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[Luxembourg 2005 Presidency of the Council of the European Union]
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SAPARD (Special Accession Programme for Agriculture and Rural Development) is a programme intended for the new members and applicant countries from Central and Eastern Europe (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia). The aim is to solve the long-term adaptation problems in the agricultural sector and in rural areas. The programme provides aid for implementing the acquis communautaire with regard to the Common Agricultural Policy and related policies. This financial support applies within the context of the preparation of accession and for a transitional period thereafter. SAPARD will continue until 2006.

Schengen (Agreement and Convention)

The Schengen Agreement between Belgium, France, Germany, Luxembourg and the Netherlands was signed in the village of Schengen in Luxembourg on 14 June 1985. It is aimed at gradually eliminating controls at common borders and establishing a system of free movement of all persons who are nationals of the signatory Member States, other Member States or third countries.

The Schengen Convention was signed by the same five states on 19 June 1990, but did not come into effect until 1995. It defines the conditions and guarantees for implementing freedom of movement. The Agreement and the Convention, the rules adopted on the basis of these two texts and the associated agreements form the “Schengen acquis"?

A protocol annexed to the Treaty of Amsterdam governs the incorporation of the Schengen acquis into the treaties. This legal incorporation was also accompanied by institutional incorporation. The Council took over the Schengen Executive Committee and the Council’s General Secretariat took over the Schengen Secretariat. In addition, the protocol states that the Schengen acquis and the measures taken by the institutions within this field must be accepted in their entirety by all applicant countries. The Schengen area has gradually expanded: Italy signed up in 1990, Portugal and Spain in 1991, Greece in 1992, Austria in 1995 and Denmark, Finland and Sweden in 1996. Iceland and Norway are also parties to this convention.

Ireland and the United Kingdom are not parties to the aforementioned agreements but, in accordance with the protocol to the Treaty of Amsterdam, these two countries may participate in all or part of the provisions of the Schengen acquis if the 13 Member States which are parties to the agreements and the representatives of the governments of the states concerned vote unanimously in favour within the Council.

In March 1999, the United Kingdom requested to participate in certain areas of Schengen-based cooperation, particularly police and judicial cooperation on criminal matters, the battle against drugs and the Schengen Information System (SIS). The decision on the request was adopted by the Council in May 2000. In June 2000 and November 2001, Ireland requested to participate in certain provisions of the Schengen acquis, including all the provisions on the implementation and working of the SIS. The Council adopted the decision approving Ireland’s request in February 2002.

Although already a signatory to the Schengen Agreement, Denmark may choose within the context of the European Union whether or not to apply any new decisions taken on the basis of the Schengen acquis.

The 10 members who joined the Union in May 2004 have applied the Schengen acquis from the time of their accession. However, like Ireland and the United Kingdom, they are not part of the Schengen area. Controls at common borders between participants of the Schengen area and the new Member States of the Union remain in place. The new Member States will join the Schengen area after setting up administrative bodies capable of ensuring improved controls on their external borders.

Single European Act

The Single European Act, which was signed in 1986 and came into effect the following year, introduced the first major amendment to the treaties of 1958. Its main objective was to complete the internal market, especially by broadening decision-making to qualified majority voting. In addition, it strengthened the role of the European Parliament with the aim of reducing the democratic deficit.

Social Charter

In 1989, the Charter of the Fundamental Social Rights of Workers (commonly known as the Social Charter) was adopted in the form of a declaration by all Member States, except the United Kingdom. The charter is regarded as a political instrument containing “moral obligations"? aimed at guaranteeing compliance with certain social rights in the countries concerned. These relate primarily to the labour market, vocational training, equal opportunities and the working environment. It also contains an explicit request to the Commission to put forward proposals for translating the content of the Social Charter into legislation. The United Kingdom signed up to the Social Charter in 1997.

Social dialogue

European social dialogue was started in 1985 and given a legal basis in 1986 under the Single European Act. It designates a concertation procedure carried out by the social partners at European level. It includes discussions between the European social partners, their joint action and negotiations, as well as discussions between the social partners and the European Union institutions. The objective of this dialogue is to involve the social partners in European socio-economic policies.

