Opening of the session
President.
I declare open the 2003-2004 session of the European Parliament.
(The sitting was opened at 9.05 a.m.)

Valdivielso de Cué (PPE-DE).
Mr President, ladies and gentlemen, I am one of several Basque Members of this House. I am also fully committed to the defence of all human rights, especially the most basic right of all, namely the right to life.
As some honourable Members will be aware, Domingo Durán, an officer in the Spanish national police force died last Friday at the age of 51. Eight years ago he was guarding a Bilbao office processing national identity cards and lost the use of all four limbs as a result of an attack by ETA.
Mr Cox, I believe it would be appropriate for you to issue a condemnation of violence of any kind in your capacity as President of the European Parliament. In particular, I call on you to condemn terrorist violence in pursuit of political aims, and to convey the condolences of the House to the family of this victim of terrorism.
As an expression of our solidarity with the people of Spain and especially the Basques I would also like to call on all those present in the House today to join in a minute's silence in defence of freedom, political coexistence and respect for the rule of law.

President.
I thank you for raising that very serious point this morning. On behalf of Parliament I convey our condolences to the family and colleagues of the deceased and also our outrage at this act.
Salafranca Sánchez-Neyra (PPE-DE).
Mr President, further to your reference to Guantanamo Bay, I should like to inform the House that a group of Christian Liberation Movement activists has been rounded up, harassed and attacked in Santiago, the capital of Cuba. I expect you are aware that the president of this movement is none other than Oswaldo Payá, the winner of the 2002 Sakharov prize. Mr Payá has issued a statement detailing the events and calling on all governments and institutions to bring pressure to bear to ensure that these peaceful activists who belong to his movement survive unharmed.
I would therefore urge you to take up the case of these people, Mr President.

President.
We will do that.

President.
The next item is the joint debate on the Commission strategy for 2004/2004 budget guidelines:
Commission statement - annual policy strategy (APS) of the European Commission for 2004;
Report (A5-0039/2003) by Jan Mulder, on behalf of the Committee on Budgets, on the guidelines for the 2004 budgetary procedure (2003/2001 (BUD)) Section III - Commission;
Report (A5-0041/2003) by Neena Gill, on behalf of the Committee on Budgets, on the guidelines for Sections II, IV, V, VI, VII, VIII (A) and VIII (B) and on the European Parliament's preliminary draft estimates (Section I) for the 2004 budgetary procedure (2003/2002(BUD)): Section I - European Parliament; Section II - Council; Section IV - Court of Justice; Section V - Court of Auditors; Section VI - Economic and Social Committee; Section VII - Committee of the Regions; Section VIII (A) - European Ombudsman; Section VIII (B) - European Data Protection Supervisor.

Prodi
The debate on the state of the Union is an established item on our agenda. It gives us the chance to look at progress in the year just ended and our objectives for the current year. This year, the debate falls at a particularly sensitive time in terms of both international affairs and the life of the Union. The Iraq crisis, enlargement and the Convention weigh so heavily on our minds and hearts that there is no need for me to mention them. I shall only stress that today's debate gives us all the duty to weigh up the opportunities and challenges connected with the unification of our continent and to reflect on the lessons to be drawn from the Iraq crisis at a time when we are drafting the new constitutional charter of our Union.
Let me start with enlargement today. Last December, we wound up accession negotiations with ten countries. Ten countries we should now call 'acceding', not 'candidate' countries. Meanwhile, negotiations are going ahead with Bulgaria and Romania so that they can join shortly afterwards and, with the necessary adjustments, joint work is continuing with Turkey. In this regard, before you all, I want to express my thanks to the Commission staff and Commissioner Verheugen for their dedication and their hard work.
The Union's task, however, in the area of enlargement does not end with the decision taken at Copenhagen. Indeed, Croatia's recent application shows that another region of Europe is knocking at our door. Here I refer to the western Balkans. I want to make it quite clear that the unification of Europe cannot be regarded as complete until the Balkan countries are members of the Union too. This prospect of membership must be clearly offered, while it must also be stressed that the criteria followed in the first round of enlargement will be applied just as strictly. After years of uncertainty, democratic debate in both the old and the new Member countries of the Union will now be on firm ground. The very positive outcome of the referendum in Malta is an auspicious sign and an incentive to even greater efforts.
Important though it is, the accession of the new Member countries is only one stage in the process, and it must not obscure the fact that there is still much to do. The first job is to complete economic integration. The current 15 Member States can and must do much more to promote growth and employment and to reduce disparities. It is the future Members, however, those that are to join next year and those that will join a little later, which warrant the greatest attention. Our shared goal must be to foster sustained growth, strengthen cohesion, step up environmental protection, reduce disparities and, ultimately, encourage all to adopt the euro. Broadly speaking, those are the main points of our economic integration project.
While this is our first priority, the second task is to advance the political debate, and that is equally important. It is time we had an in-depth, honest, completely transparent debate on the type of Europe we want to build together. The very success of our integration has already made it unavoidable. The Iraq crisis and the state of international relations mean we can put it off no longer. The possibility of war in Iraq deeply stirs the feelings of Europeans because reconciliation and peace lie at the very foundations of the European Union. It affects us Europeans all the more here and now because chance would have it that four of our Member Sates and one candidate country are currently members of the UN Security Council.
In this situation, we have to guard against two temptations. One temptation would be to build a Europe that is in opposition to the United States. This crisis is marked by widely diverging views on the instruments to be used. These differences are important because they mark the line between war and peace, but they do not affect the ultimate objective of our policies or the solidity of our alliance or cast doubt on the whole web of transatlantic relations, our shared history and the extent of our bonds. The second temptation we must guard against is focusing solely on the dissension within the Union. Differing views have clearly emerged among both the 15 Member States and the future Members in recent weeks. However, as the extraordinary meeting of the European Council of 17 February rightly pointed out, we are all agreed on a large number of fundamental points. We all want the UN to remain the cornerstone of world order. We all support the Security Council in carrying out its duties. We all believe that war is not inevitable but, at the same time, we think that Iraq must be made to face up to its responsibilities.
That said, we must confront our weaknesses head on. Indeed, we Europeans not only have a political obligation to reach a common position: after Maastricht, we are obliged by the Treaties to show loyalty and mutual solidarity. The Member States on the Security Council have a particular duty to coordinate their actions and keep others informed of what is happening, while the permanent members should defend the positions and interests of the Union.
The mechanisms for this are clearly inadequate, but does this mean we have to wring our hands and conclude that the objective of joint action is unachievable? Absolutely not. Failure to put in place effective procedures and instruments that facilitate the emergence of shared positions will make it hard to forge a common Union foreign policy and will certainly delay it. Our imagination and our determination must be equal to the challenge. Giving in is absolutely out of the question. The questions before us, which we have to answer, are both difficult and crucial. What kind of Europe do we want? What guideline are we following? I personally cannot be content with a 'supermarket', or some sort of large Single Market. Do we not want to build a genuine political area that allows us to affirm and defend our principles and our values throughout the world? Then we cannot continue indefinitely in this state of 'European schizophrenia' in which we expect the Union and the integration process to provide prosperity and development while relying on the United States to guarantee our security.
European public opinion is remarkably clear about what it wants. The regular Eurobarometer surveys carried out by the Commission reveal that our citizens, in particular, want the Union to ensure their security, both at home and abroad. This afternoon, to step up our commitment in the defence sector, the College will adopt a Communication strengthening the European defence industry. On the question of war and peace - and we have had a spectacular and unprecedented demonstration of the public's views in the streets and squares of our cities - the shared views of the public know no barriers in Europe. This is a sign that the peoples of Europe are moving closer together, a sign which prefigures and anticipates the reform of the European institutions and procedures. This shared sentiment, this spontaneous sharing of values in no way reduces the importance of an in-depth, open political debate: it only emphasises the need for it even more. It was no accident that the Commission's first contribution to the Convention on 22 May 2002 proposed a project for Europe that highlighted, amongst other things, the need for a Union that can 'exercise the responsibilities of a world power.' One of the few benefits of the tragic Iraq crisis is that it is actually forcing us to talk honestly about the very nature of our way of coexisting and doing things. We must not be afraid of an open debate, for it is only through dialogue that possible solutions can emerge.
This brings me to the Convention. I have always believed that our mission was to bring about enlargement and reform of the institutions in parallel. As they stand, the institutions and procedures, conceived and designed for a community of six largely homogenous States, no longer meet the requirements of a larger, more diverse Union. That is why I feel it is positive that the candidate countries have been full members of the Convention right from the beginning and that they are making an active contribution to it. Indeed, I would like to stress that one of the most encouraging aspects of the Convention's work is precisely the way delegates meet and work in a variety of mixed configurations that make any distinction between the representatives of the present and the future Member States essentially impossible.
This is not the time or the place to go into the progress made by the Convention, but I would like to say that the wide consensus on issues such as the constitutional nature of the text to be produced, the streamlining of instruments and procedures, the full inclusion of the Charter of Fundamental Rights and the legal personality of the Union is grounds for optimism regarding its conclusion. As I have said, this is not the place to go into details, but there is one point I regard as essential, in the light of both the international crisis and the role the Union is called to play on the international stage; I am referring to the use of majority voting across the board. The requirement of unanimity actually causes paralysis, as we have seen in recent days. This is already the case now and will be even more of a problem in the enlarged Union we have decided to build. This is another reason why we need an open political debate on the new enlarged Europe. Only if we have devised a common project will we be ready to fully accept the basic rule of every democratic institution, which is majority voting. Only when we feel that we agree on all the basic elements that unite us will we be able to accept being in a minority whenever necessary while still feeling fully represented.
Ladies and gentlemen, today's annual policy strategy debate will define the political horizons and resource framework for 2004. It kicks off a process that will end with the adoption of the budget and the presentation of the legislative work programme for next year. Throughout this process, we shall be engaged in an intense detailed debate with Parliament and the Council in order to define the fundamental political options. I would stress that the work of the Parliamentary committees will be of crucial importance here, in particular. A new element in the strategy for next year is the 2004 - 2006 multiannual programme that is to be approved by the European Council, a completely new departure.
I am confident that our interinstitutional cooperation will generate a work programme that matches our ambitions, and we have very high ambitions, as is quite clear from the political priorities we have set ourselves for 2004. Indeed, next year, our efforts will focus on enlargement, growth and internal and external security.
Without going into the details of the individual aspects of this programme, I would like to draw your attention to the issue of our relations with countries that are already our neighbours or will be neighbours of the enlarged Union. I am referring to the band of countries stretching from Russia and Ukraine to Morocco. With this ring of friendly countries we propose to step up cooperation to start a process that may in time lead us to share 'everything except institutions' with all of them. A common market, a reinvigorated political dialogue based on shared principles and values and the harnessing of the full external potential of our common policies: these are the pillars of the new strategic concept for the Union that we are setting out in a communication on a 'Wider Europe'. Only in a wider area of stability and prosperity can Europe deal safely with the sometimes disturbing developments on the world stage and fully exploit the opportunities offered by globalisation.
Like all Europe's policies for the coming years, this medium- to long-term strategy for relations with neighbouring countries calls for the preparation of a political project for the Union, and its financial implications will need to be determined. The medium-term political programme preparing the forthcoming Financial Perspective will play a key role here. The Financial Perspective must not only be in line with the constitutional Treaty that will emerge from the Convention and the subsequent intergovernmental conference but also lay the necessary foundations for an enlarged Union that strives to achieve three major political objectives: peace, freedom and solidarity. In this regard, by the end of the year or, at the latest, in early 2004, we shall put forward our overall political project for the enlarged Europe and outline the broad guidelines for the financial proposals it calls for. Then, we will prepare the relevant legislative proposals so that they are ready for adoption towards the middle of next year.
We have completed the enlargement negotiations. Now we must define the political project for the enlarged Union. This means we must say what can be done at Union level to foster and safeguard civil liberties, how the Union can complement Member States' laws in fundamental areas such as health, security and the area of freedom and justice, what policies at Union level can best contribute to sustainable prosperity in Europe, what objectives the Union should set itself to further regional and social cohesion in an enlarged Europe that will have much greater economic disparities than the Union of Fifteen, what changes will be needed in research policy and the Structural Funds to achieve those objectives, whether expenditure on cohesion should rise, fall or remain unaltered if economic inequalities are to be reduced both between Union countries and within the individual Members, and, lastly, what policies are needed to project the European model externally, particularly in countries that are close to us.
Mr President, ladies and gentlemen, as we have seen today, the Union is a Union on a journey. A Union that must draw on present experience to grow stronger, so that it can assert its identity and its role in the world more decisively. The current crisis must serve as an incentive for us to speed up the reform process which is underway. This process is necessary irrespective of enlargement, but enlargement and the present international context make it even more imperative and urgent. Today, we have a chance to reinvigorate our unity. Our fellow citizens are calling for this and events leave us no choice. The Convention is a potential turning point in the life of our Community: let us all strive to make it a success. Together, we can succeed. Together, we can and must lay the political and financial foundations to complement the institutional basis and open this new chapter.
The work we accomplish together this year and next year will, to a large extent, dictate the nature and role of the Union in the world, the Union we will leave to future generations.
Elles (PPE-DE).
Mr President, first of all, the PPE-DE Group appreciates the documents which the Commission has put in front of us this morning. It is an historic and unique occasion. This is the first time in our history where we have had the opportunity to debate budget guidelines with policy documents at the same time. So now we can see how we begin to fit the priorities to the resources available. It is a pity that the Council is not with us because it too could have been part of this debate.
I shall start with the broad document which has been produced by the Commission this morning. It sets out the outline of Union finances post-2006, rightly asking which project we want in terms, for example, of the competences that the Union will have, the limits to the geographical size of the Union, and a whole range of matters which set our budget debate in the right perspective. First I shall deal with the substance.
It is right that we should have a range of ideas, with working groups set up by the Commission dealing with peace and prosperity and with questions of sustainable development. But in terms of the external side, the working group does not cover what the external dimension of the Union should be. As the President said about the current context, it would seem to be relevant that we should be thinking about substantive issues such as what the transatlantic partnership is going to be like in five years' time.
We have asked for a report. It has not been produced. Indeed, we included in the budget for this year - 2003 - a request to have a document drawn up. When one asks the question, 'what should be the strategic priorities for the Union in the external field to 2007?' a deathly silence descends.
Next, in terms of procedure, we should be a little careful that this Commission, although very active in looking forward to the next financial perspective, could bring us in theory to 2013, which not only covers the next Commission but also the Commission after that. To find ourselves in 2003 already discussing 2013 all seems rather far away.
In this context there is one specific question I would like to ask the President of the Commission. The last phrase of this interesting document says that the duration of the next financial perspective could be brought into line with the five-year mandate of the Commission and of the European Parliament. Does that mean that the financial perspective would be to 2010 instead of 2013? The PPE-DE Group is in favour of the financial perspective covering a five-year period. I would like some clarity on that point.
While talking about the Commission, Mr President, you mentioned the Convention. When we envisage a post-2006 Union with 500 million people or more, how will it be possible to run a Union with fewer Commissioners than we have today? There seems to be this refrain across the House at the moment that we should have 10 to 12 Commissioners. I do not see how we can run a Commission with only 10 to 12 Commissioners when most governments have at least 30 to 35 ministers to run their own countries. We are dealing here with the Union, a much bigger enterprise, so why not have 30 or 35 Commissioners?
It seems to me quite normal that we should do so in the context of the Union of tomorrow.
Secondly, the priorities of the budget for 2004 are well set out in the annual policy strategy document in terms of the three points that are made. Concerning sustainable growth, it makes sense to have better integration of environmental concerns. In addition, the PPE-DE Group is interested in the document concerning a better relationship with our neighbours in terms of security and stability. Above all, we are interested in the enlargement process and in making sure that we can fulfil our obligations and that Member States are fully integrated into the Union after 1 May 2004.
We also share the view that the procedure for dealing with these policy strategies as they go through the committees and then through the budget process will be very important in order for us to be able to see that they are properly brought together.
The questions we will be asking concern the significant rise of 780 in staffing numbers and, in particular, whether we need so many civil servants in the interpretation and translation departments.
Finally, I come to my group's priorities during the budgetary process. We remain faithful to what has guided us in the last few budgets in terms of three particular elements which are important to us. Firstly, the completion of the reform of the institutions. This is where the Commission started out. We would like to ensure that this reform is completed by the end of our mandate. We still find irritations here. Yesterday mention was made of a document which was quoted partially in the press about the ongoing affair of the chief accountant who has been suspended. We would like to see that document. It is not so secret - most Members, including myself, have a copy. Why is there this fear, this wish to keep secret a document that is already half-known? We would like to see that document as soon as possible.
Secondly, there is the question of the A-30 subsidy lines - a specific, but very sensitive point for Parliament. We would like to be clear on what the Commission will be proposing in terms of these subsidies for particular institutions. We have differing views across Parliament as to what should and should not be benchmarked and we need a common approach on that.
My last comment pertains to a letter I have from the Secretary-General about follow-up to parliamentary acts. Here we find that at least 25% or 30% of reports that we ask for in this House are never produced. It states with regard to Parliament resolutions on COS documents that, of the 490 requests we made last year, the Commission has decided not to follow up 104 cases. We would like clarification as to why the Commission is not doing what Parliament requests and we certainly feel that there should be some reflection in the budgetary process if the Commission does not wish to do what Parliament has requested.
I conclude by saying that this is a key moment in this budgetary process. The Commission has set out some useful lines of discussion and debate looking ahead post-2004. I hope that at the end of the process our Parliament will be able to reach the right conclusions in the interests of our citizens.
Swoboda (PSE).
Mr President, Mr President of the Commission, we are presented here today with a highly technocratic document and a speech by you, Mr Prodi. I would not want to deny that the speech, being political, is more to my taste. What I would like to do is to try and bridge the gulf between the two elements.
You are indeed right, President Prodi, to say that the framework conditions are far from favourable, and they will probably not be anything like favourable in 2004 either. The threat of war in Iraq has opened new fault lines within the European Union and also within the candidate countries. Today, unless there is radical change, our foreign and security policy lies in tatters, and economic developments - particularly where jobs are concerned - have not been as favourable as we expected. This means that we have to take a rather more critical approach to things.
Let me start with what enlargement is intended to achieve. It is indeed the case that we have to see to it that enlargement ends up being a success. To all those who - perhaps with the events of the last few months in mind - have given it as their opinion today that we have to delay enlargement, I would like to put the counter-argument that this would divide and weaken Europe still further. I concede, though, that many of us are disappointed at how little evidence there is among many of our neighbours - and, admittedly, among some of our members - of any emotional and intellectual attachment to the European project. They are right to say that the European Union is not a supermarket, and that it is not a bank either, one from which one just collects money for a few projects. Nor is it an artefact that exists only to be used as a justification when unpleasant but necessary reform measures have to be taken.
Mr President, I believe that we have probably all failed - and not only in relation to the Iraq issue - to highlight the objectives and actual raison d'être of the EU as a peace project. President Prodi mentioned the International Criminal Court. Here too, we have neglected to convince the new members of the immense importance to us of, for example, the International Criminal Court, and also of the United Nations, and of how dear these multilateral institutions are to us. That was a mistake and a failure. Perhaps we are paying the price for what was sometimes a too legalistic and narrow view of the acquis communautaire.
The Commission is now proposing that we should establish a circle of friends around the enlarged EU, but, President Prodi, we have, over the past few years, not even managed to gain enough friends among the governments of the candidate countries, and we have to concede that the Americans have sometimes had more success in alienating at least the governments of certain countries even before their accession, using lobbyists' money, a closely-woven network of institutions and foundations, some of them funded by the diaspora, and, where necessary, pressure and threats as well.
The Commission also has the task of considering how we can counteract that, and how, above all at the level of culture and society, we can put the European idea across to more of the public, in addition to the united voice of the European Union.
Let me now deal with stability in and around Europe.
Here too, I believe, we have to take a rather broader and deeper view of the individual regions and shape relationships along appropriate lines. The objectives involved are too imprecise and undifferentiated, as Russia needs to be handled in a different way from the Mediterranean, which in turn calls for an approach different from that taken to the Balkan countries, which, by the way, have been potential candidates ever since the Zagreb Summit even though this paper states that they have yet to acquire that status.
We must concede, though, that our visa policy as regards these countries - to which I travel very frequently - is lousy. Business people, scientists, journalists, students - all those who could help to foster friendship with these countries - are often deterred by a visa policy that is highly restrictive, mindlessly unmoveable and bureaucratic, irksome to these people and, above all, to the most important opinion leaders in the countries from which they come. We must of course have a restrictive visa policy, but these social groups could receive flexible treatment under it.
Now for the third objective - sustainable growth. I admit that this is a very vague concept, but it is one that already means a number of things to me. I simply ask myself whether we really do have a coherent policy for growth. We invest too little - not only in research and development, but also in infrastructure. Think of public transport, which could also do more for the environment. Too little is being done to make educational establishments more efficient while maintaining access to them for the broad mass of the population.
We often accuse people - our own citizens - of lacking the willingness and courage to take risks. If, though, the gaps in the social networks in our own countries become ever wider and let more people fall through, it is not surprising if people are often afraid - of risks as much as of anything else.
Likewise, the progressive undermining of services of general interest - an area in which we are still awaiting a coherent policy from the European Union, and especially from the Commission - often has the unfortunate effect of leading some people to blindly oppose globalisation, or, at any rate, to be suspicious of the common market. Here, too, I want to underline what you said. The European Union is indeed not a supermarket. We should be perfectly capable of combining the objectives of sustainable development with social market economic policies.
My group does not see the desire for greater individuality, more flexibility, more mobility, more - to use a new expression - employability, as an antiquated concept. We will have succeeded when people throughout Europe have an appropriate social security network available to them. My group is firmly convinced that - even if only to avoid unfair competition - this network must also embrace those who have migrated here.
We must therefore affirm our commitment to a European model of capitalism, one that, in the long term, is more efficient, more social, and more humane.
Let me conclude by reiterating my warm welcome, and that of my group, for this paper. It is my belief, though, President Prodi, that, as you said in your speech, we need more conviction in matters of policy, as well as strategies that come to terms with the popular mindset, both in our own countries and among our neighbours.
Do something, Mr President, to ensure that the Commission's documents clearly express the nature of the European project - that it is neither technocratic nor administrative, but political.
Clegg (ELDR).
Mr President, at a time when the candidate countries in Central and Eastern Europe have been subject to quite a great deal of criticism from EU Heads of Governments, and from European Commissioners and others, for making their views on the Iraq crisis known, the ELDR Group strongly welcomes the statement from the European Commission that the central priority must and will remain enlargement. It is in our view absurd that so many criticisms have been made of candidate countries; they have been reprimanded in a condescending manner when the divisions that have opened up within the European Union in the current crisis are almost entirely of the making of the existing Member States.
It is of course true that the European Union is not a supermarket, but equally it is not a temple in which people who speak a little too loudly are asked to remain quiet. The reasons why divisions have opened up are largely to do with insistence by existing Member States on a slavish allegiance to Washington, or an equally stubborn hostility to everything that emanates from the United States. The candidate countries are innocent bystanders in that debate and should not be penalised for having being pressured into making their views known.
That is why we strongly welcome your emphasis, President Prodi, on making sure that these current problems do not in any way derail or slow down the enlargement process and hope that you will do everything possible to see the enlargement process through to its logical conclusion next year.
The second point I would like to make is on the issue of governance. This document is a useful step forward in the improvement of EU governance and to that extent we welcome it warmly. It is crucial that governance is improved at an institutional level. There is no point in one institution or another raising its game if the other institutions do not reciprocate. That is why the ELDR Group is especially keen that the somewhat stalled talks in the interinstitutional working group, which is looking at the way in which we all collectively improve our law-making capacity, should conclude as quickly as possible. Deadlines have slipped; the group should have concluded its work at the end of last year and the new deadline for the spring summit also now seems unrealistic. It is essential that we all pull our weight in the three institutions concerned to make this institutional approach a reality.
Let me give you an example. You cite at length in your document the very laudable attempts in the European Commission to apply impact assessments of a number of key legislative proposals. I think you are proposing to do that on 31 proposals in 2004. There would be no point in those impact assessments if MEPs in the European Parliament or Ministers in the Council of Ministers were then to ignore your assessment and simply revise the legislation without any regard for the impact. That is why many of us in the interinstitutional working group have been urging you in the European Commission to think about how you could extrapolate your excellent work in the impact assessment field and urge all institutions to sign up to similar practices. We would certainly urge you to redouble those efforts in the weeks ahead.

