Question Time (Commission) 
President
The next item is Question Time (B7-0563/2010).
The following questions are addressed to the Commission.
Subject: Young people in precarious employment
As the Commission notes in its communication 'Youth on the move', young people are often trapped in a chain of temporary employment contracts that reduces their chances of moving on to more stable contracts and exacerbates their job insecurity. The problem is even more acute in Member States where labour law is particularly protectionist. Can the Commission answer the following questions:
Does it believe that the often doubtful quality and uncontrolled duration of traineeships exacerbate this problem? Will it take specific action as part of the objectives set in the Europe 2020 strategy and the Youth on the Move programme to support youth employment and strengthen their job security?
Will the Commission pursue specific and even more targeted policies to promote and strengthen youth employment in those Member States that are facing an economic recession?
László Andor
Member of the Commission. - Mr President, two months ago, the Commission presented the 'Youth on the move' flagship initiative as part of the Europe 2020 strategy. This sends a clear signal that the Commission has a special concern for young people.
'Youth on the move' has three objectives: to improve education, increase employment and foster mobility for young people across the European Union. It will involve action to make education and training more relevant to young people's needs, encourage them to take advantage of EU grants to study or train in another country and overcome obstacles to entering and making progress in the labour market.
The two labour market problems which the honourable Member has raised, namely, traineeships and labour market segmentation, are among the topics 'Youth on the move' takes up. I am grateful for the opportunity to explain the Commission's views and aims regarding these two topics. I want to stress, first and foremost, that both fall within the Member States' national competence in terms of practical implementation.
Let me start with traineeships, or internships as they are also sometimes called. I know that the European Parliament regards these as very important, as Ms Turunen's report earlier this year showed. The underlying problem is that employers are reluctant to recruit young workers with little or no practical experience. This is why acquiring initial work experience through traineeships has grown in importance for young people over the years. However, they must be of high quality and have clear learning objectives. In addition, they should not replace normal jobs or probation periods at the start of a work contract.
The Commission intends to develop a quality framework for traineeships but, as a first step, we need to improve our knowledge in this area. The Commission will soon be launching a study to gain an overview of existing legal arrangements and practice across the Member States. This is part of a pilot project involving measures for employment maintenance, for which Parliament has provided the Commission with an extra budget for 2010.
A second set of issues is labour market segmentation. Young people are in a difficult position in terms of job security. Too many have short-term contracts, often alternating with unemployment, and many young people - even those who are well qualified - have little chance of getting more stable contracts. We need to tackle labour market segmentation as a matter of urgency, in particular, because it affects young people and their employment prospects most and because it endangers the future competitiveness of the European economy.
A report on employment in Europe, to be released by the Commission in a few days, finds that temporary workers are paid 14% less and receive less training than workers on permanent contracts. This has a negative impact on productivity. This applies to young people especially. Those with temporary jobs account for 40% of the total, against 13% among the overall working-age population. This means that young people bear the brunt of adjustment.
In addition, young people are experiencing more and more difficulties in getting into the labour market. The percentage of young people who are not in education, employment or training ranges from about 4% in Denmark and the Netherlands to 16 to 20% in Italy, Cyprus and Bulgaria. Reducing labour market segmentation is, first and foremost, the responsibility of the Member States. The Commission has identified this as one of the priorities the Member States should focus on in line with the common flexicurity principles under EU 2020 and the European Employment strategy.
In practical terms, the Commission proposes that Member States with segmented labour markets should consider introducing an open-ended single contract that provides for a sufficiently long probation period and a gradual increase in protection in place of the current legal disparities between permanent and temporary contracts. The Youth Employment Framework under 'Youth on the move' gives guidance on how policy makers, stakeholders and institutions can make progress in this area.
Closer policy coordination under the European Semester, which we are currently preparing with the Member States, will offer the right framework for stimulating the development of policy and reforms that will benefit young people.
Georgios Papanikolaou
(EL) Thank you, Commissioner, for your reply. Today, I read in the European Commission's communications about the adoption of an agenda for new skills and work. Today's communications refer, among other things, to the decision to promote an open single contract to replace the various types of temporary and permanent contracts.
My question is very straightforward: will the Commission be able to guarantee under this initiative that open single contracts will improve young people's sense of security at work? In other words, will the current situation be improved, insofar as it can be improved?
Franz Obermayr
(DE) Mr President, obtaining a permanent job and establishing a decent lifestyle are very important goals for most young people. They have been hard hit by the most recent economic crisis and are often forced to take short-term jobs or low paid internships, which also means, of course, that they are not contributing to a pension. This makes long-term life planning difficult. Therefore, I would like to know: Does the Commission intend to put measures in place which will guarantee permanent jobs for young people in particular? Or to put it another way: Are directives being planned which will introduce standards for temporary jobs?
Vilija Blinkevičiūt
(LT) Commissioner, thank you for your answer, because all initiatives are necessary, especially for assessing how young people have suffered during this difficult period. However, I would like to ask whether the Commission feels we should adopt a separate European Union youth entrepreneurship and innovation programme which would promote and support young people's creativity and enterprise? Where would you stand as regards opportunities for young people to take advantage of microcredits? Should the procedure for recognising companies established by young people be legally regulated?
