Resumption of the session
President
I declare resumed the session of the European Parliament, adjourned on Thursday 5 July 2001.
I hope that you have all had an excellent holiday and that you are ready to start work on this session.

Tribute
President
Ladies and gentlemen, I was very saddened to learn of the death of our fellow Member, Jacques Santkin, who passed away on 28 August. As you know, Jacques Santkin had been with us since February 2001 and was part of the Group of the Party of European Socialists. He was a member of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy and was also a member of the delegation for relations with the Palestinian Legislative Council.
I would like to ask you to observe a minute' s silence in memory of our fellow Member.
(The House rose and observed a minute' s silence)

Statement by the President
President
Ladies and gentlemen, it is once again my sad duty to open this part-session with a further condemnation of the mindless and brutal terrorist attacks which occurred in Spain during the summer.
On behalf of the House, I would like to express our unwavering solidarity and our deepest sympathy to the families of the victims and I do so with a great deal of emotion and sadness.
The European Parliament today pays tribute to Justo Oreja Pedraza, a Spanish army general, Luis Ortíz de la Rosa, member of the Spanish national police, Mikel Uribe, member of the regional Basque police, and José Javier Múgica Astibia, town councillor in Leiza for the Union of the People of Navarre, whose family is present today. I would like to say to his wife, children and his sister-in-law that we admire the courage you have shown in the face of this tragedy, which has taken a loved one from you.
José Javier Múgica Astibia always stood up for freedom and democracy and he refused to bow down to terror. Unfortunately, this cost him his life. Terrorism intends to continue its reign of terror by placing bombs in airports, on railways or in towns where there are tourists.
Our thoughts are also with María Eraunzetamurgil and her grandson, who were victims of a horrendous attack. We still do not know who carried this out.
Despite the diverse political views held by its Members, the European Parliament forcefully condemns these barbaric actions, as they constitute an absolute denial of democracy and the fundamental values on which the European Union is founded.
I would like to ask you to observe a minute' s silence.
(The House rose and observed a minute' s silence)

Request for the waiver of parliamentary immunity
President
By way of a letter dated 20 July 2001, I received a request from the Spanish government, via the intermediary of the Spanish permanent representative, for the waiver of the parliamentary immunity of Mr Silvio Berlusconi and Mr Marcello Dell' Utri, which was drawn up by the Spanish judicial authorities.
Pursuant to Rule 6 of the Rules of Procedure, this request is submitted to the relevant committee, namely the Committee on Legal Affairs and the Internal Market.
In order to assist matters, I would inform you that there are no grounds for the request for the waiver of Mr Berlusconi' s parliamentary immunity, as he has not been a member of the European Parliament since 11 June 2001.

Barón Crespo
Madam President, I would like to speak on behalf of the Socialist Group on the announcement you have just made. We take note of that announcement. We believe it is a step forward. However, we would like to express our concern and criticism of the way in which this issue has been dealt with.
You and I are Members of Parliament. We have shared responsibilities in Parliament and we also share a legal training which reminds us of that aphorism, 'justice delayed is justice denied' . You have just shown how, in this case, justice is surely not going to be done in relation to one of the Members of the European Parliament, apart from the fact that the requests for waiver of immunity must also give the Members of the European Parliament the opportunity to defend themselves, something which has not been possible in this case for a year now.
I would like to point out on behalf of my group that we - independently of the electioneering considerations we have been accused of - have believed that this issue is important for the European Parliament, for our dignity, and we believe it is a step forward that the Committee on Legal Affairs is aware of this.
However, given that the Presidency' s interpretation is in direct conflict with the integrating nature of Community law, I would ask you, Madam President, having become aware of this case, that we might resolve the issue of how we deal with waivers of immunity in this House in a positive manner and according to the integrating nature of European law. Therefore, I would ask you once again to approach the Committee on Constitutional Affairs so that it may make a proposal for a reform of the Rules of Procedure which would clearly establish how we should act, not only in cases such as this, but in all cases of waiver of immunity.
(Applause from the PSE Group)

President
Mr Barón Crespo, you are well aware that the Committee on Constitutional Affairs has already been working on a report on this issue for several months. In addition, I believe the fact that the appropriate Spanish authority - namely the governmental authorities - referred this case to me is a most encouraging step towards a very positive outcome to this matter.

Poettering
Madam President, I have only indicated my wish to speak because Mr Barón Crespo considered it fitting to take the floor here again. I must tell you that, quite frankly, I do not think it was necessary to have addressed this subject here again. Since this has been done, however, I would just like to say one or two words on the matter. Of course, the process of waiving immunity is a difficult one, and we need common rules to govern this. But, Mr Barón Crespo, it has already been decided that the Committee on Legal Affairs and the Internal Market shall deal with this. Therefore, your comment here was unnecessary. I would particularly like to stress, Madam President, that, in all questions related to this process, you have conducted yourself completely in accordance with the law, and I would like to emphasise this here once again. We would like to wish the former Member of this Parliament, Silvio Berlusconi, every success as Italy' s Prime Minister. We are certain that we also have the support of Italy in building a sound future for Europe.
(Applause from the PPE Group)

President
Thank you, Mr Poettering.
With regard to the membership of committees:

McMillan-Scott
Madam President, we have been in correspondence about Mr Titford's membership of the Committee on Fisheries, a very important committee for the United Kingdom. We have expressed the hope that, since he never attends meetings of that committee, he might stand down as a member of it.

Agenda
President
The next item is the final version of the draft agenda as drawn up by the Conference of Presidents pursuant to Rule 110 of the Rules of Procedure.
Relating to the week of 3 to 6 September in Strasbourg: Relating to Monday:
I have two requests from the Committee on Constitutional Affairs to place on the agenda a report by Mr Carnero González, on the amendment of the Rules of Procedure relating to the membership of inter-parliamentary delegations of mixed parliamentary committees, and a report by Lord Inglewood, on the European Parliament decision on the modification of the Rules of Procedure on provisions relating to the justification of amendments.
I shall now give the floor to Mr Corbett, who is replacing Mr Napolitano, to move this request on behalf of the Committee on Constitutional Affairs.

Corbett
Madam President, I am speaking on behalf of Mr Napolitano who cannot be here. It concerns these two reports about relatively non-controversial amendments to our Rules of Procedure. These reports were adopted in committee last autumn and we in our committee were unanimously of the opinion that nine months is a long enough gestation period for any report.
We have of course enquired as to why the Conference of Presidents has not placed these two reports on the plenary agenda already. We are anxious to know quickly because we need to know what will happen to these reports before we move to the general revision of the Rules of Procedure scheduled later this year. It is therefore a matter of urgency. We have been told that the Conference of Presidents has not had time to consider this in full because the matter is still being examined by the meeting of secretaries-general of political groups with the deputy Secretary-General of the European Parliament.
We all know about Coreper in the Council. Perhaps not all of us are aware that there is a sort of Coreper in the European Parliament that filters reports before they come to the Conference of Presidents, before they come into plenary. This is a highly dangerous way of proceeding and, after giving them nine months to consider the matter, it is now high time to put these reports on Parliament's agenda, if not today, then later in the week. I am sure the committee would be willing to accept an undertaking that they be put on for the next part-session. But I must move this on behalf of the committee, supported unanimously by every political group in the Committee on Constitutional Affairs.

President
I am not sure that I understand, Mr Corbett. I thought that the Committee on Constitutional Affairs was making a request for this item to be placed on the agenda of this part-session. In my view, fellow Members must be clear as to what we are talking about. Do you still request that this item be placed on the agenda of this sitting? We consulted the appropriate services to see if it could be included this evening, and as long as the House is in agreement of course, we could do that tonight. Is this the issue that we are discussing and voting on?

Corbett
Madam President, that is the proposal formally put forward by the Committee on Constitutional Affairs. We wish to make sure that this is properly addressed.

Beazley
Madam President, we see how seriously my Party takes matters in this House. As a Member of the Constitutional Affairs Committee, speaking on behalf of Lord Inglewood, I must say that it seems very nearly a year is sufficient time for the powers that be to have considered this matter. If it is not placed on the agenda this week this is clearly going to cause difficulties for the committee in question. I would urge all Members of the House, including my colleague Mr Provan, to vote in favour of this suggestion.

Provan
Madam President, I had the honour to represent Mr Poettering at the Conference of Presidents' meeting, when this matter was discussed, as you well recall. The issue was whether we had time to take a lot of reports, because the agenda for this part-session is already highly complicated and very busy. I suggested that these two reports be taken with a major report from the Committee on Constitutional Affairs by Mr Corbett himself, and said it would be good to put together a whole package of changes to the Rules, because we need certain levels of voting throughout.
There did not seem to be any dissent in by the Conference of Presidents at the time and it was hardly questioned. Therefore the recommendation of the Conference of Presidents was that these should be taken together as a package when Mr Corbett's own report comes forward.

Voggenhuber
Madam President, allow me, without mentioning this proposal - of which I am in favour - to make just one small remark: I am campaigning somewhat for the respect of the large groups. It is the responsibility of the first vice-chairman to represent a committee chairman, not of a member of his group. I would ask Mr Corbett to show the office of vice-chairman in the Committee on Constitutional Affairs this minimum respect in future.

(Parliament rejected the request)
President. The reports will not be placed on the agenda. They will of course be dealt with at one of the forthcoming part-sessions, Mr Corbett.
Relating to Tuesday:
I have some information to share with you. I have no requests for amendment, but I would like to tell you that, unfortunately, Mr Michel, the Foreign Minister and also joint chair of the Conference Against Racism, is still in Durban and he will be unable to attend the sitting tomorrow, Tuesday 4 September. This is as much a disappointment to me as it is to you. Mrs Neyts-Uyttebroeck, joint minister at the Ministry for Foreign Affairs will represent the Council at the debate.
I have a second piece of information, which is that the Commission communication regarding the White Paper on European Governance shall be followed by consultation with the political groups, on the understanding that the main debate will take place at the next part-session or at the October 1 part-session at the latest.
Relating to Wednesday:
I have three requests for amendment to Wednesday' s agenda. First of all, the Group of the Party of European Socialists would like to re-organise the day' s proceedings, which are scheduled as follows: the Council and Commission statement on the conclusions of the meeting at Genoa, followed by the Watson report. The Socialist Group proposes that we begin at 9 a.m. with Gerhard Schmid' s report on Echelon, followed by the report by Mr Watson on the fight against terrorism. The Council and Commission statement on the Genoa conclusions would be postponed until the afternoon to be dealt with between 3 p.m. and 5 p.m. The rest of the agenda remains unchanged.
I shall now give the floor to Mr Barón Crespo who will speak in favour of the request by his group.

Barón Crespo
Madam President, I believe that this amendment of the agenda resolves an issue which remained somewhat in stalemate at the Conference of Presidents.
I do not believe that there is excessive divergence between the political groups, because we consider the three issues on the agenda to be important and we could deal with two very important issues in a more balanced way in the morning: the issue of the conclusions of the temporary committee on 'Echelon' and the issue of terrorism.
I believe that this would resolve an issue which we believe was not sufficiently clarified at the Conference of Presidents.

Watson
), rapporteur. Madam President, I note the proposal and if the report on terrorism is not moved by this proposal, then I would have nothing against moving it. Mr Schmid has done an excellent piece of work with his report on Echelon and it is something which must be voted on by the whole House as soon as possible.
However, I tend to the view expressed by Mr Vitorino that one has heard of both God and Echelon but one cannot be sure that either of them exists. I also take the view, which I believe, Madam President, is sustained and supported by your words at the beginning of today's sitting, that it is extremely important that we debate and vote on the issue of terrorism - which is a very real one - as soon as possible this week. Should Mr Barón Crespo's proposal not have the effect of moving the report on terrorism then I would be very happy to support it.

Lannoye
Madam President, I submitted a request, which is different to that of Mr Barón Crespo, in that my request is to make other changes to the agenda.

President
Your request in fact arrived later than the request by the Socialist Group. We shall, therefore, discuss it immediately afterwards, if the request by the Socialist Group is rejected. This is the correct way of dealing with such a matter.
Is there a Member to speak against the request by the Socialist Group? There being no speaker, I shall put this to the vote.
(Parliament gave its assent) Tomorrow' s agenda will therefore be changed as a result. I am sorry, Mr Lannoye, but your request therefore lapses.
I have another request relating to Wednesday from the Group of the Party of European Socialists, from the Group of the Greens, from the Confederal Group of the European Left, to end the debate on the conclusions of the G8 meeting at Genoa by tabling a motion for a resolution.
I shall give the floor to Mr Baron Crespo.

Barón Crespo
Madam President, at the Conference of Presidents, my group proposed that we hold a debate on the G8 summit in Genoa, essentially on its content. Why? Because the European Union participated in the G8 summit in Genoa - and I refer to the graphic testimonials if anybody has any doubt.
The photograph of the leaders included the President of the Commission, Mr Romano Prodi, and the President-in-Office of the Council, the Belgian Prime Minister, Mr Verhofstadt, and, therefore, since they participated actively in the summit, one on behalf of the Commission and the other on behalf of the European Council, and since the summit dealt with a series of issues which are important to this Parliament, to Europe and to the world, we also believe that it is our duty to comment on the content of the G8 Summit.
I would also like to point out that my group proposed - and there is agreement on this in the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs - that, in relation to possible violations of the fundamental rights of European citizens and the management of public order during the summit, the Committee on Citizens' Freedoms should produce a recommendation with a view above all to learning from past mistakes, in the light of the Laeken Summit.
Finally, Madam President, please allow me to address the Members, particularly from the Liberal Group, because on this occasion it so happens that Mr Verhofstadt is a liberal Prime Minister of a coalition government and the most recent friends of President Prodi, at least the Italian ones, sit within the Liberal Group. And I am addressing Mr Cox so that he might have the opportunity to send compliments to the representatives of his group who sat on the European Council.

Wurtz
Madam President, my group fully supports the suggestion to conclude our debate on Genoa by a resolution. I do not propose, however, that we should enter into a debate on the content of this resolution. That is something for the various groups to do. My group believes that Parliament must deliver an opinion on the results - or the lack of results - of the G8 summit, as well as on the extremely serious events which took place during the summit, and on the extraordinary success of the initiatives of the Genoa Social Forum, which also concern us at a time when we are involved in a far-reaching debate on the future of the European Union.

Poettering
Madam President, I am somewhat surprised that we are deciding now whether to have a resolution or not. Our group had simply agreed with the proposal from the Socialist Group to revise the agenda slightly. Admittedly, we made no formal connection between the two matters, but there was absolutely no question of there now being a resolution on Genoa. Mr Wurtz, you have just indicated in your speech that we shall probably end up commenting on the very issues which we want to avoid here. In any case, we do not feel that now is the right time to comment in a brief and hasty resolution on violent events, events which we take very seriously. Our group is of the opinion that the issues of violence, menacing behaviour and the threat from globalisation should be very carefully looked at by Parliament and must not, through hasty or random decisions, be tied up in resolutions. As we can see the risk of this happening, we completely refrain from passing a resolution and support what the Conference of Presidents decided last week - where I was represented by Mr Provan - that is to say that we should hold a debate and discuss all the aspects but not come to a hasty decision now concerning the contents of a resolution, or comment on the violence. Rather, we should do this in our own time and with a great deal of care. Therefore, for sound reasons we are against a resolution on Genoa.

Cox
Madam President, I did not wish to speak at all but since the President of the PSE Group appears to be upset that I am doing too little to promote liberalism in Europe by not having a resolution, I should point out to the honourable Member that in my group we looked at the precedents. It is not the first time a Commission President has attended a G8 meeting, or that a Prime Minister and President-in-Office has attended a G8 or G7 meeting. The precedents will show the honourable Member, as they showed me, that it is not our custom to promote our friends in politics by having resolutions after such meetings.

Lannoye
I would also like to express my support for the motion for a resolution. I do not believe that there is any political justification for failing to follow our debates by a resolution, when a political debate has been held in the presence of the Council and Commission. The groups will negotiate the content of the resolution. Therefore, if some groups do not want us to discuss the violence at Genoa, that is their right, but they will show their opposition by voting against any proposal made in this direction.

President
I shall therefore put to the vote the motion to table a resolution following the debate on Genoa.
(Parliament rejected the request)
Relating to Thursday: With regard to Thursday and the topical and urgent debate, I have a request for amendment from the Group of the Party of European Socialists to replace the item 'Foot-and-mouth disease' by the sub-item 'Afghan refugees seeking asylum in Australia' , which is currently under 'Human Rights' . Mr Baron Crespo, I do not know who is due to speak in favour of this request.

Barón Crespo
Madam President, the reason for our proposal is very simple: what is happening at the moment with the Afghan refugees and the treatment they are receiving from the Australian government - and I mean the Australian government because the Australian Federal Supreme Court is finding fault with it - does not only involve a violation of human rights; it is an issue which involves a blatant violation of the principles of maritime law and humanitarian law ratified by all countries, including such an important European ally as Australia. We must speak out clearly in this regard, by condemning a political attitude which verges on xenophobia.

Maes
Madam President, it is clear that the proposal concerning the Afghan refugees is a topic that must and can be open for discussion. This is also provided for in the agenda. Given the new measures enacted in the United Kingdom in connection with the current spread of foot-and-mouth disease, we consider it vital that this matter be discussed. Since these topics are not mutually exclusive, we would ask Parliament to cover this topic too.

Van Velzen
Madam President, Mrs Maes has already put the point across very well. What really matters is that we can specifically discuss the Afghan refugees under the heading of 'human rights' . However, we all appreciate the enormity of the problems there have been in Europe in connection with foot-and-mouth. It is therefore of major importance for the European Parliament to make its views known concerning foot-and-mouth. We could combine both topics. We could discuss the Afghan refugees under the 'human rights' heading and foot-and-mouth disease under a separate heading in the topical and urgent debate. In that connection, I would like to make an urgent appeal to our Socialist MEPs to leave the agenda as it stands.

Barón Crespo
Madam President, from what I have heard, there have been two interventions against and none in favour.

President
The comments made by Mrs Maes strongly reinforce the fact that the two items could both be dealt with, as I myself also said. The situation of the Afghan refugees requesting asylum in Australia is already on the agenda, under 'Human Rights' . So, we will certainly be holding a debate on this issue, in any event.
So, how shall we deal with this? I think that we must take clear action and withdraw the item on foot-and-mouth disease from the agenda. Fine. I shall put to the vote the request from the Group of the Party of European Socialists.
(Parliament rejected the request)
Regarding the sittings of 19 and 20 September in Brussels: There are no amendments.

 
Speeches relating to procedure

Maes
Madam President, on behalf of our group, I should like to ask you personally a question. In connection with the Macedonian peace proposal, the Macedonian parliament must hold a debate as a matter of urgency. Would you address the president of that parliament? We are all hoping for broad parliamentary support for the peace proposals, but this will not happen without any effort. Parliament has a major role to play. Hence our request to you to ask the president of the parliament, in a letter or message, to discuss this peace proposal as a matter of urgency.

President
Mrs Maes, the response that I am going to give you will, I believe, exceed your expectations. I am in fact going to visit Macedonia in a few days' time, at the very request of all those people who are involved in this matter and who hoped that the President of the European Parliament would go to Macedonia, because this Parliament, I think it is true to say, is very well regarded and this certainly is a most encouraging sign.
Naturally, as soon as I can, I shall give you further details about this invitation, which I have only just received.

Hernández Mollar
Madam President, on Wednesday of last week an aircraft of the Binter Mediterranean company, which flies between Málaga and Melilla, crashed near Málaga airport killing four and injuring seventeen. It is the second time in two years that the city of Melilla has suffered a tragedy of this nature. On this occasion, thanks to the skill and professionalism of the pilots - one of whom died - almost all the passengers survived.
Madam President, I would ask you to communicate our feelings and our solidarity to the families of the victims and the injured, with the conviction that the European Commission and this Parliament are demonstrating their concern for the quality and maintenance of the safety of air transport, as the debate we are holding this very Tuesday will show, when the European Commission presents its reports on this subject.

