SUMMARY

PARTICIPANTS 3

Items discussed

IMPACT AND EFFECTIVENESS OF THE SINGLE MARKET 5

SLIM INITIATIVE (SIMPLER LEGISLATION FOR THE INTERNAL MARKET) 6

PROCEDURES FOR THE AWARD OF PUBLIC CONTRACTS 7

LEGAL PROTECTION OF DESIGNS 8

STATUTE FOR A EUROPEAN COMPANY (SE) AND EMPLOYEE INVOLVEMENT 9

FREE MOVEMENT OF PERSONS 9

FREE MOVEMENT OF TRAVEL GUIDES AND SKI MONITORS COMING FROM ANOTHER

MEMBER STATE 10

ROBERT SCHUMAN PROJECT 10

CITIZENS FIRST 10

EXTRACTION SOLVENTS 11

Items adopted without discussion

Dangerous substances and preparations I

European Mutual Society - Progress report I

Community Customs Code II

Customs Union - Agreement with Korea III

Fisheries - Agreement with Mauritania III

Common marketing standards for fisheries products III

Interconnection in telecommunications

- Convening of the Conciliation Committee IV

Programme of Community action on health monitoring in the context of action on public health

- Convening of the Conciliation Committee IV

Reduction of smoking - Resolution IV

___________________

The Governments of the Member States and the European Commission were represented as follows:

Belgium:

Mr Eric DERYCKE Minister of Foreign Affairs

Denmark:

Ms Mimi JAKOBSEN Minister for Industry

Mr Joergen ROSTED State Secretary

Germany:

Mr Lorenz SCHOMERUS State Secretary, Federal Ministry for Economic Affairs

Greece:

Mr Alekos BALTAS State Secretary for Economic Affairs

Spain:

Mr Ramón DE MIGUEL State Secretary for Foreign Policy and the European Union

France:

Mr Michel BARNIER Minister attached to the Minister for Foreign Affairs, with responsibility for European Affairs

Ireland:

Mr Enda KENNY Minister for Tourism and Trade

Italy:

Mr Giorgio BOGI State Secretary

Luxembourg:

Mr Georges WOHLFART State Secretary for Foreign Affairs, External Trade and Cooperation and Public Works

Netherlands:

Mr Michiel PATIJN State Secretary for Foreign Affairs

Austria:

Ms GEBETSROITHNER Deputy Permanent Representative

Portugal:

Mr Francisco SEIXAS da COSTA State Secretary for European Affairs

Finland:

Mr Antti KALLIOMÄKI Minister for Trade and Industry

Sweden:

Mr Björn VON SYDOW Minister, Ministry for Trade and Industry, with responsibility for Trade

United Kingdom:

Mr Roger FREEMAN Chancellor of the Duchy of Lancaster, Minister for Public Services

* * *

Commission :

Mr Mario MONTI Member

IMPACT AND EFFECTIVENESS OF THE SINGLE MARKET

The Council held an open debate on the impact and effectiveness of the internal market, based on an overall assessment from the Commission. This was the first comprehensive review of the subject since the launching of the Internal Market Programme a decade ago.

The Commission's assessment as outlined in its communication "The impact and effectiveness of the Single Market" is broadly positive, showing that the economic and social benefits of the internal market are now beginning to make themselves felt. However, it also highlights a number of missing links for the establishment of a genuine internal market and makes recommendations for filling these gaps. The Commission suggests that the European Council, at its next meeting, confirms its support for a renewed commitment to the single market.

Commissioner Monti announced that he would make available in the near future additional information about the effectiveness of the internal market, including the detailed results of the various studies undertaken on the Commission's behalf and a booklet intended for the general public.

Furthermore, he announced that the Commission would come forward, during the first half of 1997, with specific projects for filling the gaps identified in the functioning of the single market. Areas mentioned during the debate where such gaps exist include the energy, transport and telecom sectors.

Closing the debate, the President drew the following conclusions which will be conveyed to the European Council meeting in Dublin in December:

"The Commission communication has provided a welcome opportunity for the Council to take stock of the state of the single market and of the action that is still necessary both at national and Community level to further improve its effectiveness.

The debate held today was very useful. Most delegations share the Commission's analysis of the successes and weaknesses of the single market and support its recommendations for action. The Council looks forward to receiving more detailed information as announced by the Commission.

It is to be expected that the European Council will confirm its support for a renewed commitment to the single market, as asked for by the Commission.

The discussion made it clear that the Council reaffirms its commitment to the achievement of a Single Market, including finishing off the 1985 White Paper, which meets the needs of the Union, and continued vigilance against trade barriers.

