Austria settles into EU hot seat

Employment, enlargement and the European constitution will top the list of priorities for the Austrian EU presidency in the first half of 2006.

In what has been dubbed the European year of workers’ mobility, Vienna will try to get to grips with two of the most controversial pieces of employment legislation, on working time and the free movement of services.

The Austrians are keen to conclude negotiations on rules defining European working hours, but there are still significant disagreements over issues such as the UK’s opt-out and whether on-call time counts towards the 48-hour working week.

But while finding a consensus on working time is likely to be tough, it is nothing compared to the difficulties Vienna faces in brokering a deal on the free movement of services.

The European Commission’s proposals to open up the market for services has highlighted the major rift between protectionist ‘old’ Europe – embodied by countries such as France – and the more liberal ‘new’ Europe, championed by the UK.

The so-called Bolkestein directive, named after the former commissioner who drew up the proposals, was one of the key reasons for the rejection of the EU constitution by French voters in May 2005.

The European Parliament has already rejected amendments by German centre-left MEP Evelyne Gebhardt strengthening the protectionist stance, and the second reading in February is likely to be an acrimonious affair.

The free movement of workers will also come under scrutiny during Austria’s tenure.

The 12 ‘old’ EU member states that voted to control access to their labour markets by workers from the 10 new member states have to decide by May 1 whether to extend the restrictions for a further three years.

Other key employment issues likely to be debated during the first half of 2006 include the transfer of pension rights between EU countries and the future of the European ‘social model’.

Enlargement

Vienna will also oversee the final reports on the latest round of enlargements, with Bulgaria and Romania due to join the EU in January 2007.

It is also likely to further assess the membership credentials with Croatia and other former Yugoslavian countries in the western Balkans.

Convincing EU citizens of the benefits of further enlargement will also be a key factor in resurrecting the issue of the European constitution, another pledge from Vienna.

But rumours that several EU countries are unwilling to consider overhauling the text of the constitution, despite its clear rejection in France and the Netherlands, make the chances of the ‘period of reflection’ coming to an end under the Austrian presidency highly unlikely.

Budget

Austria will also have the unenviable task of convincing MEPs to back the proposals for the new EU budget for 2007-2013, agreed in extremis at the European Council in December.

Parliament has already expressed its concerns at the reduction in funds for key areas, such as research and development, and Austrian Chancellor Wolfgang Schüssel will need to build on the debating skills of his predecessor, Tony Blair, if he is to convince a sceptical hemicycle to back the budget deal by March. 

Other economic issues to be tackled by Vienna include the much-maligned Lisbon agenda to boost growth and jobs, the controversial extension of reduced VAT rates for labour-intensive industries and commission proposals for a single market for payment systems.

The Austrians will also assess the readiness of several of the new member states to join the euro – possibly as early as 2007.

JHA

Vienna also has a couple of tricky dossiers to handle in the field of justice and home affairs.

The transfer of passenger name records between the EU and the US could be blocked by the European Court of Justice, potentially playing havoc with transatlantic air travel and undermining the two blocs’ fight against terrorism.

And relations between Brussels and Washington could come under further strain following the findings of ongoing investigations into the existence of secret CIA camps in several EU countries.

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