US embassy cable - 04THEHAGUE2581

UNCLAS SECTION 01 OF 02 THE HAGUE 002581 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, NL, EUN 
SUBJECT: DUTCH PRESIDENCY AMBITIONS FOR COMPETITIVENESS 
COUNCIL 
 
 
 This cable is unclassified but sensitive;  not for internet 
distribution. 
 
Summary 
------- 
 
1.  Dutch Economic Ministry officials staffing the 
Competitiveness Council hope to use the Dutch term in the 
chair of the Council to make serious progress towards 
reinvigorating the European economy.  They acknowledge that 
past meetings of the Council -- derided by their own minister 
in June as a "dead horse in the path of progress" -- have 
been dominated by secondary issues and have therefore failed 
to engage ministerial-level attention from key EU countries. 
The November Council agenda will reflect the Dutch hope to 
rectify that problem with a thorough discussion of the Wim 
Kok report on the EU's Lisbon agenda as well as concrete 
progress on three efforts to improve the regulatory 
environment -- business impact assessments for new 
regulations, an effort to simplify the existing body of EU 
rules, and an improved methodology for assessing the 
administrative burden of EU regulations.  The Dutch have been 
working with both the Irish and with staff from subsequent EU 
presidencies to improve the effectiveness of the Council in 
contributing to improved European economic growth.  End 
summary 
 
2.  Emboffs met with Remco Zeeuw, Unit Manager of the 
European Integration and Strategy Department of the Ministry 
of Economic Affairs, and Sander Kes, Senior Policy Advisor in 
the same office, on October 5 to discuss the Competitiveness 
Council and Minister of Economic Affairs Brinkhorst,s 
ambitions for it.  Zeeuw and Kes are the officials at the 
Ministry who prepare the &dossier8 for the Council meetings 
and accompany the Minister to them. 
 
Key role of the Council for Dutch presidency priorities 
--------------------------------------------- ----------- 
 
3. Success at the Council is key for several top priorities 
for the Dutch presidency.  Laying the basis for the March 
2005 mid-term review of the Lisbon Agenda (five years into 
the ten year program) is one.  The Dutch, along with a number 
of other observers we have talked to, believe that the 
economic structural reforms necessary for achieving the 
Lisbon Agenda goals (centrally, Europe becoming the most 
productive economy by 2010) have not been implemented. 
Zeeuw, perhaps over-stating a bit, said &everybody agrees8 
on what needs to be done, but impediments at the national 
level prevent progress.  Most of the reforms identified have 
not been in the power of the EU to undertake.  The Dutch will 
seek both to identify more that the EU can, in fact, do 
itself, and to find a way for the process to encourage more 
national action.  A preliminary discussion with Wim Kok, who 
is chairing a report from a high-level committee as part of 
the preparation for the mid-term review, was held at the 
September 24 Council, and his final report will be delivered 
to the November European Council. 
 
4.  Also important for Council action are three efforts to 
deregulate the European economy.  The Competitiveness Council 
has been trying to assert its authority through use of 
assessments of the impact on European business 
competitiveness of regulatory proposals from other Councils 
(this has been most prominent in the review process of the 
Environment Council,s REACH chemical regulation proposal). 
The Irish and Dutch have cooperated in a year-long program to 
simplify existing EU regulations, where member states have 
come up with a list of 300 suggestions now being winnowed 
down to a do-able twenty or thirty.  Finally, the Dutch push 
is to introduce an agreed methodology to measure the 
administrative burden of regulations, existing or proposed. 
 
5.  Put more broadly, though, the Dutch believe that the 
central European economic problem ) slow growth ) will find 
its solution mainly in the areas that are the principal 
responsibility of the Competitiveness Council, not in Ecofin, 
the Eurogroup or the European Central Bank (though, of 
course, there is overlap especially with Ecofin). 
 
Dutch view:  the Council was not operating well 
--------------------------------------------- -- 
 
6.  Dutch Economics Minister Jan Laurens Brinkhorst has not 
hidden his low opinion of how well the Competitiveness 
Council has operated:  at a Conference Board-organized 
Productivity, Innovation and Value Creation  conference in 
Amsterdam early in the Dutch presidency, he said the Council 
was a &dead horse in the path of progress.8  He has 
repeated such criticisms ) in slightly different terms ) on 
other occasions.   Zeeuw and Kees said that other Ministers 
agreed, and that this was visible through their failure to 
attend Council meetings consistently.  Meetings were boring 
and concerned with unimportant things (Zeeuw used the 
proposed regulation on sales promotions ) currently on the 
Council agendas ) as an example). 
 
7.  The Dutch have tried to upgrade the content of the 
agendas, limit discussion items that actually need 
ministerial attention, and refer less important issues to 
junior minister or civil servant levels, in order to give the 
Council meetings the status they should have.  They regard 
regular attendance by certain key industry/economic affairs 
ministers (UK, France, Germany, Poland were mentioned)  as a 
measure of their success.  Brinkhorst has organized informal 
dinners preceding the Council meetings in order to &improve 
the atmosphere8 and give an &esprit de corps.8 
 
8.  The campaign to upgrade the Council is a long-term 
project, consciously undertaken in cooperation with the 
preceding Irish  presidency and the succeeding Luxembourg and 
UK presidencies.  Zeeuw said he has even talked with his 
counterparts in Austria and Finland, future presidencies, 
about it.  All of these countries share the same view as the 
Dutch, he said, and seek to &create coherence8 in the way 
the Council addresses Europe,s central economic problems. 
(&Coherence8, he noted in an aside, was not the Greek or 
Italian emphasis for the Council.) 
 
Comment 
------- 
 
9.  A more effective Competitiveness Council, focusing on 
more competition for European business (especially needed, 
said our interlocutors, to improve European service 
industries, who ignore innovation potential because they are 
not pressed by competition), less burdensome regulation, and 
greater transparency and input from business, would be of 
obvious benefit to US objectives.  Many US problems with 
market access in Europe derive from an inward-looking 
Commission, immune to concerns about costs.  Ministers on the 
Council, and the officials staffing the working parties 
supporting the Council, should frequently be receptive 
audiences for communicating US concerns. 
SOBEL