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Industry Council, 16 November

Lord Hughes of Woodside asked Her Majesty's Government:

Lord Simon of Highbury: I represented the UK at the EU Industry Council on 16 November.

The Council agreed to tighten the rules on government aid to industry. A new regulation will codify the existing Commission procedures for the control of state aid and it will also strengthen the ability of the Commission both to recover aid paid illegally and to undertake on-site monitoring of companies receiving state aid. The Commission agreed to publish final state aid decisions in all the languages of the Official Journal and to take a formal decision before compelling a company to co-operate where it refused to allow on-site monitoring. With these two amendments, all outstanding reserves were lifted. The Presidency concluded that a political agreement had been reached on the text of the

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regulation while the Council awaited the opinion of the European Parliament.

This was followed by a discussion on a Commission monitoring report on aid to certain shipyards in Germany and Spain and a brief presentation by the Commission on the impact of the crisis in Korea on shipbuilding.

The Council had an open debate on the Competitiveness of European Industry. The Commission opened the debate and noted that European industry was catching up with world competition, but that worker productivity was still behind the USA and Japan. This was followed by a round table discussion on competitiveness which included the results of four benchmarking studies and the Commission's response to the Business Environment Simplification Task Force (BEST) report.

The Council adopted conclusions on benchmarking and the competitiveness of business services. The Presidency concluded the debate by welcoming the progress on benchmarking and invited COREPER to take forward further work on this and the Commission response to the BEST Report.

A meeting with industry Ministers from the CEEs and Cyprus began in formal session and continued over lunch. A number of applicant states made prepared statements describing the reforms they are undertaking. During the discussion it was emphasised that applicant states needed to both complete industrial restructuring and take on the regulatory acquis before accession. The Commission also proposed a closer working-level dialogue in eight key sectors, including coal, steel and automotive industries, which could provide analysis of the CEEs' progress. The Presidency concluded that this should be followed up and that there was a general consensus for increasing bilateral contacts and advice to the applicants.

An orientation debate was held on the draft directive on late payment in commercial transactions. During this debate, all member states expressed support for the objective of the proposal, but had concerns on the degree of harmonisation of other aspects of national civil law. The Presidency concluded that discussions should be continued at official level with a view to reaching a Common Position as soon as possible. The Council also adopted Conclusions on the restructuring of the steel industry and the competitiveness of the recycling industry.

The Commission gave presentations on the Ottawa Conference on Electronic Commerce, the 10th Monitoring Report on the Control of Aid to the Steel Industry, the 27th Annual Report on Competition Policy, the Observatory for Textiles and Clothing, and Delocalisation.

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