Thursday, 24 April 2008

Kosovo seeks EU membership by 2015

EUobserver is reporting today that Kosovo has set its sights on joining the EU in 2015 and is seeking a clear signal from a meeting of EU Foreign Ministers next Tuesday in Luxembourg. From the discussions I had while I was in Pristina a couple of months ago it was made very clear to me that EU accession is a top priority for Kosovo with the EU seen as a key vehicle for providing Kosovo with security and stability.

Montenegro has already prepared its draft application for EU membership and will be seeking candidate status this year, after having signed a bilateral agreement with the EU on Montenegro's entry into the WTO. Ahead of the Western Balkans pack is Croatia which is hoping to conclude its membership negotiations with Brussels by 2009 and become the EU's 28th member state by 2011.

Of course all of this is likely to be made much easier by the French Government's decision yesterday to approve plans for constitutional reform that would see the scrapping of a previous mandatory obligation for all future EU enlargements after Croatia to be submitted to a referendum in France. This had been introduced back in 2005 and was seen as being aimed at Turkey in an attempt to reassure French public opinion about their concerns over any further EU enlargement especially in the run-up to the French referendum on the EU Constitution, which in the end failed. Under the proposal, the decision on whether or not to approve a country's accession to the EU can be taken either by referendum, or by the French Congress (this comprises the National Assembly and Senate), which would have to approve it by a three-fifths majority.

In any event I look forward to the day when Scotland can take its rightful place at the top table alongside many of our neighbours as well as the countries of the Western Balkans.

Wednesday, 23 April 2008

National Conversation comes to Europe

Alex Salmond, our First Minister was in town today together with Mike Russell, our Environment Minister, where they brought the National Conversation about Scotland's future to Brussels - though today was very much the international dimension with the focus on Scotland's potential in Europe.

The level of interest in what is happening back in Scotland over here is very apparent, not least by the fact that there was a packed audience in Scotland House with policy makers from across the different EU institutions, politicians, expat Scots, think tanks and other interested groups and organisations as well as other devolved regions.

For me personally it was a bit of a moment walking in the doors of the Scottish Government EU Office in Brussels and seeing copies of the
White Paper setting out options for Scottish independence. It's hard to believe that it's almost a year since the SNP took power as Scotland's new government.

And what a year we have had! Gone are the dark old days of the previous Lab/Lib Dem Executive which was too scared to fly the Saltire from Scotland House in the heart of the EU quarter, lest heaven forbid Scotland became too visible in Europe. Now we have a Scottish Government in Edinburgh that is more bullish in its defence of Scottish interests with London and willing to take a much more direct approach in its dealings with Europe to ensure Scotland's interests are protected and promoted. And to top it all off, we now have the First Minister of Scotland in the heart of the EU talking about Scottish independence in Europe, moving Scotland forward and the contribution Scotland can make in playing our part globally and taking our global responsibilities.

The First Minister set out where the political debate is at back home - that there is now broad political consensus that the current powers Scotland has under devolution are no longer sufficient and that not only are more powers necessary but the discussion itself has moved on to what those powers should be. Our position in the SNP is clear - we want to give the people of Scotland the right to decide for themselves in a referendum whether they want Scotland to be independent, retain the status quo or have further powers devolved to Holyrood. Latest opinion polls show public support for independence has increased by 14 points to 41% since the SNP's historic victory last May 2007. Opposition to independence has dropped from a high point of 50% to 40%.

The First Minister also made it clear that if the Unionist parties come forward with an alternative (as an outcome of the Scottish Constitutional Commission set up under the Chairmanship of Sir Kenneth Calman to look at Scotland's place within the UK ten years on from devolution) then he can see no reason why this option should also not be on the referendum ballot paper but this all depends on whether the Unionist parties would want to do this. If there are other options then the people of Scotland should be able to have a full and comprehensive debate about everything that is put on the table.

Much was made of Scotland seeking to engage much more positively with Europe, of wanting to emulate the success of other small European nations - Ireland, Denmark, Norway, Iceland, Finland (the so-called 'Arc of Prosperity' countries) and our sharing of values which underline "Scotland's natural place within the mainstream of European social democracy". This was highlighted by firstly the publication of the Scottish Government's Economic Strategy and the setting of key targets for sustainable economic growth (i.e. for Scotland to match the GDP growth rate of the small independent EU countries by 2017 and to raise Scotland's GDP growth rate to the UK level by 2011). Given we are now living in a global economy you don't need to be a large country to access the global markets. The disadvantages of being a small country have been eroded and many small countries are now coming into their own through their ability to use competitive tax policies and their power to design their own economic policies that suits the distinct needs and interests of their country.

Secondly, was the building of a new relationship with local government, working together in a new social partnership based on mutual respect through the signing of a financial concordat in November 2007.

Thirdly, central to Scotland's economic potential are our life sciences, financial services and renewables, where Scotland currently enjoys more than 25% of Europe's marine renewable energy. These are all sectors where Scotland has a comparative advantage in economic growth.

Lastly, with a minority government in Holyrood, the political culture is one of negotiation and dialogue.

While Scotland aspires for a role in foreign policy, the First Minister underlined the extent to which Scotland is limited in what it can do in this regard because of the UK's unwritten Constitution. The anomaly of Scotland's position in Europe is clear - we are inside the EU as part of the UK and yet with very distinct interests we are unable to pursue our own policies that would be more in keeping with Scotland's specific circumstances and needs rather than those of the wider UK. For example, on the euro if Scotland had been developing its own monetary policy Scotland would have joined. Until Scotland can achieve independence, for the moment Scotland can only make progress in those areas where London has little interest, i.e. fisheries.

