formal council meetings on agriculture during our presidency, one of which has already taken place, on 12 July. There are four others to come, on 27 September, 26 October, 29 and 30 November, and 13 and 14 December. The three last ones will also deal with fisheries issues. At the moment, an important informal agriculture council is taking place in La Hulpe in Belgium, where the topic is the future of the common agricultural policy. We are still waiting for the Commission communication that will contain the political outlines of the new policy; it is expected to be published in mid-November. Our intention is to have a first discussion of it at the November council and to have an orientation debate at the council on 13 and 14 December.

Another important topic will be the dairy sector and its future post-2015. We know that we are going through a fading-out process. Last year, the council agreed to the creation of a high-level group, which has come up with some recommendations. The political debate on those recommendations will take place in the council on 27 September and the Commission’s legislative proposals are expected to be published in November or early December. Other issues on the agenda include genetically modified organisms, legislative proposals on the quality of agricultural products, and plant health, veterinary and food security issues.

11:00

With regard to fisheries, there will be, as I said, three councils in October, November and December, which will focus on two priorities: the reform of the common fisheries policy and the catch quota for 2011. On CFP reform, we will continue the debate that began in July, with the Belgian presidency focusing most of all on the scientific evidence. I should point out that by Belgian presidency I mean, in this case, Flanders, because the Flemish First Minister is the only minister in charge of fisheries and represents Belgium on the fisheries council. To that end, on 9 and 10 November the Flemish Government is holding a symposium on the relationship between the science and fisheries policies. Another conference organised by the Commission and the Belgian presidency will be held in Brussels on 16 November. The Commission’s legislative proposals are expected to be published next spring or summer.

On catch quotas, we will try to take the agenda forward and reach political agreements on the total allowable catches for the Baltic Sea at the October council; for deep-sea stocks for 2011 and 2012 at the November council; and for the Black Sea at the December council. As a general TAC and quota regulation proposal is expected in October, it is still a bit too early to say anything about that.

I will stop there.

Thank you, gentlemen, for that interesting and informative outline of your priorities over the next six months and how you will work with the new presidency. Given the many issues that you have raised of importance and relevance to Scotland, I wonder whether I could ask Mr Verbeke, first, about EU 2020. I am certainly impressed by the Belgians’ pragmatic approach to their policy initiatives. I have to say, though, that we face a real challenge in Europe. Youth unemployment, for example, stands at 20 per cent; indeed, in some member states, it is as high as 40 per cent. As you will be aware, last week the Commission produced a document called “Youth on the Move”. Given your comments about the Council, the Parliament and the Commission reconciling matters and working together to reach agreement and to achieve something, I wonder whether you have any thoughts on this matter, because, despite setting out initiatives such as discount cards for young people, the document has already been criticised for failing to have a proper coherent strategy on youth unemployment and EU 2020 and to actually produce jobs. I can see how that view might well come from the European Parliament. Given your reconciliation role, do you have any thoughts on how better targets for youth unemployment could be agreed?

Secondly, have I picked up your comments about political and financial sanctions correctly? Will they be applied to EU 2020 targets?



I have one final point before I bring in colleagues to ask about a number of the key issues that you have identified. You referred to financial regulation. Recently, calls have been made for a financial transaction tax—Mr Schulz has called for that. He has said—this brings me to a different area—that if the Commission will not act on that, he will invoke the citizens initiative to try to force it to act. Will you say a little about how you expect that to play out? What is the Belgian approach to the citizens initiative? The number of member states that would be required to be involved in order to invoke the initiative is not yet clear.

I will answer your questions in reverse order. The citizens initiative is an important innovation of the Lisbon treaty. Members might have seen that ball start to roll under the Spanish presidency, and we took that up as soon as we took over the presidency. As you say, divergences still exist between member states about the critical mass that we need for the mechanism to proceed. We continue to work on that. I do not have the details here, but the subject is not felt to be politically divisive in the European Union. In the Council, some issues are divisive, such as a financial transaction tax; other matters are not divisive, but we must still agree on a compromise. I am rather confident that a solution will be found on the citizens initiative in the coming months.

