ECONOMY

EU taking hesitant steps to simplify regulations

BRUSSELS (Reuters) – European Union ministers agreed yesterday on plans to rip up rules on pre-packed food sizes, an issue seen as a first big test of the bloc’s willingness to cut red tape. The aim is to remove barriers to competition and give consumers a wider choice as eating habits and lifestyles change. But to bring France, Italy and Spain on board, member states were given up to six years to phase out their restrictions. The European Commission wants to simplify or scrap EU rules that are outdated or put unnecessary burdens on business, and believes member states should no longer be able to mandate food package sizes on home markets. «This is a very important and good example of better regulation… and promotes the free movement of goods throughout the EU, clarifies packaging for industry and promotes the rights and freedom of choice for consumers,» Finnish Industry Minister Mauri Pekkarinen told a news briefing. Member states that have introduced mandatory sizes on milk, butter, dried pasta and coffee packages can continue to impose them for five years, with restrictions on white sugar packages for six years, Pekkarinen said. However, no state is allowed to block imports of packed foods that are legally for sale in another member state but are in sizes different from those sold on the domestic market, Pekkarinen said. And no member state will be required to introduce any size restrictions under the plan, which is now due to go back to the European Parliament for a second reading. Only wine and spirits will have mandatory package sizes after the phase-out period, while restrictions on all other pre-packed foods, such as bread, cocoa and flour, would be lifted immediately. Countries such as France have argued that older consumers could be confused by unfamiliar sized packs of common foodstuffs. Small producers say it would be expensive to recalibrate machinery to different pack sizes. EU Commission Vice-President Guenter Verheugen said the executive’s «flagship» better-regulation policy was on track to beat its target for this year and would be speeded up. In November, the Commission will present a new round of simplification with a target of cutting EU red tape costs by a quarter over five years, he said. Today, he will propose scrapping rules on wood quality that say how many knots are allowed, an EU official said. Monday’s agreement brings EU rules in line with a European Court of Justice ruling that it is illegal to block the sale of a product from another state because the size of its package does not conform to domestic regulations. Split over milk In a Finland meeting yesterday, EU ministers were split down the middle on whether Europe’s milk quota system should continue after its planned expiry in 2015 or be slated for early abolition within a forthcoming review of farm policy. Created in the mid-1980s to deal with the European Union’s milk surpluses, the national quota system is due to be abolished in 2014-15 as part of the mammoth farm reform of 2003. EU Agriculture Commissioner Mariann Fischer Boel has already hinted she might favor a transitional period before quotas come to an end but also indicated that quotas were unlikely to remain much after 2013, when the EU’s current budget period runs out. That view has divided EU agriculture ministers. «The milk quota is important and we hope that it’s possible to continue the system. But it (EU opinion) is divided, there are two groups,» Finland’s Agriculture Minister Juha Korkeaoja told reporters during an informal meeting of EU ministers. Finland’s stance was echoed by Austria, concerned about its dairy industry surviving in more vulnerable areas like mountainous regions where farming benefits from extra EU cash. «The Austrian position is clear. We need a quota system after 2004-15,» Agriculture Minister Josef Proell said. «The future of milk production without quotas is not possible. You would only have milk production in the most productive regions but you lose it in less favored areas and mountainous regions,» he said. Fischer Boel, known not to be a fan of traditional market management tools for the sector, such as production quotas, buying-in intervention and export subsidies, is already drafting her ideas on the future of EU agricultural policy after 2013. The dairy sector is expected to be one of the policy areas that will be a target for reform. «I think it’ll be a very short (phase-out) period. I think most farmers are of the view that quotas are going,» said Ireland’s Agriculture Minister Mary Coughlan. Price differences Pitted against the pro-quota camp were the likes of Denmark, Italy and the Netherlands, which complained of the huge differences around the EU in the price of traded milk production quotas for farmers wishing to produce subsidy eligible milk. That is also Fischer Boel’s view, who says quotas hinder the competitiveness of the EU dairy sector if producers wanting to raise output have to pay large sums of money to buy a quota allocation. Prices in the Netherlands are particularly high, whereas in Ireland, for example, they are far lower. «We need to have this reform on milk quotas. If we are to benefit from globalization, we need a solution on quotas – and in the long term, we need to get rid of them, as early as we can,» said Danish Agriculture Minister Hans Christian Schmidt. Milk quotas have a long history of assuming an importance that diplomats say is disproportionate to their significance, even souring the harmony of EU summits and other major meetings. In 2003, Italy irritated EU finance ministers, trying to clinch a long-awaited savings tax deal, by its refusal to back the plan unless it got a partial write-off on massive fines the EU had slapped on its farmers for overproducing milk.