This point was picked up by Mike Russell, who in his summing up said that Scotland has been able to influence the UK position on fisheries. While the speaking note at recent Fisheries Councils has been developed by Scottish officials in close cooperation with Defra officials, the frustrating part is that Scottish Government Ministers cannot contribute to that discussion. It is the UK Fisheries Minister that gets to sit at the big table and uses the "Scottish" speaking note. Scottish Government Ministers are not allowed to speak - UK Ministers can "on our behalf".

It is a bizarre state of affairs for any country to find itself in. The importance for Scotland to be in the dynamics of those discussions and to have the opportunity to put Scotland's case forward as a Scot from a Scottish perspective rather than have someone else do it for us cannot be underestimated.

All I want is for Scotland to be like any other normal country and for me full independence is the only way in which Scotland can protect and promote its distinctive interests.

Monday, 21 April 2008

Euro Candidate

The SNP met at the weekend for its annual Spring Conference - this time we were at Heriot Watt University on the outskirts of Edinburgh. The atmosphere was electric with over a 1,000 delegates – a sure sign of the party’s growing success and there was much to be cheery about after an extremely successful first year in government.

On the Saturday morning the party held its hustings for candidates going forward to represent the party at the European Parliament elections next June.

I am delighted that I got through to the last seven and thanks to all those who voted for me I am now a candidate. I am very much looking forward to getting out and about round the country, meeting with as many people as possible and getting on with the campaign. We have an excellent array of candidates who are all committed and will work hard. They are (in alphabetical order):

Cllr Drew Hendry

Ian Hudghton MEP

Anne McLaughlin

Aileen McLeod

Duncan Ross

Alyn Smith MEP

Cllr Grant Thoms

Below is the full text of the speech I made at the Euro Hustings:

Fellow Nationalists, I’m Dr Aileen McLeod.

I’ve been Alyn Smith’s head of European policy since he won his seat.

Alyn, as most of you will know, is incredibly hard working.

Not only in his summer work experience trips, but also across the country and in the parliament in Brussels and in Strasbourg all year round, and in nurturing Scottish contacts across Europe.

He never shies away from getting face to face with Commissioners and making sure they take Scotland into account

Alyn Smith and Ian Hudghton are making Europe work for Scotland.

I want to join Scotland’s team and follow in the footsteps of Dr Winnie Ewing, Dr Allan Macartney and Professor Neil MacCormick.

We will win 3 MEP seats next year – and I want to be one of the team.

I haven’t put my name forward for other elections because it’s Europe I’m focused on, I understand Europe, and it’s Europe where I can do the best job for the party.

I know how Europe works.

I know how to get into the Commission at all levels.

I know what it’s like being effective in Brussels.

I know how to make Europe work for Scotland.

Since the SNP Government entered office Scotland’s voice in Europe has become stronger and more effective.

This party and our Government are making an impact.

I could stand here this morning and tell you at great length about full ownership unbundling in the energy market.

And when you woke up you’d agree with me that it is one of the big issues facing Scotland.

Instead, though, I’ll talk about our successes in Europe.

Our political success in Europe has outstripped our football success – even allowing for Scotland beating France home and away.

First, Structural funds:

London wanted to dump Scotland’s funding and the Lib/Lab coalition didn’t argue.

Scotland’s party did.

We ensured that structural funds continued in areas where they will be of key economic and social benefit - including the Highlands and Islands where we won additional funding.

We didn’t quite win the South of Scotland, but that comes back in the next budget round.

Second, Ferries:

It’s the SNP MEPs working with our MPs and MSPs who have led the fight to save our lifeline ferries.

The problem wasn’t Europe, it was the Labour / LibDem coalition whose crass incompetence threatened the very services they should have been protecting.

That’s why Alyn Smith asked the Commission to investigate formally – to clear it up once and for all.

We’re confident he’s right.

Third, Ship-to-ship oil transfer:

To protect the environment in the Forth, we engaged European legislation on Habitats.

Our MEPs worked with our councillors and with environmental groups.

And Tricia Marwick and Bruce Crawford were eloquent when we brought them to Brussels to argue the case.

That’s making Europe work for Scotland.

And there have been other successes. We worked with Scotland’s farmers to improve the Common Agricultural Policy;

We got Brazilian beef banned on safety grounds;

We brought Commissioners to Scotland to see how we are pioneering green energy technology and talk with our University sector about research collaboration.

We were even part of the success in getting Europe-wide mobile phone charges reduced.

Making Europe work for Scotland.

SNP MEPs and their staff work hard to get support from MEPs from other countries for Scotland’s best interests.

For example, there’s that full ownership unbundling.

We’re not convinced that the break-up of Scotland’s energy companies is the best way forward.

We want Europe to consider the Scottish model – a system that encourages competition between energy producers and which would work better if it was in the hands of an independent Scottish government.

That’s better than a strategy which could undermine our energy companies and leave the consumer vulnerable to higher prices and supply interruptions.

Making Europe work for Scotland.

Past glories won’t keep us, though, there are challenges ahead.

Some come immediately to mind.

Climate change and energy policy.

These two issues cannot be separated.

How we generate energy impacts on the environment so climate change targets have implications for how we generate energy.

We will not accept nuclear power.