Caudron (GUE/NGL).
Mr President, ladies and gentlemen, speaking in the debate of 18 November 2002 on the Commission's legislative and work programme for 2003, on behalf of the GUE/NGL Group, I said that I could not see how anyone could be against the political priorities stated, but I added that there was a wide discrepancy between the objectives and the measures taken to implement them, resulting in increasing dissatisfaction on the part of public opinion and the risk that the European ideal itself might be rejected by those who, like myself, want a European Europe. Four months later, having read the long communication from the Commission and heard President Prodi, and speaking on behalf of the GUE/NGL, I would be tempted to say the same thing, except that today's information document is far more watered down. It is a display of what I would term blind optimism. Worse still, I find it to be extremely dated and swamped with useless, obvious facts. For example, the mandate of the Prodi Commission ends in 2004; European elections will be held and 732 members will be elected; enlargement will take place on 1 May provided that the ratification process is complete.
Mr President, ladies and gentlemen, world peace is severely threatened and the UN is in danger of losing credibility. The Member States are divided between those that uphold peace and those that are in favour of war, between those that are blindly following the United States and those seeking a balanced European position. The economic crisis and the recession are worsening rapidly, unemployment is increasing everywhere with thousands of people the victims of harsh redundancies, insecurity in all its forms is flourishing to the detriment of the weakest and, in the face of these mortal challenges, the first two of which were raised by President Prodi this morning, the written communication discusses new forms of governance, stability, new social and economic agendas, quality of life, border security and even traffic and registration taxes for private vehicles.
Mr President, ladies and gentlemen, the members of my group are not all pro-Europe, to say the least, but they are realists. The vast majority of them, given that Europe now exists, demand that it should at least be a people's Europe, that it should be democratic, pay attention to social issues and not be subject to the diktats of the economy, in order to respond to the real problems of European citizens.
I am sorry to have to tell you, therefore, President Prodi, that not only do we disagree with the ideology that underpins your proposals but, what is worse, these proposals, even if we were to accept this ideology, are barely equal to the major issues we need to resolve. That, Mr President, is why, with all the respect that is due to you and that I have for you, I would ask you to review your document.

Buitenweg (Verts/ALE).
Mr President, Commissioners, ladies and gentlemen, I should like to extend my warmest thanks to both of the rapporteurs, and the Commission too, of course, for all their work. I share the disappointment of my fellow Member Mr Elles with regard to the absence of the Council. Today we are discussing the budget guidelines and the Commission policy strategy at the same time, as we hoped that a kind of synergy would arise between the two. That is very difficult, however, when those policy intentions are tabled so late: too late to discuss them at length in the groups and also too late to compare them with the guidelines drawn up by the European Parliament.
Therefore, my group believes that it is important to choose another moment this year for the Commission to clearly set out its specific priorities for the coming year; not a laundry list of good intentions, therefore, but political choices combined with a time schedule. Indeed, we have little time left in this legislative period. I take as an example the agreements concerning chemicals. These are supposed to be implemented in 2004, but there is a danger that a number of changes which have been agreed upon will be presented too late, which may mean that the procedure for these additional changes cannot be finalised before the end of this term. In that case, of course, there is no way we can make that 2004 implementation date, and my group is concerned about this.
In a different context, too, the motto of my group in recent months has always been 'make law not war'. In our view, legal instruments and abiding by agreements are essential; especially in matters of human rights and democracy. We should like, therefore, to make further agreements on the clauses included in the treaties with third countries. Parliament must play a role in monitoring those agreements, and conclusions must also be drawn. How else is it possible to prevent those important clauses - to which the European Union also makes constant reference in order to indicate its support for human rights and democracy - becoming just empty words?
The equal treatment of men and women also touches the heart of the Union's values. Last Saturday was 8 March - International Women's Day - and so I thought it fitting to say something about that here, too. The directives have been very influential in the emancipation of women and it is vital that they are complied with, including in the candidate countries. This is a part of the acquis communautaire that has to be adopted without transitional periods. I expect the Commission to indicate whether, in its opinion, it has sufficient financial and administrative means for this. If not, this is another part that must be included in the budgetary procedure.
I should now like to turn to a point of an entirely different order. The report by Mrs Gill states - against her wishes, incidentally - that political parties have to be paid out of Parliament's budget. This really leaves me dumbfounded. Have we not learnt anything from the report by the Court of Auditors, which said that there must be no interconnection between the groups and the political parties? In addition, this would make the line between donating money and buying votes a very fine one. Could it be that the Group of the European People's Party (Christian Democrats) and European Democrats finds it convenient that the Council has no control over these funds, because in that case the Council, in accordance with the gentlemen's agreement, will also not have any say as regards the funds for the political parties? In the view of my group, that is unacceptable. If, against our hopes, the amendment by the Group of the Party of European Socialists and the Group of the Greens/European Free Alliance, advocating the inclusion of those funds in the general Commission budget, is not adopted, we shall unfortunately feel compelled to vote against the report.

Butel (EDD).
Ladies and gentlemen, President Prodi, today, in addition to the Commission strategy for 2004, we are debating the economic and budget guidelines. As the economic and social climate is extremely tense, I am surprised by the optimism of the Commission communication and, to be frank, exasperated by this way of approaching debates. I could have written Paragraph 2 of the draft resolution on the state of the European economy which calls on European leaders at the next Spring Economic Affairs Council to avoid vague, self-satisfied speeches, and I would vote for it tomorrow. That, however, is the only part of this debate with which I agree.
As far as the rest is concerned, there is a vast gulf between, on the one hand, the Commission's lyrical flights of oratory as regards the most competitive European economy, the knowledge-based society, new governance and, on the other, the dashed hopes of growth and employment despite the repeated promises of the single market and the euro. It is shocking and cannot easily be explained. Perhaps Mr Prodi will be able to explain why the Commission is speaking this way when the analyses carried out by Eurostat and the OECD clearly paint a pessimistic picture. The government of my country has also, at last, accepted the facts, having shown excessive optimism for which, ironically, the Commission has not failed to criticise it. It is even more shocking to see that, faced with the facts, the Commission is persisting with enlargement and using all possible means to try to make the European Union attractive.
I found the advertisements that appeared in the Maltese daily newspapers, announcing the sum of aid the country will receive if it joins the Union, to be particularly inappropriate. I experienced the same unpleasant feeling on reading the following part of your strategy for 2004: 'Against this background, this Commission wishes to leave the foundations for the success of the enlarged Europe. In this context, this Commission notes that 2004 will see the completion of the objectives that it set at the beginning of its mandate'. This passage reminds me of another extract from five years ago, which stated that the mandate of the Commission at that time had been characterised by progress in several fields in order to prepare for the future with the necessary confidence and resources. This passage merits consideration in view of what happened to the previous Commission and the political objective of transparent, effective management. It is up to you to prove to us that you are not taking the same path, and that will not leave us much time to police the world.

Berthu (NI).
Mr President, today, the Commission is presenting us with a communication on its annual policy strategy, with regard to which I would like to make several comments.
First of all, with regard to the form: the very first paragraph states, and I quote: 'The Annual Policy Strategy adopted by the Commission [?] seeks to define the Commission's policy priorities and ensure that there is the right match between policy initiatives and the corresponding resources'. This phrase could give the wrong impression. It leads us to believe that the Commission is a government adopting its policy strategy. This is not the case: this communication is merely a proposal which must, one way or another, be adopted by the Council, which is the only body with the power, under Article 4 of the Treaty on European Union, to provide the Union with its political impetus. I would also note that the Council is not present today, and I do not know what conclusion to draw from this absence.
Secondly, the right priorities have been chosen, but it is possible to infer a difference in approach between the first, enlargement and the working of the European Union, and the second, border stability.
Within the Union, including old and new Members, there is a kind of Community fundamentalism; in relations with neighbouring countries, however, flexibility and variable geometry allow the implementation of differentiated frameworks for cooperation. It seems to us that flexibility should be present in all cases. President Prodi has just repeated yet again that, in a Europe with 25 States, we would have to abolish unanimous decisions and generalise qualified majority voting. Our opinion is that qualified majority voting will not work either if we do not also accept the right of veto for national parliaments and variable geometry.

Mulder (ELDR)
Mr President, the 2004 financial year will be an unusual one for several reasons. Firstly, our Budget will have to take into account the fact that, on 1 May of that year, ten new Member States will probably be joining us. For this to be possible, the financial perspective will have to be changed. Negotiations are still taking place on this subject, but, as far as Parliament is concerned, adoption of the acts of accession, and the figures they contain, should not automatically signify approval of the financial perspective. Further discussions will be needed on this subject.
Parliament has a very strong preference for a budget to be adopted in December of this year for 25 Member States. That means that we shall have to work on the basis of 15 Member States for the first part of 2004 and then, as of 1 May 2004, for the ten new Member States on top. The budgets will therefore have to contain certain remarks to make this possible.
Another new element of the 2004 budget to which I hope Members will become accustomed is a new system called 'activity-based budgeting'. As I have said, everyone will have to become accustomed to this. What are the priorities of the 2004 budget? First of all - and Mr Prodi has already said this - we have to see to it that the economies of the new Member States are integrated into those of the present Member States. We must promote economic activity and, to that end, we must first of all create better investment opportunities in those countries, and we must look into all the means to make that possible.
The second priority of the budget is improving administrative capacity in those countries. How will they be able to cope with the enormous sums of money they receive and how can they see to it that good projects are submitted?
I now wish to say something about the various budget headings; starting with heading 1, agriculture. Everything will depend on the results of Commissioner Fischler's mid-term review, but irrespective of this, we should like attention to be paid to a number of matters. First among these is the question as to the precise nature of the relationship between the payment of agricultural subsidies and European environmental guidelines. We shall have to determine this more precisely.
The second point concerns the question as to whether it will be possible to develop insurance schemes in the future for animal diseases. We are currently seeing avian influenza in the Netherlands, and we have seen foot-and-mouth disease and swine fever. We shall have to look into this. Furthermore, is it possible to take further action to promote the sale of agricultural products, especially high-quality agricultural products?
Regarding heading 2, structural funds, the main thing is that we have to do what we have promised. We have to see to it that the countries who have been told they may receive structural funds do actually receive these and that the administrative restrictions are not too restrictive. We shall have to investigate the consequences of the n+2 rule and the consequences of the 4% performance reserve.
As regards heading 3, internal policy actions, a number of items under this heading have already been laid down. For the rest, we shall have to devote attention to what Europe can do in the field of combating terrorism - which is very topical at this time. What can be done better at European level than in the individual Member States? What can we do towards the establishment of an area of freedom, security and justice, towards better protection of the external borders and a better asylum policy? What can we do to improve nuclear safety in the new Member States? Lastly, I should like to raise another point: what can we do about the proliferation of agencies? It seems that every year yet more agencies are added. Is that not excessive? I should also like to raise a final point: what can we do about the ageing population of Europe?
As always, heading 4 requires special attention, particularly at this time. What will be the consequences of any crisis in Iraq or a crisis in the Middle East? We shall be confronted by many more points, and we shall therefore have to keep a close eye on those.
Concerning heading 5, administrative expenditure, we shall have to look carefully at the results of the Commission reform. We shall also have to see what the results of the extra allocation of officials have been which we have carried out in the past, et cetera.
Regarding the last point, heading 7, a decision was taken in Copenhagen to categorise aid to Turkey under heading 7, and the Commission agrees. The Council, however, has also said that we shall have to wait until 2004 to look at whether negotiations with Turkey can begin. We shall have to look at whether this heading will have to be renamed and whether we shall have to divide it up into different sub-headings, et cetera.
My final point - I can hear your hammer, Mr President - is that I am anticipating constructive cooperation with everyone in this Parliament, and especially with the many committees. Lastly, I shall also be paying special attention to the point raised by Mr Elles.

Gill (PSE)
Mr President, the 2004 other institutions budget, as Mr Mulder has said, will be the first one for the European Union composed of 25 Member States. Consequently, it is likely to be more complex than any other and I would therefore like to thank everyone at the outset for their cooperation.
For me it is imperative that the European institutions are provided with the necessary means to complete their preparations, because enlargement must be visibly successful to the European citizen. Within this context, there are three main themes in my resolution. Firstly, to achieve greater accountability through improved presentation and transparency of the budget. I want to improve the quality of the spending, not just achieve the spending. There is a need for further development of the information on most important cost factors, to achieve greater effectiveness and sound financial management.
Real transparency will only really be evident externally to European citizens if we have it in the first instance internally. Our current system does not always lend itself readily to achieving this goal. Decision-making is too centralised and there is not enough devolution and delegation in management structures.
Whilst we are on transparency, one of the major new areas under consideration is funding for political parties. I am very disappointed that those on the other side of this House, who claim to be champions of transparency, are pushing for funding within Parliament's budget instead of the Commission's. Surely this will leave us open to allegations that we are looking after our own political interest. This budget line should remain with the Commission, which has the mechanisms for managing it objectively. The Commission is wrong to take a very short-term view and propose otherwise.
My second main concern is that we connect and communicate more coherently with the people of Europe. We need to be more innovative and ambitious in almost every area of our operation, never more so than in our information and communication policies. When it comes to informatics, our website has to be seen more as a communication tool than just an information port.
Parliament has to play an even greater role in the interinstitutional communication strategy executed by the Commission. Furthermore, we need greater endeavours by everyone to ensure active citizenship and civic participation. It is therefore crucial that European citizens are better informed about the activities of Parliament and how European legislation can influence their daily lives. To achieve this we need to consider creating a European public media space.
My third theme is to create a flexible framework for the future operations of Parliament and other institutions. This is probably one of the greatest challenges for all the institutions and I welcome the 'raising the game' proposals put forward by Parliament's Secretary-General to improve the focus of our secretariat's activities and give greater legislative assistance to Members. It has to be said, though, that this is a fairly tame set of proposals. Within these proposals there is one for establishing a tabling office, which is definitely a step in the right direction. I know there are those who have reservations about this, but if we are honest with ourselves the number of mind-bogglingly trivial amendments that we have to deal with is astonishing. I would have welcomed greater ambition and innovation from the Secretary-General, but I recognise the limited appetite our institution has for reform and change.
In conclusion, I have been a rapporteur for only the last couple of months. However, I have discovered the process to be extremely instructive. I have found nooks and crannies in this House that I never knew existed. If I may beg your indulgence, I would like to share some of my initial impressions with you.
I have come across some amazingly talented, committed and hard-working people, but for every one of them there are two who just appear to float. It is remarkable that this House achieves what it does and continues to evolve, given the resistance in almost every structure. The culture I have come across throughout the institution seems to be extremely hostile to even a small amount of change and no sooner has an opinion been expressed than there are letters flying around objecting to it. There are few who have truly appreciated the full implications of enlargement. There is a belief that we can carry on doing things as we have up to now, but just do them ten times more.
The people of the new Member States have had to show extreme flexibility in moving from the old system to the new system. We in the institutions need to start showing similar flexibility if we are to enhance the credibility of our institutions.