Dupuis
Madam President, yesterday in Vietnam, Mr Ho Tan Anh, a Buddhist monk, set fire to himself. Last July, this Parliament adopted a very articulate, precise resolution, in which Parliament specifically requested Mr Nassauer, the chairman of the delegation for relations with South-East Asia, to organise a mission to Vietnam as soon as possible in order to meet, first and foremost, the religious leaders who are currently imprisoned, and to assess the situation with regard to religious freedom in Vietnam.
Therefore, Madam President, I am asking for your support and the support of the House so that Mr Nassauer can organise this mission in the coming days. In my view, setting fire to oneself is extremely serious and it is a very clear sign that the situation in Vietnam is deteriorating and I believe that our delegation should pay an urgent visit to Vietnam, as Parliament had already decided.

President
Mr Dupuis, I shall pass on your request to Mr Nassauer. He is not here in the House at the moment, but I shall tell him exactly what you have said.

Napoletano
Madam President, although I am sure that you will have done so already, seeing as this is our first sitting after the summer I would like to remind all the Members that, a few days after the last part-session in Strasbourg, a tragedy occurred in this city: a huge tree near Parliament fell on some people who were attending a concert and many died, including a number of young people. I feel that, this being our first meeting after the summer recess, it is our duty to express our sympathy once again and send our condolences to the mayor of Strasbourg, the relatives of the victims and all the citizens for, apart from anything else, Strasbourg is our host city and the tragedy took place just a few metres away from the Parliament building.

President
Of course, Mrs Napoletano, as you already said, I immediately expressed our heartfelt sympathy and sent our condolences to the Strasbourg authorities as well as to the families of the victims. This is a truly awful tragedy, and I wanted to express the feelings of this House by sending our condolences.

Blak
Madam President, I am obliged to raise an extremely unfortunate matter. This Parliament is physically terrorising and persecuting a small Member State, namely Denmark, together with the Danish MEPs. For many years, we ourselves have had to pay for being able to watch a Danish TV channel. Now, it has been shut down, both here and in Brussels. That is not good enough, and I should like to ask you not to delay a single day in turning to the only person who can solve this problem, namely our trouble-shooter supreme, our charming, wonderful, delightful and gifted fellow MEP, Mrs Banotti, so ensuring that we have Danish television again no later than tomorrow morning and that Parliament does not in future make life uncomfortable for one of the best Member States by practising this form of terrorism upon member countries.

President
Mr Blak, as I will be visiting Denmark in a few days, I shall certainly make it clear that there was no discrimination. I am sure, however, that Mrs Banotti would like to reassure you of this fact straight away.

Banotti
Madam President, when I heard that poor Mr Blak was in trouble again I naturally rushed to see what could be done about it as quickly as possible. Apparently Denmark is now entering the digital age with television. Consequently there has been a technical glitch with the reception of Danish television here, which of course I shall immediately attempt to rectify.
If my Danish colleagues want a particular radio or television station, they must agree as to which particular one they want. This is a chance for my Danish colleagues to get together in a spirit of harmony and decide what precisely they want and I naturally will facilitate that as quickly as possible.

Êorakas
Madam President, now we can see why NATO forces in Kosovo not only made no attempt to apply UN Security Council Resolution 1244, mainly as regards disarming the KLA, but declared it to be a protected body in Kosovo. They may not have arranged but they certainly allowed its equipment to be updated and, basically, they may not have encouraged but they clearly - albeit indirectly - allowed KLA criminals to penetrate the FYROM, where the present situation has now arisen. This situation, Madam President, was the alibi that NATO needed in order to intervene, in order to apply this despicable agreement on voluntary disarming by the KLA and dictate constitutional change. Thus, with the KLA being used as a lever and with direct support from the USA, yet another country is being broken up in order to create a new Bosnia-Herzegovina type protectorate. In our view, not just the USA and NATO, but the European Union, which is supporting NATO action in the area, has a great deal to answer for.
This is not just our view; it is shared by a great many journalists who, like us, are wondering what the next step will be. We Greeks are particularly worried because we can see that the forces intervening in the Balkans are not working towards peace, they are working to stir up tension and armed conflict. We are worried because, apart from anything else, we can see the fire spreading dangerously close to Greece, with the connivance of the Greek government. As you are due to go there, we call on you to pass on our view that this policy should stop and that NATO should leave the Balkans so that the peace which existed before these interventions in our region can be restored.

Wynn
Madam President, after the serious business may I end on a lighter note, with some good news for the region I represent, the north-west of England. The English papers yesterday and today seem to be dominated by one issue, the memorable historic match when England beat Germany by five goals to one. The reason it is such good news for us - and I offer commiserations to my German colleagues - is that the main architects of that victory came from the major clubs in the north west - although we did have a Swedish manager. I hope this shows people that the north-west region of England is a centre of excellence, not just for football but for many other things as well and I invite you all to go whenever you can.

Schulz
Madam President, thank you for giving me the opportunity of responding to the honourable Member so quickly. I would like to congratulate him on the success of the English national team and at the same time point out to Mr Ferber, who is unfortunately not here, that the overwhelming majority of the German team comes from Bavaria!

Fatuzzo
Madam President, firstly, I would like to wish you all a good session this year. I promise that I will only speak when it is absolutely necessary and I will start immediately by saying that, last Sunday, 26 August, I was in Genoa, my native city. I was going to go for a swim in the sea - it was an extremely hot day - at the 'Italia' bathing resort off Corso Italia, and I was about to dive into the water when I was recognised by an old childhood friend, a municipal councillor called Egidio Saccone, the owner of the establishment, who said to me: "Mr Fatuzzo, as a Member of the European Parliament, speak out and try to ensure that enthusiasts who practise all kinds of sports - swimming, boxing, field and track events, football, cycling, tennis and so on and so forth - receive a pension as well. I am sure that they will listen to you, they will tell all the 15 States and they will do something about it." And ... then I went for a swim!

Morgantini
'Hand in hand for peace' : that was the theme of the Adep demonstration scheduled to take place on 1 September in Ankara. In actual fact, the demonstrators were unable to hold hands because the police prevented any demonstrating taking place: they entered the headquarters of Adep, which is a democratic party, and arrested hundreds and hundreds of people, going so far as to shut them in the stadium. As we know, stadiums have been the scene of appalling, tragic incidents. I therefore call upon the President to make representations to the Turkish government to ensure that the freedom of movement and speech and the freedom to demonstrate can be exercised by the Kurds and Turks, who simply wanted to be able to march together for peace, and to ensure that the people detained in the stadiums and Turkish prisons are released immediately.

President
I shall do so, Mrs Morgantini.

Uca
Madam President, I would merely like to expand on what Mrs Morgantini was just saying. The ban on the peace demonstration on 1 September led to the death of one person who was fleeing from the police. Today, 500 people remain in custody. I ask you to do what you can to see to it that the 500 people still in prison are released immediately.

President
Once again, I shall certainly do so.

Villiers
Madam President, I appeal to you to write to the Taliban authorities about the unfortunate case of Shelter Now. Members of Parliament may have heard that a number of aid workers have been arrested by the Taliban authorities, largely on the basis that this is a Christian-based organisation which contravened the Taliban's rules on religious intolerance.
I appeal to you to write to the Taliban authorities demanding fair treatment for those arrested and their rapid release. They have committed no crime apart from trying to help Afghanistan and the Afghan people. Afghanistan is one of the poorest and neediest nations in the world and it sets a very frightening precedent if aid workers are attacked because of their faith. It will undermine aid operations throughout the world and especially in Afghanistan.
I would like to draw Parliament's attention to the fact that these aid workers, both European and Afghans, may face the death penalty under Taliban law. I urge Members of the House to support an appeal to the Taliban authorities to release those arrested.

President
Of course, Mrs Villiers, we are all well aware of the facts that you have described and this is further evidence of what I see as the insane and destructive nature of the Taliban regime.
You know that Parliament has expressed its view on this matter on several occasions and therefore I shall certainly be taking this action.

Duff
Madam President, before the summer break the Parliament's Bureau finally decided that it would publish the names of all the assistants of Members paid under Article 14 secretarial allowances, but since then we find that the Bureau and the Quaestors have qualified their decision and are requiring the individual consent, of both the Members and the assistants, before they appear upon the list.
Surely, this makes a mockery of transparency and transgresses the principle that the names of all those who are paid from public funds should be published. Can I ask you to request the Bureau and the Quaestors to review their decision?

President
Mr Duff, in order to clarify matters, it was not the Bureau that reversed this decision - it is the directive on personal data protection which stipulates that this is necessary - and you will agree that it is difficult for the Bureau or the Quaestors to disregard the needed protection of personal data, which requires the consent of the persons concerned.
We have studied this matter very closely, in a strict manner, and, of course, the opinions of our legal service were absolutely firm on this point.

De Rossa
Madam President, a number of people have already raised issues relating to breaches of human rights and I also wish to raise a question of a serious breach of human rights. A human right that every single person in this House would support is the right of little children to go to school unhindered and unterrorised. As we speak in this House, four - five - and six-year-old children in a small area of Belfast in Northern Ireland are being terrorised by so-called protests.
I will not bore you with the arguments for and against these kinds of protests or the arguments of one side or the other - but these are political arguments between adults. This should not involve little children going to school. Madam President, I would appeal to you to write to all the parties in Northern Ireland, and the Irish and the British governments, to urge them to use every power and every means of persuasion at their disposal to stop these kinds of protests. Let these little children go to school unhindered.
It seems to me that there is a view that terrorism only consists of bombs, guns and bullets. But how will four-year-old children, going to school for the first day in their life remember that first day when they are surrounded by police who are armed because they need to protect them and who are seeking to provide them with a safe corridor to go into their classroom for their first day of school? It is an appalling situation and I would appeal to you to write to all the parties concerned.
While I am on my feet, may I also make the point that there has been an historic breakthrough in Northern Ireland. As we all know, agreements to change things are not enough, there also has to be a change of heart. There has been a new agreement on policing in Northern Ireland which is fundamental to the peace agreement. The SDLP - the party led by John Hume who is in this Parliament - has given its support for the first time in the history of Northern Ireland to the police service there and they should be congratulated for that.

Gorostiaga Atxalandabaso
Madam President, last month in San Sebastian a booby-trapped toy seriously injured a baby in the arms of his grandmother who was killed by the explosion. That lady you mentioned, was Maria Eraunzetamurgil, but you said that nobody knows who did it. Six people have died as victims of the unofficial dirty war that has already killed 66 other victims since 1977.
We expect those responsible to be put on trial. Mr Barón Crespo said 'justicia aplazada, justicia negada'. I spoke about 1977. Mr Segundo Marey, who was kidnapped in error at the beginning of the socialist period of the dirty war, also died last month in Hendaía. Those that were condemned as responsible for the kidnapping - high officials of the Spanish government and police - were released after only a few days in prison. All those victims also deserve our sympathy and respect.

Alyssandrakis
Madam President, the position taken by Mrs Morgantini and Mrs Uca on the situation in Turkey has our full backing. I should like to add that it is now ten months since political prisoners in Turkish prisons went on hunger strike in protest against the government's plans to keep them in tiny isolation cells. The toll to date is tragic: thirty-two young people have died on hunger strike and a further thirty-one were killed in last December's attack on the prisons by the Turkish authorities. The most recent victim was Hulya Simsek, who passed away on 31 August. She was the sixth relative of a political prisoner to die on hunger strike.
On behalf of the Communist Party of Greece, I wish to use this platform to condemn the criminal indifference of the Turkish regime and the hypocrisy of those who, while battling for human rights, have not lifted a finger to put pressure on the Turkish government to stop this intransigence in the face of the prisoner's just demands and to respect human rights in general. They include the European Union, which has a particular responsibility now that Turkey is a candidate country. Madam President, ladies and gentlemen, indifference in the face of crime is tantamount to complicity.

García-Margallo y Marfil
Madam President, I am not absolutely sure whether this is a point of order, but it is a reply to a previous intervention.
This Parliament knows that the Spanish Constitution - probably because it was created following a dictatorship - is the most respectful constitution in terms of fundamental rights and public freedoms in the whole of the European Union.
This Parliament also knows that the person who spoke previously is an example of this because he has been able to take part in free elections, in which he has been able to express his opinions. This Parliament also knows that when there have been violations of legislation in the fight against crime, those violations have been tried by ordinary courts with every judicial guarantee and there are currently people belonging to the State apparatus in prison as a result of those violations.
I cannot say the same about many colleagues from my party, from the Socialist Group or from other parties who, because they disagree with the opinions that have been expressed, have purely and simply been murdered. And there are now around a thousand of them.

European Company Statute
President
The next item is the joint debate on:
Report (A5-0243/2001) by Mr Hans-Peter Mayer, on behalf of the Committee on Legal Affairs and the Internal Market, on the Draft Council regulation on the Statute for a European Company (SE) (14886/2000 - C5-0092/2001 - 1989/0218(CNS)), and
Report (A5-0231/2001) by Mr Menrad, on behalf of the Committee on Employment and Social Affairs, on the Draft Council directive supplementing the Statute for a European Company with regard to the involvement of employees (14732/2000 - C5-0093/2001 - 1989/0219(CNS)).

Mayer, Hans-Peter
Madam President, ladies and gentlemen, the idea of creating a European form of company obeying the same supranational rules in all Member States is almost as old as the European Union itself. The Societas Europaea (SE) is the flagship of European company law. The academic foundations were laid in the late 1950s. In 1970, the Commission submitted a proposal for a regulation on the statute of an SE. It contained uniform law down to the last detail.
In 1989, the Commission submitted an entirely new proposal for a regulation which excluded social and labour law, fiscal law, law on competition, protection of industrial property rights, insolvency law and industrial constitution law. Finally in Nice, political agreement was reached on a Council regulation on the statute and on a directive on worker participation.
As regards the legal base: the 1989 proposal was based on the present Article 95 which establishes the right of co-decision. The Nice proposals are based on Article 308 whereby Parliament would simply be consulted. Article 95 is just as appropriate a legal base for the regulation as Article 308. For the purposes of democratic legitimacy - and in line with decisions of the Court of Justice - the legal base giving Parliament most say should be chosen in such a case. Consequently, Parliament reserves the right, following adoption by the Council, to bring a case before the Court to examine the legal base.
As regards the regulation: pursuant to Articles 2 and 3, there are different ways in which an SE can be established. The capital of the SE must be at least EUR 120 000. There are two different systems of managing limited liability companies under the company law of the Member States. The 'single' system in Britain, for example, provides solely for an administrative body. The 'dual' system, applicable in Germany, for example, provides for a supervisory body and a management body. European unification now requires that both systems be available in each country so that it is possible to choose freely between them.
Hitherto, company law of the Member States has been such that national companies can only transfer their place of business if they are dissolved and re-formed in another Member State. With an SE, a transfer will not result in the company being dissolved or in a new legal entity being created. The growing together of what used to be separate markets means that we must finally create organisational forms which reflect the new situation in Europe. However, there are serious shortcomings in the structure of the SEs. SEs will differ from one Member State to another. There will not be one European SE, but an SE with French, Spanish or German features, for example.
Furthermore, even within the same Member State a variety of different SEs will be created to cover various company features such as co-decision making. I consider it essential that, parallel to the entry into force of the regulation, accompanying fiscal rules should also be adopted.
The precise nature of the SE will, naturally, be determined in part by fiscal legislation. To this end, the series of amendments from the Group of the European Liberal, Democrat and Reform Party is to be welcomed. In conclusion, I advocate launching the SE on its maiden voyage. This will show where repairs are still needed so that one day it will fulfil our hopes and become the flagship.

Menrad
Mr President, ladies and gentlemen, Mr Mayer pointed out that the idea of creating a European limited liability company was already being discussed more than 30 years ago. The former President of the European Commission and Member of this Parliament, Mr Santer, made this form of company a more prominent subject for discussion in the second half of the 1990s. Mr Santer and a number of his fellow campaigners here in Parliament wanted it as a way of attracting global players from Europe to compete in world markets.
The European limited liability company has hitherto foundered in the Council of Ministers especially because of the issues surrounding the position of workers. In 1970, a regulation on the European limited liability company one-sidedly stipulated just the German model of co-decision-making, although co-decision-making is simply not an item for export.
In the late 1980s, Parliament was presented with two documents which were intrinsically linked. Dr. Mayer has already outlined these: a regulation on issues of company law - the statute - and the directive concerning the position of workers in the limited liability company or SE. Three models were established, of which one had to be chosen. Even in this matter, there was no general consensus. It was only in 1997 that a solution emerged in the form of a proposal from Parliament. This proposal was underpinned academically by the work of a group of experts under the chairmanship of Etienne Davignon, and the Davignon Report was signed by trade union members and members of employer associations. Whichever way you look at it, this was a breakthrough because it fell back on the recipe for success established by the Directive on the European works council, a subject which we shall touch upon again in the next item on the agenda.
The following basic principles for the creation of a European limited liability company were now proposed: flexibility, negotiated solutions and minimum standards. Thus, the customs of employee participation existing within the European Union were also skilfully incorporated. In other words, in some countries participation is established through legal channels and in others by means of collective agreements. Now these are combined: as regards the European limited liability company, a special made-to-measure collective agreement is drawn up between the founding board of directors and a special negotiating body of employees and, in the absence of an agreement, the minimum laws governing worker involvement shall be applicable for half a year to a year. The Davignon Report calls these reference rules. The EWC Directive talks of subsidiary requirements. I think this is the better term as it refers to subsidiarity in an exemplary manner. This idea was also decided upon in Nice. We support the regulations governing participation agreed in Nice.
The report from the Committee on Employment and Social Affairs proposes two significant amendments to the Council' s draft. Firstly, we would like a different definition of the term participation from that used by the Council. The designated body representing workers is nothing more than a special European works council for the European limited liability company, incidentally with better legal powers, something which we should remember when amending the Works Council Directive. However, there are, and remain, laws governing information and consultation. It would be wrong to use the term 'participation' here.
Secondly, the original Commission proposal made it clear that the procedure for electing employees onto the supervisory or management board is to be governed according to the provisions applicable in each Member State. In Germany, therefore, employee members must be directly or indirectly elected in accordance with the election of members to supervisory boards pursuant to the German law on stock companies. I am convinced that, in this regard, it is essential not to make a distinction in the electoral process. Under German law on stock companies, members are elected. Under the arrangements governing the European limited liability company, employee representatives will not be elected.
The regulation and directive in question have retrieved the European limited liability company from the frozen depths of European legislation. However, both - and here I agree with Mr Mayer - exhibit major shortcomings. We must finally take the first step, however. After six years, these two legal instruments should be tested and, if necessary, improved. We must get a foot in the door. The next gust of wind will open that door. I think that, with this European model, we are on the right track, including where the social dimension of the internal market is concerned. The European model is, of course, not purely a matter of market economics and, therefore, not purely a limited liability company either. Rather, it is a limited liability company also involving the participation specifically of the employees.

Manders
Mr President, Commissioner, we are delighted with the proposals that are before us. Mr Mayer and Mr Menrad have already noted that there is still room for some improvement as far as those proposals are concerned. Nevertheless, I believe we should be very pleased with the progress made on this extremely important subject. Before, it was mainly the American multinationals that considered the lack of a European Company as a deficiency, because they wanted to work in Europe rather than in the individual Member States. It is also for that reason that, as long as thirty years ago, Professor Sanders introduced the concept of 'Societas Europaea' during an inaugural speech at the Erasmus University in Rotterdam.
We are pleased that the proposal is now before us after thirty years. We regret the fact that it is still not possible now finally to bring the tax systems in Europe closer together and to gear them to one another. This does not mean that taxes should be harmonised. I believe that a band of competitive tariffs should remain in place, but I still think that it is important for a European Company to have the tax systems in the various Member States at least geared to one another. Indeed, we may now have one European Company, but each Member State will still need to apply its own social legislation and its own tax systems.
It will ultimately be the market which will require that an actual European Company with its own statute be created, something which, at present, is still being hampered by the independent actions of the various Member States. We therefore welcome the European Company. We hope that the evaluations will follow promptly and believe that the market will eventually determine the European Statute a few years following those evaluations. This will benefit a Europe that has the euro and the internal market.

