The "EU policy brief" has been created for members of the PES family, bringing together the latest information on the EU agenda, on a monthly basis, focusing particularly on social democratic priorities. PES initiatives and actions are highlighted where relevant.

PES activists are invited to give comments and suggestions or to contribute information in the forum on the PES website.

Future of Europe

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EU budget review

The European Commission was invited in May 2006 to "undertake a full, wide ranging review covering all aspects of EU spending including the CAP and own resources, including the UK rebate" and to report in 2008/9. The Commission has therefore launched the European budget review by presenting a key issues paper on 12 September, which opens a consultation phase where all actors are invited to present contributions before 15 April 2008. The paper starts by listing the challenges Europe will be facing in the near future: Europe's ability to face structural change, scientific and technological process, the transformation to a knowledge and service economy, declining birth rates, solidarity and social justice, climate change, new environmental challenges and their impact on agriculture, energy, migratory pressure and a wide concept of security and safety for citizens (not only crime and terrorism but also transport, environment, health and safety) and finally the need for a stronger external presence. The European Commission raises questions on several aspects of the EU budget, namely the need to have a budget adapted to changing needs, whether the EU budget accurately reflects the challenges Europe will be facing in the coming decades, whether budget reorientations should be made, and transparency and accountability. Moreover, the Commission also raises questions concerning the own resource system, compensatory and correction mechanisms and structure of the EU budget. The Commission is due to organise a conference at the end of this first consultation phase in spring 2008.

PES action:The budget review is one of the political priorities of the PES for 2008. The relationship between the EU budget and the Lisbon Strategy was discussed in a PES Lisbon network meeting, held on 18 September in Lisbon.

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Social Europe

	Lisbon integrated guidelines: The European Commission will be presenting its contribution to revise the current set of Lisbon Strategy integrated guidelines in December, but it is not likely to propose a major review. The PES favours a balanced review - covering each of the economic, social and environmental pillars - which is not limited to labour market issues. The PES discussed the new cycle for the Lisbon Strategy in a meeting held in Lisbon on 18 September. A joint contribution by the PES Lisbon network and Socialist Group in the European Parliament was presented. The document highlighted key political priorities for revision of the guidelines: correspondence with the PES' vision for a "New Social Europe"; macroeconomic policy coordination to boost growth and employment; strengthening coordination and the multi-supportive approach of research; innovation and education to balance structural reforms with investment activities, in particular on human capital; strengthening environmental and social aspects of the internal market; improving governance in the Lisbon Strategy; and, improving ownership.
	The financial crisis: The current financial crisis started in the USA, shortly before the summer, with the collapse of the secondary credit market. This has already had repercussions on the entire financial system and has brought forth intense political debate in which the PES is playing an important role. The first result of the financial crisis has been that economic growth is now more volatile than before: the European Commission has revised downwards its growth forecasts. It is uncertain when this crisis will end and what the magnitude of its economic and social effects will be. The financial crisis clearly shows the perverse effects of unregulated markets and of lack of transparency. Therefore, the PES has been pursuing a reform agenda in relation to the transparency, disclosure and accountability of hedge and private equity funds. The PES will continue to work with the US Democrats, trade unions and all other actors to ensure that financial markets are efficient and positively contribute to economic growth.
	PES action:PES President Poul Nyrup Rasmussen wrote a letter to European Commission President Barroso in which he urges the EU to "act now to avoid the recurrence of such a financial crisis in the future by establishing basic rules of transparency, disclosure and accountability in relation to these [hedge and private equity] funds and, as the PES has also called for, by taking the lead in establishing a global initiative." The PES President called on the Commission President to submit a proposal to the Council and Parliament this autumn.

