NEWS,21.06.2013

EU to scale back tobacco curbs

European Union health ministers agreed on Friday to ease tough planned restrictions on tobacco products to overcome opposition from some governments to the draft rules.
The ministers rejected a ban on slim cigarettes proposed by the bloc's executive, the European Commission, but said they should be sold in normal-sized packets to reduce their appeal. They also agreed to outlaw menthol cigarettes and other tobacco flavourings.
The bloc's health commissioner said that, despite the need for compromise in order to reach an agreement, the spirit of the Commission's original proposals has been retained.
"The main thrust is that tobacco should look like tobacco not like perfume or candy and that it should taste like tobacco as well," the Maltese commissioner Tonio Borg told a news conference in Luxembourg after the ministerial talks.
Cigarette sales in the 27-nation EU bloc have fallen sharply in recent years but at about 33%  Europe still has a higher proportion of smokers than any other region of the globe, according to data from the World Health Organization.
The Commission proposed a crackdown on attractive tobacco branding in December, saying such branding was designed to recruit a new generation of younger smokers to replace the estimated 700 000 Europeans who die of smoking-related illnesses each year.
The discussions pitted western European nations that favour tough tobacco controls against a group of central and eastern member states led by Poland one of Europe's top cigarette producers who fear the impact on tobacco industry jobs.
The Commission's proposal that graphic visual and written warnings should cover 75% of the surface of all cigarette packets in future leaving just 25% or less for the brand - was weakened to 65% by ministers on Friday.
Poland, Bulgaria, Romania and the Czech Republic did not support the compromise, but their opposition is not enough to prevent the law from being adopted.
Irish Health Minister James Reilly, who led Friday's talks, dismissed economic arguments against tougher tobacco controls.
"It can never be never a choice between jobs and lives," he told reporters.
Holding up a slim metallic cigarette packet designed to look like a lipstick, Reilly said: "That is advertising. That is entrapment of young people."
In 2010, the world's four leading tobacco companies British American Tobacco, Imperial Tobacco, Japan Tobacco, and Philip Morris produced more than 90 percent of the cigarettes sold in Europe, the Commission said.
Plain packaging
Last month, Ireland became the first European country to agree a ban on all branding on cigarette packs in favour of plain packaging and uniform labelling, following the example of Australia.
While the EU proposals stop short of a full ban on branding, ministers agreed that countries such as Ireland should be free to impose plain packaging if they choose.
The proposals must also get the approval of the European Parliament before becoming law, and the lawmaker leading the debate in the assembly has called for a total ban on branding.
Friday's agreement means the rules could be finalised before the start of European Parliament elections next May, allowing them to enter force in 2016.
The draft rules have been in development for more than two years and were the focus of intense lobbying by the tobacco industry.
They played a part in the October resignation of former EU Health Commissioner John Dalli, after one of his associates was accused of seeking bribes from Swedish Match, a producer of moist oral-snuff known as "snus", in return for lifting a sales ban on the product outside Sweden.
Under the agreement, the sale of snus would remain illegal across the EU except in Sweden. But a proposal that would have forced snus producers to reformulate their products to remove distinctive flavourings was dropped.
As concerns grow over the unregulated use of increasingly popular electronic cigarettes, ministers tightened proposed controls by agreeing that those containing 1 milligram (mg) of nicotine or more would be classified as medicinal products requiring prior EU marketing approval.
That also applied to e-cigarettes containing 2 mg or more per millilitre for those that mix nicotine with water.

Switzerland delays settling US tax dispute

The Swiss government will consider ways to allow its banks to hand over information to US authorities either next Wednesday or a week later, a spokesperson said on Friday, later than previously indicated.
The government is under pressure to find a way to save its banks from criminal charges for helping wealthy Americans evade tax after parliament blocked a bill on Wednesday that would have allowed the banks to sidestep strict secrecy laws.
Finance Minister Eveline Widmer-Schlumpf had said the government could consider issuing an executive order on Friday to allow banks to comply with US demands, but the government spokesperson said her ministry was still working on the plans.
The spokesperson told a regular news conference that the finance ministry now planned to present a solution at the next cabinet meeting on Wednesday or a week later.
US authorities have more than a dozen banks under formal investigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet in Geneva and local government-backed Zuercher Kantonalbank and Basler Kantonalbank.

 

EU to decide who pays when banks fail

The European Union sought on Friday to forge rules to force losses on large savers when banks fail, a divisive reform that will shape how the eurozone deals with its sickly lenders.
Finance ministers in Luxembourg are trying to resolve one of the most difficult questions posed by Europe's banking crisis - how to shut failed banks without sowing panic or burdening taxpayers.
"We are in for a very tough negotiation," Sweden's Finance Minister Anders Borg told reporters as he arrived for the meeting, saying a one-size-fits-all rule for all EU countries was "dangerous".
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, plundering taxpayer cash but struggling to contain the crisis and in the case of Ireland almost bankrupting the country.
But countries are divided over how strict the new rules should be, with some worried that imposing losses on depositors could prompt a bank run while others argue the rules of the game must be made clear from the start.
While there is no immediate deadline for a deal, dithering could undermine confidence in the ability of Europe's politicians to repair the financial system, encourage banks to lend again and help the continent emerge from its economic stagnation.
"Midsummer is the longest day of the year so we have plenty of time," said Olli Rehn, the European Commission's top economics official, referring to the northern hemisphere's June 21 summer solstice.
A 300-page draft EU law that forms the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than €100 000 ($132 000) in their account.
That would make the harsh treatment of savers that was part of Cyprus's bailout in March a permanent feature of Europe's response to future banking crises. EU countries would be required to follow these rules when closing banks.
The rules to impose losses on savers, whether wealthy individuals or companies, could be made stricter within the euro zone, in particular for banks seeking help from the single currency's rescue fund.
'Nothing is insurmountable'
A central element to ensure the eurozone's long-term survival is a system to supervise, control and support its banks, known as banking union.
Although not part of the same project, common rules in the wider European Union are considered a stepping stone towards the eurozone's banking union.
Agreeing EU-wide norms would address Germany's demand that European rules on closing banks be in place before the 17-nation eurozone's bailout fund can help banks in trouble.
Eurozone finance ministers agreed late on Thursday to set aside €60bn to help banks via the fund, the European Stability Mechanism, but with tough conditions.
If agreed, the new EU rules would take effect at the start of 2015 with the provisions to impose losses coming as late as 2018.
Still, the idea divides countries with big banking sectors who have the most at stake in any financial crisis.
Sweden, Britain and France say countries should have the final word in deciding how to close banks and not be tightly bound by any new EU rules.
But Germany, the Netherlands and Austria want regulations that will be applied in the same way across all 27 countries in the European Union. They fear that granting too much national leeway would undermine the new law.
While Sweden is adamant it must have as much control as possible over how it deals with its banks, France's Finance Minister Pierre Moscovici signalled Paris is open to compromise.
"France wants flexibility but it is willing to agree to some limits," Moscovici said. "Nothing is insurmountable."