Miller
Mr President, I should like to congratulate Mr Menrad and Mr Mayer on their reports. I would also like to back up what Mr Mayer said about the legal base. He is quite right. We have had people playing fast and loose on the whole question of the legal base. We started off with Article 95 as legal base and we have moved on to Article 308 because it suited certain people. That is wrong and Parliament is right to say that at some future date we should be challenging this in court.
Concerning the opinion of the Committee on Legal Affairs and the Internal Market on Mr Menrad's report on the information and consultation of workers, I take the two examples of Corus and BMW Rover. The first thing workers knew about the situation they were facing was when they were driving into work and they heard it on the radio. In this day and age that is totally intolerable. Workers should be informed at the very start about the situation pertaining to their jobs because they are part and parcel of that company.
I should know. I remember many years ago I turned up at my place of work to find that the gates of the factory were locked and all of us were standing outside. We were told by someone who was sent out that we had all been made redundant. I remember that quite clearly because the people who owned the factory still lived in big houses, still drove big cars and still went on holidays. I was a worker in the factory and nine months later I had not received any redundancy money: all I got was my back pay.
That is the sort of situation workers should not be faced with ever again. That is why I congratulate Mr Menrad on taking this small step on the information and meaningful consultation of workers because it is a step in the right direction. It is not perfect. It will come back and we will improve it. However, it is a step in the right direction and I support it.

Lehne
Mr President, ladies and gentlemen, I do not wish to go into any more detail, but it has already been explained why the European limited liability company is so important. That is why the circumstances in which this form of company arose and the problems with which we must deal here are all the more regrettable. We all know that the Nice Summit was not exactly a raging success and, instead, produced a meagre result as far as the treaty negotiations are concerned. With this limited liability company, the Heads of State and Government intended to be able to offer us, as a minor success of this summit as it were, something which would at least take Europe a step further. In principle, this is of course to be welcomed. However, it is regrettable - absolutely regrettable - that the Heads of State and Government have disregarded the law and the Treaty by actually changing the legal base on the basis of the motto 'we have now come to the agreement that, as regards this matter, Parliament is not to interfere' . They have replaced Article 95, which was clearly the legal base for one part of the process, with Article 308, which they have also used to replace Article 137 which clearly would have been the legal base for the other part of the process according to the text of the Treaty.
The result is no co-decision making; the result is unanimity in the Council, with decision-making resting solely with the government. Personally, I do not think that Parliament can accept this. Therefore, by a large majority in the Committee on Legal Affairs, we have amended the legal base and re-established the correct legal base, in other words Article 95 and Article 137. It is also interesting that this has been expressly established in the recitals to the original proposal and that the legal services have given their support to this. We have proceeded with consultations as with a co-decision procedure. I would like to warn the Council of the following: If they amend the legal base for this important process again in its second reading, then they are running the very serious risk of legal action from Parliament in this matter. I believe that we will win this action in the Court of Justice. The practical value of the process is, in our experience, rather limited anyway. I am referring to the letter from the president of UNICE. We have already referred to this within the committee. We have requested that fiscal regulations be revised, and I hope that this revision is carried out soon.

Rothley
Mr President, my group and myself, a rapporteur many years ago, are in favour of the regulation, but not because we are particularly taken with it, since what is presented to us here as a European limited liability company is incomplete. There will not be one European limited liability company, but 15 European limited liability companies. What complete disorder! I do not want to go into the details. The Council has confirmed what is common knowledge: that the Council itself is the problem when it comes to European legislation. The Council, not the Commission and not Parliament: the Council is the problem! It still wants only to decide on matters unanimously, and if there is a legal base for doing so - in this case Article 308 - all the better. So we do not need Parliament. But we will - as Mr Lehne said - very carefully consider whether this legal base is adequate, and in emergencies we shall involve the European Court of Justice in the matter. In the hands of the Council, Community law is becoming a new style of international law, with the difference and the practical advantage that it does not have to be ratified either by the European Parliament or by national parliaments. This is the strategy of the Council.
Why should this European limited liability company be such an attractive prospect? Why should it be adopted? Is it not the case that this European limited liability company is threatened with the same fate as the previous company patent under the Luxembourg Convention? In this case, the Council, after many years of laborious work, also came to a compromise, and the whole of industry, all parties concerned, were not interested in it. Perhaps things will not be different with this form of European limited liability company. So what are the advantages? Why should we create a European limited liability company? What are the fiscal advantages, for example? I, for one, cannot see any.
Just one more remark: It may well be that the tenth Directive concerning cross-border mergers of limited liability companies will again be unearthed after this flop, by way of a supplement as it were, because nothing will come of this European limited liability company. But hold on a minute, my friends from the Commission and the Council, nothing came, first time around, of the tenth Directive concerning cross-border mergers of limited liability companies and involving the abolition of participation, and nothing will come of it this time!
Now that we have come to grips with the European limited liability company as it were, I would like to remind you that other company forms are next on the list: the European association, the European mutual society and the European cooperative. I hope that the Commission lays down proposals on these matters in the near future.

Gasòliba i Böhm
Mr President, ladies and gentlemen, I am pleased to speak in this debate dealing with a key proposal for the process of European construction.
The possibility of having a genuine European limited liability company is in line with the thinking which has led us to a European internal market, to a monetary union and to the last phase of the full use of the euro, which we are now approaching.
Nevertheless, as one of the rapporteurs has pointed out, it has taken us thirty years to arrive at this thinking - a little more than thirty years - from the first proposal, in 1970, until now.
My observation on behalf of the Liberal Group has two aspects to it: on the one hand, we will of course support the proposal; we believe that it represents a step forward within the achievements of the process of the European construction. We must also say, however, on the other hand, that we are not satisfied. As the proposed amendments to both reports point out, the structure proposed for the creation of a European limited liability company is still too complex.
There are various options and the possible varieties of European company may even arise within a single Member State. It is now thought that if the different methods and options are taken into account and a combined calculation is made, up to two hundred different figures may be reached. We do not believe that this is the most appropriate way to consolidate a European company which would act in accordance with the reality which we have achieved thanks to the European internal market and the monetary union.
We have therefore also presented a series of amendments on behalf of the Liberal Group aimed at consolidating this key figure for the Economic and Monetary Union and we would very much like the Council to accept them.

Bouwman
Mr President, Commissioner, on behalf of the Group of the Greens, I should like to say a few words on this subject. Immediately before the summer recess, we experienced the difficult situation involving the Take-over Directive, the social aspect of which, in particular, appeared unacceptable to a majority of this House. We can be very clear about this. In this case, the Directive is certainly acceptable, although I share the view of Mr Rothley and others that it is still deficient. However, that is due to a number of other factors.
Ideally, we should have liked to have seen a kind of package deal emerge, combining the Take-over Directive and the European Company Directive, which would also have taken care of aspects related to participation, information and consultation. At the moment we are facing the difficult situation in which things happen in a certain sequence but in which we cannot entirely follow their interconnection.
In the final analysis, we naturally agree that, in the framework of what we would then term 'a European social model' , use should be made of the information and consultation rules that have been included in the reports of Mr Menrad and Mr Mayer which are, by the way, excellent, in my opinion. We should like this to be done in a non-Anglo-Saxon manner, as I indicated in connection with the Take-over Directive.
If we now compare the European works council, as it exists at the moment, with the legislation under discussion with regard to information and consultation, then this comparison works out in favour of the current model. However, as will immediately be evident from the document, we still have the improvement of the European works council ahead of us. A great deal needs to be done there, so much so that I am not sure what the exact outcome will be.
We therefore ultimately agree on this approach. With regard to information and consultation, we are naturally keen advocates of what is being described as 'Rhineland working relations' . We accept this as what might be called a minimum guideline.
For a number of countries, such as Austria, Germany and the Netherlands, the transposition into national legislation will therefore be of the utmost importance, because they generally apply superior regulations, and adaptation could prove problematical.
Finally, I would draw your attention to the fact that I especially support Mr Menrad' s Amendment No 7 concerning the definition of 'participation' . It is a challenge for the Commissioner to agree to this and also to handle the legal bases correctly.

Gallagher
Mr President, after 30 long years of negotiations, the Employment and Social Affairs Ministers managed to reach agreement last December on a statute for a European company. The creation of a European company has long been seen as essential to a comprehensive body of European company law which promotes business. In an increasingly globalised business environment, the arrival of the SE is timely.
Capital moves easily across borders as multinational firms seek out the most attractive business locations. The Union can achieve a great deal in the creation of a single market for goods, services and capital. There has long been a need to create a European company to complement this picture.
Members of this Parliament hail from 15 different sovereign states and are aware that company law differs widely from one Member State to another. I welcome the fact that this regulation foresees five different ways in which an SE can be established. Member States' company law allows for two different systems of company management. The regulation proposes that both systems be available in each country. Hence companies will be able to choose the approach which best suits their needs.
In view of the slow-down in the US economy and consequently the world economy, it is essential that we, as legislators, do all we can to facilitate business and job creation. The creation and management of European companies must take place with as few hindrances and bureaucratic obstacles as possible. Companies must be afforded the flexibility they need to stay lean and move swiftly in a highly competitive environment.
The rapporteur refers to taxation. It must be made clear that taxation policy is a matter for each Member State and its national parliament. Any proposal that corporate tax be paid by SEs and could go into EU coffers is totally unacceptable. The Irish government has a policy of low corporate tax to encourage investment. Our 12.5% rate has proved itself by actually increasing tax revenue while at the same time promoting sustained growth. Ireland could not countenance any suggestion of harmonising corporate tax rates, especially in this period of economic slow-down.
I commend Mr Menrad and the Committee on Employment and Social Affairs for their work on employee rights. We in Europe have long held that a partnership approach works best. Companies are reliant on their employees. There must be no erosion of the workers' rights that have been won over time. A European company without participation in some form is unthinkable. There are a number of models of worker participation. It is positive that the regulation avoids a one-size-fits-all approach. In conclusion, the scale of employee participation will be decided through free negotiations between the companies concerned and the workers.

Harbour
Madam President, I am speaking this evening on behalf of my colleague Lord Inglewood who has been shadowing this for the British Conservative Group and who has unfortunately been delayed due to the inadequacies of plane transport from here to Brussels. He asked me particularly to make that point to you.
I broadly welcome this as a pragmatic proposal. I do not want to reflect on what might have been. I want to address a few remarks to the Commissioner about the implementation of this proposal because it is a welcome advance that we will actually get something into the market place - and that is how we should regard it, - because companies will have the option of whether to adopt this form of company statute or not. It is entirely pragmatic and practical that we will initially have a proposal that will be subject to governments among the 15 Member States.
I want to say to the Commissioner that considerable attention has to be given to ensuring that the rules for this new company statute are consistently implemented across the Member States. Currently, we have inconsistent application of company law within the existing Member States' statutes on things like publication of information, timely publication of accounts, proper completion of accounts - all those sorts of issues are currently implemented differently. This new statute has to be implemented consistently and we have to make sure that courts in Member States who will be responsible for this have the training and ability to do so.
I also join in what colleagues have been saying about issues to do with taxation and company law. Mr Mayer, in an excellent report, wisely says at the conclusion that he advocates launching the European statute on a maiden voyage. Well, it will show where repairs are needed - that is certainly true. But we must not overload this with other expectations about aligning company law, particularly tax harmonisation. I join with colleagues who have said how dangerous this is as a concept. We must not overload this statute with things that it was not designed to carry, otherwise it will sink very quickly indeed.

Medina Ortega
Mr President, in relation to the last intervention by Mr Harbour, I must tell him that there is not much danger of the ship sinking, since it is travelling very light. I have never seen such a light regulation or proposed regulation as this one. It is so light that we are going to have practically no company harmonisation.
As Mr Rothley has said, what we are going to have is fifteen different national laws on the European company, fifteen different European companies and, as Mr Gasòliba i Böhm said, we are going to have more than two hundred possible combinations of different types of company. This is truly the softest type of legislation I have seen in my life.
Secondly, the Council intends to take legislative power away from us: Mr Gallagher spoke of acting as legislators. If we take the Council' s route, Parliament will be deprived of all legislative power. I believe that Parliament would probably take the correct route by challenging this decision before the Court of Justice, because the Treaties cannot be unilaterally modified by one Community institution.
Thirdly, as Mr Rothley pointed out earlier, the type of European company we are going to create is not going to provide any special advantage, above all any fiscal advantage; if we do not take action in the field of taxation, it is going to be very difficult to bring about the creation of European companies and, therefore, it seems to me very important, as the majority of previous speakers have proposed, that the fiscal field be involved. Mr Harbour spoke of the possibility of the ship sinking. I would say that the danger is that the ship will capsize as a result of a lack of ballast. Mr Harbour probably has some naval experience and he knows that, when a ship carries no weight, the easiest thing is for the ship to capsize and sink for other reasons.
Therefore, it seems to me that the important thing at the moment is: first, to insist on Parliament' s legal prerogatives, and, secondly, to insist that in order to have a law on European companies we must also incorporate tax aspects. Without taxation it will be very difficult for us to implement a European economic law, a European company law and a European commercial law.

Flautre
Mr President, the proposal for a directive on the involvement of employees in the European company gives us our first opportunity to establish at Community level a precise definition of what is meant by the right to information, consultation and participation of employees in all companies. The proposal determines the registration to a trade regime by companies which may choose this new statute following a negotiated agreement on employee involvement.
Under these conditions, the Group of the Greens is not turning its nose up at it; the group supports Mr Menrad' s report and its proposals, the aim of which is the swift adoption and effective implementation of this directive. Of course, we will do this in the belief that this required condition certainly does not allow us to consider that European legislation genuinely fulfils current needs. As soon as the vote is over, we must carry on and get back down to work on this issue.
You are aware that this directive will in future only apply to the employees of companies that choose this new statute, in other words, a small minority. That is why we must obviously stop ourselves from celebrating and trying to make an impact. We will only have made progress when we have simultaneously adopted this directive, revised the directive that we discussed earlier on European works councils and approved the Directive on Information and Consultation of Employees under conditions that differ slightly from the position adopted by the Council. The co-decision procedure must be used in order to perform this legislative work under conditions which guarantee a genuine debate, involving society and citizens.
I would like to stress that the Group of the Greens rejects the pressure that inevitably leads to restricting its right to legislate, on the pretext of being efficient and swift, particularly because, as we all know, this dossier dates back a long way.

Pérez Álvarez
Mr President, I would like to begin by congratulating the two rapporteurs on the work they have done, which, while certainly not reaching the zenith or the high point which the studious amongst us may have wished for, nevertheless represents important progress in the development of what in the future will be a genuine European company with all the characteristics appropriate to that concept.
Max Weber defined the company as an organisation which, while controlling them, is intended to produce goods and services for a market. Obviously, a company can be owned by a physical person or by a legal person, and it is general practice, also derived from the will of the individual businessperson to restrict their responsibility - particularly relating to property - towards third persons, that the businesses of certain economic entities adopt the form of companies.
Of course, the company means plurality, the organisation of goods, but above all of services.
It is therefore logical - and I am referring essentially to the social aspects - that there be particular study, analysis and regulation of the involvement of workers in the European company statute and that in a dual system, with a general council and a management and supervisory body, or in a single system, with simply an administrative body, the feelings and knowledge of workers be taken into account, listened to and accepted by means of their representatives, and that workers understand the progress of the company, the risks, the vicissitudes and the objectives it is pursuing.
I do not have time, and I believe it is unnecessary, to refer to the methods and degrees of participation, to the negotiating body or to the role of the European company in the structuring of European social life. However, please allow me to refer to the role of the representatives of workers at the point of closure of all or some of the establishments in one or various nations, staff relations, the creation of subsidiary companies and, in general, to all the decisions which are essential to the ordinary life of the company. Also important are the transitional period of three years, a high degree of uniformity in the application provisions of the regulation and the transposition of the directive, which would endorse the raison d' être, facilitate the nature of the European company and help to create more Europe, to the benefit of companies, employment and consumers.

Weiler
Mr President, ladies and gentlemen, when dealing with this subject we must also inevitably return to the events in Genoa. We shall of course deal with the violation of civil rights later. This evening, I would like to touch upon the protest of ten thousand, predominantly young, people against globalisation and economic power. We must take more seriously than before their concerns surrounding the increasing division in the world between the rich and the poor and the exploitation of our natural resources. Precisely because many problems can no longer be resolved at a national level, the European Union is specifically responsible for monitoring unbridled economic and financial dealings.
Up until now, the European Union has pursued this aim very hesitantly. One of several possibilities open to us is to establish the legal base for employee participation, information and consultation before decisions are taken. The European limited liability company - really an inevitable idea, and also a sensible idea in itself, within the European internal market - is however only acceptable to us as European Socialists with the appropriate inclusion of employees and their trade unions.
Company decisions are therefore only really thought out if employees' points of view are considered. Management alone cannot make important decisions. The numerous failed mergers and events at Renault Vilvoorde, Danone, Marks & Spencer and in other companies in the past are, in our opinion, good evidence of this.
Additionally, I would like to thank the French government for reaching a compromise and for also finally convincing Spain that this legislation must be given the green light. I would like to criticise the procedure decided on by the Council. In this regard, I share the criticism of the Committee on Legal Affairs. However, I would like to say, Mr Lehne, that I did not find the reasons you gave very convincing, since the Council has, of course, been able to count on the support of Parliament. We have also pursued this procedure rapidly and constructively in the course of the Committee' s work. It is not because of us that the procedure would have failed. So, there was essentially no reason to change the legal base. I share the criticism and think that the Council should consider this carefully and also stipulate their reasoning, for we have not, to date, actually heard the reason for changing the legal base.
I would like to extend my thanks to Mr Menrad for working rapidly and constructively with us in the Committee on Social Affairs to bring this report to the vote. I would also like to thank him for being more specific in response to proposals from my group. However, I believe, Mr Menrad, that we are agreed that we must not adopt Amendment No 12. I have at any rate recommended this to my group.
Finally, I would refer to the appeal to secure a majority of votes tomorrow to enable this ship - as one member put it - to be launched on its maiden voyage, despite some reservations and also in spite of some inconsistencies, which we could not allow to go unmentioned. I think, however, that it would be sensible to bring in a law that takes employees into consideration and includes their interests in time for the introduction of the euro. The planned revision does not need to be deferred for six years. We can certainly carry this out earlier.

Fatuzzo
Mr President, is the directive on the European limited liability company a good thing or not? Last night, knowing that I would have to speak this morning, I dreamed that I was Mr Fatuzzo the MEP. However, I was an older Mr Fatuzzo MEP with whiter hair and I was also rich, very rich, absolutely filthy rich, so rich that I could swim in a pool of gold like Donald Duck' s Uncle Scrooge. With me in the pool was Mr Menrad, the rapporteur, and you were there too, Mr President. That is right, I dreamed that all three of us were swimming in euro coins. Why is that? Because I had become rich when, following the adoption of the European limited liability company, I had become an industrialist, I had built factories throughout Europe and I had established registered offices of the European company in all 15 States of Europe. This directive is excellent and is the first step along a path that will lead many people to the wealth that made me - the first to set up a European company in all the States - so rich, so stinking rich.
Well then, Mr President, to conclude my expression of support for this directive, I can only invite Mr Menrad, who has been working on his report and the directive for many years, and you as well, Mr President, to come for a swim in my pool full of euros, to come and stay with me for a holiday in my newly-acquired castle. Only in your dreams, of course, Mr President!