We want an energy future driven by clean energy sources.

That means renewables;

carbon capture;

and developing energy technologies that are environmentally sustainable.

Our commitment is clear in the ambitious targets our Ministers have already set.

There is a huge European dimension, but Europe should act only where there is clear added value in it doing so.

Scotland can become the green energy capital of Europe by ensuring that Scotland’s distinctive approaches to energy challenges and opportunities are recognised in European policy.

Structural funds

Post-2013 discussions are already underway in Brussels.

Scotland’s European funding was cut from £1.1 billion to £540 million under the 2007-2013 review.

Not because our rural and remote communities have experienced some dramatic economic upturn, unfortunately.

Many of the regions in the Highlands and Islands and in the South of Scotland continue to suffer considerable economic difficulties.

I find that shameful in a country as rich as Scotland, but it’s a cold hard fact and a bitter indictment of the UK’s mismanagement of our resources.

We have to make sure that the difficulties confronting those communities are recognised by Europe until we can solve the problems caused by the UK’s ignorance of the needs of Scotland.

Opening services to competition

Health care and a range of social services are coming under the beady eye of the so-called liberalisers.

Many of you will be familiar with GATS and its less desirable effects.

SNP MEPs have to ensure that any proposals brought forward for Europe recognise the specific Scottish context in which these services are provided.

Our MEPs will have to champion the specific Scottish needs for those services.

Remember, delegates the next five years will see major challenges confronting our MEPs

We have to make Europe work for Scotland and we have to prepare Europe for Scottish Independence

I have the experience, the expertise, the commitment and the know-how to make Europe work for Scotland and to make an independent Scotland work in Europe.

What I need now is your support.

Select me as an SNP candidate to let me get on with the job.

Saturday, 19 April 2008

“We’ve heard the extremists – now lets have sensible debate on EU"

In an earlier entry on this website I advocated the establishment in Scotland of a consultative National Forum in Europe that would provide a non partisan focus for a new and informed debate over EU matters that have a major impact on the lives of Scots. I believe the time is right to think afresh about how we in Scotland engage in EU-level policy discussions and this is something I will continue to pursue.

An op-ed piece on this appeared in today’s Scotsman.

Saturday, 12 April 2008

A new Constitution for Kosova

Kosova’s new Constitution was adopted by the Kosova parliament this week, which is expected to enter into force on 15 June and will pave the way for Kosova and the EU to take over from the United Nations Mission that has administered Kosova since the end of the Balkans conflict in 1999.

The Constitution is based largely on the proposals that were drawn up by the UN’s Special Envoy, Martti Ahtisaari (former President of Finland) in March 2007. It recognises the Republic of Kosovo as an independent, sovereign, democratic, unique and indivisible state, ensures democracy and reflects its multi-ethnic character, with full respect for the rule of law and the highest internationally recognised human rights and fundamental freedoms that guarantee equal rights for all the people of Kosovo. It contains an extensive package of measures to protect minorities, especially the Kosovo Serb community where there are new powers for Kosovo Serb majority municipalities in areas such as healthcare, education. Kosovo will also have the capacity to conclude international agreements and seek membership of international organisations.

I was fortunate to have the opportunity to spend 3 days in Kosova in February, the weekend after Serbia’s presidential elections. This was my first time in Kosova and my first time in the Western Balkans. Flying in over the mountains to the south was an incredible sight. Kosova is an extremely beautiful country and one that certainly has a great deal of potential. Being there in the days before Kosova’s unilateral declaration of independence was an experience in itself. My passport was stamped UNMIK (UN Mission in Kosovo) just to remind me that Kosova was still under UN authority. On the road in from the airport I saw dozens of UN and KFOR vehicles, be they under the flag of the French, the Swedish or the Italian in amongst clapped out tractors. Posters from Kosova’s elections last November were still on the billboards as well as one advertising Hotel Afa which was offering 20% discount for citizens of countries that promised to recognise Kosovo’s independence.


The influence of the US is all but subtle especially driving down Boulevard Bill Clinton, and where the English language used in its written form is American English. Coming into Pristina I was struck by the dozens of flats awash with satellites and washing. There was a real buzz about the place with young people everywhere. Kosova has the youngest population in Europe with over half its population under the age of 25. It has a huge diaspora with over 10% of its population living and working in Switzerland and Germany.

Arriving at our hotel we were greeted with independence – it is what everyone was speaking about Right now achieving independence was all that mattered. There seemed to be great optimism about the future with high expectations and an understanding that there is no going back to where Kosovo was in 1999.

There are certainly many challenges facing Kosova, not least the position and treatment of the 120,000 Serbs living in the North and South of the country. Economic investment in Kosova is very low because of the uncertainty over the current political situation and there is much that will need to be done by both the EU and the international community to help the Kosovan government develop its economy, build the necessary infrastructure and encourage foreign business to invest. An international donor conference is planned for June 2008 to discuss priorities and key areas of need.

Likewise, a central tenet in the Kosovan government’s national agenda is the longer term goal of EU membership. Kosova is already part of the EU’s Stabilisation and Association process. A key challenge will be to ensure national laws respect the EU acquis communitaire to fulfil European standards and obligations.

Interestingly, Kosova (like Montenegro) uses the euro as legal tender but this as I discovered is done outwith any agreement with the European Central Bank and depends only on those euros in circulation.

