Select Committee on European Union Forty-Ninth Report


Letter from Melanie Johnson MP, Parliamentary Under-Secretary of State for Competition, Consumers and Markets, to the Chairman

  The DTI submitted an explanatory memorandum on 19 November 2002 on a Draft Decision of the Council on the fulfilment of the conditions laid down in Article 3 of the Additional Protocol to the EC-Czech Republic Europe Agreement with regard to an extension of the period foreseen in Article 8 (4) of Protocol 2 of the Europe Agreement (13814/02) with The European Commission's assessment of the Czech Republics steel industry restructuring plans (13525/02). These documents asked the Council to endorse the Commission's assessment that the steel restructuring plan submitted by the Czech Republic meets the criteria required of it allowing the restructuring aid set out in the plan to be granted.

  We drew the Committee's attention to the fact that we had requested advice from the Commission on the exact legal base of the draft decision, which was not specified. We have now received a revised version of this text containing the legal base, it will be Article 87(3)(e) of the EC Treaty. This follows the precedent of the original decision to extend the grace period in principle which used this article in conjunction with 300(2). Whilst we do not consider this to be the ideal legal base we do not propose to pursue this any further now, given that Member States have reached general agreement on the proposal and we have no support from other Member States on the legal base issue.

  There are other changes to the original text, but these do not change the substance of the proposal as set out in the original EM. They merely reinforce the linkage of the extension to the grace period to meeting criteria in the Protocol and the confirmation that the plans meet the requirements of Protocol 2 to the Europe Agreement. The change to the decision to a sole article reflects the fact that the other elements were covered in the previous decision (SEC(2002) 495/2 of 15/7).

  The Presidency is pushing for a decision very soon, but not before Wednesday 27 November. In the circumstances and, following advice from your Clerk, I shall be lifting the UK reserve.

27 November 2002

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