Cercas
Mr President, legal doctrine and politics talk a lot of the European social model and it should be pointed out that, at least in terms of the collective rights which regulate industrial and labour relations, European company law, as we are seeing this afternoon, is experiencing the trauma of a very difficult birth, after a pregnancy which has lasted thirty years.
I would also like to point out that, in light of the Treaty of Maastricht and the Social Protocol, since 1974 there has only been one legislative instrument adopted at European Union level. Therefore, those of us who are tuned in to the thoughts of millions and millions of workers can today be satisfied because this second approximation is taking place, and then we will also see the reform of the Statute. However, Mr President, the least we can say is that we are going too slowly and with so many preventions and precautions (with regard to certain countries represented in the Council, including my own) that, in the end we have frankly witnessed an anticlimax. Very little has been produced. However, I am going to support it, of course. After so much drought we have this little drop of fresh water which, although it is still insufficient, is beginning to eradicate this terrible anguish which our citizens are also suffering.
I would like to remind the members of the Council, as Mrs Weiler has said, that what is happening in Europe and in the rest of the world is that the people are extremely concerned, given the social advances they had achieved in each individual country, that the process of globalisation, the process of European Union construction - and next the enlargement of that Union - should not under any circumstances lead to a reversal of those social advances. Nevertheless, we are seeing that many governments, and some sections of political opinion, as well as sections of business, now intend to remove many of the achievements which had been made at national level.
I would like to congratulate Mr Menrad because he has defended, from the point of view of the best Christian Democrat tradition, as well as our Social Democratic tradition, the social achievements made in his country of origin and intended for the whole of Europe.
That must be our perspective: to move forward and to take the direction of the most advanced countries, and not of the least advanced; to take up the arguments of those who are thinking of the citizens, of the workers, and not of those who are considering how to remove the historic achievements of those citizens and workers.
Therefore, Mr President, despite many doubts, doubts about the legal basis - I believe we will have to make an effort to defend the rights of Parliament - we must not delay this company legislation for one more second since, together with the directive on information and consultation, it must make rapid progress. And there will still be time, with experience, to improve on the current deficiencies.

Bushill-Matthews
Mr President, I should like to start my remarks by referring briefly to comments from the other side of the House, from Mr Medina Ortega, who complained about what this legislation does not do, with particular reference to social harmonisation and tax harmonisation - omissions which I personally welcome. But from our different positions across the House we should not really complain about what this legislation does not do. We should be happy about what it does do, which is to enable a European company statute to come into force after 30 long years.
As has been said, this is voluntary. We do not know at this stage how many companies will be interested in starting up such companies, nor what flaws they might find in the legislation if they do. We do not know what companies might be interested but are deterred from starting up such companies, again because of flaws in the legislation. Other changes might be needed.
I discussed with one of the rapporteurs, Mr Menrad, the idea of putting into his report an amendment that this legislation should be looked at again within a reasonable period of time to see what improvements might be needed in the light of experience. He was happy to support this, but very wisely suggested that any such amendment should be put into the main body of the statute report, in other words, the Hans-Peter Mayer report. On that basis I did not table any such amendment here but would highlight Amendment No 16 in the Hans-Peter Mayer report which specifically covers all issues, therefore including consultation issues. Too often EU laws get set in stone. We need to become much lighter on our feet. This should become the rule rather than the exception.

Hermange
Mr President, first of all, I would like to congratulate and thank Mr Menrad for his tenacious and efficient approach to the dossier on employee involvement which has been a stumbling block in negotiations on the Statute for a European Company for several years. Although the first proposal for a regulation dates back to 1970, we had to wait for the Nice European Council before we finally reached an agreement on a draft directive on employee involvement, which supplements the draft regulation on the Statute for a European Company. It was therefore a delicate balance that was found at the Council meeting on 20 December and it is vital to ensure that we retain this balance.
That is why Amendment No 4, which requires Member States to make appropriate provisions for negotiations in the case of structural changes, seems hard to accept as it amounts to bringing into question the hard-fought agreement. The same applies to Amendment No 7 which seeks to remove the exhaustive list of rights held by the body representing employees in the participation process, which, in practice, leads to a participation system that disregards specific national characteristics and casts doubt upon the safeguard mechanism of rights to participation, set out in the Annex to the directive.
Key players in the economy and society have been waiting for the Statute for the European Company for more than 30 years. We must therefore ensure, ladies and gentlemen, that we fulfil the need expressed by companies for simplicity and flexibility and that we do not, as a result, complicate this statute by incorporating new restrictions which would discourage the companies concerned, and particularly small and medium-sized companies, from using this new tool that is at their disposal.

Karas
Mr President, Commissioner, ladies and gentlemen, firstly I would like to offer my congratulations to the two rapporteurs, Mr Menrad and Mr Mayer, and also, and especially, to Messrs Gasòliba, Rothley and Lehne, who have added specific aspects. I am glad that the Mayer and Menrad reports were discussed together because this also underlines the fact that we are endeavouring to live out the social market economy and, rather than play social policy off against economic policy, consider these as complementary and common factors and establish a symbol of unity.
On which basic conditions is this European limited liability company founded? Globalisation brings home to us what it means for there to be no borders; the internal market is hopefully on the verge of implementation, enlargement of the European Union will unite the continent, and there will be notes and coins for economic and monetary union, with the euro as the visible sign of Europe' s coming together, the symbol of a growing European identity and the expression of the Union' s intention to be a resolute presence on the world market.
We are agreed upon the objectives. However, transposition is often half-hearted. The keys to this are the legal base, an absence of European fiscal regulation and essential discussions on modernising the regulations governing European mergers. A number of tasks have failed to be undertaken in the Member States at the necessary pace and with the necessary determination. The jurisdiction - the key word here is unanimity - corresponds to the realities of power politics, not however to the requirements of European politics.
Finally, I call therefore on the Ecofin Council to devote more of its time to fiscal assessment at Community level and to the necessary fiscal regulations and less time to proposals which undermine the stability pact and weaken the euro.

Bolkestein
Mr President, may I begin by thanking the rapporteurs and others who have spoken in the debate this afternoon in the support of the Commission's proposals relating to the European Company Statute.
As we all know, this has been one of the most laborious and long-standing matters which we have dealt with in the European Union, with over 30 years of painful and intricate debates.
Throughout this period, Parliament has always expressed its clear support for the idea of making a Community law form of incorporation available to businesses. However you have on different occasions, most recently in 1990, 1996 and 1998, expressed serious concern about some of the controversial aspects of the texts which were then being discussed, notably with regard to employee participation, which clearly was the most complex issue involved.
The texts which were finally politically agreed by the Council following the Nice Summits reflect most, if not all, of Parliament's concerns. Those texts are not perfect, but they do translate the broad consensus which now exists within the Council of Ministers and Parliament on the rules which should govern this new form of company. That consensus, as is well known, was extremely difficult to achieve and it must be safeguarded if we wish to see the texts finally adopted.
In five years' time we shall review both the regulation and the directive after an initial period of experience with their application. That will certainly be an opportunity to deal with their possible inadequacies and shortcomings, some of which have been rightly pointed out this afternoon. For those reasons, and taking into account the delicacy of the consensus established within the Council, the Commission believes that the only realistic option at this stage consists in having the texts agreed in December 2000 adopted by the Council as soon as possible without any changes.
We are aware of Parliament's reservations, as voiced by many speakers this afternoon, about the legal basis chosen unanimously by the Council. The Commission has always supported the strongest possible role for Parliament and we regret that it has been deprived of codecision powers in this matter. But we must admit that there are strong legal arguments in favour of the legal basis adopted by the Council. Even though the Commission did in the past consider other possibilities, we recognise that the Treaty as currently worded makes it difficult to use a qualified majority codecision legal basis in this context, especially with regard to the proposed directive.
Since many speakers this afternoon have voiced their doubts on the matter of the legal basis, perhaps I can say a few more words on this important matter.
The Commission proposed, for both the regulation and the directive, two legal bases allowing for the adoption of the acts by qualified majority voting within the Council. But at the end of last year the Commission was confronted with the fact that the Council had unanimously changed the proposed legal basis of both texts to Article 308 of the Treaty, which requires unanimity. The Commission is aware of and very much regrets the fact that this change has deprived Parliament of its codecision powers on a matter on which it has always expressed a strong interest. But the Commission cannot ignore the fact that the texts agreed by the Council in December 2000 follow very closely the opinions delivered by this Parliament over the years.
In addition, from a strictly legal perspective, the Commission can understand the reservations expressed by the Council on Article 95 as the correct legal basis for the regulation, since the regulation is not aimed at harmonising national company laws. The rules in question address only the future societas Europaea and they do not affect other national provisions applicable to public limited companies at all. So, although the Commission regrets that the legal basis was changed, there is substance to the Council's opinion on the legal basis, and it cannot, just be dismissed out of hand.
Turning to taxation, which also has been mentioned by a number of Members of Parliament, you may know that the Commission originally proposed specific tax rules for inclusion in the European Company Statute, but the Council insisted on deleting them. I am firmly convinced that tax rules are still needed and I am pleased that the Commission and Parliament seem to agree on this fundamental point. The Commission will probably be producing its analytical study of company taxation in the internal market and a related policy of communication next month.
Amongst other things, these documents analyse the tax obstacles for cross-border economic activities by all companies in the EU and possible ways of dealing with them. Members of Parliament only have to talk to business people in various Member States to know that those tax obstacles are extremely real and very serious.
The documents I have just mentioned also look into the specific situation of companies formed under the Statute for the European Company and the Commission believes that they will provide an excellent framework for determining the best way forward. In particular, I believe that serious thought should be given to a comprehensive solution for the current company tax problems for businesses active in more than one Member State.
In the aftermath of the study I alluded to just now, the Commission intends to launch a broad debate on the future of company taxation in the internal market and the need for fundamental reform, not least in order to achieve the EU objectives of becoming the most competitive and dynamic knowledge-based economy in the world, as agreed at the Lisbon European Council of March 1999. In this context we shall take up the tax issues relating to the European Company Statute and treat them as a priority.
Bearing in mind the specific issues involved here and the intention companies have expressed of creating European companies, I am confident that Parliament will support final adoption by the Council without further delay and I thank Parliament in advance.

European works council
President
The next item is the report (A5-0282/2001) by Mr Menrad, on behalf of the Committee on Employment and Social Affairs, on the Commission report on the application of the Directive on the establishment of a European works council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Council Directive 94/45/EC of 22 September 1994) (COM(2000) 188 - C5-0437/2000 - 2000/2214(COS)).

Menrad
, rapporteur. (DE) Mr President, in September 1994 the Council adopted the Directive on the establishment of a European works council. The transposition of this Directive is the subject of a Commission report. The report submitted by the Committee on Employment and Social Affairs adopts a position on this Commission report. In terms of sheer numbers, we can already talk about the European works council as a success story. When the Directive was adopted by Parliament and the Council in 1994, there were approximately 30 voluntary agreements governing information and consultation in respect of the work forces of companies and groups of companies throughout Europe. In the meantime, this number has risen to above 650. The Commission report demonstrates that the Directive on the European works council was the main driving force behind this development.
In establishing European works councils, the solutions, more or less made to measure and reached at company level between the management and the special employee negotiating body, are granted priority. As with the European limited liability company, here too the formula of flexibility, negotiations and minimum standards - applicable if negotiations have not reached a successful conclusion - applies. These are referred to as subsidiary requirements in the EWC Directive. The shocking events at Renault Vilvoorde in Brussels demonstrated for the first time that the aim of the European works councils had not always been achieved, whereby the relocation of production should not be effected in the form of a commando raid but only after the employees concerned have been informed and consulted in good time. However, every light has its shadow. The directive has its weak points, and the Committee for Social Affairs is pressing for a revision. We did not say that this should have been undertaken as early as 1999 or 2000. In the discussion of the social agenda, the Commission specified the year 2002.
Our motion for a resolution is intended to form the basis for discussion with a view to the amendment of the EWC Directive. In a range of discussions, hearings and symposia, I have heard the complaint that, in some serious cases - especially in the case of emergency consultation - information and consultation have not been taking place in good time. Therefore, the proposed improvements, which aim to ensure that information and consultation take place in good time, remain the main focus of the report, the object being that advice from the European works council is listened to, and can also be taken into account, prior to decisions by the management. The report is in favour of an enhanced consultation procedure with a view to reaching agreement. Today I would like to add the words: with a view to reaching agreement 'on the further procedure' . I am not saying that it shall be compulsory to reach agreement, though, as previously in the Committee meetings, I reject the right of veto of the European works council in accordance with Amendment No 5, which was submitted today.
My report contains the more elegant solution, proposed by Mrs Ghilardotti, to hold, if necessary, a second round of meetings, as is also provided for by the Directive on the European limited liability company. A broader right to information and consultation on the part of the European works council shall not affect an important stipulation of the directive, formulated in recital K of the present report at the request of Mr Bushill-Matthews. The management' s right to communicate directly with the workforce remains as unaffected as its right to manage the company. Partnership and subsidiarity must also, according to the amendment, determine the contents of the EWC Directive. There are principles of Christian social doctrine which, of course, has supporters in different parties. Based on the initiative of the European Parliament, the legislative text of 1994 established an EWC Directive calling for the spirit of cooperation. Partnership is not a soporific measure. Partnership is intended to provide a clear representation of interests, and also a balancing of the interests of employee and employer by means of information and consultation, which is also advantageous from an economic point of view. The failure to provide information results in uncertainty, distrust and finally anxiety, which leads to blockades. Providing information in good time is a sign of transparency, which breeds trust...
(The President cut the speaker off)

Titley
Mr President, we are referring to the working of the works council directive up to the period 1996, i.e. before the United Kingdom and the Republic of Ireland signed up to that agreement. The experience up until that point was positive, with clear benefits being brought about by this directive. However, recent events have shown some weaknesses in the works council directive, noticeably in relation to restructuring as we have seen several cases recently of major restructuring in multinationals in which workers have not been consulted.
We should note that, even before the adoption of this directive, the Court of Justice in various cases held that works councils were parties concerned for the purposes of merger control proceedings. That presupposes a duty to inform and consult on the part of the employer. We should like to see a strengthening of the directive in relation to consultation in the event of restructuring.
The Commission in its report also refers to the vagueness of the requirement for an information and consultation meeting to be held with the workers as soon as possible in the event of exceptional circumstances which affect employees. That also needs to be tightened. Article 27 of the Charter of Fundamental Rights says that workers should be guaranteed information and consultation 'in good time' , which is a rather more strict interpretation than 'as soon as possible' . The Committee on Legal Affairs would like to see strengthening in relation to that point.
In addition, we find that part-time workers are dealt with differently in different Member States. We would like to see the Commission look into that aspect, and into the question of time off for activities in the works councils, which varies from Member State to Member State. This should also apply regarding the matter of training, which also varies considerably. We would like to see the Commission come forward with proposals to ensure that there is harmonised training across Member States in order to ensure that workers' representatives are able to put their case as effectively as possible.

Désir
As draftsman of the opinion of the Committee on Industry, External Trade, Research and Energy, I would first of all like to thank Mr Menrad for having taken into account most of the proposals made by our committee, particularly - and I shall mention them briefly - on the definition of information and consultation, enhancing the procedure, enhancing the role of trade unions, reducing the thresholds for membership of these councils and reducing the time limits for establishing European works councils.
I would, however, like to stress three points that I consider to be vital. The first point was mentioned in paragraph 12 with the reference to the 1998 directive on redundancies for operational reasons, which provides employee representatives with the possibility of notifying a competent authority on the basis of information submitted by the company' s management, if they believe that alternative solutions have not been explored in order to avoid redundancies, site closures or if there is doubt surrounding the legality of the procedure.
I believe that, with regard to current problems in European-based companies, including sometimes those problems which occur when there are mergers and acquisitions authorised by the Commission and by its Competition Directorate, the issue raised, and which was also raised by Mrs Diamantopolou, the Commissioner for Employment and Social Affairs, in the wake of the Marks & Spencer case, is how do employees, their representatives and their works councils go about notifying the European Commission and showing that their social right is sometimes brushed aside because the issues involved are purely financial and stock market-related. From this perspective, I support Amendment No 5 by Mrs Ainardi and Mrs Figueiredo, and personally I shall be voting in favour of this. The second point, which is related to this amendment, is that of sanctions.
I believe that we must put in place considerable sanctions which will act as a deterrent, and also specify - and this is the underlying meaning of one of Mr Menrad' s paragraphs, but I would have liked this to be clearer so that employees and citizens are aware - that, in the event of non-compliance with the procedures for information and consultation, decisions to make employees redundant or to close down sites can be overturned. I will conclude, as Mr Menrad did, by asking the Commission to realise the urgent nature of this request by Parliament, not to wait until 2002 and to formulate a proposal that reflects the determination of the overwhelming majority of the groups to see an increase in the rights of employees of companies that are based in Europe.

Bushill-Matthews
Mr President, my colleague, Mr Menrad, has put a great deal of thought into his work and raises some interesting points concerning the perceived strengths and weaknesses of the existing directive. However, it should be noted that certain countries only implemented this directive last year and that at least one country has not yet implemented certain provisions at all.
It is clear that companies and their employees still need some time to complete the learning process involved in establishing European works councils. Premature changes to the rules can only cause confusion, though it is clearly useful for the Commission and Council to take note of Parliament's views at this time.
As the rapporteur knows, I believe in information and consultation. I support the principle of works councils, I share his wish for their success. However, as he also knows, I am not at all happy with certain elements of his report. I still believe it goes too far in reference to sanctions in reducing thresholds in terms of sizes of companies and - frankly - in pushing the trade union agenda as an end in itself rather than in promoting the interests of employees. For these reasons, I have tabled four amendments, for which I have already secured some cross-party support and I also propose to vote against Recitals 5 and 7, as he knows.
Having said that, I thank the rapporteur for accommodating some amendments in committee and I confirm that I am still willing to vote in favour of his whole report, despite my serious concerns, if the PPE-DE Group supports two of my amendments, in particular Amendments Nos 1 and 3, as we have already discussed. In that way we could show that our own mini-European works council of a German rapporteur, a Dutch group coordinator and myself from the United Kingdom have set a good example in achieving a positive result.

Ghilardotti
Mr President, I would like to start by thanking Mr Menrad for his thorough work in drawing up this report, including the hearings he organised together with the Committee on Employment and Social Affairs in order to examine closely the incorporation of the directive into national legal systems.
This study shows, without a doubt, that the incorporation of the directive into national legal systems is, for the most part, having positive results and that European works councils have been set up in around 2000 European companies. In many companies, the directive has contributed to eliminating the barriers to information and consultation. What is more, the timely participation of the Company committees in some of the decision-making processes has certainly yielded positive results, first and foremost for the workers in areas such as health, safety and equal opportunities but also for the companies in that the number of disputes has fallen.
Having said that, the Menrad report - which we support - also reveals a series of gaps in the directive itself, and I consider it absolutely essential that the Commission takes measures to amend the directive to deal with these gaps without delay.
I would, in particular, like to focus on three elements which, in addition to those cited by other Members, I feel are the most sensitive points and those which require swift action to be taken.
Firstly, the information timeframe: there is no clear stipulation in the directive regarding the timely provision of information and, in recent years - we have often discussed the matter in this House - we have adopted resolutions but have, I regret to say, had a great deal of negative incidents such as workers learning of their fate from the press or being presented with a final decision by companies. In this regard, we could cite cases such as Ahlston, Adb, Marks and Spencer and many others. Well then, if this is the case, it is necessary, absolutely essential for the directive to be more precise, for it to lay down timeframes which ensure that information is provided and consultation carried out before any decision is taken, to provide a real opportunity for negotiation, otherwise it will serve no purpose at all!
Secondly, I am sure the Members will agree with me when I say that there are no rules in a legal system which, if disregarded, lose their effect. It is strange that it is only in the area of work and social rights that this is almost the norm! There have thus been many disputes and incidents of recourse to industrial tribunals in recent years, precisely because the failure of companies to respect the stipulations of the directive does not on any account place in question the validity of the effects of the decision taken and certainly does not do so automatically.
It is therefore necessary for appropriate, dissuasive penalties to be laid down and, similarly, in serious cases of breach of the directive, it is necessary to provide for the suspension of a decision in order to allow negotiations to continue.