Since Kosova’s declaration of independence on 17 February there has been much mischief making by some commentators that Kosovo could end Scotland’s European dream. International comparisons between the current situation in Kosova and Scotland cannot be made. They are not comparable. The fractured history of the Balkans has resulted in a very different and unique situation in Kosova where its nationalism is based very much on ethnicity in contrast to our civic nationalism.

36 countries have so far recognised Kosovo’s independence, including the UK, France, Germany, Latvia, Ireland, Belgium, Italy, Estonia, Denmark, Luxembourg, the Netherlands, Poland, Austria, Sweden, Finland, Slovenia, Hungary, Bulgaria, Croatia, Switzerland, Iceland, Norway. Lithuania is about to. There is no collective EU recognition of Kosova’s independence as the EU Council agreed it was for each Member State individually to recognise or not an independent Kosova.

In contrast to its failure to act during the 1999 conflict, the EU recognises that the future of the Western Balkans lies within the EU and that Serbia’s integration within the EU is crucial for ensuring the stability of the region. The EU’s role has thus far been limited but that is set to change following the deployment of an 1800 strong civilian law and order mission (EULEX KOSOVO) which is supposed to assist Kosova’s institutions in developing and strengthening an independent, multi-ethnic justice system and multi-ethnic police and customs service, ensuring they are free from political interference and adhering to internationally recognised standards and European best practices. It is early days yet and there no doubt will be difficult challenges ahead in the run-up to May’s elections in Serbia.

Wednesday, 9 April 2008

Tackling Europe's waste problem

Its been a bit of a week this week in the European Parliament with committees and a mini plenary session in Brussels. Of particular interest was the adoption yesterday of the Environment Committee’s recommendations for the Parliament's second reading on the Commission’s proposals for a new EU waste framework directive. This is essentially about overhauling the 1975 Waste framework Directive, to lay down rules on recycling and to require Member States to draw up binding national programmes for cutting waste production.

The problem remains that Europe generates over 1.8 billion tonnes of waste each year. This amount is growing faster than GDP and less than a third of it is recycled. There are huge discrepancies among Member States when it comes to recycling. Some Member States landfill 90% of their municipal waste, others only 10%.

MEPs want tougher waste recycling targets and incinerators subjected to efficiency criteria when burning waste for energy 'recovery' purposes. Other recommendations include:

MEPs call for total binding targets for waste stabilisation, re-use and recycling - waste production to be stabilized by 2012, compared to the 2009 position. Member States are asked to establish waste prevention programmes not later than five years after the revised directive's entry into force and to determine appropriate specific targets to achieve the 2012 target and further significant reductions in waste generation by 2020;

MEPs also call for targets for reuse and recycling. By 2020, re-use and recycling rates should be increased to a minimum of 50% by weight for household waste and a minimum of 70% by weight for construction and demolition waste and manufacturing and industrial waste. Member States with less than 5% recycling in either category or no official figures would be given an additional 5 years to reach the targets. By 2015 the Member States would have to set up separate waste collection schemes for at least the following: paper, metal, plastic, glass, textiles, other biodegradable wastes, oils and hazardous wastes;

Incineration - For MEPs, a crucial aim is to reduce the amount of landfill and incineration, both of which cause pollution. Incineration is to be regarded as recovery, provided it meets a certain energy efficiency standard;

MEPs want Member States to stick to binding five-stage waste hierarchy - which is designed to prevent and reduce waste production. The hierarchy also lays down an order of preference for waste operations: prevention, re-use, recycling, other recovery operations and, as a last resort, safe and environmentally sound disposal.

It is now for the EU Member States to discuss the Parliament’s second reading, and decide whether they agree with it. If not, there will need to be further dialogue and negotiation in order to reach agreement. MEPs are set to vote on the Parliament's second reading in June. Once agreed it will then have to be implemented and transposed into national law in all 27 EU Member States.

The Waste Framework Directive will have huge implications for Scotland, particularly our local authorities which remain very much at the sharp end of European policy, not least in terms of budgetary impacts and its implementation.

How Scotland compares.

Scotland has increased the amount of waste that it recycles and composts from 4.5% in 2000/01 to 29.8% in 2006/07. The latest recycling/composting rate for municipal waste in Scotland is 29.8%. Back in January the Scottish Environment Secretary, Richard Lochhead announced the Government's new direction on waste with its plan for a "Zero - waste" strategy and is presently consulting on new targets, including new targets aimed at increasing recycling and cutting down on waste sent to landfill and limiting incineration. The amount of Municipal Waste (MSW) being recycled or composted is to be increased to 60% by 2020 and a new target of 70% by 2025. Landfill from MSW is to be reduced to 5% by 2025. No more than 25% of MSW is to be used to generate energy by 2025 and large, inefficient incinerators are to be rejected.

In March 2008 the new SNP administration in Fife Council announced that it planned to exceed government requirements by ensuring all household waste was either recycled, composted or sent to waste treatment. In 2002 only 2% of waste avoided landfill. That has already increased to about 38% and the first target is to increase that rate to 47% by 2010/11. That figure will then need to increase to 64% by 2012/13.

In any event let’s see what the outcome is between the Parliament and Council over the coming months.

Tuesday, 8 April 2008

Preparing for possible climate change conflicts

Heres an interesting piece worth a look at – a report by the EU’s High Representative for Common Foreign and Security Policy, Javier Solana and the EU’s External Relations Commissioner, Benita Ferrero-Waldner, on climate change and international security.

