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MINUTES OF THE MEETING OF THE CHAIRPERSONS OF COSACLimassol, Cyprus, 9 July 2012AGENDA:1. Welcoming address by Mr Averof NEOFYTOU, Chairman of the StandingCommittee on Foreign and European Affairs, CyprusVouli ton Antiprosopon2. Adoption of the agenda, procedural questions and miscellaneous matters3. Priorities of the Cyprus Presidency – guest speaker: Mr AndreasMAVROYIANNIS, Deputy Minister for EU Affairs4. Energy 2010 Strategy - Security of Supply – guest speaker: Mr GüntherOETTINGER, European Commissioner for EnergyPROCEEDINGSIN THE CHAIR: Mr Averof NEOFYTOU, Chairman of the House Standing Committee onForeign and European Affairs, CyprusVouli ton Antiprosopon.Mr NEOFYTOU welcomed the following new Chairpersons: Lord Timothy BOSWELL,Chairman of the European Union Committee of the UKHouse of Lords;and Ms DanielleAUROI, Chair of European Affairs Committee, FrenchAssemblée nationale.1. Opening address by Mr Averof NEOFYTOU, Chairman of the Standing Committeeon Foreign and European Affairs, CyprusVouli ton AntiprosoponIn his welcome address, Mr NEOFYTOU said that the Cyprus Presidency would worktowards creating a better Europe at a critical period for both the Union and its Member States.He underlined that fiscal stability must be accompanied by growth and said that the CyprusPresidency wanted to promote measures for fiscal consolidation at the same time aspromoting the Single Market 12 levers of growth with the aim of creating new jobs.Mr NEOFYTOU noted that the Cyprus Presidency would focus on the completion of thenegotiations on the Multiannual Financial Framework (MFF) and would continue negotiationson the Common Agricultural Policy (CAP) and Cohesion Policy. Furthermore, energy policywould be a priority, especially after the recent discovery of hydrocarbons in the ExclusiveEconomic Zone of the Republic of Cyprus that may prove to be valuable resources for Cyprusas well as for the energy security of supply in Europe as a whole.Referring to the external dimension of the European Union, Mr NEOFYTOU noted thatCyprus' favourable geographic location may help communication with the countries of the"Arab Spring". The Cyprus Presidency would therefore place emphasis on the southerndimension of the European Neighbourhood Policy (ENP). He further noted that Cyprus hasthe ability, if Europe so decides, to host a European Observatory for North Africa and theMiddle East.2. Adoption of the agenda, procedural questions and miscellaneous mattersThe agenda was adopted by the Chairpersons without amendment. Mr NEOFYTOU informedthe participants that the Troika had discussed the draft agenda for the XLVIII COSAC to beheld on 14-16 October 2012 and he presented the topics and speakers for each topic. The1
Presidency agreed to include two speakers from the European Parliament, as discussed duringthe Presidential Troika meeting.The topics to be discussed in the Plenary included: 1. State of Play - Priorities of the CyprusPresidency of the Council of the European Union to be presented by Mr AndreasMAVROYIANNIS, Deputy Minister for EU Affairs; 2. The State of the Union to beaddressed by European Commissioner for Inter-institutional Relations and Administration,Maroš ŠEFČOVIČ, and Mr Carlo CASINI, Chairmanof the Constitutional AffairsCommittee of the European Parliament; 3. Energy - Security of Supply to be addressed by MrNeoklis SYLIKIOTIS, Minister of Commerce, Industry and Tourism; 4. Single MarketGovernance to be addressed by Mr Pierre DELSAUX, Deputy Director General, DG InternalMarket and Services; and 5. Europe 2020 Strategy - Recovery from the Financial Crisis,addressed by Ms Pervenche BERÈS, Chairwoman of the Committee on Employment andSocial Affairs, European Parliament.Mr NEOFYTOU moved on to the consideration of the draft outline of the 18th Bi-annualReport. Following a suggestion by Ms Eva KJER HANSEN, DanishFolketing,it was agreedto add a fourth chapter relating to the governance of the Single Market.With regards to letters to the Presidency, Mr NEOFYTOU noted that there had been none.3. Priorities of the Cyprus Presidency – guest speaker: Mr Andreas MAVROYIANNIS,Deputy Minister for EU Affairs for Climate and EnergyMr MAVROYIANNIS opened his remarks by saying that although the Cyprus Presidencywas just eight days old it was, as a first Presidency, now heading into deep waters. ThePresidency was a unique opportunity for each Member State to contribute more to the EU andto deepen European integration. He said the Cyprus Presidency would be objective andneutral and that the national issue of their relationship with Turkey would not define how itmanaged its Presidency. The Presidency would fully embrace the idea of handing on a betterEurope to future generations.He spoke of two main axes of the Presidency as being: bringing the Union back to theunderlying principles of solidarity and social cohesion; and developing a more efficient, moreeffective, more competitive Europe which would contribute to growth and job creation. Hewelcomed the shift in emphasis of the June European Council more towards jobs and growth.The specific priorities of the Cyprus Presidency he identified were:Europe, more efficient and sustainable:The Presidency would work towards thefinalisation of the negotiations on the MFF which would be its main priority. Within this, itwould focus on the quality of spending, supporting growth, enhancing employmentopportunities, and on EU policies with real European added value and on progressing theappropriate sectoral policies. The Presidency hoped to balance the need for fiscalconsolidation with the requirement to stimulate growth and jobs. The sustainable managementof resources, especially water, was also a Presidency priority.Europe, with a better performing and growth economy:It would work on the newenhanced framework of economic governance and reinforce budgetary surveillance and onmeasures which focused on fiscal consolidation and sustainable economic growth. In markingthe 20th anniversary of the Single Market, the Presidency would give impetus to the