Members might recall that we first discussed a financial transaction tax at the European Council in June, and that we did so very prudently. The subject was just touched on. In comparison with the language on the bank levy, the language of the conclusions on the transaction tax was extremely prudent, if not sceptical. When we took over the presidency, we convened a special meeting of the economic and financial affairs council, at which we started to address the issue. We took that up again at the beginning of September. We have reached a point—it includes last week’s European Council—at which we make a definite distinction between the bank levy and the financial transaction tax, which many people had confused.

It is clear that the financial transaction tax is not a matter of consensus among member states. It even appears—dare I say—that the majority of member states are not in favour of introducing such a tax at this stage, if no international agreement to introduce such a tax is reached, which brings me back to the G20. Without that agreement, such a tax might create a competitive disadvantage.

As members know, European Governments have reached broad agreement to proceed with the bank levy. Some countries—France, Germany, Belgium, Sweden and the UK—have already decided unilaterally to proceed. The discussion was about where the proceeds of that levy should go. Should they go to a European fund to deal with possible bailouts and crises? Should they go to a national level and, if so, should they go to the national budget or a national fund? You in the UK have opted for the national budget; we have done that, too. Other countries have opted for a fund, which involves a moral hazard question. Those issues are being settled, but the financial transaction tax is problematic and will remain so. Even the conclusions of last week’s European Council show that that tax is an outstanding question that has not been resolved and probably will not be addressed in the months to come.

Sanctions represent the outstanding economic governance issue. There is agreement on many issues: for example, as you know, everyone has now agreed the concept of the European semester and that, as well as setting budgetary controls, we should also put in place indicators and ensure that there is some procedure to trigger the Commission’s examination of underlying imbalances such as private sector debt, housing prices and effective exchange rates. The details need to be fine tuned, but that is all agreed. The enforcement mechanism and the sanctions package, on the other hand, have not been agreed. As I said, there is a difference between political and financial sanctions. Political sanctions, for example, are quite a sensitive issue. If a member of the Union is called on to behave properly but continues not to behave according to the book, they have their voting rights taken away. It is a drastic measure, but there is an overall understanding that if it needs to be taken, it will be. As you know, it involves the rather elegant procedure of reversing the majorities. Commission proposals require a positive majority for approval but, under the reverse majority rule, a Commission proposal is approved unless a majority of member states vote against it.

There are two approaches that could be taken to financial sanctions. First, proper financial sanctions could be introduced into the system, but the problem is that there is no legal basis in the treaty for doing that. There is a lot of reluctance not just in the UK but in many other countries on the continent for a treaty change. After all, we know how long it took to get everyone on board for the Lisbon treaty, and the current political environment is simply not conducive to trying to bring in a new treaty.

The question, then, is how we apply financial sanctions to a member state that is not complying with budgetary constraints. One could, for example, withhold entitlement to cohesion and structural funds that the country in question can normally claim. That approach is still very much being discussed in Brussels, because not every country agrees with it, particularly countries such as the UK that do not consider themselves to be the potential subject of sanctions as they are not members of the euro and have an opt-out from monetary union.

I can tell you, though, that the EU 2020 package, with all its targets and sub-targets, is not something that can be included in such a sanction regime. On the contrary, in the current discussions about the 2011 budget, we in the Belgian presidency are pleading for the necessary financial room to implement EU 2020 properly. We are asking not for the absolute amount of the budget to be increased—after all, in such times, no one could sell such a proposition—but for certain sub-items to be reallocated.

I am not in a position to answer your question about youth unemployment properly, although Geert De Proost might be able to say something about it. Although the Belgian presidency is particularly stressing research and development, it is true that the first priority is employment.

We welcome the “Youth on the Move” initiative. It is proposed as a flagship initiative and it is important that it is part of the Europe 2020 agenda and that all the work in the other councils is streamlined within the global process. We also consider that to be a priority and would like to bring it forward. It will be dealt with in the councils for education and youth, which will be chaired by Flemish ministers.

