Barroso unveils plan to halt EU's economic decline (EU controlled prosperity! Hold my welfare alert)

BRUSSELS (Reuters) - Europe must launch a daring modernisation drive to reverse its relative economic decline and safeguard the continent's culture of social welfare, the EU's executive said in a strategy paper unveiled on Wednesday.

"We must release Europe's enormous untapped potential," European Commission President Jose Manuel Barroso said in a statement released as he spelt out his 2005-2009 game plan to the European Parliament.

"I believe that we must embark on a process of transformation as bold and as courageous as the single market in 1985, the launch of the single currency or the unprecedented enlargement of the European Union to 25 member states."

The 12-page document was a response to the EU's spectacular failure to meet the goals it set itself in 2000 under the "Lisbon Strategy", a drive to make Europe the most competitive and dynamic economy by the end of this decade.

Officials say the "2010" target will be quietly dropped when the Commission next week presents new proposals to meet the Lisbon goals.

Barroso's paper proposes no grand new projects for the EU, instead aiming to "take the Europe we have and make it work". It also calls for Europe to become a more effective "world partner" but focuses less on foreign policy than the economic agenda.

Since 1996 the EU's average annual growth, in terms of output per head, has been 0.4 percentage point below that of the United States. The productivity growth rate in the EU's pre-enlargement bloc of 15 nations averaged 1.4 percent over the same period compared to a U.S. rate of 2.2 percent.

But knives were already out in the EU legislature for the former Portuguese prime minister, a market-oriented reformer who prescribed a bitter austerity pill for his own country in 2002.

Socialists and greens warned that Barroso's five-year dash to tackle the 25-nation bloc's pallid economic growth and its persistently high unemployment rates could undermine Europe's "social model" and respect for the environment.

"Mr Barroso carries an immense burden of responsibility on his shoulders today," Socialist Group Vice-president Jan Marinus Wiersma said ahead of Barroso's presentation.

"He must not allow the right-wing ideology he espoused as prime minister of his country to endanger Europe's success now and we warn him that we will not allow him to do that."

Barroso, who was forced by opponents in the parliament to throw an Italian conservative off his team executive before it took office in November, conceded that he was making a gamble.

"We are taking a risk by saying that the absolute priority is growth and employment," he told reporters on Tuesday night.

"I do not pretend to please everyone: it is a political programme that makes choices, but balanced choices," he said, adding that the emergence of Asian economies -- and China's in particular -- made Europe's modernisation all the more urgent.

Nevertheless, Barroso rejected charges that he is peddling a "liberal" strategy, arguing that if putting job creation first was liberal he no longer understood the meaning of the word.

Critics say it is not clear how Barroso will turn his vision into reality, especially given the difficulties that European heavyweights like France and Germany are running into with health and pension reforms.

Barroso called for a "partnership for renewal" between the EU institutions and member states, many of which resisted and resented past attempts by the European Commission to steer them along the path of the thus-far fruitless Lisbon Agenda

27.01.05 | 04:51 UTC


	Home

	News Bulletin

	Current Affairs

	World War II

	Business & Economics

	Culture & Lifestyle

	Science & Technology

	German Soccer

	Visit Germany

	Weather

	German Courses

	Study in Germany

	DW-TV

	DW-RADIO

	Polls

	Reader Response

	Newsletter & Service

		26.01.2005

EU Banana Skin Awaits Fruit Growers

As of 2006, Europeans will have to pay more to enjoy the banana

Germany's fruit traders are finding it tough to swallow a new EU directive which could see duties on the popular banana rise threefold by next year.

Germany is a banana republic. Within the EU, which is the largest importer of bananas worldwide, over 1.1 million tons end up in Germany. The country leads in consumption of the tropical yellow fruits. In 2003, Germans ate 17.7 kilograms of bananas per household. Only the teacher's favorite, the apple, is more popular.

The popularity of bananas isn't hard to explain. They are healthy. Their color and taste remind us in freezing winter that there are places out there that are sunny all year round. Bananas are endowed with a naturally practical packaging, ensuring you don't make a mess. Plus, they have an ample supply of serotonin, a hormone which puts us in a good mood.

But German fruit companies are afraid the euphoria surrounding the banana could soon evaporate. With the European Commission recommending raising duties on bananas from countries outside the EU to €230 ($298) per ton by 2006, there is fear that prices could spiral.

Calculations not correct

Representatives from the German Fruit Retail Association (DFHV) had a bitter taste in their mouths when they heard the announcement.

According to the DFHV, the European Commission made their duty recommendation of €230 per ton on bananas as of 2006 based on wrong price statistics.

"The calculation of the duty is based on wrong numbers," said Ulrich Boysen, head of the DFHV. He said that the numbers the commission used were simply a false sample of data. The European Commission had come up with a price of € 890 per ton. The DFHV's calculations lie at under €700 per ton.

The result will be a higher customs duty on the banana. But to understand how the commission reached its decision one has to understand the complicated duties system of the EU.

It starts with the fact that European banana producers are subject to competition from so-called cheap "dollar" bananas outside the EU. In order to protect the EU farmers, a complex set of quotas was implemented. Currently, EU fruit retailers import over 3 million tons of bananas annually. The duty stands at 75 euros/ton.

Beginning in 2006 however, the EU wants to simplify the importation. The quota system will be dropped in favor of a straight-forward customs duty. This was the result of an agreement Ecuador, one of the world's biggest banana exporters, made with the US and the EU. This new duty will be markedly higher and German retailers are worried that the bendy tropical wonder will lose its appeal.

The future of the banana

European banana producers do not have it easy against their cheaper competitors from Latin America. Their wares are currently protected but the banana is still a good bargain. If the customs duties are tripled like the European Commission suggests they should be, it will be the consumer who will have to dig deeper into his pocket -- and possibly decide to buy fewer bananas.

The fruit retailers may just be suffering from a case of sour grapes. On the other hand, consumers may just decide to purchase more grapes -- or oranges, or pineapples in the future. This should equally satisfy the fruit retailers.

Marco Stoffel (jdk)

Berlin Man Wants End to Bendy Bananas
Fed up with the inconvenient curved shape of bananas, a Berlin resident has dreamt up a way to straighten this staple of the fruit bowl, even applying to have his banana-straightening method patented. (Oct. 18, 2004)
Latin America Aims for More EU Trade
Gone are the days when coffee and sugar were the only goods South America produced for the world economy. The continent has developed dramatically and now produces an array of exports. But trade with the EU is lagging. (May 27, 2004)
Europe Lifts GM Food Ban Despite Public Opposition
The European Commission defied public opinion and environmentalists on Wednesday by giving the go-ahead to a Swiss company to import the genetically modified sweet corn BT-11, effectively lifting a five-year ban. (May 19, 2004)

DAX Index

Dow Jones Index

Key indices

Current Affairs
Sizing Up US-German Relations

Culture & Lifestyle
Making Civil Servants More...Civil

Science & Technology
Opinion: Celebrating Einstein

Made in Germany (english)

2005

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.