Interpretation of the Rules of Procedure
President
I have been informed by the Green Group, pursuant to Rule 162(4), that it contests the interpretation of the provisions governing the discharge procedure that was announced to Parliament yesterday.
I would therefore remind the House that, as announced yesterday, the vote on this interpretation will take place at voting time today, in other words at 12 noon.
There is of course no question of us holding a debate on this matter now.
Rule 162 is perfectly clear. We shall vote at 12 noon. However, I will give the floor to Mrs Theato, who has asked to speak as chairman of the Committee on Budgetary Control.

Theato
Madam President, I should like to request that the opinion drawn up by the Legal Service - which contains statements on this point -should also be made available to groups and Members. I do not know whether all Members have now received this opinion. Yesterday, it was also submitted to the Committee on the Rules of Procedure, the Verification of Credentials and Immunities.

President
That is difficult, Mrs Theato, since the interpretation has been given by the Committee on the Rules of Procedure. It is that interpretation which has been contested, and the House knows its mind well enough to decide freely for itself. It will do that at 12 noon today.

Approval of the Minutes
President
The Minutes of yesterday's sitting have been distributed.
Are there any comments?

Janssen van Raay
Madam President, on 12 January 1999, Mr Wijsenbeek and I are required to attend the Court of Justice in Luxembourg at 9.30 a.m. in proceedings on a question referred for a preliminary ruling on the basis of Article 177 by the District Court in Rotterdam. We are therefore faced with a choice. We would have to leave Strasbourg very early in the morning to travel to Luxembourg and would therefore probably miss the voting, so we must choose whether to go to Luxembourg or stay here to vote. Who should decide? This is a question that I raised yesterday as a point of order. My lawyers tell me that, according to Rule 2 of the Rules of Procedure, it is Mr Wijsenbeek and myself who should decide. If it is of overriding importance that we should be here, then we will inform the Court that we regret that we are unable to attend. If we say that it makes no difference and that we would be fulfilling our parliamentary duties better in the interests of the citizens of Europe and the free movement of persons by going to Luxembourg, then we will unfortunately probably not be here for the voting. It is up to us to decide, according to our lawyers. But the Bureau says that on the basis of Rule 5 it must decide for us, and that its decision is that, unfortunately for the Court of Justice, we must be here throughout the voting, otherwise we will be fined half a day's allowance for failure to attend. It has thus implicitly ruled that the half-day's allowance is income - think back to ground 21 in the Lord Bruce judgment - and is therefore subject to national taxation laws. I promised Mr Gil-Robles yesterday in the corridor here in Parliament that I would let the Secretary-General have a short statement in French and English sometime this week, and I shall be happy to hand it over to you this week, Madam President.

Wijsenbeek
Madam President, I would just like to say that the Court of Justice has indeed summoned me to attend on Tuesday, 12 January 1999 in the Wijsenbeek case. I would also point out that we have already discussed this issue in the Committee on Legal Affairs of which you yourself are a member, Madam President, and that the case concerns the free movement of persons and the interpretation of Articles 7 and 8, on which Parliament itself brought proceedings, though its case was rejected as inadmissible. I and my lawyer, Mr J.L. Janssen van Raay, who also happens to be my colleague here in the House, have ourselves brought proceedings on this issue, because as Members of the European Parliament and as ordinary citizens we are victims of the failure to implement Articles 7 and 8. I would therefore ask you, Madam President, both as President and as the party which brought the earlier proceedings - even if they were declared inadmissible - to lend us all possible support and cooperation and not to insist that all Members must be here all the time, because that is a misinterpretation of the Rules as construed by myself and Mr Janssen van Raay.

Pex
Madam President, I have a comment on the Minutes, because the presidency yesterday committed an omission which could have serious consequences for relations between Parliament and the Council. It was on the Council's common position on the European capital of culture for the years 2005 to 2019. The deadline for any reactions expires today, but the presidency requested and was granted a postponement by the Council. It is not clear why and when this postponement is to begin, because no announcement was made yesterday that the common position had been received. You can put this right by announcing it now, which would mean that the deadline for reactions is postponed until 15 January. The Committee on Culture decided unanimously yesterday evening to put before the plenary a declaration of intent to reject the common position. If we do not react we shall achieve the exact opposite, which is that the common position will go through on the nod. I would therefore urgently request that you make this announcement today, and I would also point out that this is the consequence of the procedure followed with documents received, which is that the President says that documents have been received and refers to the Annex that is later attached to the Minutes. We all say yes, and have no way of checking whether what was agreed has actually been done. It is only now, a day later, that I can officially see what has happened. Because of this we had the unusual situation yesterday that, after the plenary and before the committee meeting, the services informed me that the announcement had been made, then after the committee meeting they said that it had not been after all. These sorts of misunderstandings are, of course, extremely slipshod.

President
Yes indeed, Mr Pex. We are well aware of the situation, and I can assure you that the announcement will be made today.

Miller
Madam President, I refer to last night's Minutes and the speech made by the newly elected colleague in this House from Scotland. In his speech he referred solely and continually to Scotland. Madam President, could you point out to the new colleague that this is a European Parliament and if he wants to continue with his narrow nationalist views maybe he should have been elected to the Scottish Parliament?

Fabre-Aubrespy
Madam President, I would like to make a further point concerning page 22 of the Minutes. You will recall that after the rejection of my request that the report be referred back to committee, in accordance with Rule 129, I felt I had to point out the consequences of a vote of rejection by Parliament, and the President agreed with me that there could be other requests for referral back to committee. This is not mentioned. I wish to have it recorded not because I was right but because the question might be repeated, and for future reference I think it would be good to record that this was stated.

President
If it was not mentioned, Mr Fabre-Aubrespy, it is because that is what the Rules say and so it was not considered necessary.

García Arias
Madam President, I would like to make a point relating to Question Time. When we know which Commissioners are going to attend Question Time, we ask questions intended for those specific Commissioners. But in this instance, the European Commission has decided that questions that were intended for Mr Van Miert, since they concerned competition policy, are to be answered by Mr Papoutsis, who is not going to attend Question Time during this part-session.
Madam President, I would like to protest to Parliament's Bureau because when we Members ask questions intended for specific Commissioners, it is because we know that they are the ones responsible for certain issues.
I know - or at least, I imagine - that we cannot now change the questions, but the Bureau should use its authority to monitor such matters.
(The Minutes were approved)

Plooij-van Gorsel
Madam President, you know that we all have to come here to Strasbourg for one week a month and that we are often deprived of news from our home countries. The situation has been somewhat improved by the fact that we now have a television in our room broadcasting in all sorts of languages. There is even a Dutch-language channel, but every time I come here I find that it has been switched off, and I have to make a number of telephone calls to have it restored. Could the services perhaps ensure that when we arrive on a Monday the Dutch channel is also available?

President
I am told that in the new building this will not be a problem, and it is certainly unfortunate for you not to be able to receive Dutch television.

Decision on urgent procedure
Colino Salamanca
Madam President, on behalf of the Committee on Agriculture, I would like to call on the House to approve the request for urgent procedure for the programme to supply agricultural produce to the Russian Federation, in accordance with the resolution adopted by the House on 19 November. It appears that there is an urgent need to supply certain regions of the Russian Federation and certain groups - particularly the unemployed, sick and elderly - with agricultural produce. Therefore, the Committee on Agriculture is asking Parliament to approve this request for urgent procedure.

President
Does anyone wish to speak against this request?
If not, I shall put it to the vote.
(Parliament agreed to urgent procedure)

Discharge for 1996
President
The next item is the report (A4-0502/98) by Mr Elles, on behalf of the Committee on Budgetary Control, on the discharge to the Commission in respect of implementation of the general budget of the European Communities for the 1996 financial year.

Müller
Madam President, I should like to request that Mr Elles's report be referred back to committee pursuant to Rule 129 of the Rules of Procedure. I would therefore ask you to call Members back so that they can take part in the vote. I think the reasons are sufficiently well known. I do not wish to prolong the procedure. Thank you.

President
Yes indeed, we shall vote without delay, but after hearing one speaker for and one against, as provided for by the Rules.

Fabre-Aubrespy
Madam President, I can only agree with Mrs Müller's request. Her explanation of the reasons for this request was brief. I too will be extremely brief as I explained yesterday why I considered a referral to be necessary. I am therefore in favour of it.

Dankert
Madam President, in March we set out the conditions for the Commission to be given discharge. The Commission has largely met those conditions, which means that there is now nothing to prevent us from doing what we said in March, namely giving discharge.
(Parliament rejected the request for referral back to committee)

President
We shall now proceed with the debate on the report by Mr Elles.

Elles
Madam President, I rise to present my final report on the 1996 discharge. Last week in the Committee on Budgetary Control, a narrow margin came down in favour of giving discharge while voting across party lines. Even so, this report itself is highly critical of the Commission's management. We must now decide whether these criticisms merit refusal to grant discharge of this budget by the whole House.
There are three specific concerns that remain despite the valiant efforts of the budget Commissioner, Erkki Liikanen, to fill the gap left by the invisible Commissioner for financial control, Mrs Gradin.
First, the perceived lack of democratic control in the fight against fraud. In all good faith, last October this House adopted the Bösch report, setting out a clear structure for an anti-fraud office - OLAF. Despite the fanfare of the President of the Commission earlier this month in Brussels, announcing an independent institution to combat fraud, this proposal does not meet the request of Parliament. Many fear it will make combating fraud more rather than less difficult, negating as it does the independent right of investigation in the case of internal checks.
Second, the perceived lack of coherence and sound financial management in external policies. Information recently made available to Parliament by a courageous Commission official has confirmed many of our worst fears in several programmes. The handling of these issues by the Commission has compounded the problem. Not only have examples found during the discharge procedure revealed a real concern that irregularities are committed without individual Commissioners perceiving the need to take personal responsibility for their actions; but furthermore, the Commission has refused to make certain documents available to Parliament, the most flagrant disrespect of Parliament being shown in the ECHO case, where the text handed over was so heavily censored as to make it totally illegible.
Last and by no means least is the perceived lack of effective measures for improved administrative and budgetary management. Not only have recent high-profile cases involving certain members of the Commission with regard to staff appointments caused severe damage to the credibility of the Commission, but also evidence given a few days ago to our committee revealed the scope for abuse in the appointment of high officials in the Commission where, I am afraid to say, it still seems that who you know is more important than what you know. As testified, the inordinate power over appointments and resource allocations exposes the administrative structure to potential political interference in all matters of management unparalleled in Member States' public administrations. These factors can be summarised by the notion that flaws in management organisation have inevitably led to operational distortions in implementing policies.
It is small wonder that staff morale in the Commission is at a low ebb. In essence, not enough thought has been given since 1995 to how the Commission should be run. Well qualified and hard-working officials have in many cases been asked to do too much with too little. The secretive way in which high-level appointments are made has not helped. These issues must be resolved as soon as possible.
The conclusions of the committee are drawn up with the purpose of establishing a work programme for the Commission over the next 12 months to ensure significant change to modernise the Commission by 1 January 2000. Proposals include a revision of the Statute; a screening report of the Commission services so that Parliament can judge what staff the Commission needs to carry out its responsibilities effectively; and, not least, a code of conduct for the nomination of high-level officials. Is it acceptable that certain posts are kept empty, sometimes for years, waiting for the appropriate cabinet member? Is it appropriate that certain cabinets set aside a number of flags for themselves at the beginning of the Commission? I would say it is not and this needs to be acted on as soon as possible.
This work programme was adopted in the committee by a vast majority. It is deeply disquieting to have the feeling outside the Commission that any behaviour is accepted without fear of reprimand.
Where we have disagreed is on two essential aspects. First, some maintain that this discharge report contains many criticisms which go beyond the 1996 year and therefore wish to just treat the discharge as a technical matter with no political overtones. But specific evidence found relating to the 1996 budget year in many policy areas continues to be revealed by colleagues in their reports to the committee, as well as by journalistic investigation in several newspapers. Yet still some turn a blind eye, seemingly not wanting to take account of the evidence presented.
The second point is the fallacious allegation presented that the discharge amounts to sacking the Commission - a vote of censure. But this is illustrative of the manipulation to which many in this Parliament have been subjected, perhaps taking too much advice from those outside rather than looking at the specific provisions of the Treaty.
This discharge procedure is an entirely separate matter from that of censure, being a regular annual process which must be judged on its own merits.
A vote to censure the Commission has been suggested by a few parliamentarians - who are not with us at this time - but it is not a course I would support.
Why, then, did I vote in committee not to grant discharge to the Commission? Not only are the substantive issues serious enough to justify not doing so, but the real truth is that the Commission is incapable of undertaking these reforms by itself. Many of these issues have been on the table for years. The reformers in the Commission have been unable to make headway against a wide range of vested interests. They cannot succeed without the active support of our Parliament.
I therefore conclude by making an appeal on behalf of all those, whether inside or outside the Commission, who wish to see modernised institutions based on integrity, ready to implement the euro and welcome new members from the East. To give discharge for 1996 at this juncture could only be interpreted as a whitewash, a message to continue as before, ignoring Parliament's requests. We must now act not only for the long-term viability of our institutions but also for the credibility of our Parliament. We must have the courage to shoulder our responsibilities, based on facts available to us. Remember that when you all vote tomorrow you should be thinking of those who elected you and who would be in favour of a people's Europe. I urge the House not to grant discharge on the 1996 budget.
(Applause)
Schwaiger
Madam President, ladies and gentlemen, one of the main criticisms of the implementation of the 1996 budget is that in that year - and with the substantial budgetary appropriations at its disposal - the Commission failed to implement the European Union's external policies effectively. Neither the appropriations for PHARE and TACIS - the programmes for Central and Eastern Europe - nor those for the Mediterranean countries showed satisfactory levels of execution. Only 15 % of the aid for reconstruction for Bosnia - and I am taking this as my example - was actually used. The main reasons were the Commission's incapacity to take the required managerial measures in good time, and its inability either to deploy its staff effectively or request the additional resources necessary.
Compared with the United States, the reconstruction aid programme for Bosnia, for example, was grossly understaffed. The European Union's inefficiency became legendary in Sarajevo. Whether we still wish to grant discharge in the light of these facts - which belong in 1996 and can no longer be altered for that financial year - is something which the following criteria must decide: firstly, there must be a real improvement in the way in which the European Union operates in the region; secondly, comprehensive information about the measures taken should also be provided, so that Parliament has a clear understanding of where improvements have been made and where the weaknesses remain.
It is true that, following my report of April 1998, the number of staff working on the reconstruction of Bosnia was increased considerably. The Commission is endeavouring to improve matters locally. But it is still not clear whether the decentralisation of the management of the programme to the area, which we requested, is allowing targeted monitoring of the project. As the Court of Auditors recently noted, the results are hard to see. A large number of European non-governmental organisations - such as Caritas and Evangelisches Hilfswerk - do not qualify for the Commission's reconstruction aid. The Commission passes on a large proportion of the money released by Parliament to the United Nations relief organisation, which makes it impossible for us to fulfil our monitoring obligations.
The cooperation of the directorate-general brought in to work on the reconstruction of Bosnia could be improved. Despite repeated requests, Commissioner Liikanen is refusing to give information about the increase in staff appropriations which has been demanded. He is either withholding the necessary information from Parliament or giving evasive answers.

Pronk
Madam President, the Committee on Employment and Social Affairs has discussed the budget in detail and has tried to come up with some improvements for payments under the Social Fund and in the other social items. We note that there has been a gradual improvement in the situation over the last financial year, particularly as regards the Social Fund. However, a number of problems arose at the end of the year because there was not enough money to pay for the projects that had been completed, and this is something we are likely to encounter again with this budget. That was the first point I wished to make.
I also wanted to thank the rapporteur for the way in which he has examined this whole issue in such depth. In the past the discharge was perhaps just a formality, and I sometimes have the impression that this is still more or less how it is viewed by the other side of the House, but nevertheless the fact is that we are now having a very detailed and important debate on one of the most fundamental elements of the European Union. There is one point in the social section on which I am not yet in a position to comment, but which I would still like to say something about. A letter was written to Mrs Aelvoet and sent via the Internet and was thus accessible to anyone in the House who wanted to read it. A small section of the letter referred to Leonardo da Vinci, a vocational training programme that comes under the Committee on Employment and Social Affairs. We have of course not been able to investigate this matter, and even when it was discussed in the committee this aspect of Leonardo was not on the agenda. I would therefore request that it should certainly be looked at more closely, which is what we intend to do in the committee. First of all, we need to examine whether 1996 was the only year concerned, or whether there were others. We are going to have to go into this very carefully. I cannot comment on the substance of the claims, but I believe they are serious enough for us to look into them very thoroughly. This is another good reason for agreeing with the rapporteur's cautious approach to the discharge.

Dankert
Madam President, I was rather surprised that a rapporteur who talked in such detail about the integrity of the Commission should place so little emphasis on the fact that he was speaking on behalf of the Committee on Budgetary Control, because as far as I know the committee voted in favour of giving discharge, albeit by an extremely narrow majority. I find the reactions in the House to be quite remarkable, because we now seem to be accepting that rapporteurs should no longer speak as rapporteurs but should suddenly be freed from their responsibilities, which is very strange.
To give discharge or not to give discharge, that is the question, and it is a very interesting one at that. In March of this year, we postponed the discharge and we laid down five demands for the Commission. The only question now is whether the Commission has done enough to meet those five demands. The Committee on Budgetary Control itself has dropped three of the five because they have already been met over the last few months, and Commissioner Liikanen in particular has made exceptional efforts here. There are two areas left where progress still needs to be made; Mr Elles has described one of them in detail, but the other goes way beyond the scope of the five demands we laid down last time, and we really cannot expect the Commission to solve its entire staffing policy problem in just a few months. That would be quite ridiculous, and no one can expect it of the present Commission or its successor. There is so much to do, and it has already largely resolved one of the most serious scandals, that of taking on staff outside the Commission without proper provision in the budget. Agreement on this at least has been reached with the Committee on Budgetary Control, but there is still plenty to be done. There is still the problem of the provision of information. The flow of information from the Commission to the Committee on Budgets during the discharge procedure must be considerably improved if the discharge is to be meaningful, and I think we need to work towards an interinstitutional agreement to be able to deal with the discharge properly. But again, these are two problems that could not have been solved in the short time since the discharge was postponed and on which further work will have to be done over the next few months or, when it comes to the staffing problem, even years.
A lot of issues have blown up since the discharge was postponed in March. Newspapers such as Libération , Focus and Stern have revealed the various scandals and stories of mismanagement, the Court of Auditors' report on PHARE and TACIS and nuclear safety. So there was some justification for including all sorts of other issues in the discharge debate, but I think that these are generally things that need to be examined in more detail and should be included in the 1997 discharge procedure which is just beginning. So we must not be influenced by the tabloid press into changing our conditions for giving discharge. If we think that the Commission has not done enough to meet our demands, then we can draw the necessary political conclusions from this and dismiss the Commission, rather than postponing the discharge again or refusing to give it or tabling a motion of no confidence. Simply refusing to grant discharge is far too easy. Article 206 is very clear on this point and says that discharge must in the end be given. It may be postponed, but it cannot be refused. This is why the no-confidence motion is the only instrument left.
This does not alter the fact that the resolution before us is extremely critical of the Commission. The Socialist Group has tabled a large number of amendments to try to establish a better balance between the decision to give discharge and the text of the resolution. We hope that these amendments will be approved and that the necessary balance will be created.

Theato
Madam President, this Parliament has the task of monitoring how the Commission handles European taxpayers' money. The responsibility is ours alone. The Council merely gives us a recommendation, but we have to decide whether we can give the Commission discharge in respect of its implementation of the budget or not. However, to make this decision, we need to have the necessary information. Since this was not the case, we had to postpone the discharge in March; nor were we in a position to decide in September, as announced. It is now December, and we still do not have all the information we have requested, despite the Commission's recently sending us a document - which it considered to be exhaustive - with a view to obtaining the discharge.
On the other hand, Parliament can only have felt cheated, for example, when it received the UCLAF documents on ECHO which had been tampered with. I ask you: can it be right for the institution under audit to determine on what and to what extent it wishes to be audited? It is also about informing the competent judicial authorities. In two resolutions in February and March, we called on the Commission to inform the competent judicial authorities swiftly whenever there was the suspicion - and I emphasise, suspicion - of fraud. Until it was ensured that this was the case, discharge could not be given, according to the resolutions.
The Elles report unambiguously states, in paragraph 7, that this very condition has not been fully complied with. The ECHO case illustrates this, but so does the MED affair. We still do not know whether the Commission has handed over all the documents to the judicial authorities. This puts its credibility at risk and damages the confidence that steps are being taken against cases of suspected fraud in its own ranks. It is the same story with the Commission's response to the Bösch report on establishing an Anti-Fraud Office. The Commission's proposal of 2 December will have exactly the opposite effect of what it alleges it will achieve. The resources and powers are poor enough as it is, and they are being eroded instead of consolidated.
When we vote on giving discharge to the Commission on Thursday, you will know the facts, as they are listed point by point in the Elles report. Each of us then has to be answerable for being able to give discharge under these circumstances. Based on what I know and after repeatedly scrutinising my assessment, I cannot accept the responsibility for doing so.

Mulder
Madam President, I should like to begin by congratulating Mr Elles. I think that Parliament has seldom been so focused on the importance of the discharge as it has been in his report, and I welcome this. My first question is this: what happens if the discharge is not given? Would the Commission regard this as a motion of no confidence, or would it simply disregard it? It is important for Parliament to know this.
I and my group also think that what the Commission has done since April this year, when conditions were first laid down for granting discharge, is important. I feel that the Commission has shown good will in trying to solve the problems, but is this enough? No, clearly not. The resolution before us makes a number of very critical points which I think the Commission will take very seriously, because it is Parliament's right ultimately to decide on whether or not to give discharge, and the deadlines it mentions are going to have to be taken very seriously indeed.
I think that the interpretation given to Article 206 of the Treaty is also of crucial importance. How far can the Commission go in providing Parliament with information without harming the personal interests of officials? I think that we need to have a sort of covenant or, as Mr Dankert said, an interinstitutional agreement so that everyone knows what the position is in future.
Of the points made in the report, I think that the most important are the ones relating to the personal interests of officials and, secondly, the organisation of the Commission itself. How do officials gain promotion? What can prevent them from doing so? There is a great deal of unease about this issue, and I think it needs to be sorted out as soon as possible.

Pasty
Madam President, ladies and gentlemen, if today's debate on giving discharge to the Commission in respect of the implementation of the general budget of the European Communities for the 1996 financial year is one of dramatic intensity and not without passion, it is because, unquestionably, we have gone beyond the bounds what is acceptable. This debate has gone beyond technical issues to become political in the true sense of the word.
Successive audits by the Court of Auditors, which since 1994 has declined to provide positive overall assurance as to the legality and regularity of the transactions underlying the payments for the financial year, have condemned the way in which the Commission manages the operating appropriations allocated to it, whether for humanitarian interventions or the PHARE, TACIS and MEDA programmes or indeed the reconstruction programmes in the former Yugoslavia. Not only are these appropriations used inefficiently or diverted from their target, but the lack of transparency in management has allowed real misappropriations of funds to the detriment of both the beneficiaries of the programmes and European taxpayers. The compromises shown on a daily basis in the selection of operators call into question the highest authorities of the Commission, and there are serious flaws in the appointment of officials which cast doubt on the credibility of the institution. The almost total absence of communication and coordination between the different Directorates-General and services of the Commission increases the lack of transparency in management and prevents monitoring procedures from functioning normally, encouraging the widespread lack of accountability among administrators.
All these shortcomings were thrust into the spotlight by the committees of inquiry set up by the European Parliament, for example on the tragic BSE affair and on fraud in Community transit. Yet the Commission, instead of dealing with the problem head-on by undertaking a drastic reform of its structures and procedures and opting for transparency, still maintains its haughty or even contemptuous attitude towards the monitoring bodies and towards Parliament. All the current operational problems were exposed by the European Parliament. Need we point out that the serious fraud in the management of appropriations for tourism was exposed because one of our colleagues brought an action before the Belgian criminal courts, thus forcing the Commission to provide documents which it had hitherto refused to make available to the European Court of Auditors or to Parliament? Officials who contributed to the inquiry are today being punished unjustly.
In the light of the gravity of the facts exposed and the obvious reluctance of the Commission to cooperate with the European Parliament, we must refuse to grant a discharge. In March we gave the Commission respite by postponing the discharge to allow it to mend its ways. It only half-listened. Some of our colleagues today wish to grant the Commission a conditional discharge. This is pointless and shows great hypocrisy. Why would the Commission, whose mandate comes to an end in less than a year, achieve in the space of the next three months what it has so delayed doing hitherto? And what means would we have to sanction the Commission if it appeared that, once again, it had not followed our recommendations? Would we have the political courage to vote for a motion of censure during our last part-session in May? Those who propose such prevarication actually want to allow the Commission to escape all political sanction.
The Committee on the Rules of Procedure, the Verification of Credentials and Immunities, to which the matter was referred at the request of the chairman of the Socialist Group, has given the opinion that any amendment in plenary that goes against the recommendation of the Committee on Budgetary Control, which proposes that the discharge should be granted, should be declared inadmissible. This vote was obtained under dubious circumstances,
whereas a previous vote had not approved this discharge, the votes being shared equally. As for Mr Dankert, a former president of Parliament, he has the impertinence to tell us that we do not have the right to vote against granting discharge, although there is a precedent: in 1984 we refused discharge, and we refused it again following a report by Mr Wynn concerning the discharge by the EDF. When procedural devices are used to prevent a parliament from expressing itself, democracy is in danger.
I am sure that you will not fall into this crude trap, that you will assume your full political responsibilities towards your electorate and that as a result you will refuse to grant a discharge to the Commission in respect of the implementation of the budget for the 1996 financial year. Imagine, in a private sector company, an executive being granted discharge for its administration when the auditors refuse to testify, as did the Court of Auditors, to the regularity of the accounts. By granting a discharge under these conditions we would be failing to fulfil our obligations under the Treaties to protect the interests of the taxpayers.
(Applause)
Miranda
Madam President, we see the discharge process as an eminently political rather than an administrative process. Nor can this process be analysed in the light of immediate interests, whether or not there are elections in the offing, or the stage which the Commission's term of office has reached - or, even, whether there might be a motion of censure.
We think that the European Parliament should regard the present discharge process purely in terms of the powers conferred upon it by the Treaty and it should exercise those rigorously and responsibly. In these terms, the question before us is only what position to take in the light of the irregularities and instances of fraud that have been brought to light - and since we know that the Commission is undeniably responsible and that the Commission has failed to act, in particular to inform the European Parliament and the judicial authorities of the Member States.
We should also ask ourselves whether the answers given by the Commission are enough and whether they are in keeping with the seriousness of what has taken place and whether our minds can be at rest for the future. For us, the response is a definite 'no' to all of these questions - for if we did grant the discharge in this present situation not only would the European Parliament be failing outright to assume its responsibilities but, inevitably, it would be seen as jointly responsible for the acts that it has itself been denouncing.
Furthermore, that would be in complete contradiction with the assessments which - despite everything - the Committee on Budgetary Control adopted last week. Therefore, we believe that the European Parliament, at this moment and given that it does not have the slightest guarantees, should not grant the Commission its discharge.

Müller
Madam President, ladies and gentlemen, my group is determined not to grant discharge to the Commission. It is no longer a question of whether we have enough evidence to do this, but how we judge these facts politically, and what the view of the majority will be. I say to my fellow Members - and I am also thinking of those sitting in their rooms in front of their television screens - that this is Parliament's finest hour. We all need to weigh up the facts, but what standards should we apply? Each and every one of us has different loyalties to take into account: loyalties to individual Commissioners, to our party or to our government.
But as Members of the European Parliament, should we put personal, party political or national interests before the interests of Europe? Should we disappoint the citizens of Europe who are now expecting Parliament to send out a clear signal? Do we not also have a responsibility to the many excellent staff at the Commission? Doubt has been cast on their ability to do the job for which they are qualified, just because a few are not called to account.
All too often these days - and in particular from our esteemed colleague, Mrs Green - I hear that Europe would be plunged into chaos if discharge were not given to the Commission. Quite honestly, I take a very dim view of dramatising the situation. It only obscures one's view of the essential point. What is the essential point in this case? Obviously, it is the supervisory role which Parliament is assigned in the Treaty. The citizens of Europe trust that this role will be fulfilled. The atmosphere between the institutions is not exactly sweetness and light the whole time, but for all that, to talk immediately in such apocalyptic terms does not help one bit. So, not so fast, not granting discharge is not a death sentence, but a yellow card for bad behaviour. But we must send out this signal, so that the public knows that it can rely on Parliament.
Nor does it make any sense to say that we cannot be too hard on the Commission in view of our own problems. Certainly, we should not get on our high horse, but this is about the Commission's failings alone. We will not put an end to them by shamefaced introspection. Let us judge the Commission for ourselves, and then in the future we will also apply the same standards even more so to ourselves. In any case, my group will have no part in an organised display of irresponsible behaviour. That is why we will be voting against giving discharge.

Dell'Alba
Madam President, ladies and gentlemen, the European Parliament - demonstrating a sense of responsibility and awareness of its powers - voted by a large majority last March for a postponement of discharge. It did so pursuant to Annex V of the Rules of Procedure, which was perfectly acceptable then; I fail to understand why it has suddenly become so bad now.
The rapporteur, Mr Elles, had drawn attention to a number of grave problems, and Parliament performed its supervisory role to the full. It seems to me that since then the Commissioner, Mr Liikanen, and the officials and Commissioners responsible have spared no efforts in attempting to respond to the serious and thoughtful stance adopted by Parliament in accordance with the Treaty.
Over the past few weeks, however, some have been seeking to transform this important and serious exercise into a purely political affair. We have seen senior officials - people who may well be gone from the Commission a month from now - passing through the Committee on Budgetary Control, denouncing this and that, and the dossiers are mounting up. Now, if this matter is to be played up into a political issue, where both institutions have everything to lose, well, the time is ripe and that is clearly the preferred option, not of a majority but of a rather odd cross-party minority extending from the far right to the far left of this House, taking in a number of groups on the way. I doubt that Europe will emerge strengthened. Madam President, I take an extremely dim view of the fact that the handling of discharge has been transformed into a political issue. Had the other side won 14 to 13 in committee, discharge would undoubtedly have been granted, but since that side was defeated it now becomes an irregular vote.
I believe that it was irresponsible to place us in this situation: either this exercise is not conducted at all, or it is conducted on the basis of a broad consensus in this House, so that the message reaches not only the Commission but also, if I may say so, the governments and public opinion. We are a fortnight away from the introduction of the single currency and, as it happens, six months away from elections, and I am entirely convinced that Mr Pasty is initiating his election campaign. His group has always opposed the building of Europe; fair enough - whether or not this is an anti-Commission election campaign does not change the background.
I do not believe that this is an effective way of conducting our debates. Our resolution, which will be put to the vote on Thursday, remains critical - as we have always been - and demanding of the Commission; it calls on the Commission to improve its internal operations, and I am convinced - or rather, I hope - that in his reply Mr Liikanen will tell us his thoughts on some important parts of the document being put to the vote. But please let us not transform this vote into an exclusively political one, as some have attempted to do. I would say to certain members of one of the most active groups in this House what the Gospel says: 'Let he who is without sin cast the first stone', if I remember rightly.
I think we must be just a little more consistent with what has gone before, and not seek to transform this exercise into a settling of scores, which has no raison d'être. Political and national elections are one thing, ladies and gentlemen; our debate is another!

President
As permitted by the Rules, Mr Pasty has asked for the floor to make a personal statement.

Pasty
Madam President, I cannot simply ignore the remarks just made by Mr Dell'Alba to the effect that my group has always been against European construction. This is completely incorrect. To denounce, as I have done, the failures of a European institution in fulfilling its duties towards European citizens and taxpayers, is not, in my opinion, acting against European construction but, on the contrary, in favour of it. After all, the construction of Europe will not be able to progress without sufficient confidence in the European institutions, the Commission of course and also Parliament, and Parliament must exercise its responsibilities. It has responsibilities under the Treaty and it must exercise them.

Fabre-Aubrespy
Madam President, the majority of the Committee on Budgetary Control propose that we grant a discharge to the Commission for the 1996 financial year. It does so, as it did in 1994 and 1995, even though the Court of Auditors has declined to provide positive assurance as to the regularity of the accounts. Therefore, we are effectively in a situation in which, although the accounts are claimed to be incorrect, we would grant a discharge and we would do so by using procedural devices, by saying that amendments are not allowed, by saying that the Rules of Procedure take precedence over the Treaty, by using devices.
I am in favour of refusing to grant a discharge, for the reasons given in particular by Mr Elles and Mr Pasty. Refusing to grant a discharge is not to target one Commissioner or another. It is not to target the Commissioners personally, it is to give a verdict on a system, a system guided by the philosophy that we need to spend more and that not spending more means curbing European construction, a system in which questioning the operation of an institution such as the Commission would be considered as holding Europe back, whereas of course it in fact allows it to advance.
Never before have there been so many irregularities, so many scandals within the Commission. Never before have we seen so many officials denounce anonymously to Members of Parliament what they see, what they hear. This is why Parliament must exercise its responsibilities. It is because some people want to grant it powers that it is not capable of exercising when it has them that I will vote against granting a discharge, and I am grateful in advance to all those who are going to hand a convincing argument to people like me who believe that it is the Member States who can best monitor things, that is, all those who are preparing to vote in favour of the discharge.

Féret
Madam President, the Elles report, which provides us with a list - very probably incomplete - of the numerous tricks the Commission was guilty of in 1996, is of exceptional importance because of the gravity of the facts it contains.
We are aghast at the Commission's inability to manage huge sums of money, paid, we must remember, by the taxpayers, and at the great skill it has displayed in concealing this. We are appalled by the contempt in which the Commission holds Parliament. We are outraged to learn, from the media, that European officials who might have been tempted to reveal to Parliament the criminal acts they have witnessed, are being threatened by their superiors.
Numerous questions addressed by the European Parliament to the Commission, such as those concerning Mrs Cresson directly, or the Périlux affair relating to humanitarian aid, or indeed the dubious management of funds intended for statistical studies, have still not been answered. But of course the Commission does not have a monopoly on embezzlement. What can we say about the skulduggery surrounding the construction of the International Congress Centre in Brussels and, even more so - in fact much more so - the construction of the large 'object' just a short distance away from here, which may one day end up being our headquarters? If the Eurosceptics were short of arguments we have certainly given them some.

Blak
Mr President, the issues which led to us deferring the approval of the accounts in the spring have for the most part been resolved to our satisfaction. The questions which the Commission has still not dealt with are all ones which only affect the accounts indirectly, or not at all. It has therefore now come as a bolt from the blue that an unholy alliance of Conservatives, Liberals and extremists is threatening to reject the accounts for 1996. Everyone in the Committee on Budgetary Control agrees that the Commission has acted in a way that is very much open to criticism, but the point now is to join together in finding constructive solutions to the problems that have been revealed. At worst, rejecting the accounts now may mean that good Commissioners like Mr Liikanen, who is the first Commissioner ever to have shown some interest in clearing things up, will be forced to resign. In such a case, however, I would like to see one or two others go as well. At best, it may result in the EU having a lame-duck Commission for six months, a period in which there are more important things on the agenda. I would just mention the introduction of the euro, the work on enlarging the EU to include the new applicant countries and the forthcoming elections to our own institution, and perhaps that is why this joker is being played here - there are some people who want to make a name for themselves in an election campaign at home, and this issue is being used for that purpose.
The voting yesterday and today shows that there is a clear majority in Parliament in favour of closing the accounts for 1996. However, this does not mean that the Commission is now being given a permanent carte blanche for all the years to come. It means that the European Social Democrats will monitor the Commission night and day in order to uncover the truth for the benefit of the ordinary citizens of Europe. I would advise the Commission to be on its mettle in the future. We shall be constantly snapping at its heels, and while we were a watchdog before, now we shall be one with teeth, so that we can clear up all these matters. The Commission has shown the will to do this, for which I think it should be rewarded, and so everyone else should stop using this for their own personal election campaigns.

Garriga Polledo
Mr President, the European Parliament must remain a place of negotiation and compromise. Within the interinstitutional balance, this is the place for negotiation and compromise.
We are not a House of confrontation, as a national parliament would be, because we do not have a government here to support or oppose.
The Commission has not been elected by us, but it is our duty to help it work better.
The greatest achievements of this Parliament have come about as a result of cooperation with the Commission. Parliament and the Commission are the only two truly European bodies and, where possible, we must work in the same direction.
This is not the ideal time to go our separate ways. We cannot close the door to negotiations with the Commission by refusing to grant discharge.
The Elles report includes a proposal for a work programme in paragraph 26. This work programme is the key to the future relations between Parliament and the Commission, but it cannot be implemented in a context of interinstitutional confrontation in which the Commission is condemned or censured - as certain political groups have already said they want to see happen - or, simply, in which the Commission is in a weaker position for what remains of its mandate than it is in today.
Ladies and gentlemen, if we want the Commission successfully to complete its reorganisation - which is obviously essential - if we want it to respond to the many accusations of poor management, and if we want the European Parliament to have greater democratic control over the Community institutions, then we must not close the only door we have left to negotiation.
Therefore, to keep this door open, I would urge you to grant discharge under the same terms as the Elles report was approved in the Committee on Budgetary Control.

Kjer Hansen
Mr President, the question of whether or not to grant discharge is one that turns on Parliament's role as an authority which exercises budgetary control. It is in fact our credibility which is at stake, because if we give a discharge to the Commission, we shall be assuming joint responsibility for all the outstanding problems. Our work has not been particularly encouraging in the last nine months, when I think of how we have had to drag information out of the Commission and how we have had to fight for the slightest changes. The worst thing, to my mind, has been the attempts to disclaim responsibility for various mistakes and scandals. It has also been disappointing that, although we have repeatedly given new deadlines, there are a great many things which have not been followed up by the Commission.
In my view, this is not a question of wanting to send the Commission packing. My aim is to ensure that the problems are resolved, that the EU is adapted to new tasks, to the major challenges that are facing us, and that the EU is prepared for and copes with its enlargement to include the countries of Central and Eastern Europe. It is above all the European Parliament which, as the institution that represents our electors, will be held responsible by our taxpayers for how we use money in the EU. The point is therefore for us to live up to our responsibility and do what we can to bring about a sound and effective administration.
There are some things which have been resolved after a long campaign of pressure. However, there are still some serious outstanding problems and an ineffective administration. It is completely unacceptable that two, three or four years should go by before political decisions are put into practice. There are the problems with staff policy, and there is a lack of internal procedures where irregularities and corruption are suspected. The proposal which the Commission has put forward regarding changes in UCLAF is an insult to all those who wish to have a clear approach, because what we have here is the Commission wanting to keep full control over what is to be investigated and how it is followed up.
Some people have talked about the consequences of refusing to grant discharge. I believe that granting a discharge would have the most consequences, because that will not solve the outstanding problems and we would be playing our hand poorly on behalf of Parliament. If we can now accept what it takes for us to refuse discharge for a second time, and ultimately we will find it hard to explain to our voters how it fits in with our responsibility to...
(The President cut the speaker off)

Papayannakis
Mr President, I do not consider that we are talking about a political issue or about an institutional dispute between the bodies.
Anyone who claims that the subject we are debating is a difference of opinion between socialists and populists, or claims that it just concerns a shift of balance between the bodies, is in a way trying to force the hand of the Members. Indeed, the Commission is the supranational body best suited to our purposes and is Parliament's best ally. Indeed, I could add that the Commission is one of the best bureaucracies I know. However, it suffers the weakness and, if you will, the isolation of unaccountability. This is brought out very clearly in the Court of Auditors report, which refuses to confirm that all is going well. And this is where Parliament can play a very simple part, by striving to secure the trust of Europe's citizens in our institutions and in the building of Europe. Anything else, I repeat, is rhetoric and blackmail. Consequently, we cannot approve discharge.

Holm
Mr President, of course it is not Parliament's business to investigate fraud; that is not what we are doing. According to the Treaties, however, the European Parliament does have a horizontal remit to check that taxpayers' money is being correctly spent within the EU. Political conclusions must then be drawn.
The question we have to ask ourselves is this: has the Commission managed to administer the European taxpayer's money in the best possible way? I think not. As the days go by, more and more reports of alleged fraud and suspected irregularities are coming in. Yet the Commission is not coming forward with all the documents - and that is precisely the problem. Lack of transparency within the Commission, its failure to produce all the information, simply encourage corrupt practices and nepotism. It is the institution itself and ordinary taxpayers who are the losers. What is needed is access to documents and an open system of administration. Those who vote to grant discharge are effectively acquitting the Commission of the many allegations made against it. They are flatly dismissing criticism of the way the Commission spends our money.
I am very disillusioned at the way in which the PSE Group seems to be shielding the Commission, tolerating both its cavalier attitude towards taxpayers' money and its secretive style of operation. The Green Group and I will naturally be voting against discharge.

Maes
Mr President, as democratic nationalists and regionalists, we are unable to give discharge today. In granting discharge, the European Parliament would be guaranteeing its citizens that their money was being spent as economically and efficiently as possible and that the institutions were doing everything in their power to provide the best possible protection against fraud, corruption and organised crime, and we feel that we cannot, in all conscience, say that today. The people of Europe have little confidence in the European institutions, accusing them of being overly interfering and wasteful, and of delaying and failing to act effectively when action is required. Giving the Commission discharge now when everyone knows that there are major abuses and inefficiencies in handling European funding would rightly be seen by the public as a failure to take things seriously. Our responsibility as representatives of the European Parliament is at stake here.
Giving discharge would be circumventing a number of reasons which Parliament gave earlier for not granting discharge. The Commission has clearly argued that improvements have been made, which we acknowledge, but there is still a lack of democratic responsibility in the areas of combating fraud, tourism, MED, ECHO and so on. Need we go on? We also feel that the new proposals are not adequate and do not provide appropriate measures for improving administrative and budgetary policy. Commissioners, you must realise that cronyism and nepotism are clearly endemic, and the public are no longer prepared to tolerate the combining of interests that this involves. As far as Parliament is concerned, there is still not sufficient access to the information we need if we are to carry out parliamentary controls properly. The Commission has threatened that if discharge is not given the Commission will resign. What sort of a threat is that? Clearly everyone must take his or her own responsibility here and now. We are currently being asked whether we can give discharge with a good conscience. If not, and if there are consequences to be drawn from this, everyone will have to decide for themselves. There may be a motion of no confidence, or maybe not. That is not the issue at present. The Commission can draw its own conclusions, either collectively or individually. We certainly regret that motions of no confidence cannot be tabled against individual Commissioners.