The report was adopted by EU leaders at the Spring European Council last month and discussed again this week in the European Parliament’s Foreign Affairs Committee. An energy security strategy is the third part of the EU’s emerging energy policy following the publication of the Commission’s green energy plans and its internal energy market package.

Solana basically makes the point that climate change is already having a profound impact on international security. While mitigation and adaptation efforts are important he warns against three key international security threats in particular that the EU and the wider international community need to be prepared for:

  1. reduction of arable land, widespread water shortages, diminishing food and fish stocks, increased flooding and droughts will lead to conflicts between states over dwindling global resources.
  2. rising sea levels in coastal regions and islands will not only cause economic damage but there is also the issue of loss of territories and border disputes and its implications for oil, gas and fishing resources if territories or borders change, or are submerged under the sea. We are already seeing the effects of competition for greater access to, and control over, energy resources with the rapid melting of the Arctic ice caps and the race to the North Pole, where it is estimated that there is some 25% of the world’s gas and oil reserves untapped in the Arctic Ocean. Last August the Russians sent a submarine to the North Pole to plant a flag in its seabed, claiming this territory and its resources as its but Canada, Denmark and Norway are also trying to establish their claims. Writing in this month’s Foreign Affairs, Scott Borgerson argues that unless Washington leads the way toward a multilateral diplomatic solution, the Arctic could descend into armed conflict.
  3. As a direct consequence there is the possibility of millions of “environmental” migrants or refugees by 2020 fleeing the effects of climate change.

Solana warns that the multilateral system is at risk if the international community fails to address these threats, with greater divisions and resentment likely between North-South and South-South (China, India), between the major emitters and those who are affected by it the most.

The report underlines the need for greater “carbon diplomacy”, to raise awareness of the impact of climate change on security and reinforce the capacities of those countries most likely to be severely affected, not least from Africa to the Middle East, from Latin America to central and southern Asia. Other recommendations include greater EU disaster response and conflict prevention capabilities, boosting cooperation and political dialogue with non-EU countries and interestingly develop and EU Arctic Policy. So now we know.

Monday, 7 April 2008

"I'm on the plane!"

That's it, the one sanctuary left without anyone being able to reach you by the ubiquitous mobile “cell” phone or, (more importantly) reach anyone sitting around, is about to disappear. Yes, it’s about to happen. no more being out of electronic contact for the duration of a flight. All of that is now being relegated to a bygone era with today's decision by the Commission to allow mobile phone calls on flights within the European Union.

Under new draft EU rules all of us, Scottish air passengers included, will soon be able to make and receive mobile phone calls as well as text messages while flying across the European Union, except during landing and take-off.

According to the Commission's press release, the decision means "the 90% of European air passengers that already carry mobile phones on-board aircraft can remain contactable during flights".

The UK telecoms regulator announced at the end of last month that it would allow airlines to offer mobile phone services.

But what does this mean? Well, it isn’t going to be as straightforward as switching on your mobile and making the call from 30,000 feet! Instead, you will need to access a dedicated on-board mobile network controlled by the airline (and licensed by national regulators) and you will be subject to a special tariff – presumably to be negotiated between the airline company and the mobile service provider. The EU ‘value-added’ is to ensure that national rules governing the airborne use of mobile phones by national operators are such that allow passengers on all flights within the EU to utilise this service regardless of what country they are over-flying.

I guess it would be so 20th Century to oppose this type of “progress”. Then again – you can just hear the conversation: "Hi. I'm on the plane, Where am I? I don't know where I am, but I’m above the clouds".

Friday, 4 April 2008

Opening up Europe's energy markets to competition

The creation of more efficient energy markets in Europe is currently being debated in the Parliament's Energy Committee following the publication of the Commission's proposals in September 2007. As a key part of the EU's energy policy, the Commission wants to remove the remaining barriers to creating a fully functioning internal energy market that ensures fair and open competition and effective regulation, and ultimately lower electricity and gas prices for European consumers along with a single European electricity and gas grid, by January 2009.

To boost increased competition and investment in the EU energy market and greater choice for consumers, the Commission proposes to break up the power of Europe's large energy companies by splitting energy producers from their distribution networks through
full ownership unbundling of all gas and electricity transmission businesses across the EU. Ownership unbundling would see those companies that own gas pipelines or electricity networks (grids) and which provide the gas or generate the electricity at the same time be forced to sell off large parts of their business.

A second unbundling option would be to allow large energy suppliers to retain ownership of transmission assets but the management of the networks would be taken over by separate companies called Independent System Operator (ISO). The designation of the ISO will have to receive prior approval from the Commission to ensure a sufficient level of independence.

The Commission has warned that choosing the ISO option would entail a greater regulatory burden, as national regulators would be given more powers to intervene - and issue fines to companies - in the event of anti-competitive behaviour.

Dawn raids by the Commission of the offices of the German energy company, EON, in 2006 together with the imposition of a fine of 38 million euro for the breaking of an official EC seal in a room on EON's premises with highly sensitive documents underline the seriousness with which the Commission is trying to tackle anti-competitive behaviour in for example the German energy market. Indeed, EON has now agreed to sell off its electricity networks to an operator which would have no interest in electricity generation and/or supply businesses to settle current antitrust investigations by the Commission.

