Brussels, 17 May 2004

The Council had a public debate on issues summarised by Commissioners LIIKANEN , MONTI and BUSQUIN on the basis of the recent Commission communications covering aspects of Competitiveness and Innovation and on approaches to Better Regulation. Pursuant to that, the Council adopted the respective conclusions set out below, and underlined that in accordance with these conclusions, further examination and analysis of the communications will take place under the next Presidency, together with work on Better Regulation and Impact Assessment.

"THE COUNCIL OF THE EUROPEAN UNION,

1. IN THE LIGHT OF recent analyses and policy recommendations provided by the Commission1 and of subsequent comment2;

2. NOTES the Commission's view that there is no evidence, at this stage, that a general process of deindustrialisation has been taking place in the European Union but that this gives no grounds for complacency; also notes the Commission's view that weak productivity growth, insufficient innovation and investment in R&D, in a context of intensifying international competition and delocalisation are challenging trends which, if sustained, could severely undermine the competitiveness of industry with serious consequences for the EU;

1 Commission Communication on Fostering structural change: "An industrial policy for an enlarged Europe", doc. 8875/04 COMPET 57 IND 53 MNI 136 ECO 92 - final.

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• Report from the Commission to the European Parliament, the Council and the European

Economic and Social Committee: "Life science and biotechnology - a strategy for Europe - second progress report and future orientations", doc. 8440/04 RECH 70 ENV 230 CONSOM 33 SAN 63 DEVGEN 87 MI 123 IND 47 AGRI 97 SOC 187 RELEX 140 EDUC 88 - final.

• Commission Communication on "A Pro-active Competition Policy for a competitive

Europe", doc.8923/04 RC 11 COMPET 58 - final.

• State Aid Scoreboard: spring 2004 update, doc.8922/04 RC 10 COMPET 59 ECO 96 -

final.

2 Presidency summary of proceedings from the Informal Ministerial meeting in Ireland, 25- April 2004.

3. ACKNOWLEDGES the opportunities for industry created by enlargement to strengthen its value-chain across the entire EU;

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4. RECOGNISES the need to solve the problems of weak growth and persistent unemployment in the European Union; and that a better operating environment for business will help to stimulate and encourage economic activity leading to economic growth, enabling European firms to become global players, creating jobs and prosperity of European Union citizens; and that an open European trade policy shall not prevent the EU from using existing mechanisms to maintain a level playing field;

5. CONSIDERS that actions which boost competitiveness and innovation, entrepreneurship and small firms and increased investment in research in a barrier-free internal market, and which facilitate and encourage necessary structural change are now imperative;

6. STRESSES the continued need for an integrated policy approach and supporting structure to give priority to the implementation of the competitiveness agenda in order to achieve the Lisbon objectives of sustainable growth during the second phase of the process;

7. VALUES the expected benefits of the pro-active approach to competition policy enforcement, which will see both Commission and Member States work together to implement and enforce competition rules to ensure a level playing field for all economic operators in the European Union and encourage more competition in the Internal Market;

8. CONSIDERS that life sciences and biotechnology are important for the development of a knowledge-based economy and as key enabling technologies for future industrial development and innovation, and recognises the importance of effective governance, the need for strengthened collaboration between Member States and the Commission, continuous dialogue between the relevant stakeholders, and the need for full commitment of all to proactively support evolving actions under the EU Life Sciences and Biotechnology Strategy, as set out in the Commission's progress report;

Calls on the Commission and Member States Within Their Respective Competencies to

9. Improve the coherence between policies having an impact on enterprise competitiveness and exploit the synergies between policies, thereby better directing legislation and future policies;

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10. Take into account the diverse characteristics of individual sectors, to anticipate and facilitate potential structural changes and to identify the best policy mix to strengthen sectoral competitiveness, without prejudice to the horizontal nature of industrial policy;

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11. Avoid and remove unnecessary regulation and administrative burdens, and exploit e- government and one stop shops, having regard to the cumulative impact of legislation;

12. While remaining focussed on the objective of reducing the overall level of state aid, continue efforts to simplify and modernise the state aid framework in order to contribute to the objective of reorienting aid towards horizontal objectives, in particular innovation as well as research and development;

13. Implement by the due date and enforce effectively legislation, which is necessary to create a legally predictable operating environment for business;

14. Implement the legislative framework for GMOs and pharmaceuticals now in place and to implement intellectual property legislation where this has not yet been done;

15. Identify and take appropriate action in those sectors of the economy, including services, where the absence of effective competition is hampering innovation and curbing business competitiveness;

16. Put in place policies and measures, which could include public-private partnerships, to encourage innovation, to stimulate private investment in research, to strengthen excellence in public research, to increase the supply of skilled human resources, and to stimulate and enable enterprises to network with universities, in order to fully exploit the economic benefits of knowledge;

Commits Itself to

17. Promoting appropriate regulation which stimulates economic activity and does not hamper it; examining existing regulation in the light of the principles of better lawmaking, within a clear timetable; and considering, where appropriate, alternatives to regulation;

18. Ensuring that the important internal market legislative decisions aimed at improving the protection of intellectual property rights, implementing an effective internal market in services and developing a single European Union capital market are adopted without delay so that the strengths of the European Union in innovative and technology-based enterprises can be fully exploited;

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19. To further examine the analysis and policy recommendations provided by the Commission in order to decide what further steps need to be taken, and to set out priorities on these at its meeting in September."