Jensen
Mr President, I should also like to thank Mr Menrad for his report, even if I do not agree with all the proposals it contains. The Commission' s report on the European works councils shows that there is a fair way to go before the law is implemented in practice and all the undertakings concerned have set up works councils. Is it therefore a correct response to require that still more businesses be covered by the directive and to demand tougher sanctions against those companies that do not implement the directive? The Group of the European Liberal, Democrat and Reform Party cannot support reducing the size of those companies covered by the directive to five hundred employees in one Member State and one hundred in each additional Member State. I am also sceptical about some of the requests for sanctions that have been put forward here in Parliament. They may run counter to national systems which, in actual fact, operate well. Nor can it be reasonable for companies to be penalised differently for the same offence, as will happen if their managements' actions are rendered invalid or if, by failing to provide enough information and by not consulting sufficiently, they are excluded from public subsidies or public procurement.

Flautre
Mr President, the relevance that employees and citizens give to European social policy is being distorted further with each passing day, because of numerous cases of restructurings and redundancies. The revision of the Directive on European Works Councils is obviously a crucial way of clawing back this credibility.
So what do the employees who are victims of these restructurings have to say about the possibility of using this directive? To take some examples, they say that the current legislation on the right to information and consultation is flouted on a regular basis by companies, due to the lack of precise definitions for these terms, that they have no administrative and judicial support which is needed in order to check compliance with the directive, that the directive only applies in very restricted circumstances and is not at all applicable in many transnational companies with numbers of employees lower than the current threshold, that it is inconceivable that authorisations for mergers are granted when the only criterion to be fulfilled is that of observing the competition law and that the social, regional or environmental impact of mergers is not taken into account, that they are powerless when mergers are taking place, during which previous consultation procedures are no longer used, since new procedures have yet to be set up, and, finally, that they are disgusted to see that the same companies which undertake these severe restructurings have occasionally received assistance from the Structural Funds.
In my view, Mr Menrad' s report, which is the result of work that was carried out in an open, cooperative spirit, involving the social actors concerned and members of the Commission, which organised a broad public hearing on this issue, recommends bridging these gaps with a precise definition of information and consultation, by reducing, as proposed, the thresholds of employees required to establish a works council, by requesting that specific premises for consultation are maintained during mergers, by requesting that decisions made and which flout procedures can be overturned, and by introducing sanctions, including financial, for companies at fault and finally, by taking into account the opinion of employees and providing evidence that the procedures of the directive have been observed, prior to giving authorisations to mergers.
Within this context, these proposals have the support of our group. Obviously, we still need to ensure - and this requires a combined effort - that the directive is revised quickly and effectively.

Ainardi
Mr President, as thousands of employees in Europe are faced with a wave of restructurings, redundancies and redundancy programmes, the Menrad report on European works councils, although it will not radically change the situation, will at least provide a new source of support for employees to enable them to cope with extremely difficult situations and to have some bearing on the decisions being taken.
At a time when growth is giving us cause for concern, we should give thought to the content of this growth and the necessity to develop it, by encouraging job stability and skills. There is an urgent need for genuine consultation with employees, an urgent need to dispense with the attitude of treating men and women as goods which are no longer useful, because shareholders consider that they are not profitable enough, even in spite of the true economic situation.
Mr Menrad' s report is the fruit of considerable labour, and I would also like to acknowledge his efforts. The report is also the result of the willingness of the Committee on Employment and Social Affairs to listen to representatives of the employees of large European companies. Using these meetings as a basis, the Menrad report was able to make a reliable assessment of the situation by showing the need for considerable amendments to the content of the directive. I support many of the proposals made in the report. I would like to reiterate some of them which in my view represent major steps forward for employees.
For example, the call, set out in the second paragraph, for information and consultation to take place at regular intervals before the decision by the company or group, so as to allow the workers genuinely to influence the management' s decision-making process. Furthermore, in particularly serious cases, this information could even extend to giving the employees' representatives the possibility of gaining a negotiating period before a decision takes effect, as described in item 14. I shall again quote the second item, which contains a clause that the decisions of the management will only be regarded as legitimate if an orderly information and consultation process as defined in the Directive has taken place beforehand, or item 13, which proposes the introduction of sanctions for non-compliance. Lastly, there is also the call for companies to repay funds and financial aid provided if they do not observe the law in this area, and to exclude them from public procurement.
These proposals are a step in the right direction, but I believe that to ensure action for employment is effective and to improve economic performance in Europe, we could have gone further with regard to the right of employees to participate in the future of companies. This is the goal of the amendment that my group tabled, which calls for the possibility of employees' representatives to have the right to a suspensive veto. This would involve giving a guarantee to employees' representatives that their alternative proposals would at least be examined and taken into account. Many decisions which have spelled disaster for companies and for employment could have been avoided if employees had been able to influence these decisions. This right, which is an expression of social justice and democracy within a company, also guarantees efficiency for the economy and society.
Once again, the Menrad report represents a considerable step forward and this is why it has the support of my group.

Hermange
Overall, the progress made in implementing the Directive on the establishment of a European works council has been positive, since there are now approximately 650 European works councils, most of which were set up on the basis of pre-Directive agreements, in other words, on a voluntary and agreed basis.
There are still 1 200 companies, however, which have not established European works councils.
As the effects of globalisation demand new measures, the cornerstone of which are trans-national representation and information, it is advisable to consider the factors which stand in the way of European social dialogue in companies, and the report presented by the Commission which evaluates both legal transposition and practical application of the Directive in Member States now gives us that opportunity. The debates which took place in committee were useful and I would also like to congratulate Mr Menrad for his preference for dialogue and the work he did to achieve conciliation. Nonetheless, the broad consensus which existed within this committee on the need to develop information and consultation, on both a European and national level, must not hide some differences in approach which my colleague, Mr Bushill-Matthews pointed out.
I do believe that it is important to reiterate in this Chamber that genuine social dialogue in a company requires tools that are flexible and which can evolve, and not a standard, restrictive and detailed framework, such as that which some of our fellow Members would like to reintroduce when the 1994 Directive is revised. That is why I would like to stress how important we consider that the imminent reform of this directive does not take the shape of a far-reaching reform of its spirit and particularly, that we retain the difference in terms of function between the Directive itself, which is the tool of social dialogue in a company, and its Annex which punishes the failure of social dialogue.
Furthermore, lowering the thresholds for applying the Directive must not be an aim in itself; rather, this should be perceived as a straightforward option to extend this mechanism. This is why I agree with Amendment No 3, tabled by our fellow Member, and the French delegation will support this, but we are rather more puzzled by Amendment No 14.
Finally, I would like to provide an explanation for the text included in paragraph 2(i), namely that information and consultation of employees must be carried out, with due regard for the principles of confidentiality of the information. This is a very important provision which particularly refers to cases where timely information and consultation of workers, which is perfectly natural, could conflict with the law by virtue of the legislation on the securities market. The provision is therefore fundamental in order to encourage competitiveness of companies in the global economy and the safeguarding of the European social model. I hope that the Commission will take this into account when preparing its proposal for revising the directive.

Damião
Mr President, I should also like to congratulate the rapporteur for the quality, constancy, sense of responsibility and coordination, in addition to his attempt to obtain consensus, which has enabled him to present a report in which the need for both sides of industry to be able to deal with mergers, relocations and restructuring as painlessly as possible is emphasised. On many occasions, these events take place with unnecessary complications that lead to other, equally disastrous consequences which, in turn, affect workers and the rights from which they benefit in the Member States, which are constantly being weakened by these so-called relocations and greater mobility.
I should like to highlight the rapporteur' s comments about Article 127 of the Treaty, which lays down clear rules, which apply to both competition and social legislation, specifically on informing and consulting workers. We must clearly enshrine the right of workers and citizens to freely choose their destiny and also where and how they wish to work. The truth is that the damaging examples of this much sought after mobility of companies and employers are still shocking public opinion in my country even today. I shall take this opportunity to condemn what the representatives of one particular company - on this occasion it happens to be British, with headquarters in London and offices in the Republic of Ireland and in Portugal - are doing with vast contingents of Portuguese and Polish workers. These workers are placed, given the exceptional situation in Northern Ireland, in high-risk situations, with no contract, no protection, and no security, often being left to their unpleasant fate. This may seem to be their bad luck, but this really does seem to be the fate of Portuguese workers who are simply looking for better salaries and better working conditions. Yet, they are stuck in the position of not even being able to return home. Mobility is a threat not only to those who cling to it because they are socially disadvantaged, but also organised workers. These provide a warm welcome for the aforementioned disadvantaged workers and choose to stand up for them, helping them to integrate. And it is they who are their only resource, the workers representatives and their solidarity, as well as the unions, in these very distressing circumstances.
I would, therefore, like to see this law made effective and extended, since it is still a long way from achieving the social objective that the Community itself and the Treaties advocate.

Lambert
Mr. President, I would also like to thank the rapporteur for the work he has done on this report. It is important to bear in mind, given what we heard already this evening, that Lisbon was not about competition, but social cohesion as well. Companies are increasingly being expected to behave in an ethical and socially responsible manner. Sound employment practices and good working relationships with employees are key indicators for such ethical assessment and we need to see the recommendations in the report in that light.
The report points out a number of ways in which a revised directive could make works councils more effective and prevent some of the problems and breakdowns we have heard about: regular meetings, not the token annual meeting that is all 85% of them manage; increasing the representation of women, who are virtually invisible in many of these bodies, just as they are in too many boardrooms; training to improve the quality of representation and communication; and the facilities and safeguards to ensure that works council members represent all sectors effectively. The sanctions for non-compliance are also critical. We either want responsible social partners, or we do not. My group does, so we welcome this report and look forward to seeing Commission proposals based on it.

Figueiredo
Mr President, ladies and gentlemen, this report is the result of a major piece of work undertaken by the Committee on Employment and Social Affairs, coordinated by our colleague Mr Menrad, whom I congratulate on the openness he has shown in considering the proposals tabled during the debate, including several from our group, although I personally think that the report could have gone even further.
We are all aware of the countless difficulties and serious problems of unemployment that workers and their works councils are facing, particularly those in multinational companies, in the processes of restructuring and relocation that have intensified over the last few years without the rights of workers being respected in the majority of cases. These workers have been treated on many occasions as mere economic commodities. The current directive must, therefore, be fundamentally changed, particularly in terms of the procedures for informing and consulting workers and of the possibility of intervention by the European works councils, specifically through additional sanctions and a suspensive veto in cases in which restructuring, relocations and mergers do not take account of the reasonable rights of workers.
It is crucial that the Commission presents proposals for amendments to this directive, as we have already requested on numerous occasions, and that it at least includes the improvements contained in the Menrad report and approved by the Committee on Employment and Social Affairs, in addition to the proposal upon which our group insists. It is essential that there should be a robust and timely consultation process for all workers and the possibility of the right to a suspensive veto on a decision that may have harmful consequences for workers, in such a way as to allow negotiations to take place and for these harmful consequences to be avoided. It is equally important, as the Menrad report states, that companies that do not satisfy workers' rights regarding their information and consultation and all other aspects of the directive, with the new amendments that we ourselves are proposing, will not only not receive any financial aid from Structural Funds and be obliged to return any Community or national aid that has been granted them, but they will also be excluded from public contracts and subsidies. I hope, therefore, that the Commission accepts these positions.

Pérez Álvarez
Mr President, a few moments ago, when I spoke on the previous item on the agenda, I pointed out the definition of what we understood by a company and I stressed that a company, as an organisation, implies plurality and that a company consisting of a single person would not legally be classed as a company. And plurality means the obligation to regulate the role of workers throughout the organisation. I believe that Mr Menrad' s report responds magnificently to this issue and we must congratulate him on the quality of his work.
The objective of the Directive is to improve the right of workers to be informed and consulted by the multinational companies or groups which operate in Europe. It is estimated that currently more than 1 100 multinationals, which employ approximately 15 million people, would be affected by this Directive and by its modification. I agree with the rapporteur when he asks for and expects the Commission to amend Directive 94/45/EC, making information and consultation rights into a means for facilitating social dialogue as a key element of social and labour relations in the companies affected.
I also agree with him when he asks for the role of these participation, information and consultation bodies not only to be relevant at times of industrial transformation and crisis, but that they should be of a permanent nature in a global economy in which we see symptoms and characteristics of globalisation, and, furthermore, that the exercise of these rights be enshrined at the appropriate procedural moment.
And all of this is so that workers are guaranteed that their voice will be heard, not only at times of restructuring, but whenever decisions are taken which are essential to the permanence and future of the company and of their workplaces or delegations.
This is the content of the amendments I have presented and which the rapporteur has been kind enough to incorporate.
Every day we hear news of essential social importance which shocks us: all the delegations of a company are being closed in one or various countries; the company is studying a massive reduction in jobs; a merger is announced and the workers are wondering what will happen and how many will be fired or sent home, and these decisions are often taken for stock exchange reasons - to improve share prices - rather than for fundamental reasons.
Communication after the decision serves little purpose in these cases. The company is an organisation, sometimes a community, with somewhat conflicting interests.
I would like to stress that the content of these rights must also refer to training, to ongoing learning, to health and to safety, to equality of opportunity, to the environment, to the incorporation of young people into the workplace. All of this will make the company into a better-reconciled community, with less conflict. This will increase productivity and increase employment, and will improve living conditions, thereby leading to a better Europe.

Thorning-Schmidt
Mr President, many people are very concerned about globalisation. They join forces in organisations, and the most extreme also throw stones. In the meantime, the EU is blamed for making the negative aspects of globalisation worse. I believe that the discussion we are having today and the discussion we had concerning the Menrad report in our committee demonstrate the very opposite. They show that the EU can, in a very practical way, contribute to mitigating the negative aspects of the free market, in this case restructurings. The EU cannot abolish these, and nor should it, for they are a part of a modern market economy and they can have positive effects. However, we can try to mitigate the negative effects by properly involving employees in the process.
What we are doing today and what we shall hopefully do in the future by means of a new directive is, in a very practical way, to make the market a little more democratic. The directive has already had an effect. The Commission' s report shows this. Works councils have been set up as a result of the directive. As other speakers too have said, there are, however, many things which can be improved, and I hope that the Commission will allow itself to be inspired by Parliament' s report today. Some of the improvements must take the form of cultural changes within companies. Undertakings must realise that consultation and the provision of information are not a laborious and onerous duty but a constructive part of modern management and that creating partnerships also creates responsible employees. At the same time, I hope that the Commission will lose no time at all in proceeding further with its deliberations concerning a new directive, and I should like to see an expansion of the topics on which employees are consulted.
I think that, in general, we must look at the position of our fellow workers. We must understand that they are ordinary people from ordinary backgrounds who come together in the works councils. They must be given time off work, and there is a need for premises, training and translation facilities so that they can carry out their tasks as employee representatives. I also believe that employees must be able more readily to involve trade union experts. We must appreciate that there is a need to improve their conditions. A future directive might properly implement the constructive changes proposed by Parliament. These are not fanatical and far-reaching changes, but very constructive ones, and I hope that the Commission will take them on board when it proposes a new directive. Properly designed, the latter can be a further step in the direction of a European social model.

Evans, Jillian
Mr President, I am pleased to support this report. I have spoken several times in this House about the recent loss of 3000 jobs in Wales when the steel company Corus announced massive redundancies. When the Employment and Social Affairs Committee held the hearing in April this year and workers' representative from Corus European works council told us that in many ways it was a model works council. It met twice a year, it provided excellent training and it enabled experts to attend meetings. Yet it failed to tell the workers that they were about to get rid of 6000 jobs even when there was massive public speculation about these job losses.
This report states that the main goal of the directive is to remove obstacles to information, consultation and communication with the workforce to enable dialogue to take place. This is vitally important. It must be more than paying lip service to consultation. There must be a definition of consultation to ensure it is meaningful and comprehensive and carried out in good time, as others have said. In other words this must happen before decisions are made and not after and there must be sanctions against those who do not comply.
I agree with Mr Menrad that we need a revision of the directive to prevent repeats of the Corus experience and to look at other issues he identifies such as the involvement of women. I hope that this debate will help achieve that.

Laguiller
Mr President, I shall not vote against the report, for the sole reason that some trade unions are hoping that it will be adopted, whatever my views may be on their policy. Even so, however, I shall not give my approval of the report.
In fact, in order to counteract a limited increase in the rights of European works councils, the report calls upon us to approve competition rules and the confidentiality of information. The report also stresses that the role awaiting the councils is that of reducing the risk of conflict which may, the report claims, prove to be a factor in a company' s success, or rather, in an employer' s success.
In France, it is very clear that the final decision on all issues that affect workers' lives is made by employers. Works councils have been rendered powerless, such as when Moulinex, Aventis, Danone and many other companies made unacceptable redundancies, or they are tricked into approving the employer' s decisions, or even into nominating the victims of redundancies, as was the case at AOM-Air Liberté.
Therefore, the only right which would, in truth, be a right for workers would be the right to employment, or a ban on redundancies, in other words, at least in companies that are making profits.

Mann, Thomas
Mr President, the Commission was entrusted with the task of investigating the effectiveness of the European works council. The European works council has become more and more important: in 1994 there were 40, and in 2001 there are 650. In this respect, the European works council has promoted a European awareness outstandingly well and has furthered the interest of employees in transnational measures and in acts of solidarity in exactly the same way. However, there are problems; this we learnt during the hearing in the Committee on Employment and Social Affairs. It is totally unclear what is meant by appropriate information. How can employees cultivate alternative plans if they receive information far too late? For example, if a radical restructuring of the company is envisaged, an enhanced consultation procedure must be provided.
Moreover, the European works councils usually meet once a year. At least two meetings a year, if not three, should take place. The European works councils must be able to get to know each other better. They must also understand the different mentalities. The former is the condition for promoting solidarity and ensuring sustained action, and as always women are seriously under-represented. Women do not even make up 10% of European works councils. A great deal of motivational work is needed within the companies in this regard, and this must be expressed practically in votes later on.
I have spoken with many works councils - also within my constituency. It is particularly important for them that we offer more training opportunities to compensate for language difficulties. I expressly agree with Mr Menrad, who is in favour of language courses for EWC members. Investment in training of employees is also essential - and I am thinking here of accounting regulations, employment law, social law - and we must work towards being able to say: What shall be on the agenda? The protection of health, the necessity of dealing with safety at work or the issue which Mr Menrad is always pursuing: employee participation. The rapporteur succeeded in including 75 proposals from the Committee on Employment and other proposals from the Committee on Industry, External Trade, Research and Energy and the Committee on Legal Affairs and the Internal Market. Indeed, he knew how to build bridges with us in the Committee, and 38 out of 38 were in favour. May tomorrow' s vote be just as successful!

Bastos
Mr President, ladies and gentlemen, I would like to begin by congratulating the rapporteur, Mr Menrad, for the timeliness and the quality of his report. Social dialogue within the European Union is a crucial factor for European integration itself. Hence the need to re-examine this directive on European works councils in companies that operate throughout the Community. Since 1994, 650 European works councils have been created, in contrast to the 40 or so that existed in the past. There is no doubt that this has been a success.
At the same time, great changes have taken place in the European labour market that require new responses and a stringent definition of the concepts of informing and consulting workers in companies operating throughout the Community, ensuring that this takes place in good time and under the appropriate conditions for a subsequent decision to be made. The range of themes covered by this process of information and consultation must be further extended, and the range must also be improved in matters of particular sensitivity for workers as a whole. Regular meetings for such a body are also necessary, for in around 85% of cases they meet just once a year, which is clearly insufficient.
The size that a company must be in order to be covered by this directive also warrants our attention, with a more reasonable threshold being required, a point on which we agree with Mr Menrad. The provisions relating to the protection and rights of workers' representatives, who are freely elected by the workers, should be strengthened and there should be a balanced representation between men and women. Currently, 90% of the members of the specialist negotiating groups and of the European works councils are men.
Lastly, I wish to emphasise that the procedure for informing and consulting workers can lead to a deepening of the relationship between employers and workers in all Member States, thereby contributing to the development of a form of European consciousness.