11:15

Mobility is also important in Flanders. It is part of what we call “Flanders in Action”, which is our economic and social action plan. One of the targets within that plan is that, by 2020, every young boy or girl should spend at least three months abroad studying or in an internship. It is a very important initiative and we hope that it will also be reflected within the multi-annual financial framework and get the necessary attention.

Thank you. All my colleagues want to ask questions. We do not have as much time as we would have liked to have.

I want to talk about youth unemployment. I notice that Belgium is looking to a task force for older people because of the changing demographics, but I am basing my question on the economic advantages that might come from the Belgian presidency, which will be the first to implement the European employment strategy. You mentioned that research and development is one of the most important issues for Belgium and that you want it to contribute 3 per cent of GDP. Are there any other measures that your presidency proposes to ensure that Europe meets the 2 per cent annual growth target and that all the regions of Europe benefit from that while still being protected socially?

I am not sure that I am in a position to satisfy your curiosity, which I appreciate, I must say. I am not really familiar with all the sub-items that are within our five targets. As I said to you, we tend to concentrate on research and development in the first instance. Within that focus, we think that one of the first issues to be addressed is resource requirements to ensure that we get that 3 per cent contribution to GDP from research and development. This is not really part of the Europe 2020 programme as such but, parallel to that, we pay a lot of attention to the European patent. That is something that I know much better because we are really working on that every day. We are making progress. As you know, the Commission has proposed that the patent should be restricted to three working languages, and we are requesting automatic translations. All that is going in the right direction and, at this stage, only one or two countries are making some problems, and we hope that we can get to them, too.

However, that was all about research and development. Geert De Proost might have something to say about the specific question.

On unemployment, it is true that the employment council will very soon look into the employment guidelines as part of the Europe 2020 process. We believe that the 75 per cent target is very important. Belgium and Flanders have a long way to go, but we would like to focus on marginalised groups or people who find it more difficult to get a job, such as the elderly and women. It is important that the 75 per cent target is not a global figure but can deal with special target groups.

My line of questioning is directed at Mr De Proost in the main, as I want to talk about fisheries. Fisheries are not one of the Belgian presidency’s five main priorities, but they are, of course, extremely important to Scotland, where 70 per cent of the UK’s fishery effort is based. Do you see any realistic hope of the common fisheries policy being reformed in the few short months of the Belgian presidency?

As I said in my introductory remarks, we want to prepare the reform of the common fisheries policy. I think that everybody agrees that reform of that policy is needed for ecological, economic and social reasons, and it is in the interests of Europe to act and take good and wise decisions.

The Commission’s proposals will be available next year. It has been said that they will be available in spring 2011, but recent information tells us that they will probably be available in summer 2011.

We would like to focus on getting more scientific evidence because there is, apparently, a lot of missing information in the discussions on stocks. That is why we are organising the symposium that I mentioned in Ostend in early November. Another conference in the same month is being organised by the Commission and the Belgian presidency. The aim is to get more evidence so that Europe can take good and wise decisions in that field.

You will, of course, realise that we have been trying to reform the common fisheries policy for what is getting on for 40 years, without much success. Can the common fisheries policy ever be reformed as long as countries with no coastline are allowed votes on fisheries matters? Perhaps I am being a bit provocative.

All of that will come together with the multi-annual financial framework. The Commission’s first proposals in that regard will come out in early 2011 or the spring of that year. We will see what the Commission has in the budget for agriculture and fisheries and what the impact will be on agriculture and fisheries policies.

My final question is about fisheries and enlargement. You will have seen the recent difficulties with Iceland and the Faroes unilaterally fishing mackerel way beyond their quotas. Why has Iceland chosen to take that particular step at a time when it is up for membership of the European Union?

I do not know what is behind that, but it will complicate the accession negotiations. The Commission has already said that it will put that item on the agenda and that Iceland needs to respect European interests in those discussions.

I, too, have a question about enlargement, but I would like to ask a question about fisheries first. Having Mr De Proost here provides a good opportunity to ask that question.

It has been explained that Flanders leads for Belgium on the fisheries council. You may be aware that the Scottish Government wants to have a similar position for the UK. You will be glad to hear that I will not ask you to comment on that, but it would be useful to be told in a little more detail about how the Flanders arrangements work in practice. Does your privileged position lead to resentment in Wallonia?