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deepening of the internal market, through the promotion of relevant initiatives emphasising inparticular the role of SMEs.Europe, more relevant to its citizens, with solidarity and social cohesion:The Presidencywould work towards bringing Europe closer to its citizens, emphasising measures to combatyouth unemployment, the completion of the Common European Asylum System by the end of2012, and issues related to the European Year of Active Ageing and intergenerationalsolidarity. In addition, the new legal framework for the protection of personal data is a furtherpriority issue.Europe in the world, closer to its neighbours:The Presidency would place specialemphasis on the southern dimension of the ENP, in order to enhance the relations withMediterranean partners. It would also promote all processes related to enlargement and anyexternal trade policies which encourage growth. He thought that the Arab Spring had takenEurope by surprise. In future, Europe should help to ensure pluralism in these societies andhelp create conditions for all people to access society especially those supporting democraticprinciples. The EU should operate on the principle of "more for more" in these countries; thatis to say the EU must ensure that the democratic transition continues and religious and otherfreedoms are protected.In the debate which followed 20 speakers took the floor and most were satisfied with thepriorities chosen by the Presidency. Ms Melita MULIC, CroatianHrvatski Sabor,thanked alldelegations who had so far ratified the accession of Croatia in their parliaments and said thatthe reforms required for accession were worthwhile. Mr Vladimir TOSHEV, BulgarianNarodno Sabranie,hoped the Presidency would recognise Bulgaria's willingness to join theSchengen Agreement. He and Mr Rainer ROBRA, GermanBundesrat,both argued for themaintenance of the current level of Cohesion funding in the MFF, with Mr RichardHÖRCSIK, HungarianOrszággyülés,noting that it was a central policy for the EU.Mr Günther KRICHBAUM, GermanBundestag,said that the financial crisis was essentially acrisis of confidence and that the proposed use of the ESM and the new Fiscal Compact wouldhelp to create more confidence. On the MFF he believed that too much was being allocated tothe CAP and not enough on research. He was concerned also about the recent events inRomania and the maintenance of an independent judiciary there. Mr Vasile NEDELCU,RomanianCamera Deputatilor,was given the floor in response and stated that theConstitutional Court in Romania was not being dissolved as some had believed. Mr FritzNEUGEBAUER, AustrianNationalrat,in a comment on the MFF supported the introductionon the Financial Transaction Tax (FTT). Mr Carlo CASINI, European Parliament, askedabout Cyprus' plans for the discussions on the banking union and on the need, in general, topursue the community method. Mr William CASH, UKHouse of Commons,stated that therewas not enough open discussion on the financial crisis in the EU and called for a conventionon the future of European institutions involving EU leaders and national Parliaments.Mr Arni Thor SIGURDSSON, IcelandicAlthingi,gave an update on the Icelandic accessiontalks; 18 chapters were open and 10 had been closed. The fisheries chapter was not yet openand he was concerned that the dispute about the mackerel fishery was delaying matters eventhough it was not part of theacquis.Mr Simon SUTOUR, FrenchSénat,and Mr MiltiadesVARVITSIOTIS, GreekVouli Ton Ellinon,expressed disappointment that Turkey had notengaged with the Cyprus Presidency. Mr Francis ZAMMIT DIMECH, MalteseIl-Kamra
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Tad-Deputati,on ENP noted Malta's role in coordinating the evacuation of EU citizens fromLibya.In a general response, Mr MAVROYIANNIS noted that the Presidency was in favour ofIcelandic accession and would open as many chapters as possible but acknowledged that thefisheries chapter was difficult. They would progress the banking union proposals as quickly aspossible and would adhere to the community method. On the MFF he said that they hoped tofind a compromise and that the FTT, while it would be progressed under enhancedcooperation, could not be adopted as an own resource. In this regard own resource fundingwas a major problem for the EU for which Member States would have to find a solution. OnTurkey he noted that its behaviour is degrading itself and casts doubt upon its owncommitment towards EU principles.