Schreyer
Mr President, ladies and gentlemen, the annual policy strategy gives a framework to the 2004 Budget, which will be special in that it will be the first Budget for people in twenty-five Member States and, officially speaking, the first Budget in the new form in which greater emphasis is laid on European Union policies.
Enlargement will become a reality in 2004, and we in the institutions must do everything possible to ensure that it is a success from the very outset. The new Member States will participate from the day they join in all the programmes funded by the European Budget - programmes in agricultural policy, structural policy, environmental policy, the research programmes, and, to take another example, the programmes to promote trans-European networks.
Whilst the financial framework for the new Member States was negotiated in Copenhagen, the adjustment of the Financial Perspective has to be a decision taken jointly by the Council, Parliament and the Commission. That being so, it necessarily follows that Parliament has, as agreed, the right to examine the appropriateness of the proposal to the financial adjustment of the framework. I do hope, though, that we will be able to come to a joint resolution on the adjustment of the financial framework before the treaties are formally signed on the Agora in Athens. Speaking for the Commission, I can reiterate that we will of course give you every assistance in examining every option when it comes to framing a joint resolution on this.
In 2004 there will be new programmes for the new Member States, for example the Schengen facility, which will be, for the first time, a sort of cofinancing arrangement, whereby the European Budget will fund the performance of tasks in fulfilment of the Schengen criteria. For the first time, too, there will be financial aid, for example for the decommissioning of atomic power stations. As the new Member States will also, however, have to transpose legislation on competition and the environment from day one, the Commission will also be asking the budgetary authority, as soon as this year, to authorise additional posts, and, as we will have to cope with a new linguistic diversity, half the posts required in 2004 will be reserved to the language services.
Among the other priorities for 2004 are the maintenance of political stability, and, as the President of the Commission was just saying, this has both an external and an internal dimension. As regards the external effects, this priority will find expression in the Budget by our proposal for an increase in funds for the Balkan region and also for the MEDA programme. The Commission also proposes that pre-accession aid for Bulgaria and Romania - as promised to both those countries - should be increased in order to give both these countries more help towards achieving their goal of becoming Member States of the European Union in 2007.
The Commission also proposes that funds for Turkey should be substantially increased in order to support processes of reform and its preparations for accession to the European Union. The Commission will, in addition, be putting forward a new proposal for dealing with migration issues within the various policy areas. We will be proposing a new multiannual programme for this. Another priority is sustainable growth, which means that, for example, one of our proposals that needs to be improved is that on ways of combating marine pollution arising from tanker accidents, and we also need to build up resources for the fight against communicable diseases.
When I compare this list with what Mr Mulder said in his speech and with your report, on which I congratulate you, many of the priorities set for the 2004 Budget by Parliament and the Commission appear to be very similar. In so far as that is the case, I also hope that we will be able to bring the Budget procedure to a satisfactory conclusion. I also want to congratulate Mrs Gill on her report.
I would like to use the time remaining to me to deal briefly with two questions that have been put. The first question has to do with the proposal for an instrument for the Budget lines in Chapter A-30. We will be putting such a proposal to Parliament at the end of April. As regards the second, on the funding of parties, what is crucial in the first place is that we at last achieve the breakthrough and enact a legal basis enabling this chapter to be concluded in such a way that there is a quite unambiguous legal base on which funds can be allocated to this from the European Budget. As regards the question of who, in view of the separation of the powers, is most competent to administer such funds, we will certainly still have the opportunity to debate this in greater depth.
In 2004, enlargement - an historic event - will be a reality. The President of the Commission has described how the Commission has decided to discharge its responsibility and submit proposals for the Union's tasks, and the financial resources they will require, in the period after 2006. The Commission has a very open mind as regards the arguments as to whether this proposal for the new Financial Perspective - that is to say, for the period after 2006 - should cover the period up to 2013 or 2011. I take the view that this is in fact a propitious time to shift to a five-year cycle. We are fortunate in that we will have the time to debate these matters together and determine the best framework.
The proposal on the financial framework must be appropriate to the challenges that the future will bring, and, in financial terms, these will affect the issues Mr Mulder raised, of what we can do to really make Europe into an economy based on knowledge and the most competitive economy of all, of how much more we can contribute to this from the Budget, and of which programmes are required in order to do this. The expectations to which the President of the Commission referred - that is to say, the public's expectation that the European Union should contribute to their security - invite the question as to what, for example, that means for the European Budget. As the task of securing our borders is a matter of common interest, should it not find its expression in some sort of joint financing?
Enlargement will result in increased economic disparities within the European Union, and this will make particular demands on the funds we will be injecting as an expression of solidarity. These tasks will make it necessary for us to submit proposals. Even if, as a European Union, we want to play a greater role in foreign affairs, this will have to be set down in appropriate proposals on the Budget.
This means that our task will be to produce proposals for a Union consisting of twenty-five or twenty-seven Member States, and it stands to reason that any such proposals must represent an added value for the citizens of the European Union. I can already promise you that we will make use of the time available to us this year to work closely with Parliament in elaborating these proposals.

Ceyhun (PSE)
Mr President, Mr President of the Commission, Commissioner, ladies and gentlemen, Mrs Gill, Mr Mulder, this year is another in which our committee has concentrated its attention on the central issues of security on the external borders and complete freedom of movement, which are of great importance in terms of the finance allocated to the Budget areas within our committee's remit. It is unfortunate that, this year again, I have to observe that we have still not progressed much further as regards the complete realisation of internal freedom of movement. It is for that reason that we urgently need the requisite funds to secure our borders and defend ourselves against the trafficking of human beings. We continue to need unambiguous common rules for legal immigration.
The reinforcement of Europol and Eurojust, along with the fight against terrorism, continue to be among the European Union's most urgent tasks. Our objective remains what it always has been - the creation of a common judicial area, by which means alone we will succeed in winning the public over to enlargement and convincing them of its advantages. It is with specific reference to enlargement that I want to draw attention today to the increasing cost of internal security in the European Union of the future. The EU will have to spend a good deal more money on both Eurodac and Eurojust if we want, for example, to achieve an equally high standard of protection on the new borders when the EU has enlarged to include twenty-five states.
Schengen, too, will, in future, result in further increases of expenditure for the EU, which will, as I have said, have a total of 25 Member States. What all this means is that the internal policy budget will have to be topped up if the European Union is to do justice to its objectives and tasks, and if the area of freedom, security and justice is not to have a merely theoretical existence.
It is for this reason that I appeal to my fellow Members to support the amendment we have tabled today on the guidelines for the 2004 Budget procedure and the amendments that will be brought in during the forthcoming debates on the Budget.

Maat (PPE-DE)
, draftsman of the opinion of the Committee on Agriculture and Rural Development. (NL) Thank you, Mr President. To begin with, I am pleased that Mr Mulder is a rapporteur this year. Whilst being a member of the Committee on Budgets, he is very well informed on agriculture, and, as a member of the Committee on Agriculture and Rural Development, I should also like to express my confidence that we shall enjoy constructive cooperation with the Committee on Budgets and with this rapporteur.
The Committee on Agriculture and Rural Development would like to make a couple of main points with regard to the guidelines. To begin with, we note that a particular policy is starting to take shape with regard to animal diseases in Europe. Regarding the keeping of animals, the European Union has different legislation from other parts of the world, and our policy makes animals more vulnerable to disease. I note that, in the past, we have had outbreaks of foot-and-mouth disease and swine fever in the European Union, and now we have another outbreak of avian influenza. That means that we need a better policy and also need to develop better insurance systems in order to adequately combat precisely this sort of crisis, and, furthermore, must also set aside sufficient funds to enable livestock farmers and livestock farming to survive this kind of crisis. I therefore welcome the fact that Mr Mulder's report includes what is necessary in that regard.
The second point concerns the shift in the sector towards greater market orientation. That means that we must do more for promotion, market orientation and the organisation of the financial policy in this field.
The third point concerns the new Member States, in regard to which this is a historic budget. I refer to the report by Mr Xaver Mayer, in which he expressly asks that the Sapard funding be paid out in any case in the new Member States. If this should cause problems of a legislative nature, we shall have to try to find a satisfactory solution, but in any case, these funds must also be paid out in the new Member States in future, especially for the restructuring of agriculture and horticulture. It is also important that policy, especially with regard to food safety, the development of animal welfare, and environmental instruments in agriculture, be geared more towards the development of instruments for financial policy.

Collins (UEN)
Mr President, one of the clear messages from this report today is the need to introduce procedures which will simplify the Structural Funds payments regime in Europe.
It is also important that the European Commission strictly adheres to enforcing the principle of additionality through uniform verification methods. That is the view of the Regional Policy, Transport and Tourism Committee of this Parliament. The committee believes that it is important to speed up the introduction of all the streamlining measures needed to improve the quality of Structural Fund spending in Europe.
If EU Structural Funds are going to be applied for the desired purpose, namely to improve the economic and social cohesion of different regions, then these monies must be spent as additional financial resources. If the principle of additionality is not rigorously enforced and independently verified, it makes it very difficult for European Union institutions and national EU governments to ensure that the competitive position of those regions most in need is improved. I welcome the introduction of activity-based budgeting, and the setting of clear and measurable objectives will greatly aid the budgetary process. We all agree that the EU budget must be framed in such a way as to meet its objectives. I am concerned that, whereas the rate of appropriations from the Community budget for trans-European networks in the field of transport measures continues to be at a satisfactory level, a number of Member States have failed to advance the necessary monies for these TENs projects.
On a broader budgetary matter, I welcome the fact that under the 2004 budget Parliament's Committee on Budgets supports the following measures: the need to increase rural development aid measures under the EU common agricultural policy; the need to guarantee the safety of food products, both from within the territories of the Union and from third countries; greater co-ordination of security measures at the EU's external borders and improved EU immigration and asylum policies; and promotion of an EU media space to disseminate information on the workings of the European Union and raise public awareness of the impact of European Union legislation on the day-to-day lives of the citizens of Europe.

Perry, Roy (PPE-DE)
Mr President, I shall talk about a very tiny, but nevertheless very important, element of the budget: that of the Committee on Petitions. I should also like to mention the Committee on Culture, Youth, Education, the Media and Sport. Both of these committees come into very close contact with the individual European citizen.
In recent years the Petitions Committee has developed the possibility of inviting petitioners to attend committee meetings, where appropriate, to have their petition addressed. We need to ensure that there is adequate funding to enable citizens to do that, where appropriate.
Petitioning Parliament is an essential right for the citizens of Europe. The Petitions Committee often offers the citizen a way of cutting through the bureaucracy of Europe to address issues affecting their lives. I am talking about only a very modest increase in the sums available, but this would send out a very big message to the European people.
We must also remember that the Ombudsman is the other great defender of citizens' rights. According to Eurobarometer, 87% of citizens recognise their right to go to the European Ombudsman. We have just appointed a new Ombudsman. I have no personal interest in this, but we need to ensure that there is adequate funding for the Ombudsman to have the staff and resources to cope with the enlargement of Europe.
On culture - less than 0.5% of total expenditure - we must have an effective procedure for the A-30 lines. I heard what the Commissioner said earlier. I welcome that. Timing is critical in this. I hope that we will have the procedures in place so that bodies like the European Youth Orchestra and the Yehudi Menuhin Foundation know that their future is assured.

Garriga Polledo (PPE-DE).
Mr President, Commissioner Schreyer, ladies and gentlemen, I should like to support the position adopted by the Group of the European People's Party (Christian Democrats) and European Democrats with regard to Mr Mulder's report on the 2004 budget guidelines. My remarks are also addressed to the representatives of the Council although they do not appear to be present.
Thanks are due to the rapporteur for his ideas and for the care he has taken to include most of the ideas expressed by others into the report. My group fully endorses the report. Indeed we support it so strongly that we have not tabled a single amendment to it in the House. We trust that only a limited number of the amendments tabled by other groups will be adopted.
Turning to a more contentious issue, as the rapporteur mentioned, the 2004 budgetary period will be unusual throughout. Initially, the budget will apply to 15 Member States. At the close of the period it will, however, apply to 25. This will call for an additional effort to reach understanding between the three institutions, whereas relations are currently somewhat strained.
Times are hard for Europe and even harder for the wider world. The 2004 budget should represent a statement of faith in ourselves. We should be confident of our potential and abilities as Europeans. Further, the 2004 budget should help to strengthen Europe's role and influence beyond its borders. This is sorely needed as our common foreign policy, its instruments and even the individuals charged with operating them appear to have gone missing in advance of the action.
The Europe foreshadowed in the Mulder report is a united Europe. It is a Europe able to generate competitiveness and employment. It is also a Europe to be relied on by its partners in the wider world, and a Europe better able to manage its common policies. Interinstitutional cooperation is one of the prerequisites to such a Europe. Unfortunately it cannot currently be guaranteed. Paragraphs 2, 3 and 5 of this very report state that enlargement financial perspectives are to be approved jointly by the Council and the European Parliament. This does not seem to be the case at present.
Parliament must have a considerable say regarding the financing of internal and external policy, if Europe is to prove a reliable partner, and if we are to become competitive and create employment. Global amounts for the adjustment of financial perspectives must not be set unilaterally. Parliament must be entitled to identify the shortfall in these areas and negotiate adequate sums.
The Group of the European People's Party (Christian Democrats) and European Democrats is prepared to negotiate with the Council and the Commission concerning these areas. They are key to the achievement of the objectives identified by Mr Mulder. In the present climate of disunity and dissent, the Union's institutions are called on to illustrate dialogue and cooperation, not to contribute to the unrest.

Walter (PSE).
Mr President, Mr President of the Commission, Commissioner, ladies and gentlemen, let me start with sincere thanks to the rapporteurs, Mrs Gill and Mr Mulder, for the very good cooperation that we have already enjoyed over recent weeks. This is very early in the year to be setting down Budget lines, but the procedure has changed in such a way that we will always be doing this rather earlier in the future, which is not necessarily a disadvantage.
If you see what discussions are going on at present in the European Union, you will know that, on the one hand, Europe is associated in the public mind with an enormous amount of hope, but that also, on the other hand, people are at present somewhat disconcerted by many aspects of it. The debates that we will be having this year, which will also have an influence on next year's Budget, will be on issues such as the Convention, enlargement, future economic progress, and the prospects for peace. It is also necessary that we, that Parliament, should be reliable in the work we do on the Budget, reliable as regards what we did in the past, and as regards what we want to carry forward into the future.
Each individual issue has to be approached and discussed in a frank and transparent way. I have said in every Budget debate that we have to have equal rights in every area of the Budget, and I will stop saying this only when we actually are, and the Convention has a chance of making this happen and, in the Budget procedure too, even in matters of agricultural policy, of giving both parts of the budgetary authority equal powers. We have to ensure that transparency and clarity in matters concerning the European Budget are capable of being communicated to the public.
We are on the threshold of enlargement. We want enlargement. The division of the continent of Europe into West and East, poor and rich, is a falsehood, but preparations for enlargement must be transparent, and the rationale behind them must be comprehensible, even when it comes to financial matters. Parliament is one of the two component parts of the decision-making authority, and we will not allow the Council to present us with faits accomplis in these matters.
As far as Europe's economic development is concerned, many of those who have already spoken have said that we have to further develop the internal market - that internal market that many saw as pointing in the right direction and that raised their hopes; but unemployment in Europe is as much an issue now as ever it was. The means are available to us to do something about this. In recent years, we have refunded EUR 14 billion on one occasion, EUR 11 billion on another, and this year we will be refunding EUR 7 billion - resources that have not been used, in the Structural Funds for example, to combat unemployment. That is something we cannot accept. This tendency may have been alleviated somewhat, but it remains the case that far too much of the funds we have cannot be made use of. In order that we may make progress in this area, I ask you to take the simplification of administration further.
As regards peace - both around the world and on the continent of Europe - it is only natural that we should take our past actions as the basis for future development, but, as it strives to develop a common foreign and security policy, Europe must not be understood to consist only of those who are currently engaged in developing joint military structures. Our approach must be that of avoiding and preventing conflicts and of disarming, as we have done with such things as landmines, and, if I may turn to developments in Palestine and Iraq, we are of course prepared to provide humanitarian aid there at a later date, but let nobody regard this as a licence to do whatever is possible on the basis that they can do their bit, and reconstruction can be left to the European Union. We have to make it abundantly clear that we are not giving anybody carte blanche.
Now for the final point that I want to address. Europe is undergoing demographic change - and this is where we have to look slightly further ahead - in that it has an every-increasing number of older people and ever fewer young people. At European level, that will have an effect on pensions. We want all policies to be considered from the point of view of what these changes will mean in the future ?
(The President cut off the speaker)

Jensen (ELDR).
Mr President, as has already been mentioned on quite a few occasions, the budgeting for 2004 is particularly exciting and particularly complicated because of enlargement and the continued reforms of EU budgeting. This is now the first year involving the activity-based budget, which will make it simpler for us all in future to interpret the political messages in the budget.
I should like to begin by thanking Mr Mulder and Mrs Gill for their constructive and well set-out discussion documents for the work on the 2004 budget. The objective of this year's budget has been to unify Europe, for enlargement means that there is a need for a range of new initiatives. In this context, I would especially mention the need for the Commission's reforms to be implemented in such a way that the administration becomes genuinely efficient and is made sufficiently flexible for it to be possible, once and for all, to straighten out those problems that led to the Commission's departure in 1999. If we do not get the problems solved now, matters will become so much the more difficult in an enlarged EU. It may be argued that enlargement will provide special opportunities for sorting out a number of problems. On the other hand, the difficulties in solving them will also be exacerbated. As Mrs Gill mentioned, that also applies, of course, in relation to our own institution, Parliament, which will no doubt have to be persuaded to tidy up its administration.
It is important for us to set aside the necessary funds for the continued development of administration, training and social dialogue in the new Member States. That also applies to the budgets for the agencies in the spheres of training and the labour market.
The last point I wish to make is that, upon enlargement, the EU will acquire new borders in the east. In the budget, aid to the former Soviet bloc countries is to be provided through the Tacis programmes which provide money for administrative development, training and the promotion of safety in connection with nuclear power stations. It is important for Tacis to continue to ensure that the projects are properly implemented. Nuclear safety, in particular, is a high political priority.
I am delighted that, in this budget process, we can also welcome our future fellow MEPs from the new Member States. I think that, with their more detailed knowledge of our new neighbours, they will have some good ideas as to how, in the future, we can generally develop the Tacis programmes and also ensure that they are efficiently implemented. That is a strand of the debate and of the budget to which I am very much looking forward.