Samland
Mr President, ladies and gentlemen, I would say to Mrs Müller that it is always Parliament's finest hour when we hold debates here, not only when we are discussing Article 206. Article 206 stipulates that for the purposes of giving the discharge, Parliament shall examine the accounts - the financial statement and the annual report by the Court of Auditors - for 1996, so not for subsequent years. Now you have claimed today, Mrs Müller - and this is something I cannot overlook - that granting discharge is an organised display of irresponsible behaviour. Those are the very words you used. I categorically refute this, because granting discharge is not an irresponsible act; it provides an answer to the following question: is the discharge procedure an act of revenge on the existing Commission, or is it an invitation to establish new systems within the Community to ensure that the mistakes of the past are not repeated?
I am surprised to see all these colleagues taking the floor today, when I have never before heard them speak during the political debate of the last nine years on developing new procedures. Mrs Müller, I can tell you that it was the Committee on Budgets which was responsible for making sure that the director-general responsible for tourism at that time was driven from his post, because we entered the appropriations for Commission salaries in the reserve. Five days later he was gone. So do not come to me with the same old story where this issue of the discharge is concerned. We listed six points on 31 March. Replies were given to four of those six points; questions do actually remain on the other two, and we need to find answers to them.
The first point is the BATs. Nobody in this House needs to tell me anything about what the Commission has done in recent years. It has spent around DEM 460 million - ECU 230 million - on staffing outside the structure of the budget. Contrary to the opinion being propagated far and wide by the PPE Group, this does not constitute fraud. The fact is that money was illegally taken from the budget for equipment and spent on staffing. In the 1999 budget procedure, we have an arrangement stating this: transparency is now restored with regard to the ECU 230 million. If there is a further arrangement on BATs - which is not envisaged at the present time - this will automatically entail disciplinary action being taken within the Commission. That is the result of politics and not of revenge!
That is why I conclude - on the basis of the list of criteria which we drew up in this House on 31 March - that we can actually grant discharge. I also believe that from a political point of view - because we are not just bean-counters, we are politicians - it is right to say that we do need a Commission in the Agenda process.

Kellett-Bowman
Mr President, this debate has shown that the procedure on the 1996 discharge has been the most difficult ever. I wonder whether it would have been a good idea to relay it to all the Commission officials.
Last March Parliament was quite correct to defer discharge and gave five reasons for doing so. Now we have to decide whether the Commission has performed sufficiently well on these five points to merit discharge. This calls for all of us to make some highly subjective decisions. We have before us a report which had 106 amendments in committee - a record for the discharge. Lord Tomlinson and I, the joint rapporteurs on transit fraud, are happy that the Commission has progressed sufficiently on the matter of computerisation. We do not blame the Commission for the fact that their consultants failed.
Mr Pasty questioned whether there could be a conditional discharge. Every discharge decision is conditional in that it is accompanied by a report with paragraphs of resolution which the Commission undertakes to deal with on receipt of discharge. So that is a condition; and there are many strong paragraphs in the resolution.
I am glad the Committee on Budgetary Control approved discharge last week, albeit by a small margin. I believe that the House should confirm that vote on Thursday, by granting discharge to the Commission for the year 1996.

Sandberg-Fries
Mr President, if citizens are to have faith in European cooperation, then freedom of information and good governance must prevail. We are now debating whether to grant discharge in respect of financial management in 1996. No one would dispute that there are grounds for the tough criticism which Parliament has addressed to the Commission on a number of points. And there is broad agreement in the House on the additional measures necessary to reassure us, as the elected representatives of Europe's citizens, that fraud and mismanagement will not occur in future. There is equal consensus on the need for transparent administration. The issue today, though, is how we can best achieve the changes we are advocating.
I am convinced that most people, on reflection, would rather see a parliament working positively for change than one which allowed anger and irritation to gain the upper hand. Parliament's attitude to date has, I feel, been particularly constructive. Unflinching examination of the workings of the Commission has initiated a whole range of action and, in our report, we are now laying down a series of clear conditions for granting discharge. And I doubt that this House will rest until its demands have been met.
We would not however be behaving with any degree of responsibility if we refused discharge or submitted a motion of censure - which would be a logical consequence of such a decision. Two elements need to be borne in mind. Firstly, forcing the Commission to resign while Europe has weighty matters on its agenda would be very serious indeed. We cannot afford to deprive the EU of leadership at such a juncture.
Secondly, a vote of no confidence is an indiscriminate instrument. The entire Commission would be tarred with the same brush - including, for example, Commissioner Liikanen, who has demonstrated both the will and the capacity to come to grips with the problems. There would be no sense in such a move. The European Parliament should set aside this meaningless and potentially damaging posturing and rely henceforth on its own ability to engineer true change.

Tillich
Mr President, I regret that the 1996 discharge procedure is not focused on the matter in hand, but has become a political football in the debate here in the plenary. The only explanation I can find for the Socialist Group's coordinator in the Committee on Budgetary Control stepping down is that she cannot reconcile the way this issue is being dealt with in her own group with her conscience.
The facts are clear and sufficient. This is not about individual cases, but about the organisation of the Commission's work as a whole, which makes the cases we are talking about here - which have occurred in connection with MED, ECHO, Leonardo and so on - a possibility, which creates favourable conditions for them, and which in principle does not prevent them from happening. I emphasise quite specifically that this is not about the Commission per se as a whole, but about the criticisms levelled at several Commissioners. We are thus expecting the Commission to state its position on this. Mr Samland, it is clear that we are discussing the 1996 discharge. You emphasised that. We know that some things have changed in the meantime - and for the better. But the fact is that there has not been an improvement on every point. That is why we are not assessing the situation in 1998; that will come later.
I ask all Members still in doubt about which way they should vote whether they believe that anyone will take us seriously in the future, when we have debated these serious accusations against the Commission today, if we grant discharge in respect of the 1996 budget? To do so would actually be to give the Commission a clean bill of health, a confirmation that everything was in order in 1996. The agitation of recent weeks would then actually have been nothing but play-acting. In accordance with the Treaty, we, the European Parliament - as Mr Pasty said - have a responsibility to the taxpayer to confirm that the Commission is using the appropriations in a proper manner. I cannot accept responsibility for this and will therefore also be voting against granting discharge to the Commission.
Mr Dankert, the fact that we are having a legal dispute is something which should, in principle, go down as a black mark against us, because it actually shows the spirit of the European institutions and those who created these treaties. We in Europe are always right and we in Europe always act as we should. That is the only way I can understand the interpretation, at least the one now preferred by the Committee on the Rules of Procedure, the Verification of Credentials and Immunities. What I mean to say is that we must also be able to contemplate doing the opposite of what we are discussing today, namely refusing discharge.
I must ask those Members on the other side of the House in the Socialist Group, whether it is in accordance with democratic principles - at least this is what I have heard - for dissenters within your group, such as Mrs Wemheuer and Mr Bösch, not to have been allocated any speaking time by their group. In our group anyone can speak, whether they support or oppose granting discharge on the budget.
(Applause) Mr Samland, if you are accusing us of seeking revenge ...
(Heckling) ... then of course you really are wide of the mark. You yourself pointed out in your speech that we only settled the BATs issue in the 1999 budget procedure, so that will only apply in the 1999 budget year. Today we are discussing the discharge for the 1996 budget! That is why I see it as populism on your part to accuse us of seeking revenge. I do not believe that this has anything to do with revenge; you have to face the facts - we are talking about 1996.
(Applause)
President
Mr Blak has the floor for a point of order, which I hope is indeed a point of order. If it is to make a personal statement, you will have to wait until the end of the debate. Which Rule are you raising this under?

Blak
Mr President, I am sorry to ask for the floor on a point of order, but the Socialist Group has now been attacked several times ...
(The President cut the speaker off)

President
Since this is not a point of order, you will have the floor at the end of the debate.

Morgan
Mr President, I think the Socialist Group position is extremely clear and that is why it has been given very forthrightly this morning. One of the main roles of the European Parliament is to check the Commission to ensure that taxpayers' money is being spent properly and with accountability. This is no easy task when we are presented with obstacles of the kind evident during the 1996 budget procedure. Perhaps the most serious charge of all against the Commission is the lack of democratic accountability in that Parliament has been hampered in its attempts to gain access to information which would point to or dispel allegations of fraud. The reluctance with which the Commission has forwarded documents gives cause for concern and the attempts to conceal, sometimes admittedly with reason, the names of officials being investigated has descended into farce.
The problems encountered in the execution of the MED and ECHO programmes need major structural answers to ensure systems are in place to avoid a similar situation arising. There can be no question that the implementation of the external policies has had a negative effect on the EU's reputation. Nevertheless, since the postponement of the discharge in March, improvements are evident in some fields including the transit system and the SME sector.
For the European public, fraud is a serious issue. We need to tackle it seriously or the whole boat will go down because of a few wreckers who are out to destroy the European voyage. The pressure will in future increase, not decrease, to keep the accounts clean and transparent. With the firm note of warning in the Amsterdam Treaty, we must heed the Court of Auditors' view on the global assurance of accounts. This will be a new formal departure in future. Lessons must be learned, in particular, as Mr Elles has highlighted, in the field of staff appointments. But I will be voting along with my political group in accordance with the committee's position to grant discharge. I believe that not granting discharge should be linked to rejection of the Commission as whole. That is what would happen in the business community - the company would be closed.
The Commission has moved a long way since March. Mr Liikanen, in particular, has been tireless in his efforts to clean up the act and, with the introduction of the single currency on the horizon and the need for an agreement on Agenda 2000, this is not the time to create turmoil and havoc in the European Union.

Rack
Mr President, ladies and gentlemen, the 1996 budget year was certainly not a glorious chapter in the history of the European Union. The BSE crisis was at its height. It was also a year of scandals. What can, what must the European Parliament do to force the necessary changes?
In spring of this year, Parliament postponed the discharge and drew up a list of demands. Some - though not yet all - of these demands have been met. This may not be enough. So should we refuse discharge? Yes, possibly.
But - as today's debate and the debates of recent days have so clearly shown - for many this is obviously not only about a technical process. Today's rhetoric has shown that Parliament wishes to make its mark by saying that we have to send the Commission packing.
At the time of the BSE crisis, we chose the constructive method of work programmes. After two years, this has - thank goodness - proved to be the right decision. Today we have come so far that we are now already in a position to discuss reopening beef markets in the Union. That is why constructive cooperation is also the option we should choose in the discharge procedure.
In my opinion, paragraph 26 in the Elles motion is actually the decisive one. It contains the Commission work programme. As several others have already requested, I would also very much like the Commission to tell us its views on paragraph 26, and when and how it believes it will be able to perform these tasks.

Sarlis
Mr President, I must first say that this year's discharge procedure has been unlike any other. For the first time, we have been inundated by special reports from the Court of Auditors denouncing malpractices and irregularities in the Commission's administration, and giving the figures.
It must be said that we on the Committee on Budgetary Control are neither policemen nor detectives, but faced with the pile of special reports produced by the Court of Auditors, we have a duty to take action. And I say all this despite the fact that, like other speakers, I too wish to stress the very positive part played by Commissioner Liikanen, who has really tried and is trying, for the first time in history, at least from what I have seen over the past nine years, to give us facts and figures and to see something done about it. But the problem is that Mr Liikanen cannot achieve much because there is a system in the Commission which ensures that even the best efforts are frustrated. Commissioner, I doubt whether you will be able to achieve what you will promise us here, in good faith, to do. That also explains the reactions from within the Commission.
For the first time on the Committee on Budgetary Control, we have accusation made by specific individuals which cannot be disregarded and which must be taken very seriously. Even the press in Europe is saying that a vote for discharge would be 'suicide du Parlement européen ' - suicide for the European Parliament - and it explains why it regards it as 'suicide': some will vote because there is a majority of socialist Commissioners, while others will vote according to supposedly national interests. I think such a development is quite unacceptable, and that is why at present I believe that refusal to grant discharge would strengthen the hand of those who desire it - the majority of the Commission - so that they can set about internal restructuring. It would help people like Mr Liikanen and others to achieve what must be done internally, so that we who are Europeans can see ...
(The President cut the speaker off)

Fabra Vallés
Mr President, I would like to begin by thanking James Elles for the efforts he has made to reflect in his document all the reports that have been presented on this issue, which were guided throughout by the invaluable work of the Court of Auditors, the specific assistance provided by UCLAF, the help given by Financial Control - which was not always fully made use of - and the participation of all the members of the Committee on Budgetary Control.
I firmly believe that, irrespective of the result of the final vote, Parliament's view is and will be unanimous. The European Commission's management can and must improve. Parliament's reaction to the lesson learned must be unanimous: we cannot continue to approve budgets that meet the Commission's material demands, yet deny it the human resources needed to ensure that they are properly managed. Together, we need to be able to find the correct relationship between cost and efficiency.
A reorganisation such as that required of the European Commission can only be tackled with the conviction, the will and the strength of the Council, the Commission and, of course, Parliament. And that will not be possible while the Treaty and our Rules of Procedure are not aligned, while the responsibility is shared and everyone must be treated in the same way, and while the Commission's weakness is such that it prevents it from taking any decisions.
I therefore think that, for the credibility of the institutions and the Union itself, it would be better for those in charge, who are 'out on bail', to solve the problems created. If it turns out that they do not fulfill the commitments they have made to Parliament, the guarded trust we have put in them in this part-session should be withdrawn.

Bourlanges
Mr President, it does not seem to me that the question is being asked in the most usual terms. Despite the 1984 precedent, despite the wording of our Rules of Procedure, both of which take quite serious liberties with the Treaty, it seems to me that the problem does not lie in giving our opinion on whether to refuse to grant discharge. Rather, we are in a situation where in fact we either grant the discharge or we do not grant it, and I believe Mr Dankert is right to say this, even if the conclusions I draw from this are politically the opposite of his. Granting the discharge means closing the dossier. Not granting the discharge means leaving the dossier open. Where this issue is concerned there can be no definitive refusal, no refusal that applies for the entire administrative future. After all, if this were the case, we would have to accept that the discharge procedure, which in fact consists of approving the results of the financial year and accepting the balances that must be carried over to the following financial year, could mean that the accounts presented to us were found to be definitively irregular, which is obviously out of the question.
The question we are faced with for the moment is: should we grant a discharge today? The answer is obviously that we should not. Parliament is not sufficiently well informed of what happened in the course of the 1996 financial year. We have control over the clocks and the calendar. We have no reason to stop the clock, to stop taking evidence, when each day brings us more information, true or false, on the financial year under consideration. I will vote not to grant discharge but that does not mean that I refuse it definitively.

Liikanen
Mr President, the Elles report includes numerous points concerning which the Commission has already stated its position in meetings of the Committee on Budgetary Control and also in written form. I hope that all Members have had a chance to read our written replies to all the questions about the draft report which we received earlier. I do not wish to reiterate here what was said in that context, except to correct one point. Mr Fabre-Aubrespy, and also Mr Pasty to some extent, gave a wrong interpretation of the Court of Auditors' report on DAS. Mr Fabre-Aubrespy said that the Court of Auditors did not give a positive declaration on the accounts of the Communities. That is wrong. When we talk about the Court of Auditors' report we must be extremely exact. Otherwise we abuse the powers of an important external control institution.
What did the Court of Auditors say? As far as the accounts are concerned, it gave a positive declaration. As far as commitments are concerned, it gave a positive declaration. As far as own resources are concerned it gave a positive declaration. But where it has not been able to give a positive declaration, is in underlying transactions. There I would ask you to read the Court of Auditors' report for this year, which states that in the field of agriculture, these normally take place at the level of final beneficiary in Member States. They have no impact on the budget because the recovery of the clearance of accounts is on the same level as the level of the errors found.
Secondly, on the structural funds, it says that there the level of error is higher. They do not always have an impact on the budget but it is still too high. We must draw the right conclusion. Together with you, we have tried to change the system for management of structural funds. For the year 1998 the Commission has accepted the eligibility sheets and will apply the system of corrections to put things right. But, even more important, now that the whole reform of the structural funds is in the hands of the Council, your opinion is also needed. We need a clear system where if Member States detect an irregularity, they can transfer the money to a good project. If they do not, the Court of Auditors or the Commission will recover the money for ever. We need systems which control well and we must find these systems.
I also want to say that I am ready to receive criticism of the Commission, but that the Court of Auditors has criticised the Member States little more than today's debate in this area, and also as regards 1996.
I come now to paragraphs 26 and 27 and also the amendments which were mentioned. Firstly, a point on the fraud investigation office. I have very little to add to what President Santer said when he presented the proposal on 2 December. The Vienna European Council last weekend welcomed the Commission proposal and advised the institutions to examine the proposal with a view to taking a decision without delay - I stress, without delay. I would like to make it clear that, according to the proposal, the office will enjoy full freedom to conduct internal investigations on its own initiative inside the Commission and other institutions. This legislative procedure which has started offers Parliament and the Council a good opportunity to express their views, which of course will be fully taken into account. We shall see what will be the final outcome of the legislative procedure.
Point B on the Staff Regulations: the Commission has had some internal social conflicts in that very sensitive and difficult area. In order to resolve a conflict we set up a reflection group on personnel policy chaired by Sir David Williamson, former Secretary-General of the Commission, and the group submitted its final report on 9 November. The group was composed of representatives of the trade unions and staff associations and of the administration. The report is the starting point for modifications of the Staff Regulations.
Before proceeding to legislative proposals to the Council and Parliament, the report must go through an extensive consultation process with the other institutions and with representatives of the staff. The European Parliament has reiterated its will to be thoroughly consulted in this area. Consultations with the staff are already under way and interinstitutional consultation has started in parallel. The College of the Heads of Administration has already discussed the report and the first meeting at the level of the Directors of Personnel for all institutions will be held the day after tomorrow, Thursday 17 December.
Conceptually, the Williamson report can be split into two parts. The first part is about modernising the European public service. It covers the re-examination of the structure of the Commission's human resources, recruitment, training, review of career development and the policies of equal opportunities and non-discrimination. In addition, a review of the balance of incentives and sanctions will be carried out. These include both disciplinary procedures and professional incompetence.
The second part concerns the allowances of the officials of the European institutions. As far as the salaries of officials are concerned, they are guided by the rules which were adopted by the Council in 1991 for ten years and annexed to the Staff Regulations. On the basis of the interinstitutional consultation and the social dialogue, the Commission intends, by the end of January 1999, to present an indicative timetable for presenting communications on the reforms to Parliament and to the Council. The idea is first to present communications on the contents and then, on the basis of the discussion, to make the final proposals for modifications.
Point (c) on the evaluation of the Commission's services - at the end of 1997 the Commission launched a vast evaluation or, as is often said, screening of its services. As a result we will have a clear picture of present missions, resources and working methods of each directorate and unit of the Commission. The report from each DG will be ready at the beginning of next year, which is obviously the timetable you wish, and the conclusions from this exercise will be drawn during the first half of 1999.
The President of the Commission has given a commitment to present to the next designated President, on the basis of the evaluation, a global concept of how to organise the portfolios of the Commissioners and how to structure the directorates-general in accordance with political priorities. That is a major task. Much depends on the will of the President designated. But what is important is that the President of the Commission is committed to doing this.
I agree with you that the borderlines of the tasks of the European public administration need to be clearly defined. In any case the Commission must retain the power of decision and control of its activities.
Regarding point (d) of paragraphs 26 and 27 on nominations, two principles should guide the nomination of officials within the Commission, the European Parliament, the Council and the other institutions, namely, autonomy of the institutions and transparency.
The principle of institutional autonomy is established by the Treaty and the case law of the Court of Justice. The Commission considers that this principle is of fundamental importance in ensuring its independence in the spirit of the Treaty. The rules for nominations are laid down in the Staff Regulations which are common to all the institutions.
In the spirit of transparency a report on nominations of members of the Commissioners' cabinets has already been forwarded to Parliament as a follow-up to Parliament's resolution on the first reading of the budget. The Commission is willing to act in all transparency in the field of nominations while respecting the provisions of the Staff Regulations.
On the difficult issue of relations between Commissioners and the services, the Commission is currently preparing a code of conduct which will further clarify relations between the Commissioners, their cabinets and directorates-general. The proposal for the code of conduct will also be transmitted to the next designated President of the Commission. A more general code of conduct on the ethical principles of officials is also under preparation. The Ombudsman has given us important guidance in that area.
The qualifications for each post within the Commission are laid down in advertisements for vacant posts. I agree that experience in management should be made a central criterion for any appointments of senior officials. This should include experience in both financial and human resources management. Here I agree with the criticism that we must do better. Too often in the past expertise has been learned in the rather narrow field of important dossiers, however, management of a large service requires knowledge of the dossiers and the capacity to manage resources and budgets.
In this context I should like to mention that if the budget is adopted on Thursday, as the Committee on Budgets proposes, we will introduce a major management training programme next year which will be obligatory for every official working in a management position.
Regarding the Financial Regulation, last July the Commission adopted a working document on global revision of the Financial Regulation. On the basis of interinstitutional consultation, where we are still waiting for comments, the Commission will formulate a legislative proposal for global reform in 1999.
As to the Financial Regulation and the personal responsibility of the Commissioners, the Legal Service of the Commission has taken the view that Members of the Commission have personal financial liability when they act as authorising officers deciding on entering into commitment of expenditure.
In point (f), Parliament calls for Commissioners' declarations of their financial interests to be transparent and publicly available. The Commission accepts Parliament's request.
Another point which has been taken up by two or three speakers is the agreement on the exchange of information between institutions. The Commission views this proposal positively.
During this debate we have heard a lot of references to letters, press articles, rumours and even parliamentary questions. Some of them may be true but many of them could also be totally false. In the spirit of transparency, it is very important that Commission officials are invited to appear before the Committee on Budgetary Control whenever a reply is needed. If you are not happy, say so. It is very difficult to fight against false information if you do not have the opportunity to respond. You know what I mean.
For us, not all the work has been done. This report is on the year 1996. Many issues come from the past. Much remains to be done. We must improve financial management; we must get good value for money for European taxpayers. We have a huge task in front of us. We need a strong Commission for these tasks in negotiations for Agenda 2000.

Theato
Thank you, Mr President, for also giving me the opportunity to thank Mr Liikanen for his comments. I should just like to make one point clear: whether we grant the discharge or not, I still hope that the Commission will make these efforts, irrespective of how we vote.
I should also like to point out a discrepancy in the translation of Mr Elles's report. It is in the English version. Paragraph 23 has not been changed to reflect the result of the vote and the words 'give/refuse' still appear there. The 'refuse' and the stroke ought to be deleted. That is how we voted. I would ask you to check this in the other language versions too.

President
That will be done, Mrs Theato.
The debate is closed.
The vote will take place on Thursday at 9.30 a.m.

Blak
Thank you, Mr President, for giving me the chance to correct one or two misunderstandings. Mr Tillich made a number of comments about our practice with coordinators. I would like to say that the situation in the Socialist Group is that if someone is chosen as a coordinator, they look after the interests of the group and their colleagues, not their own personal interests. If a coordinator steps down because he wants to operate in a different way, another coordinator is chosen, and in this case I was selected. I would like to say that I am very disappointed that another group is attacking us in such a personal way. If a Member does not wish to be a coordinator, they are released and can step down, and the other person takes over. That is democracy, and anything else is not!

Monfils
Mr President, with regard to this debate, it was announced that the vote on the interpretation given by the Committee on the Rules of Procedure on voting rules would take place at midday. We were also told that the document would be available from 9.00 a.m. or 9.15 a.m. today. I went to the Distribution Service barely 5 minutes ago with some of my colleagues, and they have no idea whatsoever where this document is! No one has it.
It would be desirable, Mr President, for us to have copies of documents before voting on them, otherwise our task will be made extremely difficult.

President
Mr Monfils, I can tell you that the interpretation of the Rules of Procedure is included in the Minutes of yesterday's sitting, on page 24, so I would ask you to look at the Minutes.

Colom i Naval
Mr President, during this debate, the rapporteur spoke for seven and a half minutes. Since rapporteurs normally speak for five minutes, I presume that the last two and a half minutes correspond to the speaking time for his group.
I think that it would have been much wiser to separate the two speeches by Mr Elles, because his final remark was to call on the House to refuse to grant discharge.
This is something that Mr Elles can obviously do in a personal capacity but as rapporteur, it contradicts the vote by the Committee on Budgetary Control, and I would like this to be recorded in the Minutes.

President
As you know, Mr Colom i Naval, it is up to the groups to distribute speaking time and it is common practice, where appropriate, to extend the speaking time which a rapporteur has in that capacity by part of the speaking time allocated to his group. Clearly, a rapporteur is free to organise his speaking time and set out his comments as he sees fit.

Fabre-Aubrespy
Mr President, I took the precaution of submitting my question in advance and would have liked it to be recorded. But first I would like to make a personal statement.
Commissioner Liikanen said that I gave a wrong interpretation of the Court of Auditors' report. The only thing I said was that the Court of Auditors had not given a positive declaration on the regularity of the accounts for the 1996 financial year. I am not the only person who said this, Commissioner! Paragraph 1 of the resolution of the Elles report points out that, for the third year in succession, the European Court of Auditors has declined to provide positive global assurance as to the legality and regularity of the transactions underlying the payments for the financial year. I am only repeating what was stated in the report.
I would like to raise a point of order at the end of this item, Mr President.

Theato
I should simply like to clarify something once more for Mr Colom I Naval's sake. It was clearly stated on my list of speakers that Mr Elles would have five minutes as rapporteur plus two minutes for the group. This is just for the record. I do not think that he in any way intended to be misleading.

Liikanen
Mr President, I would like to say to Mr Fabre-Aubrespy that the phrase in the Elles report is correct. It talks about underlying transactions but you are talking about the accounts. There is a difference. The Court of Auditors gives four different opinions on the accounts, which are positive, and on payments and underlying transactions, which are not positive. I hope that they will be in the near future.

Fabre-Aubrespy
Mr President, I would like to make a request pursuant to Article 3(2) of Annex V of the Rules of Procedure.
A number of amendments to the Elles report were declared admissible, exactly 22 according to the information I have been given. Others were declared inadmissible. It is your responsibility to apply the annex to the Rules of Procedure, which provides that amendments must be forwarded to the Committee on Budgetary Control so that it can deliver its opinion.
I would ask you to confirm that the amendments will be given to the committee at this afternoon's meeting so that it can give its opinion on the 22 amendments which, moreover, were tabled by all the political groups. There are 11 from the Socialist Group, the very people who wanted to prevent us from tabling amendments on the operation, and from practically all the other groups in Parliament.

President
The matter will in any event be considered before the vote on Thursday, you may be assured of that.

1999 General Budget
President
The next item is the report (A4-0500/98) by Mrs Dührkop Dührkop and Mr Viola, on behalf of the Committee on Budgets, on the draft general budget of the European Union for the financial year 1999, as modified by the Council (C4-0600/98), and on draft Letter of Amendment No 1/99 to the preliminary draft budget for 1999 - Section III Commission (C4-0666/98).

Dührkop Dührkop
Mr President, Mr President-in-Office of the Council, Commissioner, I would like to begin by thanking all those who have helped me in this House for their work throughout the 1999 budgetary procedure. I would particularly like to thank those in the secretariat of the Committee on Budgets whose untiring work has allowed us to reach this second reading as anticipated. I thank you all.
The 1999 budgetary procedure is coming to an end with the European Parliament's second reading.
I would like to give a brief assessment of it but, more particularly, I would like to look once again at an essential question. We began this procedure calling the 1999 budget a 'bridging budget' to the year 2000 and the new financial perspective. The 2000 budget should represent the basis for the new financial perspective, but the 1999 budget also needs to be rigorous while meeting the priorities of the European Parliament.
These guidelines involved certain essential conditions, one of which was the mandate given to Mr Colom by Parliament to negotiate the new financial perspective and to introduce an instrument of flexibility in it.
Therefore, at its first reading, Parliament introduced a strategic amendment that increased non-compulsory expenditure and payment appropriations in accordance with paragraph 17 of the current Interinstitutional Agreement to act as a safeguard. This aimed to guarantee, on the one hand, that the Council negotiated an instrument of flexibility and, on the other, if this new agreement was not reached, that the level of non-compulsory expenditure would not be reduced, because this would put at risk Parliament's ability to fund its own priorities.
The bridge that was thus built by the European Parliament was not accepted by the Council as we had hoped, but I would point out that we have actually achieved something. We have succeeded in building a new culture and a new confidence, because it appears that the Council, through its desire to negotiate, is accepting the idea of Parliament as a genuine political interlocutor.
The Council held its second reading on 24 November, after the traditional conciliation, with a common approach with Parliament to the global aspects of the budget, but without making any progress on the strategic amendments.
I would like to review the various categories of the Council's reading and contrast them with Parliament's position before its second reading.
I said in my first speech, before the first reading, that I was somewhat disappointed with what had happened with the ad hoc procedure for agriculture since we had not managed to hold a serious debate in July, as Parliament would have liked. Nevertheless, I must point out that the ad hoc procedure before the Council's second reading has shown itself to be a very valid instrument since the Council has agreed with Parliament's views about not increasing agricultural expenditure.
The Council has also allowed Parliament an agricultural reserve, of which EUR 20 million are destined solely for agri-environmental measures, which are a priority for the European Parliament. So - to give my shortest speech in this respect - as far as Category 1, agriculture, is concerned, Parliament's position is more or less in line with the Council at its second reading. I believe that we have reached an agreement that both parties can accept.
Moving on to Category 2 - which in the financial perspective is usually called 'the Edinburgh package' - I must nevertheless say that Parliament is introducing a 'package amendment' comprising a reserve of EUR 1 500 million in commitment appropriations and EUR 250 million in payment appropriations, as well as a reduction in payment appropriations of EUR 500 million. This is based entirely on the information provided by the Commission in September on the situation regarding the non-implementation of the Structural Funds.
In all the dialogue and conciliation discussions we have held with the Council, this was never mentioned. It was never brought up for discussion as it did not pose any problems. Surprisingly, the Council accepts the reduction but rejects the reserve for the Structural Funds. This means a change to Category 2 that leaves Parliament free at second reading to take a majority vote in the House. Yesterday, the Committee on Budgets voted against reintroducing the reserve but in favour of reintroducing the payment appropriations because, as I have said, the amendment was an overall package and a reduction in payments does not make any sense given the delicate situation that exists as far as payments are concerned. It loses all justification if there is no reserve.
As regards Category 3, I told the Council at first reading that this was the 'Cinderella' of all the categories. It involves the Union's internal policies, the policies with a European dimension, and I must say that it seems as though the prince, with his glass slipper, has found Cinderella and turned her into a princess. Under the agreement we negotiated with the Council on this category the Council has accepted practically all of Parliament's priorities. Some lines have even been increased by 49 %. It is worth pointing out that we reached an agreement on the fifth framework programme on research, and included sections of the policies under the third pillar in Category 3, as Parliament had wished, thus anticipating the Treaty of Amsterdam. The Council has also agreed with Parliament about maintaining the funding of the Socrates and Youth for Europe programmes. I believe that this is an extremely satisfactory result for Parliament and I would like to thank the Council for its willingness to negotiate. We will thus be happy to vote in favour of this category on Thursday.
I would now like to look at what is, in my opinion, a serious political issue. It is a serious matter that in Category 4, Parliament has been forced to reduce the PHARE programme. It is serious because the political message that this sends out is not pleasant either for Parliament or the Council, but it was necessary in the interests of budgetary efficiency and in the light of the overall operation of the programme. In this case, we are providing for EUR 150 million less than the level of funding fixed in Cannes, but the Council has agreed to Parliament's proposal to fund its priorities in terms of external actions from this reduction in the PHARE programme.
In Category 5, Parliament is maintaining its position on the creation of a specific line for pension funds. I believe that it is a shame that during the entire budgetary year we have not been able to make even the slightest progress on this issue, which is necessary so that the Union's officials can have guaranteed pensions.
After the conciliation of 24 November we still had not reached any agreement with the Council on the strategic amendment, and a new conciliation procedure began on 8 December. It was a historic occasion because this was the first time in 10 years that a conciliation meeting took place after the Council had held its second reading. I would like to thank the Presidency for its desire to keep the doors open and to agree to have Parliament as a political interlocutor, as I said at the beginning.
After the outcome of the conciliation procedure I, as rapporteur, am withdrawing the strategic amendments for second reading. However, as in all negotiations, we know that both parties are leaving something behind. I would have liked - as I believe the whole of Parliament would have liked - to achieve something more concrete. I recognise that the planned timetable has not been adhered to. We had thought that in Vienna we would have something more specific on the table, which would in turn have made a more specific conciliation procedure possible. However, I believe and I hope that Mr Colom will go into more detail in the text of the agreement we have reached, and I think that there will be instruments to provide flexibility. We have obtained a historic unilateral declaration from the Council, which is finally going to do what it has promised, and I believe that that may be enough to allow us to reach an agreement in the course of the negotiations.
Mr President, on Thursday Parliament is going to vote at second reading on a budget that complies perfectly with the current Interinstitutional Agreement. It is a budget that will demonstrate that budgetary rigour is entirely compatible with the European Parliament's political priorities, but, in particular, it is a budget that is compatible with the interests of the people of Europe.

Viola
Mr President, I should like to begin by expressing my satisfaction that we have managed once again this year to approve the budget for the other institutions with just one reading, given that all of our amendments have been accepted by the Council. This is a sign of harmony and successful cooperation, which I hope will be repeated in future years as well.
The motion for a resolution, on which we shall vote on Thursday - which shows that there are no particularly significant or outstanding problems - touches on certain matters which have already been addressed before, the aim being to establish some general rules enabling solutions to be found for certain unresolved problems during the course of next year's budgetary procedure. Here, taking up what Mrs Dührkop Dührkop said, I do regret that the Council has rejected the possibility of setting up a pension fund for staff of the European institutions. Parliament views this as a missed opportunity to solve a problem which should be dealt with as a matter of urgency. We are now waiting for the Commission to present, by 31 March, a proposed reform of the pension system, because this remains a priority not only for Parliament but also for all the other bodies of the European Union.
Another outstanding problem, to which the resolution refers, is the translation work of the Court of Justice. The Court needs to provide us with concrete proposals as a basis for thorough discussions leading to the adoption of measures to facilitate its translation work. We therefore call on the Court to devise a computer-assisted translation system with a view to overcoming the backlog of bureaucratic and administrative texts, and thereafter to seek other ways of relieving the clearly onerous workload of the lawyer-linguists.
It must be said from the outset that the budgetary authority is not in a position to solve the Court's wide-ranging problems through an intensive recruitment policy, which would be virtually impossible over a single budget year; it would however be possible if it were staggered according to a multiannual plan.
The European Parliament - and this is another noteworthy aspect of the resolution - also wishes to make a point to the Committee of the Regions, given that the problem of the forthcoming expiry of the Secretary-General's term of office has arisen; the possibility of falling back on Article 50 has been mooted, with considerable financial implications, as it is estimated that the operation has already cost ECU 320 000.
Our resolution obviously stresses the need to find alternative solutions which are financially acceptable, technically feasible and will avoid a vacuum in the leadership of this body, whose workload is set to increase as a result of the new Amsterdam Treaty.
Furthermore, the resolution underlines the need to carry forward the existing policy on buildings, which amounts to taking on rapidly the ownership of the buildings used by the various Community institutions, as well as the relevant payments. Yesterday we noted with satisfaction the adoption of the supplementary and amending budget and the availability of the sizeable sum of EUR 150 million, which will serve - for example - to bring forward the purchase of D3. This operation will generate an estimated saving of EUR 40 million over the next ten years.
This policy has already borne fruit and, if it is pursued further, will bring additional, appreciable savings for the Union's budget. We are therefore pleased that our amendment allowing the construction of the new building for the Court of Auditors was accepted.
Now that the debate on this first EU budget in euros is coming to an end, Mr President, we can say that we are satisfied to have drawn up a rigorous and well-balanced budget for the other institutions, one which does justice to the budgetary efforts made by the Member States. I should like to end by thanking my colleagues in the Committee on Budgets for all their help and, above all, the staff of the Commission for their much-needed assistance with our work.

Lenz
Mr President, this year's debates on the budget are certainly taking place against a rather tempestuous background. Sometimes the sea does become calm, and happily it does so before it is too late. That is true to a certain extent, in any case, of the part of the budget for which the Committee on Foreign Affairs, Security and Defence Policy is responsible, which has been in considerable turmoil, in particular where the implementation of human rights programmes is concerned.
Fortunately, Parliament and the Council agreed a compromise formula for technical assistance which meant that the legal bases issue could be settled. This allayed our main concerns with the 1998 supplementary budget and the 1999 budget. Of course we would have liked to have seen more, but what is important is for these issues to be resolved this year. For it would have inflicted great damage on the European Union if in this year of all years, the 50th anniversary of the UN Universal Declaration of Human Rights, and in this particular week, when we are awarding the Sakharov prize for the tenth time, there had been difficulties here. No one will deny that improvements can be made, but any support is welcome where human rights and work on forging links with the other countries of the world are concerned.
I have just returned from Latin America, where I was once again able to see the value of this work for myself, whether it is election supervision, human rights or the work of our institutes. We will be monitoring the implementation of the 1999 budget very carefully with these points in mind. I should, however, also like to express my particular thanks to Mrs Dührkop Dührkop for her excellent cooperation in this matter, which has shown once again that Parliament is aware of the significant role it can play on these difficult issues, and is supporting a cause across all national boundaries, which all of us, as good democrats, need to fight for throughout the world.

Sonneveld
Mr President, the agriculture heading has not given rise to any particularly heated debates during the various phases of our examination of the 1999 budget - is this the calm before the storm, or have procedures improved? The latter, I think. By continually analysing expenditure in the current year and allowing special scope in the budgetary procedure for drawing the appropriate conclusions at the right moment for the new budget, we manage to prevent too much from being earmarked for agriculture, while also having the certainty that if things develop badly, sensible provisions will be made.
As the draftsman of the opinion of the Committee on Agriculture, I have helped to make sure that the procedure introduced last year whereby the Commission sends notification of amendments between the first and second readings has been followed to the letter this year too, and we have received specific proposed amendments to a considerable number of budget items. A total of EUR 513 million have had to be added to the original total for Category 1.
The Council and the European Parliament delegation agreed, however, not to include this relatively small adjustment from the draft budget in the total budget amount for Category 1, but to revise the various items in the earlier total on the basis of the most recent estimates. The Commission then put forward the required proposals. This is in line with Parliament's desire not to solve the problem by making a linear reduction, cutting a small percentage from all agricultural expenditure in the budget, but by making specific reductions to a number of items.
Furthermore, the fact that a surplus of ECU 1.4 billion has now been identified in Category 1 of the 1998 budget is an important factor for revising the rather poorer outlook for 1999, and on the basis of our close observation of market developments up to now, we can already tell that we are going to have to live with a little uncertainty about agricultural expenditure in the future. But this margin can be considerably reduced, compared with the excessive margins of agricultural spending in the past, when very considerable amounts would be held over and repaid to the Member States every year.

Rübig
Mr President, ladies and gentlemen, we have not entered the appropriations for security within and around the buildings of the European institutions in the reserve. Nevertheless, I should like to point out that action urgently needs to be taken here. As the rapporteur on the budget for the Economic Affairs Committee, I think that we can be very pleased with the benchmark data for the next budget. In its proposal, the Commission had already allocated sufficient appropriations to the principal economic lines. Parliament has successfully defended these appropriations. Title B5-3 on the internal market was increased by EUR 13.8 million, and title B5-5 on the labour market and technological innovation by EUR 12.2 million. I am particularly pleased with the agreement reached on stimulating small and medium-sized enterprises. The line designated for this purpose, B5-512, was increased by a full 60 %.
However, we are also looking at the interrelationships and indicators for a healthy overall economy in a wider context. Therefore, education and the youth exchange programmes are important for providing human resources, which our internal market so urgently needs to remain competitive. Title B3-1 - Education, vocational training and youth - was allotted additional appropriations of EUR 136.4 million, and even though I have great sympathy for the demand expressed by European youth organisations for a further increase, in this budget we have in fact paved the way for these education and vocational training initiatives actually to be continued and extended. For the economy, the principle of austere budget management is, after all, of particular importance. Let us not forget that in just over two weeks, 11 countries will join together in a currency union. I believe that this is a basis for a successful Europe!

Ferber
Mr President, Commissioner, ladies and gentlemen. I should first like to thank our colleagues in the Budgets Committee and the rapporteur for making it possible for this complicated budget procedure and the conciliation procedure on research to at last be brought to such a successful conclusion, with the result that we shall be voting on the research programme today at midday, and then on Thursday we will be able to enter the appropriate figures in the budget, which means that our research policy will continue to run, uninterrupted, next year.
I should, however, like to draw your attention to a problem: in its explanatory statement on the draft budget for the second reading, the Council pointed out that, in its opinion - and as far as I know the Commission has endorsed this view - the remarks on the budget lines were only intended as an indication, meaning that they are not binding for the purposes of implementation. In practice, this would mean that all the specific tasks and objectives which Parliament has included in the remarks, and the appropriations and percentages accordingly placed in the reserve, would, at best, be pipedreams. I am thinking in particular of research. We have few budget lines, but each has a large amount of money, and our remarks here are to be treated only as an indication. I do not think that this is the end result of the budgetary procedure which we in the Committee on Research, Technological Development and Energy had in mind.
Mr Liikanen, I have just listened carefully to your speech on the Elles report. Here too, you could send out a clear signal for Parliament. Our remarks are not pipedreams; they are entirely genuine demands made by Parliament in the budgetary procedure. I make the same claim on behalf of the Committee on Research, Technological Development and Energy, that is, that our remarks on managing the appropriations of the fifth framework programme of research should not be taken merely as an indication, but should be binding. I have prepared an amendment to the motion to this effect on behalf of my group, and hope that it will also meet with the agreement of the House.

Schwaiger
Mr President, ladies and gentlemen, as the rapporteur of the Committee on External Economic Relations, I should like to make just two points today, which we were not able to deal with in October at the first reading. We had submitted several amendments concerning the remarks for trade cooperation with Latin America, Asia and South Africa, also including investment.
Our proposal was to involve economic and social groups, chambers of commerce and industry, employers' organisations, unions, consumer organisations and environmentalists in these programmes. We made these proposals, which are in fact modelled on the ACP States, amongst others, - so they are on the same lines as the provisions which apply to the ACP States and Turkey - in order to secure greater participation of economic and social groups in the work of reconstruction. Unfortunately, the Budgets Committee did not accept our proposals, although they would not cost a penny and do in fact reflect a broad consensus within the Committee on External Economic Relations, having been drafted by the various groups within the committee.
My main request to the chairman of the Committee on Budgets, and also to the rapporteur, would be to incorporate this idea, possibly in the motion. These are sensible proposals and they correspond largely to what is already common practice in the ACP States.
I should also like to make a second comment. It will only be possible for us to open up the Japanese market if young managers - above all those from small and medium-sized enterprises - are educated about the specific features of the market and also have the opportunity to adapt to them. Until now, such initiatives have been promoted to great acclaim by the European Union, making it possible for training and instruction to be given to between 30 and 40 managers every year. This proposal was not taken into account because there is no legal base at the present time. I hope that the Commission will table the necessary proposals and that we will have a legal base as soon as possible, so that we can reinstate this budget line.

