Grootste Europese wolkenkrabber in Moskou, discussies over BTW op verbouwingen (en)

EUOBSERVER / BRUSSELS - Moscow is set to host Europe's tallest skyscraper after the Russian firm Mirax Group signed a contract with Chinese builders on Monday (25 July).

The investment creates a stark contrast with the EU's construction sector however, which is struggling to emerge from a 10-year long recession.

"Russia feels itself as the midpoint of Europe and Asia", one of the building's architects Sergei Tchoban told EUobserver. "The wish of Moscow is to be seen as a world class metropolis and financial centre and this statement must be projected outward".

Chinese Engineering Construction Corporation will erect the main part of the 85-storey, 340 metre tall Federation Complex at a cost of some €440 million in the heart of Moscow's financial district.

The building is due to open in April 2007, hosting a five-star Hyatt group hotel, luxury apartments, offices, shops and restaurants.

The Federation Complex has also been built to withstand a 9/11 style terrorist attack via its thee-tower concrete structure, which enables any two of the towers to support the load of all three in the event of an explosion.

"Our construction is so strong that if an airplane was to hit it, which I sincerely hope it never will, nothing would happen", Mr Tchoban explained.

Moscow is currently building four other large skyscrapers in the 250-305 metre high range, which is huge by western and central European standards.

Russia towers over EU

The tallest building in Europe today is Frankfurt's Commerzbank Tower at 259 metres and Madrid is building four towers in the 220-250 metre tall bracket, but only a handful of other cities - Warsaw, London and Paris - are home to buildings over 200 metres tall.

Asia and the Middle East dwarf Europe in skyscraper terms however.

The United Arab Emirates' Burj Dubai complex will become the world's tallest at some 670 metres in 2008, overtaking the current holder, Taiwan's 448 metre tall Taipei 101 citadel (not counting antennas or masts, such as the CN Tower in Canada).

Domenico Campogrande, director of legal and economic affairs at the European construction industry's trade association, FIEC, explained that the popularity of skyscrapers is usually linked to the price of residential and office space in any given region.

"[But] you don't measure the ambition of a sector simply by the height of its buildings", Mr Campogrande indicated, pointing out that the EU has slated some of the world's largest road and rail infrastructure schemes under the trans-European network umbrella, which envisages spending €400 billion in private-public partnerships.

The UK, Spain, Portugal, France, Italy, Poland, Hungary and the Czech republic have been the fastest growers in the construction sector in recent years, with most EU countries expected to post some growth in 2005.

But Portuguese spending is expected to dry up in the medium term as the country's public deficit runs riot, while Germany, which accounts for almost a quarter of the EU 15's building activity is holding back the sector's overall performance.

"We have been in a very, very deep recession during the last 10 years", the FIEC expert explained. "Germany over-invested after re-unification and now there is a lot of overcapacity which has to be absorbed, a lot of offices are standing empty".

EU legislation could hamstring growth

Mr Campogrande is also worried about two EU legislative developments that threaten to hold the sector back.

He said that the current version of the services directive would actually hinder the movement of construction service providers by creating legal uncertainty over which country's rules apply in the case of, for example, buildings insurance.

But his biggest worry is the imminent expiry of an EU directive allowing individual member states to voluntarily cut VAT on household renovations, which has stimulated growth in recent years.

"It is a very hot issue because it threatens a lot of jobs and we are lobbying actively against it", the FIEC director indicated.

Member states must unanimously agree to extend the VAT derogation clause before 31 December otherwise the EU's minimum VAT levels will once again apply to the whole sector.

A European Commission spokeswoman said ECOFIN ministers have tabled a discussion on the subject for 8 November, but warned that "currently there is no unanimity in the council".