László Andor
Member of the Commission. - The previous discussion extensively covered the open-ended contract, which I think is one of the practical solutions. In addition to that, we have seen during this year that the Commission discussed the situation of young people and the impact of the crisis on youth employment, and 'Youth on the move' has already addressed this in concrete terms. Further initiatives are obviously possible.
We will have to monitor the situation and work with the Member States. During this phase, we have just gathered details of the national programmes developed by the Member States, and after analysing these and looking at the practical solutions and undertakings they made, we will be able to come forward with further suggestions. The most important one here, however, is to shape a macro-economic environment in Europe that will facilitate a continued, robust recovery.
One further point I would like to make is that young people have, of course, been among those who have suffered most from job losses and the lack of opportunities in the last couple of years. We are aware of the long-term risk of this which is not just as an immediate employment or social question. If we do not take action, it can have an impact on demography trends which are already extremely complicated, so in the next term, in a kind of alliance or cooperation with the Hungarian Presidency, we will discuss this in the context of a demographic discussion, because demography and family policies also have to be looked at in the same context as job security and income security for young people in Europe.
Subject: Enhancing competitiveness through alternative energies
It is the objective of the Commission, and of us all, to guarantee our fellow citizens a comfortable and secure standard of living within a framework that fosters the competitiveness of European companies. Use of alternative energy sources is one solution that can help improve the competitiveness of production. Unfortunately, few countries can boast impressive figures in this field, and these are mostly in the North of Europe. The spread of technologies using alternative energy sources is slow in the new Member States, particularly in the East.
What incentives and promotional measures has the Commission taken, or does it intend to take, to target Member States that make little use of alternative energies or in which this technology is slow to spread, so that these countries and the European Union as a whole become more competitive on a global scale?
Günther Oettinger
Mr President, ladies and gentlemen, the honourable Member has been speaking about the subject of renewable energy and asking what we plan to do to achieve our joint targets. Three years ago, the European Council set us some ambitious climate goals. One of these concerns renewable energy, which, by 2020, must make up 20% of the total energy consumption in the European Union. Each Member State must exploit the opportunities available to it and make a mandatory contribution to achieving this goal.
If we divide this 20% across the various different sectors, such as transport, heating, electricity, industry and agriculture, it is clear that electricity generation is the most important. In order to achieve the target of 20% of total energy consumption, we need around 35% of our electricity to be generated from renewable sources. If we are to do this efficiently and ensure that the price is affordable for consumers, we must make use of the best locations. Each Member State has different strengths and weaknesses, which must be exploited, and these include wind from the North Sea, sun in the southern part of the European Union and biogas from rural areas. Obviously, in order to ensure our security of supply, we need to make significant improvements in the quality and capacity of our infrastructure, our transport networks and our storage facilities. The Commission took this point into consideration a few days ago when we discussed and adopted an energy infrastructure package which focuses, in part, on integrating and feeding in renewable energy.
We have set binding targets for renewable energy for every Member State. In a few days, on 5 December, we will reach the transposition deadline and the Commission will begin following up on the implementation of the directive, in order to ensure that the appropriate incentives have been put in place and that suitable subsidy measures have been taken, which will allow the binding targets to be achieved. The Member States must concentrate on creating the ideal conditions for the use of renewable energy. Among other things, the European Union directive calls for Member States to produce national action plans specifying the necessary measures and the concrete, binding national targets, broken down by sector, such as transport, heating, electricity conversion and industry. The next step involves removing the administrative obstacles to renewable energy. A third important area is the construction industry. Around 40% of our energy is used in industrial buildings, service sector premises and private homes.
By the end of 2012, we want qualification and certification schemes to be in place for the installation of renewable energy facilities. These include distribution and transmission networks which must be prepared for the development and increase in renewable energy and which must also guarantee priority access for renewable energy. The Member States can be flexible in their choice of technologies. They can decide which types of renewable energy they will invest in to achieve the binding targets. The Commission will subsidise innovations and projects which aim to research into, develop and commercialise technologies for renewable energy, using funding from the seventh framework programme that you in this House have made available to us.
The Commission also has money from the European Economic Recovery Plan for three years which is specifically intended for renewable energy projects, in this case, for the development of offshore wind energy. I would like to emphasise to the new Member States that cohesion programmes and funding to promote renewable energy are also available. Renewable energy has a high priority in our energy and climate policy, in particular, with regard to reducing our dependency on imported fossil fuels. Only by working together will we succeed in achieving our ambitious climate goals and increasing Europe's competitiveness. I am relying on a close partnership with the Member States regarding the use of the different energy resources.
Justas Vincas Paleckis
(DE) Thank you very much, Mr Oettinger, for your clear and convincing answer. I believe that the Commission has done a great deal towards achieving these objectives. However, in my opinion, it should be possible to provide the public with more information and to win over the mass media, in order to gain more support in this area. This is not what is happening in my country, Lithuania, for example. Of course, that is the responsibility of the national governments, but the Commission could provide them with assistance.
My final question is: In your opinion, which states have been relatively successful in meeting the 2020 objectives and which have not?
Silvia-Adriana Ţicău
(RO) Bearing in mind that the energy and climate change package already imposes certain targets on Member States for reducing polluting emissions and increasing energy efficiency, I would like to ask you what measures you are taking to support businesses in industrial sectors which are major consumers of energy in modernising their facilities so that they become more energy efficient and cause less pollution.