Delegations expressed views in particular with regard to

- stressing the importance of the single currency for the internal market;

- promoting convergence and generating employment through increased competition as a key to improved international competitiveness in a worldwide economy;

- promoting and extending the opportunities for businesses and citizens to take advantage of the Single Market;

- recognizing that the protection of consumers and in particular of health and safety is a common concern in the context of the Single Market;

- ensuring mutual recognition of rules and regulations and the proper enforcement of Community rules across the entire Single Market;

- simplifying and increasing the transparency of Community rules and regulations;

- responding to the requirements of tomorrow's economy by extending the internal market to new areas of products and services."

The Netherlands delegation stressed the forthcoming Presidency's commitment to pursue the examination of the questions raised in the Commission's Communication.

SLIM INITIATIVE (SIMPLER LEGISLATION FOR THE INTERNAL MARKET)

After extensive discussion of the Commission report on the draft SLIM project, the Council adopted the following conclusions:

"The Council, recalling its Resolution of 8 July 1996 on legislative and administrative simplification in the field of the Internal Market and having taken note of the recent Commission Communication on the SLIM Initiative (Simpler Legislation for the Internal Market), confirms its view that simplification and improvement of legislation will contribute to the better functioning of the Internal Market and hence to improving competitiveness and the creation of employment within the Union.

The Council welcomes the fact that the pilot phase of the SLIM initiative has yielded concrete and positive results and invites the Commission to come forward as soon as possible with proposals to adjust the legislation concerned, whilst maintaining and strengthening the Community "acquis", and, where appropriate, to make recommendations to improve administrative practice in the fields concerned. It undertakes to deal with such proposals expeditiously.

The Council confirms the desirability of extending the SLIM initiative to other areas of Community legislation for the Internal Market. It takes note that the Commission will decide on the areas to be covered by the second phase of the SLIM Initiative after consultation with the Member States in the Advisory Committee for coordination in the Internal Market field, as well as other appropriate forums and having regard also to the studies undertaken by the Commission in evaluating the impact and effectiveness of the Internal Market.

It recognises that efforts to simplify legislation should not be limited to the Community level but must also be pursued at national level where appropriate.

The Council underlines the need for transparency and for keeping all Member States fully informed during all phases of the SLIM initiative. The Council invites the Commission to make regular reports to the Council on progress achieved."

It is noted that in the first phase of the pilot project the Commission concentrated on four sectors, concerning the Intrastat system for collecting statistics on intra-Community trade, the mutual recognition of diplomas, legislation on construction products and plant health rules for ornamental plants.

PROCEDURES FOR AWARDING PUBLIC CONTRACTS

The Council recorded a unanimous political agreement on the amendment of the Community directives relating to public contracts in the light of the Agreement on Public Procurement (APP) resulting from the Uruguay Round. The common position will be formally adopted after legal/linguistic finalization of wording. It will then be forwarded to the European Parliament which will proceed to its second reading within the framework of the co-decision procedure.

The two proposals in hand are designed to amend

- the directives on contracts for services, supplies and works applying to the public sector (Directives 92/50/EEC, 93/36/EEC and 93/37/EEC);

- the directive on the "excluded" sectors, namely water, energy, transport and telecommunications (Directive 93/38/EEC).

The agreement re-affirms the position taken by the Council (Internal Market) on 23 November 1995, which could not be approved earlier in the absence of the Opinion of the European Parliament. It takes account of the Commission's amended proposals.

The amendments thus made to Community legislation on public contracts follow upon the Agreement on Public Procurement (APP) resulting from the Uruguay Round, which has been in force since 1 January 1996. They align the procedures taken from the directives referred to on those laid down in the APP, in order to avoid simultaneous existence of differing Community and international rules, and to prevent reverse discrimination with regard to Community enterprises, i.e. more favourable treatment for tenders from third countries.

LEGAL PROTECTION OF DESIGNS

The Council held a detailed discussion of the proposal for a directive on the legal protection of designs, with a view to arriving at a common position.

Very considerable progress was made on the basis of an overall compromise drafted by the Presidency. However, it was not possible to solve the most controversial problem: that of the "repair" clause. While, as part of an overall package, all the Member States would be able to accept the Presidency's compromise on this - the main effect of which was to temporarily waive harmonization of the relevant national legislation - the Commission was unable to endorse it since such a solution was fundamentally different from its amended proposal based on an amendment by the European Parliament.

In the light of the Commission's position on this clause, the Member States's unanimity on the overall compromise would have been required to adopt a common position. Such unanimity was not possible in view of the fact that one Member State could not accept another of the elements of the overall compromise, namely Community exhaustion of rights.

The Presidency therefore noted that there was no agreement on a common position at present, but left its overall compromise on the table.

It should be realized that the purpose of the directive is to approximate the laws of the Member States on the registration of designs, in order to reduce the legal obstacles to the movement of goods to which designs are applied.