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Climate change and energy

	Informal EU Environment Council: The Informal Environment Council on 31 August-1 September in Lisbon discussed a topic of special importance for the Portuguese Presidency in the field of environment: water scarcity and droughts and their socio-economic and environmental impact. The Portuguese Presidency discussed its focus on the implementation of the Commission Communication addressing the challenge of water scarcity and droughts in the European Union, adopted in July 2007, and the Water Framework Directive (WFD), the EU's flagship directive on Water Policy, adopted in October 2000. The PES Environment Ministers and Spokespersons, who met before the Council, supported these political priorities.
	Third Energy Liberalisation Package: On 19 September, the European Commission presented the third "Energy Liberalisation Package". Following the failure of the initial plan to gain support amongst ministers for full unbundling of energy production and distribution in March, the new proposal will present Member States with alternative options to full ownership unbundling. The first option is to force energy companies, which own both energy production and distribution infrastructure, to completely sell off their gas and electricity-transmission networks. The second option would allow companies to maintain ownership of their assets. However, the management, including investment and other commercial decisions, would have to be transferred to an Independent System Operator, which would pay a fee for the use of the networks. This seems to be an attempt to avoid a veto from nine countries led by Germany and France. The Commission, and in particular EU Energy Commissioner Andris Piebalgs and EU Competition Commissioner Nellie Kroes, considers further liberalisation as a pre-requisite for guaranteeing the EU's energy security, for promoting the use of renewable energies, and for ensuring the proper functioning of the EU Emissions Trading Scheme. In December 2007 the European Council will discuss the the liberalisation package. A possible political agreement in Council could then be achieved under the Slovenian EU Presidency in the first half of 2008.
	ETUC study of employment effect on climate change: The European Trade Union Confederation (ETUC) recently published a study that has been carried out along with the Social Development Agency (SDA), which attempts to improve current understanding of the relationship between climate change and employment. The main finding is that even moderate climate change will affect economic activity and employment in Europe, with some regions and economic sectors being particularly vulnerable. Increased warming will be likely to have very damaging consequences. The second half of the report considers the challenge for employment of the transition towards a lower carbon European economy at the horizon 2030, in four key economic sectors: energy production, transport, steel and cement industries and construction. The study considers a number of scenarios for a reduction of 40% in CO2 emissions by the year 2030 and what the effects can be on European employment and skills. This study underlines the need of a new smart, green growth for Europe. Robust action on climate change, made up of both mitigation and adaptation measures, should be based upon two crucial elements: political initiatives which are most effective in delivering the double dividend of the fight against climate change and the creation of quality jobs; and the introduction of instruments to anticipate and provide socially responsible support for the economic and social changes demanded, and to make workers the players in that change.
	OECD report biofuels: The debate around political support for biofuels is warming up, with a new OECD study on the consequences of a massive increase of the use of biofuels. It argues that EU governments' support for biofuels will cause food shortages and lead to the destruction of natural habitats - while making little impact on climate change. The OECD suggests that EU plans to obtain 10% of its transport fuel from plants by 2020 will have little or no effect on climate change.
	PES action: The Spanish Minister for Environment, Cristina Narbona, has become chairwoman of the PES network for Environment Ministers and Spokespersons. At the PES network meeting on 31 August, prior to the EU's informal Environment Council, PES Ministers and Spokespersons agreed to focus their work on two priorities for the coming months: firstly, the development of a PES policy on "Smart, Green Growth"; secondly, the preparation for the United Nations Framework Convention on Climate Change Conference, to take place in Bali from 3 to 14 December 2007. The PES President has written to Commission President Barroso to ensure that the Commission invests all its efforts into making the EU a world leader in clean technologies and progressive climate policies through an appropriate revision of the EU's sustainable development strategy and the submission of EU legislative initiatives this autumn.

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Migration

	Migration and Integration: The Commission published its Third Annual Report on Migration and Integration, on 12 September, which gives an overview of policy developments on integration of third-country nationals at EU and national level. The Commission proposes new initiatives on further development of the EU framework for Integration, including: participation and citizenship as an integration factor; Common European modules for migrant integration on different integration issues; the benefits of integration for social inclusion, and developing common indicators and indexes in order to assess integration policy implementation and results.
	European "Blue Card" scheme: A so-called "Blue Card", inspired by the US Green Card system, is to be proposed this month by the European Commission. Commissioner Frattini's proposal for an EU work permit for highly-skilled workers should make the EU a more attractive work destination and help the EU fight demographic challenges. However, unlike the US Green Card, it will not constitute a permanent work permit and therefore will prevent brain-drain in developing countries.
	European Migration Pact: The French President and his government expressed their priorities for the 2008 French Presidency on 28 August. President Sarkozy and the French Minister for Migration, Brice Hortefeux, announced that they want to put migration issues on the forefront of their agenda. Mr Hortefeux strongly believes that there is a need for a European Migration Pact covering issues such as the refusal of massive legalisation of migrants, common asylum rules, keeping illegal migrants out of Europe and a common dialogue with the countries of origin. France will organise a Euro-African Conference on migration and development.
	European Migration Network: On 10 August the Commission put forward a proposal for a Council decision setting up the European Migration Network (EPN). Besides collecting up-to-date information about the developments related to migration, the aim of this network would be to contribute more to ongoing developments of policy making and decision making for a common European immigration and asylum policy. The EPN's Steering Board - represented by the Commission, the Parliament and every Member State - will have the task to ensure that all Member States are actively involved and that the Network keeps closely linked to the EU's political agenda.

