17.03.2003 - 08:14 CET The two authors, ANDREAS OLDAG, former EU correspondent in Brussels for the Süddeutsche Zeitung and HANS-MARTIN TILLACK, Stern’s correspondent in the EU capital, know the inner life of the European Union very well. (Photo: Argon) EUOBSERVER / BRUSSELS – It is not only the German Chancellor Gerhard Schröder who has recently decided to go his own way in international politics. Two well-known German journalists are now going beyond the pale, as well.

In a new 400-page book named "Raumschiff Brüssel - Wie die Demokratie in Europa scheitert" (The Brussels Spaceship - How Democracy Fails in Europe), to be published on Tuesday, they paint a damaging insider portrait of the European Union.

The two authors, Andreas Oldag, a former Brussels correspondent for the Süddeutsche Zeitung and Hans-Martin Tillack, Stern’s current correspondent in the EU capital, know the inner life of the European Union very well. The book explains in detail, and with numerous examples, how the European institutions function – or more precisely how they do not function.

No person or institution is singled out for the failures and malfunctioning of the European Union. Mr Tillack and Mr Oldag find fault with the system as a whole.

Each topic is dealt with in a separate chapter. There include ones on the Commission, the Council, the Parliament, the EU summits, the Presidencies, the governments and the Convention on the Future of Europe. The book manages to give a real insight into the inner working of the different institutions and their complicated interaction in Brussels.

Tips for newcomers in Brussels The book does not tell anything that is new for most bureaucrats and correspondents in the "space centre" Brussels. But much of the information might be interesting for people outside.

Before entering the EU, for example, it might be helpful for diplomats in the 10 new member states to know that representatives may only speak at council meetings if they are opposed to proposals. This was something the Austrians were unaware of in their first council meetings

Another useful tip for newcomers might be that the officials from the Northern part of Europe normally show up in office at eight in the morning to take their turn of the day and insist on leaving at five. The first Southerners are not likely to be seen before 9 in the morning and have no problems with staying late in the evening. So whether a decision is passed easily or not can depend on whether a meeting is scheduled for 8am or 6pm.

Prodi - a weak president The Commission President Romano Prodi is portrayed as very weak. The book lists his notorious slip-ups such as when he called the Stability and Growth Pact stupid and when he implied to the Irish that it did not matter what they voted in the Nice Treaty as enlargement would go ahead anyway.

On the big-bang enlargement with a planned 10 new countries to enter the EU on 1 May 2004, the authors claim that everybody in Brussels knows the major risks – but they are not being discussed. The European Union is in major crisis and 25 members could bring about collapse, the book warns.

Lacking political opposition and a critical press The book also tells of journalists in Brussels, who are not working entirely in the interest of their readers but also as heralds for the European idea.

It is not that the Brussels-based bureaucrats are any better or worse than their counterparts at home. The difference is that those in Brussels are not living under the constant pressure of having a political opposition or a critical press.

The fundamental failures in the structures of the European Union cause many absurdities but because the system is not scrutinised enough, these errors are not corrected.

"It is not those responsible for mismanagement, irregularities and self-service mentality who are punished in Brussels, but those who point to the problems," the book says.

Criticism and opposition may not be pleasant, but without it the European Union is at major risk.

Scandals and absurdities "Raumschiff Brüssel" refers to the many scandals and ridiculous situations which have occurred over the last years in the EU - from the fall of the Santer Commission in 1999 to the disputed perks and payments systems for officials and politicians.

It is revealed how boring Commission meetings are and how the heads of states behave behind the well-guarded and opaque European summits.

What happened in the late night hours at the Nice summit? What is ANTICI - the famous system developed to communicate the latest disputes and decisions inside the summits to the officials at lower level who do not have a seat inside the meeting room.

What is the Concour - the system where the EU in 1998 alone examined 30,000 candidates hoping to become the highly-paid EU officials of the future, only 475 were employed in the end. How are they chosen?

The book sheds light on these and many other questions.