Eisma
Mr President, I am delighted that the Council has agreed to our proposal to increase the environment budget, making more money available for the fifth action programme on the environment, LIFE and other programmes. This is all very well, but the fact remains that the environment receives only 0.2 % of the overall budget, which is why we are having to think about integrating the environment into other sectors. For this reason, I am most surprised that the Council has not approved the very proposals that were designed to 'green' the budget, and the Committee on Budgets is therefore retabling five amendments relating to the environment aspects of the Structural Funds, environmental protection and the allocation of Structural Fund money to environmental protection under the habitats and birds directives. We would also like to see at least 10 % of the MEDA funding going to environmental projects. A better environment begins with each of us, and this is why I have tabled an amendment to the resolution - also accepted by the Committee on Budgets - on the 'greening' of the institutions themselves. The Council, the Commission, the Committee of the Regions and Parliament itself can still do a great deal about saving energy, recycling waste and mobility. If we can do this in a credible way, we shall be setting an example for the Member States and we can promote a genuine environment policy.
Finally, I am pleased that the Council has also agreed to increase the budget for consumer and health policy. I regret the fact that it has put both amounts in the reserve, but fortunately, thanks to our intervention, the Committee on Budgets is to take the amount for consumer policy out of the reserve again, and the legal basis for this is expected shortly. It is a pity that we were not able to achieve the same thing with the health-care policy.
I shall finish there, Mr President. Thanks to our excellent cooperation with the rapporteurs, Mr Viola and Mrs Dührkop Dührkop, I am satisfied with the overall result.

Morgan
Mr President, I should like to thank Mrs Dührkop Dührkop again for her work on the budget for 1999.
For the Culture Committee it was a year without precedent. There has been a recognition of the importance of culture in cementing European integration and an emphasis on creating a true Europe of knowledge. The extra money that has come as an extension to the Ariane and Kaleidoscope programmes is very welcome. Not only is this money significant for 1999 but it is also critical in indicating the appropriate direction for the forthcoming Culture 2000 programme.
The perseverance of the rapporteur on the issue of lesser-used languages is crucial to the 50 million European Union people to whom it is relevant. We eagerly await a Commission proposal on this issue and are confident this will provide a formal legal base in future.
On the issue of information policy it sometimes seems as if the Council is cutting off its nose to spite its face. Nobody is more acutely aware than the Council of the need to inform the public of Europe about the current integration process including, critically, the launch of the single currency. And yet it is the Council that has been dragging its feet when it comes to recognising the Commission's competence in this field. How are we to create a true people's Europe if people do not know about it? One thing is for sure: they do not know about legal bases and they do not really care. It is important that we do not get into this squabble year after year. We are glad that the Council has at last seen reason on this issue, for this year at least.The committee also welcomes the accord between the Council and Parliament compensating the funding used for administrative purposes over the past years for the SOCRATES and Youth for Europe programmes. It has been a good year for the Culture Committee. Thank you very much, Mrs Dührkop Dührkop.

Cunningham
Mr President, on behalf of the Committee on Development and Cooperation, I would like to begin by thanking Barbara Dührkop Dührkop, the general rapporteur, for her tremendous help and support. I would also like to thank my own group coordinator, Terence Wynn, and my committee secretariat for their help and encouragement.
As a committee we have not achieved everything that we wanted to achieve but, at the end of the day, we have achieved a budget that we can certainly live with. I do, however, have a number of concerns.
First of all in relation to the budget heading on tropical forests, I note that the Commission proposals to increase payment appropriations, i.e. by 5 million euros, were not accepted by the Commission. Therefore, I would expect that the Commission, by one means or another, to be able to transfer and agree to the topping-up appropriations which might be necessary as far as our external policy is concerned.
Secondly, on gender, I hope that next year we will see an increase in the budget heading. We have seen a decrease this time which was gravely disappointing as far as my committee is concerned.
Finally, on the issue of land mines, there were numerous arguments about the number of budget headings we should have. I am informed that there are currently something like 12 or 13 budget headings that mention land mines. I am told by the Commission that they have plans to bring all of these under one heading and that they are proposing a sum of something like 35 million euros to be spent on mine clearance and rehabilitation programmes. I very much welcome this, it has been something that the Development Committee have pushed forward for some time. The sum of 35 million euros, if we can keep this for a number of years, will go a long way to clearing the world of what has been an horrendous scourge for millions of people in the developing world.
I would like to express my thanks once again to the general rapporteur. It has been an extremely successful budget procedure.

Deprez
Mr President, ladies and gentlemen, on behalf of the Committee on Civil Liberties and Internal Affairs, I can confirm, on the occasion of the second reading of the budget, that I am as satisfied as I was at first reading. In this respect, I would like once again to thank our rapporteur Mrs Dührkop Dührkop and the members of the Committee on Budgets and their chairman Mr Samland, who were much more sensitive to our committee's demands this year than they were last.
I would like to highlight three particular reasons for my satisfaction, all of which are priorities for the Committee on Civil Liberties. Firstly, we asked for measures to be continued and for an increase in resources to combat violence towards women and children, sex tourism and criminal use of the Internet. The solution that was arrived at for these items is satisfactory.
Secondly, we wanted measures to be continued and resources to be maintained for the integration of migrants and the fight against racism and xenophobia. As you know, ladies and gentlemen, these budget headings were in a very delicate position because of the absence of a legal basis. The solution that has been arrived at here is also satisfactory.
However, our main reason for satisfaction is that for the first time, at Mr Brinkhorst's insistence, the Committee on Budgets yesterday approved the creation of a European fund for refugees. I must thank Mr Brinkhorst for this. Everyone knows the importance of the refugee problem for the European Union, and everyone also knows that the Council has committed itself to taking measures with a view to equal burden sharing, and this European fund for refugees is the best way of achieving this. Consequently, I do not understand why the Council persists in rejecting this instrument, which is both necessary and sound.

Tillich
Mr President, I should like to pay the rapporteur, Mrs Dührkop Dührkop, a compliment. She has worked very hard on her report during this budget year. I should like to thank her for her ready cooperation, and I also extend thanks to the Commission and the Austrian Presidency.
From the point of view of the Committee on Budgetary Control, it is apparent that we still have much to do. The very fact that in the 1998 budget we have still overestimated agricultural expenditure by ECU 1.4 billion shows that there is scope for further measures here. Despite our actually brokering an agreement with the Council in the 1998 budgetary procedure to reduce the allocation which the Commission had entered in the budget, we still have a surplus. That is why I also welcome the fact that the Commission has used a new kind of justification for utilised, non-utilised and partially utilised budget lines in the Notenboom procedure. I should like to call on the Commission and request that it continue to do this in the monthly reports during the implementation of the 1999 budget. This would mean that the European Parliament would be better able to monitor expenditure on a month-by-month basis. The individual committees would be more involved in monitoring appropriations and the process of implementing the budget. Communication between Parliament and the Commission would improve.
Allow me to make just two further comments on the strategic reserve. Overall, we are certainly not exactly ecstatic about the result. We can, however, credit the European Parliament with success on one count. The Council has realised that it has to respect the European Parliament as a partner and as one arm of the budgetary authority. In the future, it will no longer be enough simply to take account of the interests of individual Member States within the Council; the will of the European Parliament will also have to be respected.

Pérez Royo
Mr President, on behalf of the Committee on Fisheries, I would like to add our appreciation to that already expressed for the rapporteur, Bárbara Dührkop. The Committee on Fisheries has collaborated with the general working party for the 1999 budget during the various stages of the budgetary procedure, mainly through the original draftsman for the Committee on Fisheries, Mr Apolinario, who is no longer a Member of this Parliament.
Although the only amendment tabled by the Committee on Fisheries is an amendment proposing a slight increase in appropriations for monitoring actions, we would like to take this opportunity to repeat a series of priorities that form the core of the committee's actions. I will list them in no special order: firstly, actions that monitor actual compliance with Community rules; secondly, specific actions in the areas of non-industrial and inshore fishing; thirdly, research, which is closely linked to the development of the fifth framework programme; fourthly, the Structural Funds, an issue we have already discussed on many occasions; and finally, the question of international agreements, which I would like to consider for a moment.
As far as international agreements are concerned, the appropriations proposed for the 1999 financial year are lower than those for 1998, both in commitment appropriations and in payment appropriations. Undoubtedly, there is justification for this reduction, but we would like to make an important point here. The Committee on Fisheries would draw the attention of the authorities to the difficulty that will arise, when preparing the budget for 2000, in relation to the agreement with Morocco. This runs out on 30 November 1999 and costs EUR 120 million every year, practically half of the total for this heading. The budgetary authority will have to show its capacity for sound management in order to ensure that the necessary budgetary appropriations are available to implement a new agreement, while remaining discrete about this amount so as not to endanger the negotiations with Morocco.

Gröner
Mr President, ladies and gentlemen, I should first like to thank the rapporteur, Mrs Dührkop Dührkop, who was very receptive to the proposals from the Committee on Women's Rights, which sought, above all, to enshrine the concept of mainstreaming in the budgetary procedure, in other words to incorporate equal opportunities for men and women into all European policies. We had some degree of success, as can be seen from extensive correspondence with 12 Members of the Commission. We have recorded this in two working documents.
As draftsman of the opinion of the Committee on Women's Rights, my second priority - alongside mainstreaming - was to maintain special support measures for women in the fourth action programme and in the Structural Funds. I emphasise once again that women are not a marginal group; we represent 50 % of European citizens. This is also reflected in the new Daphne programme. I might remind you that we - 350 Members of this House - called for a European campaign and a European Year against violence to women in a written declaration. The Council ignored it. In the second reading, it also deleted the remark on this, despite the Austrian Presidency itself working very hard in support of this cause.
We in the European Parliament are keeping to our demands; we are expecting EUR 5 million to be allocated for a campaign to combat violence against women, and we are looking forward to the concepts of equal opportunities and mainstreaming being very much more in evidence in the new policy areas of employment and enlargement towards the east than they have been up until now. As the Commissioner has already said, the Treaty of Amsterdam gives us a new basis on which to work for equal opportunities and non-discrimination, and if female citizens do not find themselves represented in the policy of the European Parliament - and, by the way, this also applies to the committees - then we shall pay the penalty in the fifth directly elected Parliament.

Schmidbauer
Mr President, ladies and gentlemen, I can, I think, be brief, because I explained the main arguments of the Petitions Committee in our debate at the first reading. I should, however, like to use this opportunity to emphasise, on behalf of the committee, that we feel like the hinge between Parliament and the citizens of Europe. We are, as it were, the hinge on the door, allowing it to open to the citizens. According to the Treaty on European Union, any citizen of the Union has the right to address petitions and lodge complaints, individually or in association with other citizens or persons, and for us in Parliament to be able to deal with these petitions in an appropriate manner and in as short a time as possible, it is necessary for the committee to be provided with sufficient resources and staff. That is why it is also imperative for the Petitions Committee to be able to continue to work as an independent committee in the new parliamentary term.
I wish to thank the Budgets Committee and Mr Viola for judging the Ombudsman's requests to be objectively justified, and for the fact that the creation of a new body for the Ombudsman will make it possible for sufficient resources to be placed at his disposal.

Ruttenstorfer
Mr President, ladies and gentlemen, I am sure I do not need to tell you that the 1999 budgetary procedure has been a complicated undertaking; this was, in particular, for two reasons. Firstly, the 1999 budget is the last to be covered by the Edinburgh agreements and the last to be adopted before the conclusion of the Agenda 2000 negotiations, which are being held between our institutions to establish a financial framework for budgets after the year 2000.
Secondly, a decision on the 1998 supplementary and amending budget and a decision on the 1998 global transfer have also become part of the 1999 budget. Despite the complexity resulting from combining these different matters, we have finally succeeded in reaching an overall compromise on the 1999 budget, the 1998 supplementary and amending budget and the 1998 global transfer. I should like to recall that the success of this overall compromise was to a large extent dependent on the results of intensive discussions on flexibility, which we held with Parliament's delegation at the two Council meetings of 24 November and 8 December. In accordance with Parliament's wishes, it is intended that budgets will display flexibility of this kind, and this will be introduced in the new financial perspective.
The conciliation we held last week with a number of your colleagues paved the way for the overall compromise on the 1999 budget procedure to be confirmed. This conciliation in fact resulted in an agreement between our two institutions that there will be no strategic reserve in the 1999 budget, something which we have seen repeatedly threaten the 1999 budgetary procedure from beginning to end. The Council thus saw itself in a position to declare itself willing to accept an element of flexibility in the negotiations on a new interinstitutional agreement. The nature and extent of this flexibility will depend on the overall result of the negotiations, and on the level of the agreed financial framework.
During the budgetary procedure, but at the latest before Parliament's first reading, both arms of the budgetary authority can decide - in accordance with the rules on majority voting pursuant to Article 203(9)(5) of the Treaty and by means of a Commission proposal - to activate this flexibility component. When applying this statement - and this is something to which I should particularly like to draw your attention - the Council will not make any internal agreements which would nullify these majority rules. I should particularly like to emphasise this. The positive outcome of our conciliation on the flexibility of future budgets has made it possible for the negotiations on the entire 1999 budget procedure to be brought to a successful conclusion.
Allow me now to turn to the results of the Council's second reading of the 1999 draft budget and in so doing to highlight a number of points. When examining the draft budget, as amended and with the proposed modifications, the Council's general concern was to try to achieve as low a rate of increase as possible for the 1999 budget. When assessing the results of Parliament's first reading of the 1999 draft budget, the Council was also guided by the following principles: complying with the Interinstitutional Agreement of 13 October 1998 on legal bases and the implementation of the budget; assessing needs with a view to entering realistic appropriations in the budget which it will be possible to implement; and dividing the savings equally between all the headings in the financial perspective, which means that reducing appropriations for one of the headings also has to entail a reduction in the appropriations for other headings.
Taking all these principles into consideration, the Council approved the content of the overall compromise drafted in conjunction with a Parliament delegation. As you have noted, it has accommodated Parliament on many points. I would ask you to take that into account when you yourselves vote! As I said at the beginning, the overall compromise on the 1999 budget procedure also includes an agreement on the 1998 supplementary and amending budget and on the global transfer. Both the supplementary and amending budget and the global transfer allow non-utilised appropriations to be redeployed, with the result that, in particular, payment appropriations for the European Social Fund and PHARE can be increased by ECU 795 million and ECU 150 million respectively. In addition, Parliament will receive ECU 150 million for its building projects. I should also like to draw your attention to the ECU 400 million for food aid to Russia, which we decided on as part of the supplementary and amending budget.
The 1999 budgetary procedure is drawing to a close. When you vote on the budget on Thursday at the end of your second reading, some of you will be taking part in this procedure for the last time, and for those Members in particular, I am glad that during this budgetary procedure they have been able to experience some degree of cooperation between the two arms of the budgetary authority, something which has not always been the case in the past, a fact which the chairman of your Budgets Committee, Mr Samland, referred to himself last week at the end of our conciliation. I should particularly like to thank Mr Samland for his tireless efforts to improve the quality of our cooperation. I also thank the two rapporteurs, Mrs Dührkop Dührkop and Mr Viola, and of course the Commission, for their valuable contribution to bringing the 1999 budgetary procedure to a successful conclusion. I was very pleased to see them adopt such a constructive approach, putting us in a position to achieve the result we all wanted, the adoption of a budget for the coming year.

President
Thank you, Mr President-in-Office.
The debate will continue at 3 p.m. with the speech by Commissioner Liikanen.
It is now voting time.

Ford
Mr President, I wish to raise a point of order under Rules 24(7) and 31, with respect to seating in the Chamber. In view of the on-going civil war between Mr Le Pen's faction of the National Front and Mr Mégret's, I should like to ask the Conference of Presidents whether they will consider moving the two factions apart to avoid the possibility of disturbance in the Chamber. In the meantime, we should be very grateful if they would wear the appropriate labels so we would know whether they support Mr Le Pen or Mr Mégret.

Blot
Mr President, I would like to make what is, I suppose, a personal statement, as Mr Ford is criticising me as a member of the National Front. I would like to assure him immediately that I believe everyone is to be polite in this House, as is traditional, including on the National Front benches.

President
Thank you, Mr Blot.

VOTES
President
We shall now take the vote on the interpretation of the provisions applicable to the discharge procedure - Annex V of the Rules of Procedure.
Since questions have been raised, I am taking a vote on the interpretation given by the Committee on the Rules of Procedure of the provisions applicable to the discharge procedure. The interpretation by the Committee on the Rules of Procedure - which was also included in the Minutes - was that it considered that the provisions of Annex V were not at variance with the general provisions of the Rules concerning the tabling of amendments, which could be accepted under Rule 125. On the other hand, amendments proposing the opposite to the proposal of the committee responsible were inadmissible.
(Parliament adopted the interpretation by the Committee on the Rules of Procedure)

Whitehead
Mr President, as the rapporteur for Parliament, I just wish to confirm that the common position is acceptable to us, as is the financial settlement at ECU 112.5m. I should like to thank the Austrian presidency and DG XXIV for their work on this.
(The President declared the common position approved)

President
Before we go on to the explanations of vote, I should like to congratulate the Committee on Research, Technological Development and Energy and the rapporteurs on the way they organised the votes, which has made it possible for Parliament, thanks to the systematic way in which they were proposed and accepted by the Bureau, to vote on so many reports and 320 amendments in just 40 minutes! This is a record rarely achieved, for which the Committee on Research must be thanked.

Andersson, Hulthén, Lööw and Sandberg-Fries
We appreciate the need to consider the status of those countries which are not, for the time being, signing up to the single currency. It is a matter that certainly needs a thorough airing as part of the general political debate in the Member States concerned. We must not forget, however, that one of the aims of this report - which has a united committee behind it - is to influence public opinion. Yet some of the assertions made here are based on pure speculation as to developments in the non-participating countries.
We do believe that the advent of the single currency will be of great significance in terms of competitiveness, employment and growth. And we think that Sweden should join EMU at some point in the future. But it is not for the European Parliament to tell Swedish citizens - as happens in this report - that their country should adopt the single currency. Any such decision will depend on a prior proposal having been put to the Swedish people, either in a referendum or in conjunction with elections to the Riksdag.

Berthu
In the Stevens report, the European Parliament shows kind concern for the misfortunes likely to descend upon the Member States which did not wish to join the euro zone (United Kingdom, Sweden, Denmark) and on the country that did not qualify (Greece). Their national currencies will, it seems, become more volatile, and as all their economic actors will favour the euro, it will become a genuine 'parallel currency' in these countries. The conclusion of the report is obvious: 'As the only way the risks inherent in parallel use of the Euro can be removed for the United Kingdom, Sweden, Denmark and Greece, is by joining EMU, they should do exactly that, as soon as possible'.
We are astounded at the arrogance shown in this report and the contempt displayed for the democratic choices made in three of these countries. If tribute is to be paid to the United Kingdom, Sweden and Denmark, then it is because their governments were able to organise a genuine debate on the single currency and then to respect the choice of their citizens. Not everyone can say the same. Moreover, we may wonder whether the aim of the Stevens report is not to allay the feelings of guilt on the part of those in the euro zone who trampled on democracy, by showing them that they were not wrong because, when all was said and done, even those who respected democracy subsequently reached the same conclusions.
But there is an enormous gap in this report: it is by no means certain that the countries that did not choose to adopt the euro will regret it. For example, if we assume that the euro is strong against the dollar, the European countries not participating in the euro zone will perhaps find that they are at an advantage by retaining more reasonable exchange rate parities. Similarly, unification of monetary conditions within the euro zone will not be beneficial, or even painless, for all its members. Some will doubtless regret not having been able to retain flexible exchange rates to be able to bring their economies smoothly into line with those of their neighbours. They will envy the countries that have remained unrestricted outside the euro zone. But perhaps the Stevens report has another, hidden, objective: to try to eliminate these recalcitrant countries that could in future become embarrassing witnesses to the error of the single currency by absorbing them into the euro zone.

Blak, Kirsten Jensen and Sindal
The Danish Social Democrats have today voted against the Stevens report on the euro as a parallel currency. The report calls on the governments of the non-participating countries to join in the third stage of EMU as soon as possible and predicts all kinds of mishaps and calamities if they fail to do so without delay. Furthermore, it is claimed that the general public in the countries in question is expressing a wish to join the monetary union in the near future. Only a referendum will show whether the Danish population wants this to happen.
Lindqvist (ELDR), Eriksson and Svensson (GUE/NGL), Gahrton, Holm and Schörling (V), Bonde, Lis Jensen, Krarup and Sandbæk (I-EDN), in writing. (SV) It is somewhat rich for the European Parliament to start telling Member States what sort of economic policy it thinks they should implement. This report states that 'it is to be earnestly hoped that the United Kingdom, Sweden, Denmark and Greece, in their own interests, in the interests of the other Member States participating in the start of EMU and, above all, in the interests of the peoples of the European Union as a whole, will be able to join the single currency as soon as possible'.
Worse still, we hear that 'substantial majorities' of the citizens of these four Member States expect to be joining EMU in the foreseeable future. And, to top it all, parallel use of the euro is seen as a way of hurrying them willy-nilly into EMU.
It is quite unacceptable that the ECB should set up a special committee to monitor parallel use of the euro in the four Member States in order to 'help' them to join the single currency.
We cannot countenance instructions from the European Parliament on how the central banks in these four countries should manage parallel use of the euro. Nor can we tolerate talk of the 'risks' if the Member States concerned are not 'clear' about their policy with regard to the euro. Telling them that the best thing for them to do is to join EMU is pushing at the boundaries of decency.
We voted against this report.

Murphy
The European Parliamentary Labour Party abstained in the final vote on the Stevens report on 'The euro as a parallel currency' for the following reasons. The rapporteur is unnecessarily alarmist regarding the consequences of the euro as a parallel currency for the pre-in countries. The nature of his call on the pre-ins to join the euro ignores national policies and is not grounded in the real world.

Palm, Theorin and Wibe
Those states which elected not to take part in the third stage of monetary union reached their decision democratically in the wake of a process of mature consideration. There are no grounds for the European Parliament to voice disapproval of the outcome; to do so would be to overstep its powers. It is for national parliaments, governments and citizens to decide on participation in EMU.
Fundamental policy decisions on parallel use of the euro also lie with the countries concerned. Parliament has no right to comment on the sort of restrictions which states should, or should not, be maintaining as a matter of national monetary policy.
Castagnetti report (A4-0471/98)
Andersson, Hulthén, Lööw and Sandberg-Fries
We would underline the importance of Union action to strengthen the rights of disabled people. The Helios II programme is a case in point. The Treaty of Amsterdam contains express provisions to assist the disabled, and we urge the Commission to come forward with new Union-wide measures to promote the rights of the disabled, whilst at the same time building on the achievements of Helios II.
Quisthoudt-Rowohl report (A4-0493/98)
Bébéar
The framework programmes for research, technological development and demonstration activities always lead to lengthy and stormy debates with the European Commission, particularly where they are linked to budgetary issues. This provides the European Parliament with an opportunity each time to fight for the financial share we believe to be fair. Until now, we have always been the decisive factor in allowing the European Union to create a real policy of research and technological development.
The fourth framework programme has now proved itself. Scientific cooperation and technology transfer are organised around this unique programme that covers all areas. Thanks to its vast range of activities, the opportunities offered to researchers, teachers and companies have been increased, and the result has been the development of a real sense of European identity.
We have achieved positive results that have been acknowledged unanimously. This great popularity within the European scientific community must not be compromised at a time when a new framework programme is being drawn up and eleven new countries are knocking at the door of the European Union and are likely to bring mutual scientific and technical enrichment.
We therefore need appropriate financing to take account of the most recent technological developments. Consequently, I approve the Quisthoudt-Rowohl report and the compromise it presents for 1998-2002.
I am one of those who would have liked to go a step further. As this is not possible, let us accept a good compromise that includes the majority of the amendments tabled by the European Parliament.
Scientific research and technological development have become the focal point of the economic future of Europe. Promoting these among small and medium-sized enterprises would therefore be promoting the progress of the European Union.

Eriksson, Seppänen and Svensson
We voted in favour of the joint text approved by the Conciliation Committee concerning the fifth framework programme for research. We would however draw attention to several unresolved problems with regard to the EU's research policy. The administrative procedures governing EU intervention need simplifying, for example. The fact that the EU contribution does not cover all the costs of activities equally gives cause for concern. We need a uniform attitude to national cofinancing across the Union. A research-led approach would also be desirable, building more upon researchers' own initiatives. Decisions on project funding could then be taken on the basis of scientific criteria by competent research bodies.
The Swedish Left Party's priorities in this field are: researcher training, basic research and the establishing of creative research environments in the universities. Research needs to be more rooted in society as a whole. Collaboration between academic institutions and industry is beneficial to both sides, but those doing the commissioning do not have an equal interest in all types of research. The balance between basic and applied research is shifting disturbingly to the detriment of the former; disinterested enquiry is losing out to more utilitarian-style work. It behoves the EU to be mindful of such developments. A strong commitment to basic research and researcher training is the best way of supporting industry's own R & D.
The Left Party sees research and its results as a matter for the whole community. It is ultimately the general public who commission and fund the research effort. We therefore support in particular those provisions within the fifth framework programme which stress the need to disseminate research results (Chapter III, Articles 13-20). The report on the joint text approved by the Conciliation Committee laments, however, the need for unanimity in Council. We wish to distance ourselves from such a view.
Lastly, we feel that more attention could have been paid in the fifth RTD programme to increasing the presence and enhancing the position of women within the research community and its hierarchies.
Tannert report (A4-0451/98)
Andersson, Hulthén, Lööw and Sandberg-Fries
We thank the rapporteur for her thorough work on this subject, which is of particular importance for the future of EU research. Parliament's involvement with the fifth framework programme has been crowned with considerable success. We are pleased to see that this report further underlines the need for action in the following areas: equal opportunities; a gender-specific approach to research; work on ecological sustainability; research into issues affecting the elderly and the disabled. We also welcome the commitment to an ethical stance on genetic research and note the emphasis on not allowing any resources to go to cloning or genetic manipulation of human hereditary material.

Hyland
It is certainly time for the EU and national governments, as a matter of urgency, to review all regulations which govern the operating of genetic research.
The following points must be borne in mind in the context of this debate:
The recent decision by the British Government to permit experiments on 'human embryos' is in conflict with the ethos and spirit of the vast majority of Members of the European Parliament. Those who seek to cross this threshold of ethical unacceptability must be stopped in their tracks through the implementation of Community and national law.-Scientists who abuse welcome advances in genetic research are doing a serious disservice to humanity by discrediting work which has the potential to find treatment for diseases, world hunger and food quality.-'Therapeutic Cloning' is the thin end of the wedge on the road to human cloning which is an affront to the ethical and moral values of society.-Complacency at times by those in authority may well leave mankind exposed to the whims of those who seek to ignore the origin and sacredness of human life and the existence of God as the creator of all mankind.- Estevan Bolea report (A4-0454/98)
Pirker and Rübig
We voted against Amendment No 9 because the amounts are too low and there should be at least 30 % for SMEs.
Marset Campos report (A4-0455/98)
Palm and Wibe
In Amendment No 33, the committee considers it 'necessary that a European scientific journal be published along the lines of Science or Nature as a way of adequately disseminating European scientific achievements at world level'. We do not intend to vote against this report, but nonetheless wish to make clear our belief that science is international. Accordingly, there is no reason to distinguish between 'European' scientific research and the investigative work carried out by everyone else. Nor is it up to the EU to decide what sort of journals should be published.
McNally report (A4-0458/98)
Blak, Kirsten Jensen and Sindal
The Danish Social Democrats in the European Parliament have today voted in favour of the report by Mrs McNally. We did so despite the fact that the Joint Research Centre of the European Atomic Energy Community has previously worked on both fusion and fission energy, which we in Denmark have judged too dangerous and damaging to the environment for us to want to build nuclear power stations on Danish soil. It is therefore gratifying to see that the priorities of the JRC have now been changed, so that research into fusion energy is to be scaled down and research stepped up into the treatment and storage of radioactive waste. This shift in attitude is welcome, since it brings with it the hope that in future it will be possible to phase out Europe's nuclear power plants and to concentrate instead on sustainable solutions such as water, wind and solar energy.
Matikainen-Kallström report (A4-0459/98)
Andersson, Hulthén, Lööw, Palm, Sandberg-Fries and Theorin
We would like to thank the rapporteur for this very interesting investigation into the Union's research effort in the field of thermonuclear fusion and fission. On the question of fission energy, our position is that we wish to see a phasing-out of nuclear power, although any decisions must be taken at national level. We cannot therefore support any fission research which would lead to the development of more nuclear energy. We commend the way in which the Commission is now emphasising investment in operating safety and targeting the whole fuel cycle - which includes waste management. And we support the proposals on decommissioning reactors, phasing out nuclear power and storing radioactive material.

Lindqvist
Whilst I approve of investing in research and development to improve nuclear safety and devise new waste management techniques, there is no reason for the EU to put research money into new thermonuclear fusion or fission reactors. We are told in the report that the aim is 'the possible construction of safe, clean and economically competitive prototype reactors'. It is very hard to draw the line between nuclear safety research and new reactor research. In order to avoid a fresh proliferation of nuclear power, however, the distinction must be made before any further projects are commenced.

President
That concludes voting time.
(The sitting was suspended at 12.50 p.m. and resumed at 3 p.m.)

1999 General Budget (continuation)
President
The next item is the continuation of the debate on the general budget for 1999.

Liikanen
Madam President, the 1999 general budget for the European Union is the last budget which will be adopted by this Parliament. It may be permitted, therefore, to put it into a more historical perspective. The 1999 budget concludes a remarkable process of qualitative and quantitative consolidation. In the future, the Union will be in better shape to justify its financial requirements.
Qualitatively, this budget procedure has solved three major problems which have been discussed for many years. Firstly, the 1999 budget is established on the basis of the new interinstitutional agreement on legal bases. The new budget procedure has shown that the agreement works. New and experimental activities can still find their starting-point in the Community budget. The Commission and the organisations concerned will benefit from the clarity for the execution of the budget. This is a major achievement.
Secondly, significant progress has also been made with regard to Community subsidies. The recent Commission communication imposes mandatory minimum rules for publicity and collective decision-making on all Community subsidies. This is something that Parliament has asked for on many occasions. The new rules come into effect for the execution of the 1999 budget. A vademecum has been distributed. We have had a successful seminar exchanging information and holding discussions with the actual and potential beneficiaries; further seminars are in preparation.
Thirdly, there are the technical assistance offices. The intense work of the Committee on Budgets and of experts on both sides has established an unprecedented degree of transparency and control in the 1999 budget. In this area, lack of clarity can no longer be an excuse. The Committee on Budgets has made that very clear to the Commission.
Work has to continue to strengthen links between decisions on financial and human resources for each Community action. For that reason the Commission is currently developing the first elements of activity-based budgeting. Legal bases, subsidies and technical assistance offices are qualitative improvements that may look small to some but they solve problems which have long overshadowed the Community budget. They will remain after this budget for the future.
What will also remain is a string of rigorous Community budgets. Since 1996 the Community budget has regularly grown less than public spending in the Member States. Thus the Union has contributed to the consolidation effort for the successful launch of Economic and Monetary Union. At the same time, within the rigorous framework, clearer priorities have been set. On the one hand, financial support for cohesion, as agreed in Edinburgh; on the other hand, employment-creating expenditure, for example trans-European networks research and education. External expenditure has grown fast, pushed by the Member States and events. It took some time to establish the regulations and the administrative structures to permit satisfactory execution and, as has been said today in the earlier debate, further efforts are still required.
Qualitatively and quantitatively, the European Parliament has built up a reputation of being, if not always an easy, at least a credible partner in the budget procedure. Let us reinforce this partnership with the Council. In this respect it has also been fortunate with regard to the most recent presidencies. I hope for the best for the future.
The hope is that this partnership will also permit the successful conclusion of a new interinstitutional agreement next year. Important progress has already been made: agreement on a legal basis, the flexibility element, concertation throughout the budget procedure. It is no exaggeration to say that more progress has been made in the budgetary field than in any other part of Agenda 2000. This makes me fairly optimistic that new interinstitutional agreements can be reached with this Parliament.
In conclusion, let me congratulate the rapporteurs, Mrs Dührkop Dührkop and Mr Viola. As this is the last budget to be adopted under his chairmanship, I should like in particular to thank Detlev Samland. I think you will agree that his years at the helm of the Committee on Budgets will not be forgotten. However, we still have a lot of work to do during spring so that the agreement on Agenda 2000 will be ready before the end of this Parliament.

Wynn
Mr President, this budget has been different in many respects from any other budget I have been involved with. The Commissioner has just highlighted the three major topics which have come from the discussions between the three institutions. The thing that will always stick in my mind is that we had a conciliation before the Council's second reading, something which has never happened before. One of the reasons for this, and part of the process, is that we are trying to get Parliament and the Council to work much more closely together on the budget so that we do not again have the game of ping-pong we have had over the past few years when trying to make sure that the budget we get reflects what the Council wants and what Parliament wants.
During the conciliation process before the second reading, the big decision was to drop the strategic amendment. Those of us who were part of the delegation did that on the assumption that, come the negotiations for the next interinstitutional agreement, flexibility will be part of it. The Council made that statement and the President-in-Office stated that clearly this morning. Getting that agreement also paved the way for the supplementary and amending budget.
That position was taken by those of us who were involved for a number of reasons, not least of which was a threat by the Council unilaterally to break the existing interinstitutional agreement and state that the 1999 budget would have been illegal. There are those of my colleagues who say that we should have gone along with that line of action, that we should have called the Council's bluff and should have carried on with the strategic amendment. Had that happened we would have been confronted with all the consequences of 1999 having no budget, provisional twelfths, etc. Quite frankly, many of us did not want that.
We are trying to be sensible, cooperative and prudent, and that should be kept in mind by those in the Council who think a great victory has been achieved over Parliament. From our side it was a spirit of responsibility and good sense that helped us to make that decision. The Socialist Group went along with this in what we hope will be a new spirit of cooperation between those two institutions.
Having said all that, we have a problem which was not mentioned during this conciliation process. It concerns Category 2, where Parliament set out its position at first reading. Nothing was said in our discussions but at the end of the day when the Council had its first reading, we find that it has made a cut. It has agreed with the ECU 500m cut in payments but, at the same time, it has also got rid of the reserve. We are left with the problem of what to do. Those who were at the Committee on Budgets' meeting last night will say that problem is now exacerbated, because we were going to go back to first reading and the Committee on Budgets did not agree with that. The Committee on Budgets has not agreed the reserve but has agreed the ECU 500m extra spending.
Our group will be discussing that this evening and we will be taking a position on it then. Therefore, I cannot give a conclusive statement as to what our position will be until it has been decided and until we vote on Thursday. I have to say that the cut in the reserve does not help our position for the maximum rate of increase if things go wrong with the interinstitutional agreement.
Finally, we need to congratulate Mrs Dührkop Dührkop. She has been congratulated throughout the speeches but we must recognise the hard work she and Mr Viola have done. Mr Viola's report is a formality at this second reading: but in Mrs Dührkop we have a single working mother from the Basque region, with all that implies. Half way through the process she found herself at the top of an assassin's death list! We should appreciate the work she has done this year - it has certainly not been easy for her.

Pronk
Madam President, I too would like to thank the rapporteur for all her hard work on this report. The debates on the second reading of the budget were extremely hectic, but they are actually relatively calm this time. The discussion on the strategic amendments in particular took a great deal of time, and we agreed with the rapporteur's approach. We in the PPE Group have always maintained that strategic amendments should not involve any extra costs, and that was how they were formulated. They were intended, as we saw it, to get negotiations going, and as such they succeeded. There has never been such a broad agreement between Parliament's first reading and the Council's second as there is now, and this is all thanks to the strategic amendments. We must thank both the rapporteur and the Austrian Presidency for this. I must admit that I, as a Dutchman, still feel rather bitter that this perfectly normal negotiating strategy was so badly misinterpreted by the Dutch Minister of Finance, who made Dutch Members out to be some sort of traitors to their country. That was what he said at the time, though he has certainly now been shown to be wrong, as the Dutch Government has also acknowledged.
The social items too have been settled, though there is one problem remaining, which is the expenditure under the Social Fund and other funds. Mr Wynn referred to this a moment ago. There are a lot of countries - of which the Netherlands is one - that are having to spend more than 33 % of the commitment appropriations. According to the most recent figures, the Netherlands is having to spend 45 % of Objective 2 commitments, 37 % of Objective 3, 42 % of the agricultural section of Objective 5a, 67 % of the fisheries section of Objective 5a, and 57 % of Objective 5b. These are very worrying figures, and a number of other northern European countries are in the same position. Last year, it was clear that there was not enough money left in the Social Fund at the end of the year, and the same thing is going to happen this year. This means that projects will be paid late, particularly, I have to say, in the Netherlands. This situation can only be prevented by making sufficient payment appropriations available. I am therefore pleased that the Committee on Budgets has approved the amendment to make those payment appropriations available, otherwise a good many projects would find themselves in difficulties, which is the last thing we want to see.

Brinkhorst
Madam President, the debate this afternoon on the budget is perhaps less emotional than the one on budget discharge, but I think it is no less fundamental. The substantive amendments are not really the issue today. Gradually over the last five years the Council has become accustomed to the idea that a dialogue with civil society - where the Council's presence has always been negligible - should be promoted. Parliament, far from being a spending Parliament, has proved to be responsible.
The issue therefore is not so much finance as institutional issues. Some people, including our own rapporteur, said that a new culture is developing. You, Commissioner, said that there is progress in the budgetary field more than anywhere else. I tend to question that. Surely all groups, including the Liberal Group, will adopt the departure from the strategic amendment. But if one looks at what has really been achieved, one can put some questions. There is a very thin compromise. At the end of the day the Council has agreed to vote in future by a qualified majority - something that already existed. So my main point is that on the question of the interinstitutional agreement - the new interinstitutional agreement in particular - the next Parliament must be much more careful to see what will happen.
From the perspective of the strategic amendment there was always a compatibility with the interinstitutional agreement. Article 17 made it very clear. We have stayed within the financial perspectives. But then the question of whether we agreed under the Treaty was a different matter. I have always understood that during the time of an interinstitutional agreement it would not be possible for either the Council or Parliament to denounce it. This particular threat to which Mr Wynn referred quite clearly indicates that was the main argument for the Conciliation Committee to change.
We should not go back over old history. The story for the future is that for the time being the European Parliament margin for future expenditure remains pretty much close to zero. Therefore I think we have reached an armistice, rather than that the battle is won. The battle for the new structure will come up again in the next three or four months when Agenda 2000 is to be agreed. No definitional flexibility is being agreed. In short, the question of the future budgetary rights of this Parliament still remains in abeyance although the culture has certainly changed.

Miranda
Madam President, the fact that the Council has accepted a good many of the proposals made by the Parliament at first reading and the proposal to include certain others by our committee means that I do not need to make any further comments on this matter. I shall, therefore, concentrate on certain questions that I think are of particular importance in this final phase of the procedure. I shall begin with something that was spoken about a lot at first reading: the fact that this budget, being the last in the lifetime of this Parliament, may be seen as a bridge leading to the following budget. I cannot forget that this statement was made in relation to the so-called 'strategic reserve' and the possible failure to conclude an interinstitutional agreement.
In any case, now that this process is almost over I must draw attention to the extremely low level at which the budget has been set and how far it is from the financial perspective set out in Edinburgh, and, fundamentally, to the negative impact which this has in terms of sacrificing the Community policies that we all see as fundamental, particularly if it is taken as a reference for the definition of future financial perspectives. With or without an institutional agreement. In other words, in our view this is the most negative aspect of the whole process.
Let us now look at the question of strategic reserves: now that we have reached the end of the process I must say that we have many doubts and a great deal of concern today about the strategy that has been adopted and, above all, the results obtained by it. For the sake of a point of departure that was meant to be higher in the future and in order to prevent any need to resort to Article 203 of the Treaty, we have ended up by adopting a rigorous budget. That was achieved by the Council once it had rejected the reserve. Apart from this, there has just been a vague agreement with the Council on the basis of an imprecise declaration of principle about flexibility, the significance and extent of which also seem to us to be extremely unclear. The only conclusion is that there is to be very little flexibility indeed, and only the future will tell just how little.
I would like to make one final comment to say that there seems to be reasonably good sense in the proposal approved by the Commission to reinstate as payment appropriations the ECU 500 million from the Structural Funds that had been cancelled at the first reading by the Council. It is a fact that these are payment appropriations and the question might therefore seem quite technical. But it is not technical for the public. It is no less true that, even in the technical field, given that the strategic reserve was also rejected here the failure to include this amount inevitably resulted in a huge and incomprehensible discrepancy between authorisations and payment appropriations. We hope therefore that common sense will prevail here in the plenary and that this proposal will be confirmed.

Dell'Alba
Madam President, ladies and gentlemen, I regret the fact that such an important debate as the budget is being held in circumstances where I am almost obliged to speak because so many other people are absent. In my opinion, this is partly a result of having tried to place too much political emphasis on another debate held this morning.
With the 1999 budget we had a lot of challenges and demands to present to the Council. Unfortunately, we were unable to do so because we had to accept a certain political realism and abandon the amendment which we had nevertheless voted for at first reading in an attempt to strengthen our influence in the negotiation process and thus achieve a credible interinstitutional agreement, in other words an interinstitutional agreement that also involves the Council.
We have achieved this. Personally, I regret that, obsessed by a dispute that is admittedly relatively important for the proper functioning of the institution but is in my opinion quite fruitless from the political point of view, we have to some extent neglected the real institutional debate with the Council. The result is that we are in the process of adopting a budget at second reading that, all in all, gives greater consideration to the Council's current concerns than to those of Parliament, and I mean that quite sincerely. We have sacrificed our concerns on the altar of a different debate. We shall see whether this tactic, chosen by those of our colleagues who - I repeat - wished to place a different debate at the centre of Parliament's concerns, was the right one.

Fabre-Aubrespy
Madam President, Commissioner, Mr President-in-Office, those few ladies and gentlemen who are still with us, for the first time in four years, in the Committee on Budgets, I was in agreement with Mr Samland, the chairman, in rejecting the draft submitted to us. To be honest, I am not sure it was for the same reasons: the chairman of the Committee on Budgets rejected the draft because he was not satisfied with the conditions under which the strategic amendment was withdrawn, and I rejected it even though the strategic amendment was withdrawn.
At first reading I criticised the fact that in artificially raising the budget to 1.17 % of GNP we were holding our countries' taxpayers to ransom, and I mentioned the Committee on Budgets' gamble. Well, the gamble failed. The Legal Service rightly declared that the strategic amendment did not comply with budgetary rules or with the principle of entering funds for a specific and genuine purpose.
So the Council is bringing us back to reality, and it is doing so, I must admit, without making any major concessions. It has not agreed, for example, that Parliament should discuss compulsory expenditure with the Council. It has simply accepted the possibility of a certain flexibility and also the idea of possibly using majority voting, which in fact means that it would be applying the Treaty. For our group to vote for it, the budget proposed by the Council at second reading will have to be adopted in accordance with the terms and the amounts already set out. Otherwise we will vote against the draft proposed at second reading.