The co-operation on EU affairs between the different levels in Belgium goes back to a co-operation agreement in 1994. We divided the EU councils, taking into account the separation of powers within Belgium. Responsibilities at the federal and regional levels were taken into account, and the nine councils were split up into six categories. As fisheries policy concerns only Flanders, it has exclusive responsibility for taking up the Belgian fisheries seat, and it takes the chair during the presidency. However, for agriculture for instance, we have another mechanism. There is still a national minister for agriculture, who is assisted by the two ministers in charge of agriculture in Flanders and Wallonia. There is therefore a Belgian trio operating on agriculture issues. In relation to the other councils, on research and innovation policy, for example, there is a duo, in which a regional minister is assisted by a federal minister. Because we cannot send three regional ministers at the same time, a rotating system comes in, and one of the three is sent. The rotating system operates in parallel with the six-month presidencies. If you want, I can give you more information. There is a document giving the detail of how that works.

That might be useful. Thank you for that information.

Mr Verbeke, you mentioned the prospective accession of Turkey to the European Union—somewhere down the line I presume. In the past few weeks, Turkey has held a referendum on its new constitution. There are still concerns about the new constitution, for example among the Kurdish minority, who fear that it is still not good enough to satisfy their concerns. I think you said that the discussions that you are involved in at the moment could head towards an impasse by the end of the year. Did I pick you up correctly? Forgive me if I did not.

Yes.

Will you tell us why?

The impasse is because, in order for the enlargement process with Turkey to be sustainable, in a credible way, through time, we must be in a position to open new chapters from time to time. It is the nature of the negotiation process to progress—standing still is not an option. You have to progress and open new chapters. In the last days of the Spanish presidency, we opened a new chapter, which was on food security. In order to keep the momentum, we are willing to open another new chapter, the competition chapter. However, opening a chapter requires a preliminary study by the Commission that says that it is satisfied that the necessary minimal legislation has been adopted by the country involved—in this case Turkey. We would recontemplate opening the competition chapter, but we cannot do that unless the so-called state aid law has been adopted by the Parliament in Ankara, which has not yet happened. The risk is that we will dry up on chapters on which we can negotiate—negotiation keeps alive the enlargement process.

At the same time, there may be an odd blockage that relates to the implementation of the Ankara protocol. You may recall the Ankara agreement, which was essentially the accession agreement of 1963. There was an addition to that, the so-called Ankara protocol, which provides for the fact that the ports and airports in Turkey should be opened for Cypriot boats and aeroplanes. However, Turkey has not been willing to comply with the Ankara protocol because we, the Europeans, have not complied with our commitment to open direct trade with the northern part of Cyprus, the so-called Turkish Republic of Northern Cyprus. That led to a mutual impasse or blockage. We fear that the report that the Commission will publish in November on the enlargement process and the so-called progress that is being made will look rather dry, if not rather depressing.

11:30

I will leave the pure negotiation track and look at the broader picture. It would put Europe in a very difficult position if it found that things were totally stuck with the most important candidate country for entering the European Union. From a political point of view, that would be extremely embarrassing. We hope that the positive result in the referendum that was held the weekend before last, which will lead to constitutional changes, will create the political momentum in Ankara for it to adopt the necessary legislation to permit us to open a new chapter. Perhaps having won that battle of the referendum, Ankara feels more relaxed about opening the ports and airports to the Cypriot vessels and aeroplanes. In that case, Nicosia will be in a position to unblock the chapters that are being blocked. That is all rather technical stuff, but the point is that, from a geopolitical point of view, there is no doubt that this is the most important file on the enlargement question.

We are running very short of time, ambassador, and we have to start our next evidence session with the minister, who I understand is already here. If colleagues feel that any of their questions have already been answered, please do not ask them. However, if you still wish to ask a question, please do so.

I have a brief question. I declare an interest in rural matters. Rural development is very important to Scotland—more important than it is to the UK. I am interested in what Belgium would like to happen with rural development and the common agricultural policy by the end of its presidency and perhaps by 2013.