Seán Kelly
Mr President, I should like to thank the Commissioner for his very comprehensive response to the question.
I have two questions, firstly regarding the 2020 strategy. Is he confident that we will reach the 20% target for renewable energies in that strategy? Secondly, he mentioned grids. How realistic, desirable and affordable would a Europe-wide grid be, and is it attainable?
Günther Oettinger
Member of the Commission. - (DE) Mr President, ladies and gentlemen, in a few weeks, we will be submitting to you, the European Parliament, the Council and the Member States our proposal on how we plan to achieve a 20% increase in energy efficiency. Looking at the three targets which you have set us, with regard to the 20% reduction in CO2 emissions, we are making good progress towards this objective. I am sure that, if we continue with our current efforts, we will reach or even exceed the target of 20% less CO2 in 10 years.
On the subject of 20% renewable energy, we are also doing well, although the progress made in the different Member States varies. Some Member States were already a long way ahead when compared with the reference year. For example, Austria had a 23% share of renewable energy five years ago and is expected to reach a level of 34% by 2020. In contrast, the figure for the United Kingdom was only 1.3% and for Malta 0%, which meant that these countries had to start virtually from scratch. The leaders include Sweden, which is aiming for 49%, and Finland and Portugal with a goal of 38%. The Baltic States, with targets of 25%, 40% and 23%, have also been very successful and their figures are above the European average in this important area.
The target of a 20% increase in energy efficiency is the one which gives me most concern. This involves making intelligent energy savings and using energy in a targeted way. I will be happy to talk to Parliament about this during the first quarter of next year when I will be able to submit to you our proposal for achieving a 20% improvement in energy efficiency.
You mentioned the media. In fact, on the subject of renewable energy and consumers, more can be done by industry and investors, both investors in technology and financial investors. I have a proposal for you. I am planning to visit the three Baltic States next spring. I will be happy to attend a conference of representatives of the media, the banks and business, if you can suggest suitable candidates, in order to increase awareness in your country, using my modest resources, and to open up opportunities for new programmes and cofinancing.
The next question was: What do I think of a European energy network? I want to answer this very openly. If you look at the transport infrastructure in Europe, we have roads, motorways, railways, the European airspace, with its large and small regional airports, and major ports, such as Genoa, Marseilles, Hamburg and Rotterdam. There are also terminals for liquid natural gas and for oil in the Mediterranean, the Black Sea, the Baltic, the North Sea and the Atlantic. In addition, we have a digital infrastructure for information, communications and navigation, including our mobile phone network. In comparison to these areas, our energy networks are lagging far behind. We can transport televisions, pig carcasses, tinned foods and other goods from Portugal to Latvia and from Holland to Greece, we can transport workers and tourists and we can transfer information and financial services, but our gas and electricity networks are still divided up along the lines of 19th century principalities. We need to integrate the markets in the Baltic States, Finland, central Europe and Greece, before Serbia and Croatia join the European Union. We also need bridges and interconnectors to transport electricity in both directions between Spain, France and Germany. Over the next 20 years, we must put in place the financing and the legislation to ensure that our transport networks for electricity and gas are of the same quality and have the same capacity as our road and rail networks and our airspace, which can be used to transport goods and give people freedom of movement. Otherwise, we will not have security of supply or be able to show solidarity in an emergency. We will not be in a position to exchange storage capacity or establish renewable energy facilities in the best locations and bring the electricity to the centres of population. In addition, we will not have the competition which consumers want or be able to establish an internal market, which has always been one of the basic principles of the European Union and which must become a reality for gas and electricity.
For this reason, I strongly support a major initiative to develop the transport networks for electricity, gas and oil.
Subject: Structural Funds and disability
Many reports on the use of the Structural Funds show that, even if resources reach those who need them most, this is not done in the manner that would be most beneficial for them or in such a way as to bring about a genuine improvement in the quality of their lives.
How does the Commission plan to prevent the Structural Funds being used to finance the institutionalisation of people with disabilities? How does it plan to encourage their use to finance community-based alternatives to institutional care and promote the social inclusion of people with disabilities?
László Andor
Member of the Commission. - As you are aware, social policy, including policy relating to people with disabilities, is primarily a national responsibility. However, stepping up support for disadvantaged groups and, in particular, for people with disabilities, including people living in institutions, is a key strand for action under the European Social Fund.
According to some estimates, people with disabilities account for at least 16% of the EU working age population, but only 40% of people with disabilities are employed. The Commission encourages a shift from institutional to community-based care and is working closely with the Member States and, in particular, the managing authorities of the ESF and the ERDF and NGOs in this field.
In 2009, the Commission published a report by an ad hoc expert group on the switchover from institutional to community-based care. In line with the principle of shared management, the Member States are responsible for selecting operations for financing under the structural funds.
In the current programming period, the European Social and Regional Development Funds are supporting some de-institutionalisation schemes and the switch-over from residential care to community-based services. This is particularly true in certain Member States that joined the EU after 2004. Thus, projects are being financed in Bulgaria and Slovakia.