Seppänen (GUE/NGL).
Mr President, Commissioners, I have had a poor impression in the European Convention of the direction in which the EU's policy on languages is heading. There the proposed amendments to the Praesidium's draft constitution are not translated into the official languages of the EU. The discussions held by the Convention's working groups have only been interpreted into two or three languages. A constitution is being drafted, however, which is at a higher level than the Member States' national legislation. As the Convention is called the Convention on the Future, language restrictions and the destruction of national linguistic identities would seem to be the future of the EU.
Both budget reports give attention to language, translation and interpreting. When Mrs Gill speaks of controlled multilingualism I am not sure that that means equality for all languages. When distance interpreting is mentioned, I am not sure that that means distance interpreting for all languages. If not all languages in the EU are to be used equally, let us draw lots for those languages that are to be the so-called working languages. Another linguistic outrage is the fact that the European Parliament visitor's service no longer has a Finnish-speaking official.
Otherwise, the guidelines for the budgetary procedure are on such a general level that there are only a few general remarks to make. Parliament's unanimous political will would seem to be that there should be a determination to reduce the amount of unpaid payment appropriations, or RALs. Many in our group oppose the introduction of financial support for Europarties, as the parties would then become supranational.
As regards Mr Wynn's report, which is the next to be discussed, some amendments to it have been tabled calling for the introduction of 'Eurotaxes' to finance the work of the EU. These supranational taxes are unacceptable to many in our group.

Van Dam (EDD).
Mr President, Mr President of the Commission, Commissioner, the defining of a strategy for the coming year provides us with an excellent opportunity to set priorities. In its policy strategy for 2004, the Commission chooses the accession of ten new Member States to the EU first of all, followed by stability, and lastly sustainable growth. We can endorse this choice of political priorities. The accession of ten new Member States has been an important theme throughout the term of office of this Commission, and it is right that it be given top priority in 2004. After all, by 1 May of next year enlargement from 15 to 25 Member States will be a reality; provided, of course, that the populations of the candidate countries agree to this.
In the Commission's elaboration of the theme of 'sustainable growth and solidarity' it strikes one that, in the opinion of the Commission, the Union bears a very large number of responsibilities, namely: a) strengthening economic and social cohesion, b) tackling the uneven level of development between the various regions, c) supporting sustainable economic and social development and d) promoting balanced and sustainable development.
This optimism about one authority single-handedly bringing about social change does not square with our view of the matter. The Commission should adopt a more modest attitude in this regard and should not take on so many tasks.
We consider that making stability a priority was the right choice. After all, we need to take the global terrorist threat most seriously. The elaboration of this policy area in concrete terms, however, is once again at odds with our idea of security and stability in Europe. The most important partner in the global fight against terrorism and in maintaining international stability is missing from beside what is known as the 'new neighbours initiative', or 'ring of friends' policy. I am talking about the NATO alliance, with the United States of America as a strong ally. Is the Commission prepared to define its position on this matter?
It is in the European Union's multi-annual perspective for the period 2004-2006 that it really shows its true colours: this perspective talks of the fundamental tasks not only of 'European citizenship' and the solidarity mentioned above, but also of 'enabling the Union to exercise the responsibilities of a world power'.
In the light of the current situation, it is Utopian to think of the deeply divided European Union playing a more active role in the maintenance of security in the world.
Congratulations are due to Mr Mulder for his commendable report on the guidelines for the 2004 budgetary procedure. Unfortunately, I cannot talk in such positive terms about the report by Mrs Gill. The advantages she envisages in the draft statute for European political parties completely escape us. The Commission wants to get no less than 75% of the budget for these European parties out of the EU budget! Is that not completely out of proportion?
Political parties are free associations of citizens. Is it not logical, then, for citizens, who form the basis of every party, to give financial support to the party of their choice? This also respects the natural link between parties and their support base, which can only be beneficial to their involvement in politics. National political parties that wish to associate at European level should pay for that themselves - that is to say, their members should. European political parties are by definition much further removed from the bed of our citizens than national parties. If, therefore, we give those European parties an enormous subsidy from Community funds, we increase the gap between citizen and politics.
We find completely incredible Mrs Gill's analysis that a propaganda offensive would bring the parties closer to the citizen. What visible effect have European campaigns about European citizenship or the benefits of the euro produced? The answer is none, so why should that succeed now? In the opinion of our group, it would be better to get the draft statute off the table as quickly as possible.

Dover (PPE-DE).
Mr President, as the shadow rapporteur, I wish to raise four points on the Gill report. Firstly, on political party funding - the matter just raised by Mr van Dam - my Group considers that this funding should be in Parliament's, not the Commission's budget. The reason is that we can be accountable: the rules are already set down and agreed between the three institutions. I understood that there was also a move by the Council of Ministers and the Commission to move this budget towards Parliament's financing. It is right and appropriate to show that we are responsible and accountable. An amendment has been tabled and I urge Members to vote - perhaps against their own groups - for Parliament to have control of the political party funding budget.
Secondly, on buildings, the Bureau has made too many decisions without referring back to the appropriate committee - the Committee on Budgets. I welcome Paragraph 40 of the Mrs Gill's report, which I broadly support. That calls on the Secretary-General to submit a report by 1 June 2004 outlining 'the functional justifications for the new building projects'. I hope that report will include the proposals for two new conference rooms here. The United Kingdom Conservatives and Socialists are opposed to those two conference rooms, as they would spoil the very pleasant entrance to the European Parliament by the flags. There is no functional justification. The conference rooms - in particular the large ones - are under-utilised. There is more than enough room, even with the enlargement countries, to provide all the necessary facilities. That is a very important matter and, in future, we at least will be requiring functional justification before spending is approved.
I should like to draw attention to a very positive amendment - of which I am sure Mrs Gill will approve - to Paragraph 28. This clarifies the movement towards more facilities to cover multilingualism, which is particularly important for enlargement. It concerns electronic guidance, computer workstations and directions to rooms. I know that as a new Member three years ago I had great difficulty in Brussels and Strasbourg even in finding rooms. Think of the language difficulties for Members from the new countries. Therefore, monitors and permanently-installed signs scrolling through the various languages would be a very important addition.
Finally, there is a reference in the report to the Court of Auditors. It does very important work and needs extra resources, a suggestion I fully endorse.

Pittella (PSE).
Mr President, ladies and gentlemen, I too would like to thank the rapporteurs. However, I would particularly like to thank President Prodi for stating in a very wide-ranging speech a political fact: these are terrible times but the Union must press ahead with its projects and ambitions.
The historical goal we are about to achieve - the enlargement of the Union - calls for total consistency in our budgetary decisions. In this regard, too, Parliament will play its part, which is not the part of a solicitor who merely writes reports and accepts the decisions of others without having any influence. There are four main European policies which will contribute to enlargement: cohesion policy, the common agricultural policy, the TENs policy and the policy for cooperation between small and medium-sized enterprises. The success of enlargement and integration will depend to a large extent on the way these policies are revised and the importance given to them in the budget.
There are just two things I want to say. Firstly, I believe that we need to reconsider the funding allocated to the TENs and the Union's contribution, simplify the procedures and reinvigorate the North-South dimension as well as the East-West dimension. Secondly, I believe we need to increase the internationalisation of small and medium-sized enterprises and their ability to form partnerships with the small and medium-sized enterprises of the candidate countries. To this end, it would be beneficial to enhance the current instruments and the current pilot project on enlargement and SMEs and take the opportunity afforded by the mid-term review of Agenda 2000 to give a clear boost to the measures facilitating the internationalisation of small and medium-sized enterprises.

Virrankoski (ELDR).
Mr President, firstly I want to offer my warmest congratulations to Mr Mulder and Mrs Gill for their excellent reports, and also to Commissioner Schreyer for the very constructive approach she has shown in the preparation of the budget. My special thanks, however, go to the President of the Commission, Romano Prodi, for the important work he has done so far in building the European Union and bringing nations closer to one another in a joint project that we now call enlargement to the east.
The budget before us will be the first to be drafted for a Community of 25 Member States. This is a very challenging undertaking technically speaking, as the budget will apply to 15 Member States for the first four months and 25 Member States for the rest of the year. For this reason the important role of the rapporteurs in drafting this budget must be emphasised.
Fortunately, we have activity-based budgeting, which is now being implemented in earnest for the first time. It will improve the transparency of the budget and give a better picture of the work that is done within the framework of the European Union. Activity-based budgeting provides a straight answer to the question of what each activity actually costs.
Eastward enlargement is a challenge for everyone, and has to be taken into consideration throughout the entire budget preparation process. That starts with administration. We must continue to have respect for the individual languages of the Member States and hold multilingualism in esteem. The greatest challenge, however, concerns the Structural Funds. Enlargement to the east will be an enormous rebuilding project, the largest that Western Europe has embarked on since the Second World War. For it to succeed, the administration of the Structural Funds must be simplified and dealt with more efficiently. Only in this way can the results we are striving for be achieved.

Fiebiger (GUE/NGL).
Mr President, the Commission has emphasised in its communication that enlargement of the European Union will be the core challenge of 2004. Whilst the importance of this issue is not to be denied, I do, however, have my doubts as to whether these Budget lines will actually enable the Commission to handle these challenges.
My real concern is with the fact that, in connection with enlargement, provision has been made for expenditure of some EUR 11 billion in 2004, which amounts to only 10% of the total commitment appropriations. In agricultural expenditure, the proportion is as low as 2.4%. These proportions are hardly likely to guarantee the Member States participation on an equal basis, even when it is borne in mind that accession will happen as late as 1 May, so what I expect of the Commission is that they should set out in detail in the preliminary draft Budget what legal entitlements the new Member States will have to participation in all programmes funded from the EU Budget.
Funds for the structural measures are very extensive - for this too, sensible advance plans were made in former years - but what is not working is the outflow of resources. What I expect is that the Commission will not delay long in producing precise figures and an analysis of why this is so and of the obstructions involved. There is a need here for greater confidence in the system's fairness, for not one euro of structural support funding must be wasted. For many citizens in the European Union's regions, the projects that depend on such funds are often the last fragile hope for the maintenance of their jobs.
Now, today, the starting pistol has been fired, and the process of drawing up the preliminary draft of the 2004 general Budget can begin; there are important debates before us, and important work remains to be done. I therefore expect absolute transparency of the whole procedure, coupled with wide-ranging public relations work, which cannot fail to improve the public's perception of the European Union.

Salafranca Sánchez-Neyra (PPE-DE).
Mr President, the President of the Commission recalled the context of the Commission's strategy for 2004.
Mr Prodi was bound to speak of the crisis over Iraq, enlargement and the strategic need for a political project for an enlarged Union. He also referred to the in-depth assessment of ourselves and our role in the world currently under way in the Convention preparing for the Intergovernmental Conference. A number of other issues were mentioned such as the entry into force of the Treaty of Nice and, more directly relevant to the budget, the entry into force of the new Financial Regulation on 1 January.
I should like to focus on foreign policy. Clearly, the Union needs an effective, transparent and visible foreign policy. It would therefore be appropriate for the Commission to give some indication of how the policy on decentralisation has evolved. An update on abnormal outstanding payment commitments would also be helpful. Parliament has been concerned about both these issues for some time now.
In my view, serious thought should be given to heading 4 on foreign policy. We have been making do and mending for years. We are, however, likely to be called on to take urgent decisions on Iraq. We need to deal with Afghanistan, the Middle East, the Balkans and Mediterranean policy too. In addition I believe it is essential for us to review our transatlantic relations. They are bound to be affected following the conflict with Iraq. Last but not least, Commissioner, we should tackle the matter of relations with Latin America.
I urge the Commission to be consistent as it presents this year's draft budget proposals. It must honour the undertakings given at the Madrid Summit. Additional priorities cannot be financed out of the same resources. For instance, the Commission is adjusting the system of generalised preferences for countries such as Colombia or Costa Rica, and the Commission is not expected to suggest further budgetary cuts in the draft proposals.
Commissioner, I urge you to bear these considerations in mind. In my view, if we wish to develop an ambitious foreign policy we must consider how to make available the necessary resources to move forward in the context of foreign policy and defence policy. If we do not do so I believe we shall continue to be excluded from negotiating tables and be reduced to bankrolling major international events. We will never be involved in decision-making.
I congratulate Mr Prodi on the vision he has shown on opening this debate on strategic priorities. The debate should be linked to the debate on budget guidelines for 2004.

Patakis (GUE/NGL).
Mr President, the war about to be waged in Iraq in the interests of American imperialism and its allies, is not just an inhumane war; it will have a huge impact on the economy of the European Union and will palpably reduce working class incomes and the revenue of the European Union.
The accession of the new Member States, whose GDP is below the Community average and whose needs are greater, will also cause severe problems. The European Union 2004 budget guidelines are all about cutting spending on the structural funds and the common agricultural policy and funding the repressive, aggressive common European defence and security policy, using the fight against terrorism and immigration, crisis management and conflict prevention as an excuse. In other words, agricultural spending is to be slashed in line with the WTO approach and under pressure from the USA, and this will be compounded by mandatory restructuring and an anti-farming slant to the partial reform of the CAP.
All this does is to prove that the budget is still an anti-grass roots budget and that the sacrifices imposed on the workers in the interests of the monopolies are continuing, in the Lisbon vein now, with increased exploitation, attacks on workers' employment and insurance rights, galloping unemployment, environmental disasters and even greater commercialisation of health, education and social services.
The workers, the poor and lower middle classes of urban and rural society, are again being called on to pick up the bill for the recession, so that big business can keep raking in the profits. The MEPs of the Communist Party of Greece are opposed to these budget guidelines because, instead of resolving the problems of workers, farmers and small enterprises, they will create new ones and the standard of living of people in the candidate countries will fall. Instead of helping to maintain peace, the budget is being used to fund more militarisation and aggression on the part of the European Union and its anti-democratic, anti-grass roots philosophy.

Laschet (PPE-DE).
Madam President, ladies and gentlemen, I would like to respond to a number of remarks that have been made about these Budget lines from the point of view of foreign policy. Traditionally, in the Member States, foreign policy is a matter for governments, but the parliaments are involved via the budget procedure, which enables them to influence foreign policy and the government's setting of priorities.
As there is something of a lack at European level of any counterpart to this sort of democratic control, we welcome the attention given by the Convention to a wider range of options for Parliament to exert influence on fundamental issues of finance for foreign policy concerns.
Above all, we welcome the fact that it was possible, in the course of the 2003 Budget procedure, to come to an agreement with the Council on information concerning measures in the area of foreign and security policy. For the Council to take significant steps to accede to Parliament's wishes is a new thing, and although it did not, initially, keep to the undertaking it had given during the Budget procedure, information on our activities in Macedonia has now found its way onto the table. The most recent consultation with the Council made it possible for this to be guaranteed, and I see this as having been a step in the right direction. Such cooperation between the Council and Parliament is a foundation for our future endeavours. It is for this reason that we consider particularly important the passage in the guidelines in which Parliament lays renewed emphasis on its willingness to work together with the Council on the common foreign and security policy, and on its own insistence on its involvement to the fullest possible extent in budgeting for joint actions, planning them and taking decisions concerning them. We have had problems with this in the past, in that financial undertakings given by the Council meant that Parliament ended up being obliged to provide the funds from the Budget. That can be changed if Parliament is informed and involved in good time. If that happens, I think these Budget guidelines may well usher in a new stage in cooperation between Parliament and the Council.
Still on the subject of foreign policy, let me make another observation concerning the ad hoc group that we have now set up to examine direct payments to the Palestinian National Authority. I think this ad hoc group gives us a good opportunity to cooperate with the Commission in seeing exactly what has been done with European taxpayers' money. We decided not to set up a committee of investigation, which would amount to laying charges at the outset, whereas we simply want to know how this direct aid worked and how we can organise it better in the future. This working group is about to start work. This is not so much a problem between Parliament and the Council as one between Parliament and the Commission, and we hope that, in the working group, the Commission will keep to its promise and be willing to work together with Parliament.

Morillon (PPE-DE).
Madam President, when analysing what you, President Prodi, called the state of the Union and the related budgetary guidelines, we must take care, as you also said, to avoid two pitfalls. The first would be to exaggerate our differences, while the second would be to consider them negligible.
If we are to establish a Community foreign policy, if we are to provide this enlarged Union with the means to defend its values, we must not be afraid of debate and, if we may, ladies and gentlemen, perhaps for the first time at this stage, let us discuss the financial resources that we will have to agree to release for this purpose.
As the rapporteur, on behalf of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, for a report on the new architecture of the European security and defence policy, which will be voted on in committee at the end of this month, I welcome the opportunity to introduce this subject without further delay, just as I welcomed the information and signals received over the past few weeks, both from the Commission and from the Council.
With regard to the Council, first of all, at its meeting of 27 January last, the General Affairs Council, in deciding to take charge of the military operation in Macedonia, simultaneously decided to establish an operational financial mechanism designed to cover the share of related spending that will have to be cofunded by the European Union. This initiative is entirely new and will certainly begin to give some credibility to the stated objectives, which you have just recalled so clearly, President Prodi. We must now hope that this instrument, which was swiftly drawn up in accordance with Parliament, can be extended to all future EU operations.
With regard to the Commission, I was equally interested to note the account of the recent meeting between you, President Prodi, and the Greek Defence Minister, Giannos Papantoniou, who apparently suggested including a new heading to fund research into defence within the EU budget. That is precisely one of the new proposals that should certainly be endorsed in a few days by a majority of my colleagues in the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy. Might I ask you, President Prodi, what your own reaction was to this proposal and when you think it could start to be implemented?
In conclusion, Madam President, President Prodi, unless the Union provides itself with the necessary institutional, operational and financial means, it will be doomed to remain on the sidelines of the international playing field for a long time. I am sure that this is not what the majority of our fellow European citizens want.

Ferber (PPE-DE).
Madam President of the Commission, Commissioner, ladies and gentlemen, I would like to start by expressing my thanks to the Commission for having done as it promised to do last year and synchronised the debates on the coming year's policy strategy and Budget; I see today as an important occasion and one that bids us shoulder together this great shared responsibility for Europe and its inhabitants.
The questions with which we are faced are of course important ones, and, right now, I want to say one thing in very clear terms: Commissioner, it would be a very great help to us if we did not have to concern ourselves solely with questions that will become relevant after your term of office has expired, such as how we are to proceed after 2006, and what we can expect to face then. What we have to deal with, quite specifically, is how the Financial Perspective is to be adjusted to take account of enlargement. I would have been glad if the Commission could have taken a line more openly sympathetic to Parliament in order to secure Parliament's rights, and hence the public interest in the transparency and openness of this process. We could certainly have done with more explicit statements in this area. Let me just say now, in very clear terms, that we will have to consider whether we will be in a position, a month from now, to deal with the applications for accession in this House, or whether we perhaps ought first to resolve the institutional question of how Parliament is to be involved in dealing with this important issue.
What I actually wanted to do now was to say something to the Group of the Greens/European Free Alliance, who are now conspicuous by their absence and do not think it necessary to send someone to represent them in this debate - and that itself speaks volumes! Now that we are discussing enlargement and preparing to welcome to our Parliament observers from the candidate states in only a few weeks' time, we should certainly be giving thought to other options for cooperation - Mr Dover made that point very impressively, and I am very grateful to him for doing so - in order to grow together in a more organised way in our day-to-day work and daily life. I think it is a pitiable thing for the Greens to table amendments aimed at deleting these passages from Mrs Gill's report. That is the very opposite of what we need if we want to accommodate over a hundred new Members in this House.
So now, Commissioner, here comes my request that we should now be concentrating on the matters in hand! I have mentioned the subject of the Financial Perspective, so let me remind you of the Andreasen case. I have here an internal memorandum from the Commission, which reaches an assessment different from that which you set out in the Committee on Budgetary Control. Now, at long last, we have to sort out the problem with the accounting systems. One of this Commission's great promises was that this parliamentary term would see things getting moved forward. When we have worked through all these things properly, then we will be able to talk about the prospects for the EU finances after 2006, but right now there are other things on the agenda, and they have to be sorted out as a matter of urgency if all the things promised since the day the Prodi Commission took office are to be finished by the time its term of office comes to an end. If we manage that, we will have achieved much for Europe.

