European Commission President, José Manuel Barroso, called for the European Council not to neglect the climate and energy package at the summit this week, whilst advocating that the main focus should nevertheless be the financial crisis.

In a speech given to the European Parliament, he insisted that those who believe that economic prosperity cannot go hand in hand with an effective climate package are mistaken, and that the European Council must therefore aim to keep to the timetable put forward by the French Presidency. This would mean working towards a political agreement by the December European Council meeting.

He highlighted the fact that failure to act now would result in higher costs later, and missing out on the chance to exploit new markets. He also reassured industries ‘that they will not be put at a competitive disadvantage’. Mr Barroso added that he had been encouraged by the outcome of the Environment committee’s votes last week saying that it ‘took an important procedural step forward’.

In draft conclusions prepared by the French Presidency, Member States reaffirmed their determination to reach a deal on the climate and energy package before the end of the year, but fell short of backing it outright in its current form. This is partly because of the current financial crisis, and partly because of concerns regarding the costs associated with the package.

Specific issues that were raised include the stability and industrial interests of national economies, which Germany and Poland in particular have stressed they wish to ensure. There are therefore calls as well to clearly establish criteria for which industrial sectors are entitled to free emissions allowances. Member States are also urging that they retain control of the finances raised out of ETS permit auctions rather than the EU, and seem to be reluctant to commit to an automatic increase in CO2 emission reductions from 20 to 30%, if an appropriate deal is reached in Copenhagen.