In order to strengthen the role of trade union organisations, the Maastricht Treaty has imposed mandatory consultation of the social partners on social matters since 1992, and introduced the possibility for the social partners to enter into treaty relations, including agreements.

Social dialogue offers the possibility for the social partners to negotiate framework agreements among themselves. At the end of these agreements they may, if appropriate, ask the European Commission to convert the provisions into a European Union Council directive.

The European Commission consults the social partners on questions relating to social policy before proposing new directives. They provide it with opinions and recommendations.

Stability and Growth Pact

The Stability and Growth Pact (SGP) is an intergovernmental agreement intended to ensure that Member States continue their budgetary discipline efforts once the single currency has been introduced. The SGP was adopted at the Amsterdam European Council in June 1997 and aims to avoid the appearance of excessive budget deficits. It compels states in the eurozone to have budgets that are balanced or nearly balanced in the long term. Along the same lines, non-participating states must submit a convergence programme. The Council may impose sanctions on any Member State which does not take the measures necessary to comply with budgetary discipline. However, unlike monetary policy, the budget policy remains a national power. The SGP has two types of mechanisms:

  • multilateral surveillance (preventive mechanism): the states in the eurozone submit their medium-term budget objectives in a stability programme which is updated each year. An early warning system enables the Ecofin Council, where the economic and finance ministers meet, to draw up recommendations to a state in the event of budgetary indiscipline;
  • the excessive deficit procedure (deterrent mechanism): this is triggered once a Member State exceeds the criterion for public deficit which is set at 3% of GDP, unless there are exceptional circumstances. The Council of Finance Ministers then sends recommendations so that the state will put an end to this situation and, if appropriate, it can impose sanctions.

In November 2003, France and Germany were persistently above the limit of 3% of GDP. In application of the SGP, the European Commission asked the Council’s ministers to initiate an excessive deficit procedure against these two countries. However, the finance ministers rejected these recommendations, while adopting a declaration requiring budget cuts by Germany and France. The Court of Justice of the European Community was informed by the Commission in July 2004, and it quashed the decision by the Council of Ministers to suspend the excessive deficit procedure against Germany and France. While the Court allows Member States a certain margin for manoeuvre in implementing the pact, it considers that the Council of Ministers cannot amend the recommendations without a new impetus from the Commission “which has a right of initiative within the context of the excessive deficit procedure"?. In view of the judgement by the Court of Justice and the budgetary situation of several countries in the euro group, which continue to pose deficits above the 3% limit, a debate on the reform of the Stability Pact was started within the Union and its Member States.

State aid

Article 87 (former Article 92) of the EC Treaty states that “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the Common Market"?

The European Commission and the Court of Justice have given a very broad interpretation to the concept of “aid�? as regards the body granting it, which may range from the State itself to a regional or local authority, from a body over which the State directly or indirectly exerts a decisive influence to a private company or a public corporation, etc.

Accordingly, any advantage conferred by the State is regarded as State aid where it:

  • confers an economic advantage upon the recipient;
  • is granted selectively to certain companies or products;
  • may distort competition;
  • affects trade between Member States.

The prohibition applies to a large number of aid measures, whether direct (grants) or indirect (e.g. measures that ease the financial burden on a company), and regardless of their basis or purpose.

However, an absolute ban on State aid is impossible and the treaty provides for a number of exemptions for aid that are compatible with the Common Market and for aid that may be compatible under certain conditions.

The procedural regulation on State aid stipulates that any aid or aid scheme must be notified to the Commission and approved thereby before being implemented. However, the prior notification requirement has been relaxed by the regulation on the control of horizontal State aid, which authorises the Commission to exempt by way of regulation certain categories of aid, including training aid, employment aid, aid for small and medium-sized enterprises and aid of minor importance.

By drafting new Community guidelines and frameworks, the Commission has clarified the conditions under which other forms of State aid pursuing horizontal objectives, such as regional development aid, environment aid and research aid, may be granted.