The empty cockpit of the space ship Now, who is in charge of this huge system which has stripped national parliaments of much of their power and hidden them inside very complicated decision-making structures meaning that few understand what is really going on?

According to the book, 50 per cent of all legislation originates in Brussels. 360,000 journeys are made to the EU capital every year as part of working groups preparing for council decisions. In the Council, only 15-20% of decisions are taken by ministers, 80-85% of European legislation is agreed among civil servants.

The Commissioners are certainly not running the show. They are very dependent on their staff, according to the book.

In the first half of 2002, the Commissioners took only 79 decisions, while their staff pushed through 1090. While Commissioners are changed - generally every five years - the top administrators of the system are permanent. This is one of the system's major problems, say the authors.

The reforms carried out by UK Labour Commissioner, Neil Kinnock, to streamline the system are described as about as useful as moving around the chairs on the deck of Titanic.

Commission president Prodi regularly complains about the complicated administration procedures. Once, upon receiving a document with ten signatures, he is reported to have asked: "Ten signatures. And who of the ten has actually read the paper"?

MEPs bury their heads in the sand The European Parliament is also described as a very weak institution, even though it is the only EU institution holding a democratic mandate.

When the Parliament could really make a difference, MEPs merely bury their heads in the sand. They accept year after year that accounting for the EU budget is not correct. The MEPs continue to put up with tax payers’ money being wasted on keeping three working places for the European Parliament (some 3200 boxes containing official documents have to be transported by lorries between Brussels and the Strasbourg every month).

The book does not provide a good explanation for the indulgent behaviour of the Parliament, the authors allege that the same political families setting the tone in the Parliament are seated as Commissioners and in the national governments.

But why paint such a bleak portrait of the European Union, which has achieved so many good things for European citizens and is so attractive to those not yet members of the club?

The authors say it is simply to make the European Union survive. "Europe is too important to be left with the career Europeans".

"RAUMSCHIFF BRÜSSELS - Wie die Demokratie in Europa scheitert", by Andreas Oldag, former EU correspondent in Brussels for the Sueddeutsche Zeitung and Hans-Martin Tillack, Stern’s correspondent in the EU capital. Published by Argon Verlag, 416 pages, hardcover 19,90 euro

Profile Andreas Oldag / Hans-Martin Tillack

Written by Lisbeth Kirk Edited by Honor Mahony

www.forbes.com Reuters, 03.07.03, 9:07 AM ET By Neil Chatterjee LONDON, March 7 (Reuters) - Diesel pump prices have started to go up in Europe with further hikes expected after the wholesale market traded at post-Gulf War highs this week, industry experts said on Friday. This means larger fuel bills for both motorists and hauliers, who are already suffering from higher costs as prices have been boosted in the past few months by fears of war in the oil-rich Middle East. "There's a genuine shortage and I think motorists are definitely going to be paying more starting from next week," said Ray Holloway of the UK Petrol Retailers Association. In Germany, Europe's largest consumer of motor fuels, oil major Shell <SHEL.L><RD.AS> lifted its diesel pump price by three euro cents on Thursday, to a minimum of 94.9 euro cents ($1.05) a litre, as a direct result of this week's wholesale jump. Dieter Gripp of the Hamburg-based European Oil Telegram said that although German retail competition and the strength of the euro currency could limit pump price hikes, businesses buying diesel wholesale would be hit by the extra costs. On Friday oil major TotalFinaElf <TOTF.PA> bought a standard diesel cargo at an all-time record premium of $105 a tonne over April IPE gas oil futures, giving a full price of $412 a tonne -- a jump of 54 percent from the start of the year. Total traders say they need to pay up at massive premiums in the face of European shortages of the motor fuel and of tankers to carry it.