Novelli
Mr President, ladies and gentlemen, in April 2000 the Commission presented a report on progress in the implementation of the 1994 directive on the institution of a European works council for Community-scale companies. The report has a relatively positive outlook, for today more than a third of the companies affected have implemented these works councils, yet it must be said that recent history surrounding certain redundancy programmes have made this process of informing and possible consultation more necessary than ever.
New draft directives have therefore been added to the 1994 text subject of this report. With regard to these drafts, I think that three different courses of action should be taken.
Firstly, the inclusion of measures so that, within a reasonable time, the majority of companies involved would have a European works council. From this point of view, the idea of lowering thresholds of employee numbers above which companies are affected does not seem very reasonable. We should in all cases honour the 1994 Directive. The second course of action should consist of proposing a global text that is a combination of different texts, rather than a stack of directives. The third measure should be to guarantee that autonomy and freedom in company management are preserved from the time when these companies can completely fulfil their duty to inform and consult.
The report by Mr Menrad, while I appreciate the work contained therein, has not been able to avoid certain pitfalls. It must be said that codetermination, a management technique favoured in Germany but in that country alone, has led him to accept socialist amendments from our fellow Member Mr Harlem Désir, amendments that our group had, upon my initiative, rejected in the Committee on Industry, External Trade, Research and Energy. I am thinking most notably of the thresholds above which companies are involved and the institution of part vetoes using sanctions in certain cases, which I truly regret.
Regarding the Socialist Members, it must be said that they demonstrate a degree of stubbornness when they reject, for example with the postal or energy services, the Commission' s proposals with the view that what already exists should be applied, or vice-versa, as is the case here, to rely upon the widely perceived lengthy nature of proceedings to jump the lights when it suits them.
In my opinion, competition, the opening up of markets and the creation of an internal market go hand in hand with informing and consulting employees. This is the reason why, with sadness but with certainty, I am going to abstain, if paragraphs 4 and 14 in particular are adopted as they stand.

Bolkestein
Mr President, may I begin by saying that the Commission welcomes this report on the operation of the European works councils directive. It will certainly form a very significant input into our review of the directive. In particular I should like to thank the rapporteur, Mr Menrad, for the effort he has put into this report over a long period. The report clearly reflects his profound knowledge of the subject. I am also conscious of the time that the Committee on Employment and Social Affairs has devoted to this issue and in particular the extremely useful public hearing which the Committee organised earlier this year, giving all actors the opportunity to express their views.
The report acknowledges the overall success in the operation of the directive, while identifying a number of weaknesses. The directive was the first piece of Community legislation to provide for a specifically transnational aspect of employer/employee relations and in doing so it broke completely new ground. From that beginning we now have a situation where there are European works council agreements in 650 companies or groups in Europe, covering about 60% of relevant employees. In each of those companies meetings are now taking place between management and employees from several Member States. That would have been almost unthinkable some years ago and it is a considerable achievement. Because of the inherent flexibility of the directive, this has been achieved notwithstanding the wide variation in employee participation and industrial relations systems in the Member States. As the report acknowledges, the directive has undoubtedly contributed to the development of a European consciousness among employee representatives.
In acknowledging the directive's success, I should also like to acknowledge, as the report does, the role played by the trade unions, in particular the trade unions at European Union level. Their input into and coordination of numerous negotiations has made a major contribution to the success of the directive.
To acknowledge the overall success of the directive is not, of course, to say that there have not been problems with this application. The Commission's report to Parliament and to the Council in April 2000 identified a number of legal and practical problems relating to the application of the directive. Parliament's report, prepared in response to the Commission's report, has elaborated on that analysis and identified a number of weaknesses in the operation of the directive and it proposes a series of changes to address those weaknesses. Parliament may be assured that we shall examine all its proposals carefully.
A key issue highlighted in the report, one which, as the report notes, has been the focus of much public interest of late, is the clarification of what we mean by information and consultation. We need to ensure that employees are informed and consulted at the right time, when they can still influence decisions. The report highlights some of the cases where, regrettably, employees have not been properly informed or consulted on major decisions affecting their livelihoods.
Since I share Parliament's concerns on this issue and since I am determined to do all in my power to meet those concerns, I was extremely encouraged by the decision of the Employment and Social Policy Council on 11 June to adopt unanimously a political agreement on a common position on the draft directive establishing a common framework for informing and consulting employees. The common position was formally adopted by the Council on 23 July. As Parliament may be aware, the Commission's proposal for this directive contained comprehensive provisions on information and consultation both as regards content and timing. I am pleased to see that Parliament's report has references to the Commission's proposal as a benchmark in this regard.
I know that Parliament is now actively working on its second reading of the draft directive to allow for its adoption as soon as possible. There will be issues to be resolved between Parliament and Council, most notably on the issue of sanctions, a subject which has been raised by a number of speakers this afternoon. This is an issue where the Council's common position is furthest removed from the shared desire of Commission and Parliament to see effective sanctions: sanctions for failure to meet information and consultation obligations. Notwithstanding this, however, I believe that the political will now exists throughout the institutions to reach final agreement on this text quickly, thus putting in place a comprehensive framework for information and consultation throughout the Community.
Just as some of the issues raised in Parliament's reports relate to the information and consultation draft directive, so others - such as the role of trade unions, the issue of training for employee representatives and the length of time allowed to negotiate agreements - are touched on in the context of the draft directive supplementing the Statute for a European Company with regard to the involvement of employees. I am happy that Parliament has delivered its opinion on this text so promptly thus paving the way for its final adoption, I hope, at the October Employment and Social Policy Council.
Parliament's report acknowledges - and it will be clear from what I have just said - that the revision of the European works council directive is closely linked to these two legislative texts currently under consideration, that is to say firstly on information and consultation and secondly on employee involvement in the European Company. I have always believed that, because of that linkage, we should focus on finalising those two texts before addressing the revision of the European works council directive. That remains the Commission's strong view. But now, happily, we have the final adoption of those texts in sight and therefore it is my intention to be ready, as soon as the information and consultation directive is finalised, to address the revision of the European works council directive. The first stage of that process will, as indicated in the report, be a formal consultation of the social partners.
Before concluding, may I give some brief replies to two specific questions. Firstly, a question by Mr Désir and Mrs Flautre on what the Commission are doing to address the social aspects of merger control. In brief, the answer is that the Commission has indicated its intention to examine the interaction between Community competition law on mergers and the social consequences of such mergers. The second question was put to me by Mr Désir. He asked about the Commission's plans as regards the timing of the revision of the European works council directive. I would reply that the Commission plans to address the revision of the European works council directive as soon as the information and consultation directive is adopted. The first step would be consultation of the social partners which, if conciliation on the information and consultation text is completed by the end of this year, could be launched early next year. The Commission has consistently taken the view that the timing of any revision of the European works council directive is inextricably linked to adoption of both the information and consultation directive and the final adoption of the European Company statute proposal.
In conclusion, may I once again thank Parliament very much indeed for its in-depth and knowledgeable reports which will provide crucial input into, not only the Commission's thinking, but also the thinking of the other actors in this important issue.

President
Thank you, Commissioner Bolkestein.
The debate is closed.
The vote will take place tomorrow at 12.30 p.m.

Monitoring application of Community law (1999)
President
The next item is the report (A5­0250/2001) by Mr Koukiadis, on behalf of the Committee on Legal Affairs and the Internal Market, on the Commission's seventeenth annual report on monitoring the application of Community Law (1999) [COM(2000) 92 - C5­0381/2000 - 2000/2197(COS)].

Êoukiadis
Madam President, we should all look on the report on the application of Community law as one of the all important reports because this is the report which reflects the real state of the European Union, which measures its heart beat and how it relates to the man in the street on a daily basis. This report is the first to be drafted for this new decade, which is also the beginning of a new century, and I think that it could turn out to be an opportunity to take a more integrated approach to the problems associated with the practical operation of the single market, the European Union as a whole, and the vision of enlargement.
In view of three new factors, impending enlargement on an unprecedented scale, the quest for the deepening of the European Union and the ever-increasing rate of legislative intervention, we need to radically rethink how we control the application of Community law. This entire subject is inextricably bound up with the review of the Treaties and should be one of the top items on the agenda for the next Intergovernmental Conference. The White Paper identifies the problems; all we need to do now is to see how we can resolve them.
Unless we eliminate delays in transposing directives and unless we forge a uniform interpretation of Community law, there will be no single economic area and it will be impossible to promote the idea of European citizenship. A citizen from one country who goes to work in another country and has trouble getting his professional qualifications recognised feels like a foreigner, not a European. Competition rules applied selectively in various countries adulterate European competition and so on and so forth. That is why the question of the application of Community law must be a matter of concern to each and every one of us and why we must put it at the top of our agenda. It is futile to spend hours at a time debating whether or not this or that amendment will get through and then do almost nothing to check if a directive is being applied. Greater importance needs to be attached to this report because it reflects real life in the European Union.
A second line of approach taken in the report is to question what becomes of suggestions by the European Parliament from previous reports. I have read several previous reports containing interesting suggestions. I was surprised to discover that most fall by the wayside. However, more importantly, the Commission report contains no explanation as to why these suggestions were not applied. We need to find a way of ensuring that Parliament's suggestions are followed up.
The third basic comment is that, despite the improvements reflected in the data on the application of Community law, these improvements are not constant; there are reversals and the improvements are not impressive enough to appease us. The general diagnosis remains the same. We should therefore pay serious attention to this phenomenon and deal separately with the multiple reasons and causes for it.
I should like to use the time left to draw a few general conclusions. The best rate of transposition is in Denmark, with an average of 98%. As far as procedures for controlling infringements are concerned, we must remember that the control system as a whole is based on 4 stages. Letters of formal notice, which constitute the first stage, ran into large numbers. The three countries which received most letters were France, Italy and Greece, with 236, 160 and 154 and the three which received the fewest were Denmark, Finland and Sweden, with 40, 43 and 46. The number of reasoned opinions, which constitute the second stage, was fairly small, proving that this procedure is effective for certain countries and extremely effective for others. In all events, the relative reduction in the time taken to send out letters of formal notice and reasoned opinions is one positive aspect of attempts to speed up the control procedure. As far as referrals to the Court are concerned, the number of cases of non-compliance again fell significantly.
Our general conclusions are as follows: first, there has been a gradual reduction of 35%-40% from one stage to the next; secondly, the order of countries committing infringements remains the same at all stages; thirdly, at the third stage the number of cases of non-compliance is marginal for certain countries, with other countries persisting; fourthly, the efficiency of control procedures should not be used to play down the fact that these procedures are used by the Member States as a way of delaying the date of transposition, thereby creating a new de facto transitional period.
The fact that certain countries with different systems constantly perform worst, while certain other countries perform best means that, basically, infringements are a matter of political will. In other words, the problem of the application of Community law is a political problem and not a legal or technocratic one, as many believe. It masks the clash between national sovereignty and European authority and reveals just how much the European conscience has matured. Finally, the Commission has not analysed the circumstances or reasons behind these statistics. I do not wish to take up any more of your time but I would like to say a word or two about the amendments. I can accept two of the three proposed amendments. I do not understand Mrs Thors' amendment and it requires clarification if it is to be accepted.

Pérez Álvarez
Mr President, it should not surprise anyone, particularly if they have any legal training, that the control of the application of Community law should fall to the Committee on Legal Affairs. That is obvious.
I would like to begin by congratulating Mr Koukiadis on his kindness - and I would go as far as to say his wisdom - in including the conclusions of the Committee on Employment and Social Affairs in his report.
I am speaking as draftsman of the opinion of the Committee on Employment, and this suits me because I would like to pose the question out loud, before you all, of what kind of Europe it is we want to build.
In 1996 in Turin, the French President, Mr Chirac, said that if Europe only makes progress along the economic route, the commercial route, it would be a failure. He said that we had to deal with the situation of the Europeans, that we had to revive the idea of the European, and that that would herald the road to success.
Now that my country, Spain, is beginning to prepare for the Presidency, the competent authorities, the President, Mr Aznar, and the Ministers, talk every day about the idea of creating more Europe. What does more Europe mean? Probably realising the contents of our Charter of Fundamental Rights, that is to say, a Europe which is concerned about Europeans.
That is why this report is important and essential, and I would like to highlight certain points in it.
Firstly, something that should be of concern to all of us - in the Commission and in the Council - and that is the transposition of directives, because it is precisely in the social sphere that a very low percentage of directives is transposed when compared to other fields or to transposition in general.
Secondly, there are certain especially sensitive subjects; our professions always accompany us and, as a works inspector, I am enormously concerned that in the fields of safety and health at work, directives are not transposed more quickly.
Thirdly, equality. I believe that we must demand from the Commission more power to impose fines, which would have sufficient coercive effect, greater inclination to coordinate the different governments of the Member States, in order to achieve that greater coordination and, in summary, greater intensity in its activities, so that the principles enshrined in the Charter of Fundamental Rights might become reality.

Thors
Mr President, our debate today is somewhat absurd. After we had prepared the report, two important documents came from the Commission. I am thinking firstly of the White Paper on governance and secondly of the communication on the Information and Communication Policy. Having studied these documents, I am quite confused about the way in which the Commission intends to help us supervise the application of Community law and about how it intends to prioritise the issues concerned.
Where, firstly, the Information and Communication Policy is concerned, the communication says that the future of what is known as the European justice system is in the process of being looked into. In sharp contrast to what is stated in the communication, we in the Committee on Legal Affairs and the Internal Market had been given to understand that this network of specialised lawyers, which can provide people with advice and which operates at the Commission' s delegations in the Member States, was viewed as valuable by the Commission. The June communication now tells us that the Commission is considering how the system is to look in the future and that the tasks of the lawyers concerned are perhaps to be transferred to national administrations.
Who, I should like to ask the Commission, believes that a national administration will help people obtain justice from the self-same administration?
Secondly, I am confused about the fact that, according to the White Paper on governance, there is a desire for 'networks of similar existing bodies in the Member States capable of dealing with disputes involving citizens and EU issues' , at the same time as an intention to improve people' s knowledge of their rights under Community law.
How does the Commission intend that we should monitor the application of Community law? I believe that we need to do some serious thinking, and I think that the Commission could have been more practical when it came to how this very issue was dealt with in the White Paper.

González Álvarez
Mr President, I wanted to speak in this debate on compliance with Community law because, as a member of the Committee on the Environment and the Committee on Petitions, I am familiar with non-compliance with that Community law, above all, as previous rapporteurs have said, in the social and environmental fields.
It is true, as my Spanish colleague said, that there is a low level of transposition in the social field of only 71% of directives, but it is even truer that in the Commission, on environmental issues, there is not only poor transposition, but flagrant non-compliance, which is the worst thing: lack of application.
This is something that we note every day in the Committee on Petitions, since it is the main form of non-compliance: 40% of non-compliances reported by citizens to the Committee on Petitions relate to the environment.
As Mr Koukiadis rightly says in his report, the right to petition is the principle par excellence of the recognition of European citizenship and therefore we should be worried by this repeated non-compliance in the social and environmental fields, which are so closely related to the rights of that European citizenship. If we examine each of the petitions which reach the Committee on Petitions - naturally I am most familiar with the petitions which come from my country - we will note the enormous interest amongst European citizens in collecting information and perfectly understanding Community law in order to report non-compliances with great rigour.
We therefore believe that in the annual report a section should be dedicated to petitions, as the rapporteur rightly says, because it is in that committee that a real contribution to compliance with Community law is made.

Bernié
Mr President, with 1075 formal notices, 470 reasoned opinions, 178 referrals to the Court of Justice - twice as many as in 1998 - the 1999 balance sheet for the application of Community Law is proof enough of serious discontent.
To tell the truth of the matter, Europe legislates too much and too badly. It even manages to legislate in areas where it has no competence. It did this in 1979 with the 'conservation of wild birds' directive and more recently, without any legal foundation, on the status and financing of European political parties.
If Member States drag their feet in transposing Community law into national law, if disputes have multiplied in number, it is because European regulation is often restrictive, finicky, unsuited to local realities and far removed from the worries of our fellow citizens, that is, when it is not directly opposed to their will and our republican principles. Additionally, last year the French government proclaimed its disagreement with the 'genome' directive. Mrs Guigou, the Minister of Justice, felt that this directive, was "incompatible with French bioethical laws, with the code for industrial property and also the civil code that prohibits the marketing of the human body".
Can we, in the name of Europe and its qualified majority, impose legislation upon a people who reject it? This is a fundamental problem. Should we standardise everything and sacrifice our differences, our true European diversity? We do not think so. In addition, in a democracy, it is not the business of the Court of Justice to create legislation through case law. It is up to elected representatives. At the present time, MEPs, uniquely elected by universal suffrage, have no true right of legislative initiative, a monopoly that is jealously guarded by the Commission.
It is not by using the threat of fines and penalties in the unrelenting attempt to apply poor texts, as Article 15 so clearly wants, that Europe will solve problems. Stubbornness has its limits and when a text is poor, there should be the clear-mindedness and the courage to change it, as we are proposing to do with Article 12.
It would therefore be a good idea to legislate less in order to legislate better, to respect national will and democracy by applying the principle of subsidiarity to the maximum. For example, regulation on the transport of hydrocarbons is becoming an urgent matter, but once again it has been postponed indefinitely for purely mercenary reasons.
Contrary to that stated in item M of the preamble, we do not think that strict application of Community law will lead towards the emergence of an unwanted European nationality. We are too worried about the respect of identities, of democracy and the right to difference.

Berthu
Mr President, the application of Community law is the cause of an ever-growing number of problems, for according to the Commission' s own report, it has opened 2270 files on this subject since 1999, compared with just 124 in 1978. This rapid increase is caused on the one hand by the constant proliferation of Community Law, and on the other hand, from the increased severity of a Commission that has at its disposal, since the adoption of the Maastricht Treaty, effective instruments of oppression, notably Articles 226 and 228 of the EC Treaty. The report we are debating today in the European Parliament adds further to this sense of repression, for it urges the Commission to use these articles more than ever before, to threaten Member States with fines or penalties to a greater extent, and even to propose a new system of automatic sanctions applicable to those who do not transpose Community directives quickly or sufficiently enough.
So why do Member States, who are supposed to have accepted the Council' s directives, drag their feet when it comes to applying them? This is the big question everybody seems to avoid. As far as I am concerned there are three answers. Firstly, a bizarre side effect of the extension of qualified majority voting causes institutions to have what I will call a type of regulatory illusion. We think that because we have voted by a majority in the Council, everything is solved. In reality, however, if members of the minority have good enough reasons and if application does not follow through on ground level, nothing is solved. And to redress the balance, we launch Europe into a downwards spiral of repression that better consensus at the start would have prevented.
Second cause of non-application: the unsuitability of certain parts of Community Law, such as the 1979 Directive on the conservation of wild birds, toughened further by the Court of Justice behind the back even of the Council. In a case such as this, which, take note, is from a unanimously adopted directive, what is lacking is the opportunity for an automatic revision to be made after a ten year period, at the request of a single Member State.
Finally, the third cause of non-application: certain directives are still not transposed or are badly transposed because the governmental representatives sitting on the Council wanted to turn over a new leaf in relation to Europe by closing their eyes to future difficulties that they of course knew would be inevitable. This is for example what has taken place in France with Directive 98/44 on the patentability of living matter, which now proves to be non-transposable because it is contrary to several essential parts of our own law. This is, alas, the usual behaviour of French leaders, up to the highest level. Nowadays, we agree to sign such and such a European text, not daring to raise objections, and tomorrow we will have to deal with their application. It is precisely this that has just taken place with the Treaty of Nice, and France will have a high price to pay.