Naranjo Escobar (PPE-DE).
Madam President, I believe three basic issues arise out of the 2004 budget guidelines. These are firstly, the potential level of expenditure, secondly, improved implementation, and thirdly, strategic options for expenditure.
As regards the level of expenditure, the Union's budget currently represents 1.02 % of gross Community income, and is at its lowest level. The present perspectives would allow an additional 5 000 billion. The same level of expenditure is planned for the 2004 budget. We are therefore operating in austerity mode, which should please the Council.
Sound implementation is crucial for the 2004 budget. Payment take up has been well below that forecast during the last three years. The total surplus for those three years amounts to some 23 000 billion. Last year's declaration on implementation profiles and the plan to do away with the abnormal RAL must therefore be followed through.
Concerning priorities, I am sure Mr Mulder's report is on the right lines. It takes account of two key issues, namely the concerns and expectations of the citizens on the one hand, and on the other, the conditions needed to allow the budgetary authority to reach a consensual decision.
The 2004 budget is crucial and represents a new departure for the Union. There are a number of reasons why this is so. The citizens understand that their security, freedom and prosperity demand appropriate budgetary decisions and common instruments. External border controls, the fight against organised crime and terrorism demand increased capacity for Europol and Eurojust.
Finally, the promotion of business activity is crucial to the success of an enlarged Union. Many issues are still outstanding. I refer for example to the potential financial implications of agricultural reform or of the adoption of the adjustment of the financial perspectives. I have to say that I am amazed the Council is not represented in the House today. Nonetheless, the Council must realise that there is only one way of dealing with the challenges before us, and that is by reaching agreement with Parliament.

von Wogau (PPE-DE).
Madam President, ladies and gentlemen, we are discussing the Budget and the strategy for 2004. As has been said, 2004 will be the year of the European Union's enlargement, but it must also be a year in which, at last, the European Union's foreign and security policy is developed further. So the crucial question is what democratic control there will be when we get a common defence policy. In this area, democratic control is exercised primarily by way of the Budget procedure. If we are to have to handle issues of war and peace in the same way as issues of foreign and security policy, such democratic control is even more important than in other areas. It is in view of the Convention that we need to make certain demands now, demands that will be significant in 2004.
For a start, we have to ensure that the military element of operational expenditure on peacekeeping and crisis management has a fixed place in the European Union's regular Budget and that we in Parliament get full powers of codecision. Secondly, President Prodi, you said that joint actions were being undertaken in the European Union in the area of research and development, and in the purchase of armaments. We know that the Convention is talking in terms of an armaments agency, and we must do all in our power to ensure that these Budget lines do not disappear into a shadow budget somewhere, a budget over which neither the European Parliament nor the twenty-five national parliaments will have any control, but rather that these items of expenditure are reflected in the regular Budget of the European Union.

Piscarreta (PPE-DE).
Madam President, Mr President of the Commission, Commissioner, ladies and gentlemen, in the context of this joint debate on the European Commission's political strategy for 2004, I am bound to recall that this is the first budget in an enlarged Europe covering the new Member States.
The European Union budget must therefore, now more than ever, contribute to achieving social and regional cohesion, both in the new States and in the current 15 Member States
I support the fact that the priorities selected for this 2004 budget are the completion of the internal market, the strategy for sustainable development, and achieving the Lisbon strategy, in the aim of making the European Union the most competitive and dynamic knowledge-based economy in the world by 2010. This is, in fact, one of the major challenges facing the European Union, and which stand out because they have immediate and practical implications for every European citizen.
I also welcome the entry into force of the Treaty of Nice which, despite all the criticism it has rightly generated, has at least one virtue: it has increased the number of policies covered by the codecision procedure, thereby giving the European Parliament greater power to act.
Nevertheless, and because the situation is not entirely rosy, I should like to make some criticisms of the European Commission document that has been presented to us today.
Firstly, I agree with the rapporteur on the need to insist that the European Commission makes increasing rural development aid under the CAP its priority guideline. This is precisely the area in which the greatest disparities between Member States can be seen.
Secondly, I urge the Commission to step up the process of streamlining and improving the implementation of the budget, especially in its structural funds policy. In this context, I support the implementation of more reliable payment provisions, and the European Parliament being better informed about the level of payments underway, by programme, in order to respond to the risks of payments being cancelled.
Specifically in the context of the cancellation of funds, it is my view that Rule N+2, which forces Member States to use funds within two years of their being programmed must be seen as an incentive for the rapid use of funds, without, however, compromising the quality of the expenditure undertaken.
With regard to the structural funds, I should also like to take this opportunity to draw the Commission's attention to a problem of which it has already been made aware: the accession of the new Member States will have the statistical effect of reducing the European Union's average GDP. Consequently, some regions' levels will increase, with major risks of losing structural funds because they exceed the minimum levels that would entitle them to Community aid. I wish to emphasise that this, as in fact the Commissioner for enlargement himself, Günter Verheugen, has said, constitutes wealth on paper, but not in reality. Statistical indicators alone cannot justify terminating a cohesion policy for the current Member States. It is entirely in the European Union's interest to see its current Member States enjoy high rates of growth, more employment and more opportunities.

Weiler (PSE)
Madam President, Commissioners, ladies and gentlemen, the public - especially in the candidate countries - often makes the erroneous assumption that the European Union's Budget deals, in effect, only with agricultural policy. Such an assumption is not only fatal, but also false. It is even more important, in times of economic upheaval and renewal, for us to affirm and create social cohesion in order, among other things, to stabilise democracy and gain public acceptance in these new Member States.
Speaking on behalf of the Committee on Employment and Social Affairs, I would like, then, to highlight four points from the debate that were of particular importance to us. In this context, the first is support for the social dialogue. In practically all the candidate countries there is still the need to establish and reinforce structures that will make the social dialogue a reality.
The second point is the need to improve conditions in the workplace. Our work in the Member States treats health and safety at work as a priority, and the same must be true in the candidate countries.
The third point is that the Committee on Employment and Social Affairs has stressed our desire to have greater support, in every case, for the social platform as part of the action programme against social exclusion and discrimination. I would refer you to the Lisbon resolution in which we highlighted competitiveness and employment opportunities and stressed the need for them. In the candidate countries, restructuring affects not only agriculture, but still also major, and outdated, sectors of industry. They need our help with that, help that we can - and should - provide by means of European Union funds.
In all these areas, we rely, of course, on the knowledge of the agencies. We therefore expect them to receive the financial appropriations that they need.

Prodi
Madam President, ladies and gentlemen, I should like briefly to respond to some of the questions, which are extremely interesting. It is a pity that the majority of the Members are absent. This should be a dialogue. However, I am glad to see that Mr Elles is here, and so I will address my answers primarily to him, for he has asked a number of key questions.
First of all, he raised the issue of whether this perspective is just for five years or whether it is for seven years. We are not in a position to decide, and so we have kept our options open. I personally am in favour of a five-year perspective, both because that would synchronise it with Parliament's work and because I feel that a seven-year perspective would be too long, that it would make control too difficult and extend beyond our powers of farsightedness.
Mr Elles also raised the issue of the number of Commissioners. The problem is not the number of Commissioners but the authority to organise and take decisions accorded to the President. Whatever the number of Commissioners, the question is how to organise the Commission's work. It can be managed well with a small number of Commissioners or it can be managed well with a large number of Commissioners. Then, as regards the staff and the translation service, we have made veritable Herculean efforts and restricted the number of new staff to be employed to cope with enlargement to the bare minimum.
Mr Elles raised a number of other points which I feel it is important to discuss. For instance, he pointed out possible shortcomings in the chapter on external relations, particularly as regards the transatlantic partnership. I mentioned one of the two errors to be avoided right at the beginning of my speech, that of failing to understand the importance of the transatlantic partnership, and I did so precisely because I consider it to be crucial. Indeed, the 'peace group' set up by Commissioner Lamy is concerned with this too. More specifically, there are two major dimensions of external relations - the regional dimension - 'Wider Europe', the project we are approving today - and the international dimension, which essentially and primarily covers transatlantic relations.
Reforming the Commission has been a priority right from the beginning and, starting in 2004, we will have completely new Staff Regulations. It has been a huge undertaking. We have a qualification process which covers all the institutions, today we are discussing the annual policy strategy, we have completely transformed the Commission's financial management and we have a new management system giving much greater powers and responsibilities - this is vitally important for our future - to our officials, we also have a new control system and we are working on precisely the new accounting system, as you are aware, Mr Elles. Seeing as you mentioned the letter, now that I know of its existence I can assure you it will be published immediately, for these things must be made public. In any case, however, we must realise that, should a disciplinary procedure be necessary, all the rights of those involved in the procedure must be respected. In any case - I would stress - the letter must be made public without delay.
As far as the famous requests still outstanding are concerned, I will look into it. I will do everything possible and more, employing all available resources to look into it as quickly as possible. I must say, however, that the fact that 400 requests - as you said , Mr Elles - have yet to be addressed, might mean that too many requests have been made. I take the blame for the delay in producing some replies, but I believe we have a barrage of extremely important questions to deal with.
I would also like to focus on the point raised by Mr Clegg concerning better regulation, for it is related to these issues. An agreement is imminent, but I must say that my impression is that Parliament is taking less interest in the matter today than it did some time ago. I would like to take this opportunity to call for a last spurt so that an agreement can be achieved during the interinstitutional summit on 19 March. I formally urge the Presidency of Parliament to make the most of this opportunity and to be prepared for a political conclusion next week. The Commission, for its part, is genuinely ready for this.
General Morillon asked for information on the budget heading and research related to defence. We are exploring the possibility of financing military research outside the Sixth Framework Programme for research but we do not yet have a definitive answer on this matter. I have pointed out the need for a debate - it would be useful to discuss the issue and we will submit solutions as soon as possible.
My final points are in response to the questions raised by Mr Swoboda, in other words what he described as the imprecise debate on objectives, on the Balkans and the Mediterranean. The Commission has presented - and it is supplementing that material today - an extremely precise plan with a clear policy which treats the Balkans as part of Europe. They will be Members of the Union, but they will be subject to the same strict conditions which have applied to the countries of this first phase of enlargement. There are no discounts. The door will be open when they approach it, but they will only be allowed to come in when they are ready. There is absolutely no leeway on this.
I agree with what Mr Swoboda said regarding the issue of the visa policy - which he described as stupid - not because we do not need to be rigorous in protecting the Union's borders but because I genuinely feel that it is a policy which is in need of a complete overhaul. Indeed, in many cases, criminals have no trouble at all obtaining visas whereas, for normal citizens, this is often a tedious process which is not matched by greater controls, and I am saying this precisely because I have seen how the visa policy is applied in practice. What we need is not, I would stress, to reduce the protection of our borders but, on the contrary, to increase it and make it more effective and focused.
Finally, Mr Caudron's last point: the Commission displays unwarranted optimism in its report. We are in an extremely difficult situation in which everything is falling apart. I want to make it quite clear that we are fully aware of the difficulty of the situation, of the tragic events taking place, but we are also aware of the huge importance of maintaining a balanced approach which takes all the factors into account, of the need to give maximum consideration to the work of the United Nations, of the fact that the new strategy genuinely calls for stronger, universally supported international institutions, with regard to which Europe's role is indispensable.
I believe that there may well be an extremely serious crisis in the coming weeks, but I am deeply convinced that this very crisis will reveal the indispensable role of the European institutions. Europe alone has succeeded in uniting with peace as its top priority, introducing and implementing a new concept of national interest and relating it to the common interest, behaving towards the countries which support it with openness and displaying, I would say, a new insight into world relations and issues. This cannot go unnoticed. Clearly, at a time of crisis such as this, people are not paying as much heed to us as we might like, but we know that we are sowing seeds for the future.
President.
 Thank you, President Prodi.
The debate is closed.
The vote will take place at 12 noon.

President.
 The next item is the report (A5-0046/2003) by Mr Wynn, on behalf of the Committee on Budgets, on reform of the budgetary procedure: possible options in view of the revision of the treaties [2002/2271(INI].

Wynn (PSE)
Madam President, the Committee on Budgets decided that it would be wise to draw up a report on this subject. As a consensus could not be reached on the person to draft it, it decided that the Chairman of the committee should also be the rapporteur and I was left with the wonderful task of putting this report together. Because of that, I am wearing three hats at the same time - if that is possible. I wear one hat as the rapporteur and reflect the wishes of the committee in the way it has voted and amended the original draft. I wear another hat as the Chairman of the committee, thereby keeping an eye on the rapporteur. I wear my third hat as a British Labour Member who is at odds with a number of amendments from his own political family, the PSE. It has not been easy trying to put those three together.
It is fair to say that the only change I attempted to make to this report was to try to merge Paragraphs 6 and 8 to make it more coherent. However, I failed to achieve a consensus amongst the political groups and, therefore, the report stands as it is.
If I could change those hats - which I cannot because I am wearing my hat as the rapporteur - and if I were speaking as a British Labour Member, then I would approve Mrs Buitenweg's text as it reads well, it is simple, concise and, in particular, it does not make any big deal about own-resources! However, I would run a mile - well perhaps I could manage half a mile - from the amendments by the PSE Group! Let me make it absolutely clear that I am not speaking as a British Labour Member and, therefore, I cannot say those things. I have to wear my hat as the rapporteur and speak as the rapporteur, knowing full well that the Chairman is keeping a watchful eye on what I say.
In fairness, the report is acceptable to all the political groups. The vote was almost unanimous in committee, but there are one or two small points of disagreement on own-resources. That is why the PSE Group has tabled two amendments.
What we are all agreed upon is that the budget procedure needs to be simplified. That is quite clear. The own-resources system in this age of transparency is completely opaque and no one outside the Committee on Budgets or the Budget Directorate-General understands what it is about and how it is made up. Codecision is needed and, therefore, compulsory and non-compulsory expenditure need to be eradicated. This is stated quite simply in the first three paragraphs of Mrs Buitenweg's report. We need to reform, update and simplify our procedures. There is a need for the budgetary system to be more transparent, comprehensive and democratic, and the codecision procedure should apply to all legislation, including the Financial Regulation and the budgetary procedure. Under those conditions, compulsory and non-compulsory expenditure would disappear.
I hope when we vote on this - I am sure the vote will be successful - that we can send this along to the members of the Convention and that our Parliament representatives on the Convention can present this as Parliament's position for the future.

Schreyer
Madam President, ladies and gentlemen, the European Union's Budget exists to finance its policies and its institutions. That sentence should be printed at the head of the financial part of the constitutional treaty that will be our future constitution, for it is self-evident that this should incorporate a financial constitution in the form of a chapter devoted to finances. That is indeed provided for in the outline of the constitutional draft on which the Convention is working.
The chapter on finance should specify the most important budgetary principles and lay down the principal instruments, principles and, above all, rules whereby decisions are to be reached, as regards both outgoings and receipts. The financial constitution would thereby lay down Parliament's budgetary rights. The Convention must come to treat this as a core point. A parliament's budgetary rights are a yardstick indicating the degree to which a system is democratic, and it is the Commission's opinion that the time has now come for the European Parliament to be accorded full budgetary rights.
I congratulate the rapporteur, Mr Wynn, on the competence and extensive experience with which, as chairman of the Committee on Budgets, he has even-handedly set out the core points in his report and put forward proposals for the future constitution. I also congratulate him on his ability, so to speak, to wear three hats at once!
In Budget matters, Parliament and the Commission cooperate so closely that it is not surprising that a very large number of Parliament's proposals are identical with those put forward by the Commission or tend in the same direction. Among these is the principle that the Budget's receipts and expenditure should balance and that expenditure should not be allowed to be funded from credit. Another is the proposal that the multiannual financial perspective should be incorporated into the constitution as an instrument; the consequence of this would be that, in future, the multiannual financial perspective would no longer be founded on an agreement, but would become a law enacted jointly by Parliament and the Council on the Commission's initiative. Even when it comes to the proposal that the European Development Fund should in future be an integrated part of the Community Budget, there is complete agreement.
On the subject of the Community Budget's outgoings, let me also address an issue that has not yet been discussed in the Convention, but is on the agenda, and that is whether or not the future constitution - like the present Treaty - should exclude the possibility of military expenditure being borne by the Community Budget. Is there not much to be said for the idea that, where Petersberg tasks are undertaken jointly, the costs resulting from these joint operations should be borne by the Community Budget?
That the Community Budget should be funded from own resources is a firmly-embedded principle about which there is no debate, but does the present financial structure reflect the principles of transparency? Are our financial arrangements sufficiently autonomous; is it enough for Parliament to be able only to give an opinion on the own-resources resolution? The Commission's view on all these questions is that, no, what we have at present is not enough, and change is urgently needed.
When taking decisions on the own resources, it follows that the sensitivities of the Council and of the national parliaments must also be taken into account. Even so, the European Parliament should be accorded the right of codecision in this area too. The financial structure should reflect the fact that the EU is a union of Member States and of citizens. The Commission has therefore, in its proposal, advocated more direct involvement in financing the European Budget.
If I may turn to the Budget procedure, the Commission shares the position stated in Parliament's report, that the Budget procedure should be simplified and resources concentrated. The Commission should submit a draft to Parliament, and the first reading in Parliament should be followed by one reading in Council, followed by a consultation and the second reading in Parliament. If this procedure were to be adopted, the amendment of Council resolutions would require a super-qualified majority in Parliament.
There is also full agreement between the positions of Parliament and the Commission as regards the abolition of the distinction between compulsory and non-compulsory expenditure, a distinction that could not, in any case, be made clearer to the public and justified to them. I really do hope that there will be absolute consensus in the Convention, and that this distinction and the consequent curtailment of Parliament's budgetary rights will become a thing of the past.
The constitution's financial chapter should describe the whole of the Budget process in simple words and with unambiguous rules. It should therefore also refer to the implementation of the Budget and specify not only the Commission's responsibilities but also the Member States' obligation to cooperate. It should give a fixed place to the discharge for the Budget, and impose on the Community and the Member States the obligation of safeguarding the Community's finances against fraud. It should, with this in mind, at last enshrine the possibility of instituting the office of Public Prosecutor at Community level. The public expect Community assets to be able to be protected effectively and fraud to result in criminal prosecution.
The Convention now affords us the opportunity to establish new rules, appropriate to the Union's development, for the European Budget, which is an important Community instrument. This debate is being held just at the right moment, as the Convention is at this very moment working on the financial chapter; the Convention should adopt this important report by Parliament, and the Commission, in its proposals to it, will be putting forward clear principles and provisions that will, in particular, put the case for Parliament to enjoy full budgetary rights. Thank you for your attention.