To be honest, I do not know the answer to your question.

The common agricultural policy is definitely not for the Belgian presidency. It will be looked at in the budget and the financial perspectives review that will start next May. Under the Hungarian presidency, in May 2011, we will start having a look at a new financial perspective for 2014 to 2020. We are now at the mid-term review. The new CAP will be studied in that context. France and Germany have already floated an informal paper in which they give broad indications about the lines along which things would evolve—that is really the first element that we have seen in the field—but no debate has yet taken place about the reform of the CAP. Politically, I do not think that we must expect major changes to happen. Most probably, most things will stay where they are. The European agricultural sector has become more competitive on a worldwide scale, given the rise in world food markets generally. Therefore, the need for subsidies may diminish and the political pressure to have the appropriate agreements will most probably be somewhat more relaxed.

Rural development is also part of the cohesion policy. The Commission will present its interim report before 3 November, when it will outline the future of the cohesion policy as well as rural development. On rural development, the only issue on the agenda that we are dealing with is the revision of a regulation on the simplification of a control mechanism in rural development.

You have answered the questions that I wanted to ask, which were on how the presidency works in the new situation. However, while you are here, will you divert a little from today’s brief and give us an indication of how negotiations on forming a Government are going within Belgium? The language that we hear from some politicians suggests that those are not going well and that that might lead to the break-up of the state. I am interested in how that is progressing.

Starting at the end, on the talk about the break-up of the state, I say in all openness and frankness and with a certain degree of assurance that that is simply not an option. The reason why it is not an option is that the population does not want it. Recent polls indicated clearly that, even in the Flemish part, which is the part that is closer to the possibility of having the country break up, I think that 80 per cent of the population said that that is not an option and not what they are after.

So that is out. However, we have to find a Government for our country, although, that being said, there is always a Government. It is a false proposition to say that Belgium is without a Government. Each country always has a Government. Although we have a caretaking Government, we have a rather open interpretation of what “caretaking” means. We take decisions that another Government would not take. For instance, here in the UK, the caretaking Government was extremely prudential and cautious, but we continue to take decisions, including on issues such as sending servicemen to Afghanistan.

The problem in Belgium is that two parties won the elections. In Flanders, it was a party that strives for more competences—more devolution, in your language—for Flanders. In Wallonia, it was a traditional social democratic party, the Parti Socialiste. The problem is at the same time a good thing and I will explain why. In the Flemish part, we have a party that wants more powers for the regions and that has a socioeconomic agenda that is more to the right than to the left, if I may say so. In Wallonia, we have the converse—a traditional party that is for the political unity of the country and that, socioeconomically, tends rather to the left. Therefore, the gap to bridge could not be wider.

That is the challenge. The good thing is that if that gap is somehow bridged, we will have stability for years to come, because everything that is between the two extreme positions can of course be accommodated within that overall compromise that will have to be found. However, there is no alternative to finding a Government. Going back for elections is not an option because it would simply lead to a repeat of the results.

As you know, Belgium is a country of compromises. We are a country in which every problem throughout our history has been solved through conversation, dialogue and negotiation. We even have a prominent political scientist in Louvain who has captured the essence of Belgian political culture in a book on “de overlegcultuur”, which means the culture of deliberation. It is in our genes. It will take time, because difficult dialogues and conversations take time, but we will solve the issue. In our history, never a shot has been fired, across any border, linguistic or other. In these times, that certainly will not happen. We will find a solution through dialogue.

Constitutionally, you do not have a timeframe within which the Government has to be formed.

No, we do not.

That is interesting. You will know that in Scotland we have a set timeframe within which a Government must be formed.

What if that does not happen?

If not, the next biggest party gets the chance to try and do that, but that has never happened, so fingers crossed.

We wish you all the best with your deliberations.

Thank you.

That was very interesting. I thank His Excellency and Mr De Proost for taking the time to give evidence to the committee. On behalf of the committee, I wish Belgium all the very best for the rest of your presidency. We hope that it goes well.

I suspend the meeting for a few moments while we change witnesses.

11:41 Meeting suspended.

11:44 On resuming—