Samland
Madam President, ladies and gentlemen, I would say to Mr Fabre-Aubrespy that your group has never yet distinguished itself by taking a constructive part in the discussion. So your present attitude does not surprise me either.
Secondly, as regards the general attitude, I would actually be quite happy to devote another minute to that. I believe that the Council and Parliament, with the support of the Commission, have in fact succeeded in developing a procedure which is moving towards greater cooperation. This has not just taken place under the Austrian Presidency - that would be to heap too much praise upon it - but has been an ongoing process since the Luxembourg Presidency and the presidency before that. The ad hoc procedure for agriculture, for example, originated not this year, but last year, although we have also used it successfully this year.
Secondly, I say to the President-in-Office and the entire Council that you have not done anything to be proud of! You ran the risk, if we had not agreed at second reading, of unilaterally revoking the Interinstitutional Agreement. Because your announcement that, if the strategic amendment were adopted, you would stand here and declare that the maximum rate had been exceeded would have amounted to nothing other than your side revoking the Interinstitutional Agreement. This, you see, specifically states that the ceilings on expenditure set in it are the same ceilings which you too accept when the maximum amount is determined. You were not ready for that. You can give us the credit for being ready - despite the poor results last week - to reach a compromise, because a declaration on your part not to accept the maximum rate would certainly not have been an invitation to Parliament to negotiate an interinstitutional agreement for the period 2000 to 2006 in the next three months, to state that quite clearly here.
The way in which you extracted yourself from that tight corner leaves much to be desired. I must be open about this. Because after the discussions and negotiations we held with the Austrians, I can only say that I had expected more. Mr Fabre-Aubrespy is right there. The results are extremely disappointing. Over the next few months, we will have much more ground to make up and catching-up to do on what we have not managed to achieve now. For you can take it - I am stating this quite clearly here - that the European Parliament will not agree to another institutional agreement which restricts the room for manoeuvre, characterised by flexibility, which it enjoys on the basis of Article 203.
You, Mr President-in-Office, must be interested in this new financial perspective, because otherwise this House will be invited to enter the ceiling on expenditure in each respective budget, simply to ensure that expenditure does not fall the following year. To that extent, ladies and gentlemen, Mr President-in-Office, this was a step in the right direction, a leap, one might say, but a leap which fell short. I should, nonetheless, like to warmly thank all those who, through their work, have supported the discussions on the budget. My main reason for doing so is because this will be the last full budget on which I shall work as chairman of the Committee on Budgets and as a Member of the European Parliament. I would like in any case, at this early stage, since I will indeed be going some more of the way with you - and have no fear, I still want to leave my mark on Agenda 2000, so that you will think of the work I have had a hand in here for another seven years - to wish every success to those who must then continue working on the budget. For you have a huge amount of work ahead of you. Always remember that the discussions on the budget are a real political opportunity in the European Parliament. While Mrs Müller said this morning on the discharge that Parliament's hour had come, I would say that it comes repeatedly every year with the budget.

Pimenta
Madam President, ladies and gentlemen, we are facing this final vote on the 1999 budget with trepidation. At first reading, in October, the European Parliament did some positive work by reinstating the necessary appropriations for some of the main programmes for regional and social development, fighting unemployment, preserving the environment and humanitarian aid.
Thanks to the action of the rapporteur, Mrs Barbara Dührkop Dührkop, we then voted for a strategic reserve which raised the overall value of the 1999 budget to a value closer to that originally planned, to provide a possible starting point for the budget for the year 2000, with amounts which are more realistic given the challenges of the euro, enlargement and the problems of inequality between the rich and poor regions of Europe.
Unfortunately the Council did not accept the strategic reserve, which meant that our framework for the future was uncertain. Regarding Category 2 of the Structural Fund, the Council seems to ignore the fact that there are very large delays in payments, and funds are not being paid to projects already completed, which we feel is completely unacceptable and a discredit to the European Union. In January of this year we had to use up PTE 230 billion (ECU 1.17 billion) of the 1998 budget in order to pay what should have been paid in 1997. Since the blanket was short we covered our heads and left our feet outside. Throughout the year the Commission has been doing all it can to clear these back-payments, but it has not solved the problem. How can some people now want to cut or place in reserve appropriations that are already lacking?
As for the rest, I would briefly like to express our concern at the mismanagement of the programme of assistance to Russia - namely TACIS - and our doubts as to the objectives and results of the food aid that has now been proposed.
Finally, I should like to declare the support of our delegation for the creation of stricter machinery for fighting fraud and the misuse of public money.

Virrankoski
Madam President, first I would like to thank the rapporteurs Mrs Dührkop Dührkop and Mr Viola for their excellent work. Similarly I wish to express my sincere thanks to the chairman of the Committee on Budgets, Mr Samland, whose leadership of the committee has been almost legendary. I also wish to thank Budget Commissioner Erkki Liikanen for the cooperation he has demonstrated in his dealings with Parliament.
The budget for next year is being created on the whole with consensus, and with little dissension, among Parliament, the Commission and the Council. It is a tight one. It represents only 1.1 % of gross national product, whereas the ceiling is 1.27 %. Personally, I am pleased that the planned EUR 130 million of appropriations for the TACIS programme have not been placed in reserve, as it would have paralysed this important programme and jeopardised, among other things, measures to improve nuclear safety.
This EU budget is the last in the lifetime of this parliament. For the next budget both opinions on funding and an interinstitutional agreement will have to be discussed and negotiated. Closely connected with this will be resolving the EU's finances, which includes the issue of net contributions.
The Agenda 2000 resolutions will be vital for the budgets over the coming years. We could say that Agenda 2000 is Europe's most all-embracing international economic agreement ever made in peacetime. For that reason, we must focus on its entry into force. The worst thing we in Parliament could do now would be to render the Commission powerless, for example by refusing discharge for the 1996 accounts. This would mean that our house would virtually be without a master just at a time when the crucial Agenda 2000 talks are going on, and Parliament would not have a negotiating team. For this reason I hope that we can debate this issue just as we did the previous one, in a spirit of cooperation, for the sake of the EU and, above all, its Member States and citizens.

Kaklamanis
Madam President, ladies and gentlemen, let me remind you that the Council's commitment two years ago, when we were debating the 1997 budget, was that the 1997 budget would be the last austerity budget. And I remember the charismatic chairman of the Committee on Budgets, Mr Samland, wagging his finger during his speech and saying to them 'be sure not to let us down'.
Unfortunately, Mr Samland, it seems that they have let us down. Just as they did last year, the same has happened this year and so we are now debating a budget shaped by the demands of the stability pact, a budget tied to the commitment to prop up a phoney Economic and Monetary Union, subject to the dictates of bankers, banks and economic lobbies, and one which has absolutely nothing to do with what we all once dreamed of, namely a Europe of solidarity and employment, the social Europe.
I know what is going to happen now. Everyone who spoke, even the rapporteur Mrs Dührkop, whom I do not see here to congratulate - it seems that she too became bored and has left the House - was disappointed with the budget. At the end of his speech Mr Samland said the same thing, and all of you who have spoken said the same, but you will then vote for the budget, you will vote for it as you did last year and the year before. I, however, wish to be consistent with my beliefs and vote accordingly. Therefore I will not vote in favour of this budget. And those who elected you should ask you how you can maintain and say one thing and in the end vote for something else, and how you can issue ideological manifestos with a view to the coming elections containing false promises that you know you cannot fulfil so long as the budget remains at 1.10.

Seppänen
Madam President, we in Parliament are good at eloquent speeches, but the words we utter have no influence on how things turn out. In Parliament's Committee on Budgets we roundly condemned the decisions taken by the Economic and Social Committee and the Committee of the Regions to pay officials their salaries during the strike in May, but as the view of Parliament is not reflected in the budget, it counts for nothing.
Paying salaries during a strike is a small matter. However, the so-called strategic reserve is a big issue, and showed Parliament's desire to increase its powers. But it lost the wrestling match with the Council. In the end Parliament always humbly does what the EU political elite wants. Parliament never opposes anyone.
Parliament spent a whole morning criticising the Commission for the ineffectual way it monitors finances. Today, when in many speeches there have been suggestions of not granting the Commission discharge, Parliament is clearly in favour by a large majority of delivering ECU 400 million worth of agricultural produce into the hands of the Russian mafia. The European Parliament will not impose any conditions on the granting of aid that have to do with the proper monitoring of the sale of food aid. Thus Parliament itself will be powerless when it comes to looking for those guilty of fraudulent activity regarding EU surplus agricultural produce on the market. When food aid is being sold on the Russian market, without any proper market mechanisms, we are squandering taxpayers' money. Selling off ECU 400 million worth of EU food is equivalent to just giving the Russians ECU 150 million directly in cash.
With the European Parliament approach it is easier to squander money all in one go than to squander it in a few small amounts. The Committee for Budgets only monitors these small amounts.

van Dam
Madam President, at first reading I opposed the ECU 3.75 billion strategic reserve, which I described as a completely wrong signal that will lead to the maximisation of expenditure in 1999 and thereafter, whereas the financial perspectives are precisely designed to control expenditure.
The Committee on Budgets is now proposing not to have this enormous reserve, which is sensible because Parliament would risk being condemned by the Court if it persisted in this dangerous course. The extra buffer would mean that the maximum rate of increase under the Treaty would be considerably exceeded. The Council's promise to include 'elements of flexibility' in the new interinstitutional agreement gives Parliament an excuse to change its mind.
But has Parliament actually achieved anything? The Council has given no promises about the nature and scale of the flexibility. Will there be possibilities for transferring between the budget categories? Will there really be more flexibility than we already have with the current financial perspectives? None of this is clear, yet Parliament is content with this vague promise. I doubt very much whether we really needed to put our credibility on the line just for this, and we must not repeat these sorts of antics in the future.
I also think that the Council was right not to make any specific promises. The division of the financial framework into maximum expenditure figures for the various categories has helped the budget to achieve controlled and balanced development. Budget discipline requires these maximum figures to be strictly adhered to. Some flexibility is needed in fleshing out each year's budgetary priorities, but this can be done without transferring funds between the various headings, which so many people have been calling for. The headings are broad enough to accommodate varying requirements.
One final point on the Structural Funds. It was stated in Edinburgh that these should be spending targets, and now we are paying for that statement. At the end of the programming period, we can expect to see a considerable pool of unallocated appropriations, and we need to find a solution to this problem. If we carry appropriations over until 2000 as the rapporteur suggests, they will have to be deducted from the financial package for 2000-2006.

Colom i Naval
Madam President, as has already been stated, there is no doubt that this budget is a historic one. However, in my view, it is not historic because Mrs Dührkop is the first female Iberian Member to be appointed general rapporteur - although I congratulate her on her work - nor is it historic because it is the last budget of the current 1993-1999 financial perspective and because it is certainly going to influence the next financial perspective, if there is one, which is not yet certain. Nor is it historic, in my view, merely because it is the first budget in euros. We knew all this when the budgetary procedure began.
In my opinion, it is historic because, in the course of this budgetary procedure, the Council has promised in writing, and this morning it repeated that promise verbally, that it would respect what it has signed.
We have managed to get the Council to make a momentous declaration here. Some people may be surprised to know that it is the first time in 40 years that the Council has made a unilateral declaration stating that it will respect its commitments. This might seem evident and redundant to some people, but it has not been the case in the history of the Community.
This Council declaration relates to the question of flexibility in the future financial perspective, which we would like to sign and to have, but not - and I would stress this point - at any price.
Ladies and gentlemen, the basis for my current negotiating mandate is the resolution of 4 December 1997 in which Parliament gave its support to a new financial perspective that would be adequate to meet the challenges that the European Union will face in the coming years.
Parliament accepts as a practical necessity the own resources ceiling of 1.27 % and calls for mechanisms to provide flexibility: on the one hand, review clauses for the financial perspective; and on the other hand, mechanisms that speed up the process of transferring funds between categories and mobilising new resources when necessary.
In a working document several months ago, I pointed out that the problem stemmed from paragraph 12 of the current Interinstitutional Agreement, which provides for the financial perspective to be reviewed in accordance with the majorities provided for in Article 203(9) of the Treaty. However, the Council had voted unanimously for an internal decision that prevented any degree of flexibility.
To put an end to this inflexibility, we tabled the so-called strategic amendments. In my opinion, these can now be withdrawn following last week's agreement.
I must point out that Amendment No 708 on the Structural Funds from the first reading followed a certain logic that the Council has now broken. It has removed the commitment appropriations from the reserve and added them to the heading, while maintaining the reduction in payment appropriations. Frankly, in this situation I would prefer to go back to the preliminary draft budget.
What do the Member States hope to save through this? At best, they will gain the interest on EUR 500 million at 3 %. At the most, Germany would save between EUR 2 million and EUR 3 million over the year. That is the maximum that can be saved.
Is this a symbolic gesture? Clearly, what counts are the commitment appropriations, but we are going to have to explain that we have only cut the payment appropriations, which do not really have much of an effect. The analysis has already been made in the press and simply indicates that there has been a reduction in the Structural Funds. And as far as symbols go, Madam President, I prefer that of solidarity.

Bourlanges
Madam President, it is a great advantage to be the last to speak because that allows me to address the general rapporteur who has returned and whom I wished to congratulate. Firstly, you understand, because I believe that the general rapporteur ex officio deserves support, consideration and respect from the House. That is a matter of principle. But also, I must admit, because Mrs Dührkop Dührkop has shown us in a very striking way something that is fundamental: that in a budgetary procedure interinstitutional war was not inevitable, that the dealings between the Council, Parliament and the Commission were sometimes farcical, but not necessarily doomed. And we should be delighted about this.
You have shown that it was possible to come to a sound agreement with the other arm of the budgetary authority. The agreement holds in two ways: by means of rigour and flexibility. Rigour, because that has been the law of Europe's public authorities for years, and will continue to be for years to come, and flexibility, because it is a pre-condition for the intelligent use of rigour. Intelligent rigour is impossible without optimum allocation of resources. Optimum allocation of resources is impossible unless the budgetary authority is freely able to allocate what are scarce resources across all potential expenditure.
There is an important difference between the Council and Parliament here. We have shown rigour. Over the past years we have proved that we were capable of bearing our share of the burden because we knew that behind each beneficiary of Community appropriations there was also a taxpayer, and that behind both of these there was a voter. But we have shown this. At the end of the parliamentary term we have achieved a level of expenditure that is very much lower than the 'own resources' ceiling decided at Edinburgh.
On the other hand, in terms of flexibility, it is up to the Council to prove its goodwill, to prove its willingness to change. Yes, there is a link between rigour and flexibility. We have done our part of the work. Ladies and gentlemen of the Council, it is up to you to do yours.

President
The debate is closed.
The vote will take place on Thursday at 9.30 a.m.

1998 assessment and 1999 annual programme
President
The next item is the statement by the Commission on the assessment of 1998 and the annual programme for 1999.
I should like to welcome Mr Santer, who now has the floor.

Santer
Madam President, ladies and gentlemen, 1999 will be the last year of this Commission. It will also be the first year of the euro. It will be a full year, because there is a great deal to do, because we have a heavy programme and the firm desire to complete it, and because we must leave our house in order for the next Commission.
I, too, believe that the internal reform of the Commission, as I have already said, is a priority for 1999 and I will come back to it later.
The Commission's work programme is based on priorities I have held since 1995, because they are the priorities of our fellow citizens. Since the work programme was forwarded to you a month ago and you have been able to acquaint yourselves with it, I will merely make a few political remarks.
I will begin with Agenda 2000.
As I have said on many occasions to this House, all the Commission's proposals are now on the table. As a result, 1999 is the year of decisions. The adoption of Agenda 2000 is a key issue for the construction of Europe, in that it is the very development of the Community that is at stake at a time when monetary union is about to begin and, above all, when we face the prospect of enlargement.
Rather than speculating on the dates for enlargement, it is essential to reach political agreements that will allow it to succeed. The Commission will do all in its power to encourage an agreement on Agenda 2000, respecting the Community interest, by March 1999 at the latest.
I would now like to look more specifically at three points. The first relates to our main priority, that is, growth and employment. On 1 January the euro will come into use in the 11 participating countries. This will mean that economic policies will have to be more closely coordinated in future, particularly in fiscal matters. We discussed this at length at the Vienna European Council and at Pörtschach.
As far as employment is concerned, the strategy launched at the Luxembourg European Council just over a year ago provides the framework for Europe's efforts to generate employment, and this will continue and be extended in 1999. Thanks to this strategy, the Member States can situate their efforts within a common framework. As the European Council noted, considerable progress has been made in terms of creating jobs and reducing unemployment. I hope that over time the European strategy will allow us all to carry out reforms that truly generate employment and that naturally respond to specific national needs.
That is why, from 1999, the Commission will be placing greater emphasis on applying the European strategy in practice. The joint report planned for 1999 will present the first series of evaluation results and will back up the proposals for guidelines on employment for 2000. Also in 1999 the Commission will present a communication on the systematic consideration of employment needs at Community level, as required by the Treaty of Amsterdam through the amendment to Article 127.
In the same spirit, the Commission has included in its work programme its intention to strengthen the Union's social dimension in 1999. It will concentrate on developing policies aimed at modernising social protection systems, promoting social inclusion and combating discrimination and inequalities.
Madam President, another priority for 1999 is the creation of the area of freedom, security and justice. The area of justice and home affairs is now clearly on the agenda for the Heads of State or Government. In Vienna, we adopted the action plan presented by the Council and the Commission, and in addition an extraordinary meeting of the European Council is to be held in Tampere - under the Finnish Presidency - in October 1999 to respond to this challenge and its implications.
After the ratification of the Treaty of Amsterdam, we will have to make real progress in 1999 on judicial and police cooperation and on the asylum and immigration policy. There are a great many areas in which our citizens have high expectations. The 1999 work programme includes the integration of the Schengen acquis into Community law, with an overhaul of a certain number of legislative instruments. The Commission fully intends to make use of the new privileges conferred on it by the Treaty of Amsterdam.
I would now like to move on to the challenges for the Union presented by the changes in the international context, with the birth of the euro and globalisation in the field of external relations. I have often said and will repeat now that I feel real frustrated at the Union's slow development and our inability to exploit our full potential. I am pleased with the agreement on the external representation of the euro. It is a step in the right direction towards responding to the rest of the world's 'need for Europe'. For several months now the international environment has suffered a great deal of turbulence. The Union could get to the very heart of this and even be a source of stability.
In this context, we will have to continue to strengthen our relationship with the United States, and the main objective for 1999 in this respect will be the implementation of the Transatlantic Economic Partnership. The Commission will keep a close eye on developments in Russia. We will continue to provide aid for reform and economic recovery, both within the framework of the partnership agreements we have with that country and all the new Independent States, and by mobilising the resources of the TACIS programme.
We must also remain vigilant with regard to the situation in Asia and in Latin America, and on a general level the Union must clearly be involved in the debate on the reform of the international economic and financial system.
This obviously means that the Union must speak with one voice. It also means that the Union must set itself the objective of promoting a more integrated approach for the various areas of its external action. We need to encourage the Member States to become aware of this need, and this will again be another of the Commission's priorities in 1999. The Union must take advantage of the complementary nature of its internal and external policies. In this respect, it has various instruments available: the common commercial policy, the policy on public aid for development and the CFSP. It must make greater use of these, be more active and be more present on a political level. We must not forget that 1999 will be the year when we will appoint someone to take full responsibility for the CFSP. We must do all we can to ensure that this person can fully meet the expectations this role entails.
Madam President, beyond these three important central issues, I would like to highlight several of the guidelines for our 1999 work programme that specifically represent a shift in Community policies in favour of the concerns of Europeans. I would like to mention, in particular, a number of key points.
The first is public health. In 1999, the Commission will present a new action programme aimed at achieving a high level of health protection.-The second is food product safety. The Food and Veterinary Office has been established with the specific objective of helping to enhance controls in the Member States and third countries, in order to ensure compliance with Community legislation and to provide responses to food hazards.-The third key issue concerns the interests of consumers, which are to be included in the definition and application of other Community policies.-The Commission will also present a communication on the problems encountered by citizens in exercising their rights within the internal market.-The final key issue is the environment. Respecting the commitment made in Cardiff, the Commission will ensure that environmental concerns are integrated into the main proposals in the work programme, particularly as regards Agenda 2000, transport and energy. We will also have to be determined in pursuing the Kyoto strategy on climate change.Madam President, to prepare the Union for its external and internal challenges, particularly those posed by enlargement, we must make progress - and we all admit this - on institutional reform.
It is now well established that this reform involves two issues. On the one hand, there are the institutional reforms themselves. The Commission has already set out its ideas on this matter on many occasions. It will clarify them during the first half of 1999. On the other hand, there are the reforms that do not require any amendment of the Treaties and can already be decided on and implemented in order to modernise and improve the effectiveness of all the Community institutions. This exercise must result in a genuine internal reform of all the institutions at the same time to ensure that they remain coherent and effective as a whole. I will be devoting a great deal of my energy in 1999 to the reform of the Commission.
As I told the house on 2 December, the Commission needs to be modernised, and it must also adapt its structures, review its work methods and simplify its management. Its management must be responsible, it must be monitored and it must be decentralised. Why is this necessary? It is necessary because we have strived for and achieved a high degree of integration and this means that there is a constant need for adjustment. It is necessary because the acceleration of the Community 'product' since the end of the 1980s has provided the Commission with a whole series of new tasks, entailing direct management of substantial sums of money. However, this expansion in tasks has not been accompanied by a similar increase in levels of personnel. It is also true that this expansion in tasks occurred at a time when management training and experience in these new areas had still to be consolidated. And lastly, it is necessary because the Commission is a relatively young and multinational administration that must constantly improve its administrative culture. Moreover, I believe that all international organisations face this challenge and that the Commission is not lagging behind in this respect.
As soon as I took up my post I launched the SEM 2000 (Sound Economic Management) and MAP 2000 (Modernisation of Administration) initiatives. These are beginning to bear fruit, even if it is evident that they cannot solve all the problems overnight. We cannot just assume that those in charge will monitor what is going on. I am convinced that we will succeed in making the most of all the talent and commitment of our officials who have given so much to the construction of Europe.
To ensure coherence, as much synergy as possible and, above all, consistent efforts, I decided a few months ago to incorporate all the Commission's actions within the framework of the 'Commission of tomorrow' initiative. So what are the main ideas behind the 'Commission of tomorrow'? There are, in fact, three. The first is to undertake a more in-depth examination of the Commission's future role and missions. Secondly, in the light of this exercise, we will reexamine the institution's structures and organisation, and finally, we will extend the reforms relating to financial and personnel management.
As I have already told you, during the first half of 1999 I will be setting out general ideas on the restructuring of the Commissioners' portfolios and the reorganisation of the Commission's services, with a view to bringing them more into line with the changes in the Commission's tasks. I will hand these on to the next President. A detailed examination of the Commission's activities, the resources used and the work methods followed is currently under way in order to prepare for the reform. This structural reform will only succeed if it is accompanied by a profound change in the administrative culture. At the moment, two codes of conduct are being prepared for this purpose: a code of ethics establishing the rules of behaviour for officials, and a code determining the relationships between the Commissioners, the private offices and the services.
Finally, in 1999, I will draw the operational conclusions from the report drawn up by a joint discussion group on staffing policy, which is currently the subject of extensive consultations with the staff representatives. This examination will undoubtedly involve the other institutions since it may result in a reform of the staff regulations, which obviously concerns all the institutions.
This leads me to a final comment: work is already underway in all the areas I have just mentioned. Some have begun to show concrete results, while others will do so over time. They need time and cannot be completed successfully without the support of all the actors involved in the construction of Europe. We each have our own role to play. I hope that this is done in a spirit of transparency, trust and mutual respect.
Madam President, ladies and gentlemen, these are the main issues in our 1999 programme. I would add only one thing: the construction of the Community is not an end in itself. The Union's legitimacy lies in providing specific, democratic solutions to specific problems. The countries of Europe are faced with certain challenges that they cannot resolve on their own. Our duty is to help them respond effectively to these challenges.

Desama
Mr President, Madam President, at the height of the Lewinsky affair, a commentator on American television said that it was 'a grim time for the President'. I would paraphrase that today by saying that it is 'a grim time for the Commission'.
I am not just talking here about the debate on the discharge, because every day the press and media provide us with further information and make revelations, confirmed or unconfirmed, about the increasing problems affecting the running of the Commission.
Such revelations obviously affect the credibility and therefore the effectiveness of the Commission. The Socialist Group is strongly urging you to act in a rapid and determined manner on the intentions you have expressed regarding the reform of the Commission, its working methods, its organisation, the flexibility of its procedures and, above all, its systems of transparency and control. Although it is true that our two institutions are coming to the end of their respective mandates, it is also true that they still have their work cut out for them. To be able to accomplish the tasks before us, we all need a strong and determined Commission, as that institution is still the motor behind the construction of Europe that it has served so well since 1957.
If we turn now to the assessment of 1998, we could use the old image of a bottle being half full or half empty. We must be fair and admit that the legislative assessment of 1998 is relatively positive, though with two obvious regrets. The first is that when the Commission drew up the legislative assessment, it did not put a great deal of emphasis - very little, in fact - on the role Parliament played in this legislative work through its additions and contributions. I believe that the assessment would have appeared more objective if you had mentioned Parliament's increasingly decisive legislative action, particularly since the Maastricht Treaty.
The second regret is that compared with the anticipated work programme, a certain number of legislative proposals - and this is normal - did not see the light of day. They remained out of sight. The reason for this should have been explained to the European Parliament; you should have justified why no work was done on these specific proposals. Moreover, why are the proposals that did not see the light of day in 1998 not then included in the 1999 programme? There is certainly inconsistency here which concerns us somewhat, and we would like to hear what you have to say about this.
Last year, Mr President, when presenting your 1998 programme, you announced that the Commission intended to carry out a periodic assessment of the rate at which the legislative work was progressing. We have been disappointed in this respect. Very little has been done. In any case, the Commission has done much less than it promised. Finally, to round off my comments on 1998, I would like to stress the fact that as guardian of the Treaties, it is your duty to keep an eye on this trend for the Council - which is mainly to blame - to hold on to a number of legislative proposals to which the Commission and Parliament are committed in its in-tray, as it were. There is a problem there that you must be aware of.
In addition to this the Council is increasingly tending to claim the right to annotate legislative acts, as it were, including those that involve codecision. It does so through a number of unilateral declarations, as if it were up to the Council, and the Council alone, to create some kind of third court in the European legal order. I therefore call on you, Mr President, as the representative of the Commission, to ensure that this practice stops.
I would now like to move on to your 1999 programme. You have stated, Mr President, and we agree with you, that the main priority is to ensure that Agenda 2000 is a success. Without the essential mechanism of Agenda 2000, there could be no prospect of enlarging the European Union in the foreseeable future. Naturally, the discussion on the financial perspective and the future interinstitutional agreement that began during today's debate on the budget is very closely linked to Agenda 2000. It is therefore essential for the Commission and Parliament to work together in a determined fashion so that we complete this work, work that is difficult but that we must pass on to those who are going to succeed us.
The second priority is the Treaty of Amsterdam. It is true that a certain number of Member States have yet to ratify the Treaty of Amsterdam. It is true that some of them are caught up in the slow pace or difficulties of their institutional procedures. However, nothing should prevent the Commission, and nothing is preventing it, from pressing ahead with the preparations for the Treaty to come into force and for the instruments that will allow it to be applied as quickly as possible, as soon as the last country ratifies it. Clearly, I am thinking here of the new legal bases that will have to be provided for certain legislative proposals that are pending, the problem of publishing or advertising the documents and acts, and the difficulty that my colleague, Mr Medina, will speak about shortly relating to the ultra-peripheral regions. That is a point that we should also like to stress.
My final point concerns what, for us, is the most important priority of all, that is, the fight Europe must wage against unemployment and social exclusion through a dynamic employment policy. The tide of social democracy that has swept across the governments of Europe in recent years is bringing a stronger wind with it that is blowing in the right direction. It is important now for the Commission to unfurl as many sails as possible to ensure that the winds carry the European Community as far as they can towards this, to our minds, essential objective: social Europe, the fight for employment and the fight against exclusion.

Oomen-Ruijten
Madam President, ladies and gentlemen, I should like to begin by thanking the President of the Commission for the very diplomatic way in which he attempted today to examine the concerns that both our institutions have about the way we deal with each other.
The work programme that we are discussing today is supposed to be the product of our institutional consultations. An agreement was once reached between our two institutions that the European Commission should consult the European Parliament before fixing its political priorities. I have noticed over the last few years that this arrangement does not work entirely satisfactorily. We tried last year to improve matters, as Mr Desama has already said. We suggested that the Commission should produce quarterly or six-monthly reports in order to try to anticipate at an earlier stage any changes that should or might be made with Parliament's knowledge. But I do not think that this was the problem. I think the problem was that the Commission did not do what it had promised. I spoke to the Commission President about this, and I think that some of the blame also lies with us, Mr Desama, because we should have kept a closer eye on whether or not the Commission was keeping its promises. There is blame on both sides. We failed to remind the Commission about what had been agreed.
Mr Santer, you made a very severe speech today and implied that something is wrong between our two institutions. We have always been natural allies in defending Europe, but now, just when the euro is about to be introduced, which is a major political event, relations between us have deteriorated and we no longer trust each other as we did. That is what I think. And if there is something wrong between us as we approach this major political event, then we must ask each other why this has happened and how we can rebuild our trust.
The European Parliament is finding itself the target of criticism, and we have tried to resolve a number of issues by introducing the Statute. I have noticed that when ministers go back to their Member States, they claim all the credit for Europe's successes themselves and blame the Commission and the European Parliament for everything that goes wrong. This means that neither institution can do anything right. When we vote on the discharge for 1996 the day after tomorrow, I personally hope and expect that discharge will be given, but I do not know what the newspapers will say the following day about everything else that is now going wrong. So we must both try to find solutions together.
You have made a number of proposals that I agree with. You said that you want to modernise the Commission. If we have new responsibilities, we must have the staff to carry them out. We must ensure that officials - not just at the Commission, but also at the Council and the European Parliament - undergo proper recruitment procedures, and that we have proper rules to be able to dismiss them where necessary. You did not say anything about this in your speech.
The codes of conduct for both institutions are extremely important, but I have to ask, with the proposals you have made, how we can really monitor whether we are each complying with them, so that we can hold faith over the coming years and not have to go into the elections feeling that promises were made but not kept. So I think we have a lot to do here.
I should just like to make three more brief points. I am concerned about a number of political elements such as Agenda 2000 and the short time available. I wonder whether our two institutions should not have clearer agreements here. Secondly, I am concerned about growth, employment and all our efforts in the social field. You talked about modernisation, but I have the impression that particularly those workers who cross frontiers every day are not seeing the advantages that we hoped they would.
I am concerned about food safety and everything to do with it. One of the conclusions reached after the BSE crisis was that we in Europe definitely need something like a Food and Drug Administration. We have hardly got anywhere with this, and that worries me. It is not all your fault, the Council is also to blame. What progress are we making there?
Finally, I hope - and in many parliaments there is a group of elder statesmen or party chairmen or whatever they may be called - that after the vote on Thursday, we can find a better way of managing crises and that you will reach agreement with Parliament's President and the Conference of Presidents on how we can ensure that we have a good run-up to the elections, and that you yourself can enter your last six months with your head held high, because that is what I and my group would very much like to see.

Thors
Madam President, it might seem a little frustrating to be discussing the likes of programmes in the afterglow of the Vienna summit, but the Commission and Council's work does involve producing such things. I certainly agree that implementation of Agenda 2000 deserves top priority - along with all the other programmes with '2000' appended. The President of the Commission himself mentioned MAP 2000 and SEM 2000. No evaluation of the last six months will be complete until we see that the goals set are being achieved.
The Commission President mentioned two codes of conduct, but said nothing about his institution's existing commitment to good administrative practice. We have in the past seen the fruits of this - and surely sound internal governance is now more relevant than ever. Rules on transparency and conflict of interest are vital if a dividing line is to be drawn between political and administrative activities. The credibility of each and every one of us is at stake here. I very much hope that Commissioner Oreja and his team will soon be tabling proposals on transparency and access to information, because an open style of management is essential if the provisions of the Treaty of Amsterdam are to be honoured. And I would repeat today what I have already stated twice before in this House: it is transparency that will lead to greater effectiveness and efficiency.
Let me now switch to another subject under debate, namely the viability of the euro. I sadly cannot endorse the compromise reached on how the euro zone should be represented on the international stage.
Mr President, there has been talk of new employment goals for Europe. However, I fear that we could easily fall back into old moulds when it comes to ways of achieving them.
It was good though to hear from the Commission President that a new programme of health-promoting measures is on the way. And the decision this week by the agriculture ministers to ban the use of certain antibiotics was excellent news. I hope that steps will be undertaken as part of this programme to combat resistant forms of the tuberculosis and salmonella viruses. These are currently causing severe problems both in the EU and beyond.
May I conclude by saying how pleased I was that Mr Santer mentioned the extraordinary European Council to be held in Tampere on internal policy and security. Let us hope that the Commission and its President will make the most of the right of initiative they do actually enjoy under the third pillar. And I would appeal for a pro-active approach to the Northern Dimension.

Hyland
Madam President, those of us who have the responsibility of representing the agricultural sector of our individual countries must be concerned, if not alarmed, at the extent of the economic crisis experienced particularly by livestock farmers. We are failing seriously in our duties if we cannot respond to what is an emergency situation resulting from an unprecedented set of circumstances which could not have been anticipated in the context of the 1992 CAP reform.
While acknowledging Commissioner Fischler's concern and efforts in modifying regulations to ease the burden for farmers, the reality is that beef, sheep and pigs are being sold at a loss or at best at marginal profits. The situation in Ireland is extremely serious and unless there is some recovery in prices, many farmers will not survive. It is not in anybody's interest, particularly in Ireland, with our greater dependence on agricultural exports, that the basic infrastructure of the food sector - the family farm - is in such dire straits.
With regard to the sheepmeat sector, the Commission should, as an emergency measure, suspend the stabiliser at least on a temporary basis to enable the system to reflect the reality of the market-place for Irish sheep farmers who are leaving sheep farming at an alarming rate. Such instability is certainly not in the long term interests of the European farm model which we purport to represent in the context of Agenda 2000. If the Irish family farm is to survive within a framework of the European model, as envisaged in Agenda 2000, greater efficiencies must be achieved through cooperation and well-planned partnerships. The agricultural proposals, as represented in Agenda 2000, are not satisfactory, particularly from an Irish perspective. It is impossible to envisage further price cuts without a corresponding increase in direct income support from the EU and the agricultural budget.

Querbes
Madam President, I, too, would like to speak solely on the issue of agriculture, the Union's most important financial policy and the decisive issue in Agenda 2000.
Mr President of the Commission, when will you admit that the reform of the CAP that you are proposing is leading to deadlock? First, because it reinforces a production-based approach that does not respond to the needs of farmers, those who live in the country and European society in terms of jobs, the quality and diversity of agricultural products, the balanced use of the land, and international cooperation.
Moreover, it preempts the result of the negotiations on the WTO and on enlargement by already penalising the Union's interests, particularly by accepting additional concessions in the face of American demands.
Finally, what future does this reform have, when it is based on financial forecasts and international markets that have been turned upside down by the financial crisis and the constraints of budgetary stability linked to the euro?
This all explains why this reform has been rejected on a massive scale, not only by the vast majority of national and European agricultural organisations, but also by the majority of this House. On two occasions, the European Parliament has stated that it would prefer a different form of CAP, one that is based on employment, the adjustment of income support and the balanced use of land, and that respects Community preference.
The Committee on Agriculture has just rejected the proposals to reform the common organisation of the markets in beef and veal, milk and cereals, but until now, the Commission has refused to listen to the signals we have sent in its direction. Not only has it failed to make any significant change to its initial drafts, but it is still persisting in negotiating free trade agreements with third countries, under conditions that are bringing about a further weakening of the Community preference and the European model.
When will the Commission decide to pull the reform out of the rut it is in and take account of the House's proposals to make the CAP fairer and more just, to the benefit of farmers and all of society?
In conclusion, how can the Commission justify its proposal to lift the embargo on British meat, while most scientists still have strong reservations and while not all the health guarantees have been met?
I should like to hear what the Commission has to say about these comments and questions.

Lannoye
Madam President, our debate on 1998 is taking place in a unique context for two reasons.
It is unique, firstly, since, as our colleague Mr Desama has already pointed out, there is a serious crisis in our confidence in the Commission, entangled as it is in a muddle of accusations and allegations of poor management, which is obviously preventing the Commission from working effectively.
The second point concerns the political context. In fact, 1999 is an important electoral year, when the public expects clear messages from the various political actors involved and from the Commission, so that they are able to make up their minds.
Finally, it is also a year when preparations will be made for the new World Trade Organisation negotiations, the review of the Lomé Convention and the adoption of Agenda 2000.
So there are many issues and a difficult background. And, in my view, there are three questions that need to be answered here that many people ask.
Firstly, where is Europe going?
Secondly, what are the responses of the Commission and the various institutions to the current challenges we face?
And thirdly, given the political crisis, do original and credible responses exist?
On the first question of where Europe is going, I believe that there are two possibilities. On the one hand, Europe can content itself with being a form of free trade area without much of a political dimension. This is unfortunately a possibility that risks becoming a reality if, as I fear, the reform of the institutions does not measure up to what has been planned. On the other hand, we can have democratic, political integration with a common project for all Europeans, including those who are to join us in the years ahead.
Today, unfortunately, all the talk seems to be about enlargement and the Commission makes nothing but technical statements on the planned institutional reforms. It talks about changing the composition of the Commission, extending the use of qualified majority voting, and giving new weighting to the votes within the Council, but it says very little about what we are all waiting for, that is, a far-reaching reform of the running of the European Union. A new treaty which is much more ambitious than the Treaty of Amsterdam is essential and, as far as I am concerned, the Commission is the institution that is in the best position to propose one today, a few months before the election. It is to be noted that there is no response to this either in your speech or in your documents.
The second question relates to the main challenges facing us. You mentioned them yourself: globalisation, sustainable development, technological changes and international instability. I am surprised to see that these challenges are presented as if they were independent of one another, and as if the European Union were faced with a sort of inevitability that had come from somewhere else, to which we must adapt as best we can by sustaining as little damage as possible at an ecological and social level. This idea is, to my mind, mistaken and dangerous, and I think that it is a fundamental, and probably the principal, challenge. Is globalisation, as it appears today, compatible with a democratic European Union that is the bearer of an original development plan, in other words, a model for development that is sustainable on both ecological and social levels? In the present context, this is not possible because many mechanisms regulating investment, global trade and technological choices still need to be introduced, and it is on this point that the Commission should provide at least an initial response. I see no such response in your text, nor did I hear it in your speech.
Finally, the third point relates to transparency and confidence. You say yourself that we cannot achieve any results without the participation and confidence of the general public in the democratic model. Several of my colleagues have condemned the problems concerning the relations between Parliament and the Commission. And it is true that even the commitments made by your predecessor, Mr Delors, and by yourself, regarding relations between Parliament and the Commission have not always been honoured, and I would even go so far as to say that this has often been the case.
Given this situation, Mr President, you will surely admit that it is difficult to ask us to have confidence. I therefore call on you to respond and to make a special effort as, to paraphrase one of our well-known predecessors, the Belgian Paul Henri Spaak, it is not too late, but it is high time to do something. I would like to repeat to you what he said: it is not too late, but it is certainly high time to do something!

Sandbæk
Mr President, in the past, Mr President of the Commission, you have promised fewer rules but better prepared ones in return, and I am very pleased with that. I simply do not have the chance to see if you meant to keep your promises. Amendments to existing directives, plans for green papers, action programmes and important communications are not in fact included in the Commission's statement. The long version - the one which corresponds to a prime minister's inaugural address - is drawn up by the Commission's directorate-general, but it is not official. When a government is presenting its list of legislation, one might perhaps accept this state of affairs: after all, the voters can decide to replace the government at the next elections, if they are dissatisfied with what it delivers. We have no opportunity to do that, since it is the officials at the Commission who have the right of initiative in the EU. We therefore believe that the right of initiative should lie instead with the national parliaments, but at the very least the long and uncut version should also be presented in writing to those who are elected by the people.
In the light of the discussions on redundancy pay which are currently taking place in Denmark, for example, I would like to know more about the substance of the Commission's item regarding a proposal for a directive on the fiscal treatment of the supplementary pension rights of employees and self-employed persons moving within the EU.

Medina Ortega
Mr President, as has previously been pointed out, the Commission's programme for 1999 has the particular characteristic of applying not only to the development of the Treaties currently in force, but also to the development of the 1997 Treaty of Amsterdam.
There has already been a considerable delay, which is normal in the process of ratifying Community Treaties, but it is expected that the Treaty of Amsterdam will enter into force at the beginning of next year. As a result, the Commission will obviously have to devote a substantial part of its work to the preparation and development of this Treaty.
In one particular area some progress has already been made, as at the Luxembourg Summit of November 1997 on unemployment, the Commission managed to obtain a commitment from the Member States to provisionally apply the provisions of the Treaty of Amsterdam relating to employment, which means that certain aspects of the Treaty are already in force.
However, there are other aspects for which there is no such provision. In his speech Mr Desama already mentioned one example, namely the special system for the ultra-peripheral regions.
Article 299(2) of the Treaty of Amsterdam provides for the immediate application of all Community legislation in these regions. I am referring here to the Canary Islands, Madeira, the Azores and the French overseas departments.
If the Commission does not draw up special application rules, then those regions could be deprived of their current special status. They might all be subject to ordinary Community legislation from the very first day of the Treaty's application, which would have negative effects on the development of these ultra-peripheral regions of the European Union.
I therefore believe that it is important for the Commission to include in its 1999 work programme - as the Socialist Group's motion for a resolution does - specific provisions on the application of Article 299(2) to the ultra-peripheral regions of the Community.