4. Energy 2010 Strategy - Security of Supply – guest speaker: Mr GüntherOETTINGER, Commissioner for EnergyMr Günther OETTINGER, European Commissioner for Energy, opened his address bypointing out that the next big step for European integration would have to be made in the fieldof energy policy: the Single Market for oil was completed; and the single market for coalwould be operational with the ending of subsidies in 2018. The real issue was to create theSingle Market for gas and electricity. There were still plenty of public utility companieswhich were not competing on the open market.Mr OETTINGER outlined the aims for a European energy policy: 1. security of energysupply; 2. solidarity: Member States should be able to help one another; 3. affordability ofenergy and choice for consumers; 4. renewable energy and the reduction of carbon dioxide(CO2) emissions - which would only be achieved through adequate infrastructure. In hisanalysis the Commissioner came to the conclusion that for oil, petrol and diesel the existinginfrastructures were almost perfect, with those for coal categorised as very good, but for gasand electricity they were insufficient.In other areas, such as transport and information technology, trans-European networks didexist, Mr OETTINGER pointed out, but this was not the case for electricity which could notbe transported, for example, from Spain to Germany. Very often there were no reverse-flowpossibilities for gas which could ensure security of supply. Based on these examples MrOETTINGER advocated the creation of trans-European energy networks which had to includecountries in the Western Balkans as well as Switzerland, Norway (with its big storagecapacities) but also Ukraine and Turkey. Only the inclusion of the southern and easternMediterranean shores would create a true pan-European energy infrastructure.Turning to recent market developments, the Commissioner underlined that, due to theindependence of the United States from gas imports (due to the extraction of own shale gasresources), liquefied natural gas (LNG) from Qatar was now available for transport to Japanor Rotterdam, making gas a truly global product. He argued that LNG terminals anddistribution networks should be built also around the Baltic Sea. To trigger a similardevelopment in the area of electricity, modern infrastructures within the EU Member Stateswere needed, especially interconnectors between national electricity networks which alsoapplied to gas pipelines,.
