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EU: News Of New Policy Agency and VW Fine

Brussels, 30 January 1998 (RFE/RL) -- Here's another one of our occasional run-downs of brief news items dealing with significant European Union actions that sometimes get overlooked in reporting on the 15-nation group. The items range from the progress made this week on getting into operation by Autumn the EU's collective police intelligence agency --to be known as "Europol" -- to its Executive Commission levying the biggest fine ever on the German car maker Volkswagen for unfair sales practices:

--Europol and the East: At a meeting yesterday in Birmingham, England, EU interior and justice ministers agreed to intensify their collective efforts to combat organized crime. Perhaps even more important, the ministers said that the EU's long-planned Europol should become fully operational by the Autumn. There is already a Europol drugs control unit operational in The Hague, the seat of the Netherlands Government. But until all EU members ratify the agency's founding convention, now expected within four months, Europol will n-o-t be able to set up its own data base and expand its activities to cover traffic in human beings, arms smuggling and other cross-border crimes.

Europol's establishment will be important to the 10 Central and East European countries seeking rapid EU membership, particularly to the five of them due to begin substantive membership talks in early April --the Czech Republic, Estonia, Hungary, Poland and Slovenia. Home Secretary Jack Straw of Britain, which currently holds the EU's revolving six-month p[residency, told reporters in Birmingham that police matters will play what he called a "crucialS role in EU expansion negotiations. Each candidate, Straw said, will be judged on its policing and how effective its external borders are.

French Justice Minister Elizabeth Guigou said the EU had tended so far to neglect these police issues in the work of preparing candidate countries for accession. "Now," she added, "we will have to work twice as hard to catch up."

--New Measures to Stem Kurdish Flow: At the same Birmingham meeting today, the ministers are likely to agree on additional measures aimed at stemming the flow of Kurdish refugees to EU nations. Specifically, they will probably authorize Brussels officials to consult with the United Nations High Commissioner for Refugees on setting up new so-called safe havens in northern Iraq to reduce the stream of Kurdish refugees from the area.

Earlier this week (Jan. 16) in Brussels, EU foreign ministers approved a package of measures, including external-border tightening and closer police cooperation, to stop Kurds from entering EU territory. The Birmingham meeting today will almost certainly endorse those measures as well.

A major British non-governmental agency dealing with refugees criticized the safe-haven plan yesterday. Nick Hardwick of the British Refugee Council said no one fleeing persecution in Iraq would want to go to an EU safe haven, given what he characterized as Western countries' failure to protect such enclaves in the past.

All the EU's actions to stop Kurdish emigrants at the Union's external borders were triggered by the arrival earlier this month on Italian shores of upwards of 2,000 Kurdish refugees from Turkey and Iraq. Some European refugee groups have said that the EU has over-reacted to a relatively small migratory movement of Kurds.

Still No Accord on ECB President: For a brief time yesterday, it appeared that the long-standing dispute over who will be the first president of the EU's European Central Bank (ECB) had been resolved. The ECB is due to come into existence in 11 months with the launching of the EU's Economic and Monetary Union (EMU) and its new single currency, the "euro." A German financial newspaper ("Handelsblatt") reported that Dutch banker Wim Duisenberg and French Central Bank head Jean-Claude Trichet had made what it called a "gentlemen's agreement" to split the eight-year term of office. But within hours, both German and EU officials denied the report. A spokeswoman (unnamed) for the German Finance Ministry said no decision on the matter will be made until an EU summit on EMU set for early May. That meeting is also expected to designate officially 11 of the 15 EU members as eligible to join EMU on January 1 of next year --with Britain, Denmark and Sweden opting out for the moment, and Greece deemed too backward economically to qualify.

Until three months ago, Duisenberg had been expected to take over the ECB top job without much opposition. The former Netherlands Central Bank chief now heads the ECB's forerunner, the European Monetary Institute, in Frankfurt. But in November France nominated Trichet for the job in a move seen by analysts as a bid to assert its importance in the run-up to monetary union that has so far been dominated by Germany.

The French action has not only thrown open the question of who will run the ECB. Analysts say that it has also delayed appointing a replacement for France's Jacques de Larosiere, the outgoing head of the London-based European Bank for Reconstruction and Development (EBRD) that focuses on Eastern Europe and the former Soviet Union. They say that's because EU nations generally indulge in so-called trade-offs in the naming of top officials of their multilateral organizations.

--Commission Levies Heaviest-Ever Fine on Volkswagen: On Wednesday (Jan. 28) the EU's Executive Commission levied its heaviest-ever fine on an individual company, punishing the German car maker Volkswagen (VW) 112 million dollars for obstructing sales of its cheaper Italian models over a period of 10 years. The fine represents about 10 percent of expected annual profits for the giant firm, which immediately announced it would appeal the judgment to the EU's Court of Justice in Luxembourg.

After a lengthy investigation, the Commission found that VW had what it called "systematically forced" Italian dealers n-o-t to sell their cheaper-priced versions of the company's cars to Austrians and Germans who went to Italy to make their purchases. EU Competition Commissioner Karel Van Miert said VW's interference in Italian sales clearly contravened EU policy on cross-border sales. Van Miert told reporters that, in his words, this was "an extremely serious breach over a long period..."

In a statement, Volkswagen officials called the steep fine "incomprehensible (and) completely disproportionate" to the alleged violation. In any case, the statement said, VW h-a-d respected EU rules and had n-o-t blocked legal cross-border sales. VW said it had acted only against so-called "parallel-market" re-importation of the cars sold in Italy to Germany and Austria. Its instructions to Italian dealers, in the statement's words, "only targeted unauthorized resales."

Whatever the ultimate disposition of the case, Central and East European nations aspiring to rapid EU entry had perhaps better start getting used to this kind of strict Commission enforcement of the EU's Single Market rules. Upon accession, they too will be exposed to the Commission's intense scrutiny.