As you know, the Commission is currently working on new provisions on the structural funds for the post-2013 period and will put forward proposals in 2011. To step up the fight against discrimination and promote social inclusion of people with disabilities, future operational programmes may, for example, be required to identify the groups at risk of discrimination and exclusion. The Commission will explore the role that national equality bodies could play and may consider stricter requirements on Member States' reporting of measures to combat discrimination, implemented with support from the structural funds.
In addition, one of the aims of the European Disability Strategy for 2010 to 2020, which the Commission adopted on 15 November, is to give impetus to Member States' efforts to ease the transition from institutional to community-based care. The strategy seeks to do this by identifying good practice in using the structural funds to encourage people to live independently and in the community and aims to develop awareness-raising initiatives that target structural fund managing bodies at EU and national level. For example, a toolkit on how to use the structural funds to support the development of community-based services will be developed for the managing authorities.
Kinga Göncz
(HU) Mr President, indeed, it was this issue that I wished to pose further questions about and comment on. I was pleased to hear the Commissioner's answer. In fact, my supplementary question is whether, on the basis of these principles, the Commission plans to introduce a kind of new conditionality in the next budget period that prevents the strengthening of segregation but allows, say, the use of these funds to target social integration specifically. The problem was that these funds were often used for building and rebuilding large institutions rather than for integrated housing. I believe there are many good experts who will willingly help the Commission as well as the Member States in this.
Vilija Blinkevičiūt
(LT) Thank you for your answer, Commissioner. I would like to congratulate the European Commission which earlier this month presented the new European Disability Strategy 2010-2020. However, I have the following question. What specific programmes does the Commission plan to prepare on the basis of this strategy and when, so that there are more favourable conditions for disabled people to enter the labour market, or so that their environment and infrastructure are adapted for them?
László Andor
Member of the Commission. - The Belgian Presidency held a conference in Liège about the future of cohesion policies on the basis of the Fifth Cohesion Report, which we jointly published with Commissioner Hahn. Conditionality was one of the main discussion points and, as regards the European Social Fund, the situation described by Mrs Göncz is being covered, and we would like to develop conditionality in that sense.
Conditionality has various meanings and, unfortunately, some of these are seen as unfair or counterproductive. We believe that the real meaning of conditionality, as regards the structural funds, is that awareness and responsibility have to be raised not just as regards the content, but also the context of the projects and the operational programmes. We really have to connect with the social reality when we fund programmes in various regions and microregions, and we will take this very seriously.
We have been working recently with some Member States on community-based services. For example, in Bulgaria, a joint project was financed by the European Social and Regional Development Fund to close down institutions for children with disabilities, as a first step in implementing an ambitious action plan to close down all existing institutions for children and providing family-type care and new services to support families. This particular programme was in the range of EUR 39 million but there are also similar ones not only in Bulgaria, but also in Slovakia.
Subject: Anglo Irish Bank
Commissioner Almunia in a statement on the Irish financial sector said that there were 'a number of important aspects that still needed to be clarified' in relation to Anglo Irish Bank. Will the Commission explain what these important issues are?
Joaquín Almunia
Vice-President of the Commission. - Mr President, when Mr Mitchell tabled these questions on 7 October, the situation was not the same as it is today in Ireland and in the Irish banking sector. My answer will take into account what has happened since this question was asked.
Seven days before your question was tabled, on 30 September, the Irish Finance Minister, Mr Lenihan, discussed the total cost of the restructuring of the Anglo Irish Bank, giving two possible figures: a mid-range estimate of EUR 29 billion and a higher estimate of EUR 34 billion. At the time, total capital injections from public funds to Anglo Irish amounted to around EUR 23 billion.
As always, since the beginning of this crisis, according to our banking and restructuring information, when financial institutions receive injections of public capital, they have to present a restructuring plan to the Commission. Following much discussion on Anglo Irish, this restructuring plan was presented by the Irish Government on 26 October. In this draft restructuring plan, they considered a winding-down scenario for Anglo Irish proposing the split of Anglo into two banks - an asset recovery bank to wind down the assets of the bank and a funding bank to get the resources needed to keep it running during the process of winding down its assets.
A scenario in which assets are wound down is less problematic than one in which the bank continues to operate, both in terms of State aid rules and competition. Consequently, I made some public statements saying that, in our opinion, the task was therefore not as difficult as negotiations concerning certain restructuring plans for other financial institutions in many Member States.
We had been working on this draft restructuring plan from the time the government presented us with the document until last Sunday, when the Irish Government decided to ask for a programme making use of the different mechanisms to support Member States in the euro area with financial difficulties. Now, due account should be paid to the restructuring plan for Anglo in the ongoing negotiations on this programme. Hopefully, the Irish programme will be agreed and adopted in the coming days. I very much hope so.
In this framework, I can give you some more precise answers on the Anglo Irish Bank restructuring plan presented by the Irish Government that will be considered by my services pending a decision. I hope this will take place as soon as possible after the adoption of the programme.
In any case, I must say that I very much hope that the adoption and implementation of the programme will lead to a more favourable climate for tackling Ireland's financial and economic problems. Hopefully, the sound and strong fundamentals of the Irish economy will receive very good treatment, taking into account the need to restructure the financial sector that is the origin of the problems in your country.