STATUTE FOR A EUROPEAN COMPANY (SE) AND EMPLOYEE INVOLVEMENT

Commissioner Monti informed the Council regarding the mandate and timetable of work of the Independent Working Party of Experts which was to find ways of freeing the proposal for a Regulation on the Statute for a European company (SE) from the current impasse.

The Working Party is chaired by Mr Etienne Davignon, the former Vice-President of the Commission. Its mandate is restricted to finding solutions relating to the role of employees within the context of the European Company. The Working Party must submit a report at the beginning of 1997.

The present proposal on the SE has been before the Council since 1989. The dossier has been held up because of positions which are at present irreconcilable concerning the system of employee participation in the decision-taking bodies within an SE. This problem also affects the proposals on the statutes of the European Association, the European Cooperative and the European Mutual Society.

FREE MOVEMENT OF PERSONS

The Council took note of the announcement made by Mr Monti that the Commission intended to make a number of amendments, following the opinions delivered by the European Parliament, to its proposals for directives on

- the elimination of controls on persons crossing internal frontiers;

- the right of third-country nationals to travel within the Community.

The Commission does not however intend to amend its proposal on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families and the abolition of restrictions on movement and residence within the Community for nationals of Member States with regard to establishment and the provision of services.

These three proposals (known as the "Monti package") are intended to give practical form to the objective in Article 7a of the EC Treaty of creating an area without internal frontiers ensuring free movement of goods, services, capital and persons, by bringing this area into existence with regard to the free movement of persons, the only area in which it has not yet been implemented in full.

FREE MOVEMENT OF TRAVEL GUIDES AND SKI MONITORS COMING FROM ANOTHER

MEMBER STATE

The Council held a brief discussion on this subject at the request of Germany. It took note of the information supplied by the delegations concerned and by the Commission, who were in close contact with a view to resolving any problems arising for the professions concerned.

ROBERT SCHUMAN PROJECT

Mr Monti presented this Commission initiative which is designed to improve application in Member States' courts of the rules necessary to the operation of the internal market by improving the training of judges and lawyers and making them better informed on Community law.

The Robert SCHUMAN project will, through temporary and conditional financial support, help eligible institutions launch training and information programmes on Community law for judges and lawyers and carry out accompanying measures likely to increase the effects of training or information programmes.

The Commission is proposing a Decision of the European Parliament and of the Council for this purpose. The project would last three years (1997-1999) with a budget of ECU 5,6 million; it would be designed as a programme to encourage and support the initiatives undertaken in the Member States.

CITIZENS FIRST

Alongside the Council meeting, the Ministers took part in the opening ceremony of the "Citizens First" information campaign, which was held on the premises of the European Parliament in Brussels. President Hänsch (European Parliament), President Santer (Commission), Mr Maragall (Chairman of the Committee of the Regions) and Mr Jenkins (Chairman of the Economic and Social Committee) were also present.

The aim of the campaign is to demonstrate the advantages and possibilities which the single market offers to citizens.

EXTRACTION SOLVENTS

With the aim of reaching a common position, the Council discussed the proposal for a Directive amending for the third time Directive 88/344/EEC on the approximation of the laws of the Member States on extraction solvents used in the production of foodstuffs and food ingredients.

At the close of the discussions, the President noted that there was political agreement, by a qualified majority, on the common position. The text would therefore be adopted as an "A" item as soon as the Economic and Social Committee had delivered its Opinion. The European Parliament, for its part, had approved the Commission proposal without amendment. The Danish delegation announced its intention of voting against the common position.

The aim of the proposal is twofold:

- to adapt the positive list (list of authorized substances) annexed to the Directive, by

= deleting a substance which the food industry apparently no longer uses (methyl-propanol-1);

= changing the conditions of use and reducing the authorized maximum residues for hexane;

= authorizing a new extraction solvent used in the preparation of flavourings: 1,1,1,2-tetrafluoroethane.

- to simplify the procedure for making the necessary adjustments of the Directive to technological progress. Having to use a proposal based on Article 100a of the Treaty every time was thought too cumbersome in an area in which adjustments to technical progress and scientific knowledge had not hitherto elicited any substantive objections from either the European Parliament or the Council.

Henceforth, decisions relating to new substances to be added to the positive list, conditions of use and maximum residue levels would therefore be taken in accordance with a regulatory Committee (Committee IIIa) procedure.

OTHER INTERNAL MARKET DECISIONS

(Adopted without debate. Where these are legislative acts, votes against or abstentions are indicated. Statements which the Council has decided to release to the public may be obtained from the Press Office.)

Dangerous substances and preparations

The Council adopted, with the abstention of the Danish delegation, its common position on the proposal for a Directive amending for the fifteenth time the Council Directive harmonizing Directive 76/769/EEC relating to restrictions on the marketing and use of certain dangerous substances and preparations (originally worded "...amending for the sixteenth time...").