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Internal Market

The European Commission is due to present a proposal for the future of the EU's Internal Market strategy in November. On 4 September, the European Parliament adopted, with a broad majority, an own-initiative report, drafted by Jacques Toubon (EPP/FR), intended to contribute to the Commission's forthcoming proposal. The resolution calls for the completion of the Internal Market, by opening network industries such as transport, telecommunications, postal services and energy transmission, and the reduction of administrative burdens, especially for SMEs. It also stresses the need to ensure full and proper implementation of the existing rules, as there are still protectionist tendencies in many Member States.

Position of the PES and Socialist Group in the European Parliament: Following the decision of PES Leaders on 21 June to call for the line between the Internal Market and Europe's welfare states to be respected, and for equal access and affordability of public services to be ensured, the Socialist Group in the EP has set out a detailed position paper, on how the social dimension of the Internal Market should be developed. The Socialist Group has succeeded in adding elements to the European Parliament's report, including the principle of solidarity and impact analyses of markets, the environment and the social sphere to accompany any new legislative initiatives. More precisely, it suggests introducing a "compatibility test", which should examine the legislation's effects on the four freedoms constituting the Internal Market. Socialist MEPs called once again for a clarification of the exclusion of health services and social services of general interest from Single Market legislation. Although opinions were divided, the resolution also mentions a need for further harmonisation, especially in taxation, and stresses the potential of nuclear energy for tackling climate change.

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External dimension of Europe

Turkey: On 22 July Turkey held its general elections, in which the ruling conservative Justice and Development Party (AKP) received 46% of the votes, marking an increase of 12 points over the 2002 elections. The legislative elections have confirmed the presence in parliament of the two other main parties: the Republican People's Party (CHP), an SI member, and the far-right National Movement Party (MHP) won 20.9% and 14.2% of the votes respectively. A total of 27 independent deputies were elected - amongst which a member of the Democratic Society Party (DTP), also member of the SI - mainly representing the Kurdish minority. On 29 August Foreign Minister Abdullah Gül succeeded in becoming Turkey's new President. The parliament elected the successor of Ahmet Necdet Sezer in the third round of voting. Gül's election as new President remains a matter of high controversy due to his political history as a former member of the now banned Islamic-oriented Welfare Party. President Gül reiterated his commitment to Turkey's secular system upon his election. On 27 August, French President Nicolas Sarkozy softened his stance on Turkish membership of the EU, in his first major foreign policy speech as President, by agreeing to allow negotiations to continue. Read PES President statement on the election of Mr. Abdullah Gül as the new Head of State of Turkey.

Serbia-Kosovo: The six-nation Contact Group, comprised of Britain, France, Germany, Italy, Russia and the United States, agreed on the troika format for the new round of talks following the inability to agree on a UN Security Council resolution amidst Russian veto threats. On 29 July the European Union appointed Wolfgang Ischinger, Germany's current ambassador to Britain, to represent it in the negotiations on the future status of Kosovo. The agreement to a new round of talks will allow an additional 120 days of negotiations. The UN has given the troika until 10 December to reach an agreement with Russia, which calls for an extension of this time limit. The Kosovar assembly, along with President Fatmir Sejdiu, has made clear that this round of talks constitutes the last attempt to win international support for independence. Rumours of partition before the troika talks, as a possible solution to the impasse, have triggered rigid responses from both Pristina and Belgrade. The EU continues to prepare for the post-UNMIK period through the EU Planning Team. In the meantime Kosovo prepares for the next parliamentary and local elections scheduled for 17 November 2007. The local and parliamentary elections were to be held in November 2006 but were postponed due to fears on their impact over Kosovo's final status. Kosovar Serb political leaders are divided as to whether they should take part in the elections with a boycott still a possibility. Serbia's presidential elections are expected later this year or in early 2008.

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Party of European Socialists