I attended the informal meeting of the Competitiveness Council on Saturday 22 April, hosted by the Austrian presidency in Graz. My ministerial colleague, Lord Sainsbury, attended the Council on Friday 21 April.

At the morning session on 21 April, Austrian Minister for Education, Science and Culture, Elisabeth Gehrer, chaired a discussion on the breakdown for the EU's research budget for the 7th Framework Programme 2007–13 (FP7).

Commissioner Potocnik presented the principles behind the Commission's revised breakdown for the budget for 2007–13 following agreement on the overall EU budget. The budget for FP7 would see a 60 per cent. increase over current levels to an average of €7.8 billion per annum as opposed to €4.8 billion per annum under the 6th Framework Programme, but this was still a reduction on the Commission's original proposal in 2005. Ministers were unanimous in stating that the Commission's revised breakdown represented a good basis for negotiations, but all put forward suggestions for changes.

The presidency hoped that this discussion would allow the Competitiveness Council to agree a general approach on FP7 on 29–30 May 2006. This would give them the basis with which to negotiate with the European Parliament, which expects to complete its first reading of FP7 in June.

The afternoon session on 21 April was on "The Opportunities of Globalisation". There were presentations from Vice-President Verheugen on "Competitiveness Through Innovation"; Commissioner Kroes on "Less and Better State Aid for Growth and Jobs"; French Minister Francois Loos on "Competitiveness Clusters"; and Helmut List, CEO AVL List, on "Centres of Competence".

Ministers showed general support for clusters as useful initiatives. Some member states thought EU cooperation on clusters was important, and a number have drawn up a national map of clusters. There was general support for Commissioner Kroes's plans to introduce some additional flexibility to EU rules on state aid for innovation. Member states were also supportive of improving access to risk capital for SMEs.

At the morning session on 22 April I participated in a discussion based on the Commission's revised proposal on the services directive. Austrian Minister for Labour and Economics, Martin Bartenstein, chaired the discussion, inviting Ministers to agree that the revised Commission proposal, based largely on the European Parliament's first reading text, should be swiftly agreed as an overall "package" with the aim of reaching political agreement at the Competitiveness Council on 29–30 May. Member states expressed support for moving forward quickly on the basis of the Commission's revised proposal but noted that important issues remained to be discussed.