Gay Mitchell
I thank the Commissioner for that response. This word 'restructuring' is being bandied about a lot outside the House. Could the Commissioner tell the House if he sees any possibility for a takeover or merger of part of Anglo Irish Bank with any other entity as a possible contribution to this, or does he anticipate that the bank will eventually be wound down? In that case, will the Irish taxpayers get some, or all, of their money back? What is the Commissioner's view on that?
Janusz Władysław Zemke
(PL) Mr President, Commissioner, I would like to thank the Commissioner for this information. However, my question is about a slightly different matter. You were speaking, Commissioner, about a very large bank - about Anglo Irish Bank - but information which has reached us indicates that other large banks in Ireland are also having problems. Could you tell us if similar negotiations are also under way concerning other banks in Ireland?
Brian Crowley
I would like to thank the Commissioner for his answer as well.
With regard to the specific issue of Anglo, is it the view of the Commission that Anglo is different to the existing clearing banks, as we call them in Ireland, like Allied Irish Banks, Bank of Ireland, Ulster Bank and so on?
Secondly, with regard to the clarification that he was talking about, is this also linked into the proposal coming forward from the government in Ireland tomorrow with regard to the banking finance facility which is being discussed with the IMF and with the European Central Bank?
Joaquín Almunia
Vice-President of the Commission. - Unfortunately, given that the negotiations on the programme that has been requested are ongoing during these days and hours, I cannot go into details. What I can tell Mr Mitchell is that these restructuring plans for the financial institutions in Ireland, and in general, the programme to finance the financial needs of Ireland at these difficult times, will hopefully have the positive outcome of putting an end to this very difficult and challenging situation in order to put the Irish economy back on the path of recovery and sustainable growth, as was the case in the past. Ireland was one of the best examples of economic success in the euro area and in the EU.
This is the way to tell Irish taxpayers that their money which is now being used for this restructuring, together with financing that hopefully will come after the adoption of the programme from the two European mechanisms, plus the IMF cooperation in this programme, will be returned to them as the positive result of a successful solution to the present Irish problem.
I cannot go into the details. I also ask for your understanding on this. What I can say is that there are other financial institutions, other Irish financial institutions, under the restructuring plans being negotiated, or that have been analysed by the Commission. You have seen our State aid rules competences. In the case of Bank of Ireland, we adopted a positive decision on the restructuring plan. In the case of the Allied Irish Bank, we are also negotiating the conditions of the restructuring plan. In the case of two building societies, EBS and INBS, we are also considering the restructuring of these financial institutions.
I have to say that in two cases, the Anglo Irish Bank and the INBS building society, we are working on a winding-down scenario. In the other cases, the restructuring will hopefully put those financial institutions in the market in better conditions, in viable conditions, after their restructuring is decided and implemented.
Subject: Creating a common European conscience
The creation of a common European conscience among EU citizens is vital if the enterprise of European unification is to survive. Given that mobility among those working in the cultural and arts sectors is the most effective way of forging a common European identity, what specific measures will the Commission take to encourage exchanges of experience and knowledge among European artists, establish a funding programme solely for artistic events in the EU and promote the administrative streamlining and financial support of cross-border artistic cooperation programmes?
Androulla Vassiliou
Mr President, the Commission agrees completely with the honourable Member as regards the huge importance of cross-border mobility of those working in the cultural and arts sectors. We, too, are making efforts to eliminate obstacles to their mobility.
These efforts include coordination of social security, passport visa rules for artists from third countries, taxation and, of course, better information on mobility issues. Experts in the cultural sector are debating how to promote mobility, in working parties where the Member States and the cultural sector are represented, with a view to applying the objectives of the European Agenda for Culture.
Under the Culture programme (2007-2013), the Commission is supporting projects and activities which promote cross-border mobility of those working in the cultural sector, encourage the transnational circulation of artistic and cultural works and foster intercultural dialogue. In 2009, approximately 80% of the projects funded by the Commission focused on the circulation of cultural works and the mobility of those working in the cultural sector.
Of course, the Commission is still making an effort, as I said, to facilitate access to the programme. The programme guide, the calendar, which is for the period 2008 to 2013, good examples of projects and the cultural contact points in each country all help to simplify access. The experience acquired to date will be useful in developing procedures for future culture programmes.
Following an initiative passed by Parliament, the Commission also applied pilot projects to encourage mobility of artists, both in 2008 and 2009. The aim of these projects is to give European artists a chance to extend the scope of their activities and to reach a new public, as well as to exchange experiences and learn from each other in order to further their career.
The results of these pilot projects will be input into future culture programmes and are, of course, of help to the working parties of Member State experts within the framework of the open method of coordination. In the long term, everything I have just mentioned will help to forge a common European conscience among the citizens of the European Union.
Georgios Papastamkos
(EL) Mr President, my thanks to the Commissioner for her detailed reply. On the European cultural weather map, the clouds of de-unification are gathering, as we all know. There is the Europe of numbers, the technical Europe, but there are also those of us who envisage a Europe of culture, of education, of art, of mobility of artists, of encouragement for cross-European cultural creation.
I am one of those who believe that these are the foundations, the cultural foundations of Europe, and can act as a secure, stabilising factor for further dynamic support for the process of European unification. Give culture and artistic creation impetus and as a percentage - to waive my own rule for a moment and talk in numbers - let us increase the contribution to European GDP via culture and artistic creation.
