The Austrian Presidency took over from the UK at a difficult time. There had been some setbacks in 2005. The failure of the referenda in the Netherlands and in France had generated a sense of Euro-scepticism, there was a mood which seemed to be a crisis of confidence, and certainly there needed to be a period of reflection over the Constitutional Treaty.

The period of reflection   Clearly, a major objective must be to win back the trust of EU citizens and their confidence in the European project, by showing them that the EU is capable of delivering concrete results, showing them how and in which areas the EU can add value, how the EU touches upon their daily lives. This implied better transparency in policy, improving the visibility of the Union, enhancing its political clout, and developing better legislation.

Some practical measures emerged in areas such as security, but there were also unforeseeable events. These would have been a challenge however well prepared the EU had been – the January gas crisis, the cartoon dispute which risked precipitating conflict between cultures and religions, the unease over Iran’s nuclear research, the election victory of Hamas, and avian ’flu. The EU Presidency is called upon to orchestrate the views of member states, going through a process of mediation between diverging views until a common and coherent EU position could be established.

Achievements   One of the achievements of the period must have been establishing various initiatives to rebuild confidence in Europe: “Europe listens”, “Sound of Europe” (a debate on European identity), and the Café d’Europe.

Other initiatives were the realisation of several practical proposals. With the movement of goods across Europe, transport regulations have become important. The new Eurovignette is based on relative levels of pollution, EU law was adapted to allow cross-financing. Developments in the railway infrastructure were agreed. There was a meeting of transport ministers to agree principles for greater road safety. There was also a new agreement on fluorinated greenhouse gases, providing a basis from which countries could develop their own stricter regulations.

During the first half of the year 2006 the Presidency team handled an extensive agenda, which included:

Issues in the future Enlargement of the EU

	Agreement on financial aid for northern Cyprus
	Western Balkans: Salzburg Declaration
	Turkey and Croatia: opening and closure of 1st chapter in the margins of the June meeting of the General Affairs and External Relations Council.

Ongoing programmes

    agreement on keeping reduced VAT rates for certain labour intensive services
    brokering the final agreement on the establishment of the new Human Rights Council
    good progress on the development of the Fundamental Rights Agency
    Sustainable Development Strategy: revised strategy will be adopted at June EC


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	tensions vis-à-vis Iran
	defining clear guidelines and principles on how to deal with Hamas
	developing a mechanism on financial assistance for the Palestinian people
	the European Neighbourhood Policy faced in turn the need to take positions on Ukraine and Belarus
	continued cooperation with other international strategic partners

    Justice and Home Affairs:

	adoption of directive on data retention
	agreement on European Order for Payment
	Vienna Declaration on Security Partnership: dialogue with the Russian Federation, the United States and Mediterranean countries – topics focused on co-operation in the fields of organised crime, human trafficking, migration, corruption and drugs, combating terrorism

    The EU Spring summit in Lisbon covered another extensive agenda:

	jobs and growth: EU member states committed themselves to create at least 2 million jobs a year until 2010, and to fight against youth unemployment.
	research and development: EU members decided to set themselves individual targets
	encouragement for smaller enterprises – the “Think Small First” principle should pervade all areas; and the setting up of small and medium-size enterprises should be facilitated; this was an area where better regulation needed to be developed
	energy policy: kick-off for a European energy policy, looking at security of supply (deepening of energy dialogue between countries, whether producer, transit or consumer; diversification of energy sources), competitiveness, sustainability; adopting an action plan on energy efficiency was an important step aiming for energy-saving of some 20% by 2020; while ensuring that member states retained full sovereignty over their own national energy mix.

    Setting the EU Budget for the period 2007-2013 had been an ongoing task: agreement needed to be reached with the European Parliament and the European Commission. A new inter-institutional agreement had recently been endorsed by the Council on 15 May, and was approved by the European Parliament on 17 May). The budget would now include more money for research and development, progress on Trans-European Networks for transport, small and medium-size enterprises, and encouragement for student mobility.

    The January-June period also included finalising a Services Directive. Service providers are to be governed by the rules and regulations of the country in which the service is being provided. The kind of services covered by the directive are: hotels and restaurants, car hire, construction, advertising, social care. Services that would not be covered are: broadcasting, postal services, electricity, gas, water, waste, audiovisual services, legal services, social services, public transport and public health. The directive set out to ensure that discriminatory and extra barriers for service providers would not be allowed; any restrictions imposed by a county would be subject to examination by the Commission. There would be a transition period of 3 years to allow for its implementation.

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