Garriga Polledo (PPE-DE).
Madam President, Commissioner, ladies and gentlemen, I must congratulate Mr Wynn on his work as both Chairman and rapporteur. His is an excellent report. I am delighted it has been favourably received by all the political groups. I should like to point out to Mr Wynn that even as disparate a group as the Group of the European People's Party (Christian Democrats) and European Democrats only intends to table a single amendment. This is an indication of the scale of our effort to achieve consensus and support the report.
Further, my group strongly supports adjustment of the current system of distinguishing between compulsory and non-compulsory expenditure. This has now become a common position of Parliament. It should always be taken into account when specific types of expenditure can be guaranteed, notably in the case of agriculture. We endorse most of the proposals put forward by the Convention's working groups seeking to ensure the principle of a dual budgetary authority: Parliament and Council.
The Group of the European People's Party is of the opinion that the most effective way of ensuring this comes about is to formalise a balance between both branches of the budgetary authority. The budget would be adopted by a codecision procedure adjusted to this specific case. In the event of failure to reach agreement, the Council would have the final say on income and Parliament on expenditure.
As regards the financial perspectives, we believe it is imperative to endow them with greater flexibility. This would ensure an effective response to unexpected situations. Unduly rigid provisions have sometimes served to safeguard expenditure. On other occasions, however, such rigidity has hindered more effective allocation of resources.
We fully endorse the proposal by the Convention's working group to include financial perspectives in the treaty, together with provisions on discipline and budgetary cooperation. In the interests of providing continuity regarding financial decisions, financial perspectives should cover the five-year term of Parliament and the Commission.
Finally, reform of the budgetary procedure must be based on simplification with a view to greater democratisation, legitimacy and transparency. We therefore fully endorse the proposal to do away with first reading in the Council, as this seems to be consistent with the objective of simplification.
Further, we reject the amendments leading beyond this debate, as we wish the document presented to the Convention to enjoy the fullest possible support of the House.

Colom i Naval (PSE).
Madam President, only a few stalwarts are in the House at present. Nonetheless, history has shown that the budget is the cornerstone of representative democracies. They can only flourish if Parliament controls the sovereign's expenditure.
We are on the point of adopting the first European constitution. The Union has been in existence for 46 years and budgetary powers have remained unchanged for the last 30. I therefore believe updating is imperative. Several points are now obsolete. In addition, if the treaty were applied to the letter it would not be in line with the reality of present day budgets. Mr Garriga Polledo referred to budgetary perspectives a moment ago. There is no provision for these in the treaty, though the Council often seems to be unaware of that fact.
Ladies and gentlemen, the constitution must encompass the budgetary process and own resources. The mantra of seventeenth century revolutions was 'no taxation without representation'. Precisely the opposite applies in the European Union. There is strong democratic representation in the form of this House, but taxation is not approved democratically.
Essentially, the own resources system amounts to national contributions by another name, even though these are legally the Union's own resources. This cannot be allowed to continue. Resources should henceforth come directly from the citizen. The citizen would then understand that taxes are destined to the Union's budget. This is a basic feature of democratic responsibility. Otherwise, Finance Ministers will go on collecting the money and the Community will go on spending it and the reasons will remain unclear. This is bad for democratic control.
It is therefore necessary to move towards a system enabling this connection to be made without increasing the total tax burden on the citizens. Personal and possibly progressive taxation should be introduced. It would then no longer be possible to allege, as is often the case, that unemployed citizens in eastern Germany are subsidising large landowners in Andalusia. Please excuse this crude simplification. The result is unhealthy populism. It is essential to ensure that it will no longer be possible to distinguish between the various countries' contributions under any future financial system.
A citizen's contribution should be based on his or her personal resources. It should not depend on his or her place of residence. In my view, this must be a key feature of the new approach, that is, of the new way of tackling the system of resources.
Madam President, this is the main point the Socialist Group wishes to make. Other honourable Members will speak on further aspects of our stance.

Buitenweg (Verts/ALE).
The rapporteur, the chairman of our committee and my esteemed fellow-Member from the British Labour Party have really given all groups ample opportunity to contribute their ideas and to attempt to reach a compromise. I give him my most sincere thanks for that. Nevertheless, my group is not completely satisfied with the end result. We have chosen not to table any amendments, because it would result in a kind of hotchpotch, but instead to table an alternative resolution. We have opted to do that precisely because absolute clarity is necessary when it comes to establishing the form the budgetary procedure of the future should take. For example, we also wanted to make it very clear right from the outset how competences should be divided up. The Council and Parliament should negotiate with each other to reach common agreement both on the structure and the ceiling of the financial resources for the EU budget and on the annual or multi-annual expenditure. Should the negotiations fail, the Council would simply have the last word on revenue and Parliament on expenditure.
In our resolution, we also keep repeating the necessity of having codecision powers in all legislation. It is all very well to argue for an end to the distinction between compulsory and non-compulsory expenditure, but if we do not also have the power or codecision over the legislation, we are often left empty-handed. Then a situation can arise in which we do have codecision over agricultural expenditure but in which we are obliged to simply hand out money to farmers because they have a right to it under European law. In addition, the judgment of the Court of Justice on the legal basis has taught us that we cannot take any budgetary decisions in our own right without a legal basis.
I should like to conclude that budgetary codecision is of no benefit to us as a Parliament if we do not have legislative codecision. The two matters must go hand in hand.

Hyland (UEN).
Madam President, Mr Wynn's report is consistent with the very high standard we have come to expect from him in this House. However, he will understand if, from my group's perspective, I cannot go along with the suggestion that we abolish the distinction between compulsory and non-compulsory expenditure. I signal openly to the rapporteur that I will seek to remove this suggestion from what, as I have already said, is otherwise a very constructive report.
The distinction is there for one simple reason and it has served its purpose well down the years. That reason is to depoliticise decision-making when it comes to the agricultural budget. Farming is perhaps the industry in the most precarious position in the European Union at present. There are onslaughts on farm income from left, right and centre. I will not attempt to outline my objection to the CAP reform proposals in today's budget debate, but I wish to make one very short and simple point: farmers need to plan ahead and they need policy stability. Exposing the common agricultural budget to the vagaries of annual political battles in the European Parliament will wreak untold havoc on farm income and on the viability and competitivity of the European farm sector vis-à-vis the world market.
I appeal to the House to consider this when voting tomorrow. Farm income in Ireland and many other Member States is very much dependent on the direct income support from the European Union budget. Stability arises from the fact that such expenditure has hitherto derived from legally binding assurances and we must continue to give these assurances.

Piscarreta (PPE-DE).
Madam President, ladies and gentlemen, under the process of revising and simplifying the Treaties, which is currently being debated in the Convention on the Future of Europe, the European Parliament has taken the opportunity to apply itself to the reform of the European Union's budgetary procedure.
In fact, year after year, reform after reform, the budgetary procedure has been amended on an informal basis, by means of political agreements between the various institutions involved. These informal amendments have rendered the current text redundant and obsolete. The next constitutional Treaty must contain articles covering the principles that govern the budget and the procedures for approving it.
As a contribution to the debate on this report that the Committee on Budgets has presented on its own initiative, I wish first of all to congratulate our Chairman and rapporteur, Terence Wynn on his commitment and on the exemplary quality of his work.
I wish to express my full and unequivocal agreement with the proposals for reform that have been tabled. Firstly, because I believe we must seize this opportunity to review the issue of the European Union's funding. More Europe means, amongst other things, more money. The contribution of the Member States must be appropriate and in proportion to the objectives that the European Union wishes to achieve. It is entirely utopian to set objectives, such as those of the Lisbon Summit, which uphold the current financial framework. It should be added that the European Union itself must undertake a thoroughgoing study into its own resources for funding the EU budget. Secondly, because I can see that, in addition to these new challenges, a new reality is approaching: a European Union with 25 Member States. In this context, the Structural Funds will reveal their fundamental importance, on the one hand, to achieving economic and social cohesion in the new States and, on the other, to continuing the progress that has been made in the current Member States. Thirdly, because I believe that the distinction between compulsory and non-compulsory expenditure and their respective procedures has become artificial. I am therefore in favour of a complete revision of the procedures, giving the European Parliament greater power to act by means of the codecision procedure, thereby achieving an equal footing with the Council.
In this context, budgetary expenditure for the common agricultural policy (CAP) would then be studied by the European Parliament under the codecision procedure. If it is adopted, this measure would represent an historical development for the European Parliament, which has been forced to remain at a distance in political terms from the CAP since its inception, despite the fact that the CAP today accounts for more than 50% of the EU's total budget.
Greater involvement of the European Parliament in the CAP can only be positive for farmers and for rural development. This will provide greater control over the use of funds. I would remind you that every year, enormous sums intended for the CAP end up being refunded to the Member States because they have not been properly used. It is also worth adding that the CAP is becoming increasingly diffuse, incorporating new dimensions, such as rural development, conservation of the environment and food safety and quality, and consequently requires funding that corresponds to this new state of affairs, which is of the utmost importance to European citizens.
Only last week, Eurostat published data that warrants our utmost interest: European citizens, including those of the future Member States, feel that the CAP's priorities should be food safety and support for improving rural life.
By the European Parliament having this greater ability to act, the economic, social and environmental interests of European farmers will be safeguarded.

Haug (PSE).
Madam President, Commissioner, our debate is being conducted under the heading of 'reform of the budgetary procedure', which is a modest title for an ambitious enterprise. It would probably be more appropriate to speak in terms of a reform of the financial constitution, for we want the Convention to produce a coherent draft for a constitution that will advance European integration. We want the Treaty to be underpinned by democratic legitimacy, to be transparent and effective, and to give the public unambiguous answers to their questions as to what the federation of states and peoples called Europe can - and must - achieve in the interests of its citizens. The European Union's Budget must enjoy the very same democratic legitimacy in its function of financing European policy.
What we urgently need, then, is not just changes to the Budget procedure, but a reform of our public finances, and what this will require is plain for all to see, encapsulated in our demand for all Budget areas to be subject to the codecision procedure - even decisions on the own-resources system, the structure of which is in need of fundamental change. Whilst it has to be admitted that the present system of finance works, it meets with criticism quite apart from its undemocratic nature.
Neither what we receive from VAT or out of gross domestic income can really be described as the European Union's own resources. The fact is that they are transfers from the Member States, and that is precisely the argument used by the Member States when the positions of net contributors are under discussion. It is not immediately evident to the public which taxes go towards financing the EU's outgoings. The proportion of what are termed traditional own resources is decreasing all the time, and the whole system is mutating from genuine self-financing into the transfer of lump sums.
Nor does what we call the British rebate have any rationale behind it any more, Madam President, Commissioner, Mr Wynn, and, wearing only my one hat - in my capacity as rapporteur for the PSE on own resources - I can tell you that, in that area too, the British rebate makes no sense any longer, any more than does its being funded in different ways by the other Member States. It should be abolished!

The structure of the Budget has ceased to provide any justification for it. Changes have had to be made in the structure of the European Budget's expenditure over the past fifteen years. Policies already in existence, such the agriculture policy, were reformed, and other policy areas were added, such as structural policy and pre-accession aid, and this renders obsolete the imposition of an unfair burden on everyone else by preferential treatment for Great Britain.
All this leads to the logical conclusion that we should introduce a tax to replace the former own resources, and that this should be done without imposing additional burdens on European taxpayers, who would, though, be able to see, at last, how they are funding the European Union.
Let us in this Parliament, then, not demand less than the Commission has already done, but, rather, join together in taking a great step towards greater transparency and democracy.
(Applause)

Guy-Quint (PSE).
Madam President, Commissioner, ladies and gentlemen, the main points of the report presented by the chairman of the Committee on Budgets, Mr Wynn, have already been described. We can all, therefore, understand its importance. Reforming the budgetary procedure is by no means a technical issue that can only be handled by specialists. Quite the opposite: it is an eminently political subject: it concerns our ability to give substance to European integration and demonstrate our solidarity through action.
I personally would simply like to remind the participants in the current negotiations of their responsibilities. That means going beyond the sterile little game of defending national privileges and territory in the short term. That kind of attitude never leads to successful negotiations, ending instead with lame compromises which, at the end of the day, do not satisfy anyone. It is time we looked to see where the true interests of Europeans as a whole lie. We need to create a virtuous circle where the concessions made by the various parties ultimately benefit everyone. If this state of mind is allowed to triumph, I think it will be possible to seize the opportunity provided by the Convention.
Let us therefore have the political courage necessary to demand a genuine reform which, I reiterate, includes, specifically, removing the distinction between mandatory and non-mandatory spending, establishing a European tax and laying down uniform rules for all the Member States. The Convention must establish a genuine codecision procedure, within which framework Parliament and the Council can work together as equals to handle all aspects of the Community budget and the other financial instruments available to European politicians. This method alone will make it possible to strengthen the democratic nature of the European budget decisively and to bring the citizens closer to our institutions, as we want with all our hearts.
President.
 Mrs Guy-Quint, I would congratulate you on having managed to speak calmly and clearly amid this hullabaloo.
The debate is closed.
The vote will take place at 12 noon.

Heaton-Harris (PPE-DE).
Mr President, yesterday we had a short debate in this House about a very serious matter: asking the Commission to respond in a debate to allegations concerning its Budgets DG. Unfortunately, it transpires that in that debate Mr Watson, the leader of the Liberal Group, factually misled the House and thereby influenced the House by indicating that the Director-General of the Commission's internal audit service, Mr Muis, was attending last night's meeting of the Committee on Budgetary Control to discuss this matter and therefore no debate was needed.
Mr Muis did not attend last night. In fact it is only because of pressure applied at last night's meeting by the PSE Group and the PPE-DE Group that he could be attending a meeting next week. Would Mr Watson like to tell us whether he deliberately misled the House, or is this just another example of British Liberal Democrats' inability to call failing Commissioners to account?

President.
I should point out to the Member that in the matter of accountability the ELDR Group has an excellent record in this House.
(Mixed reactions)

Watson (ELDR).
Mr President, it is an honour to be attacked by one of the Conservative Party's young Turks.
(Mixed reactions)
I gave the House information which I believed to be correct. In fact I said to the House that I 'understood' that Mr Muis was going to be at the committee meeting, but I am pleased that later on in that debate the Chairman of the committee herself said that she was unaware Mr Muis was going to be there, so the House was in no way misled. Had I had different information, I would have communicated it.

President.
The next item is the vote.
Request for consultation of the Economic and Social Committee - Representation of women in social partner organisations
(Parliament approved the request for consultation)

Request for consultation of the Economic and Social Committee - Appraisal of the experience gained by the ESC in evaluating the social and economic impact and effect on employment of the structural reforms carried out in the Union
(Parliament approved the request for consultation)
Recommendation for second reading (A5-0034/2003) by the Committee on Regional Policy, Transport and Tourism, on the Council common position with a view to adopting a European Parliament and Council directive amending Council Directive 91/671/EEC on the approximation of the laws of the Member States relating to compulsory use of safety belts in vehicles of less than 3.5 tonnes (10927/1/2002 - C5-0532/2002 - 2000/0315(COD)) (Rapporteur: Ewa Hedkvist Petersen)
(The President declared the common position approved)
Report (A5-0038/2003) by Hubert Pirker, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a regulation of the European Parliament and of the Council on drug precursors (COM(2002) 494 - C5-0415/2002 - 2002/0217(COD))
(Parliament adopted the text)
Report (A5-0029/2003) by Bill Newton Dunn, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a European Parliament and Council decision amending Decision No 276/1999/EC adopting a multiannual Community action plan on promoting safer use of the Internet by combating illegal and harmful content on global networks (COM(2002) 152 - C5-0141/2002 - 2002/0071(COD))
(Parliament adopted the text)
Report (A5-0030/2003) by Monica Frassoni, on behalf of the Committee on Constitutional Affairs, on the proposal for a regulation of the European Parliament and of the Council adapting the provisions relating to committees which assist the Commission in the exercise of its implementing powers laid down in European Parliament and Council instruments adopted in accordance with the procedure laid down in Article 251 of the Treaty (COM(2001) 789 - C5-0004/2002 - 2001/0314(COD)) 
Before the vote:

Frassoni (Verts/ALE)
Mr President, today's vote on these four reports concludes the long process of adapting the comitology system which came into force in 1987, a process which started in 1998 with the Commission proposal, continued with the adoption of the new Council decision in June 1999 and which we are, at last, concluding today by approving with these four reports the bringing of all the existing committees into line with the system which has been in force since 1999. This has been a mechanical and, I am sure, tedious project for the people who have dealt with the details and, on behalf of our institution, I would like to express my heartfelt thanks to them today. It has taken four years to bring the hundreds of committees into line with the new system and to prepare for the vote which we are about to take. This figure alone makes it clear that a great deal of work really does remain to be done if we are to give the Union a system for implementing its rules which is transparent, simple and helps to improve the as yet unsatisfactory way in which Community rules are implemented.
Parliament has worked furiously to make substantial improvements to the comitology system. I would, therefore, on this occasion, like to pay tribute to the patient, accurate work of the rapporteur during those years, Mrs Adelaide Aglietta, who succeeded in fully involving Parliament in the comitology discussions, which was no easy matter at that time. I am sure that the proposals on comitology presented last December by the Commission and the proposals in the recent texts submitted to the Convention are also the result of this work. Although, in 1999, it was not possible to achieve what Parliament has always wanted, namely parity with the Council and the option of revoking an implementing measure when it is considered to be contrary to the will of the legislator, this path now seems to be open. At that time, the intransigence and formalism of the Commission and the Council prevented us from achieving that result and we had to be content with a modest alarm bell system. Now, thanks, not least, to that year and a half of patient, sometimes obscure work, the Commission appears to have changed its position and the Convention looks set to overcome the bureaucratic reservations of the governments.
It is my genuine hope that the reports we are voting on today will soon be forgotten or superseded too, and that the mysteries of the comitology system will be confined to the history books.