Janusz Władysław Zemke
(PL) Mr President, I would like to thank the Commissioner for this interesting information, but my question and my concern are related to the budgetary situation. We are well aware that we are, today, in an uncertain situation as to what budget will be available next year. In relation to this, I would like to ask you, Commissioner, if these problems might in any specific way affect the very interesting plans which you have presented?
Androulla Vassiliou
Mr President, may I start by saying to Mr Papastamkos that I absolutely agree with him. I attended a huge 'Soul for Europe' forum in Berlin a few days ago, which was also attended by representatives of all the cultural agencies. We discussed these issues and said that Europe is not just an economic Union; it starts with culture.
As Jean Monnet says in his memoirs, 'if I could start again, I would start with culture'. So I absolutely agree and the efforts we are making are in this direction.
I agree with you, but I fear, like everybody else, that governments, when they start cutting budgets in times of austerity, start with the obvious: culture - as we have seen already in certain cases - education and health. I agree it is a very narrow-minded policy and we should oppose it because, in the long run, we shall all feel the repercussions of such cuts.
Subject: Structured dialogue between the EU and sporting federations on matters of shared interest and possible specific measures
Following the ratification of the Treaty of Lisbon and the recognition of the special nature of sport, the way is now open for giving sport a truly European dimension. New provisions allow the European Union to support, coordinate and integrate the actions of the Member States, promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports. The treaty also recognises the importance of protecting the physical and moral integrity of sportspeople, especially young people.
In the light of the treaty provisions, what steps does the Commission expect international sporting federations to take with a view to launching an ever more fruitful dialogue on matters of shared interest? What specific measures will the Commission take to support this dialogue and to make full use of the powers relating to sport laid down in the treaty?
Androulla Vassiliou
Member of the Commission. - In 2007, the Commission set up a structured dialogue with sports stakeholders on the basis of the 2007 White Paper on sport.
Following calls from EU sports ministers and the European Council in 2008, the Commission committed itself to further strengthening the dialogue and to giving international sports organisations a more prominent place in the dialogue with the European Union. This has led to regular exchanges between the Commission and the International Olympic Committee and international sports federations.
In 2008, the Commission established the EU Sport Forum. This is considered to be at the heart of this structured dialogue, gathering together once a year all key sports stakeholders at international, European and national level, including governing bodies as well as non-governmental sports organisations. The next forum will take place in February 2011 in Budapest, where the Commission intends to present its communication on a new EU sports agenda to sports stakeholders.
The Commission has paid great attention to the need to ensure a balanced and inclusive representation of the sports movement when organising meetings and events. It is committed to this dialogue, taking into account the specific organisation of sport, the complexity of topics to be addressed and, of course, the diversity of sports actors. The reinforcement of this structured dialogue with the sports movement will be essential for the success of the EU agenda for sport, which the Commission intends to propose, based on the Lisbon Treaty. Within this strengthened dialogue, Member States, Parliament and the Commission should all have their place.
Iva Zanicchi
(IT) Mr President, ladies and gentlemen, following the ratification of the Treaty of Lisbon and the recognition of the special nature of sport, the way is now open for giving sport a truly European dimension.
New provisions allow the European Union to support, coordinate and integrate the actions of the Member States, promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports. The treaty also recognises the importance of protecting the physical and moral integrity of sportspeople, especially young people.
In the light of the treaty provisions, what steps does the Commission expect international sporting federations to take with a view to launching an ever more fruitful dialogue on matters of shared interest? What specific measures will the Commission take to support this dialogue and to make full use of the powers relating to sport laid down in the treaty?
Salvatore Iacolino
(IT) Mr President, ladies and gentlemen, I listened very attentively to the Commission's response. I would like to ask the Commission about its stance on illegal betting, the illicit bets that are such a feature of football and other sports competitions, and if it intends, as part of the programme we have just heard described, to devote special attention to this aspect, which risks blighting every competition and spoiling the fairness that should characterise sporting competitions.
Androulla Vassiliou
Member of the Commission. - Let me start with the last question. Commissioner Barnier is dealing with this question. Of course, I will follow very closely what he does. I understand he is going to present a Green Paper in 2011 in order to start the consultation on this very important issue. I assure you that because of my interest in my portfolio, I will follow what happens very closely.
As I said in my introduction, I am going to present a communication on sport. It will be the first ever communication presenting the political agenda on sport - hopefully at the beginning of January - and all the issues mentioned by the honourable Member will be discussed in this communication. The first presentation and discussion will take place, as I said, during the structured dialogue in the context of the sport forum in Budapest next February.
Subject: Tax burden in Greece
By signing the memorandum of understanding, Greece has placed itself at the forefront in Europe when it comes to basic taxation, with the result that Greece now has the third highest rate of VAT, the third highest tax on fuel, the third highest rate of social security contributions and one of the highest rates of business taxation and nominal taxes. The imposition of this tax burden in Greece, combined with parallel cuts in salaries and pensions, is not leading to the anticipated increase in revenue. On the contrary, it is worsening the recession and stifling the market, increasing the level of poverty, particularly with regard to basic needs, making it difficult for wage earners and pensioners to meet their living expenses and leading to the closure of hundreds of businesses.