The aim of the text is to transpose at Community level PARCOM Decision 96/1 on the phasing-out of the use of hexachloroethane, a toxic substance which results in bioaccumulation in the ecosystem.

The Directive aims at adding hexachloroethane (HCE) to Annex I to Directive 76/769 so that its use is prohibited in the manufacturing or processing of non-ferrous metals. By way of derogation, Member States may however allow its use on their territories:

- in non-integrated aluminium foundries producing specialized castings for applications requiring high quality and high safety standards and where consumption is less than 1,5 kg of HCE per day on average;

- in the production of certain magnesium alloys.

Those derogations will be reviewed at the end of 1998.

Member States should apply the Directive from 1 January 1998.

European mutual society - progress report

The Council took note of the progress report on the amended proposal for a Regulation on the Statute for a European mutual society and the amended proposal for a Directive supplementing the Statute with regard to the involvement of employees.

It emerged from the first reading of this proposal, started under the Irish Presidency pending a solution to the main problem - the involvement of employees - that some delegations are unconvinced of the necessity of establishing a statute for a European mutual society although others insist on the value of this legal instrument. Most delegations have still to finish examination of the proposal in their capitals, but some main issues and preliminary guidelines have emerged during the technical discussions.

1. The principal questions identified so far are:

- the appropriateness of the legal basis proposed by the Commission, namely Article 100a of the Treaty;

- the need to assess the precise nature and scope of the European mutual society, since the activities of national mutual societies differ greatly from one Member State to another. Related to this, there exists the need to determine clearly the nature of the members of the European mutual society.

2. The following tendencies emerged during the discussions:

- a tendency to favour referring questions which did not affect the "European" nature of the mutual society to national law;

- a tendency to favour aligning the text relating to the European mutual society on solutions adopted for the European cooperative or association, where appropriate.

Community Customs Code

The European Parliament having approved the Council's common position dating from 28 May 1996, the latter adopted unanimously, with the abstention of the Austrian and Netherlands delegations, the Regulation amending Regulation No 2913/92 establishing the Community Customs Code. The Regulation makes various adjustments to the Community Customs Code to meet the following objectives in particular: to take account of the Uruguay Round Agreement which was concluded after the Code was adopted, to combat fraud and, in general, to clarify the text.

OTHER DECISIONS

Customs union - Agreement with Korea

The Council adopted a Decision on the conclusion of the Customs Cooperation and Mutual Assistance Agreement between the European Community and the Republic of Korea.

Fisheries

Fisheries - Agreement with Mauritania

The Council adopted a Decision on the conclusion of an Agreement in the form of an exchange of letters concerning the provisional application of the Agreement on cooperation in the sea fisheries sector between the European Community and the Islamic Republic of Mauritania, initialled in Brussels on 20 June 1996.

The Agreement covers a period of five years from 1 August 1996.

Common Marketing Standards for Fishery Products

Following the political agreement reached on 14 October 1996, the Council adopted a Regulation laying down common marketing standards for certain fishery products.

The main objectives of the Regulation are:

- to consolidate in a single legislative act the basic Regulations (EEC No 103/76 and EEC No 104/76) as well as the amendments and modifications which have been made since those Regulations were adopted;

- to bring the market standards into line with changes in production, markets and business practices;

- to adjust freshness ratings distinguished by product group which will make grading easier through the use of simpler, more appropriate freshness criteria.

- to underline that technical conservation measures (minimum biological sizes) should take precedence over minimum commercial sizes;

- to strengthen the efficiency of market standards with the aim of improving market quality, withdrawing, as a consequence, the Community financial compensation for the lowest quality category fish (i.e. category B) from January 2000 onwards.

Withdrawal prices at Community level for category B fish will continue to be fixed, with financial support being left to producer organizations to decide, without any Community contribution.

Telecommunications

Interconnection in telecommunications - convening of the Conciliation Committee

The Council observed that it was unable to approve all of the European Parliament's amendments to its common position of 17 June 1996 concerning the proposal for a Directive on interconnection in telecommunications. The Conciliation Committee will therefore be convened pursuant to Article 189b of the Treaty.

Health

Programme of Community action on health monitoring within the framework for action in the field of public health - convening of the Conciliation Committee

The Council observed that it was unable to approve all of the European Parliament's amendments to its common position of 18 June 1996 concerning the above Decision. The Conciliation Committee will therefore be convened pursuant to the Treaty provisions concerning joint decision-making (Article 189b).

Reduction of smoking - Resolution

The Council formally adopted a Resolution on the reduction of smoking in the European Community (see Press Release 11437/96 - Presse 314 of 12 November 1996).