Brok
Mr President, Mr President of the Commission, allow me to address a number of issues. I believe that it is important to record that the Commission - in contrast to the golden age of legislation on the internal market - is only tabling 31 new legislative proposals, and some of those consist of amending existing directives. This shows a pleasing tendency, in line with the principle of subsidiarity, and I think that we should also make the public and our governments fully aware of this.
Secondly, I should like to ask the Commission - as we have also stated in our motion - to tell us more clearly why 181 dossiers are pending in the Council awaiting a final decision, and why the Council has still not adopted a common position in 85 cases. I believe that we would perhaps be able to kick-start this process if the Commission were to inform Parliament in more detail of the reasons for the blockage in the Council.
That illuminates my next point, a call for more transparency. One of the objectives which the Commission has included in its work programme is implementing the provision on transparency in the Amsterdam Treaty. I believe that this issue is vital to the future acceptance of the European Union, and I should like to ask the Commission, when defining transparency and specifying and applying rules, to involve Parliament at a very early stage - if possible before its directives are published - so that we can use this as a basis for reaching a consensus on our ideas, because essentially this is also about how we can force the Council to be more transparent, to the point of establishing a legislative Council. I believe that we should work together closely here.
That brings me to a further point, applying the provisions of Amsterdam. The debate with Parliament hitherto has, I feel, suffered from a marked lack of proposals from the Commission on implementing the common foreign and security policy in connection with Amsterdam, and a lack of information about, for example, the composition of the Planning Unit. Information or a dialogue might perhaps raise public awareness, so that this is not settled by the governments of the Member States amongst themselves. In the same way, we should also like to discuss working together on the procedure for the forthcoming selection of the Commission, and in other similar areas. We should also like to ask the Commission, as far as possible, to apply the provisions of the Amsterdam Treaty even now, before it is ratified, and also to take initiatives, so that the fields of justice and home affairs can - following the five-year transition phase - move over to codecision. Preparations should be made even now, so that this changeover can still take place before the enlargement treaties are concluded.
Finally, I believe that it is extremely important for the Commission to table proposals for the new stage of institutional reform, as Parliament has proposed. I completely understand that the date of December 1998 cannot be adhered to because of the delay in ratifying the Treaty of Amsterdam. But I do think it is necessary for proposals to be made by March of next year, so that they can form part of the debate during the European election campaign, which in turn will bring the topic to the forefront of the discussion.

Sierra González
Mr President, the legislative programme for this year should respond to the public's demands for employment, social justice and economic and social cohesion. It should ensure that the construction of European is more transparent and closer to the people, and that it concentrates more on the political realisation of their immediate aspirations concerning their daily lives and wellbeing.
The programme does not make significant progress in this respect, although it does make a commitment to that end. To make any progress, the programme should give priority to strengthening social justice at all levels and to solidarity between regions. This is particularly necessary at this delicate time when the preparations for enlargement have allowed the risks of increasing imbalances to come to the surface. Questions have been left aside that would illustrate the desire for cohesion, and this is what has happened with the status of the ultra-peripheral regions.
I would finally like to point out that this programme - a programme for the last year of this legislature - will not increase public support for the European project or the construction of Europe, and this is something we need to win. The President of the Commission said that the construction of Europe is not an end, but a means. The end is naturally the wellbeing of the people, and in order to fulfill that objective, this programme needs to have a greater degree of democracy and justice.

Lukas
Mr President, I think it is particularly important to mention an action implemented this year by the Commission - actually Directorate-General XXIII - which may be very small when seen in an overall context, but which I believe to be very significant and very positive. Working in cooperation with non-governmental organisations and the travel industry and with a budget of ECU 500 000, targeted and efficient preventive measures against child sex tourism were taken. These consist of information videos being shown on long-haul flights, information pamphlets being distributed to travellers, and so on.
This is a laudable and tangible first step in the fight against a dreadful development, which is being further exacerbated by the economic and financial crisis in Asia. European tourists bear a considerable part of the responsibility for this situation. That is why I call on the Commission to please continue this positive work and further intensify its efforts.

Myller
Mr President, I cannot overemphasise the importance of the issue that has been raised by some speakers already, that is to say, the basic question of how the Agenda 2000 dossier is to be moved forward. The Commission has its job to do here, and so have Parliament and the Council, but the Commission must not forget that its particular job is immensely important. Unless this matter is moved forward according to the agreed timetable, everything else is thrown into question.
In the field of environmental policy, it has to be said that Commission's work programme is not the most ambitious. The Treaty of Amsterdam makes it compulsory, on the basis of the principle of transparency, for environmental matters to form part of all European Union policy. However, the Union is not committed to framework legislation on this issue. I would urge the Commission to attend to this, so that next year Parliament can start debating framework legislation that should in particular include proposals for integrating environmental issues into transport, agricultural and energy policy.
Enlargement is one of those challenges that has to be met using our full weight, and environmental issues also form a very large part of the whole process. Right from the start of any enlargement negotiations, when bilateral talks commence between Member States and the applicant country, it has to be made clear that the environment must not take second place to other issues, and that it will feature more substantially than before. Before any new enlargement the European Union must, however, see to it that the policies of the separate northern dimension are realised and that next year the means are found to make progress on those issues designed to make policies in the European Union's Nordic regions more effective.

Salafranca Sánchez-Neyra
Mr President, the objectives for 1999, which is a transition year for both Parliament and the Commission, should not be radically different from those considered at the Vienna Summit. These include the fight against unemployment, the birth of the euro, the consolidation of the internal market and, above all, the Commission's proposals in Agenda 2000. The Commission must make efforts to ensure that these proposals are accepted within the Council and, in this respect, I would also ask the Commission to give very special priority to the presentation of specific measures to help the ultra-peripheral regions and a rehabilitation and reconstruction plan for the countries of Central America.
Many of us here - I would say the majority of this Parliament - do not believe that the Commission is a high authority of stateless bureaucrats but rather a key institution with significant merits that are important for the development of the process of European integration.
However, this does not mean that the Commission does not have to change some of its rules of behaviour. In his investiture speech, Mr Santer committed himself to leading a merciless fight against fraud. Fraud must be combated because, apart from anything else, it undermines the credibility and image of the European Union. The Commission must cooperate with Parliament and keep it rapidly and effectively informed. In certain Commission departments there is almost administrative paralysis, which we urgently need to resolve. It is also urgent to establish a healthy personnel policy that prevents frustration and takes account of the legitimate aspirations of the Commission's officials. I am very pleased with the remarks made by the President of the Commission in this respect. It is now time for the Commission or, should I say, certain Commissioners - for there are others who set a fine example that nobody remembers, as Mr Santer said - to take a decisive step in the right direction. And the right direction, Mr President, can only be to set a course towards the process of European integration. This course must be maintained, as has always been the tradition, and form a harmonious partnership with Parliament so that the present discord can be resolved into harmony for the future.

Martinez
Mr President, Mr President of the Commission, this programme gives us the opportunity to consider some fascinating issues. Up to now, Europe's problems, with the single market in 1993, have been of a technical and legislative nature, trying to determine, for example, if 80 % or 90 % of our legislation was European or national. But we Members are looking at real questions, strategic questions that are all extremely fascinating.
As regards the euro, the die is cast, if I may say so; the ball is in play. With all the asymmetric shocks that it might cause, we do not know what the consequences will be or where they will stem from. We may pray for miracles; I hope we get them. Soon it will be Easter and, perhaps, the time for resurrections.
There is also Amsterdam to consider. You were not sensible, or at least this Treaty is not sensible, with tides of immigrants flowing in unchecked. Fancy leaving this to a simple majority decision! All this over the last five years with our Finnish and Swedish friends who, protected by their climate, naturally do not have as many immigration problems.
Then there are the WTO negotiations for the year 2000. I hope that you will hold out better than during the GATT negotiations, when all Mr Brittan left us were memories. But we are a little worried given that all the free trade areas are coming together. What is more, we have this great and wonderful plan to enlarge towards the East, even though we fear that our Polish or Hungarian friends might not be on the same level as us. In addition, there are, of course, more technical problems due to all the rationing you have introduced, as well as serious health concerns.
I will not go into detail on the 1998 assessment, Mr Santer. At the end of the day, you are only the latest in a long line. However, those 18 million unemployed do exist, as do the children I read about in the press, the 500 000 children under the age of 12 in the United Kingdom who have to work. It is like Victor Hugo's ' Les Misérables' . What is more, the 50 million people excluded from society also exist. And you do, in fact, devote a large section of your work programme, paragraph 3, to the eternal issue of employment.
Mr Santer, I believe that if we wanted to look at the philosophical errors since the beginning, since the Commission of the 1950s, it would be easy to see where they came from. The philosophical mistake comes from Malthusianism. In fact, your prevailing ideology is that of the Club of Rome of the 1960s. Every time there is a problem, you resolve it in a negative manner. When there was a coal problem, you closed the mines. When there was a steel problem, you closed the steelworks. After that came Vietnam and Thailand. As for the shipyards, they were also closed down. Calves were turned into bonemeal. Each time, you succumb to the heady lure of the void. Each time, Europe's policy is a Malthusian policy, even as far as the most technical points are concerned, such as the budgetary stability pact, which is actually a budgetary rationing pact. Your ideology is that we cannot invite many people to the great banquet of European humanity and, therefore, we must cut down, we must ration payments, ration social protection, ration care and ration health. That ha produced consequences that are plain to see.
If only you had a different policy, based on a different philosophy, based on the philosophy of life, on the belief that life is beautiful, that tomorrow brings with it our future, and that there are more things to life than just this! Instead, because we make cuts and add restrictions, we have ended up with the current situation.
If only you wanted to treat the causes of unemployment! It is not the good Lord or the devil that bring unemployment. It has been caused by the senseless opening of borders, overly high taxation and the pointless race for extreme levels of production. And what if Europe wanted to be European? For example, with Europe's common security policy, what would it be like if we no longer followed the United States' line on human rights, Iraq and the Iraqi children, for instance? Europe is simply humiliating itself and going back on everything it has stood for when it turns Iraq into a concentration camp with 18 million dying inhabitants, without even raising its voice against Mr Clinton and against the United States.
As regards financing - since everything boils down to money - Mr Monti is making some very ordinary proposals about fiscal measures and savings. If only you had greater ambition when it comes to taxation! We should reduce Europe's taxes and provide for a form of European fiscal contribution with a ceiling for compulsory levies in order to free up resources. Then you would have your European funding programme with a GNP resource that would replace everything, both levelling out and cofinancing. (By the way, by mistake my group, having been against cofinancing, very nearly voted in favour of it because of a practical error.) If only you had a great ambition, Mr Santer, a great ambition and a European Europe! For we are not the stupid anti-Europeans you believe us to be. If you had a great ambition for a European Europe, a Europe that was no longer Malthusian and that wanted to forge bridges towards the future, a Europe that was itself, then we could agree with you, Mr Santer. That is the Christmas miracle. Thank you very much.

van Velzen, Wim
Mr President, I should like to look at the work programme for the coming year in conjunction with the results of the summit held last weekend. The initial reaction of anyone who, like me, has been mainly occupied with the issue of employment over the last few years must be to be happy with the results, because I have never seen so many pages devoted to employment in a final report. However, I have also seldom read so many pages where so little that is practical is said about employment either. I therefore think that one of the most important tasks for the Commission is to keep the Union on track in the process developed last year in Luxembourg, and to keep to the idea of benchmarking and specific targets. These are things that it seems to have more or less abandoned in its proposals, which I regret, but I hope that improvements can be made in the year to come. An important aim for the coming year, and one which could become extremely important for future generations, is the development of effective coordination between economic policy and social employment policy, involving all the various players here. I can well imagine that this will entail a whole new process, but I hope that it is already being prepared for the summit under the German Presidency.
There is just one problem. Now that we have finally succeeded in making employment a top priority, I have the impression that it has become the only issue in the social field. But employment is not and cannot be the only issue. Social policy is more than just labour market policy. Social integration and combating poverty, now included in the national action programmes, are also linked to wages policy. It is all well and good to talk about work and poverty, but talking about combating poverty without having a minimum wage, for example, means that your policy has no solid foundations, and I hope that the Commission succeeds in coming up with some proposals on this subject too. Social policy is also about legislation, and here I think the Commission has not been bold enough in recent years. I would urge that the convergence of social protection in Europe should be put higher on the agenda this year, and that we should consider whether the system we have developed as part of our employment strategy, using benchmarking and specific targets as a way forward, would not also be a good approach for social convergence. With social protection, we have concentrated far too long on often demoralising minimum levels of protection and minimum directives, which were often extremely difficult to justify in countries which already had quite well-developed systems. I hope that we can continue the process we have started with our employment policy, moving forward on the basis of benchmarking and targets. I wish you every success with this.

Rack
Mr President, you said, Mr Santer, that you had set the Commission a full programme for the coming year. That is good, because not only is this the last year of this term of office, it is probably also the most important, if you look at the challenges facing the European Union, and thus the Commission. The key word is Agenda 2000. You said quite rightly that the development of Europe is at stake here, and we will need to make every effort if this process of development is actually to lead anywhere. The Commission can be assured of the European Parliament's cooperation, precisely on this important issue, if it actively seeks this cooperation from Parliament, and if it grants the European Parliament the legal powers which we must otherwise wait for the Treaty of Amsterdam finally to bestow on us, in particular when decisions are made about the important reforms covered by Agenda 2000 - the common agricultural policy and structural policy - but also where financial decisions are concerned.
A further important point is implementing the transatlantic economic partnership. This crops up time and again, but in the future, next year and in the years thereafter, it will have to amount to something more than repeated displays - all too common in reality - of our obstructing one another's trade in petty quarrels about relatively unimportant matters; I am thinking here of bananas.
My third, final and, in my view, most important point is as follows: you said that the Commission had to ensure that its house was in order. This morning in the debate on the discharge, we heard that Parliament wishes to set the Commission a particularly important task in this respect, with a view to cleaning up the Commission. A set of Staff Regulations which does not just meet with the approval of staff representatives should make a significant contribution to our being able to clean up the Commission. This starts with the recruitment of officials. Both selection procedures and in particular the procedures by which senior officials are appointed need to be run quite differently from the way in which they have been run all too often in the past. The key word of transparency should not remain simply a word; we also need actually to put this transparency into practice.
I have one final point, which cannot be overlooked. In my view, it is important for the Commission also to resolve to pursue the individual responsibility of Commissioners in particular cases, where that proves to be necessary.

Jarzembowski
Mr President, Mr President of the Commission, ladies and gentlemen, I should like to confine my contribution to transport policy and, within that, to the Commission's work programme for 1999. I should like to say at the very outset that I still clearly remember the time in 1994 and 1995, before this Commission was appointed, when this Commission swore that it would always listen to Parliament. I should now like to remind you of this by making two points.
I should in fact like to ask you not to proceed with two proposals in the 1999 work programme. In transport policy, Mr Kinnock, on behalf of the Commission, has proposed tabling a directive on market access for port services. When I drew up my report on the Green Paper on sea ports, the Committee on Transport and Tourism decided unanimously that there was no need for a legislative initiative of this kind at the present time. Should there be any difficulties, the Commission is kindly requested to use its powers in the field of aid and competition rules to improve market access. But we certainly do not want you to initiate legislation.
Secondly, the Commission is proposing to produce a white paper on trans-European transport networks. Mr Santer, we do not need one! We do not need a new general basis for our discussion; instead, we need a specific proposal to amend the 1996 guidelines adopted by Parliament and the Council, as it says in Article 21. This states that there shall be a revised proposal in 1999, not a white paper. Given the forthcoming parliamentary elections and the reappointment of the Commission, I can understand the desire not to table a new proposal on trans-European networks. But nor do we need to have Parliament working on a superfluous white paper. Instead, you should say that you will propose specific legislation in the year 2000. Perhaps you could have a word with Mr Kinnock, because if both houses - the Council and Parliament - do not even want a bill, then why should the Commission draft one? You can save yourself a lot of time if you listen to Parliament first!

Mosiek-Urbahn
Commissioner, ladies and gentlemen, the private economic law of the Union's Member States is increasingly influenced by European legislation. Recent examples of this are to be found in the fields of product liability, guarantees for consumer goods and payment arrears. The Union's work in the field of private law thus far has been characterised by a host of individual initiatives. The Commission should consider whether this method of taking many small independent steps forward really will continue to be the best one in the future.
Of course, the Union's usual procedure is to legislate on individual, limited areas at a time when those rules are necessary, and when they are likely to receive majority support. An approach of this kind will not necessarily increase our citizens' confidence, however; it must seem to them as if their national private law were being eroded bit by bit, by the back door as it were. What is lacking is a confidence-building, recognisable system, an approach clearly based on a system. That is also the reason for the - quite justified - repeated complaints about the lack of consistency when private law is approximated in Europe. Before taking further isolated initiatives, the Commission should, therefore, develop a plan of action which openly - but also with due moderation - expresses support for some basic principles of a body of Community private law, on which there is likely to be a consensus. The discussion initiated by the so-called Lando Committee needs to be reopened and included in the work in progress in the Commission; otherwise we cannot expect people to accept European legislation.

Bianco
Mr Santer, your programme undoubtedly goes in the right direction: it is an ambitious one and addresses the problems which will confront us over the next few years. But, in order to be fulfilled, ambitions - like good intentions - require a certain political climate and general conditions which, in my opinion, do not exist at present and which the Commission should set about creating. How can the problem of greater cohesion be tackled with fewer resources? How can the agricultural policy be improved through a proposal which in actual fact destroys the good parts of what exists at present? How, for instance, could we possibly think of replacing the good wines produced in Europe's hilly areas with sugaring carried out in chemical processing plants? And I could continue.
Nor do I believe that the outcome of the Vienna summit goes in the right direction. There is a certain resurgence of nationalism which does not augur well and which the Commission, as Europe's government, should somehow combat with courage and determination.
The problem of unemployment is of crucial importance, and I do not believe that it can be tackled solely through financial or administrative measures, however flexible these may be. One key theme must be scientific research, innovation and the updating of cultural and educational systems, which represent the greatest challenge for the future. Achieving these aims is a matter not only of transferring technology to SMEs but also of mounting large-scale projects, because they alone can transform, innovate and carry forward scientific research and innovation within Europe.

Santer
Mr President, ladies and gentlemen, I would first of all like to thank each of the speakers who have taken part in this debate and who have thus contributed to enriching the Commission's action programme for 1999. I am clearly not going to respond in full to all the points raised but you can be sure that I will forward them to those of my colleagues who are directly responsible for the more specialised areas.
This debate comes between the debate you held this morning on the discharge and the debate that will take place tomorrow morning on the conclusions of the Vienna European Council. I would therefore like to avoid any needless repetition. Clearly, you have already put up with enough of that today. I would, however, like to respond to certain points and questions that were raised and to clarify certain issues.
I would firstly like to apologise to Mrs Oomen-Ruijten for not having gone into much detail on the assessment. This is because I deliberately wanted to concentrate more on the future, that is, to look at things more from a political perspective. However, as far as the assessment is concerned, I must point out - and I say this with some pride, perhaps not justified in every case, but with a certain degree of pride all the same - that, for the first time, of the 34 new legislative initiatives scheduled in our action programme for 1998, 30 were actually put forward, in other words 88 %. Those that are not completed by the end of the year will naturally be carried forward to next year, and thus be added to the 26 proposals for the 1999 programme. I do not want to inundate you with statistics but I have here a table that shows us what the new initiatives are. Of these initiatives, 30 out of 34 have been implemented. 14 consultation procedures have been initiated, while 29 action plans and other initiatives have become a reality, and so on. I will stop there. This is perhaps of interest to the officials and secretaries who work for the committees. It is not always of interest to politicians.
I would also like to assure you that the Commission guarantees that the legislative programme will be monitored. During the course of this year, I myself attended the Conference of Presidents to be present for the assessment of the programmes. And my colleague, Mr Oreja, also attended the Conference of Committee Chairmen to discuss the legislative programmes and the work programme. Rest assured that both myself and Mr Oreja, who is responsible, in particular, for relations with the European Parliament, will certainly be at your disposal if you, the Conference of Presidents or the Conference of Committee Chairmen want to contact us. I believe that we will do all we can to ensure that this programme can be implemented, for reasons that you know very well, because 1999 will be an important year.
Some of you have also raised the matter of the reform of the Commission. I must tell you that this is an issue that has concerned me since I was appointed, because I noticed when I took over this role, in January 1995 - and I have already said this to you on many occasions - that there was a management problem within the Commission. I had certain dossiers on my table, such as the tourism dossier, for example. That is why, from the outset, we introduced a number of initiatives to help the Commission resolve the management problems. These included SEM 2000 (Sound Economic Management), MAP 2000 and many others. I have already spoken about these initiatives and will not go back to them now. Our anti-fraud body, UCLAF, also became operational under this Commission. It was created a little earlier, but only became operational under this Commission. I must tell you, and emphasise the fact, that it is thanks to UCLAF, thanks to our own services, that a number of matters, particularly the incidents of fraud, have been brought to light.
What we can criticise is the fact that we have become victims of our own goodwill and, perhaps, our naivety. The issues that are now the front-page headlines in all the newspapers, the matters that have led to a number of articles are, in fact, euromyths. We need to forget about these euromyths that are splashed all over the newspapers; I do not believe them, and I know what I am talking about. But, on the other hand, these matters also relate to real events, and they are real events that we have discovered precisely because we want to be transparent. As I have already said, we want to wage an effective fight against fraud. In all the instances where fraud has been discovered, we have drawn the consequences, both the disciplinary consequences for the officials concerned and the judicial consequences for the dossiers themselves, which are, in fact, currently sub judice . This applies equally to tourism, to ECHO and the other matters involved. In actual fact all these matters go back to 1990, 1992 and 1993, in other words to a time when the Commission, as I said earlier, took on a number of new responsibilities, but those in charge were not able to monitor the management of the funds under their control.
For example, the humanitarian office, ECHO, had 38 officials in 1993 to manage an annual budget of ECU 100 million under very difficult conditions. You know how the volunteers from our NGOs work, be it in Rwanda, in the region of the Great Lakes, in Bosnia, in China, in North Korea, and so on. At times, the accounting rules as they are now cannot always be applied in the same way, including in relations with the various auditing authorities.
That is why I believe it is essential to have screened all the directorates-general and learned a number of lessons that are currently bearing fruit. I assure you that we want this Commission to do this work thoroughly, and we want to learn all the lessons we can so that the new Commission, in the year 2000, has a number of instruments available with which it can work. This is just as important - and I believe that Mr Rack or Mr Desama, I am not exactly sure who, raised this question - when the individual responsibility of the Commissioners is at issue, which is not the case at the moment. The Commission works as a college. It therefore has a collective responsibility towards Parliament.
Under the new Treaty of Amsterdam, however, the President of the Commission will have an entirely different role to the one he currently has. He will define the Commission's policy and that will have implications, firstly, when it comes to the appointment of Commissioners, who will only be appointed with the agreement and approval of the President, while at present he is only consulted. In addition, in accordance with the provisions of the Treaty and its protocol, the President will be able to distribute the portfolios at his discretion and, if need be, to change this distribution during the term of office. As a result, following the entry into force of the Treaty of Amsterdam, the President's role will change and be strengthened. He will have control and authority over the Commission, whereas at the moment he does not and cannot have such powers, since the institutional rules do not provide for that possibility.
Therefore, if we consider this entire arrangement, the efforts we are currently making to introduce the necessary changes, and the transparency we want to guarantee, with Parliament's help - without which we would fail, as we are accountable to Parliament - I feel certain that we will manage to find a way to remedy certain situations which you are perhaps rightly criticising at the moment.
As regards the questions raised in this respect, as Mrs Oomen-Ruijten quite rightly said, the most important issue relates to the codes of conduct that are currently being drawn up. Some of these are already in the final stages. We did not wait for the provisions on the discharge. The work began several years ago and is essential if we are to guarantee transparency. Clearly, we will have to see how this transparency can be monitored. There are certainly various ways of doing this. There are proposals on the access of the institutions to documents and on the protection of personal data. These must be looked at together.
I will stop there, because you have already discussed that at length this morning. Of course, our action programme for 1999 forms part of an established political line, and broad agreement has emerged from the various speeches which will enable us to determine the important issues that will define our, and your, political action during 1999. Agenda 2000 is the main issue. As I stated at the Vienna European Council and as I will state again tomorrow morning, when it is being discussed, I agree with those who said that if there is no agreement on Agenda 2000 by the end of March, then there will be no enlargement. But if that happens, the Community's activities will be at serious risk. We will have a crisis, and at the very time when we need it to be strong, Europe will be facing doubts about its credibility, which will have a knock-on effect on the management of the euro, I am sure.
We must not underestimate all the efforts that have yet to be made to reach an agreement on Agenda 2000. The Commission has put all the cards on the table so that the negotiations can resolve all the problems. As I said to the Member States the day before yesterday in Vienna, please, let us stop hiding behind our principles and begin to look at the areas where negotiation is possible, where agreement might be reached, or where a compromise might be achieved. I still believe that the political will does exist and I am very pleased to see that it is there. Our Heads of State or Government were unanimous in Vienna in stating that we must conclude this by the end of March 1999. But to reach a final agreement, we naturally need everyone to agree to put everything on the table and not to insist on concessions obtained which are no longer justified.
I therefore agree with you that before the forthcoming enlargement, a comprehensive institutional reform must be completed. If you have read Agenda 2000, you will see that the Commission proposes a new international conference. However, we must wait for the Treaty of Amsterdam to be ratified and to come into force and we must not do anything that might hinder ratification in any of the Member States that are more sensitive to institutional issues by making new proposals at this stage. It is a question of time, but I agree with those who said that as soon as the Treaty is ratified and has entered into force, we will have to put forward proposals to take the institutional reforms further.
Some of you wanted to know what the attitude of the European Union, and more particularly that of the Commission, is towards the phenomenon of globalisation. It is impossible to expand on all the problems in just a few words, but we have submitted a communication to the European Council on globalisation. I believe that it is a very interesting document, and it analyses the phenomenon of globalisation while suggesting what the European Union's responses should be to it. I would urge you to read it, as it sets out the Commission's response to these problems. There is no reason why we should suffer from globalisation, even if it is a fait accompli . We must react to it, learn from our experiences and thus be true actors on the international stage. That is why it is so important for the European Union to be present at an international level and for it to draw the political consequences of its economic dimension in order to assert itself before the rest of the world.
Other speakers raised more specific questions regarding the peripheral areas.
Certain speakers - Mr Medina, I believe, and one of his colleagues - spoke about these ultra-peripheral regions. I can simply assure you that the Commission is currently preparing for the entry into force of the new Article 299 of the Treaty of Amsterdam. An interdepartmental working party is working on this and at the moment is carrying out an assessment and drawing up a programme for the future. On this basis, as soon as the Treaty of Amsterdam is ratified, I will call a partnership meeting with the regions and the Member States involved so that together we can organise the future and the introduction of the new status for these regions under Article 299.
Some speakers referred to the environment. We have put forward a number of proposals on this subject and we must work on them. This also applies to other initiatives that you called for, particularly - and I am in complete agreement on this point - as regards our external relations, and, above all, the Transatlantic Economic Partnership, which we need to develop.
Of course, trade disputes have become more serious recently, but we must not focus solely on the problems. We must ask ourselves what the essence of our cooperation with the United States is and consider the possibilities for overcoming the difficulties we are encountering at the moment, because we are, in fact, partners. Our relations are relatively well-balanced, in terms of both our trade and direct investment throughout the world. It is therefore in our interest to develop political dialogue with the US. A meeting will take place at the summit between President Clinton and President Klima on Friday, 18 December 1998 in Washington, at which the development of transatlantic relations will certainly be discussed.
The third point raised is, of course, employment. I complete agree with those who say that we need to continue and consolidate the process and the strategy defined in Luxembourg. The first attempt has already borne fruit. In the future, in other words next year, the national action plans will be assessed on the basis of 19 guidelines, and they will be adjusted and adapted accordingly. On that basis, we will also add the finishing touches to the process. The process and strategy defined in Luxembourg must continue to form the backbone of the European employment pact, even though the strategy itself may have to be extended and firmed up. And you know the extent to which I am in favour of such an initiative since I launched a confidence pact on employment in January 1996, which was a forerunner to the current pact.
I am also very pleased - and we will be able to discuss justice and home affairs tomorrow - that the idea I had proposed to you of convening a special European Council meeting on justice and home affairs has been taken up by the European Council. I think that these areas must not be left solely to the ministers for justice and home affairs. These are very sensitive matters that must be dealt with by the Heads of State or Government, who will have to assume their responsibilities.
I will not detain you much longer, ladies and gentlemen. I only want to say, particularly to those who were perhaps a little more pessimistic, that it is clear that the international environment has changed a great deal since January 1995, when the Commission began its work.
At that time, an atmosphere of gloom hung over Europe and unemployment was on the increase. Soon, however, the introduction of the euro on 1 January 1999 will give the European Union new life, putting it in a different position in international economic, monetary and political relations. Unemployment is falling. For the first time, unemployment has dropped to below 10 % and has now reached 1992 levels. Clearly, this is still too high, and that is why we are implementing this employment strategy which we must continue and consolidate. In spite of everything, last year we created 1 700 000 new jobs, something that had not happened for five years, and I believe that we should work on this basis. I am very confident because, as the headline in an American newspaper not known for its pro-European stance said a few months ago: Europe is back. So, please, let us continue on this path and let us ensure that we do not allow ourselves to be swayed by other aspirations.

President
Thank you, Mr Santer.
I have received six motions for resolutions tabled pursuant to Rule 37(2).
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Jensen, Lis
Mr President, I did ask for the floor earlier, but no one was looking in this direction. I should like to know why we are so far behind with our schedule. I was told that the Metten report would be taken at about 4 p.m. I should like to know when I can now expect it to be dealt with. Why are we two reports behind schedule?

President
If you look at the agenda, you will see that, five minutes later than planned, we are beginning Question Time to the Commission. As you are well aware, the debates on the reports are sometimes subject to a certain delay, but we cannot afford to delay the questions to the Commission. At the moment, I cannot give you an answer. The only thing I can say is that it is now time for questions to the Commission to begin. What I can also tell you is that the debate on the report by Mr Metten will be held after 9 p.m. So, Mrs Sandberg-Fries, you now know that the debate on Mr Metten's report will take place during the night sitting, after 9 p.m.

Question Time (Commission)
President
The next item is questions to the Commission (B4-0713/98).

President
As the authors are not present, Questions Nos 46 and 47 lapse.
Question No 48 by Brian Crowley (H-1146/98)
Subject: Computer systems and the year 2000
With just over a year to go, preparations for the year 2000 in the computer system field are far from complete. OECD (September 1998) suggests that 'while awareness is increasing, the amount of remediation is still daunting, the problem continues to be underestimated... Preparedness among the health-care industries, small business and some parts of government appears to be particularly worrisome'. Other information suggests that rogue software specialists are introducing as many errors as they are correcting when overhauling systems for the millennium (FT, 26 November 1998).
Will the Commission state what, in its view, is the state of preparedness in the EU for the millennium switch-over in the areas cited above, as well as in the transport, nuclear, banking and telecommunications industries, and how does it respond to the view that 'early IT system failures will occur more often as 2000 approaches, simply because IT systems generally look ahead in terms of forecasting sales, orders and other business functions' (FT supplement, 2 December 1998)?

Bangemann
Mr President, the Commission drew attention to this problem some years ago. Not only have we set up working groups with the Member States, but our services have also employed a variety of methods to make private companies and administrations aware that they need to be prepared for this technical problem. We really have, therefore, taken every possible measure. Solutions for the various information systems are also now available which allow the problem to be completely eliminated. Sufficient attention is still not being paid to the problem, however, and that is why the Commission has sent a further communication to the Council. In this communication, we have once again indicated what can be done in government, and what additional work still needs to be done to make those concerned in the private sector deal with this problem.
In the private sector, the level of awareness is still too low. I cannot imagine why this should be the case, because actually everyone should realise that they will be the ones to suffer the most if they do not make the necessary preparations. The honourable Member will understand that we ourselves can only deal with this to the extent that it affects us. The Member States can only deal with it to the extent that it affects their public administration. We cannot go into every business and solve the problem by installing the necessary software.
On the other hand, we should not exaggerate either. I read or heard somewhere that someone was considering laying in emergency food stocks to overcome the year 2000 problem. Even though the Commission ought to find this an attractive idea, because of its agricultural policy, it is certainly an exaggeration.

Crowley
I should like to thank the Commissioner for his answer - I realise how difficult it is for him to speak on this issue when so much depends on action being taken by other people and other institutions. However, over the week-end the British Government advised people to hoard food because of the year 2000. As well as that, with the introduction of the single currency next year and the changeover in financial markets and other similar situations, there is a great fear, and a danger, amongst Member States, private individuals and institutions, that not enough work has been undertaken. I should like to ask the Commissioner whether, within his own area of competence, he has brought forward any codes of best practice which should be copied by the Member States or by small and medium-sized enterprises, in particular when we consider that in its final resolution the Vienna Council placed particular emphasis on helping small and medium-sized enterprises for the changeover in the year 2000.

Bangemann
I fear, Mr Crowley, that a code of conduct - even if there were not more general reasons against having one - would not be of much help, because the systems differ so greatly. The hardware is very varied. Different companies work with completely different computer systems. It is understandable that more modern computer systems are easier to switch over. Let me repeat: we did not start working on this just today; we have been working on these issues for the last four years. As early as four years ago, we also established that it was impossible - or in any case very expensive - to replace all the hardware. So we put our money into software being developed for the hardware we already had - and we also supported work of this kind in our research programmes - software which could be installed on the existing hardware and would thus take us through the year 2000.
That means, firstly, that there are solutions; secondly, that these solutions are expensive, and that is probably the main problem, because anyone who is familiar with the problem can install this software and will have no difficulty in the year 2000, but they will pay good money for it. There are many small and medium-sized companies which are probably living under the illusion that they will somehow overcome the problem without having to pay the money.
More recently, I have read advertisements from insurance companies wishing, under certain circumstances, to insure for any damage resulting from a failure, which shows that even in this field offers have become available. We cannot do any more. You are facing a situation where, as a public administration, you can do so much, but then the people themselves have to react. If they do not, then you cannot make up for it.
Everyone knows or ought to know that this is a problem and that there are solutions to it. People can ask the firms they work with how they are dealing with it. Obviously, we and the Member States have made the necessary preparations. We really cannot do any more than that. Even if the British Government's advice were correct - and I very much doubt it - laying in food supplies will really only benefit the European agricultural policy, though that may indeed be reason enough.

President
Question No 49 by Graham Watson (H-1158/98)
Subject: Protection of children on foreign exchange schemes from abuse
Children under 18 account for 20 % of the world market for tourism. It is estimated that, in 1998, four million European tourists will be visitors under 18 years of age, of whom at least one million will be independent stay visitors attending foreign-language and activity schools.
Is the Commission aware that, throughout Europe, this sector is almost entirely unregulated?
Will the Commission therefore reflect on how best to combat abuse of children in this sector and give careful consideration to the promotion of a Europe-wide code of conduct? I should like to welcome Mr Monti and ask him to reply to Mr Watson's question.

Monti
The Commission is aware of the importance of youth tourism, of its benefits for the development of the young people concerned, and also of the economic activity of the tourist sector in general.
It is equally aware of the concerns, expressed in one Member State at least, regarding the inadequate regulation of the activities of those who organise annual trips abroad for large numbers of youngsters wishing to pursue foreign-language courses and other activities, especially in respect of the participants' personal safety Looking ahead to the adoption of a new Community programme in the field of tourism, it might be possible to examine this matter in the context of the work undertaken to identify and disseminate best practice, particularly since many responsible organisations, individuals and authorities have probably already taken serious steps to provide protection in this field.
Under the Daphne programme, which supports non-governmental organisations in combating violence against children and young people, the Commission encourages the establishment of telephone helplines in all the Member States; these offer useful advice and information to troubled youngsters, and can assist them when they travel abroad. As far as regulatory aspects are concerned, however, the Commission would point out that these fall under the auspices of the competent authorities in the Member States.

Watson
I should like to ask the Commissioner where we are with this matter. The vast majority of young people who travel across our borders for language courses enjoy a very good experience and their first visit abroad is a very happy one. For the unlucky few it can be a nightmare. This is not the kind of problem that one wishes to sensationalise: we certainly do not want to put young people or their parents off taking advantage of the benefits of a united Europe. However, there is evidence of infiltration of this sector by organised crime and organised paedophile gangs and, as a parent myself, I am worried about the dangers of this. I am very pleased that you are going to tackle it under the new programme on tourism but would the Commission not consider a study of what the extent of this problem might be and how it could be effectively tackled?

Monti
The Commission is taking this issue very seriously. Questions relating to the security of individuals and standards and procedures to be observed by educational establishments are a matter for Member States. It would be wrong for the Commission to seek to become involved in this aspect. The same holds true in the matter of judicial cooperation if there is any question of organised criminal activity covering more than one jurisdiction.
On a more optimistic note, if it happens that we can reach agreement on a Community tourism programme, we may be able to make some contribution in the context of youth tourism if this is seen as a priority area for Community action. Otherwise, given also the absence of any budgetary support, there is no possibility of our contributing in this area. However, there is a specific budget heading with associated remarks which allows us to support the efforts of organisations involved in the campaign against child sex tourism. That, of course, goes some way towards addressing the important problem to which you so rightly call our attention.

President
Question No 50 by Angela Billingham (H-1062/98)
Subject: British ski instructors in the French Alps
It appears that no consensus has been reached between the French and UK Governments in the two series of bilateral meetings concerning the recognition of British ski instructors' qualifications in France and that the French have been unable to prove that there is a substantial difference between the BASI Grade 1 Diploma held by British instructors and the French Brevet d'Etat held by French instructors.
In the light of this, is the European Commission intending to intervene in order to end the discrimination against British ski instructors and allow them to teach in the French Alps? I give the floor to Mr Monti to answer Mrs Billingham's question.

Monti
The Commission has already taken action to promote bilateral dialogue between the parties concerned, namely the BASI - British Association of Skiing Instructors - and the UK authorities, on the one hand, and their French counterparts on the other, with a view to encouraging them to agree on a basis for the recognition of the BASI Grade 1 Diploma in France. An initial meeting between the BASI and the competent French authorities took place in Brussels at the end of 1997.
It was decided at the Commission's initiative to establish a Franco-British working group to examine issues relating to the two countries' training systems. The Commission was recently informed that this group has drawn up a report. However, the French and UK authorities have decided by joint agreement to discuss the report first and only then, if possible, to forward joint conclusions to the Commission.
As the honourable Member will appreciate, the Commission would be ill advised to pre-empt the outcome of this process, before the working group has made public its conclusions.
At this point in time, therefore, I can merely assure the honourable Member that the Commission is committed to solving the outstanding problems. In order to do so, if and insofar as possible, cooperation should be stepped up between instructors, their professional associations and the appropriate competent authorities.
At the same time, the Commission is fully aware of its own responsibility for checking carefully that Community law is properly complied with, in respect of sporting and recreational activities in the Alpine regions. I would add that the contacts established between those most directly concerned have already led to agreement on a considerable number of practical measures. These measures have already been taken and have substantially improved matters, and those concerned deserve to be congratulated on their work so far.
The Commission hopes that further progress will be made in the near future, building on the success already achieved thanks to the clear commitment on the part of both the French and UK authorities.

Billingham
Commissioner, I welcome your reply and thank you for the work I know you have done. But it must be said that, as yet, not one single British ski instructor has been allowed to work in the French Alps. It is two and a half years since we first spoke about this in the Chamber and you assured me that French ski instructors would allow the British to work that year. Two years on, still no action. This is an absolutely disastrous situation!
There is a new twist: a French ski school has sought to employ 15 British ski instructors and has been prevented from doing so. They themselves are now taking the French Ski Association to the courts. Clearly there is a terrible situation here, which throws into question our ability within the European Union of translating the Treaty into appropriate action. I am sad to say that we have an example here of French protectionism which has to be stopped.

Monti
The honourable Member is implying, quite correctly, that it is not easy to enforce fully the rules governing the single market. Our daily experience makes this perfectly plain; as Mrs Billingham knows and is good enough to acknowledge, we have been dealing with this case for some time and with great determination.
And we have to say that some results have been achieved. The two new decrees by the French authorities have now provided a legal solution to the problem. It is the implementation on the ground - or should I say on the snow - of these new decrees that is the principal concern of the Commission. One important element is that tests can be imposed only in cases of substantial differences in training in each Member State. This is one key point. The French authorities consider that there are substantial differences whilst the British ski instructors do not agree, as you know. The Danish, by the way, also consider that their qualifications should be recognised.
In view of these narrowing but still persistent differences the Commission has made efforts involving the British and French authorities and the professional associations which are promising to bear fruit.
For the reasons that I mentioned, we are not in a position to present these fruits here at the moment. But we have to be confident.

Skinner
This is slightly off-piste if you are going to talk about being on the ground or on the snow. This is very familiar ground for those that have worked in the area of free movement of workers and mutual recognition of qualifications across the European Community. It strikes me that some authorities are continuing to prevaricate, in one country at least. Is there not a case for returning to the status quo at least of two and a half years ago? If there is a problem in agreeing on benchmarks and this is an indication of disaccord in bilateral discussions, the Commission should be very much involved in helping to reach an agreement on these benchmarks in a way that will lead us out of this impasse.

Monti
The problem is a complex one because in principle the French authorities are allowed to impose aptitude tests on foreign ski instructors. Under Community law - Directive 92/51 EEC - the national authorities are allowed to impose compensatory measures but only where there are significant differences in the levels of qualifications. In the case of ski instructors, where the issue of safety is at stake, they are allowed to impose aptitude tests. This is why it is not particularly easy for the Commission to enter into such a debate - a debate, you will appreciate, involving comparison of very technical courses. If the BASI considers it appropriate, the problem could be resolved by a national court which is responsible for the correct implementation of Community law. Of course one way to solve the problem is also bilateral dialogue. This is the way forward that - as I explained in some detail in my initial response - the Commission has been pursuing and will continue to pursue.

President
Question No 51 by Reinhard Rack (H-1057/98)
Subject: Simplified selection procedure for temporary staff at the Commission
In connection with the recent Commission selection procedure, in which irregularities occurred, the question arises of other forms of appointment procedure at the Commission, particularly the simplified selection procedure for temporary staff.
How many staff on fixed-term contracts are there normally at the Commission? How many of them are taken on as officials under the simplified procedure? I should like to welcome Mr Liikanen and now give him the floor to answer Mr Rack's question.

Liikanen
Mr President, there are at present 2 993 temporary staff employed in the Commission. 750 of them are paid out of administrative appropriations and 2 243 are paid out of funds set aside for research. The procedure for selecting and employing temporary staff was reviewed on 1 December 1996. The review applies only to those temporary staff who are paid out of administrative appropriations. A total of 135 staff have been employed since the new procedure came into effect. On the basis of a decision taken in December 1996 regarding temporary staff, the Commission will no longer organise competitions for making posts permanent after 1999. This is because those taking part in internal competitions and those participating in general competitions were usually regarded as having unequal status.
However, the Commission has begun to look for ways of dispensing with mass competitions, which are so difficult to organise. In February we are reorganising the aborted competition of early autumn, and I hope that after that the mass competition system will no longer apply. At present we are considering how preselection might be approached in future, for example on the basis of languages or by country, thus simplifying the very ponderous competition process involving tens of thousands of applicants. We shall inform Parliament of this as soon as some progress has been made. The working party responsible for reviewing personnel administration under Mr Williamson, the then Secretary-General, has made a considerable number of proposals for reform.

Rack
Mr President, I should like to thank you, Commissioner, for that detailed reply. Not only did you give the figures I asked for, you also anticipated a possible supplementary question, namely what the situation is with the current selection procedures and how they will proceed. Nevertheless, may I put a further supplementary question? It is as follows. Admittedly, I cannot expect you to give specific figures, but I would like to have a general idea. Are there any particular Member States with an especially high number of nationals who have been recruited as officials through this device for particular nationals?