President.
 Four years' work and one roll-call vote!
(Parliament adopted the text)

Recommendation (A5-0033/2003) by Monica Frassoni, on behalf of the Committee on Constitutional Affairs, on the proposal for a Council regulation amending Regulation (EC) No 1260/1999 laying down general provisions on the Structural Funds (11104/2002 - C5-0440/2002 - 2001/0313(AVC))
(Parliament adopted the text)
Report (A5-0031/2003) by Monica Frassoni, on behalf of the Committee on Constitutional Affairs, on the proposal for a Council regulation adapting the provisions relating to committees which assist the Commission in the exercise of its implementing powers laid down in Council instruments adopted in accordance with the consultation procedure (qualified majority) (COM(2001) 789 - C5-0091/2002 - 2001/0315(CNS))
(Parliament adopted the text)
Report (A5-0032/2003) by Monica Frassoni, on behalf of the Committee on Constitutional Affairs, on the proposal for a Council regulation adapting the provisions relating to committees which assist the Commission in the exercise of its implementing powers laid down in Council instruments adopted in accordance with the consultation procedure (unanimity) (COM(2001) 789 - C5-0092/2002 - 2001/0316(CNS))
(Parliament adopted the text)
Report (A5-0028/2003) by Xaver Mayer, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council regulation amending Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of Central and Eastern Europe in the pre-accession period (COM(2002) 519 - C5-0497/2002 - 2002/0227(CNS))
(Parliament adopted the text)
Report (A5-0035/2003) by Marcelino Oreja Arburúa, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a Council regulation on amending Regulation (EEC, Euratom) No 354/83 concerning the opening to the public of the historical archives of the European Economy Community and the European Atomic Energy Community (COM(2002) 462 - C5-0417/2002 - 2002/0203(CNS))
(Parliament adopted the text)
Report (A5-0056/2003) by Brian Simpson, on behalf of the Committee on Regional Policy, Transport and Tourism, on the external relations of the European Union in the field of transport (2002/2085(INI))
(Parliament adopted the text)
Recommendation for second reading (A5-0050/2003) by the Committee on Regional Policy, Transport and Tourism, on the Council common position with a view to adopting a European Parliament and Council directive on market access to port services (11146/1/2002 - C5-0533/2002 - 2001/0047(COD)) (Rapporteur: Georg Jarzembowski) 
Before the vote on Amendment No 48:

Piecyk (PSE).
Mr President, the committee agreed overwhelmingly on the need to restrict self-handling to ships' crew.
Now, though, we have the problem that these expressions are used very differently in the various translations, not only the German, but also the English and French versions. As I see it, knowing that the basis must be the German text, the most correct and tidy translation is the English one, which refers to 'regular seafaring crew', enabling Parliament to make it abundantly clear that we are not talking about what is done on land, but only about what can be done by the ship's crew, using their own equipment, and nothing more.
That is why I would like this made clear by the language used in the translations. 'Seafaring crew' and 'Schiffsbesatzung' would have the additional advantage over the expression used in the German version, in that 'seemännische' in German still has a very masculine ring to it, whilst 'Schiffsbesatzung' and 'seafaring crew' could be said to be gender-neutral, which would have an advantage in terms of gender mainstreaming.
(Loud applause)

President.
Before I turn to the rapporteur for advice, I have been informed that Amendment no 48, as you suggested, constitutes a linguistic amendment in several languages. It is an important linguistic clarification, but the primary amendment in this regard is Amendment no 13. My suggestion, if the rapporteur agrees, would be to vote on Amendment No 13 first and then to vote on the relevant parts of Amendment No 48 and the linguistic dimensions therein.

Jarzembowski (PPE-DE)
Mr President, I, too, think it would be right to vote on Amendment No 13 first, but I do believe that, in the event of Amendment No 13 being adopted - which I hope it will be - all the others will lapse. I do not see the need to vote on the others.
As regards the question of language, we should not be having a great debate about it right now, but should proceed as follows. The committee wants - as, I assume does this House - to delete the words 'regular land-based personnel' from the Council's version. Whatever is in the other part - 'seafaring personnel' - we do not want to change it, and it should remain in the text the way it is in the Council version, so that questions of language do not bring us into conflict with the Council. So what we are aiming to do is to delete the words 'regular land-based personnel', and we should approximate the terminology used in English, French, and so on to the Council's Common Position, as we should not deviate from that. Thus far, I believe that Mr Piecyk and I are of one mind without having to engage in great linguistic discussions.

President.
We will thus now vote on Amendment No 13.
Before the vote on Amendment No 16:

Ribeiro e Castro (UEN).
Mr President, I wish to ask whether, following the vote on Amendment No 13, Amendments Nos 56 and 57 should now lapse. Let me explain: the purpose of Amendment No 13 was to restrict self-handling to crew members. If I understand correctly, Amendments Nos 56 and 57 concern conditions for granting licences for port operators to undertake self-handling. This makes no sense in my opinion, however, when we are restricting self-handling to crew members.

President.
I put the rapporteur on notice that when we get to Amendments Nos 56 and 57 we will ask for his opinion.
Before the vote on Amendment No 45:

Watson (ELDR).
Mr President, my group believes that this amendment should not fall even if Amendment No 24 is adopted.

Jarzembowski (PPE-DE)
Mr President, this amendment is redundant, as sentence 2 of Amendment No 24 makes provision for the eventuality of an appeal at law. The reference therein to Article 17 (3) of the directive is final, and so we cannot now vote on any alternative options. There is no doubt in my mind that this amendment must lapse.

Sterckx (ELDR).
Mr President, I do not agree with the rapporteur. I think that the amendment can indeed supplement the amendment by the Committee on Regional Policy, Transport and Tourism that has now been approved, and that it is a more precise statement of the content of the first amendment.

President.
 The rapporteur seems adamant. My ruling, therefore, is to go with the rapporteur and rule against Amendment No 61.
(The President declared the common position approved as amended)

Report (A5-0039/2003) by Jan Mulder, on behalf of the Committee on Budgets, on the guidelines for the 2004 budgetary procedure (2003/2001 (BUD)) Section III - Commission
(Parliament adopted the resolution)
Report (A5-0041/2003) by Neena Gill, on behalf of the Committee on Budgets, on the guidelines for Sections II, IV, V, VI, VII, VIII (A) and VIII (B) and on the European Parliament's preliminary draft estimates (Section I) for the 2004 budgetary procedure (2003/2002(BUD)): Section I - European Parliament; Section II - Council; Section IV - Court of Justice; Section V - Court of Auditors; Section VI - Economic and Social Committee; Section VII - Committee of the Regions; Section VIII (A) - European Ombudsman; Section VIII (B) - European Data Protection Supervisor 
Before the vote on Amendment No 8:

Dover (PPE-DE).
Mr President, when we, in the PPE-DE Group, tabled Amendment No 4 we added the words: '... expects the legislative procedure to be concluded by the end of June 2003 at the latest'.
I suggest that Amendment No 8, by the PSE Group and others, is split so that we have the first section from the start, 'welcomes the fact that the Commission has presented ...', down to the words '... in the Commission's budget' as the first split. The second split should be the remainder of that amendment.
We would support the first part and oppose the second. That split would then be followed by a third vote - it need not be a roll-call vote - which would take up our words which stand alone from the rest of it: '... expects the legislative procedure to be concluded by the end of June 2003 at the latest'.
I ask for your permission, Mr President.

Gill (PSE)
- Mr President, the proposed deletion does not make sense. There is no reason to have the remainder of the paragraph as it has been suggested. That is a matter for the Committee on Constitutional Affairs to deal with. The reason we have a reference here is to try to take a decision as to whether, under the proposal from the Commission, the funding should be moved to Parliament's budget or not. I do not think it should be moved to Parliament's budget, in the interests of transparency and accountability and also because it has cost implications.
It is important that we leave it in the Commission's budget. Therefore I suggest that we support Amendment No 8 as it stands.

Frassoni (Verts/ALE).
Mr President, just on a point of order, Mr Dover appears to have requested a split vote, and there are rules governing that sort of procedure. Therefore, if it can be done, that is all well and good: it will be a precedent that we should follow.

President.
Thank you for your cautionary advice, Mrs Frassoni.
(Parliament adopted the resolution)

Report (A5-0046/2003) by Terence Wynn, on behalf of the Committee on Budgets, on reform of the budgetary procedure: possible options in view of the revision of the treaties (2002/2271(INI)) 
(Parliament adopted the resolution)
President. That concludes the vote.
EXPLANATIONS OF VOTE

Foster (PPE-DE)
. It is now 20 years since it became compulsory in Britain for car drivers and front-seat passengers to wear seat belts. That law has saved an average of 7 lives every day. Yet lives are still being needlessly lost because those rules do not apply to coach passengers.
Too often the European Parliament becomes bogged down with regulations which do little to help our constituents. This directive is our chance to make a real difference - to reduce the tragic waste of lives lost on our roads.
That is why the British Conservatives welcome this report and congratulate all of those who have helped to bring forward these long-overdue measures.
However, we are disappointed that the proposals do not go further. It is time that the safety of children on school buses was given the consideration that it so urgently needs.
It is unacceptable that children are being taken to school on buses without seatbelts and that many children are forced to stand due to there being too few seats.

Ribeiro e Castro (UEN)
Naturally, I fully support this report. Firstly, because I believe it is crucial and of the utmost importance to reduce the number of fatalities on Europe's roads, which today stands at around 45 000 per year and mainly because I am convinced that the compulsory use of seatbelts has made a positive contribution to reducing these tragic figures. It is indeed bizarre that in the third millennium, road accidents are the main cause of death amongst children. As a Portuguese citizen, I am particularly concerned to note the fact that my country, together with Spain and Greece, is responsible for a significant share of Europe's total number of fatalities.
As the rapporteur states, this proposal must be seen simply as an integral part of a broader action plan. In this context, I think that this plan in particular could be linked with European transport policy and seek for example, to provide safer alternatives to road transport as swiftly as possible. Furthermore, I believe it is crucial to invest in implementing genuinely preventive measures since, although the safety belt is an important measure, it serves only to minimise the effects of accidents. I am referring, in particular, to improving road signage, to stepping up passive protection, to monitoring...
(Explanation of vote abbreviated in accordance with Rule 137(1) of the Rules of Procedure)

Coelho (PPE-DE)
. (PT) Drugs are one of the issues of greatest concern to European citizens. Combating drugs requires a European dimension that includes the immediate adoption of legal instruments against the manufacture and trafficking of drugs, cooperation with producer countries and the promotion of preventing and combating drug addiction.
Mr Pirker's proposal responds to the steady increase in the production and trade in synthetic drugs. It is a matter of concern that most illegally produced synthetic drugs originate in Europe - according to data compiled in 1999 by the Swiss Federal Criminal Investigation Office, the Netherlands alone accounts for more than 50% of world production.
There is an urgent need for effective and rigorous control of the manufacture and sale of substances which, whilst also being chemical products with legitimate applications, are frequently diverted to the illicit manufacture of narcotic drugs and psychotropic substances. This does not apply to the legal trade in these substances, specifically the manufacture of medicines.
I support this proposal, which transforms the current directive into a Regulation, allowing legislation to be simplified, making it easier to implement - in a uniform and concurrent way - (which is even more important in the context of enlargement). The main aim is to monitor the trade in drug precursors in a harmonised way and prevent their misuse for illicit drugs production, through closer cooperation between the competent authorities and economic operators (who should immediately notify the authorities of unusual orders or transactions), which must be extended to substances that have not to date been included on our lists.

Ribeiro e Castro (UEN)
. (PT) I agree with this report first of all because I am extremely concerned at the fact that Europe is described as the main source of illegally produced synthetic drugs. As if this were not serious enough, reports from international bodies such as the International Narcotics Control Board (INCB), have also revealed that the production of and trade in synthetic drugs continues to increase.
Consequently, the way effectively to combat drugs lies, primarily, in effective precursor control. There are, however, some obstacles to this control and it cannot be undertaken simply by prohibiting the use of these substances. Precursors are not used purely for illicit drug production, which means that ensuring effective control will entail some sacrifice on the part of medicine manufacturers, for example. I feel that the report has achieved a reasonable balance on this point.
Lastly, I believe it is equally crucial to adopt measures on Internet sites that promote the sale of these substances and provide information on how to produce them.

Ribeiro e Castro (UEN)
. (PT) I have voted in favour of all of these four reports by Mrs Frassoni, despite some difficulties that this matter raises. Indeed, the use of comitology must be marked by greater transparency in the work of the various committees, focusing especially on the need to provide the EP with the agendas for and summary records of committee meetings, lists of participants, draft implementing measures submitted to the committees, provisional calendars of meetings and details of the outcome of votes.
Furthermore, all committee documents, with the exception of confidential documents, of course, should be accessible to the public.
I therefore agree with the assessment made by the Committee on Constitutional Affairs stating that it is not the intention of the European Parliament to usurp implementing powers pertaining to the Commission: what it is actually seeking to do is to introduce a system that will enable it properly to exercise control and, if necessary, to contest an implementing measure with which it does not agree when this falls under the codecision procedure. This is the only way of ensuring that the legislative process and Parliament's powers as co-legislator are fully respected.

Boogerd-Quaak (ELDR).
Mr President, it is very good to see you again, and I hope to visit you again in person in future. I am very pleased that you are now President of Parliament, but I should just like to talk about this directive. My group, or at least D66, voted for this directive to provide for the possibility of fair competition in ports and to prevent social dumping. That means that all parties, including self-handlers, must have the required high social standards and professional qualifications. In addition, the Member States and the port authorities, in particular, must lay down conditions in the field of safety and environmental protection. What is important is that the Council and Parliament draw up and present the directive in such a way as to rule out the possibility of social dumping, and also the possibility of rigid protection of one of the parties, and I hope, therefore, that the negotiations are productive.

Howitt (PSE).
Mr President, the ports of Harwich, Felixstowe and Tilbury are in my constituency. Hundreds of dockworkers are concerned today about this directive, one I believe was never required in the first place, mistaking, as it does, competition within ports for the real aim, which should be competition between ports. Nevertheless I am very proud that the European Parliament has passed amendments ensuring that action is taken against unfair public subsidies, that pilotage is excluded for good safety reasons, and - perhaps most important - that the new providers have to protect workers' rights properly and work under the EU flag, not one of convenience.
Above all, with a 36-year phase-in period where there is major investment, I believe that no dockworkers currently working in Harwich, Felixstowe or Tilbury need have their jobs affected for their lifetime. I call on those involved in the conciliation to stick resolutely by Parliament's amendments, so that we can ensure that the safety of our docks and the jobs of our dockworkers are put first.

Alavanos (GUE/NGL)
 On the pretext of creating a single operating framework and providing better port services, the private sector is being paid to take over a sector which is still being run as a public utility.
Existing ports are being given the opportunity to start providing more services in any sector they deem profitable, in contrast to the public administration and central service provider which takes care of necessary - if unprofitable - activities.
Under the new system, terms and operating licences will be the preserve of a decision-making centre, which will be different from the past port services provider, because the same agency cannot act as both service provider and port manager.
Corporations providing port services must comply with transparency requirements in their financial dealings with the public authorities. However, there is no evidence of any such obligation on the part of the private sector.
The directive specifically mentions staff. Under Article 6.5, the service provider has the right to employ personnel of his own choice, but no reference whatsoever is made to qualifications or training.
What we want are port services which operate transparently, which provide the same standard of service to everyone, as well as employment rights for workers, environmental protection and safe ports.

Darras (PSE)
. (FR) The aim of the directive, which is to establish common rules for sea ports in order to increase their role in terms of transport and give them pride of place in intermodality, by means of transparent access to port services, must not be achieved regardless of the cost, in other words by forsaking a high level of maritime safety, effective environmental protection and satisfactory employment conditions for workers in this sector.
The directive under examination, however, calls into question the social rights of workers, the subject of self-help being the paradigmatic example: it would allow self-handling to be entrusted to 'land-based personnel' employed by shipowners, which would probably lead to this work being taken away from professional docker workers and other qualified technical personnel and given instead to cheaper, unqualified workers. The risks of social dumping are clear.
I shall therefore vote to reject this directive, a position that will certainly not be shared by the majority of the EP. That is why I shall then vote for any amendments that seek to increase the protection of workers provided for by the text.

Krivine and Vachetta (GUE/NGL)
. (FR) Parliament, the Council and the Commission continue in and confirm their desire to liberalise port services. The small amount of progress that has been made, such as deleting pilotage services from the directive, does not reverse the process that is underway and we fear that pilotage services will only enjoy short-term respite. If liberalisation - a synonym for abandoning public service missions, combined with social regression for workers and serious violations of environmental and safety standards - is to fail, workers and users of port services must be rallied on a large scale.
The dock workers threatened by self-handling, in other words by the possibility for shipowners and charterers to use their own staff to load and unload their ships, have led the way by organising several European strikes and demonstrating in their thousands in front of the European institutions. We supported and still support their action. That is why we have voted to reject the directive. It will lead to environmental, social and human tragedies, just like the liberalisation of the rail sector. These disasters will no longer take place along our coasts, like the Erika and Prestige shipwrecks, but within the ports. In order to combat liberalisation, we must promote a public port service that is coordinated at European level and guarantees the highest possible levels of safety and social standards.

Martinez (NI)
Having opened maritime transport to ultra-liberal competition, with its known consequences: polluted beaches, French fishermen killed by a Norwegian tanker carrying chemicals, piloted by Sri Lankans, the European Commission is now going to deliver port services, from pilotage to dock work, into the hands of private services, in the name of competition between ports, competitiveness and cost reduction, as in the case of the air and rail sectors.
The opening of the market, which will apparently be limited to large ports, although we do not know whether that means those handling 3 million tonnes of freight or those handling 45 million, will, for example, include 'self-handling'. In other words the ship's crew, who I imagine will be underpaid workers from South-East Asia, a reservoir of new slaves to world capitalism at the service of social dumping, will be able to carry out dock work, all under a flag of convenience.
The debate is limited to ascertaining whether concerns for safety will make it possible to exclude pilotage and towage from port 'privatisation'.
That said, our dock workers in Marseilles, Sète and other large ports will be handed over to the pirates of ultra-liberalism. The destruction of port employment will be added to the destruction of fisheries employment. The rebellion and despair of these men in the face of a directive produced by the hawks of economic globalisation is understandable.

Meijer (GUE/NGL)
 - (NL) The ports between Hamburg in Germany and Le Havre in France, and all the Dutch and Belgian ports in-between, see the most competition of all ports. This is because together they serve largely the same extensive hinterland, including the German Ruhr district, through which flows of cargo can constantly move from one port to another. As a result, the transhipment costs per quantity of cargo are already lower in these ports than in America or East Asia. The effects of a ports directive, which aims to encourage competition in order to drive down the price of port activity, are the most far-reaching in precisely those ports. They cannot operate at still lower costs, and yet they are forced to do just that. In ports such as these, the risk of social dumping and deteriorating safety is much greater than where one port has a virtual monopoly over a smaller hinterland. The port or port town that has the strictest requirements regarding safety, environment, quality of work and working conditions loses the competition, and the worst port is the winner. Furthermore, the directive will force EU Member States to act contrary to obligations they have entered into within the framework of the ILO Convention. Opting for self-handling at second reading and declaring that votes on the obligations under the ILO Convention are not in order throws up conflicts for the third reading, and, after that, legal proceedings and strikes.

Pasqua (UEN)
. (FR) This directive is far from perfect - the States must be able to demand that the rules in force for land-based personnel should apply to seafaring crew carrying out self-handling activities cited in the annex to the directive - but it is welcome nonetheless.
The reluctance shown by some companies merely demonstrates a categorical rejection of the opening up of port services to competition. This autocratic logic is not just a rejection of the principle of a market economy. The formal declarations on maintaining public service obligations, the guarantee of jobs and the preservation of safety and the environment in ports - which are perfectly legitimate objectives that nobody is disputing - conceal the far less noble desire to defend monopolies, in particular trade union monopolies, that some believe to be untouchable.
The implementation of a large-scale project such as 'Port 2000' in Le Havre, the largest French port in terms of container goods trading, clearly shows that our ports and companies in the sector are not afraid of the introduction of a more competitive dynamic into port services. On the contrary, by equipping themselves with the infrastructure necessary to prepare for the future, ports will be able to meet the challenge posed by the opening up of the market and overcome it.