The Commission's proposals for liberalising Europe's energy markets are being resisted by many countries, not least France, Germany, Austria, Bulgaria, Greece, Latvia, Luxembourg and Slovakia. They argue that complete separation of ownership and control of both gas and electricity transmission (from supply and production activities) will not resolve all the problems in Europe's energy markets. Instead of leading to lower energy prices and more grid investment, the 8 countries consider that the Commission's unbundling proposals and the ISO option would increase sector instability and create legal insecurity and uncertainty for investors at a time when companies are also being asked to invest in upgrading the grid network for more renewable generation or to improve security of gas supplies.

Supporters of ownership unbundling (Sweden, Finland, Belgium, Denmark, Spain, the Netherlands, Portugal and the UK) argue that full ownership unbundling is the only way to create more competition, transparency and integration in the EU energy markets. Anything less would not be able to assure adequately of any potential conflict of interest. They take the view that when it comes to a vertically integrated company there is the potential to frustrate competition by having access to confidential business information about competitors' activities or by exerting influence over competitors' rights of access to the transmission system which the vertically integrated company still owns, thereby preventing fair access for new entrants.

How Scotland's energy market operates offers the EU an alternative. The current system was set up only in 2005 by the UK Regulator (Ofgem) which integrated the English and Scottish electricity markets by appointing an Independent System Operator (ISO) (i.e. the National Grid) to carry out the operation of the Scottish electricity transmission system previously carried out by two vertically integrated Scottish Companies, Scottish and Southern Energy (SSE) and Scottish Power (SP). SSE and SP are each classed as a Transmission Owner (TO) in this arrangement and continue to own, maintain and invest in their networks as the TOs while the National Grid operates the day to day control and is responsible for contracting with users for access to and use of the grid and assures of non-discriminatory access for connecting new entrants to the grid.

Ironically, the UK set the system up in this way to avoid any issues of potential conflict and yet it continues to push for full ownership unbundling which can only have negative implications for Scotland's energy industry and come at the expense of our industry. I want to see greater liberalisation of Europe's energy markets with greater competition, openness and transparency which can only be a good thing for Scottish consumers and our energy companies to ensure they can compete and invest on a fair basis in other European countries. Rapidly rising energy prices across the EU are bad for business and are increasing fuel poverty especially among low income households and other vulnerable groups as well as remote areas.

Energy prices in the UK have gone through the roof since January 2008 accompanied at the same time by a shameful rise in energy companies' profits and quite rightly there have been calls for the Competition Commissioner to investigate what is happening in the UK's energy market.
The House of Commons Business and Enterprise Committee has since launched its own investigation into energy prices and the UK's energy market as well as the interaction between UK and European energy markets. UK energy companies blame rising energy prices, especially gas prices, on the lack of competition in Europe's energy markets.

However, what we mustn't see happen is Scotland's energy industry become expendable as part of some compromise and trade-off in smoke-filled rooms behind closed doors in Brussels. I want to be able to see Scotland's energy companies competing in Europe's energy markets on a fair and equal basis.

As an alternative to the Commission's unbundling proposals 8 Member States led by France and Germany presented a
'Third Way' in February 2008. Their suggestion being that the effective unbundling of energy operators' activities should be done through a network of regulators guaranteeing free access to infrastructure and independence of investment decisions. In response, the Commission issued two 'non papers' in which it argues that the "Third Way" proposals, which prefer "structural separation" within a business to ownership unbundling, cannot be a credible alternative unless they guarantee the independence of the TSOs. In many respects the Scottish model is actually more robust than the Third Way because there is ownership unbundling of the system operation together with strict controls and regulatory oversight of investment.

Over in the European Parliament discussions on the Commission's proposals aren't much better. The Energy Committee is due to vote on 6 May with a first reading expected from the Parliament in June 2008.
There are over 1,000 amendments to the whole internal energy market package which MEPs will now start to try and negotiate compromises.

The most contentious issue remains ownership unbundling on which the Committee is split along national lines - though I suspect a deal may already have been done on this for the issue to be returned to in 2010 and for all other aspects of the energy market package to be agreed to. Not least given that much of the real negotiation will be done under the French Presidency of the European Council in the second half of the year - the French government of course being the co-authors of the 'Third Way' proposal and its opposition to the Commission's full ownership unbundling proposals. For the moment the Energy Council remains divided.

The UK Labour MEP, Eluned Morgan is drafting the Energy Committee's report on the internal electricity market and has taken the UK government line in her support for full ownership unbundling which she says is "the only model that can give an assurance to competitors who want to enter the market and ensure no conflict of interest arises" and consequently has sought to delete the ISO model as an alternative option. There are amendments from the SNP and Scottish Labour backing the Scottish model with a number of French, German, Hungarian, Bulgarian, Luxembourg, Greek and Austrian MEPs backing the Third Way as an amendment.

Since its setting up three years ago, the "Scottish model" has shown that it works and can deliver the key requirements of non-discriminatory access. By fully separating the operating system and the commercial arrangements for accessing contracts and tariffs and placing it with the ISO, this ensures there is no potential conflict of interest and the confidentiality of information is also ensured. Equally, in terms of investment, both SSE and SP are responsible for delivering an investment plan which is then reviewed by the ISO and it can comment on whether it considers it to be adequate or not. Once agreed the TSO (i.e. SSE and SP) implement the investment plan even if it could be detrimental to the interests of its affiliate companies.

Despite its critics, the Scottish model does offer Europe's energy markets a viable solution to the unbundling issue and on this one Scotland's energy industry cannot and should not be expendable.