STOCKING UP Meanwhile some dealers say refiners in Spain, Germany and Italy have been told to build up their compulsory diesel stocks ahead of a possible U.S.-led war with Iraq, the world's eighth biggest oil exporter. French diesel prices have not seen any fresh hikes linked to the latest price surge but have already gone up six euro cents this year to 88 euro cents a litre as underlying futures prices have surged on war speculation. War fears and a three-month old strike in Venezuela, the world's fifth biggest exporter, have also pushed European gasoline prices up since the start of the year, with further rises likely. In the UK, diesel prices have risen this year to an average of 79.5 pence ($1.28) a litre, with this week's wholesale surge and poor retailer margins meaning experts expect a hike of two pence a litre next week. "We're in a pincer movement, because of shortages in the Middle East and in the U.S.," said Holloway. He said military demand was soaking up supply from the Middle East, while in the U.S. inventories had dropped following the Venezuelan strike, a major programme of U.S. refinery maintenance and strong heating oil demand amid a cold spell. U.S. industry data this week showed a 3.5 million barrel drop in gas oil stocks last week, which includes heating oil, diesel and jet fuel, leaving them 34.6 million barrels or 26 percent below this time last year. The U.S. Energy Information Administration said on Thursday that commercial oil stocks were likely to remain near the lower end of a 5-year average through 2003.

Warsaw Business Journal www.wbj.pl 24th Feb 2003

As war drums beat louder in the potential Iraqi war zone, analysts and budget watchers began to worry over the potential impact of further hikes in oil prices on the national economy. When the last serious price rises hit the country in 2000, the increase of 30% sent inflation soaring. Urszula CieÊlak, petroleum market analyst at Biuro Maklerskie Reflex, said prices are rising only because of the possible conflict. Despite the fact that the market had calmed down as war seemed to be postponed, prices refused to respond by falling. “If there will be corrections of prices, it will depend on if there will be the permission to start military action or not,” she said. “The tension will continue. There are no chances of a long-term trend in falling prices. At present, we have fluctuations of prices, and it is the general mood which prevails. If the war begins, there will be a sharp increase in prices; if the war is short, the prices will drop faster; if it develops for a longer period, the prices will stay at higher levels longer and then will go down slowly.” The country’s oil supplies for industry, transport and motorists mostly originate in non-OPEC Russia where supplies are plentiful, so shortages are very unlikely. However, Russia does hitch prices closely to OPEC and other reference levels.

Raimo Valo, president of Svenska Handelsbanken’s operations in Poland, is on record in the Business Journal as warning that the country is acutely exposed to oil price increases, and the danger point would be reached at $35 a barrel. On February 14, the price per barrel touched $34.40. Over 12 months, the price had gone up by $12 a barrel. CieÊlak added: “The price contains a war bonus, and it should drop to around $24. However, in that case, oil producers like OPEC may try to keep the price between $25-$28 by limiting output.” Lars Christensen, senior analyst at Danske Bank Polska, said: “As a rule of thumb, 10% reduces GDP growth by around half a percentage point year-on-year. The implication of that is that if oil prices stay at the present level for the rest of the year, then it would take a percentage point off growth.” He added it was a “risk that could be ignored, although prices ought to drop once the conflict is resolved.” Taking into account the oil situation and the continuing sluggish performance of the German economy, Danske Bank has revised its predictions for economic growth this year to 2.7%, well short of the finance ministry’s projected 3.5%, and 3.8% for 2004. “We are fairly optimistic that we will see a recovery this year, but it will be a struggling recovery and somewhat weaker than (finance minister) Grzegorz Ko©©odko expects,” Christensen said. “Higher oil prices always act as a drag on a country’s economy.”