Liikanen
Mr President, in accordance with EU regulations and legislation on the employment of staff there can be no favouritism or discrimination based on nationality. This principle is obviously in force. But of course statistics on staffing and nationality indicate that, depending on official rank, a few nationalities are over-represented and a few under-represented at some levels. I will be glad to submit the figures for the honourable Member to look at.
What I can say is that when we have organised competitions aimed at specific nationalities amongst the new Member States, it has been the Finns who have shown the most interest in EU posts, and for this reason selections have been made faster. The Swedes have not shown quite so much interest, and the Austrians have shown the least interest. We have tried to correct the problem and we are now organising new competitions both for Swedish and Austrian applicants, and we hope that by the end of 1999 the Commission will have met all the targets fixed for these three countries when they joined the EU in January 1995.

President
Question No 52 by Alexandros Alavanos (H-1054/98)
Subject: Trafficking in women in Europe
Five hundred thousand women are victims of the present-day slave trade which is called trafficking in women. This phenomenon is becoming increasingly widespread, encouraged by the fact that the penalties are limited; as Anita Gradin, the Commissioner responsible, told a recent East-West conference on trafficking in women held in Vienna, 'this form of trafficking is lucrative and the risks are minimal'. Since the relevant programmes 'STOP', 'DAFNEE' and 'OISIN' have proved unable to curb the steadily increasing phenomenon of trafficking in women and under-age girls, will the Commission say what substantive additional measures it intends to take forthwith to protect victims of this practice originating from non-EU Member States and to bring the traffickers to justice? I should like to welcome Mrs Gradin and ask her to reply to Mr Alavanos's question.

Gradin
I fully share the concern of the honourable Member, Mr Alavanos, at the continuing and growing trafficking of women into the European Union for sexual exploitation. Combating this shameful form of organised crime and violation of women's human rights is a question on which I have spent much time and energy since I became a Commissioner in 1995.
Before then no one had thought that the European Union could deal with this question. In June 1996 I organised the European Conference in Vienna on trafficking in women. This was the first time the main European players from both East and West had met to discuss this serious problem. On the basis of their recommendation, in November 1996 I presented an action plan against trafficking in women for sexual exploitation. Since then a number of important actions have been taken. I shall recall some of them briefly.
Firstly, in November 1996 the Justice and Home Affairs Council decided to extend the mandate of Europol's drug unit, now Europol, to include trafficking in human beings. By 1999 Europol will support joint investigations in order to dismantle criminal organisations involved in this trafficking. Europol also intends to establish a report on the general situation in the European Union concerning trafficking in women.
The second important decision was the creation in December 1996 of the multiannual STOP programme. This programme has a budget of ECU 6.5m over five years. It aims to promote research, information campaigns, training and exchange of projects. All professionals involved in combating trade in human beings are targeted. Since 1996 we have been able to support 30 projects.
Thirdly, and finally, in February 1997 the Council adopted a joint action in order to criminalise trafficking in human beings. It also agreed on concrete measures for judicial cooperation and protection of witnesses.
Another crucial factor in the fight against trafficking and in providing support to victims is the work and role of non-governmental organisations. In order to support their work we set up the DAPHNE initiative in May 1997 to combat violence against children, adolescents and women. The main objective is to support the setting up of NGO networks across Europe and to support pilot projects. Ten of these projects concern the fight against trafficking in women. The Commission has also been able to give direct support to the development and work of NGOs in Central and Eastern Europe. This has been possible through the PHARE and TACIS democracy programmes.
To fight trafficking in women is to fight a moving target. New criminal networks and new strategies are created almost daily and their methods become increasingly ruthless. So we constantly need to strengthen and revise our own strategies and create new tools. This is why I am very happy to inform you that on 9 December the Commission adopted a new communication for further action against trafficking in women. This communication is a follow-up to the one in 1996. It reinforces the multidisciplinary approach and aims to cover all the various stages of the trafficking chain - recruiters, traffickers and exploiters. It reviews progress made so far in this field and on the basis of experience so far suggests deepening ongoing activities as well as initiating new ones. This communication also responds to the request made by the European Parliament in the report by Mrs Waddington, to present it before the end of 1998. The main objective is to ensure that the fight against trafficking in women is kept high on the political agenda of the Union and to reinforce cooperation between countries of origin, transit and destination, including both governments and NGOs.
The aim is also to encourage the Member States to implement fully, by the end of 1999 at the latest, their legal obligations under the joint action of February 1997. The main new initiatives in the communication are to produce in 1999 a communication on assistance to victims of crime including victims of trafficking; to make a proposal for legislative actions as regards temporary residence permits for victims who are ready to act as witnesses; to refocus the existing guidelines of the STOP programme to include information to victims on ways of seeking assistance, and research on the various intermediaries of the trafficking chain; to launch training projects to prevent and combat trafficking in women in the areas of migration and detection of false and fraudulent documents; to advertise among the concerned target groups the possibility of support under several other Community programmes such as INTEGRA and the Leonardo da Vinci programmes; and to promote further cooperation and exchange of information on the issue of trafficking in women within the pre-accession strategy as well as in cooperation with the newly independent states.
I hope we now have a new platform for our common fight against trafficking in women and I am looking forward to continuing to work closely with the European Parliament in combating this shameful violation of women's human rights.

Papayannakis
Mr President, let me thank the Commissioner for her very long and detailed answer. Yet, Madam Commissioner, as you too are aware, the phenomenon persists and is constantly on the increase. In my country, indeed, we find that public authorities or some public authorities at least - particularly members of the police force - are accomplices in the spread of this 'trade', if we can call it that. I think that what the Commissioner said is encouraging. There are, however, two more detailed questions I should like to ask: firstly, is the Commission empowered to arraign before the European Court of Justice for the violation of human rights, countries which are not taking adequate steps to combat trade in human beings effectively? I think there may be accusations and that, as the custodian of the Treaties, the Commission can do that. And secondly, can the Commission require countries which are candidates for accession to implement, as a condition for joining during the forthcoming enlargement, effective measures to suppress trade in human beings?

Gradin
Thank you very much for your question. Of course we need to work together much harder to convince some of these officials and people in government who are not that engaged in these questions.
With the Eastern and Central European countries we do this best through projects. The projects we conduct with them are quite successful and the networks that are being built up between non-governmental organisations in the 15 Member States and in the accession countries are becoming quite good. This is the best way of making progress with these questions.

President
Question No 53 by Clive Needle (H-1086/98)
Subject: Increase of cigarette imports in Andorra
Figures published by the customs authorities in Andorra show that 3.1 billion cigarettes were imported into that country from the EU in 1997. On the basis of those figures, every man, woman and child in Andorra smokes 140 cigarettes per day.
What action does the Commission propose to take to ensure that the smuggling of tobacco products into the EU is prevented, with particular reference to action against tobacco companies such as Gallaher, who must have been aware that their sudden increase in sales to Andorra could not be explained by any legal supply to a normal commercial market? I give the floor to Mrs Gradin to answer Mr Needle's question on this surprising increase in imports of cigarettes.

Gradin
Mr President, Mr Needle is concerned about the smuggling of cigarettes out of Andorra and wonders what measures the Commission intends to take to combat this trade.
At the end of 1997, we were informed that significant quantities of British-manufactured cigarettes were being exported to Andorra. Simultaneously, several Member States reported seizures of cigarettes smuggled into the Union from Andorra. A clear picture began to emerge of Andorra as a centre for illegal trafficking in the direction of the EU.
The Director of the Commission's anti-fraud unit, UCLAF, went to Andorra in December 1997 for talks with the country's government. The purpose of his visit was to reach an accord on how to stop cigarette smuggling. It was agreed that the Community would operate a number of checks in Andorra during the first half of 1998. These would be carried out by UCLAF officials, together with investigators from the relevant authorities in the countries affected: France, Ireland, Spain and the United Kingdom. The results demonstrated that Andorra had manufactured as well as imported large quantities of American-brand cigarettes - mainly from the United States. There was strong evidence that a large element was earmarked for smuggling into the EU, in particular Spain. Moreover, criminal networks operating both in Andorra and in a number of Member States were found to be behind this activity. The Andorran authorities stressed, however, that they could neither produce statistics on cigarette sales, nor could they ascertain the final destination of the goods in question.
Since these investigations were carried out, the Commission has been in constant touch with the Andorran Government and, as a result, measures are now in place which should enable us to come to grips with this illegal trade. We have already noticed that considerably fewer cigarettes are being seized by Member States on suspicion that they have been smuggled from Andorra. There has also been a huge reduction in UK exports to Andorra compared with 1996 and 1997. What is particularly distressing is that manufacturers in Britain must have been aware of the situation, since exports to Andorra rose so sharply over such a short time-span. The whole affair is now being looked into both by UCLAF and the authorities in the countries which took part in the original investigations in Andorra.

Needle
I would like to express my gratitude to Commissioner Gradin for what was a very informative and positive answer. I very much hope that we can get some further information on the successful measures and the extent to which the problem is being reduced. I am grateful to the Independent newspaper in the United Kingdom for raising this, and it is extremely important that people are made aware of this issue, because of the work that UCLAF is doing. In the current climate it is important to talk about potential successes as well as problems.
For the wider issue, in terms of the health debate in the European Parliament and measures the Commission is taking to combat tobacco consumption, on which I hope there will be further progress in the Commission tomorrow, there is progress in Member States such as Great Britain, where proposals have been produced by the government to tackle smuggling as a priority. I am delighted to hear that the Commission will be working in partnership on that and I hope that sufficient priority will be given to tackling this, to ensure that directives such as the tobacco advertising directive will be effective and will not be undercut by these criminals, particularly in the tobacco companies, who must take responsibility for what they are doing: increasing smoking.

Gradin
I am very pleased that we have been able to have good cooperation between UCLAF and the different Member States. This is the only way we can combat trafficking in cigarettes. As you may be aware, we have also been quite successful in working on this in the Mediterranean and we have now a specialised unit in UCLAF that looks into trafficking in cigarettes. We will always willing to give information to Parliament about our work in this area.

President
Question No 54 by Maj Theorin (H-1099/98)
Subject: Illegal immigration
Illegal immigration is a big problem for the European Union and its Member States. The Council has therefore taken steps to harmonise control methods and to increase consultation and cooperation between Member States on matters relating to refusal of entry and action to combat the smuggling of human beings. Many refugees currently live illegally inside the EU's borders, some 3 million of them having entered Europe between 1991 and 1993. They often live, children and the elderly alike, in inhumane and unhealthy conditions, as described by Chris de Stoop in his book 'Utan papper'.
How, in the Commission's view, can these people's living conditions be improved? I give the floor to Mrs Gradin to answer Mrs Theorin's question.

Gradin
Mr President, I share Mrs Theorin's concern over the situation of third-country citizens residing unlawfully in the Member States of the Union. Some fell prey to traffickers in human beings, others arrived here independently. Most of them came in pursuit of a decent life and a better future. Reality does not always match their dreams, however, and many find themselves struggling to survive under very difficult conditions.
As things stand, immigration rules vary from one Member State to another. There are a number of EU-wide recommendations and agreements on immigration policy and these cover most - but not all - categories of migrant. Nor are all the various provisions fully coordinated. In 1997, I duly tabled a proposal for the introduction of common rules to govern immigration into the EU. My hope is that clearer and more uniform immigration criteria will help to reduce the scope for illegal entry. The proposal is now before the European Parliament for consideration and I look forward to discussing the resulting report - which will be produced, I imagine, some time next year.
The nineties saw the advent of increasingly worrying forms of human smuggling. There is a real slave trade in women operating around Europe; migrants are loaded onto buses and containers for shipment over the EU borders. They run the risk of dying an unusually painful death, brought on by either thirst or lack of oxygen. People are dispatched to sea aboard unseaworthy craft in the middle of winter. No one knows how many drown each year in this manner.
Trafficking in human beings is organised by well-run criminal networks. These mercilessly exploit the vulnerability of the weak for their own greater gain. Large amounts of money are earned at relatively low risk. Only a many-pronged strategy can enable us to fight such rings. Action is needed at both national and EU levels. If we are to put a stop to this growing trend, it will be necessary to combine immigration measures with intervention in other key policy areas.
Little effect can be hoped for from isolated measures on visa policy or border controls, or from one-off decisions to deport or expel individuals. A joint and coordinated strategy across the policy spectrum is what is required. I am thinking in particular of CFSP, together with trade, development and humanitarian aid policy. A general commitment to the progress of society and social justice is of course an important component when we are seeking to reduce illegal immigration into the EU. Let us never forget that we are talking about individual human beings who find themselves in difficulty. Even if they have no legal entitlement to enter the Union, they can expect to have their human rights and fundamental freedoms respected. This principle should underpin any European strategy to combat illegal immigration.
The situation of asylum seekers and those coming from war zones is somewhat different. These people did not leave their homes voluntarily. Maybe they are fleeing civil war, or their government cannot offer them adequate protection. Usually they will be part of a mass migration process. The Commission has, as you know, submitted two proposals to the Council of Ministers in the hope of easing the situation: one on temporary protection, the other on burden-sharing when the Member States are faced with mass movements of people fleeing their country of origin. Both proposals are currently before Council and the European Parliament has already considered them on two occasions.
You will have heard that one of the aims of my proposal is to establish a minimum level of social protection for such migrants once they have entered the territory of one of the Member States. If the Council of Minsters can agree to the proposal, everyone needing protection within the Union will be able to be guaranteed decent living conditions.

Theorin
I should like to thank the Commissioner for her comprehensive and very positive answer. Our views seem to tally pretty much on many of the issues, which is gratifying. I particularly appreciate her reference to the need for social measures in order to drive progress in terms of society.
The magnitude of the problem is none the less catastrophic for the Union and Europe as a whole. Whereas we used to deport 30 000 people a year, now we are approaching a figure of 200 000. As the Commissioner herself pointed out, this is partly due to the fact that various mafia-style rings have discovered that trafficking in human life is a highly profitable enterprise - a situation which we did not have to face in the past.
The central issue from my point of view, however, is that there are people actually in hiding in the EU and elsewhere in Europe. Their children often receive no schooling and do not have access to the health and social care they need. This is extremely worrying and the psychological pressure on them is enormous. Surely the least we can do is to reach agreement on guaranteeing illegal immigrants in the EU their full human rights.

Gradin
How to deal with those individuals who are residing illegally in our 15 Member States is a very difficult question, particularly given that we have 18 million unemployed already and no longer have a need for imported labour. It is the refugees, however, who require our particular attention. Their predicament further complicates the situation. I agree that dignified solutions must be found to the problems of these people. And let us hope that most of them will subsequently be able to return to their countries with their difficulties resolved.

President
Thank you, Mrs Gradin.
With that question by Mrs Theorin, we have reached the end of the time set aside for this group of questions. Questions Nos 55, 56 and 57 will therefore receive written answers.

President
Before we move on to Question No 58, Mrs García Arias has a point of order.

García Arias
Commissioner, I would like to raise a point of procedure that, in my view, is important not only for the questions that some Members wanted to put to the Commissioner responsible for competition policy, but, in general, for the European Commission's control procedure for Question Time. So, Commissioner Van Miert, are your services analysing the development of Article 24 of the Directive on common standards for the internal market in electricity, which talks about a transition to a competitive environment?
If the Commissioner could answer this question, then I would know if I can protest to the European Commission regarding the issue of which Commissioner is responsible for answering the questions that certain Members have asked.

President
Mrs García Arias, you have just asked a question that is not on the agenda for the type of answers the Commission has proposed. You have also protested today before the House that your question was not among the questions answered by Mr Van Miert. You are now asking a question that is not included on the agenda. To introduce this question would mean upsetting the established agenda. If the Commissioner wants to give you an explanation, I will allow him a short time to do so but, in any event, he must take into account that it is not actually on the agenda and that there are other questions which are that require his time.
Mr Van Miert, we are breaking with custom here, but I am relying here on the good will of the other Members of the House and on your own good will, and I would like to ask you if you wish to respond to this question.

Van Miert
I can answer this question at the same time as that of Mr Pérez Royo. I will do this in a personal capacity, of course.

President
That seems fine to me, Mr Van Miert. Then we shall not break the order. Mr Van Miert has agreed to reply to Mrs García Arias in the context of the question by Mr Pérez Royo and, if we make good time, we shall be able to reach Mr Pérez Royo's question.

President
Question No 58 by Felipe Camisón Asensio (H-1052/98)
Subject: Mergers in the bus sector
The Commission recently gave its authorisation for mergers in the European Union's bus sector. To what extent are such mergers likely to affect competition and job creation? I give the floor to Mr Van Miert to answer Mr Camisón Asensio's question.

Van Miert
I can give you a very brief answer to this question. The Commission did indeed approve the merger between Iveco and Renault, but only for the three main categories of buses: tourist coaches, buses for use in towns and urban environments and buses used for public transport in general. We examined the merger in question and decided that it did not present any problems as regards competition. As you know, we looked at the issue on the basis of the regulation on mergers of undertakings, and it was clear that, firstly, both companies held a declining share of the market in their respective Member States and, secondly, that there was sufficient other competition left. I have to say that as far as tourist coaches are concerned, the competition is extremely strong, while for the other categories of buses the market is currently opening up, because it was traditionally nationally based, as you know. But even this market is now opening up to the extent that we can start to talk about a European market, and we had no problem with the merger from the competition point of view because there was still plenty of competition left. I should add that once we can resolve any concerns we might have about competition aspects, then we will always be happy to include other elements such as employment in our analysis. But our first responsibility under the regulation on concentrations or mergers of undertakings is to analyse the competition problems and to base our response - in this case a positive one - on that.

Camisón Asensio
Commissioner, I would like to ask a question concerning the Commission's authorisation of the merger of the bus manufacturing activities of Renault and the subsidiary Iveco, a concentration that naturally puts the second manufacturer in a much more important position on the European market. Have you taken account here of the willingness or desire of companies to make access to buses easier for the disabled through the addition of retractable platforms? And in what respect has this been considered?
Similarly, in relation to the employment creation measures mentioned by the Commissioner, has consideration been given in this concentration to transferring activities to the United Kingdom, Germany or Spain?

Van Miert
In this particular case, neither of the notifying parties raised any employment-related aspects, though they did tell us where they intended to concentrate their activities. The mergers regulation allows trade unions to put their case to the Commission's services or to myself, but as far as I know, no requests were made in this case. We would be quite happy to listen to their concerns and, as I said, to accommodate them as far as possible. In another very typical case, that of Kässbohrer/Mercedes-Benz, we received a great deal of interest from the trade unions and this was taken into account in the procedure. It also led to a decision that we took at the time in another case. But as I said, in this particular case neither the notifying parties nor, as far as I know, the trade unions made any request to speak to us.

President
Question No 59 by Paul Rübig (H-1068/98)
Subject: Discriminatory fares
The British ferry company which operates the Dover to Calais route has a discriminatory fares policy. Subject to certain conditions, special offers are available which mean that a crossing can cost as little as £16; but these are available only to inhabitants of the United Kingdom. Other citizens of the Union have to pay the normal fare of £79.
Does the Commission have any reservations about these practices, either from the point of view of the rules of competition (Article 85 et seq. of the EC Treaty) or as regards the elimination of quantitative restrictions between Member States or bodies on which they have an appreciable influence (Article 30 et seq. of the EC Treaty)? I give the floor to Mr Van Miert to answer Mr Rübig's question.

Van Miert
It seems that this is a question of the commercial strategy of an operator of the cross-Channel ferries. If that is the case - and it might well be that this is just part of a commercial strategy - and if we receive complaints then eventually we will look at the matter further. So far as I am aware this is not the case but it might indicate that ferry operators have made certain agreements. As I said, there is no indication that is the case here.
Another question which could eventually be raised concerns Article 86: if there has been an abuse of a dominant position. Since the company in question is not in a dominant position, this does not apply. Therefore, for the time being, according to our information, there is no problem in relation to the enforcement of competition rules.

Rübig
Commissioner, the problem is that those travelling from Europe to the United Kingdom find that there are two separate fares; a much reduced one for UK citizens and a normal fare. I have also come across this problem in Austrian ski resorts, where the same thing happens with ski passes, and that is why I believe it is important for us to consider the principles behind this issue of discrimination against certain countries. On the other hand, of course, we all know that discounts also exist, and there can be discounts for particular professions, educational groups, companies, authorities and so on. I do believe, however, that it would definitely be appropriate for the Commission to express a clear opinion on this matter.

Van Miert
Mr President, of course most people are glad when there are discounts, and that is what we have here. We then also have to take a careful look to see whether there is anything more to it than that, for example whether certain shipping companies have come to an arrangement. Occasionally there might be a cartel. We have already had cases of this kind, whether related to the tunnel or these sea crossings. You will certainly also know that, just last week, we decided to fine the ferry companies operating between Bari in Italy and Greece. We will of course investigate if we receive complaints. But in this case, there is no sign as yet - as far as I and my services can see - that this is anything more than what would normally be called a policy of offering discounts. If you have any more information, please let us know, and we will see what we can do.

Macintosh
I welcome the Commissioner's reply. I wonder whether he saw the Money Programme on BBC 2 on Sunday night - I know he is an avid television watcher in his spare time - which indicated that this practice is not confined to ferry companies alone. The practice of charging different fares for different flights, depending on which country you start your journey in, is a widespread practice within the European Union airline industry. When the euro comes into force on 1 January and prices have to be quoted in euros, will he please undertake to make sure that this practice is not rife throughout the whole transport sector? If it is, and cases are reported to him or if his own department's research indicates that this is a widespread practice, will he please use the powers available to him under the Treaty?

Van Miert
You mention a broader question which is a very real one; probably an even more real one in the civil aviation business than in the ferry business. Again, if it is just about promotional fares, that is all right. People like it. But if there is something more behind it and if we get some evidence and coherent information about it, we insist that we will look into it. There is another question about Sabena. My answer is that indeed, there are reasons to launch a broader investigation about certain practices, particularly in the civil aviation sector.

Watts
As MEP for East Kent, I represent Dover. I am very keen to help reassure Mr Rübig that good deals across the Channel are, in fact, available to all citizens of the European Union. Special offer fares of around GBP 16 are available to all citizens of the European Union for day trips. In practice, many EU citizens benefit from that particular offer, not least, of course, our friends, the French, across the water, who regularly take up those good deals and many last-minute bargains. Of course when duty-free goes, many of these bargains will go with it. I hope that duty-free stays and Mr Rübig and his fellow countrymen and women come to Nord/Pas de Calais, take a trip across the Channel on these ferries that represent excellent value for money. He and others would be very welcome to visit my constituency. I can reassure him on that point. We do not discriminate on fares.

Van Miert
I have the impression that this was not really a question but a one-minute advertisement. I congratulate a Member of Parliament for being so outspoken on behalf of his region.
Having said this, there is no discrimination between Community citizens. If there were, obviously we would have problems and would act. That is not the case. Let there be no misunderstanding about that. If there appeared to be an abuse somehow or a kind of hidden cartel, or whatever, then we would act. As far as I and my services can see today, that is not the case.

President
Question No 60 by Fernando Pérez Royo (H-1069/98)
Subject: Oligopoly in the Spanish electricity industry
In Spain, an oligopoly appears to be taking root, whereby four undertakings have cornered 90 % of the electricity market, with two of them alone, ENDESA and Iberdrola, controlling 80 %. Recently formed partnerships such as the one between ENDESA and Gas Natural amount to fresh horizontal integration, which is exacerbating this trend.
Does the Commission regard these shifts and agreements amongst undertakings as running counter to the spirit and the letter of the Treaties and as detrimental to free competition and to the consumer? As the Commissioner has indicated, this is the question we are dealing with, and I now give him the floor.

Van Miert
Unfortunately, I cannot be of much help to the honourable Member, as we too only learned of the two companies' intentions from the press. Therefore, my services are currently making every effort to gather all the information we need because, for now, I am not even in a position to tell you whether this is a concentration or an operation involving Article 85, that is to say a type of joint venture or cooperation.
For the time being, therefore, I am unfortunately unable to tell you any more. But I have agreed with my services that we will insist on obtaining information very quickly from the companies concerned because I can assure you that we are following developments in the energy sector very closely, not just in Spain but also in the other Member States.
I would now like to answer the other question raised that appears later in the list of questions. Firstly, this matter actually concerns DG IV, but it also concerns my colleague Mr Papoutsis because it comes under the directive and the Member States are therefore required to inform the Commission, and in particular Mr Papoutsis, of their intentions with regard to stranded costs.
Secondly, as it is mostly a question of state aid, my services must also be notified of this type of matter. I can also tell you that, during my last visit to Madrid at the beginning of the month, I discussed this issue at length with Mr Piqué, the minister responsible, who promised me that my services would definitely be notified of the issue so that we can examine it in parallel with other cases, because the problem exists almost throughout the Member States. In the course of the coming months, we hope to examine all of the cases of stranded costs in a spirit of coherence and transparency.
I cannot therefore tell you any more, except that we have insisted that the Spanish Government should notify us of the issue so as to allow my services too to examine all relevant cases, obviously in full cooperation with Mr Papoutsis's services in DG XVII.

President
Commissioner, I would ask you to remain with this issue as, firstly, I have a supplementary question from Mr Pérez Royo and I then have two further supplementary questions, one from Mrs Estevan Bolea and a second from Mrs García Arias. Therefore, I will first give the floor to Mr Pérez Royo for one minute.

Pérez Royo
Commissioner, my written question refers to the oligopoly that exists in the Spanish electricity industry. Given the measures that the Spanish government has been promoting recently, we should instead be talking about a form of capitalism between friends or a sharing out of the loot. In fact, on the eve of the liberalisation of the electricity industry, the companies have managed to get the government to propose compensation of ESP 1.3 billion, that is, EUR 6 200 million, to cover the costs of the transition to a competitive environment. The government, in collusion with the companies, hopes to move this issue of compensation forward before quantifying the costs involved and before even knowing whether or not there are any costs at all. Indeed, this compensation is going to mean a significant rise in charges for consumers.
The regulatory body for the industry, the Comisión Nacional del Sistema Eléctrico, has stated that it opposes this measure and believes it to be unjustified. The only response from the government to the views of the regulatory body was the assertion that the chairman of the Comisión Nacional del Sistema Eléctrico is a socialist.
Apart from the embarrassment I feel at the attitude adopted by the Vice-President of the Government, I would like to specifically ask the Commissioner if the government has informed the Commission of its intention to approve these measures by urgent procedure, in less than a few weeks. Secondly, I would like to know if the Commission's services believe that such practices are compatible with the rules on competition.

Van Miert
It is clear that the two questions are linked. Firstly, as far as the trend towards concentration is concerned, once again, I cannot for the time being tell what is involved here as I do not have sufficient information. But we are, of course, insisting that the companies provide us with full information so that we can check whether this is an example of a concentration and see whether we must examine the case, or whether it should be dealt with by the national authorities. Then, if it is a cooperation agreement we may also have to examine it, this time in the light of Article 85 rather than the regulation on concentrations. That is all I have to say on the first aspect of the question, which in fact is similar to the question asked initially.
As for the other aspect, I have just said that a few weeks ago, when I was in Madrid, I managed to secure Mr Piqué's agreement to ensure that Mr Papoutsis is notified of how the transitional measures are funded not only under the directive but also in the form of state aid. Perhaps this has been checked in the meantime, but we are going to examine this whole issue in terms of state aid and stranded costs. I cannot tell you any more at the moment, except to confirm that we refused to accept that we should not be informed of this so that we can examine it properly.

Estevan Bolea
As you know, Spain is the country where there has been the greatest and most widespread liberalisation of the electricity market. At the moment, 18 % of supply comes from private generators, that is, autoproducers, so Mr Pérez Royo's figures are somewhat out of date. There are also new projects involving a number of American companies.
I would like to ask you about the situation in France, which has the company Electricité de France . I would like to know whether or not you believe that the French are complying with the directive in terms of the transition to a competitive environment.

Van Miert
I am very grateful for this question because it allows me to give you certain details.
Firstly, there must be no mistake. We very much welcome the government's current plans to liberalise the energy market. There is no doubt on that point. But in doing this we must also respect the rules of the game, particularly by checking that the amount devoted to stranded costs is real and does not exceed the actual stranded costs involved. This is yet to be checked, both in Spain and in other countries such as France and Belgium.
Secondly, you are correct. The situation is in a way even more complicated in certain other countries. In France, everyone knows the situation concerning EDF. But there too the market will have to be opened up, particularly as EDF has just bought an electricity company in the United Kingdom.
Therefore, if we want to have access to other markets, we must of course accept that others can also come onto our market. It works both ways. There must not be any misunderstanding on that point.
Once again, we welcome the government's policy, on the whole. Nonetheless, we must check that the way in which it is being implemented does not cause problems. However, I will not comment on this now but will wait until I have been fully informed about the system in question.

García Arias
In the days ahead, before the end of this year, the Spanish Chamber of Deputies is going to vote on an amendment to the accompanying government bill on budgets that will allow electricity companies immediately to obtain around one billion pesetas from the financial market that the banks will recover through an additional charge to be added to the rates paid by consumers over the coming years. The electricity companies are going to be able to use the money they pocket against other competitors, not only in the electricity industry, but also, for example, in the telecommunications sector, where these electricity monopolies are already evident.
I would like to ask the following question. Do you not believe that it is urgent, before that vote, to warn Spain's legislators - on the basis of the Community law you represent - that this substantial aid or subsidy needs to be authorised in advance by the European Commission and that the vote should therefore be postponed?

Van Miert
Of course. I can tell you that we have informed the government that this practice is at the companies' own risk. You are right in saying that the Commission must be able to check whether aid given by the authorities as compensation for stranded costs is correct and, consequently, until the Commission is able to complete its work, authorisation cannot be given and, as a result, if they go ahead it is at the risk of the authorities and of the companies concerned. This must be clear.
Therefore, I will not conceal the fact that I have asked the government to postpone this operation. That is the stage we are at now.
As for putting it on the market, for which you have quoted the amount - so that there is no misunderstanding, the remainder is the overall system, which will be examined - not only would this be at the companies' own risk but, moreover, those concerned would be well advised not to proceed with it before the Commission has been able to complete its work.

President
Thank you, Commissioner. Knowing how generous you are, I would propose that you deal with one last question in the two minutes that we have left.

President
Question No 61 by Jyrki Otila (H-1101/98)
Subject: Sabena flights to Strasbourg during part-session weeks
The Belgian national airline Sabena discriminates against economy class travellers on the route between Brussels and Strasbourg during the European Parliament's part-session weeks. The airline prohibits the purchase of other than business class tickets for certain departures. This causes problems to other passengers, not least with regard to the compatibility of timetables and the limited alternative travel possibilities.
Does the Commission consider that in acting in this way Sabena is abusing its dominant position on the Brussels-Strasbourg route? What measures does the Commission propose to take to put pressure on Sabena to halt the discrimination against economy class travellers on this route? I give the floor to Mr Van Miert to answer this last question in the two minutes which remain.

Van Miert
I would ask the honourable Member, who was quite right to raise this question, to give us a little more information, because it is not clear whether this was a case where all the economy seats had been sold and it was claimed that there were only business-class seats left. That may have been the case - it does happen. Or else there were still some economy seats left, but the person concerned was forced, as it were, to pay the business class price. That happened to me once, not on this flight but on a flight from Brussels to Milan. I have to say that there are obviously still certain practices going on here and there - hence the answer I gave to Mrs McIntosh a moment ago - which are enough to make us look at the whole situation a little more closely, not just that one flight. I have the impression that certain things are happening that are a little suspicious. I do not want to comment on this particular case because we have of course asked Sabena to provide further information, but if the honourable Member could give us any more detailed information himself, it would be helpful.

Otila
Mr President, I thank the Commissioner for his reply. It is true that Sabena only offer a business class service on this route. But as our time is drawing to a close I do not wish to prolong this sitting. I shall return to the subject later.

President
Thank you, Mr Otila.
Since we have now come to the end of the time set aside for questions to the Commission, Questions Nos 62 to 113 will receive written answers.
That concludes questions to the Commission.
(The sitting was suspended at 7 p.m. and resumed at 9 p.m.)

Information strategy on euro
President
The next item is the report (A4-0485/98) by Mr Arroni, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the Commission communication on an information strategy on the euro (COM(98)0039 - C4-0125/98).
I give the floor to the rapporteur, Mr Arroni.

Arroni
Mr President, ladies and gentlemen, money is present in numerous acts of daily life. It is not only a vital cog in the economic wheel but also a store of values and ideals; and if the currency under discussion is the euro, these considerations take on a far deeper meaning. Hence the importance of informing Europe's citizens about the euro and ensuring that they appreciate its significance.
Much is at stake: the euro is now a fait accompli and must succeed. But its success depends to a large extent on its acceptance by all the citizens of Europe. Their acceptance will in turn depend on our capacity - until now and from now on - to communicate with them and inform them about the euro. Acceptance by all Europeans, therefore, is the first aspect on which I wish to dwell.
A mere glance at the budget of the Prince programme reveals straight away that the investments scheduled increase in stages and culminate at the key date of 1 January 1999, only to decline inexplicably thereafter. What does this mean? Does it mean that our task will be complete once we have satisfied the information needs of that part of the population which will have the possibility, the desire and indeed be privileged to use the virtual euro as from 1999? What do we intend to do for the other part of the population, the less fortunate groups, the ordinary citizens who will only encounter the euro once it is in their pockets in 2002?
We must remember that for many European citizens the euro will not arrive in 1999, but in 2002. We have been quite right to focus our efforts so far on those who will be using the euro as from 1 January 1999, but we must not make the mistake of believing that this is enough. If we were to do that, the euro could be perceived even more than now as a currency for the rich or for just one section of the population, and this would not only be a social injustice but really could jeopardise the much-desired success of the entire operation. That is why one paragraph of my report proposes that the budgetary effort - ECU 38 million - should be maintained in the years following 1999.
Let us now move on to another problem: when the target population changes, can we maintain the same type of information? In the Economic Affairs Committee I proposed that, after 1999, we should offer information that is less technical and more emotive, so as to arouse people's feelings. The committee did not think it advisable to take this course, and I respect its view. What I would say, however, is that not only must the nature of the information be different, but so must the type of language and the practical methods used.
Until now, we have been attempting to communicate on the basis of rather technical information - economic and financial considerations - stressing the economic and financial potential of the new single currency. This was without doubt a winning approach, because it was aimed at a section of European society capable of understanding and benefiting from it. However, as I have said, the success of the euro will depend on its acceptance by the average citizen. We must therefore use a different sort of language, try to speak to the ordinary citizen in his own language and find out what kind of information he needs.
As for the methods, we must bear in mind that 25 % of Europeans - I repeat, 25 % - are a target population which cannot be reached at all by means of the methods used to date. An OECD report states that between 30 and 45 % of Europe's citizens are illiterate or recurrent illiterate: this does not mean that they cannot read or write, but that they have difficulty in grasping the meaning of a written text. So we could send out kilos upon kilos of brochures, or put together the most sophisticated websites; all to no effect. It is not a matter of repudiating the magnificent work done so far, and which has served our purpose so well, but this should be complemented by other, more suitable methods. As regards the most disadvantaged groups, one undoubtedly effective method could be to use so-called 'euro mediators': people whose social role brings them into close contact with these disadvantaged groups, such as the family doctor, pharmacists, postal workers and social workers.
I would just conclude with a thought for the young people who, by their very nature, will be the bearers of the positive messages which we entrust to them.

Tillich
Mr President, Commissioner, we have often discussed the question of the euro and the European Parliament's information campaign, known as Prince. Those Members of Parliament present today, who are almost all experts, know that the Prince programme is an initiative of the European Parliament and that in 1998 we have had a heated debate with the Commission concerning the implementation of its information activities. For this reason we in the Committee on Budgets, in our opinion on the present report, which dates from as far back as 15 June, first considered calling for an independent Prince campaign in order to ensure that we would have a continued role in decision-making in the Prince programme, as the President at that time did not accept the amendments or the Pex report.
On the other hand, of course, we did not create the Prince initiative solely for the purpose of a euro campaign but also in order to take in two other areas of activity. It is ultimately the wish of the Committee on Economic and Monetary Affairs and Industrial Policy no longer to do so to such an extent, but I am pleased that the rapporteur has included the main paragraphs from my opinion - paragraphs 7, 8, 9, 10, 11 and 12 - which deal with the main points agreed on by the joint working party of the European Parliament and the Commission.
I would ask the Commission and the Commissioner responsible, Mr de Silguy, to use their authority where the budgetary framework is concerned. You are familiar with the problem. We have constant problems between Parliament and the Commission, although in the past Parliament strongly supported the Commission in making available the necessary resources. Yesterday, in the supplementary budget, we once again made additional resources available for the euro campaign so that its implementation is guaranteed. I hope that in future the Commission's proposals will be sound at the outset, so that Parliament does not need to put them right.

Randzio-Plath
Mr President, the rapporteur is right to highlight in his report the importance of information and communication in the context of introducing the euro. It was the European Parliament that, very early on, pointed out the lack of information on the euro and fortunately found in the European Commission a partner to organise cooperation between the European Commission, the European Parliament and the Member States of the Union. As always, I regret that information in the Member States and also in the regions and local communities is not as highly developed as it should be.
We have discovered that many people in the European Union do not feel involved. They feel that they are not properly informed and that the information they have is not broad enough. They do not feel that they are sufficiently well informed about the pros and cons of monetary union. Yet monetary union begins in only 17 days. We in the European Parliament must therefore ensure that this work on information continues, as the rapporteur rightly emphasised. It must continue in particular in the next year when we will be living in the European monetary union but only cashless payments will be handled in euros. Do you know that many people believe that euro coins and notes will be available to them from 4 January? Do you know how frustrating this will be? Do you know how difficult it is to adjust to a different currency? All these issues concern us particularly as Members of this European Parliament. We must therefore continue to insist on conferences on the subject of the euro, on discussions and on reliable information booklets. But we must also ensure that we include the NGOs, consumer protection associations, youth organisations and women's associations, so that they can help to persuade people in these areas. I believe that with the help of such efforts over and above the report, a great deal more can be done and that the genuinely positive approaches of the information and communication work on the euro can and must therefore be extended.
It is true that we must also consider the problem groups in our society, the disadvantaged sections of the information society, and it would therefore be helpful if the Commission could tell Parliament today that it intends to make 10 % of the resources available for these disadvantaged groups and that in addition to the initial projects it has a new strategy to genuinely include everyone. We have also shown that we are concerned not only about handicapped persons but also about people who live in remoter regions, who do not have much opportunity to travel, and also about illiterate people, for example. We therefore need a more substantial contribution and also a greater commitment from the Member States. So I call on the Ministers of Finance and in particular the Ministers of Education in the European Union to ensure that the euro is taught about in schools and in adult education, and to provide the necessary resources for this. We must involve young people and older people, so that they know that European monetary union is in their interest. We cannot leave it to the private sector to take full responsibility for information on the euro. The public sector must take on the leading role which we wanted it to have in the regions and in the Member States too.

Peijs
Mr President, publicity for the euro is bearing fruit. Support for the euro in the 15 Member States has risen to 60 %, and as high as 75 % in the Netherlands, although it is uncertain whether this support will continue to grow.
In my country, for example, things are going adrift in cooperation between the departments organising the government campaign and private parties represented in the national forum for the introduction of the euro. The banks have known for years that they would need to clarify their policy vis-à-vis the consumer. I was pressing for this in the media before the summer holiday period. For years, the banks have hidden the cost to the consumer in an exchange rate margin which is difficult to quantify. And now, with the launch of the euro just four weeks away, they are confusing their clients with new money rates at a time when those clients understandably thought that they would face no further costs in the future. The reaction of people in the Netherlands is quite understandably one of extreme irritation. In the view of the consumers, the proposed rate is too high and in some instances not transparent. Equally questionable are the settlement rates which the banks will be charging each other. There seems to be no element of competition there at all.
Another threat is looming over the introduction of the euro. The retail trade in the Netherlands is united in wanting a 'legal big bang'. The same is true in other countries too. So it will be guilders up to 1 January 2002 and euros thereafter, with the possibility, if necessary, of exchanging guilders for six months afterwards. The retail trade has put forward some good arguments and given the government a helping hand in the form of practical suggestions. From the government side, we have not heard one single convincing argument, just vague talk about safety and security and the need to call in the army. I do not think that is relevant, since the army is a positive force in society in Europe and will be more than ready to lend its assistance. My question to the Commissioner is this: can the Commissioner say whether he thinks competition between the banks on their reciprocally agreed rates is guaranteed? Does he think the 'legal big bang' is possible, and is the so-called 'frontloading' which this requires legally possible? Is there any truth in the rumour that there are plans for a law which will make frontloading impossible?

Boogerd-Quaak
Mr President, ladies and gentlemen, the Arroni report has made it very clear that information about the euro is of great importance. But I should like to raise here the question of policy with regard to target groups. Member States will need to broadly coordinate the information they provide on the practical procedures for the introduction of the euro as a currency between 1 January and 1 July 2002. To my mind, the choice between a transitional period of a few weeks and one big change-over day all at once largely determines the way in which information on the euro should be given to our citizens. Information must be targeted at the moment of the actual physical change-over. The problem is, however, that most countries have not yet taken a decision on that. If Member States decide to introduce the euro all at once in a 'big bang' of the kind Mrs Peijs referred to, then information should be aimed primarily at older people encouraging them to start using the euro right away. Because a 'big bang' needs frontloading. Euros will need to be distributed a few days ahead of 1 January 2002. We have to avoid older people being taken by surprise by a change-over all in one day. Research shows that older people are more reluctant than others to start using euros early. A fairly long transitional period will enable people to pay with the old currency and the euro. This method will mean that the retail trade in particular bears a large proportion of the cost of the actual change. If a fairly long transitional period is chosen, information must focus primarily on encouraging the public at large to pay by transfer methods using PINs, chips and credit cards. This will as far as possible ease the burden on the retail trade and small businesses.

Gallagher
Mr President, this report by Mr Arroni has been drawn up at a defining moment in history as we move towards the introduction of the euro. The arrival of the single currency needs a revolutionary approach not only on behalf of the institutions but on behalf of all the citizens of this Union. Our habits and our traditions will have to change.
To be effective this change must be accompanied by a real and effective information policy. The transfer to the euro is going to change a whole scale of values. The symbols for the currencies we have grown up with will disappear. I am certain that with a properly organised information campaign we will quickly adapt to the new euro symbol.
Europe will be moving forward together on the euro. The point of no return has been reached. It is legitimate to devote half the information budget to a public awareness campaign on the euro to ensure that the transition happens as smoothly as possible. The transfer to the euro is not only an economic question for bankers and financial institutions. Public opinion also counts. Without delay, without exception and if necessary through large-scale trial runs, we must ensure that the less-favoured, the blind, those with disabilities and those who are isolated must be the target of a practical and major information campaign.
Governments and local authorities - as they are close to the people - have a role to play in this information campaign. The main focus must be on schools, universities, small shopkeepers and the media. From the year 2001 a major campaign of public awareness must be launched throughout the Union aimed at promoting the identity of the euro. It must take into account questions raised between now and then. My group fully supports a rise in the funding levels for the Prince programme.