Wallis
Mr President, the rapporteur should be congratulated on his wide-ranging and important report and he has rightly identified the problems of transposition and application of Community law, mainly with regard to directives. But we may have seen nothing yet, because we are moving into an era of new legislation - the era of co-regulation. Will this in future form part of Community law, whose application and uniformity we should be looking out for?
In its White Paper on governance, the Commission states that co-regulation will not be appropriate where rules need to apply in a uniform way. Nor will it be appropriate where fundamental rights or political choices are called into question. Yet this year we had to produce Parliament's own-initiative report on the EEJ-Net, a European alternative dispute network set up by the Commission using a co-regulatory approach. Yet what could be more fundamental than our citizens' access to justice or the way that law is applied and dispensed? Will we be watching every arbitrator and regulator to make sure that Community law is correctly applied? We have enough trouble at the moment with the normal judiciary.
We need to be aware of these issues. They are fundamental to our citizens and also to the rights of this Parliament as a co-legislator, not to mention their possible fragmentary effect on the achievements of the internal market if they are not very carefully monitored by this Parliament.

Krarup
Mr President, as has been said, the application of Community law does of course constitute nothing less than the decisive turning point in the European Union. The EU stands or falls according to whether or not a common, effective legal system is established. Community law, the 'acquis communautaire' and European unity are based upon European law. However, the problem, which is illustrated very clearly in the Commission' s report as well as in the previous reports and in this one, is that there is no such thing as European law, any more than there is such a thing as a single European people. There are profound differences between the different legal systems. The Roman-dominated common law and the Nordic legal traditions are incredibly different on a range of crucial points. Legal systems cannot, as it were, be transplanted like flowers from one pot to another. There are a number of structural, or what might be called cultural, differences, and that is also transparently obvious from this report.
Paragraph D contains a statement well worth noting. The European Parliament believes that one of the reasons for the poor implementation of Community law is the inability 'correctly to understand secondary Community legislation' . I thought that this was a translation error, even though the translation services are well thought of, but we find the same turn of phrase in a number of other languages: 'l'impossibilité d'une compréhension correcte' , 'umuligt at opnå en korrekt forståelse' etc. It is therefore impossible to achieve a correct application of secondary Community legislation. That is certainly an interesting acknowledgement. It might even be imagined that, as previous speakers have suggested, integration and supranational regulation have consequently gone too far, but that is not the conclusion. As is made clear, using almost military technology, on page 11 of the report, the conclusion is that we must establish a system leading to the 'elimination of national opposition' . If Community law and national legislation are inconsistent, respect for national legal traditions will decline, and this may perhaps be an explanation of why, not only in Denmark but also in Ireland and many other places, there is growing opposition to this system.

Kinnock
The report on monitoring the application of Community law that is before the House today is the seventeenth that has been produced in response to the request originally made by this House in a resolution in 1983. These reports give, as the House knows, an annual record of the work of the Commission in discharging one of the most vital parts of its role as guardian of the Treaties by taking action against infringements under Article 226 of the Treaty. It is obviously right for the House to scrutinise these activities. The Commission is gratified by the fact that Parliament has given a warm welcome to this latest report and grateful also to Mr Koukiadis and his colleagues for their work.
Every year, each of the two periodical reports on suspected infringements produced before infringement proceedings are open and each of the two reports on established infringements that are produced after notice has been given to the Member State concerned cover some 2 000 or so cases investigated by the Commission. The bulk of these are individual cases of incorrect application of Community law by the Member States' authorities. Clearly it is only possible to deal with such a caseload with a procedure which combines the advantages of individual examination of cases, speedy processing and compliance with the principle of collective responsibility applied in the Commission. The development of an efficient computerised system is also essential to fulfilling this task. For this reason a single management database has been set up, covering all infringement files opened by the Commission and covering data on the transposal of directives by Member States.
One benefit of this system is that it enables the Commission to take action systematically against Member States which have not adopted national measures to implement directives before the time allowed for transposal is completed. As the House will know, this is not an obsession with uniformity for some bureaucratic reason. It is essential in the interests of equity across the Union.
The development of an efficient computerised system will also make it possible to report in greater detail to the public on the action taken by the Commission to monitor application of Community law whenever a decision has been taken to issue a reasoned opinion or to refer a case to the court. The Commission is continuing its policy of issuing immediate press releases, which we first established in 1998, and in addition, since January of this year, decisions giving notice of an infringement, issuing a reasoned opinion, referring the case to court or terminating a case have also been published on the European Communities' Europa server as soon as they have been adopted by the Commission.
The peer pressure exerted by this greater transparency of decisions that relate to infringements by Member States may also help to promote more rapid conformity from Member States as they all now learn immediately of the decisions taken against each of them. Greater transparency can also be seen as a guarantee of fair hearing of complaints.
The House will be aware that because the Commission has a privileged position in bringing infringement proceedings it therefore has a unique ability to safeguard the interests of complainants. The guarantees offered by the Commission have been built up over time and they now mean procedural arrangements, which ensure registration of the complaint, strict confidentiality and information for complainants who may make their views known before any decision is taken to close the case. We are dedicated to ensuring maximum strength and maximum dependability in these vital procedures.
In its reply to the Ombudsman on the criticism of the management of the infringement case concerning the award of the contract for building the Thessaloniki metro, the Commission has therefore pledged itself to consolidating the administrative rules for complainants in order to facilitate contracts between complainants and Commission departments. Parliament will be informed of this consolidation as soon as it is complete.
The report adopted by the Committee on Legal Affairs and the Internal Market - which is the basis for the motion for a resolution before the House today - contains several findings and recommendations. For brevity, I hope that the House will permit me to deal only with the main ones.
I begin by saying that the Commission does not agree with the report's conclusions that the growing volume of infringements handled by the Commission departments, in particular on the basis of complaints, reflects a deterioration in the application of Community law.
The main reasons for that are as follows. Firstly, the overall volume of complaints and of cases handled is actually stable. The number of complainants registered even dropped slightly in 2000. Secondly, account must be taken of successive Community enlargements and the expansion of Community law, particularly in connection with the Community's wider powers and the growing public and business awareness of Community law. These are all factors that affect the number of infringements handled by the Commission and on that basis the increase in the absolute number of cases handled is a positive development rather than something that should cause disquiet. As Mr Koukiadis states in his report, it is important that every effort should be made to get to the root of infringements and find ways of reducing their number without relying exclusively on the standard infringement procedure.
As regards the interpretation of statistics in the annual report, the scope for interpreting the figures is still restricted because of the many causes of infringements, the Commission's great dependence on complaints and the political dimension of the work arising from the fact that proceedings are at the Commission's discretion. The Commission is in a position to determine an order of priority for proceedings by reference to, firstly, the perceived damage to the Community legal order, secondly the perceived damage to the interest protected by the rule that has been breached, thirdly the recurrent nature of certain infringements which are the subject of individual or collective complaints and fourthly the harm caused to Community's financial interests. In addition, topical events in any given area of the Community law can also trigger an increase in complaints to the Commission and cause the Commission to step up its action to satisfy the needs of the political agenda. The various stages in the completion of the single market were a good example of that. The increasing awareness of the possibility of infringement of environmental law is another instance. All of these points are of course made in very clear terms in the White Paper, which is, as some Members have reminded us, to be considered in this House tomorrow. It must be borne in mind that the national courts are the first guardians of the Community legal order and therefore the Commission deals with a relatively small proportion of Community law infringements.
It also has to be recognised that, since much of this law is made up of directives which have to be transposed into the Member States' domestic legal systems, once they have been transposed, the instrument concerned belongs to domestic law and any infringement must be dealt with by the national courts. I know that is understood in this House, but I spell it out for the record in the hope that it might eventually trickle through to the understanding of the press in Member States and maybe eventually to the public, who are persuaded daily by the newspapers that there is a great centralising process going on in the European Union when in fact the opposite is the case.
The report from the Committee on Legal Affairs and the Internal Market refers to the need to shorten the time taken to deal with complaints. Naturally we sympathise with that objective and we are therefore contacting relevant Member States with a view to securing faster compliance with Community law and reducing Member States own handling times, particularly by greater use of the computerised system. As I have already said, in the interests of greater transparency the Commission is now publishing its decisions to send letters of formal notice, to issue reasoned opinions, to refer cases to the Court or to close or withdraw cases immediately a decision has been taken.
I would also stress that specifically in response to Parliament's concern, the 18th Annual Report relating to the year 2000 will contain a specific section on the management of exceptions to the harmonisation which Member States enjoy under Article 95 of the Treaty.
The Commission also notes Parliament's concern about the need to improve cooperation between the Commission and the national authorities responsible for implementing secondary legislation. As you know, there are regular contacts between Commission departments about specific problems with the application of Community law through package meetings and so-called directives missions. However, the Commission is also looking at ways of improving the procedure for the notification of national implementing measures as an extension of the IDA programme for the interchange of data between administrations. That work involves the networking of Community and national legal databases covering directives and national implementing measures and will also give the public easier access to Community law and assist with the training of lawyers in Community law. The network will also provide direct access to the reports on domestic application of Community law produced by specific national authorities.
In conclusion, Commission action on monitoring Community law is crucial to fulfilling our essential mission of preserving the Community legal order, fairly, firmly, consistently, and with public understanding. The active interest of this House in such activities is invaluable and we are therefore grateful to it for its continuing support and understanding.

President
Thank you, Commissioner Kinnock.
The debate is closed.
The vote will take place tomorrow at 12.30 p.m.

Commission reform
President
The next item is the oral question (B5­0330/2001) by Mr Harbour and Mrs Guy­Quint, on behalf of the Committee on Legal Affairs and the Internal Market and the Committee on Budgets, to the Commission, on the reform of the Commission.

Harbour
Mr President, on behalf of all my colleagues I would like very much to welcome Mr Kinnock here to discuss the reforms. I would like to say to him that it is not through lack of effort on our part that it has taken a long time to get this question on the agenda. It has been very disappointing that we have not made progress with the Bureau to elevate the importance of this discussion. Nevertheless we will make up for it tonight and it is a pleasure to have you here.
Clearly the reforms - and I know you will be able to tell us much more about them in a moment - are at a critical stage. We know you have been consulting extensively. In a way that presents us with a dilemma in Parliament. You will know from the support for my report last year that colleagues have taken a very deep and intensive interest in the whole package of reforms and we have given you strong support for them. Indeed, we have been very conscious of the fact that these reforms need to be implemented as quickly as possible so that staff do not get disillusioned and they can see that change is ahead of them and new working methods coming before them. We have made some suggestions that are reflected in the question tonight.
We do not want to disrupt that process. On the other hand when you send us the elements of the Staff Regulations, as legislators we need to make sure that those changes to the rules are going to work in favour of good administration and not against it. You made out the case persuasively, as it says in our report, that in many cases the current Staff Regulations are deficient in that respect.
The question we have tabled tonight goes to what we regard - and I hope that you will share our opinion - as the very heart of the reforms you are putting together. The achievement should be an organisation in which advancement is on merit, an organisation in which all members of staff in the Commission know that they have clear goals, know what those goals are, know that if they meet or exceed those goals their performance is going to be fully recognised. They should know that they work in an organisation in which appraisals of their performance are not bureaucratic exercises that are carried out every two years and put in a filing cabinet and not referred to again, that the appraisal process is part of the overall quality of management and processes within the Commission, part of giving all members of staff the feeling that it is part of their personal development. It is setting them goals, it is identifying the need for training for development, for promotion and identifying the things that they need to do to contribute to the development of themselves and to the organisation overall.
That question of appraisal links very strongly to an aspect of the reforms about which we know you are engaged in heavy discussions at the moment. I hope you will not mind if I mention that tonight even though it is not part of our question. That is the question of career structure and your proposals to move to a linear career structure. It is clear that appraisal and career structure are inextricably linked together. It is my argument - and indeed that was expressed in my report and supported by colleagues - that if the appraisal and development system works properly there are no obstacles to achieving the linear career structure - and that is the whole thrust of what you are trying to do. There should be no reason for setting artificial barriers to people's progress through an organisation. If there is a need for qualifications or training to move to the next job the development process will identify that. And so a properly designed and effective appraisal system, which we have asked you a number of questions about in the question we have tabled, is also linked very strongly to that move, and indeed it is the very foundation of a linear career structure as well.
My colleague, Mrs Guy-Quint, is going to cover all the detailed budgetary questions with her considerable expertise in that subject, but I would just like to mention two final elements of our questions, to set them in context. The first is one that we have specifically asked you about as an aspect of a modern public organisation: a policy for whistle-blowing - and the English terminology is now being widely accepted as a very good way of identifying a policy where officials believe and are confident that if they find wrongdoing they can report it without fear of recrimination or their careers being affected. The second links in with a debate we will be having later this week on the code of administrative behaviour: how do you see that as an integral part of the overall reforms?
In conclusion we very much look forward to hearing your responses this evening and also your reassurance that the reforms are proceeding to plan as you would wish. We hope you will also identify ways in which you would like more support from this House in what is for us an absolutely crucial development for the future of the Commission and indeed for the future of Europe itself.

Guy-Quint
Mr President, Commissioner, ladies and gentlemen, following on from what Mr Harbour has just said, I will now very briefly talk about technical problems of concern to the Committee on Legal Affairs and the Internal Market. I would nonetheless like to tell you, Commissioner, that I am delighted with the advances that have been made in the area of cooperation since our last meeting in a plenary session.
In fact I, in addition to many other Members, regret that the Commission should make proposals and generate information, but does not really consult the other institutions, the trade union organisations or the staff committees of these institutions. Now, since February, my prayers have been answered, because this procedure, thankfully, has been given a great deal of attention and has been widely listened to by the institutions you are currently consulting. I know that you will notice that a wide consensus has been reached on many proposals.
On this subject, I would like to say something quite different to my colleague Mr Harbour. It turns out that there are still two delicate points for us to consider in these negotiations. To be precise, the structure of careers, that is to say linearity, or else the status quo, and also the pensions system. If, recently, I understood you correctly, it appears that you are currently searching for a compromise between these two career systems. It is my personal wish that a realistic and modern proposal will be found through your negotiations. I would also remind you that as far as pensions are concerned, even if very often it is thought that a pensions system by pre-funding is the way forward, there are many of us, the trade unionists, employees and others, who think that the current system of distribution can be upheld or in any case combined.
I shall now come back to budgetary concerns relating to the reform. Firstly, and as a matter of precaution, I have to remind you that the implementation of a system for early retirement has not received Parliament' s endorsement other than upon the specific condition of budgetary neutrality, wherever it may be implemented. In relation to the entirety of the reform, we would therefore wait for, as soon as is possible, a complete document stating the budgetary aspect of the current negotiations. It is therefore very important that the Committee on Budgets should have better knowledge of your current predictions on the global cost of reform. In fact, in March we heard talk of EUR 500 million. Today, EUR 600 million is stated. In addition, further measures proposed and the demands of other institutions have put a large strain on the funds required for the balance of category 5, hence our concern.
Another element of doubt that makes the 2002 budgetary decision more complex is Council' s failure to respond to the 2001 letter of Amendment No 1 on the implementation of early retirement schemes. If the Council still insists on its proposal to raise the age for early retirement, we have a question: what will be the consequences for your draft, and, more importantly, do you think that it would be wise to continue under these conditions? We do not currently have a document that allows Parliament to measure the consequences of these positions.
Although we are very attached to the idea of reform, we cannot make blind decisions on choices that are so technically, humanely and financially important. To decide in this way would be like signing a blank cheque to the Commission, which is not in our nature. To this day, we can only remark that the preliminary draft budget put forward by the Commission exceeds the category 5 ceilings of 5 million and that Council is now putting forward a draft budget where these ceilings are most certainly respected, with a margin of 58 million, but where all the policies of the different institutions would not, as a result of this, be respected.
The solution: should category 5 support the two largest projects - enlargement and the cost of reform - on its own? Should we continue these efforts solely on reform or also on enlargement? In any case, we need a response. Would it not be possible to extend reform over a longer period? On the eve of voting on the draft budget, we are aware that the responses you provide clearly depend on so many pieces of the same puzzle, but it is very important that you clarify matters in order for us to make a decision.

Kinnock
Mr President, I am very grateful to both Mr Harbour and Madam Guy-Quint for tabling this comprehensive question which permits me to make a full report to the House on progress with various aspects of the Commission's reform strategy. As I hope the House will understand, providing detailed replies to every part of this oral question this evening would take up all the time allocated to the debate. I am therefore making a full progress report on all individual reform actions available today to honourable Members in written form. Perhaps some honourable Members will have received that full report and here I will concentrate on the most salient recent developments with the human resources policy elements of our reform strategy and I also refer, as requested by Madam Guy-Quint, particularly to the budgetary issues.
I first report, without any complacency, that in the five months since the Commission adopted the detailed consultative document on reform and modernisation of human resources policy, progress has been sustained and progress has been satisfactory. The joint high-level group chaired by the former Secretary-General of the Council, Mr Niels Ertsbøl been particularly useful in facilitating a very thorough constructive and productive process of consultation with staff representatives. The Commission has conveyed its warm thanks to Mr Ertsbøl.
In consultations and negotiations on the complex matters of personnel policy, it is natural of course that some delays have been experienced. I am very glad to say, however, that they have not been of a nature or of a length likely to cause any severe disruption to the reform schedule. As I previously emphasised to the House, and Mr Harbour has repeatedly and in my view rightly emphasised too, the Commission is aware of the need to sustain the momentum of change, not only in the interests of the institution but also in the interests of our personnel and of the public which we serve. We are sure that we can maintain the necessary pace while simultaneous achieving the understanding and the support required for fully effective implementation of the essential changes.
Against that background, the Commission adopted a document on 18 July entitled 'New orientations for the reform of personnel policy'. This has been communicated to Parliament but of course because Parliament rose at roughly the time we were producing that document, there was not an opportunity to formally bring it before Parliament at that juncture. The document includes a timetable for the completion of the current negotiations. By the end of this year the Commission will be in a position to adopt finalised decisions on all issues that do not require changes to the Staff Regulations and also to present a formal proposal for a revised set of Staff Regulations to the interinstitutional Staff Regulations Committee. We hope that the intensive consultations undertaken with the Secretaries-General and Presidents of this Parliament and of the other institutions will facilitate the support that is essential to the changes that are necessary to fulfil, I remind the House, the clear reform mandate given specifically to the Prodi Commission by this House and by the European Council.
The Commission appreciates the supportive purposes of honourable Members in their reference in this oral question to implementation of the new career development policy ahead of formal agreement. We advise the House, however, that such efforts would be certain to attract formal complaints and court cases and therefore lead to delays and indeed to unnecessary ill will. We will therefore continue to fully observe the conciliation agreement which we reached with the staff representatives in March. In any event, as the July timetable shows, discussions with Commission staff representatives will be concluded in the near future and many substantial changes in personnel policy that do not require amendment to the Staff Regulations will then be decided by the Commission and implemented immediately.
I am pleased to report that the basic objective of our February proposals, of which we are again reminded by Mr Harbour, of directly linking career advancement to proven merit has been accepted in the negotiations to date. Changes in detail made as a result of negotiation and consultation have, I am glad to say, produced improvements in the proposal. Details relating to these matters and to Mr Harbour's questions on benchmarking, appraisal, management and pensions are available in the progress report which I am circulating to the House today. To save time I therefore turn to the concluding part of the question put by Mr Harbour and Madam Guy-Quint relating to budgetary matters.
Firstly I note the reference in the question to EUR 600 million as 'a cost reform' and I must say that the House is in danger of accidentally misleading itself. It is essential to stress with maximum emphasis that a clear distinction must be made between the costs of meeting the Commission's carefully measured request for 717 new posts including 118 posts in Delegations, submitted in the amending letter last September, and the far smaller gross costs of investing in reform. The new posts needed to enable the Commission to fulfil its policy and operational obligations to 2006, set out in fine detail in the amending letter and accompanying documents, will cost around EUR 542 million. The gross cost of personnel policy reform to 2006 will be around EUR111.9 million. The largest part of additional human resources spending is therefore not related to any significant extent to the design and implementation of the reform strategy. I underline the fact that neither the request for Commission posts, nor any of the Commission's reform proposals, would cause a breach of the limitations set down under heading 5 of the 1999 financial perspectives and the Commission will fulfil the undertakings to stay within the limitations which we volunteered last year both to this House and to the Council.
However, as Mrs Guy-Quint mentioned, the House should take account of the fact - as a table I am also circulating today demonstrates - that recent proposals made by institutions other than the Commission would have the effect of significantly increasing the forecast rates of growth of expenditure on personnel and administration under Heading 5. The institutions which are at present contemplating an above-average rate of growth in Heading 5 expenditure will doubtless want to give further attention to this matter. It is conceivable that part of the estimates which they are making relate to the anticipated costs associated with enlargement. That is a matter of interest and requires a focus from all of us. The fact remains that, as things stand at the moment, any danger of breaching Heading 5 of the financial perspective emanates entirely, solely and completely from the ambitions of institutions other than the Commission and has absolutely nothing to do with the modest and temporary proposals that we make for additional investment associated with reform, which is a fundamental mission of the Prodi Commission, given to us by the overwhelming majority of this House and the unanimous decision of the European Council.
Although discussions with staff representatives are not yet concluded, the Commission wishes to emphasise that as examination of all relevant figures will show - and the relevant figures are in the documents that I have circulated today and in the document adopted by the Commission on 18 July - the increase in yearly expenditure under Heading 5 generated by Commission reform will be modest and temporary. The figures published in the new orientations document in July show the maximum yearly increase due to reform - if the measures were adopted by all institutions - would be EUR 34.3 million higher in 2005 than in 2001. Thereafter, after 2005, the cost will actually decrease, leading to permanent savings of EUR 23.5 million by comparison with 2001.
Taking those factors into account and in specific answer to the question before the House, the Commission considers that our reform strategy does not require that we request a revision of the ceiling of Heading 5 and we will not make such a request. Obviously following from that, we do not consider that it is sensible or necessary to make what would be a false distinction between urgent and less-urgent aspects of reform.
On the question of staging the reform over a longer period, I simply remind the House that first of all, a substantial part of the House argues - rightly in my view - for sustained momentum of change, for the sake of our staff as well as for the sake of the institutions. Secondly, it was the explicit mandate of the Prodi Commission - not any other Commission - to undertake and achieve the reforms in its quinquennium. We certainly intend to do that. At EUR 111 million, over four years, with investments that would result in actual cost savings, as we have demonstrated, none of the reform investment is expensive. All of the reform investment is essential. There is no question of our seeking or accepting a blank cheque. Every argument that we have made, every figure that we have put, every proposition that we have tabled is carefully calculated. We expect no-one to take anything on credit or on trust.
It is clear that negotiations on modernisation of the career system have led to a consensus about the objectives of changing the system and also about conditions for reforming the system. Those negotiations have not, however, yet produced agreement on the detailed practical means of implementing the sort of reform that is needed to produce a more continuous modern career structure. The prospects of gaining such an agreement are, however, very much alive, I am glad to say.
Over the past weeks in August, work has therefore continued in order to produce fresh and detailed models and options, which will be the subject of resumed discussions with staff representatives and with other institutions this month. It is realistic to anticipate that by the end of October the Commission will be in a position to take a final view of the whole of the human resource policy reforms, including a career structure that is more linear and in the best professional interests of the permanent and independent European public service. To turn such proposals into reality the understanding and support of Parliament, both as a democratic assembly and as an employing institution, will be essential. I am optimistic that support and understanding will be provided.
As Mr Harbour reminded us, last November the large majority of this House gave support to his report which explicitly favoured the principle of making significant change - not the status quo or anything like it - in order to establish a more linear career system for the European civil service, for all the reasons he was kind enough to set out again tonight.
I hope that such a positive stance will be maintained by the House and by the administration which serves the House. Negative attitudes would frustrate the will of this House that was clearly expressed by a huge majority in September 1999, in November 2000 and on several other occasions. The reason that the will of this House would be frustrated by negative attitudes is that these would impede or prevent the Commission from making changes which are at the core of the modernising reform that has been explicitly required by the Council, by Parliament and by the European public.
I hope that the constructive and cooperative attitude to reform that has repeatedly been manifested by this House will continue strongly and consistently.