Magdalena Kandefar, BP Polska’s spokeswoman, said that in addition to the higher costs of petrol at garage pumps, there was also the problem of the shrinking of the retail margin where forecourt profits are made. “Such a situation is unfavourable for our clients and for producers,” she said. “We can expect a decrease in petrol prices only when the cost of production will diminish.” BP Polska followed a strategy of adapting to market tendencies and not being an initiator of changes. “Therefore, if the market will calm down provoking a drop in prices, then BP will go immediately after market changes,” she said Pump prices at the weekend were z©© 3.72 per litre for petrol and z©© 2.87 for diesel. A year ago, the prices were z©©. 3.24 for unleaded petrol and z©©. 2.49 for diesel. “The increase of petroleum prices in the world always means an increase of detailed prices of petrol in Poland,” said William Kozik, the sales director of Shell Produkty Polska. “This has a direct effect on the demand. Additionally, the increase in oil prices provokes the decrease of retail margins of petrol, and we do not want to transfer the rise in oil prices worldwide on our clients.” With eyes on developments in Iraq, Kozik says that undoubtedly any change in the situation there would impact oil prices here, but that his company “will do everything possible to make another increase in oil prices the least difficult for our clients in Poland.” Arkadiusz Majzner, petroleum market analyst in the oil and fuel trade office at PKN Orlen agreed, but pointed out that oil workers’ strikes in Venezuela as well as the cold weather in the United States caused US oil reserves to drop and prices to increase. Nevertheless, he stressed that the possibility of military action in Iraq influences the high level of oil prices the most with the uncertainty of the situation keeping prices high.

www.mpa.gr Thessaloniki, 22 February 2003 (13:25 UTC+2)

Greek Minister of Development Akis Tsochatzopoulos had a working meeting this morning with responsible European Commissioner Loyola de Palacio and OPEC general secretary S. Galderon. The meeting were held on the sidelines of the informal EU Energy Ministers Council meeting taking place in Thessaloniki. Mr. Tsochatzopoulos, who is the President of the EU Energy Ministers Council, stated that they discussed the likely consequences of an unfavorable geopolitical development in the region of Iraq. He assured that during the informal EU Energy Ministers Council meeting the participants will be briefed on the predictions of the OPEC countries and will take the necessary measures. He said that the goal is to protect Europe from the likely consequences of a war in Iraq. Responding to the question if the situation concerning the international oil prices will have a successful conclusion, Mr. Calderon stated that the goal is to strengthen the cooperation with the EU to have enough oil in the market. Referring to the recent problem with Venezuela, Mr. Calderon stressed that it was transitional and was faced successfully in cooperation with OPEC which acted immediately to meet any oil shortages.

www.mpa.gr FRIDAY, 21 FEBRUARY 2003 Thessaloniki, 20 February 2003 (15:10 UTC+2)

Europe is not self sufficient in oil and natural gas and all EU countries have the same dependence on third countries – exporters for energy, such as OPEC and Russia, said the Secretary General of the Ministry of Development Giorgos Agrafiotis, in statements to mpa.gr, pointing out the EU's common interest is obvious and that any problem must be dealt with jointly. At the same time he estimated that oil prices will not surpass a barrel. Regarding the informal Energy Meeting to be held on Saturday in Thessaloniki, Mr. Agrafiotis stated that the first issue on the agenda is the crisis in the Gulf, while an attempt to approach a unified European position will be made. “Europe must show its unity during a crisis, it must look and find the elements of its power”, said Mr. Agrafiotis, adding that “there is the spirit of a united confrontation, which, at least, the Greek Presidency will explore”. He appreciated that during the works no specific decision will be made, but there will be a first exploration of the member-states' intentions will be made by the presidency, so that if necessary, the Greek Presidency can prepare a draft for a joint decision, similar to that of the European Council in Brussels last Monday. The Secretary General of the Ministry of Development supported that the creation of a strategic supply in Europe will give it the ability to intervene in the rise of prices. “All member-states have corresponding legislature. The issue is how do we have a unified legislature – direction in Europe on the common management of the security supply”, he stressed. According to the Ministry's appreciations, oil prices will not surpass those of the present at a barrel. “We are missing 2.4 million barrels on the daily market from Venezuela. A crisis in Iraq would mean a further shortage of 1.8 million barrels. However, the strike in Venezuela is over, and the country is reentering production – it is already at half its daily output. We believe that any loss of oil from Iraq will be covered by Venezuelan oil. I do not think that we can escape from the a barrel price”, said Mr. Agrafiotis.