Ribeiro
Mr President, Commissioner, I have very little time but I would like to use it to emphasise the fact that even the Commission itself claims that SMEs are not as well informed about the consequences of the euro as larger firms are. That is natural given the origins of the euro and the interests that its creation primarily serves! Again, the Commission itself says that the preparation of local authorities and elected representatives is at times lagging behind. That too is natural! And it is being too kind in watering down the expression by adding the phrase 'at times'. It is small and medium-sized firms, small and medium-sized elected representatives, small and medium-sized consumers, small and medium-sized people who are being given too little information about the euro. That is natural, because the euro was not created for anything small or medium-sized, even though they are going to have to use it in their small and medium-sized daily lives! Recital J of the Arroni report points out the psychological, social, political and national dimensions and rightly considers that a currency is not only a technical instrument to make trade easier. I would like to add, in the case of the euro, the phrase 'between large groups in international economic and financial relations'. I would like to draw attention to recital L, although perhaps it exaggerates when it says that switching to the euro is going to destroy all scales of values in existence, and people's memory of prices and habits. I emphasise all of this but I could also underline the fact that in France there are still people who work out prices in old francs; in Portugal people still refer to a thousand 'reis' or 'tostões'. Probably every country has examples of people who run the risk of being discriminated against or even excluded. For our part, when it comes to the euro, we would like to make them special targets for information about the euro.

Lulling
Mr President, it may initially seem rather strange and also late in the day for this House to be discussing the information strategy for the euro when we are just 17 days away from its introduction.
However, we should remember that, since 1996, many costly efforts have been made to inform the inhabitants of the European Union about the introduction of the single European currency as this will affect them more than any other EU measure. The introduction of the euro must therefore be fully understood by all EU citizens, whether employees, businesspeople or consumers, with regard to both its political, economic and social objectives and its methods of use during the transitional period and after 2002.
Approximately ECU 150 million have already been spent in the campaigns organised between 1996 and today. From next year until 2001, another ECU 100 million will be available.
I must congratulate our rapporteur, Mr Arroni, on his report and thank him in particular for having accepted the majority of my amendments. However, he has had to report that, despite this expenditure, a large part of the EU population feels ill informed about the euro and that, according to the OECD, around 30-40 % of the European population experiences difficulty comprehending written information. This is rather astonishing, particularly when you consider that we are all normally interested in money, whether we have it, whether we do not or whether we have enough.
Our rapporteur has recommended that the general public be among the main target groups of the euro information campaign, with special attention being given to particular sections of society and with certain specific groups in society being used to distribute this information.
I have secured the addition of women's organisations as a multiplier for communicating and targeting the information. There is a regrettable tendency to ignore the major national and European women's organisations which have millions of members in the Member States and very specific and direct means of reaching and informing women. Perhaps the Commission could encourage these organisations to participate in the information campaigns by offering them a partnership? This would be money well spent and more cost-effective than glossy brochures which no-one reads or understands.

Lukas
Mr President, the physical introduction of the euro really affects all the citizens of the countries that are participating in monetary union. The replacement of the coins and notes we have been accustomed to with something completely new and different will be an important event in all our lives. This changeover will require a new way of thinking and a positive attitude to the event. Mr Arroni's excellent report, which is also technically outstanding, is therefore a highly important document in view of the need to provide economic actors and citizens with information as efficiently as possible. Large sums of money are being spent on this information campaign, so it is important for the European Parliament to state clearly how the agencies responsible should use it.
As all sections of the population, all social classes, all age groups, including partially sighted people and the mentally handicapped, need to be able to deal with and handle the money, information cannot just take the form of general statements. Instead, it is important to try to initiate dialogue with the people and to provide information geared towards specific target groups. We will be able to avoid a lengthy and costly two-track situation in the first half of the year 2002 if people are fully informed before that point.
Institutions and firms that are particularly suited to the role of multipliers must play a key role in information. These include in particular schools, local authorities, banks or even tourism organisations with an international clientele. In terms of the acceptance of the new currency, it is important that we should no longer give the impression at this stage that we are advertising the euro, but that we are simply providing information about it.

de Silguy
Mr President, ladies and gentlemen, on behalf of the Commission I must first of all congratulate Mr Arroni on his report on the information strategy for the euro. I believe that we have very similar views on this subject and I share the concerns expressed in this House about the fears, expectations and even hopes of the general public in the changeover to the euro.
I also believe that the action which we have carried out together since 1996, following the Madrid European Council at the end of 1995, has largely achieved its objective of mobilisation.
I would be inclined to answer Mr Tillich by saying that cooperation between the Commission, the European Parliament and the Member States is useful. I believe that this has been proven and, in the future, cooperation will be the decisive factor in the success of the transitional period.
I will very briefly comment on two aspects arising from the speeches and from having read this report. The first relates to the method of operation of the campaign and the second concerns the priority targets.
With regard to the method of operation, I would remind you that our campaigns are based on two principles: partnership and decentralisation. I believe that partnership is a vital concept because the Member States must be brought as close as possible to the citizens. This is why conventions have been signed - in the end with all 11 members of the euro zone - which have worked well. They will be renewed next year and I can inform you, as requested by Mr Arroni, that the Commission is not limiting itself just to the euro zone. On the contrary, we are ready to discuss with the various 'pre-in' countries the issue of cofinancing euro information actions from 1999, if they wish to do this.
However, Mr Arroni is suggesting that we limit the Community cofinancing to 50 % of the total budget. I find this rather strange because it was specifically on the basis of the recommendation of the joint Commission-Parliament working group that approximately two-thirds of the available annual funds were reserved for partnerships. Also, our evaluations confirm the success of these partnerships which, in the context of the conventions, act as a lever for the actions carried out by each Member State not only at national level but also among local communities, SMEs, the distribution sector and the vulnerable sections of the population, about whom you are rightly concerned.
Partnerships are therefore the best way of ensuring that the information reaches the grassroots level. Also, the way in which these partnerships are implemented is essential, in this case through tripartite structures in which your representatives are participating. Mrs Randzio-Plath, these tripartite structures allow these partnerships and actions to be guided, thus ensuring the necessary monitoring and follow-up.
With regard to the second principle - decentralisation - I must remind you that the Commission proposed the creation of local observatories. These are being set up and will provide structures in each Member State to improve the monitoring of the information actions' impact. They will therefore meet this need for information and the need to reassure public opinion, namely the general public.
The ECU 100 million budget specified for the Prince line for the transitional period - that is, ECU 38 million (or EUR 38 million as it is now) for 1999, 32 million for 2000 and 30 million for 2001 - seems sufficient to us to assist the efforts of the Member States. Having said this, I have noted the rapporteur's wish to see this line increased. It will be up to the budgetary authority to decide on this on an annual basis.
Turning now to the second aspect - priority targets - I believe that, as mentioned by several of you, including the rapporteur, the priority targets must be the SMEs, particularly in the distribution and tourism sectors, and also, Mr Arroni, the general public and the more vulnerable sections of society.
I must thank you for highlighting the important role of the Commission's recommendations in the spring on the dual display of prices, banking charges and the monitoring of the euro's introduction. These recommendations were the result of real cooperation and have allowed codes of good conduct and good practice to be established between the various sectors concerned. I can give as an example the agreement between distributors and consumers, particularly regarding the dual display of prices. This will be embodied by a euro logo with a broad smile which you will soon see throughout Europe and which appears to have been accepted by the population. A code of good conduct and good practice on conversion charges, which is currently being developed, will also be introduced in the banking sector.
However, in addition to these agreements, the Commission shares the rapporteur's view concerning the need to adapt the information strategy to the requirements of the most vulnerable target groups. I can say to Mrs Peijs that, with regard to the so-called big bang, the idea currently being studied in Europe involves arranging for shopkeepers to give the euro as change from 1 January 2002. Therefore, just before 1 January 2002, they will be provided with enough euro notes and coins so that they can give change only in the euro from 1 January 2002, with the public being able to continue paying in the national currency for a few more weeks. This is the formula which is currently being studied.
With regard to the public, and specifically those in vulnerable and disadvantaged groups, I believe that our information strategy must develop, in the short and long term, into partnerships with the Member States, with these groups being a priority. We have therefore planned for specific actions to be carried out among young people and in the world of education.
Mrs Lulling, based on ongoing qualitative studies we have also planned a specific action targeted at women, particularly those not in paid employment. As for the so-called sensitive groups, several pilot projects are currently being developed. However, I do not believe that it is appropriate to fix a predefined limit of 10 % for the funds. Some countries will need more while in certain cases more is already being done. In any case, I believe that a certain amount of flexibility must be kept in order to adapt the effort to current and future requirements. Clearly, political pressure in favour of these disadvantaged groups must be maintained, which is what the Commission intends to do.
To conclude, I must applaud the exemplary collaboration between our two institutions. Since 1996, this has allowed a coherent information strategy for the euro to be developed. We must continue in this manner and affirm that our ultimate aim is to ensure that, unlike the situation which occurred in France in the 1960s, on 1 January 2002 when the euro notes and coins are put into circulation, this will be for everyone the final stage in a process for which they will have been well prepared and which will have been properly explained. Our aim is also to ensure that this changeover occurs smoothly.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Adjustment mechanism in cases of asymmetric shocks
President
The next item is the report (A4-0422/98) by Mr Metten, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the adjustment mechanism in cases of asymmetric shocks.

Metten
Mr President, how are countries to cope with an economic crisis once we have the euro? That is really what my report is about. From 1 January, eleven countries of the European Union will have a single currency. At the same time, they will have a single monetary policy and the various exchange rates between them will be irrevocably fixed. What this means is that whilst they gain a common currency, they lose the ability to absorb the consequences of an economic crisis affecting only themselves and not other countries of Euroland by applying a monetary policy which is tailored to their own national circumstances or by revaluing their national currency.
From 1 January, monetary policy will be geared to the average situation in Euroland as a whole, and only the euro itself will fluctuate in value against currencies outside the euro zone. In economic terms, the Member States in Euroland are simply regions within a greater whole. A crisis affecting one region cannot be resolved through national policy. Whilst the euro countries are losing two major instruments for dealing with regional crises, they still have the most important instrument, namely their budget. In the event of a regional crisis, they can use their budget to resolve it.
However, the stability pact has restricted the ways in which the budget can be used. If the budget deficit is 3 %, those possibilities are exhausted. Other possibilities for resolving country- and region-specific crises and the unemployment to which they lead could well be labour mobility and wage flexibility.
But in Europe, with its different language regions, the mobility of labour will always be limited, and there are clear limits to what is acceptable in Europe as regards wage flexibility. All this means that Euroland is quite vulnerable to economic crises which affect just one or more countries. I offer two solutions to this in my report.
Firstly, Member States can take their own precautionary measures, as the social partners have done in Finland. In Finland, the social partners use the pension funds as a shock absorber. In times of sound economic growth, they increase contributions into the pension funds so that in times of crisis they can reduce them.
Since national economic crises may, in the strongly integrated Euroland, spill over on to other Member States unless they are dealt with effectively, I propose a safety net at European level in the form of a stabilisation instrument to be funded by loans raised on the capital market. A mechanism of this kind is already allowed for under Article 103a(2) of the Treaty. It is in fact quite simply an insurance instrument against the consequences of a serious national crisis. It cannot resolve the crisis, but will buy governments the extra time they need to take structural measures to restore the balance. It will in fact replace the exchange rate instrument which in practice served the same purpose prior to the advent of the euro. Since the monies involved are funds raised on the capital market and repayable loans rather than transfers, I would expect Member States to be happy with this idea.
A major fear in the past, that a stabilisation mechanism of this kind might conflict with the stability pact, has now been allayed. The conditionality attaching to loans will undoubtedly run in tandem with the requirements of the stability pact. I shall be glad to hear from the Commission how it intends to keep its promise of 8 April last year that it will, before the end of this year, consider jointly with the Council and Parliament how the terms of Article 103a(2) can be implemented. Precisely because this Treaty article envisages a stability mechanism and unanimity is needed in the Council to implement it, we in Parliament think it is important to draw up the framework for implementation well in advance, because if a country is faced with a shock which it cannot absorb effectively itself by using existing resources, Community assistance is needed promptly and we cannot spend half a year talking about what to do and how to do it. This same need for a speedy response means that an early warning system might usefully be devised. We are urging the Commission to do this too.
Mr President, country-specific shocks within Euroland are not problems over which politicians are losing any sleep, let alone the general public. This House is convinced, however, in view of the broad support which my report has received, that this is not right. So the Commission and the Council have to get their act together.

Torres Marques
Mr President, in Portuguese we have the equivalent of the expression 'shutting the stable doors after the horse has bolted' - in other words people tend to find ways of avoiding problems only once they have taken place. Before any unexpected shocks hit national economies following the introduction of the euro, we should decide on arrangements to tackle that situation. We should not try to find solutions after a crisis has struck. That is the aim and the merit of this report, an own-initiative report drafted by our colleague Alman Metten, whom I congratulate and who proposes a number of different solutions on the basis of Article 103a of the Treaty of European Union, which provides for a Stabilisation Fund to tackle national shocks.
First of all we must bear in mind that this support can only be granted in exceptional circumstances beyond countries' control and by a unanimous decision of the Council. The instrument which we are now proposing to create will be particularly useful when crises occur in Member States which have not yet sufficiently reduced their budget deficits and do not have their own reserves to face such situations.
It also seems to us that the proposal for the European Union to have a stronger budget to allow it to take effective action against asymmetrical economic slumps is the most appropriate one. The European Union now needs instruments to defend the economies of its future Member States.
The Commission should, therefore, put forward draft directives setting out all of the possible solutions for tackling this potential risk. However, the appropriations should certainly not be deducted from the Community Funds, since they have another aim and are applied to those regions that are still the least developed in the whole of the European Union.

Fourçans
Mr President, now that European monetary union is in place, we must examine in detail some of its consequences. How will EMU function? What problems may arise and how will these be solved? In this respect, the question of asymmetric shocks is clearly vital. It is well known that, with the introduction of the euro, the Member States will lose two courses of action in their economic policy: the manipulation of exchange rates and monetary policy. We should therefore ask whether the euro zone has sufficient instruments to deal with any asymmetric shocks.
We firstly need to clarify one point which Mr Metten has briefly mentioned: that the chance of asymmetric shocks will fall under monetary union. Why? Quite simply because the Member States can no longer set themselves apart by pursuing economic policies which go against those of the other countries in the euro zone, and God knows that some not too far away have done this in the past.
Having said this, even if the chance of asymmetric shocks will fall, we must not delude ourselves into thinking that these will be completely eliminated. So what can we do? We can put into practice the old saying 'prevention is better than cure' - this must be a day for sayings. To do this we firstly need to reinforce the coordination of economic policies in order to at least minimise, if not prevent, the infamous asymmetric shocks. Secondly, we must implement major structural reforms in a number of Member States, particularly relating to the operation of the labour market and the weight of the social and tax burden. However, we must also provide a cure using remedies that involve in particular good coordination of budgetary and tax policies and possibly, eventually, a greater transfer of certain budgetary expenditure and revenue from the Member States to the Community budget - eventually. I am not so naive that I do not realise that although this would currently be the best solution economically speaking, this is not the case politically.
Our rapporteur is proposing the creation of a stabilisation fund based on Article 103a of the Treaty. I would say to Mr Metten that this article does not go that far as it only authorises Community financial assistance to the Member State concerned. This is why we in the PPE believe that we should stick to an insurance instrument and we are therefore proposing an amendment to this end.

Goedbloed
Mr President, the Liberal Group read with interest Mr Metten's proposal for an initiative on the absorption of asymmetric shocks. The aim, as he indicated just now in his brief introduction, is to find an alternative to devaluations and local monetary policy. That prompted the Liberal Group too to wonder, when we compare the old situation with the new one, how much has really changed, who bore the responsibility previously and who is to bear the responsibility now? The underlying cause of this kind of shock frequently lies in the policy of the country concerned. Have the countries made sure, and a number of speakers have asked the same thing, that their own policies are sufficiently balanced as regards taxation, the budget and the national debt? The Treaty also allows for measures to be taken in special situations, and deficits of more than 3 % are permissible, but in very exceptional circumstances. From a Liberal point of view, I think that these should be very exceptional circumstances and then intervention, perhaps short-lived, should be possible in the case of a bigger budget deficit. But that is a very special situation and it requires unanimity. The other side is that responsibility lies primarily with the policy pursued by the national Member States, and those national states must continue to pay for it. We do not agree with the idea that this should be done primarily through a stabilisation fund at European level. In that respect, we do not support the proposal.

Svensson
Mr President, this report asserts that asymmetry within the EU economy will decrease with the introduction of the euro. However, the facts tell a different story. Divisions between the various regions of the Union are increasing, and have been doing so for a long time. There is a clear trend towards concentration of business and other activities. Countries differ in terms of their dependence on raw materials from abroad; and the single market itself is creating growing inequalities. The very notion of a common market is underpinned by the need for specialisation and concentration - in other words, increasing asymmetry is built into the system. I view the report as one more example of how little real analysis has been done on the actual foundation for this hazardous monetary venture.

Berthu
Mr President, the Metten report highlights that the euro zone may ultimately be relatively unstable due to the impact of various asymmetric shocks. These shocks could come from outside the zone or may also, in particular, come from inside. We should not forget, Mr Fourçans, the shocks resulting from the system itself given that this will impose uniform policies on national economies in differing situations.
In this respect, it will be very interesting for economists to see if, in the coming months, the first of these destabilising shocks will result from the alignment of short-term interest rates which took place on 3 December among the various countries in the zone. The explanatory statement of the Metten report considers this situation, and is particularly concerned about the situation in Ireland. What will happen if the sharp fall in interest rates leads to the economy of this country overheating? The rapporteur proposes offsetting the effect of the fall in rates by increasing taxes in Ireland. This is a solution which will undoubtedly not please the Irish, who will be sacrificed on the altar of the single currency.
In more general terms, Mr Metten proposes using Article 103a of the Treaty to set up a European stabilisation fund intended to assist countries falling victim to asymmetric shocks. Of course he promises us, as is always the case in this type of exercise, that this will be a lightweight structure that will provide guarantees but will not redistribute finance among countries. We do not believe this. The logic of the single currency system is to gradually progress towards a Community redistribution budget in order to offset the internal instability of the zone. The contributing countries which are already complaining about the extent of their payments would do well to consider this.

Lukas
Mr President, the question of whether the risk of asymmetric shocks will increase or decrease with the introduction of monetary union is one that can hardly be answered at this point. However, it is clear that this possibility exists. But it is also clear that the instrument of devaluation will no longer apply. Mr Metten's report makes a series of useful recommendations for both the Member States and the Community. However, the coordination of national policies is certainly the most appropriate way of reducing risks. I agree with the reference to Article 103A as an insurance instrument. The idea of providing the Union with a bigger budget in future in order to take effective action to combat economic slumps seems to me to be completely pointless, at least for now. The only effective means of successful intervention will continue to be the political will of the Member States.

Berès
Mr President, the problem raised by Mr Metten is clearly a central one which economists have been studying for some time. These economists must now find solutions because the advent of a single monetary policy prevents the use of the weapon of devaluation and is in fact the cause of the problem raised by our colleague's report.
In simple terms, it is clear that when exchange rates were involved, shocks were possible within the Member States which had consequences for the whole Union. You can therefore appreciate the importance of anticipating the possibility of such asymmetric shocks within a country or, as rightly pointed out by Mr Metten, within regions or sectors and not just within a state structure.
Such shocks exist in our Member States. It is currently possible for one region in a Member State to be in an asymmetric position with regard to the rest of the country, and the solution used is one of cohesion and solidarity. This same solution must be used accordingly at European level. This will require much more work yet. Firstly, we must strive for closer coordination of economic policies. By implementing coordinated policies of stimulation, growth and solidarity we will help to reduce the chances of asymmetric shocks.
At the same time, we must also strengthen the means at the Commission's disposal because I believe that, in order to prevent asymmetric shocks, we must harmonise the Commission's evaluation and procedural means so that the Commission is not solely dependent on those of the Member States. The Commission must have its own means of expert evaluation. Turning to the broader picture, Mr Metten raises the question of freedom of movement. I feel that, in addition to freedom of movement for workers, freedom of movement for citizens would help to make our economies more fluid. I would go further by saying that, in terms of the universities, we must create courses with common-core syllabuses.
Finally, the solutions proposed by the rapporteur relate primarily to the budgetary issue. I believe he has quite rightly raised the question of the current budgetary ceiling in the European Union. If we do not consider this question today, we will eventually be forced to consider it because, if we want to effectively combat asymmetric shocks, we will need further means in addition to the insurance instrument or stabilisation fund. I believe the course proposed by the rapporteur on the basis of Article 103a should be explored in order to find solutions to these asymmetric shocks.

García-Margallo y Marfil
Mr President, Mr Metten's report is clearly not the report that I would have liked to have seen produced. It does not go far enough but, having said that, it is the only report possible at the present time. I should like to thank Mr Metten for his efforts and for having accepted many of the amendments I tabled.
I should like to add, by way of warning to some Members, that I am not defending Spanish interests here, nor am I entering into the debate concerning rich and poor countries, which featured so prominently at the Vienna Summit. I am only defending a European interest.
So why am I not defending Spanish interests here? I am not defending them because, as highlighted in the Metten report, asymmetric crises in the past affected, above all, the United Kingdom in 1980, Germany following reunification, and the Netherlands. And, in the future, although the report makes no reference to the fact, experts have predicted that those most likely to suffer such crises are Portugal, in the event of a crisis in the textile industry, and Ireland, in the event of a recession in the United Kingdom which would have a devastating effect on Irish exports and emigration.
Why have I therefore chosen to defend a European interest? I have done so because we need to prevent a risk that might affect anyone. Those who think that Europe can grow with increasingly less money, when confronted with the problem of the asymmetric crisis and the question of what can be done - as Lenin said -, simply say nothing. Those of us who believe that Europe should progress at an even faster rate, emphasise the importance of and applaud the amendments tabled. A number of these were somewhat cautiously highlighted by Mr Metten, while others were strongly defended and supported in his report.
Mr Metten states that there is a need for greater mobility of production factors. In this connection, I should like to highlight what Mrs Berès said: language learning and the coordination of academic studies will make Europe an area that is increasingly open to people.
One of the fundamental elements of this is the principle of coherence together with the budget, the early warning system and safety net facility that Mr Metten included in his report, on which I congratulate him sincerely.

Katiforis
Mr President, fortunately we are the only ones here this evening and we can speak quite freely. I even hear the name Lenin mentioned in this hallowed Chamber. I would like to take up the subject at the point where it was left by Mr Fourçans, who told us quite rightly that two of the three instruments of economic policy available to the Member States are no longer at their disposal, and indeed they do not have control over economic policy and exchange rate policy. It should be added that financial policy, which is the third instrument, is very heavily mortgaged to - if not eliminated by - the notorious stability pact, and I would say that the rapporteur's analysis of the stability pact should be considered with particular care. According to the rapporteur, the 3 % deficit limit permitted by that celebrated pact is enough to cover the operation of the economy's automatic stabilisers, provided we start from a zero-deficit basis. As the rapporteur rightly observes, it is most unlikely that zero deficits will be achieved in the next few years. The aid from the stabilising fund proposed by the rapporteur may therefore prove particularly useful during the first, critical period of the euro's operation.
As you will certainly be aware, Mr President, the prevailing interpretation of the stability pact is that public investments not covered by taxes are also subject to the stability pact's 3 % limit. Public investment in Europe today averages 2 % of national income, having fallen to that level from 3 % at the beginning of the decade. If public investments are to be governed by the stability pact, then either there will be no room for the automatic stabilisers to operate, or there will be no room for public investment, or public investment will have to be financed by higher taxation, which would be a recipe for madness - as indeed the entire stability pact is a recipe for madness - at a time when economic activity in Europe is on the decline.
In any case, Mr President, if the stability pact is actually applied - which I doubt, because it seems to me quite unworkable - it will be a source of pain for Europe's economy. In that sense, measures like those proposed by Mr Metten may mitigate the harm and we should support him, even though his proposals are purely symbolic and without much practical value since they depend on the principle of unanimity in the Council. And since this evening is an evening of slogans, as Mr Fourçans himself said, what we need to extract Europe from its present impasse is 'de l'audace, de l'audace et encore de l'audace ' - as your celebrated compatriot once said, Mr Fourçans. But where are we to find that 'audace' when we have all subjugated our reasoning to irrational monetarism which is leading us straight towards disaster unless we react against it? Let us at least give a sign that we reject that mentality.

Mendes Bota
Mr President, to speak of asymmetric shocks is to speak of the forthcoming enlargement of the European Union. That shock will be scheduled, predicted and inevitable. It is an example of how the same event will affect the economies of the 15 Member States differently, highlighting their vulnerabilities and inequalities, nationally and regionally.
The golden years of devaluations and fiddling around with interest rates to affect exchange rates are over - governments have lost that weapon in their arsenal. The risk of asymmetric shocks is still latent and will not always come with an early warning, as in the case of enlargement. It could occur out of the blue.
That is why this Stabilisation Fund is so important, legitimised as it is by Article 103a of the Treaty. It could take the form of loans from money markets anchored in solid guarantees by the Member States. We might study the possibility of special low interest rates in the Union's budget.
We cannot see any incompatibility between the Stabilisation Fund and the Stability Pact. But we do see the need - like the rapporteur - to strengthen the safety net for situations of macro-economic difficulties faced by one or more countries, without calling into question the overall aim of giving the Union a set of healthy public finance systems.
All studies conducted to date show that Portugal is the country least likely to benefit from enlargement to the East and the one most directly harmed by its impact. From traditional industry to tourism, and cuts in the Structural Funds, fulfilment of Agenda 2000 in its original version would make the second least developed country in the EU the victim of that foreseeable asymmetric shock. It would be unjust, but if it did happen then the adjustment mechanism being proposed here today could help to repair any damage.

Caudron
Mr President, Commissioner, ladies and gentlemen, the text before us today is the result of careful and thorough work by the rapporteur, Mr Metten, and our Committee on Economic and Monetary Affairs and Industrial Policy. Once again, Commissioner, this parliamentary initiative demonstrates our capacity to consider the major problems with which Europe is or risks being faced and also our capacity to propose serious and realistic solutions.
I therefore support this report and congratulate Mr Metten because, like him, although convinced of the security that the euro will provide, I believe that we must now guard against the risks, which may be small but are ever present, in the period after its introduction. In this respect, the creation of a Community fund and an insurance instrument to help countries in the euro zone in the event of a crisis in one of these countries can only strengthen our single currency and, in particular, help the countries which have decided to join. I would add that this fund would also be a stabilising element for the euro in respect of other world currencies, whether these are strong or unstable, dominant or speculative.
Furthermore, while we may feel that any asymmetric shocks will be minor - as confirmed by the stability of the currencies in the euro zone - we cannot ignore the differences in laws and policies.
To conclude, I must wholeheartedly join with those calling for improved coordination of our economic policies, harmonisation of taxes and, in particular, cooperation in our fight against unemployment and our drive for employment, in which the Commission will also be needed.
All in all - and I will finish on this - in order to maximise our assets and limit the risks, we need a positive Europe.

Ilaskivi
Mr President, to assume that all European countries will avoid asymmetric shocks is naïve. Within the EU we have to be prepared in good time in order to ward off such shocks. They may well most obviously affect countries with a narrow industrial structure. As Mr Metten takes Finland as an example of these, I would like to emphasise that the substantially increased role that Nokia and high tech exports have come to play in the economy has diversified the industrial structure and exports.
I cannot really support Mr Metten's recommendation for preventing crisis within the framework of the EU budget. The decision-making process is too slow. Nor do I see a harmonised monetary policy as appropriate. That is why sufficiently independent national action is vital. Mr Metten refers quite rightly to the Finnish plans to change pension contributions so that they would be lower than average during a recession and correspondingly higher during periods of relative prosperity. For my own part I would like to stress the importance of Keynesian budget policy as a tool to ward off recession. Automatic stabilisers must be developed in the budget.
I would like to remind you all that over a year ago Parliament approved the proposal I made to the Committee on Economic and Monetary Affairs and Industrial Policy that a deficit of 3 % should be viewed within the context of the whole economic cycle, not from one moment to the next. In this way, when the danger of an asymmetric recession looms the country in question could, by means of a budget deficit, stimulate the economy and, with the surplus of the boom phase, bring the situation back to an overall framework of 3 %. Now it is time for the Commission and the Council to follow the same line and amend the Stability Pact so that different Member States may prepare to avoid shocks by means of anticipatory measures.

Paasilinna
Mr President, I would like to thank Mr Metten for a splendid and professional report, which contains some excellent proposals. The greatest and most influential shocks have been wars. We have succeeded in preventing some of them in this Chamber. Economic shocks are nonetheless serious and they always affect the worst-off most seriously.
The 1973 and 1981 oil crises were explosive events that spread fear around the world. Furthermore, the steep decline in the value of the dollar was a shock, not only for the Americans but for us also. Although these shocks were felt throughout the whole EU area, the effect on some states was greater than on others. This is what breeds asymmetry, rather like what happens in the blood circulation system. When shock hits a country which is a member of an economic and monetary union, it is a serious matter. Medical supplies are urgently needed. On this subject I agree with the previous speaker, but we no longer have the right devaluation medicine at our disposal.
I was one of the member of my large group who had the honour of interviewing candidates for the post of Director of the European Central Bank. I was astonished that one of them did not regard the issue of asymmetric shocks as important. If such unrealistic views were to spread within the ECB, its work would certainly produce a shock here in Parliament. ECB monetary policy is not neutral, so it must acknowledge its responsibility for employment and asymmetric shocks.
The rapporteur gives as examples of shocks affecting single countries the effect of North Sea oil production on the United Kingdom, German unification, the floods in Europe, mad cow disease, and swine fever in the Netherlands. From Finland's point of view the crisis in Russia can be compared to any of these. The situation in Russia may erupt into an asymmetric shock at any time. For that reason it is time that EU aid to Russia was targeted at relieving the violent social upheaval that has been going on, and not at supporting an oligarchy led by people who moreover, send their money, which is actually our money, abroad. A Finnish shock could be caused by the timber processing industry getting out of step. Fortunately the importance of wood in our country has declined dramatically, and it is the metal and electronics industry that has become the largest export sector. Nevertheless, the situation in the timber processing industry is important, and when the Russian crisis came along, it did not affect Finland, which shows how much our situation has changed.
We need a guarantee fund and instruments of stability. We also need an early warning mechanism in respect of shocks that affect single countries.

Porto
Mr President, the creation of an adjustment mechanism to tackle asymmetric shocks may be seductive on the surface, but we have reservations and worries. Of course we do not wish to question the merit of the rapporteur's initiative, and I wish to congratulate him. Nobody could question the fact that it is preferable to attack evil at the root, eradicating or at least attenuating the circumstances that might give rise to these shocks by means of sectoral diversification, structural reinforcement and more flexible economies - in particular, through the markets, on the one hand, and tight budget policies, on the other. Let us hope that this will be successful because, who knows, the size of these asymmetric shocks - or even symmetrical shocks, affecting the whole of the economy - might be so great that dealing with them might be far beyond the capacity of the European Union's budget, a budget that falls short of even 1.2 % of the entire area's GDP.
Unfortunately, Mr Metten's hope that the European Union will have a stronger budget than it does at present is not realistic and the fight against short-term slumps would undoubtedly be fought with the resources that should really be earmarked for structural solutions. This fear is not lessened by the rapporteur's own reservations, since he says that it would not be a transfer mechanism but only a credit guarantee to be repaid with interest, and that it would be conditional on policies aimed at bringing about a balanced budget (while in the explanatory statement he talks about special low interest rates). The question that arises is: what about the need for a fund or for budget increases if the necessary resources are not available?
This might end up by being an open door to extremely unfair transfers of resources, especially if those resources are transferred to the richer countries - it is even said that the small countries might not even need this mechanism - or if countries with less correct policies are actually rewarded to the detriment of countries deprived of any structural support and which, having pursued the correct policies, manage to avoid asymmetric shocks.
Since the question of priorities is at stake we should make it a priority to promote structural policies that are absolutely the right ones but that are incomprehensibly being questioned by politicians with blinkered visions of the European project. With this stronger safeguard, we should be able to make progress towards the creation of the fund proposed in Mr Metten's report.

de Silguy
Mr President, ladies and gentlemen, Mr Metten is asking us to consider a problem which often arises in the context of Economic and Monetary Union, namely the problem of asymmetric shocks. Even though I do not agree with all his conclusions, I must congratulate him on his work and also on the work carried out in the relevant subcommittee.
I had prepared a longer version of my speech but, as time is getting on, I will shorten it as much as possible. I will provide anyone who is interested with my detailed thoughts on asymmetric shocks. I would have liked more time to try and convince Mr Berthu but I believe that, at this stage, this would require a specific lecture on basic economic mechanisms, which I am prepared to give him.
First of all, we must understand what is meant by asymmetric shocks so I will give a definition of these. We must also be aware of the probability of these shocks occurring in Europe and, finally, what solutions are possible. These are the three ideas which I would like to briefly develop.
Firstly, what is an asymmetric shock? There is a simple, theoretical and fairly vague answer to this question, which is that an asymmetric shock is a shock in supply or demand affecting a specific part or sector of an economic zone in a different way to the other parts or sectors. Given that we have worked on this extensively in the Commission, we have tried to establish a typology or classification of asymmetric shocks in order to illustrate this definition. We have distinguished four types of shock.
Firstly, there are shocks caused by nature, for example after an earthquake or epidemic. Their asymmetric nature is due to the fact that the operative event is very localised and affects a particular region. Secondly, there are shocks which are caused by an exceptional historical development which is impossible to foresee. I am thinking, for example, of the unification of Germany. Thirdly, there are shocks caused by the collapse of demand for a good or service in which a country specialises. I will use the example mentioned earlier of the collapse in the price of wood and therefore of the wood sector, which represents 15 % of the GDP of Finland. In this category, the asymmetry clearly depends on the degree of specialisation of the country. Fourthly, and finally, there are shocks whose asymmetry is caused by differing responses in economic policy to the same operative events. For example, during the first oil crisis in 1973 in principle all the industrialised countries should have tackled the problem in the same way as they were all similarly affected. However, this was not the case. What happened was that national responses differed greatly, thus creating asymmetric shocks. In some countries stimulation policies were initiated, whereas others aimed for stabilisation. This is therefore the definition of an asymmetric shock. But that is not all there is to it as it is also necessary to try to assess the probability of the shock.
Firstly, I would say to Mrs Berès that the Commission is currently equipping itself with analysis structures. I can tell you that, just today, the new organisation chart of DG II has been signed in which we have really reinforced economic analysis skills, and we have also set up a system for 'reasoning in the euro zone'. I think we will have an opportunity to discuss this again but I wanted to reassure you on this point.
There are two relevant factors in assessing the probability of asymmetric shocks: the integration of the economies of the Member States and the coordination of economic policies. It is precisely due to the combination of these two factors that asymmetric shocks are very unlikely within EMU.
With regard to the first factor - the integration of the economies of the Member States - you can see that the achievement of a single market makes the economies increasingly interdependent, and even more so with a single currency. This lessens the specialisation of the national economies. Furthermore, structural and cohesion policies approximate the levels of development in the Community. These two elements therefore help to prevent asymmetric shocks and I would say that the situation in Europe in this respect is at least as positive as in other monetary unions. Mr Berthu, Finland is no more threatened by a crisis in the wood sector than Alabama is by a cotton crisis or Michigan by a crisis in the automotive sector. Finally, I would say that the relatively low degree of national specialisation in Europe makes the occurrence of national asymmetric shocks very unlikely. This does not mean that shocks will not occur in a town or region affected by a natural disaster or which specialises in one product. Rather, there may be a shock but this will not affect just one Member State.
The second factor is the coordination of economic policies, and I believe that one of the characteristics of EMU is precisely to provide coherent and coordinated political responses. Firstly, single monetary policy excludes any possibility of a franc tireur , or lone gunman if you prefer, aggravating the consequences of a shock on the economies of the other Member States. The situation is therefore very different from that which could have occurred between 1992 and 1995 in the European Union. Furthermore, the coordination of budgetary policies - and I am thinking particularly in the context of the stability and growth pact - specifically prevents differing national responses, such as were seen during the first oil crisis. However, the stability and growth pact also allows budgetary margins of manoeuvre to be regained by eliminating structural deficits from public finances. Therefore, for all these reasons, and because it is accompanied by the convergence and coordination of economic policies, EMU reinforces the EU's capacity to avoid asymmetric shocks or to limit their impact by means of appropriate political responses.
Having said this, shocks are not totally impossible. So what measures do we have to tackle them? There are two categories: measures involving the market which, rather strangely, no one here has mentioned, and budgetary measures which, by contrast, have been much discussed.
If I may, I will briefly talk first of all about the market. This is an asymmetric shock absorber. Analyses too often tend to focus solely on the public responses to economic shocks. This type of analysis no longer corresponds to the modern structure of our industrialised economies. In our economies, it is the market and not the government which has the ability to adapt and provide finance.
I have found a study on asymmetric shocks which was carried out in 1996 by Brown University and which showed that the financing needed to offset the effects of a shock came from the capital markets in 62 % of cases and from the federal budget in 13 % of cases. The market's action is therefore decisive. Accordingly, EMU is providing Europe with new assets represented by two essential markets: the capital market and the labour market.
With regard to the capital market, there is of course the euro which is primarily a major capital and credit market. The introduction of the euro will therefore result in the establishment of an extensive and very liquid market and also, undoubtedly, a liquidity and security comparable to that of the American market. Negotiations are currently under way to form a genuine European stock exchange. We are also witnessing the promotion of the European venture capital market. A major European capital and credit market will be better able to release the financing needed to absorb an economic shock.
With regard to the labour market, I would refer you to our main economic policy statements and to the guidelines on employment, which have the same message, namely that the Member States, the Commission and Parliament want to improve the ability of the European labour market to react to the effects of globalisation. I believe that this greater flexibility will be an important element in absorbing the negative effect in employment terms of any asymmetric shocks in the future. I will not go into the conclusions of the Vienna European Council as I believe that Mr Santer must do this, but the proposed European employment pact has the same aim. To give you the full picture, I must add that the improvement of the single market in goods and services, which the Council lists under 'economic reforms', will also help to reinforce the ability of the European economy to respond in the event of a shock. Therefore, the private sector's ability to respond is vital and must not be neglected.
The other means of combating asymmetric shocks is to use budgetary policy; this is still in the context of the stability and growth pact and the Treaty. Budgetary policy can be used in two ways: in the context of national budgetary policy and in the context of financial solidarity, and this involves Article 103a as you have mentioned.
With regard to national budgetary policy, I would remind you that, by avoiding excessive deficits and by fixing as a medium-term objective a budgetary situation which is close to equilibrium or slightly in surplus, the stability and growth pact aims, by 2002 at the latest, to give the Member States a sufficient budgetary margin of manoeuvre to allow a broader response to economic shocks. Four national stability and convergence programmes, which we have already analysed and which have been accepted by the Council, respond to these objectives. Another eleven programmes are pending which should in principle be available before the end of the year. We will examine these from the same viewpoint.
Your report, Mr Metten, which noted that these margins of manoeuvre would not be available until 2002, cleverly suggests that the Community budget could also be used to artificially speed up this process, for example by deferring or bringing forward the national contributions. In this respect, I must say that nothing of this kind is provided for by the budgetary legislation of the European Union and that such an arrangement would be unfair, in my opinion, because it would transfer the burden from some countries to others, without providing a lasting solution. This is why the best solution is to strictly apply the stability and growth pact and, if possible - as you yourself have underlined, Mr Metten - to create budgetary reserves during boom periods, as in Finland, which could be used in the event of shocks.
In general, the Commission recommends that Member States create for themselves an additional margin of manoeuvre which can be used in the event of a shock or dramatic change in the economic situation. This is in addition to a position of structural equilibrium in the public accounts.
Finally, to round off this point, I must remind you that the stability pact specifies that a Member State may temporarily and exceptionally use its budgetary policy beyond the 3 % deficit limit in the event of exceptional economic circumstances. This completely covers the occurrence of an asymmetric shock of a particular extent, and that is all I have to say on 'national budgets'.
The other important aspects are the Treaty and Article 103a of the Treaty. I would remind you that Article 103a of the Treaty states that: 'without prejudice to any other procedures provided for in this Treaty, the Council may, acting unanimously on a proposal from the Commission, decide upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.' It also states that: 'where a Member State is in difficulties or is seriously threatened with severe difficulties caused by exceptional occurrences beyond its control, the Council may, acting unanimously on a proposal from the Commission, grant, under certain conditions, Community financial assistance to the Member State concerned. Where the severe difficulties are caused by natural disasters, the Council shall act by qualified majority. The President of the Council shall inform the European Parliament of the decision taken.'
The scope of this text is very clear. Under no circumstances can it be interpreted as authorising the bailing out of a Member State whose economic policy does not comply with the Treaty. The text is worded wisely. In the event of an unexpected shock, it gives the Commission and the Council significant latitude to ensure financial solidarity. It is clearly not possible to prepare precise remedies for the unexpected. Nevertheless, the Commission is already considering the best way of ensuring the financial solidarity of the euro zone in the event of a natural disaster, for example, and I hope to have the opportunity to discuss this with you at some stage in the future. I would point out that the main problem with Article 103a is that it requires the unanimity of the Council, whereas an effective mechanism for absorbing asymmetric shocks must by nature be immediate and automatic.
Finally, to finish on this point, I must add that, in accordance with Articles 109k and 109k(6) of the Treaty, the 'pre-in' and 'pre-out' countries - those which are not in the euro zone and those alone - can still benefit from Community assistance for the balance of payments. We will be making proposals in this respect before or during 1999.
To conclude - and I apologise for having taken so long but we could go on for hours on this subject - I would say firstly that if there is an asymmetric shock, it is necessary to adjust and not just provide finance. It is wrong to focus solely on finding Community finance when the problem is primarily the responsibility of the countries which must implement reforms imposed by the adaptation to a de facto situation.
Finally, asymmetric shocks are an unlikely occurrence. There is less chance of these occurring with the euro than without the euro and I believe that the coordination of the policy mix introduced by EMU will give the Community the best weapons to combat asymmetric shocks. This is the direction our work must take in the coming months, now that we are just 16 days away from the introduction of the euro.