Thursday, 3 April 2008

EU's green energy plans

At the top of the EU's agenda is a new energy and climate change policy for Europe. Within the European Parliament there is an ongoing debate about how the EU can meet the challenges of climate change, ensure the security of Europe's energy supplies and boost European competitiveness. Given the global interdependency of Scotland's energy market Europe's new energy and climate change policies will have clear implications for Scotland’s energy industry and consumers, so it is vitally important to ensure that Scotland's distinctive energy challenges and opportunities are represented within this ongoing debate.

In January 2007 the European Commission published its first energy package outlining an
"Energy Policy for Europe" to combat climate change and boost the EU's energy security and competitiveness. This followed the launch of a wide-ranging public debate in 2006 on a future European energy strategy with the publication of a Green Paper in March 2006. Back in 2005 EU leaders asked the Commission to bring forward proposals for the development of a common European energy strategy following their discussions at the European Council in Hampton Court in October 2005 and in Brussels in December 2005 during the UK Presidency. Much of this was an attempt to get the EU out of its constitutional impasse following the rejection of the EU Constitution in the French and Dutch referenda and the reality that Europe needed to modernise through a refocusing of its efforts on issues of public concern such as jobs, globalisation, migration, climate change, etc.

The need for greater coordinated EU action was prompted by concerns about high energy prices, Europe's increased energy dependency on Russia and OPEC, recent gas disputes between Russia and Ukraine, new insecurities concerning long-term availability of coal, oil and gas reserves, growing energy demand and climate change. Central to the thinking was the need for the EU to speak with one voice on strategic energy issues on the global energy stage, to complete the single internal energy market and to move towards greater energy efficiency and a low carbon economy through the development of clean energy technologies.

The Commission's 2007 energy and climate change package would, according to the Commission, 'set the pace for a new global industralised revolution', and called on the Council and European Parliament to approve:
an independent EU commitment to achieve a reduction of at least 20% in greenhouse gas emissions by 2020 compared to 1990 levels
the objective of a binding commitment to a 30% reduction in emissions from developed countries (United States, Australia, Canada, etc) by 2020, subject to the conclusion of an international climate change agreement on the post-2012 Kyoto framework. The main result of the UN Climate Change Conference in Bali in December 2007 was a clear timetable with the deadline set for December 2009 in Copenhagen for the conclusion of an international agreement;
a mandatory EU target of 20% renewable energy by 2020 including a 10% biofuels target. The Parliament had initially supported a 25% renewable energy target.

This strategy was endorsed both by the
European Parliament and by EU leaders at the March 2007 European Council, both of which underlined the right of individual countries to determine how they use their energy resources. Agreement paved the way for a two year action plan to be implemented between 2007 and 2009.

The European Council invited the Commission to come forward with concrete proposals, including how efforts could be shared among Member States to achieve these targets. In response the Commission brought forward in November 2007 a
European strategy plan for accelerating the development and implementation of cutting edge low carbon energy technologies. On 23 January 2008 the Commission published a major energy and climate change package. Central to the proposed package are a set of legislative measures for implementing the "20 / 20 / 20 by 2020" targets (a 20% increase in energy efficiency, a 20% cut in greenhouse gases and a 20% share of renewables in total EU energy consumption, all by 2020.

These include key policy proposals for reforming the
EU Emissions Trading Scheme (ETS) for the period after 2013, the sharing of efforts to meet the EU's independent greenhouse gas reduction commitment in sectors not covered by the EU ETS (e.g. transport, buildings, services, smaller industrial installations, agriculture and waste), revised environmental state aid rules (which also now covers aid for carbon capture and storage projects). Of particular interest for Scotland are the Commission's plans for a new legislative framework for promoting the use of renewables as well as for the safe deployment of carbon capture and storage

The Commission's proposed package was approved by EU leaders at the
European Council in Brussels on 13 and 14 March. In an attempt to ensure the EU retains a key position in the international climate change negotiations, national governments want an agreement on the energy and climate change package by the end of 2008 with its adoption early in Spring 2009 at the very latest. While the EU is good at setting targets, whether the Member States can deliver to make these targets for cutting greenhouse gas emissions a reality will be a key challenge. The wrangles have begun and already it is clear that the Member States differ over how CO2 reduction and renewable energy efforts are to be divided between the different countries and there are concerns about the impact of climate change on the competitiveness of Europe's heavy industries. Issues were raised about the metal sectors such as steel, cement and aliminium being forced to relocate their operations outside Europe if countries with lower environmental standards don't adhere to Europe's strict environmental rules and the job losses this could result in - in Euro jargon, this is the issue of "carbon leakage". Following pressure from some of Europe's heavy industry, Member States like Germany secured safeguards from the Commission against any unfair competition from countries with lower environmental rules.

In the final conclusions, the Commission agreed to add the words: "The European Council recognises that in a global context of competitive markets, the risk of carbon leakage is a concern in certain sectors such as energy intensive industries particularly exposed to international competition that needs to be analysed and addressed urgently in the new ETS directive so that if international negotiations fail, appropriate measures can be taken."

Much of this seems to be part of the EU's fall-back strategy in case of failure to reach an international agreement. But if the EU is to be serious about its playing a leading role in the global fight against climate change and retain public credibility then it has to stand firm with its CO2 commitments that were agreed to by national governments despite the apparent back-tracking from some EU countries.

Then there are the Baltics, who fear that if their energy producers have to pay 100% of emission allowances, this would increase the price of electricity to such an extent that it would force companies to relocate or worse still force them to look to alternative sources of energy, not least Russia. So there are also issues of energy security to be considered.