Structural Fund and Cohesion Fund

The Structural Fund and the Cohesion Fund are financial instruments of Community regional policy whose overall objective is to strengthen the economic and social cohesion of the European Union. The financial resources devoted to this policy represent approximately one-third of the budget of the European Union (EUR 213 billion for the period 2000-2006) and thus form the second-largest budget item after the Common Agricultural Policy.

There are four structural funds:

  • the European Regional Development Fund (ERDF) finances infrastructures, productive investments to create jobs, local development projects and aid to small and medium-sized enterprises;
  • the European Social Fund (ESF) helps the working population adapt to changes in the labour market and helps unemployed people and disadvantaged groups find jobs by financing training and systems of recruitment aid;
  • the European Agricultural Guidance and Guarantee Fund (EAGGF – guidance section) finances rural development action and aid to farmers, mainly in regions whose development has lagged behind, and as part of the Common Agricultural Policy (CAP) within the rest of the Union;
  • the Financial Instrument for Fisheries Guidance (FIFG) finances the structural reform of the fishing industry.

For the period 2000-2006, the structural funds are pursuing two major objectives in order to:

  • promote the development of regions whose development has lagged behind (objective 1);
  • support economic and social restructuring of zones with structural difficulties (objective 2);
  • encourage adaptation and modernisation of education, training and employment systems (objective 3).

Moreover, the Cohesion Fund (EUR 18 billion for 2000-2006) finances improvements in the environment and transport infrastructures of some Member States. All Member States whose GDP is below 90% of the Community average, and which follow a convergence programme drawn up within the context of the Economic and Monetary Union, can benefit from the Cohesion Fund.


The subsidiarity principle seeks to ensure that decisions are taken as close as possible to the citizen and that constant checks are carried out to ascertain whether action taken at Community level is justified in relation to the options available at national, regional or local level. Specifically, the principle involves the Union taking action only where it is more effective than that taken by the Member States.

The principle applies only to issues where powers are shared between the Community and the Member States. It does not concern areas that come under the exclusive competence of the Community (such as the Common Agricultural Policy), or those which remain within the sole power of the Member States (e.g. the right to nationality).

The Edinburgh European Council of December 1992 defined the basic principles underlying the concept of subsidiarity and the guidelines for its interpretation, which anchors subsidiarity in the EU Treaty. Its conclusions were set out in a declaration which still forms the cornerstone of the subsidiarity principle.

The Treaty of Amsterdam adopted the overall approach that follows from this declaration in a protocol on the application of the principles of subsidiarity and proportionality annexed to the EU Treaty. This protocol introduces, among other things, the systematic analysis of the impact of legislative proposals on the principles of subsidiarity and the use, as far as possible, of less constraining Community measures. Each year, the European Commission writes a report for the European Council and the European Parliament, which is mainly dedicated to applying the subsidiarity principle.

The treaty establishing a Constitution for Europe enshrines subsidiarity as a fundamental principle of the Union. A protocol sets out the arrangements for its application.

Subsidiary powers

On a proposal from the European Commission, the Council may make appropriate provisions without the powers to act required for this purpose being explicitly provided for in the treaty. The Council may also use these powers if joint action is deemed necessary to realise one of the integration objectives.

Suspension Clause

The Suspension Clause was incorporated into the EU Treaty (Article 7) by the Treaty of Amsterdam.

It provides that in the event of a serious and persistent breach by a Member State of the principles on which the Union is founded (freedom, democracy, respect for human rights and fundamental freedoms and the rule of law), that State could have some of its rights suspended (e.g. its voting rights on the Council). However, the obligations incumbent upon that State would still be binding.

The Nice Treaty supplemented this procedure with a preventive mechanism. On a proposal from one-third of the Member States, by the Commission or by the European Parliament, the Council, acting by a four-fifths majority of its members after receiving the assent of the European Parliament, may declare that there is a clear risk of a serious breach of these fundamental rights by a Member State and send appropriate recommendations thereto.

This page was last modified on : 29-12-2004

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