Given that the EU's objective is to guarantee both fiscal consolidation and social adequacy, how does the Commission, as a party to the memorandum of understanding, assess the above fiscal measures?
Algirdas Šemeta
Member of the Commission. - As the honourable Member is aware, Greece has introduced a number of tax policy measures to reduce its deficit. This economic adjustment programme was agreed with the Commission, the IMF and the ECB. It conditioned the EUR 110 billion financing that is being provided by the euro area Member States and the IMF.
On 6 August 2010, a report was submitted by the Greek Government to the Council and the Commission discussing the implementation of those tax measures, as well as of wide-ranging structural reforms. The honourable Member can refer to the communication from the Commission to the Council of 19 August 2010 for a detailed and thorough assessment of the measures adopted in the first half of 2010 by Greece to comply with Council Decision 2010/320/EC of 10 May 2010.
This assessment mainly concludes that the budgetary execution shows positive developments over the first half of 2010 with a deficit declining faster than planned, mainly as a result of lower than expected expenditure. Moreover, within the framework of the planned fiscal adjustment, the choice of the mix between expenditure and revenue measures made by the Greek Government takes into account important social and economic aspects, in particular, in terms of potential complementarities with a package of structural reforms and measures to improve the micro-economic environment and the functioning of the public sector.
Konstantinos Poupakis
(EL) Commissioner, I should like to ask the European Commission the following supplementary question: as a party to the memorandum, what recommendations does it intend to make to Greece, bearing in mind that the current high level of taxation has already resulted in the closure or relocation of businesses to other, more tax-lenient, neighbouring countries and, at the same time, in a reduction in incoming investment capital, the return on capital and entrepreneurship in general.
Nikolaos Chountis
(EL) Mr President, Commissioner, I should like to come back to an issue raised in my honourable friend's question. With the increase and the tax policy being applied by the government based on the memorandum, inflation has rocketed in Greece and is now over 6%, the highest rate in Europe. Mr Rehn agreed, in answer to a question, that high inflation is due to the increase in the VAT rate, in other words, to fiscal policy.
I would like to ask you if the Commission believes that these tax measures really have led to the spiralling inflation that is undermining the competitiveness of the Greek economy and what measures you are proposing to the Greek Government to address this issue.
Algirdas Šemeta
Member of the Commission. - Actually, the questions are rather similar and here I have to emphasise that in the case of Greece, we had a huge deficit which needed to be addressed. We all know that, in addressing the deficit, there are no miracle solutions. The Member State has either to reduce expenditure, increase taxes or both in order to consolidate its fiscal position. The Commission's attitude to this is very clear: that it is the Member State which has to choose the measures to address the shortfall. Greece chose a mixture of measures on both the expenditure side and the revenue side.
The Commission cannot dictate to the Member States what specific taxes they can increase or reduce. It is the Member State which decides on this matter.
So far, the Greek programme is functioning well and I believe that the Greek authorities will take all necessary future measures to fix their fiscal position.
Subject: Fraud and customs losses due to cigarette smuggling
Is the Commission concerned that there is an alarming level of smuggling of illegal cigarettes into countries like Ireland from third countries? The effect of this is that the EU is losing out on customs revenue, which is an important source of finance, given that it makes up 15% of the EU budget. Member States are also losing out on excise duties. Does the Commission have any plans to enable, or indeed force, Member States to increase their checks at external EU borders, in order to tackle the issue of customs fraud?
Algirdas Šemeta
Member of the Commission. - In relation to border controls, customs controls must balance the protection of a range of EU financial, safety and security interests with the interests of legitimate traders.
For this reason, a Community risk management framework was developed enabling customs controls for security and safety to be carried out on the basis of common risk criteria and standards.
In the EU, 1.5 million tonnes of sea cargo and 12 million tonnes of air cargo are checked each year. Under Article 209(1) of the Treaty on the Functioning of the European Union, the Member States' customs services are responsible for the application of the EU legislation concerned.
Therefore, they are in charge of organising customs controls at physical frontiers and elsewhere on the basis of risk management techniques as specified in the EU's Customs Code.
With regard to cigarette smuggling, the Commission plays an active role in helping Member States to tackle the phenomenon of international cigarette smuggling and to dismantle the criminal gangs responsible for this trade.
In particular, the European Anti-Fraud Office assists law enforcement authorities throughout the European Union with their operational cases and coordinates major customs and criminal investigations with the Member States and third countries.
Using the provisions of European mutual assistance in customs matters and a number of agreements concluded between the EU and third countries, OLAF organises joint customs operations between EU Member States and with third countries aimed at targeting specific problems, such as Operation Matthew II, targeting road traffic on the eastern border, or Operation Sirocco, focused on deep-sea container transports from China to the Union.
Finally, OLAF provides financial support to Member States from the Hercule II programme for measures specifically targeting cigarette smuggling, such as the purchase of specialist x-ray scanning equipment to be used at border points and the organisation of regional actions.
Moreover, cooperation agreements were signed with British American Tobacco and Imperial Tobacco Limited in 2010, and agreements were signed with Philip Morris International and Japan Tobacco International in 2004 and 2007 respectively. These legally binding agreements provide a comprehensive set of measures designed to limit the presence of the products of these companies on the illicit tobacco market.