Metten
Mr President, our thanks to the Commissioner for his extensive reply, but he has not answered my very specific question, namely how does the Commission intend to keep the promise it gave on 8 April last year in connection with a report of mine on the same subject that it will, before the end of this year, consider jointly with the Council and Parliament how the terms of Article 103a(2) can be implemented. He has said nothing on that. Nor has he confirmed that he still plans to keep that promise. That was really the thrust of my report.

de Silguy
Mr President, Mr Metten could perhaps read my original speech in detail as I believe this would provide the answer to his question.
Firstly, with regard to Community financial support in the event of difficulties in the balance of payments - in other words the extension of the system in Article 109h to countries not in the euro zone - we are committed to preparing an assessment and proposals. As I have said, this will occur in the next few weeks or months.
Secondly, with regard to the accelerated procedure allowing the implementation of this article in the event of a natural disaster with micro-economic consequences, I must say that we are currently examining the possibility of a procedure which would accelerate the Council's decision. This would be taken by qualified majority in order to initially provide the bare essentials of assistance through a special budgetary line followed by reconstruction in the areas affected by means of loans, particularly involving the EIB.
Thirdly, with regard to the most contentious point about asymmetric shocks - which I believe is a problem of substance and doctrine - namely the first part of paragraph 2 of Article 103a, analysis and discussion work has been carried out on different empirical cases of asymmetric shocks, including the development of various economic and legal arguments. I was able in my presentation to give you some answers. I remain at your disposal to continue the discussion in private or in public.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Trading of goods between Member States
President
The next item is the recommendation for second reading (A4-0486/98), on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the common position adopted by the Council (8776/98 - C4-0492/98-97/0155(COD)) with a view to adopting a European Parliament and Council Regulation amending Regulation (EEC) No 3330/91 on the statistics relating to the trading of goods between Member States with a view to reducing the data to be provided (Rapporteur: Mrs Lulling).
I give the floor to the rapporteur, Mrs Lulling.

Lulling
Mr President, Commissioner, on 31 March I submitted to this House my report on the two proposals for regulations presented by the Commission. These proposals are intended to simplify the Intrastat regulation, reduce the statistical burden of undertakings, particularly SMEs, and reduce the costs of those information providers who must provide Eurostat with the data which allows the preparation of the essential and invaluable statistics on the trading of goods between Member States in the single market.
I regretted at the time that these proposals did not contain all the positive suggestions of the SLIM initiative. I also said that they were simply a step in the right direction in anticipation of a more radical simplification, all the more so given that the reliability of the Intrastat statistics is inversely proportional to the costs incurred by the 450 000 undertakings which must provide the data. These costs are in the order of 500 million, plus another 100 million for the operation of the system by the national statistics collectors.
We therefore tabled amendments at first reading. These were adopted unanimously and, apart from a few details, received the blessing of the Commission. Commissioner de Silguy actually said in the House that he could include all our amendments. Unfortunately, this was not the case in the Council, which sent us a common position which actually watered down the Commission's original proposal, whereas we and the Commission wanted to strengthen it. If we followed the Council, in other words the governments, in their negative attitude - which is all the more incomprehensible given that their statistics officers collaborated in the SLIM initiative - this would lead to an increase in the statistical burden on undertakings. The Council even went as far as to simply refuse to adopt a common position on the proposal for a regulation concerning the nomenclature.
We could have resigned ourselves to such a negative attitude from the Council and capitulated due to the impossibility of moving the mountain of Member States' bureaucratic requirements, thereby discrediting the SLIM initiative and ignoring the interests of undertakings which continue to ask for a reduction in their statistical burdens. Instead, we have chosen to keep our amendments to the two proposals for amending the Intrastat regulation. I realise that, in the absence of a common position from the Council, the Commission might say that, for formal reasons, it cannot accept certain amendments even though it basically supports these and its opinion has not changed since 31 March. To us, keeping these amendments is a political signal to the Council, which must realise the confidence and solidarity which exist between the Commission and Parliament on this matter.
As the rapporteur, I have again been subject to pressure from users of these statistics who are legitimately interested in receiving detailed and quality information on intra-Community trading of goods and who are keen to maintain the finest subdivisions, with eight-digit codes, in order to have cheap and reliable economic information.
As there is some misunderstanding among these users about the extent of our amendments, I must reassure them by saying that, in our Amendment No 8, the Combined Nomenclature is recognised as being the basic nomenclature for the classification of goods. A single nomenclature, the Combined Nomenclature, will be used for external and intra-European statistics. Our amendment is the result of abandoning the idea of a specific Intrastat nomenclature. In addition, as regards the recommended simplification of using a six-digit code instead of the eight-digit code for identifying certain goods, as in the Harmonised System, the conditions needed in order to benefit from this simplification are being adopted by the Commission in comitology by taking into account a partnership between national administrations and users and by noting the vital importance of close cooperation with all the indicated parties being confirmed from the outset by a legislative text. This partnership could guarantee that certain special needs, particularly in the agri-foodstuffs sector, will be covered. My friends in the wine sector can relax as they will continue to receive statistics which show them how much red and white wine, and of what regional origin, has been the subject of intra-Community trade.
Keeping our amendments will stop us from shooting ourselves in the foot by limiting our own competitiveness due to a lack of strategic intelligence. In addition, work is in progress in the context of SLIM II in order to simplify and modernise the Combined Nomenclature. The preparations for a code of conduct for the management of the Combined Nomenclature are currently being finalised and the European professional federations know that close sectoral collaboration in this has already resulted in a reduction in the nomenclature. However, Mr President, because we must go further and adopt measures exempting information providers in certain cases from providing data for the detailed version of the nomenclature, we have decided to continue down the road taken at the first reading. I hope that the Commission will follow us.

Rübig
Mr President, ladies and gentlemen, Europe's firms need our help. The entrepreneurial environment, characterised by a variety of tightly regulated legal frameworks, has undoubtedly become more and more complex and complicated in recent years. From the experience of my own country and my own forging business, I know only too well that the administrative burden arising from national and European legislation causes a lot of problems, especially for small and medium-sized companies. In this respect, the present common position, together with the amendments proposed by the Committee on Economic and Monetary Affairs and Industrial Policy and those introduced by Mrs Lulling, forms a positive basis for simplifying administration. It is a small step but a good one, and above all it is a step in the right direction.
The distinction between Intrastat and Extrastat means that there is still a lot of work to be done. Simplifying the nomenclature within the internal market is an interim measure. The ultimate goal must be deregulation, as with other statistics.

de Silguy
Mr President, Mrs Lulling, ladies and gentlemen, you have referred to the Commission proposals of 30 May 1997 which are intended to simplify the basic regulation on the Intrastat system, this being the statistical system on the trading of goods between Member States. As you have indicated, Mr Rübig, the aim is to reduce the statistical burden on undertakings, firstly by reducing the list of data to be provided in the declarations and secondly by simplifying the nomenclature of goods used to classify traded commodities.
This House welcomed these two proposals in a very positive manner and even tried to widen their scope by tabling 8 amendments. As I promised, the Commission accepted these amendments in the main during the first reading on 1 April and incorporated them into its amended proposals.
The common position adopted by the Council on 20 July was limited to the first proposal on the reduction in the range of data to be provided. In this common position, the Council unanimously rejected the Commission's amended proposal. The Council did not mention the second proposal but merely expressed a hope that the Commission would continue its work on classification.
I would remind you that at the time the Commission officially published a statement stressing that the Council's position was a real step backwards in terms of the aims of the SLIM initiative to simplify the legislation of the internal market.
I will start by commenting on the Commission's first proposal and the Council's common position. The rapporteur proposes introducing further simplifications in the context of the SLIM initiative. I am able to say that the Commission can accept the majority of these amendments, with the exception of three points.
Firstly, you ask for the immediate deletion of the 'mode of transport' data. The Commission would prefer to retain this data until 1 January 2000 when the directives on transport should come into force in all the Member States.
Secondly, you also propose the immediate deletion of the 'delivery terms' data. The Commission does not agree with this and recommends a transitional period of one year to allow the Member States sufficient time to adapt their statistical systems.
Thirdly, and finally, you have not kept the option of granting derogations to Member States for the application of new regulations. The Commission feels that it is necessary, in view of the constraints involved in adapting the national systems, to provide for a transitional period of one year. This does not seem unreasonable to me.
I will now turn to the second proposal, on which the Council has not made a decision. In the absence of a common position from the Council, the Commission is not permitted to consider the four amendments, Nos 1, 2, 3 and 8, which this House is proposing to adopt. However, I understand the rapporteur's concern about maintaining pressure on the Council in order to force it to adopt a position on the simplified use of the nomenclature for traded commodities.
The Commission would like to draw the attention of this House to the development of the Council's position following the fairly recent adoption, in fact on 1 December, by another authority - the Ecofin Council - of a Monetary Committee report underlining the importance of the simplifications to be made to the Intrastat system. I believe that this position is closer to the Commission's proposals and the position of this House and I believe that it should help to define a common position on the whole subject.
To conclude, I must applaud the support which the rapporteur has given the Commission on the simplification of the Intrastat system, in line with the objectives of the SLIM initiative. I can assure you that the Commission will not fail to keep you regularly informed of the development of the procedure in the Council where it is sparing no effort to achieve a favourable result.

Lulling
Mr President, I must thank Commissioner de Silguy and say that, with regard to the minor details, we can certainly reach agreement on the deadlines.

President
Mrs Lulling, we cannot have a debate. You may ask a question, but not reopen the debate.

Lulling
Mr President, I must reply to the Commissioner ...

President
No, the debate is closed and there are no replies to be given. It is late, and you are well aware of the Rules. You may only ask a question.

Lulling
Mr President, I must tell the Commissioner that we can reach agreement. We are after all at the second reading and I do not see why I cannot answer him as he is saying that he cannot agree to the deadlines, whereas I hope that by discussing this we will be able to reach agreement ...

President
I am sorry, Mrs Lulling, but the debate is closed.
(The President cut off Mrs Lulling, who continued to protest without a microphone)

President
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

External transit
President
The next item is the recommendation for second reading (A4-0442/98), on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the common position adopted by the Council (C4-0536/98-97/0242(COD)) with a view to adopting a European Parliament and Council Regulation amending Regulation (EEC) No 2913/92 with regard to the external transit procedure (Rapporteur: Mrs Peijs).
I give the floor to the rapporteur, Mrs Peijs.

Peijs
Mr President, during the May part-session, Parliament adopted seven amendments at first reading. Several of these have been adopted by the Council, in whole or in part. Two important points remain which I think need to be raised again. Firstly, an administrative note. I am told by the Swedish representation in the Council that an error has crept into the Swedish translation of the first amendment. The English text should be taken as the original. I do not speak Swedish, so I cannot comment further.
As regards the two amendments, and firstly the transparency of the decisions taken by the committee, this has been a matter of concern for a number of years now, not least to Parliament itself. Important decisions are taken in the committee on how firms operating in the area of Community transit should conduct themselves vis-à-vis the customs authorities. In particular, the conditions which firms must fulfil if they are to use the simplified procedures on safety are crucial. These can greatly affect the way in which individual companies operate.
Parliament has laid down the broad lines of these conditions in the legal text, but the committee will still have to finalise them. There must be complete clarity to ensure that the legislation is applied uniformly to firms in comparable situations.
Secondly, I have retabled an amendment concerning the time-frame within which customs authorities must complete their work. The transit system is still a paper-based operation, sometimes even a manual operation, scarcely credible on the eve of the year 2000. In future, this will have to be computerised and the year 2000 has featured in the planning, even now in 1998. But it will be a few more years before this computer system is in place. As a result, the completion - the discharge, as the jargon has it - of an individual procedure for an individual shipment can sometimes take months, or even years. Parliament is forced to accept this, but is launching its own inquiry into the reasons for this almost intolerable delay.
The lack of a computer system is one of the considerations relevant to the discharge for 1996. It has to be agreed that the internal market cannot be enlarged to include new applicant countries if we do not have a fully computerised customs system up and running. I would urge a number of Member States to abandon their regrettable opposition to linking their national systems to the European system. Complaining about fraud at borders in transit traffic cuts no ice if there is not close cooperation between national and European customs services.
The Commission has intimated that it intends to set a time limit of 30 days in the implementing provisions for customs authorities. Purely on condition that this is actually done, I have agreed to incorporate an amendment into the recitals at this second reading. Personally, I think it is unacceptable to impose all manner of obligations and restrictions on the industry without yourself being willing, as an authority, to be bound by administrative deadlines. There has to be a balance in the obligations undertaken by all the parties. Last week the Council working party responsible discussed the amendments and I gather, Mr President, that it may be possible to avoid a conciliation procedure. That will save a great deal of time and money. I hope the House will support the amendments we have tabled.
I have a little time left to say something which is close to my heart. It is a remarkable dossier we are discussing here, a highly technical one. It is crazy that all the fundamental questions and all the fundamental issues of our European Union should be raised in a technical dossier of this kind. This is a question of transparency and democracy, and this transparency and democracy, which I have reflected in the amendments, are constantly being ignored by the Commission.
I had a letter this evening from the platform for freight transit or whatever name they have adopted, and this platform backs my request. You cannot negotiate with an industry which speaks with different voices and does not speak with a single voice to the Commission. They have now changed that. They are now speaking with a single voice to the Commission. But whenever there needs to be real transparency in the committee procedures, there is none. Then the Commission says, yes, but we are talking to you. Of course they are talking. That is the most normal thing in the world. If we had wanted to live under a dictatorship, we would not have needed the European Union, we could have made our own dictatorship. We do not want to live under a dictatorship, even one headed by technocrats. We want the European Commission to maintain the utmost transparency vis-à-vis the platform on transit, not least as regards the committee procedures.
I should like to be sure that the Commissioner will pass this message on to his officials. We shall keep a watchful eye on things. We are asking the European Commission to cooperate seriously here. It should not confuse a normal consultation procedure with the industry with transparency in the committee procedures.

Rübig
Mr President, ladies and gentlemen, I would like firstly to congratulate Karla Peijs on her commitment to the fight for simplification in this area. We should actually apply SLIM rather than simply talking about it, and we should regard the impact statement as a fact. We must involve those concerned and deal objectively with justified objections. I myself was a member of the committee of inquiry that dealt with fraud in Community transit, and I know that there are problems in this area, but we must not throw the baby out with the bath-water.
Quite simply, what we need is a simplified procedure. We need proper regulations concerning guarantees, and we also need the 60-day time limit so that the system is efficient and so that in future customs procedures are handled in such a way that the European Union can see where its money is going.

Watson
Mr President, I too would like to congratulate Mrs Peijs on this report. It is an excellent piece of work indeed. This action plan for customs transit is hugely important. As the euro comes in we expect a growth in trade across our frontiers and the procedures for dealing effectively with this trade must be in place. Objectives such as creating more efficient recovery procedures in transit operations and shortening the time taken for discharge are of considerable importance to our industry for cutting down their costs and burdens, especially considering that the procedure can take up to five years to be completed at present. Central to these proposals is the need to curb fraudulent practices in the transport procedure. We have heard a lot about fraud recently and the problems about fraud against the Community budget. It is not helped by a lack of transparency in decision-making, which is why my group supports Amendment No 1 in particular.
It is, as Mr Peijs has pointed out, quite amazing that in this day and age we still have so much done on paper. I have heard it said that to err is human, but for a real cock-up you need a computer. I think that we have probably moved to the stage where computerisation is essential and that procedures that are introduced by Member States must be compatible with the rules governing Community transit procedures. These rules must be clearly defined. Calculations must be based on the operators' liability and the risks attached to the goods. I welcome this report.

Paasilinna
Mr President, ladies and gentlemen, I congratulate the rapporteur. The changes in the external transit procedure are based on the work of Parliament's Committee of Inquiry, which approved the changes in 1997. I was involved myself, as was my colleague, Mr Rübig.
The transit system was reformed in three respects. Legislation was reviewed and amended, cooperation was increased among Member States through Customs 2000, and automation was introduced. The system of automation that we are dealing with here, with the computerisation of customs and networking, is absolutely essential. An efficient customs system in the European Union is not possible today without effective networking. Ladies and gentlemen, we and the Commission are currently making life very easy for crooks and criminals. If the Member States and the Commission do not realise this, it is very strange. We talk about the information society, but it is not working in the area of customs.
I agree with the rapporteur that all committee-based decisions should be as open as possible. But it is important that essential matters are not just left to the committee, but that Parliament should be able to debate them, as otherwise it is not just a question of avoiding transparency, but also bypassing democracy.

Monti
Mr President, I should like to begin by thanking the Committee on Economic and Monetary Affairs and Industrial Policy, and in particular the rapporteur, Mrs Peijs, for this vital contribution to reaching a fair compromise on the amendment of the Community customs code in connection with the reform of the transit procedure.
The Commission and Parliament have already demonstrated their joint interest in making the transit procedure more secure, so that reliable economic operators are able to benefit from a more flexible system. That is why, as announced in its communication of 30 April 1997 to Parliament and the Council, when unveiling its action plan for transit in Europe - 'a new customs policy' - the Commission embarked on an ambitious reform of the transit procedure, designed in particular to implement the recommendations of the parliamentary committee of inquiry into the Community transit procedure.
The reform consists of legislative measures, operational provisions and - an essential element - the computerisation of the service. The proposed amendment of Regulation (EEC) No 2913/92, which introduced the Community customs code, was presented in September 1997. The Commission accepted most of the amendments tabled by Parliament at first reading, modifying its proposal accordingly on 3 July 1998. The Commission can approve all the amendments to the Council's common position which are now being put forward by Parliament at second reading, because it considers them to be fully consistent with the aims of the action plan on transit.
The first amendment, on the transparency of decisions taken under the committee procedure, is in keeping with the principles followed by the Commission in terms of both consulting economic operators and the design and implementation of the transit reform. This amendment, already tabled by Parliament at first reading, has therefore been incorporated into the Commission's amended proposal of 3 July 1998.
The second amendment ties in with one of the most important aims of the transit reform, in that it refers to the operational measures which ensure a more secure and efficient procedure. The quickest possible discharge of the transit procedure is essential to the monitoring of transactions and necessary in order to ensure that the holder is released from his financial obligations within a reasonable period of time. Therefore, the Commission can likewise approve this amendment.
The Commission is satisfied with the progress made by the proposal in the codecision procedure, since it reveals that Parliament, the Council and the Commission are all keen to see the reform of the transit procedure - which is so important and, as we all know, so difficult - implemented at last. I wish to conclude with a further warm word of thanks to the rapporteur, Mrs Peijs.

President
Thank you, Mr Monti.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Diversification out of certain fishing activities
President
The next item is the report (A4-0463/98) by Mr Souchet, on behalf of the Committee on Fisheries, on the proposal for a Council Decision on a specific measure to encourage diversification out of certain fishing activities and amending Council Decision 97/292/EC of 28 April 1997 (COM(98)0515 - C4-0543/98-98/0274(CNS)).
I give the floor to the rapporteur, Mr Souchet.

Souchet
Mr President, Commissioner, ladies and gentlemen, on 8 June 1998, after a long debate, the Council adopted a regulation banning fishing with drift nets in the Atlantic and Mediterranean with effect from 1 January 2002.
To provide compensation for some of the economic loss suffered by fishermen (requirement to adapt vessels for deep-sea tuna fishing using new techniques, cessation of activities and so on), the Council drew up this proposal on the basis of Article 43 of the Treaty. This proposal follows the broad outlines of the Spadare plan created for Italy in 1997, which provided measures for seafarers and shipowners. The measures proposed involve compensating fishermen following either the cessation of all economic activities before 1 January 2002 or diversification into other fishing activities. Shipowners can be compensated following either the cessation of all fishing activities or diversification into other fishing activities. This compensation is for shipowners and fishermen who have been involved in drift net fishing in 1995, 1996 or 1997. This year could also have been included so that it is mainly those fishermen who are fully active who benefit from this measure, as is usual.
Five Member States are affected by this ban: Spain (only in the Mediterranean), Ireland, France, Italy and the United Kingdom. In order to limit budget costs and prevent possible abuse of the investments, this proposal sets only the maximum amounts of the premiums. The Member States must themselves adjust these payments in line with the actual economic and social loss resulting from the ban on fishing with drift nets.
I must emphasise that the ban on the use of drift nets could cause the premature cessation of activity for certain fishermen, as the proposed measures provide for the establishment of an additional compensatory payment in the event of cessation of all fishing activity before 1 January 2002. Local authorities and fishermen have recently made significant investments in infrastructures such as markets, particularly to meet Community standards. These investments will show reduced profitability following the cessation of activity by certain fishermen, in particular in those ports where the vessels affected by this measure concentrate the landing of their catches.
The Committee on Fisheries has adopted 8 amendments which I proposed as rapporteur. Amendments Nos 1 and 8 aim to reestablish an equitable situation between Italian fishermen affected by the Spadare plan and fishermen from the other Member States affected by the decision to ban drift nets. These diversification measures must not in any case produce a distortion of competition.
Amendments Nos 2 and 7 aim to allow the aggregation of the funding to enable the financing of diversification by fishermen for the period between 1 January 2000 and 31 December 2001. These amendments are particularly important as certain Member States have initiated studies and are experimenting with possibilities for adapting other fishing equipment for use as a substitute for drift nets. A large number of the fishermen affected are waiting for the results of these studies so that they can provide for the necessary investments for the technical modification of their vessels.
Amendment No 3 specifies that only fishermen over 50 years of age can benefit from the compensatory payment of ECU 50 000 if they cease all economic activity before 1 January 2002. This amendment will prevent the possibility of windfalls, the risk of fraud and the abuse of a measure which is not meant to turn young fishermen away from their chosen profession.
Amendment No 4 specifies that it is necessary to ensure that the measures provided under this decision apply only to the fishermen and owners of vessels who suffer a real loss because of the ban on fishing using drift nets.
Amendment No 5 specifies that the age of the vessels should be taken into account only in the specific case of a payment for cessation of activity. If the owner has to make investments to convert his vessel in order to be able to use other fishing equipment, it is essential to take account of all the investment needed for this conversion, without having to apply an abatement coefficient linked to the age of the fishing vessel.
Finally, Amendment No 6 asks the Commission to make provision for the necessary financial resources so that all fishermen who are eligible can benefit from the diversification measure. Certain Member States, particularly Ireland, have used or will use all the funding allocated under the FIFG.
In my opinion, all these amendments which have been adopted by the Committee on Fisheries are in line with the spirit of the measure which the Council felt obliged to adopt in order to assist the diversification of those fishermen severely affected by a measure which they feel is particularly unfair. This measure aims not to dissuade but rather to encourage young fishermen from our Member States who fish for albacore using newer vessels. It is essential that we encourage the continuation of deep-sea fishing as this involves a particularly healthy resource and helps to conserve species which are struggling.

Crampton
Mr President, my group supports this report with the amendments. It is a very necessary report. Now the governments of the European Union have decided this, and the European Union and this Parliament have supported the measure to abolish driftnets, then they have to do something about the livelihood of the fishermen concerned. It is absolutely necessary that we do this. Driftnet fishing was considered bad by this Parliament. It was considered that the by-catch of dolphins and other sea creatures was too important, so we abandoned driftnet fishing. But now we must do something about the fishermen.
Firstly, we have to provide compensation, retirement, or whatever you call it, for those fishermen who go out of business and fish no longer. That is one aspect of it.
The second aspect is to change the methods so that fishermen are still going out, catching their tuna, but using different methods of doing so, which do not have the by-catch consequences that driftnets have.
We have to remember that, although fishing is a very small part of the European Union total gross domestic product, or however we should like to measure it, to those communities such as western France, Italy and Ireland, a few areas in the United Kingdom and some in Spain, fishing is about the only thing they have. There are very few alternatives. I totally agree with the rapporteur that the European Union should offer compensation for those that go out of the industry, and for retraining and re-equipping vessels for different methods of fishing for those that want to carry on.

McCartin
Mr President, I want to thank Mr Souchet for his report and to say that if his proposals are accepted it will be a more generous and more acceptable package which the fishermen deprived of their livelihood are being offered.
The Parliament agreed the ban in the first place along with the Committee on Fisheries. I was one of the people who had serious doubts about it, in that I considered it was political considerations rather than scientific knowledge that led us to believe that this method of fishing was seriously damaging to marine life. Having said that, I think that many fishermen believed that this ban was not necessary. Therefore, if the Commission is to propose and the Union agrees to prevent them from earning a living and not to propose any compensation, this measure without Mr Souchet's proposals will not provide any new money or any new assistance to fishermen.
The money that had already been allocated to Member States for the improvement of their fleets and of marketing and processing and port facilities is what they are expected to use to provide compensation for the people who have lost their livelihood. This was a make- believe measure and it is still that for most of the fishermen involved. If extra money is not provided in the case of the countries that had provided their plans for the development of their fishing industry and had spent their structural funds, then we are offering them nothing.
We are coming to the time of year when we will have new quotas and new arrangements for allowable catches. Fishermen are feeling extremely frustrated. There is sometimes an unjustified feeling in the fishing areas that the European Union is being rather oppressive and is busy thinking up restrictions and regulations. To do that without scientific knowledge and to fail to provide compensation would have been a mistake.
There is only one provision we do not accept in the Souchet report, and that is where he makes reference to the fact that they should not be put into effect until the Court of Justice has made its decision. Of course this cannot be put into effect until the ban itself comes into effect and we believe we should let the position stand. If the ban comes into effect when it is supposed to, then their compensation should automatically come into effect and the reference to decisions that may or may not be taken by the Court should be left out of it.

Eisma
Mr President, as long ago as 1994, Parliament tried to get drift nets banned. On 8 June this year, that is to say four years after our efforts, the Council finally approved an amendment to the regulation which will outlaw fishing with drift nets in the Atlantic and Mediterranean after 1 January 2002. In doing this, the Council is at last partly heeding the wishes of Parliament. I say partly, because the job is far from over. It is still possible to fish with drift nets in the North Sea and the Baltic. Even though these seas do not have dolphins swimming in them which can get caught in drift nets - that is not a problem in these waters - the problem of by-catches still remains. Hence my question to the Commission. When shall we be getting proposals to have the ban on drift nets declared applicable to the North Sea and the Baltic too?
This is a first step in the right direction. We need now to have this ban properly implemented and complied with. I would also ask the Commission what additional control measures it will be taking? I should like to know how it intends to prevent this fishing activity from switching to non-Union countries. It is right that fishermen should be compensated for some of the financial loss, but I should also like to know what conditions the Commission proposes to attach to this, namely the fact that nets should indeed be destroyed so that they do not simply disappear to non-Union countries. Naturally, Mr President, my group stands fully behind the rapporteur Mr Souchet and the amendments tabled by the Committee on Fisheries.

d'Aboville
Mr President, we all know that the decision taken to ban drift nets was a political decision without any scientific basis. Proof of this aberration has been given today by those who previously saw in an alleged shortage of tuna a reason to ban drift nets, and who now seem to be discovering that it is essential for the tuna fishermen in the Bay of Biscay to convert ... to tuna.
In line with this view, which we obviously support, the amendments tabled by the rapporteur provide essential improvements to the Commission's proposal. With regard to fishermen, it is clearly desirable to ensure a payment for cessation of activity only for those for whom this is appropriate, namely those of an age to retire. With regard to vessels, while it is reasonable to take the age of a vessel into account when calculating the payments for cessation of activity, surely it would be unfair to reduce the assistance available for converting some old vessels, provided that this involved adapting these vessels to other techniques allowing them to continue fishing for tuna, in order to prevent the transfer of their activities to sensitive species.
Finally, we feel that it is absolutely appropriate to aggregate the funding so that the conversion period can last until the end of 2001 in order to profit fully from the studies and experiments being carried out to try to adapt other equipment to tuna fishing. To neglect this point would encourage some fishermen to diversify prematurely and disastrously by turning to other species of fish, specifically threatened coastal species.

McKenna
Mr President, the Green Group welcomes the decision that was taken in June to get rid of driftnets for albacore, tuna and certain other species. We also welcome the Commission's proposal to provide funding for fishermen affected by this decision. It is important that proper and sufficient funding for compensation is made available for fishermen to convert to more selective and appropriate fishing gear. We hope that the EU draws a lesson from this whole experience.
Driftnets were encouraged for use in several countries by national governments and by the EU, despite the fact that experience elsewhere had shown that these nets had high levels of by-catch. Proper evaluation should have been conducted before their use in the EU but this was not done. The nets were introduced on a commercial scale and then expanded. More selective gear was available which should have been promoted instead.
My other points concerns the motion for a resolution. As other speakers have mentioned, it has a very unusual clause to the effect that the Council should delay the implementation of this decision until the EU Court of Justice has issued its decision on the case brought by certain French fishermen. It should be pointed out that the French Government had intended to bring a similar case but decided against doing so as it was clear that such a case had no chance of success. The French Government is being extremely cynical in this case by having their own lawyers advise the fishermen on a case which the French Government itself knows will fail. We feel that if this clause is not taken out of the resolution we will have no option but to vote against the whole resolution. It is very important that this clause is removed so that the resolution can be passed by a vast majority of Parliament. As has been said by another speaker, it is not correct to have a clause like this regarding the Court of Justice and a decision that must be taken there. We have to keep that separate.

Langenhagen
Mr President, Commissioner Monti, if I did not have another exciting topic to deal with this evening, I would like to ask you about the new duty-free development. But this is not the time to do so, so I will turn now to the Souchet report. Having fought for it for so long, as we have heard, fishing with drift nets in the Atlantic and the Mediterranean was finally banned in June of this year. This was long overdue in order to protect our scarce fish resources in an ecological and sustainable manner. Yet we must not forget that the ban results in further economic loss for the fishermen in the countries concerned, fishermen who were already experiencing serious problems. We must provide at least some compensation for this loss.
According to the Commission proposal, both the fishermen serving on board and the owners of vessels should receive compensation. But the authorities and other investors will also suffer financial loss, as in recent years a great deal of money has been invested in improving infrastructure such as port facilities and markets. As fishing activities decline, however, these investments will become economically less viable. And this is in a situation where fishermen are to receive compensatory payments for giving up fishing, which may lead them to stop early. But we want the profession to remain intact, so incentives must be created to help in particular the younger generation of fishermen to change to alternative fishing methods.
We would remind the Council that it wanted to promote diversification into other techniques. It now has an opportunity to do so. Furthermore, the Committee on Fisheries is of the opinion that the aggregation of funding to allow diversification by fishermen should be guaranteed beyond the end of the FIFG in 1999. The Group of the European People's Party approves Mr Souchet's amendments here. However, in the opinion of my group, diversification must take place immediately and should not wait for a decision by the European Court of Justice.

Fraga Estévez
Mr President, though I acknowledge the considerable amount of work that the rapporteur has had to do, I would, however, like a number of my colleagues, like to express my disagreement on one very important aspect of his report.
Paragraph 4 of the motion for a legislative resolution calls on the Council to delay implementation of the financial measures contained in its proposal for a decision until the Court of Justice of the European Communities has given its verdict on the appeal lodged by several drift gillnet users against the regulation prohibiting them from using this piece of fishing equipment from the year 2002.
Contrary to what the rapporteur said and wrote in his report, I think that such a request is absurd and, what is more, is extremely detrimental to the fishermen concerned. The Council's proposal is aimed at reducing the economic effects this ban on drift gillnets entails for fishermen and encouraging them to diversify into other activities. Therefore, the fishermen will be entitled to receive compensation as they gradually cease this type of fishing activity until 2002, when the ban will be fully implemented.
No-one - and least of all the fishermen - would deny that fishing with drift gillnets does not have any future in the European Union. We must therefore bear in mind that when the Court has given its verdict on the appeal lodged, the majority of fishermen will have already ceased this type of activity and many will want to do so as soon as possible so as to promptly establish their new activities.
As a consequence, it makes no sense to deprive those who wish to receive payments from having access to them. Not all the fishermen concerned have appealed to the Court of Justice and nor should their entitlement to the fixed compensation be subject to conditions because of the attitude of others who, on their own account and at their own risk, have decided to take the matter to the courts.
So, as I believe that this is detrimental to all and beneficial to none, I call on you to vote against paragraph 4 of the motion for a resolution.

Monti
Mr President, the Commission has taken note of the report by Mr Souchet, to whom it is grateful. There is a broad consensus among the three institutions with regard to compensatory payments and diversification in the case of fishermen affected by the ban on the use of drift nets, for which the Council gave a mandate to the Commission at the meeting of 8 June 1998.
As regards the amendments proposed in Mr Souchet's report, the Commission regrets that it cannot adopt the following: Amendments Nos 1, 2 and 7, which are formal amendments having no practical effect; Nos 5 and 8, which restrict the scope of the decision; and No 6, which oversteps the mandate given by the Council to the Commission.
On the other hand, the Commission can fully endorse Amendment No 4. One which deserves particular attention is Amendment No 3, introducing a minimum age for beneficiaries of these measures. The different rules existing in the Member States on the pensionable age, however, make it impossible to set a single minimum age across the board. The Commission will therefore ensure that the spirit of Amendment No 3 is taken into account at the bilateral negotiations with Member States concerning the diversification plans and their implementation.
I should also like to touch briefly on two or three points which were raised during the debate. As far as the introduction of the accompanying measures is concerned, the Commission will take care to ensure that the banned nets cannot be reused elsewhere. There will be a mandatory clause to this effect in the Member States' diversification plans. As for the possibility of banning these nets in the North Sea or the Baltic, that is not of course the subject of this debate; today we are discussing the measures accompanying the ban imposed on 8 June. At present, the Commission has no intention of extending the ban to other marine areas, where the impact of this type of fishery on marine mammals has not been proved.
Finally, several Members raised the question of the timing. I would point out here that every Member State is at liberty to designate an intermediary body responsible for implementing the accompanying measures. Under the general provisions governing the Structural Funds, such a body may be regarded as the final beneficiary of structural aid, and all that is required is for the total allocations to be awarded to that body by 31 December 1999. In this way the monies are committed, and payments to the final beneficiaries - the fishermen and shipowners - may continue until the end of 2001.

President
Thank you, Mr Monti.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Emergency food aid to Russia
President
The next item is the report (A4-0506/98) by Mr Colino Salamanca, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council Regulation on a programme to supply agricultural produce to the Russian Federation (COM(98)0725 - C4-0678/98-98/0343(CNS)).
I give the floor to the rapporteur, Mr Colino Salamanca.

Colino Salamanca
Mr President, the Committee on Agriculture's decision to fully endorse the Commission's proposal on the food aid programme to the Russian Federation will, I believe, also be supported in the House tomorrow.
Moreover, I believe that the Commission, the Council and Parliament share the same concerns in relation to this proposal. The first of these is whether the proposal can achieve its aims. In other words, we need to ensure that the raw materials or processed food products that are essential for the survival of the Russian Federation's population reach the disadvantaged regions they are destined for. And as we saw in the memorandum, the aid is being distributed amongst the regions most in need. In addition, as far as possible, this aid needs to reach the most disadvantaged through free distribution.
The second concern - which again is one I think we all share - is to ensure that the operation is transparent and is sufficiently monitored so as to achieve its aims. Given all the rumours about possible mafia groups operating within the Russian Federation, it is good to know that such food aid will be able to meet its objective. And in this respect, the European Union is donating aid to a value of EUR 400 million. It thus follows that Parliament, and particularly the Committee on Agriculture and the Committee on Budgets, have emphasised the importance of ensuring that adequate monitoring takes place to guarantee that the aid will meet the objective of this initiative. In this connection, we must obviously ensure that the food aid does not distort the Russian Federation's domestic markets, as it represents quite a substantial amount, including 1 million tonnes of wheat, 500 000 tonnes of rye, 50 000 tonnes of rice, 1 million tonnes of pork, 150 000 tonnes of beef and significant amounts of skimmed milk powder.
I would stress that these conditions have been established by the Committee on Budgets and accepted by the Committee on Agriculture, and are, in my opinion, of great interest. It means that the operation will be monitored by both the European Union and from within the Russian Federation itself. The aim of this is to enable us, through the Commission and the Court of Auditors, to monitor the operation even from within the Russian Federation itself to ensure that these objectives are met.
That is why the amendments tabled relate directly to these objectives. They hope to ensure that the aims behind the launch of this programme are met and also to ensure that the significant financial contribution that the European Union is going to make is clearly reflected through these objectives being met.
In addition, I think that this has fulfilled the very resolution Parliament adopted recently, on 19 November, a resolution that took account of both the circumstances that have been relayed to us essentially by the Russian authorities and the commitment made by the European Union, together with the United States, to assist and support regions suffering from acute food shortages.

Herzog
Mr President, the Committee on External Economic Relations was asked for an opinion on supplying food aid to Russia but, in view of the urgency of the matter, we have not had a chance to meet in Strasbourg to discuss it and adopt an opinion. This is why, as chairman of the committee, I will make a few points with which the majority of the members of our committee will very probably agree and which are totally in line with what Mr Colino Salamanca has just said.
Firstly, we are obviously totally in favour of supplying emergency food aid to Russia, particularly given that this is based on Russian requests made during the visit of the President of the European Commission to Moscow in October. The supply situation is appalling in certain regions of the Russian Federation and we clearly have a humanitarian duty to a population threatened by famine. I would add that it is also in our own interest to see the political and social situation stabilised. Obviously I am not interested in the resulting positive effect of a reduction in stocks of agricultural products in the European Union.
Secondly, we can only agree to the method of supplying and distributing the food aid, while hoping that the Russian public authorities will be able to distribute the products free to the neediest people.
Thirdly, it is clear that we must follow closely the implementation of this measure. I would remind you that, in view of the political and financial situation in Russia, this House, during the first reading of the budget for 1999, put into reserve a significant amount intended to help Russia. This was based on an amendment proposed by our committee. We are not actually sure if our assistance is reaching the intended beneficiaries or if it is being used for the objectives specified. The same concerns apply to the food aid and we invite the Commission to apply the Memorandum of Understanding to the letter and to inform Parliament immediately of any possible cases of fraud or speculation.
Finally, it goes without saying that the funding of this food aid action through the Community budget, which involves a large amount - EUR 400 million - must not be regarded as a subsidised export. I would remind you of the European Union's undertaking, signed in the context of the WTO agreement, to reduce the quantity and volume of subsidised agricultural exports in the budget.

Monti
Mr President, I should like to thank Parliament for having supported the idea of an emergency procedure, and say how much the Commission appreciates the report by Mr Colino Salamanca. I shall merely draw your attention to the principal issues, in particular who will assume responsibility for the operation, which regions are to benefit, and the aspects related to monitoring.
Given the scale of the operation, the Commission is firmly convinced that it cannot be administered by non-governmental organisations, as usually happens for food aid. The United States are of the same opinion as concerns their food aid programme. Therefore the operation must inevitably be carried out under the auspices of the Russian Government.
As for the regions covered by the programme, the products will be distributed to the poorest regions and those worst affected by the shortages. These include neither St Petersburg and the surrounding area, nor Moscow and its environs. A total of some 40 regions are included in the food aid programme. The large number of beneficiary regions will obviously make surveillance of the operation all the more complex.
With regard to monitoring, I would stress that the Commission is not able to exercise any control over the implementation of the programme within the Russian Federation; this has also been made clear at the General Affairs and Budget Councils, and again at yesterday's Agriculture Council. In the Commission's opinion, it is impossible to maintain thorough surveillance over the programme in the more than 40 regions concerned, not only because of the vast geographical area involved but also because Russia is currently in a state of internal turmoil. The distribution of food aid on Russian territory represents a high-risk operation, and no surveillance measures could entirely eliminate this risk.
The Commission has nevertheless taken note of the extremely firm stance adopted by the European Parliament and by several Member States in favour of incorporating surveillance measures into the programme, and has therefore made provision in the regulation for recourse to external technical assistance with monitoring, auditing, control and evaluation within the Russian Federation. This arrangement has already been accepted by the Russian Government.
The other provisions on monitoring, originally contained in the memorandum of understanding, will however be more important than the external technical assistance. First of all, the regions and areas benefiting under the programme are listed in the annex to the memorandum, with an indication of the products to be distributed to each of them. The Russian Government is to reach an official decision, which will be made public, on this annex.
Consequently, the governors of all the regions will be able to check whether the exact quantities of each product earmarked for their region have been delivered. Clearly, if that is not the case, protest mechanisms will be triggered. Secondly, the products will be despatched in several consecutive batches. Thirdly, the Russian Government will send monthly reports to the Commission on the implementation of the programme. These reports will contain all necessary information about the progress of the operation, by product and region, as well as a statement on the management and use of the special account. Fourthly, the European Court of Auditors is empowered to carry out audits in the Russian Federation concerning the food supply programme.
I would stress last of all that, should the Commission receive any information leading to reasonable doubt as to the proper implementation of the programme, it will be able to suspend the supply of aid.
I would conclude by stating that, in the Commission's opinion, the programme of food aid to Russia can be carried out under optimum conditions only if responsibility for the operation is shared by all the institutions, and if all the institutions realise from the outset - and before taking any decision whatsoever - that the programme is not free of risk. We have done everything humanly possible to minimise such risks, but we cannot do so altogether. On the other hand, nor can we sit back and refrain from assisting Russia for fear that the operation might misfire in some way.
Let me now review rapidly the amendments which the Commission is unfortunately not able to adopt.
Regarding Amendment No 1, it has to be borne in mind that we, with the Russians, specify quantities to be delivered, which we have to respect. The amounts to be expected are estimates by the Commission services based on standard values which can be higher than expected, especially considering transport under winter conditions. A fixed maximum amount would risk, therefore, diminishing the quantities of the products to be delivered, which nobody wants.
As far as Amendment No 2 on the tender procedure is concerned, the only tender which is envisaged is one which designates the bodies or operators which will, on behalf of the Russian authorities, carry out the necessary work for taking over the transporting, processing and sending the goods to the final destinations. This tender procedure has already been accomplished by the Russians for both the European Union's food aid action and those from the United States of America.
As far as the NGO's involvement in this operation is concerned, the Commission thinks that, due to the enormous size of the transactions, only professional operators which have the necessary infrastructure could accomplish this task effectively.
Regarding Amendments Nos 3 and 7, among the specific conditions agreed in the MOU, re-exports of the food aid deliveries as well as the exports of the same commodities produced in Russia or imported from any other third country are explicitly forbidden. It seems to the Commission that underlining one of the conditions would weaken the others or risk giving them less importance.
As regards Amendment No 4, it is clearly indicated in the regulation that the Commission shall call in outside technical assistance for monitoring, auditing, controlling and evaluating the proper conduct of the operation including on Russian territory. To specify that this technical assistance should be provided by a technical assistance office will not strengthen the text but rather restrict the kind of external control organisms which could be involved.
As far as the amount allocated for this kind of technical assistance is concerned, the same remarks are valid here as for Amendment No 1.
It is not necessary to put Amendment No 5 in the text as the Commission has already made available the draft memorandum of understanding to the European Parliament. It is also clear that the Commission, in the framework of the early warning system, will give as usual all information to the budgetary authority concerning the execution of the operation.
Concerning Amendment No 6, this provision is already in the memorandum of understanding and need not be repeated in the regulation.
Amendments Nos 8 and 9: fisheries products were never mentioned by the Russians as products for which a shortage exists in Russia for the next winter. Therefore the Commission cannot include these products in the current food aid programme.
Finally, regarding Amendment No 10, there are a lot of needy people in the Russian Federation. To specify each group or to highlight a specific one seems to us to be inappropriate.

President
Thank you, Mr Monti.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.
(The sitting was closed at 11.51 p.m.)