Pomés Ruiz
Mr President, I must talk about control issues, as I am sure Mrs Morgan will do. I would like to welcome her and congratulate her on recently becoming a mother.
Mr Kinnock, there is a Spanish phrase which says, 'the road to hell is paved with good intentions' . You have a very difficult task and I have the impression that, in order to progress from intentions to actions, you must put your foot down and take risks, as President Prodi promised us when he began his five-year mandate.
There are issues of budgetary control which I would like you to expand on in your written reply.
I remember that, a year ago, you told us that eighty officials were expected for the central auditing service to begin work in full in April on an evaluation of the management and control system. We do not know whether this is yet under way. We do not know whether centralised prior approval is yet under way insofar as a high degree of experience in the authorising bodies has been achieved. We do not know whether specific prior controls are operating, on the basis of a risk analysis and according to the wishes of the authorising officers.
We have great doubts, Mr Kinnock, about the future of the financial regulation, which must be created urgently. It will not be your exclusive responsibility, but we are very unclear about this. We are worried. You are going to produce a new version. When will this be? What is happening with the Convention on the protection of the Community' s financial interests? What is happening with the helpdesk which you were going to set up so that the measures in the White Paper could be consulted by officials? I could go on and on.
We have the impression that the task is enormous, that there is a timetable to be created. You know that you have our support. We want you to take risks. We will support you if you make a mistake, as we supported Mr Prodi when he told us about it, but perhaps we need someone to put their foot down and timescales to be respected and promises to become realities, Mr Kinnock.

Miller
Mr President, when we embarked on this exercise all of us knew that the reform of the Commission was never going to be easy, it was never going to be smooth and it was never going to be quick, because we had 40 years of entrenched views and in trying to change that we were always going to have to overcome some problems. Despite these obstacles, I have to say, having listened to the Commissioner, we have congratulate him on the progress that he has made so far and we also have to congratulate the staff trade union for having gone into negotiation and made headway in a number of areas of reform. It is important that this question is down here because I would like to touch on a couple of points that some of my colleagues have raised.
Mr Harbour - rightly so - raised the question of timing. Timing is important because, if you get the timing wrong, it impacts on the morale of staff and once the morale of staff starts to fall then that has an impact on career improvements, advancement, etc., and once that starts - they do not move forward. All these points go together.
I was glad that Mr Harbour touched on the question of the linear career structure, it is a big issue and one that we have to face up to as the Commissioner is well aware. I would add that I agree that whistle-blowing is now in the public knowledge. However, whistle-blowing has a different ramification in the west of Scotland: it tends to indicates flutes and that does not go down too well in my part of the world.
I slightly disagree with my colleague Mrs Guy-Quint. On the question of consultation: we have been consulted at every opportunity. She did argue again for a more protracted period of reform, but as we said, if we spin it out longer and longer it impacts upon the morale of the staff and that impacts on the performance of the staff. We have to keep this as short as possible.
The whole question of retirement: I was the person responsible for piloting the question of the retirement package through Parliament and it is a wonderful package. I would love to be offered the same. Can I say to the Commissioner, we heard quite clearly about the breaking of the Heading 5 ceiling. We realise that it is not in the domain of the Commission and maybe it is high time that some of us were to look at some of the other institutions and how they were getting on with on with that.
In conclusion, we have made significant progress. It is important that we are kept informed of the progress. I am glad to hear what the Commissioner said, because only by that and by monitoring what is happening can we have an impact. If obstacles do occur, we can then start trying to tackle them, here and in the other institutions as well.

Jensen
Mr President, the Group of the European Liberal, Democrat and Reform Party also wants to say that we very strongly support the initiatives you have put in place in the personnel area, Mr Kinnock. It is no easy task you have embarked upon, and it is therefore important for Parliament to offer its full support. It has, of course, been a widespread feature of society over the last few years that organisations have been obliged to re-think the way they organise their work in order to maintain competitiveness and exploit the opportunities offered by modern technology and public administration and, in so doing, give the electorate full value for their tax contributions. Moreover, it is precisely the electorate that has a lot of difficulty understanding why the EU' s institutions maintain such a rigid and old-fashioned personnel policy in which promotions are made on the basis of very formal criteria rather than on the basis of effort. There is no grass-roots understanding of why EU employees do not have to meet the demands for fresh thinking, flexibility and adaptation that apply in the rest of society.
In that connection, I should like, on behalf of the Group of the European Liberal, Democrat and Reform Party, to support the Commission' s proposal for the linear career structure which has been mentioned quite a few times this evening and in which promotions are made on the basis of ability and effort. I should also like to regret the fact that, in a letter to the President of the Commission, Mr Prodi, the President of the European Parliament in actual fact went against Parliament' s own views on this point, as expressed in the Harbour report. Moreover, I hope that this has not created too much in the way of difficulties for the Commission in the negotiations. It is vital that the Commission' s reforms should involve a personnel policy that rewards commitment, hard work and adaptability, and that is something we must support. Against that background, I shall look forward to the Commission' s compromise proposal for a career structure. I should also like to acknowledge the Commissioner' s pointing out what is creating the problems in Heading 5. I think that remark was rather apposite.

Dell'Alba
Mr President, I have not so far received a report, either in Italian or English. Maybe they are in my office. But if I understood Mr Kinnock correctly, in his opinion the only way to respect the ceiling of the Financial Perspective is to abolish the other ten languages and just keep the language that I am speaking now. My problem is not English. My problem is that I do not want to speak only English with a mother-tongue English-speaking Director-General of the Commission, for example, and I do not want one culture to have excessive influence.
Mr Kinnock, two years ago, in September 1996, Parliament conferred upon the Prodi/Kinnock Commission a very clear mandate: reform. Two years have passed since then, Mr Kinnock, and - as far as I am aware - the only reform which you have implemented is to take the gold medal for 20 years of service away from civil servants, which, in all sincerity, does not seem to amount to much. In Italy, there was a Ministry of Public Administration Reform for 20 years, and then they removed the word 'reform' because it was becoming rather ridiculous that reforms were taking 20 years and it became the Ministry of Public Administration, full stop. It would appear that this reform - and it is not by chance that Mr Pomés Ruiz mentioned the Financial Regulation - is, so to speak, just a castle in the air: we have been talking about it for two years but I feel that all the proposals are raising difficulties and a whole range of problems. Therefore, I wonder when this reform will come to an end, when there will be an end to this discontent. I am sure you are not unaware of the fact that the European officials are not too happy with the way things are going. I am not going to defend them as a corporation, but I will say that this matter is serious because it was the task of this Commission to reinvigorate the European public administration. In my opinion, rather than reinvigorating it, the Commission is scouring it out.

Marinho
Mr President, we all know how difficult it is to reform an administration: it is basically a case of replacing the current equilibrium, which is grounded in the inertia and routine of years and of habit with one that is different; excellent in principle but uncharted territory and always experimental in practice. This is, of course, a daunting challenge, and one that we welcome. For this reason in principle we support, without writing a blank cheque, of course, the initiative for the reform of the Commission. It is, however, worth remembering that this is not simply an administrative reform, but also a political reform, where in addition to the traditional balances it is necessary to be safeguard the traditional European institutional balance, in which issues of power are raised that cannot be dealt with in the same way as a reform of a more neutral nature.
So what is our main cause for concern? First of all, we need to know whether we are heading towards a strengthening of independence and autonomy in European public service, and I can offer good advice to those taking the decision on this matter, or whether the discretionary nature of career progression privatises the hierarchical relationship, making a European official very similar to an official in a multinational company. Furthermore, on what objective criteria are these competences to be awarded? How can we prevent merit from being watered down into benefits, into obedience to management, creating a structure of senior officials, some of whom will be quickly promoted, others more slow to rise up the ladder? And how can we prevent this polarity from taking on the form of national considerations, the defence of national interests, in opposition to the actual purpose of the Commission, which is responsible for protecting European interests? These are the political risks of these reforms, our fears and our concerns. It is your task, Commissioner Kinnock, and it requires your integrity and intellectual honesty to prove that these risks, these fears and concerns are unfounded. The onus of proof, however, is on the Commission and specifically on Commissioner Kinnock.

Kinnock
Mr President, I am aware of the fact that I trespassed on the patience of the House earlier in order to try and make a full reply. I will now try to be as brief as I possibly can in response to the very good points that have been made by honourable Members in the course of this debate.
Perhaps if I try to go through the more salient points made and simply make the most brief answers that will assist the House, especially against the background of the fact that in their post today and probably in their offices already, there is a very comprehensive lengthy reply to every aspect of the oral question set down by Mr Harbour and Madam Guy-Quint and secondly a very full table of 23 pages going through each of the 98 actions for reform proposals and giving a detailed account of the state of play on each of those at the moment, whether those proposals have been completed and implemented, which several have, or whether they are currently the subject of consultation or whether they have been presented to this House, or to the Council, or both, for the legislative amendment required to put them into effect. All the honourable Members, including Mr Pomés Ruiz and Mr Dell'Alba and others who have enquiries of that kind can, simply by referring to that table, get the most up-to-date information available to any one in the European Union, including the Commission itself.
In response to Mr Harbour's questions relating to whistle-blowing and to the code of good administrative behaviour, obviously we require changes to the Staff Regulations in order to secure the necessary advances on the existing legislation relating to the duty to report suspected wrongdoing that has an effect on the financial wellbeing of the European Communities. The proposal has been made in detailed form. We are now seeking the cooperation of the Council and Parliament in the course of consideration of the modernisation of the Staff Regulations next year. I am optimistic that this cooperation will be forthcoming. The result will be that the European public service will have the best and most secure provision for safeguarding the interests of staff and the institutions and the European public of any public administration anywhere in the European Union. As far as the code of administrative behaviour is concerned, the principles of that code are already set down in the Staff Regulations. In day-to-day practice, since we have implemented the code, the answer to the question on the oral paper today about whether the code of administrative behaviour is in practice incorporated in the activities of the Commission is yes.
On the career structure question, it appears that people have either adopted misinformed views or been given misleading opinions. I assure the House that the intention behind the reform generally, and specifically the intention behind the proposals we have made in relation to career structure, is not to try to emulate some form of private sector multinational. It is to establish, to make an assessment upon, to recognise merit and to provide reward in the development of an individual's career according to the very best principles of accountable, efficient, independent, professional civil services at European Union level. No more no less. If anyone is trying to give the impression that we are trying to set official against official, to destroy the contribution of loyalty made by officials over the years, to overlook the individual qualities of individuals by making the proposal that we do, they are sadly misled.
I am prepared to go into the most thorough detail in order to ensure that we do not get any repetition of the misunderstanding that has led to various communications that have manifested a complete failure to comprehend the purpose and detail of what has been proposed so far. I am very glad to say that in the Commission the staff unions, or a majority of the unions representing Commission staff members, have gone into these issues in the most thorough detail and have actually developed attitudes and ideas that can lead to significant improvements on the original propositions and options that were put.
It is on the basis of that constructive dialogue and negotiation, which has lasted over the past five months, that we are now putting refreshed and reconsidered options which I hope will recommend themselves not only to staff in the Commission but to the other institutions. There is nothing to fear and there is everything for the staff, the institutions and the public interest to gain by the modernisation of the career structure of the European Union institutions from the inherited structure which is over 40 years old. Everything else in the European Union has changed and it is time that the career structure and the recognition of commitment and capability caught up with those other changes.
Can I say to Mr Pomés Ruiz that the answers to the questions that he has raised, for instance on audit, are available in a number of documents which have been conveyed to Parliament. But for quick and easy reference, I draw his attention to the set of tables that he will have in his office today or at the very latest tomorrow - I suspect that they are there today - which will give him complete and up-to-date details on each of the aspects of reform relating to the establishment, development and operation, for instance, of the internal audit service.
Mr Miller refers to timing. That is an apposite point. Our commitment to sustained momentum is nothing to do with any desire to rush the Commission, its staff, Parliament, the Council or anybody else. The point is that in managing very substantial change that affects our institutions and the people who work for them it is in nobody's interests to delay, evade, or unnecessarily prolong the deliberations. Let those deliberations be thorough and the negotiations candid and well-informed. But when the prospect of change hangs over people's heads it can be destabilising, demoralising and demotivating, which is in nobody's interests. That is why we are not rushing. These changes are being considered properly and democratically in a process of consultation and negotiation. We have honoured every commitment on that and we will continue to do so.
As regards the early retirement package mentioned by Mr Miller, the package we have now has retained its attractiveness for staff and its cost neutrality. We have kept our promises. What we need now is for the Council to act quickly and effectively, because the increased efficiency and cost neutrality and the benefit to the operation of the European Union that can derive from the Commission's proposal last year could be drastically reduced or even lost altogether if any part of the Council prevaricates. That is not in anybody's interests. I take Mrs Jensen's point: what we are proposing is to link effort to recognised assessment and reward.
I think I have covered Mr Marinho's point relating to the nature of what we are seeking to do, which is consistent with principles of public service, but now I come to Mr Dell'Alba's point about language. He is a Member of this House for whom I have great respect despite our political differences. His point about language hegemony was a cheap point, which regrettably diminishes my respect for him, and what he says has absolutely no foundation at all in anything that I or my fellow Commissioners have said or done. He might have intended it as a joke but I do not think that in the European Union of 2001 we should joke about things like that.
We have been told that, in the two years we have had as a Commission, the only reform has been to get rid of the medal for 20 years' service. But when I look back over these two years I see that we have kept promises to establish, for the first time ever, an independent, professionally led and staffed internal audit service, a central finance service, audit capabilities in every directorate-general, an audit progress committee that bears comparison with any comparable mechanism in the private or public sector anywhere in the European Union. We have drafted a new financial regulation which came to this House on time and to the Council on time and we are waiting for its enactment. We have developed a strategic planning and programming system. It is capable, with the use of activity-based budgeting and management, of being implemented in the European Commission, on time, provided that we get the necessary support from elsewhere. On time, in keeping with the promises we made on 1 March 2000 we have set out the most complex and extensive set of proposed reforms for personnel management and conduct in the European Commission and European public service comparable to the work that has been undertaken in the administrations of Member States over five and ten years.
It is a slur on the people who work in the Commission and the huge commitment that they have shown, in working 75 hours a week or more, month after month, to suggest that this Commission has done nothing in two years. I will not tolerate that kind of attack on the officials of the Commission and the way in which they have demonstrated their dedication to the public interest by seeking to fulfil the mandate given to the Commission by this elected House.
We have not finished the reform. It will be some time before we have even implemented the mechanisms of reform, let alone securing the changes in attitudes, conventions, behaviour and so-called 'culture' that will result. One group of people really does deserve credit: the civil servants of the European Union, both those who have contributed to the design and development of the reform programme and those who, in a time of turmoil, have shown patience, understanding and commitment in thinking up the ideas, considering the proposals being made, suggesting improvements and showing the goodwill that demonstrates a high standard of professional commitment to the cause of Europe.
We will continue along that path, hopefully with the cooperation and constructive support of Members of this House and the Council. But if in the end we do not succeed in making all the changes that are needed in the time available, one thing I want to ensure is that every tax-paying citizen and every voter in the European Union understands that a failure to meet the targets and deadlines is in no way the responsibility of the European Commission or the people who work for it. The responsibility for failing to fulfil the mandate lies elsewhere - maybe with the very institutions that gave us the mandate in September 1999. I would much prefer to be able to show people in the Member States that Parliament, the Council and the Commission heard and heeded the demands for change and modernisation and have worked together to bring about the changes needed to ensure that the citizens of Europe have the high quality, efficient, transparent and professional administration they deserve.
The Commission and its staff have committed themselves to that. I hope that this House will continue to show the same commitment.

Dell'Alba
Mr President, I have asked for the floor for personal reasons to speak just on the language issue, for the rest is a political matter. I read in La Stampa on 15 August that Mr Védrine and Mr Fischer had been complaining. I wanted to make an understatement and, as the Commissioner has pointed out, it is difficult to make a joke in a language that is not one' s own. I failed and I apologise. It was, of course, a joke, as the Commissioner said. The rest is clearly a different matter and I respect what the Commissioner has said. My comment referred purely to the first part.

President
Thank you, Mr Dell'Alba.
The debate is closed.
(The sitting was suspended at 9.52 p.m.)