Jim Higgins
I want to thank the Commissioner for his very comprehensive reply. As he said, tobacco smuggling is a very lucrative business. There is a lot of ingenuity, they are perfectly wrapped, perfectly presented and perfectly labelled.
Recently, I met with the head of the customs authorities in Ireland in Dublin Castle, and she told me that one in every five cigarettes - 20% of the cigarettes smoked in Ireland, a small country - actually comes via China, and that when they actually seized them and analysed them, they found a mixture of tobacco and canine excrement. We really need to tighten up our regulations.
I welcome international cooperation, but we still have an awful lot of work to do. I would basically ask that OLAF, the EU anti-fraud agency, needs to be given increased resources.
Algirdas Šemeta
Member of the Commission. - I will try to be very brief. The answer in this case is probably not needed, but I would like to share your concerns.
Next month, I am going to China to discuss, among other issues related to customs matters, the issue of cigarette smuggling. We are implementing a number of measures, working together with the Chinese authorities, in order to address this issue. It is true, as you rightly pointed out, that China is still a major source of counterfeited cigarettes, so we have to work in close cooperation with them in order to tackle this issue. I have to emphasise that the Chinese authorities are ready for this cooperation.
Subject: Common Consolidated Corporate Tax Base
Can the Commission say what its current proposals are on the adoption of a common consolidated corporate tax base, indicate a proposed timeframe and outline its reasons for pursuing this policy?
Subject: Ireland's corporation tax rate
There is a considerable amount of speculation ongoing in international media so it would provide a welcome signal to international markets in a time of crisis that this key element of Ireland's economic model will not be affected in any way by any proposal by the Commission.
Can the Commission outline clearly and unequivocally that the EU will not bring forward any measures that have any influence on Ireland's corporation tax rate?
Subject: Common Consolidated Corporate Tax Base (CCCTB)
Can the Commission make a statement confirming that the proposed CCCTB initiative will not impact upon the ability of Member States to set their individual corporation tax rate?
Algirdas Šemeta
Member of the Commission. - Do you mean these three questions on the CCCTB?
The Commission has no plans to make proposals on corporate tax rates. Differences in rates allow a certain degree of tax competition to be maintained in the internal market. In addition, fair tax competition based on rates offers more transparency and allows Member States to consider both their market competitiveness and budgetary needs in fixing their tax rates.
In relation to the issue of corporate tax bases, conversely, the Commission has been working for some time on a proposal for a common consolidated corporate tax base. This initiative is included in the Commission work programme for 2011 as a strategic initiative to tap the potential of the single market for growth. It is also quoted as a key proposal in the Single Market Act, which was adopted on 27 October 2010.
Currently, the Commission's plan is to adopt a proposal by the end of the first quarter of 2011. The CCCTB is a common system of rules for calculating the tax base of companies; it has no bearing on tax rates. Member States will continue to decide their own corporate tax rates. The Commission believes that progressing with the CCCTB is the appropriate solution to tackling cross-border fiscal impediments to growth in a comprehensive manner.
Currently, the existence of 27 highly disparate corporate tax systems in the EU means that companies are faced with significant tax obstacles and an administrative burden which discourage, if not impede, their activities in the single market and negatively affect their competitiveness, in particular, in the case of SMEs. Such a highly fragmented landscape gives rise to significant market distortions and barriers and creates considerable compliance costs.
Marian Harkin
I would like to thank the Commissioner for his reply. I understand perfectly what he says about the difference between tax rates and tax bases, but one of the issues for companies - particularly for foreign direct investment coming into Europe - is the ability for those companies to know in advance, with certainty, the tax implications of a transaction. If part of that calculation is sales by destination, that cannot be determined beforehand, so there is real uncertainty for those companies. I think that acts as a disincentive for foreign direct investment. I have many other questions but I know we are tight on time so, if the Commissioner could answer that one, I would be happy.
Pat the Cope Gallagher
I would like to thank the Commissioner for his comprehensive response but also ask him if he could acknowledge that the Lisbon Treaty includes a detailed protocol with respect to taxation and a Member State's right to veto tax proposals.
Algirdas Šemeta
Member of the Commission. - We can disagree on certain principles of taxation, which is always a rather sensitive matter. The biggest support for the CCCTB comes from businesses; we have clear evidence of this. I understand this because, when dealing with 27 different Member States with 27 different corporate tax systems, it is really a mess for them.
Concerning foreign direct investment, if we are able to agree on this proposal, we have to do so unanimously. If we are able to agree, this will facilitate foreign direct investment because foreign investors who want to invest, not in one Member State but in several, will be able to deal with one corporate tax system instead of several corporate tax systems, and that is a big advantage for foreign investors. Throughout bilateral discussions with potential investors, they really emphasise the issue of 27 corporate tax systems as an impediment to facilitating foreign direct investment.
Finally, when we are talking about the Common Consolidated Corporate Tax Base, we are not talking about tax rates. It is clear that this has nothing to do with the sovereignty of Member States in deciding tax matters because, even within the CCCTB environment, they will be able to decide on corporate tax rates, based on their needs, their social systems, public services and so on. So the proposal itself does not reduce the sovereignty of Member States in tax matters.
President
Questions which have not been answered for lack of time will receive written answers (see Annex).
That concludes Question Time.
(The sitting was suspended at 20:35 and resumed at 21:00)