All of this will be played out in the coming weeks and months. Discussions are now underway in the European Parliament's Energy and Environment Committees. Since the MEPs have the final say on the proposed package together with the national governments in the Council, the European Parliament is in a prime position.

With our vast renewable energy potential and as an important provider and supplier of energy, there is much Scotland can and should contribute to these discussions to ensure a sustainable energy future that is good for Scotland and good for the EU in the long term. Clearly for the SNP we want to see an Independent Scotland control its own energy future with Scotland's energy policy decided in Scotland and based on Scotland's own energy interests. It is therefore all the more important to ensure action taken by the EU on energy and climate change is based on maximum subsidiarity. Where there is added value from a coordinated EU approach to energy matters, such as strengthening Europe's voice on the international stage then intra-EU cooperation makes sense. But ultimate authority over national energy policies and national energy resources must remain with the appropriate domestic authorities. This is not only necessary under the principle of subsidiarity, it is also essential that as Europe's green energy powerhouse future EU energy and climate change policy must be suitable to Scotland's distinctive energy interests.

Wednesday, 2 April 2008

Addressing the gender pay gap in Scotland

Sharing Catherine Stihler's concerns about the gender pay gap as highlighted in the SNP government's recently published annual report into the Gender Equality Scheme, her writing to the First Minister to ask whether the SNP government would consider setting up a task force to address the continuing pay gap in Scotland is a welcome one. But curiously I wonder whether Catherine has also written to the UK Prime Minister and leader of her own Labour party, Gordon Brown, or the UK Minister for Work and Pensions or to any of their predecessors (ever) on this issue as legislation on employment and equal opportunities (including equal pay) is a matter reserved to the UK Parliament.

Perhaps Catherine could urge her colleague Wendy Alexander to include employment law as a competence that her recently established Commission might consider as a prime candidate for devolving to the Scottish government not to mention the tax and benefit arrangements for social security.

Its always good to see a Labour MEP demonstrating once again that the devolution settlement of 1999 is inadequate to meet the aspirations of the people of Scotland. Catherine clearly recognises that the SNP government wants to see a fairer Scotland and that this requires it has all the policy levers under its control. In the meantime perhaps Catherine could also contribute her thoughts on this to the SNP government through its National Conversation.

Tuesday, 1 April 2008

New EU Health Commissioner-Designate

The new European Commissioner for Health, Androula Vassiliou came before the European Parliament's Environment Committee today for her confirmation hearing. The Commissioner-Designate Vassiliou replaces the former Health Commissioner Markos Kyprianou, who resigned his Commission post last month to return to Cyprus as its new Foreign Minister in order to take forward peace talks on the reunification of Cyprus with Turkish and Greek Cypriot communities. The Parliament will vote next week on Vassiliou's appointment as EU Health Commissioner.

Following her grilling by MEPs, the new Commissioner-Designate Vassiliou will have responsibility for a wide range of animal and public health issues as well as food safety. She will also be responsible for controversial EU plans on cross-border health care, which have been repeatedly delayed since the autumn of last year, and in effect would create a single market in public healthcare. These are now expected in June.

The proposed plans follow several rulings by the European Court of Justice for those patients facing "undue delay" on waiting lists to be entitled to treatment in other EU member states with costs reimbursed by national health systems. The aim is to provide a clear legal framework regarding access to cross-border healthcare services under EU internal market rules, outlining how this will work in practice and to improve the quality, efficiency and effectiveness of EU health care systems. It would allow patients in Scotland to travel to hospitals across Europe for health treatment and to claim back costs on the NHS. Once published, the EU's plans are likely to focus attention on the performance of the NHS as compared to health systems across other parts of Europe.

Initial drafts sparked concern among MEPs about "two speed medical care" and "medical tourism" with most member states remaining unenthusiastic and divisions within the Commission itself. Issues were raised as to the need to respect the diversity of healthcare systems and subsidiarity given that the provision of healthcare is the preserve of national governments and in Scotland is devolved to the Scottish Parliament and Government. The draft of December 2007 proposed that the NHS must fund outpatient treatment in Europe so long as the patient has been referred by a medical professional and is suffering delays. This raised various issues of contention as to whether a patient needs to be on a long waiting list to qualify for treatment abroad or can demand it straightaway, and whether the patient needs prior authorisation from the NHS funding body to be able to travel. The UK government wants to retain control over funding and to ensure prior authorisation remains in the hands of member states.

The Commissioner-Designate said that with the new proposal "we are not talking about the freedom of movement of services but about the right of citizens to get healthcare all over Europe". It is supposed to be part of a "social package" to be launched in cooperation with Social Affairs Commissioner Vladimír Špidla to promote access, opportunities and solidarity for all EU citizens. The new proposal is also now to include a 'safety clause' to allow individual member states to take measures if the "export of patients" becomes excessive and damaging to national health systems. Specifically, a country could require patients to ask for prior authorisation before seeking care abroad. However, Vassiliou also pointed out that the ECJ decision states that for non-hospital care, no prior authorisation is needed. As far as hospital care is concerned, "only if there is evidence that the national systems are going to be over-burdened or will suffer financial loss" can the country of origin ask for prior authorisation.

The issue of patient mobility is of direct concern to Scotland given the potential impact any EU framework in this area could have for the NHS. Scotland would be subject to and face any costs resulting from such rulings. It is essential that the full implications of this proposal (when it is finally published in June) for Scotland be properly considered and is certainly one to keep an eye on.