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Therefore, Mr OETTINGER said, the Commission was making plans for more gasconnections in more regions, such as the North Sea or Central Eastern European Countries.However, there were still obstacles to overcome; to increase the speed of issuingadministrative planning permits, the Commission would publish its network priorities atEuropean level. In addition, the European Commission had proposed €9 billion under theConnecting Europe Facility (between 2014 and 2020) to support some gas connections whichwere not economically viable, such as the connection between Greece and Cyprus. MrOETTINGER also brought up the subject of the €4 billion made available under theEconomic Recovery Programme for energy projects such as electricity grids, gas pipelineinterconnectors, LNG and carbon capture and storage facilities.Finally, Mr OETTINGER turned to energy efficiency - referring to the agreement reachedbetween the Council and the European Parliament on the Energy Efficiency Directive in firstreading two weeks before - and the production of renewable energy. The latter still posedsome problems since, compared to the legally requested storage facilities for oil and gas (bothabove the required limits of 90 days and 30 days of consumption respectively), the currentstorage capacities for electricity were equivalent to just 20 minutes of consumption. The issueof the base load capacity of tidal energy, wind and sun was to be addressed. He proposed aEuropean policy to encourage optimal location of these energy production capacities. Inparticular, solar energy required European cooperation and, at a later stage, integration withinthe EU. Moving to 30 percent or 50 percent of renewable energy would only be possible withmore European cooperation, the Commissioner concluded.In the debate which followed, 15 speakers took the floor, many of whom emphasised theimportance of completing the single market for energy, in particular to ensure energy securitythroughout Europe. The Commissioner agreed and confirmed that the Commission wasworking hard towards this aim and expressed the hope that recent proposals on this topicwould be agreed in the next 6 months by the Council and the European Parliament. He notedthat the production infrastructure required serious improvement and investment and hespecifically called for planning procedures for infrastructure projects to be accelerated.In reply toMr Česlovas Vytautas STANKEVIČIUS,LithuanianSeimas,and Mr AndrejGAŁAŻEWSKI, PolishSejm,Mr OETTINGER offered his support in finding investors forthe construction of new nuclear power plants. At the same time he mentioned that storage andreverse flow facilities, gas interconnectors and the projected LNG hubs would contribute toincrease security of supply for countries that still depended heavily on one source of energyproduction or one single supplier.Mr HÖRCSIK emphasised the importance of connections between European countries forensuring energy security. Mr OETTINGER said that he recognised that European co-financing was badly needed to improve interlinks and infrastructure in countries "on themargins" but that agreements were difficult to negotiate. In response to a question by MrZAMMIT DIMECH, Mr OETTINGER said that EU action was needed to help countries likeMalta and Cyprus, currently on the edge of the grid, take advantage of their location whichwas of strategic importance. He also highlighted the importance of the greater Europeanenergy area and energy links to the Caspian region and North Africa, encouraging thecontinued creation of such links to neighbouring regions and countries including Norway.A number of Members raised the issue of sustainable energy sources and, when questioned onthe sustainability of biofuel, Mr OETTINGER said that its sustainability was questionable in
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many cases due to the carbon used for transportation. He encouraged the greater use of locallycreated biomass instead. In reply to a question by Lord BOSWELL, the Commissioneranswered that the Emission Trading Scheme (ETS) was a problem due to the unpredictabilityof price of carbon, but that he hoped there would be an improved proposal on this matter bythe end of 2012. Mr Dominic HANNIGAN, IrishDáil Éireann,highlighted the importance ofenergy efficiency and he emphasised the need for the single market in energy to stimulategrowth.Mr CASH said that energy was also a foreign policy issue and asked what approach the EUwould take on the Turkish approach towards the economic interests of Cyprus. MrOETTINGER said that the EU would defend the interests of its Member States in this regard.The European Commission was ready to support Cyprus to exploit the opportunities in theregion.Several interventions concerned the future energy mix, some pro, some contra the use ofnuclear power generation. Mr KRICHBAUM asked if the European Commission wasinvolved in the storage of nuclear waste. Mr Edgar MAYER, AustrianBundesrat,expressedthe view that nuclear energy was not a sustainable energy source. Mr Othmar KARAS,European Parliament, stated that this question remained in the remit of Member States andthat it would certainly not result in a consensus soon. Instead he proposed that nationalParliaments do everything they could to remove the obstacles for building new energyinfrastructures in order to complete the internal market for electricity and gas. Ms AUROIpointed out that one should always ask the question of the impact of political decisionsconcerning the energy mix; some fossil fuels would have to be saved for the time after 2050.Commissioner OETTINGER, in his reply, warned of an uncontrolled development of newrenewable energy sources. The development of renewable energy sources would have to beaccompanied by the construction of energy transport grids in parallel. He said that theEuropean Commission remained neutral concerning the use of nuclear power; it was onlyinvolved in safety aspects. The Nuclear Waste Directive obliged Member States to storenuclear waste within their own borders or coordinate storage with another EU Member Stateand prohibited storage agreements with third countries. With reference to the MFF 2014-2020and the Connecting Europe Facility contained therein (€9bn over seven years) he underscoredthe importance of new energy infrastructures: if they were not built, no internal market forenergy could emerge. To this end, the Commissioner offered to have his services preparecountry-specific recommendations for the construction of energy networks which could besubmitted to the COSAC and/or national Parliaments for discussion.
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