Piscarreta (PPE-DE)
. (PT) Following the shipwreck of the Prestige, concerns have been growing about maritime safety. I share these concerns because my country has a long coastline, which is highly dependent on maritime resources. For these reasons and because these problems also affect other countries in the European Union, the Jarzembowski report on port services warrants our full consideration.
With regard to the regulations on pilotage, I think that it makes sense to remove these from the scope of this decision. Every Member State must be able, for reasons of public interest, to maintain the current system, taking account of specific local characteristics.
This report is marked by the way in which it maintains a degree of balance between liberalising port services and demonstrates ongoing concern for social legislation on worker protection, maritime safety and environmental protection in sensitive regions. This balance has already been achieved in the liberalisation of air and rail transport.
With regard to social and labour legislation, the rights of workers in EU ports must be safeguarded. I therefore support the opinion of the rapporteur advocating greater protection for these workers, not forgetting the need to maintain qualified personnel in ports and insisting on measures for the training of crew members.

Queiró (UEN)
. (PT) We are broadly in agreement with the Commission's proposal for a directive on ports and infrastructures for maritime transport, which is intended to create or re-establish transparent conditions of competition for all EU ports, in the specific context of opening up the market to the various port services.
The services covered by this directive for towing, mooring, cargo-handling, including loading and unloading, do not warrant special attention. The issue lies in whether or not to exclude pilotage activities in those covered by this directive. Since I believe pilotage to be a job that requires considerable experience and which is extremely important to the safety of maritime traffic in ports, I agree with the majority vote achieved in this Parliament, which I supported with my vote in favour of the report.

Ribeiro e Castro (UEN)
. (PT) My vote is intended above all to highlight three points that I believe are crucial: firstly, what is known as 'self-handling', must not be surreptitiously subverted, opening the door to all types of opportunism and market distortion. Instead, it should properly be restricted to the ship's own crew and undertaken in conjunction with the competent port operator; secondly, the system of pilotage in ports must be kept outside the scope of the directive and reserved for national legislation; thirdly, it is crucial that the way is opened for clear rules on State aid in this field to be properly defined, as suggested during the debates on the Green Paper and on which, regrettably, the text of the directive still says very little. Lastly, where the directive makes significant economic amendments to the port operating system, I believe it is also crucial to provide for transitional systems that protect the rightful interests of those operators who have nevertheless accepted ongoing obligations imposed by national legislation and whose economic balance could suffer irremediably.

Sacrédeus (PPE-DE)
In general, we think that the proposal is balanced and constructive, with the exception, however, of the inadequately justified limitation upon self-handling.
Restricting, as now, self-handling to apply only to personnel on board a vessel and not to land-based personnel such as employees at a factory near the port, means that the legislation ignores how the business operates. The opportunities for competition within this area are in this way reduced. We have therefore chosen to vote against the committee where these aspects are concerned.
With regard to pilotage services, we agree with the proposal that the nature of these is such that they ought not to be covered by the directive.

Van Dam (EDD)
 - (NL) The reason for the port strikes is the section in the port package on self-handling, in particular. This also applies to the position of the pilots, the duration of concessions, social conditions for workers, transparency with regard to state aid and the freedom of ports to develop.
Admittedly, the common position is not perfect, but it does offer an adequate response to the provisions on the duration of concessions and the freedom of ports to develop, for example. It also takes pilotage services a step forward. The points remaining for discussion are the directives on state aid and working conditions for port workers, particularly focusing on the provisions with regard to self-handling.
As far as the first point is concerned, Parliament's amendments make clear what is expected of the Commission, and within what time limit.
The second point is more complicated. If self-handling is able to take place within excessively wide margins, there is a danger of it degenerating into cutthroat competition, with all the adverse consequences this entails. Unfortunately, the procedure does not give us any scope to prevent this at EU level. It is now up to national governments to do everything possible to eliminate distortions of competition on this point. Failure to do this could result in the spectre of inefficient port workers becoming a reality. That would benefit no one.
With all its - unavoidable - shortcomings, I accept Parliament's position; in order, in any case, not to give the Council a free rein and in order to spur the Member States on to action.
(Text abbreviated in accordance with Rule 137(1) of the Rules of Procedure)
Miranda (GUE/NGL)
. (PT) The rapporteur recalls the low level of payments set and accepts the trend of reducing the EU budget's share of Community GNI/GNP. Given this situation, with the systematic increase in priorities and with the savings policy that has been pursued - inseparable from the Stability Pact and which contains the systematic practice of cuts, freezes, call-backs, redeployment and reprogramming of budgetary expenditure - consequences that are damaging to the implementation levels of the EU's traditional priorities are inevitable, especially in the social fields and those of cohesion and cooperation. The very credibility of the budgetary process is also undermined.
We are now seeing further problems with defining priorities, such as that given to the Lisbon strategy, or to issues of immigration and asylum.
The rapporteur also concedes on the need for changes to national budgetary policy when he accepts the current framework of financial perspectives and even the existing limitations in internal and external policies. He does so to the point of contradicting himself, where Afghanistan is concerned, stating on the one hand, that he would not reduce support for other regions but then says, on the other hand, that he intends to evaluate the possibilities of redeploying the budget and of making it more flexible.
Furthermore, priority is still not being given to Palestine ...

Muscardini (UEN)
. (IT) We can only agree on the perspective presented: the priorities of the accession of ten new States and stability and sustainable growth cannot be denied or rejected.
The view of the immediate future is not as optimistic as might appear from the Commission's document, however. With regard to accession, considering everything that has happened in recent weeks between the President of a Member State and the candidate countries and considering the recent statements of the Chairman of the Convention regarding the danger that the Convention might not conclude its work within the timeframes laid down, our optimism is clouded by a misgiving which we hope is unfounded. Will we succeed in ensuring that the dates set for enlargement are observed? If they are not observed, many points of the strategy will be just wishful thinking.
The objective of stability is also a priority which must be pursued. We know how difficult it is to create all the conditions necessary to ensure stability and we must work to ensure sustainable growth. With the almost 5 million unemployed in the Federal Republic and with the negative rates recorded in many other countries too - both Member States and candidate countries - how can we be optimistic about these priorities?
(Text abbreviated in accordance with Rule 137(1) of the Rules of Procedure)

Queiró (UEN)
. (PT) The Copenhagen European Council confirmed the outcome of the accession process involving ten candidate countries and negotiations were concluded on the basis of a financial package totalling EUR 41 billion, which will enable the financial perspective to be adjusted and will form the basis of the budget for 2004, which also increased with the entry into force of the Treaty of Nice, on 1 February 2003.
We voted in favour of the report because, where internal policy is concerned, the text recalls that the completion of the internal market, the implementation of the Lisbon strategy and the strategy for sustainable development remain the European Union's three main objectives and will take on particular importance in 2004, when the new Member States start participating.
It is also to be welcomed that the emphasis is placed on measures supporting SMEs, as creators of employment and economic growth and also on the absolute need for the global war on terrorism.
This is, in short, a report that properly expresses the Union's political guidelines with a view to including them in the 2004 budget.

Bernié, Butel, Esclopé, Mathieu, Raymond and Saint-Josse (EDD)
We continue to object on principle to the idea of Community funds being used to finance European political parties.
Should the adoption of this draft still be imposed by the large groups, however, we consider that it would be vastly preferable for these appropriations to remain within the budget of the Commission, which would remain in charge of their implementation and would thus shoulder the responsibility for its initiative all the way, rather than offloading them onto Parliament's budget and perpetuating the confusion between parliamentary groups and political parties.
We have therefore supported Amendment No 8, but purely on this principle of budgetary technique and with a view to the resulting responsibility, but we are still opposed to the proposal as a whole.

Queiró (UEN)
. (PT) The 2004 budget will be the first in a European Union of perhaps 25 Members and we must emphasise the historic importance of the forthcoming enlargement, which will bring to an end the artificial division of Europe; until then, a considerable number of measures will have to be adopted in 2003 and 2004, to ensure that the European institutions obtain the necessary means with which to complete preparations.
I was particularly sensitive to the request made in the text for Parliament to adopt an ambitious approach to streamlining its operations and consequently its spending, whilst at the same time maintaining multilingualism and fidelity to its principles, since these form an integral part of the institution's democratic legitimacy.
It should be added that the report's idea of improving the technical assistance given to Members is a fine one; indeed Members must be given the best assistance possible in order to enable them to undertake their legislative and budgetary duties, whilst at the same time improving the performance of their work in order to minimise as much as possible the impact of staff being based in three different working places.
Although I do not agree with other points, specifically with the idea of the Commission's managing funds intended for the European political parties, a task which should be transferred to Parliament for obvious democratic reasons, the broad thrust of the report is to be welcomed as it was in ...
(Explanation of vote abbreviated in accordance with Rule 137(1) of the Rules of Procedure)

Andersson, Färm, Hedkvist Petersen, Karlsson and Sandberg-Fries (PSE)
We have today chosen to vote in favour of the report on a reform of the budgetary procedure. The report contains a number of important measures in the area of the budget. It is proposed, for example, that the distinction between compulsory and non-compulsory expenditure be abolished. We believe that there is no good reason for such a division. Clearly, Parliament must have influence upon agricultural expenditure too.
We support the proposal for making it simpler to move money between different categories of expenditure in the EU budget. That is an important measure for creating a system in which money is used more efficiently in the EU.
The report also points out that the rules governing the EU's own resources must be reviewed. We want particularly to emphasise that we support a system that is clearer than the current one and that is better at showing how much money is going into the EU. We are, however, completely opposed to a system that could lead to Parliament's being given influence over how much money is to be allocated to the EU. It is important that it be the Member States that decide upon the levels of funding for the EU and that Parliament have the last say on the money that is spent.

President.
That concludes the explanations of vote.
Exceptionally, Mr Fatuzzo is not here today to give an explanation of vote on behalf of the Italian pensioners.
(The sitting was suspended at 1 p.m. and resumed at 3 p.m.)

President. -
The next item is the report (A5-0062/2003) by Mr Mann, on behalf of the Committee on Employment and Social Affairs, on new proposals for employment strategy and social policy in the European Union [2002/2236(INI)].

Mann, Thomas (PPE-DE)
Madam President, ladies and gentlemen, it was three years ago that the European Council, meeting in Lisbon, decided on a thoroughly ambitious strategy, according to which the European Union was to become the world's most competitive and dynamic economic area by 2010, and was to do so on the basis of qualified knowledge. This was intended to achieve lasting growth, along with full employment, more and better jobs, and greater social cohesion. Were we too ambitious, too euphoric? Were not today's crises foreseeable even then? Eurostat tells us that we currently have almost 14 million unemployed. The primary causes of this are the failure to resolve structural problems in the Member States, such as bloated bureaucracies, the distortion of competition by the failure to remove subsidies, and extremely high unemployment among women, young people, older workers and people with disabilities. Official figures indicate that there are 4.7 million unemployed in Germany alone, the highest level for five years, and the wave of bankruptcies among its businesses and the high level of taxes and duties, which spare neither businesses nor private citizens, are set to reach record levels.
There is no doubt that the European employment strategy has achieved successes by coordinating national, regional and local employment policies. Although the subsidiarity principle has been adhered to, the continual expansion of the European employment strategy, from horizontal objectives to the Four Pillars, has led to constant reductions in its effectiveness. I agree with the Council and the Commission in their assessment that the new guidelines should be tightened up for the sake of greater efficiency. We need, above all, evidence of their having been transposed and of resultant changes in labour markets. Whatever the orientation in the medium term - the Commission proposed three years - it is my view that we must keep checking up on an annual basis whatever happens, so that there will be healthy pressure on the Member States, some of which have problems with implementing their National Action Plans. What we need is voluntary undertakings, of the same calibre, let me add, as the Stability and Growth Pact, and these elements must not then be altered in the way they once were when the stimulation of growth and investment are high up the agenda. Strict adherence to the Pact is the foundation for stability, for confidence on the part of the markets and the public, and so economic dynamism and employment are essentially dependent on it. The one is inseparable from the other. The new thing about the European employment strategy is the adherence to three priorities: firstly, getting as close as possible to the Lisbon employment rates of 70% for men and 60% for women up to and including 2010; secondly, improved quality of work, the direct effect of which is to increase productivity; and thirdly, the opening up of the labour markets to the vulnerable and those on the margins of society.
Jobs call for the right financial framework conditions. The tax laws of many Member States are inimical to enterprise and employment. Far from there being further increases in taxes, these should be reduced. Consumers and enterprises must have the burdens lifted from them, and administrative expenditure must be reduced. We must get back to job creation being worth it in financial terms. Reducing VAT on services up to the end of this year was the right way to go about it. I propose that there should be more mini-jobs subject to reduced taxation and levies, quite independent of full-time jobs rather as an alternative to them - as I am alleged to have said. It is always a matter of balance between, on the one hand, greater flexibility, and, on the other, long-term security.
Above all, small and medium-sized enterprises need favourable conditions, for they are, after all, the driving force behind employment, providing as they do 70% of all jobs and 80% of all traineeships. I have not contented myself with generalised commitments to support for SMEs, but have made very specific demands. They range from the making available of venture capital at favourable rates via favourable tax treatment for start-ups to the speeding-up of approval procedures, from networks for people starting up businesses to ways of freeing them from bureaucracy. Different experiences at national level meant that there was intensive debate on these proposals in the Committee on Employment and Social Affairs, but together we achieved compromises with some reservations. Let me, at this point, thank all the groups' shadow rapporteurs for their constructive suggestions. We learned a great deal together and from each other.
We can also expect employment to receive impetus from more flexible ways of organising work, such as contract work and part-time jobs, from which women benefit in harmonising work and family. We call on the Member States to do more to provide childcare facilities and tax benefits for the people who work in them. Flexibility is also of benefit to the long-term unemployed, to those starting work and to those with few qualifications, who can acquire new employment skills. Too little attention is paid to demographic change and the lack of specialists. The way people are treated when they are in their fifties is not acceptable; many of these, who find themselves laid off and excluded are willing and able to work, and want to learn more. They want more training and can take the strain. Experience is a bonus; it cannot be a defect.
One final thought: if this new European employment strategy focuses on the three priorities I have mentioned, we may well not have long to wait for effective changes in our labour markets, and so we will be taking a significant step closer to the Lisbon targets.

Diamantopoulou
Madam President, ladies and gentlemen, five months ago I presented the results of the evaluation of the European Employment Strategy to Parliament and Parliament passed a resolution approving the core results of this evaluation and the basic guidelines.
The presentation of the results was followed by an extended debate between all the European institutions. Broad consultations were also held with the social partners, so that the Commission could present the results of the debate together with specific proposals for future priorities and improved management of the Employment Strategy. As a result, the Commission presented a document in January containing a new approach to the Employment Strategy.
Basically, the new approach focuses mainly on implementing the Lisbon objectives. As Thomas Mann said, the situation is different, the economic situation is not auspicious, and this is having a significant impact on unemployment, with certain groups of the populace being harder hit than others. Thus, despite the positive evaluation of the results of the Employment Strategy, with reforms in all the Member States and ten million new jobs created between 1997 and 2001; despite the positive approach, there can be no doubt that we need to activate more policies and speed up the reforms.
In order to be able to focus more on Lisbon, we have set three basic objectives: full employment, labour standards and productivity and a cohesive labour market. I should like to emphasise that the gender dimension has been mainstreamed in all three objectives and in our priorities and specific reference is made to the particular conditions faced by women in the labour market.
Having agreed on the three basic objectives, we then come to the substance of the guidelines. Both Parliament and the Council called for fewer, simpler guidelines focusing more clearly on results. Our objective, therefore, is to cut the number of guidelines, if possible by half, and to articulate them around highly specific priorities. We have selected eleven priorities; the new priorities and those that have come up against the greatest resistance, in the sense that some countries accept them while others do not, are undeclared work and immigration. So we have three basic objectives and eleven basic priorities around which the guidelines on employment are structured.
We believe, in the light of experience over recent years, that the quantitative approach plays a very important part. In other words, the guidelines need to include quantitative targets, if policy is to be quantifiable, and governments need to be judged on the basis of specific targets. Our proposal therefore includes specific sectors which can be used as a basis for discussion and in which Member States can agree on European or specific national targets.
Another important point is partnership. The method of administering the procedure for the Employment Strategy does, of course, vary from one country to another. Each country takes a different approach, depending on its culture and on how the social partnership and local authorities are organised. However, the evaluation identifies certain points which are common to every country. The social partners need an enhanced role, the procedure needs to be advertised in order to increase awareness among as many citizens and agencies as possible and, of course, in the European and national parliaments, the territorial dimension of the strategy needs to be developed in the form of regional and local employment plans, civil society needs to be galvanised into action and, finally, parliamentary bodies need to be more involved in the procedure.
This last point brings me to timetabling. I should like to say from the outset that I understand perfectly Parliament's concerns this year, as far as approval of the guidelines is concerned, because this year is the first time we shall be implementing enhanced coordination of economic policy cycles and employment policy cycles.
In order to implement this coordination, which has been called for on numerous occasions, including in Parliament, we need four different stages. The first stage is to decide on the general guidelines for the strategy on employment and the broad economic policy guidelines at the spring Council. The second is to submit the guidelines as quickly as possible after that, as a package. This means that, once we have the spring Council's guidelines, the Commission will present a package of guidelines on both economic policy and employment. The third is to approve the guidelines; this needs to be done as quickly as possible, if possible at the June Council. The fourth, once these guidelines have been approved, is to draw up national action plans and the joint report on employment by the autumn.
Clearly, therefore, we are all under a great deal of pressure this year if we are to keep to this timetable, but may I remind you that we shall not be starting the debate in April from square one. The debate on the reform of the Employment Strategy started back in July last year. A very specific debate was held in Parliament, followed in January by the recent communication and I think that, if Parliament and the Commission work closely together, we should be able to overcome timetabling problems and coordinate economic policy and employment policy this year. This is very important if we are to avoid overlaps and ensure that one procedure does not take precedence over the other.

Pronk (PPE-DE).
Mr President, first of all, I should like to express my sincere thanks to the rapporteur for his report, which I see, moreover, as a courageous one. For the first time, some new ideas are raised, ideas which have not always come up in recent years and which also tie in somewhat with the new reality that we are now faced with, in the context of a less favourable economic situation than we have seen in recent times. That is why I find it a courageous report, and, moreover, it is not very politically correct on a number of points. I think that that is a good thing too, because if there is to be a genuine debate on employment, it cannot just be politically correct, and that is something I believe applies to this aspect as much as it does to others.
As I said, we are faced with a kind of economic slump. That is always bad news for employment, with unemployment rising, as a rule. In that case, we generally see unemployment among young people increasing more sharply than unemployment as a whole. That is because it is harder for young people to find a job than it has been in the past. The minute the situation suddenly improves, young people are the first to find a job. The minute the situation is less good, however, they are left standing. In order to prevent that happening, and precisely because we can see it coming, we should be focusing on this in particular. That does not mean that we should completely forget about the other groups we have indicated - that is, women and older people. On the contrary, you take the view that we should also continue with this, but I believe that young people need extra attention that they have not received in recent years.
I should now like to turn to the matter of comparisons. At present, unemployment in the European Union is approximately 2.5% higher than in the United States and Japan, but the differences are not as great as they seem at first glance. Luxembourg, the Netherlands, Austria, Ireland, Denmark, Great Britain and Sweden are doing better than the United States. The other countries are therefore doing somewhat worse. If, however, we look at the differences, that is very alarming. It is precisely for that reason that this policy and these ideas are so important. One cannot help but see that if a country has very high unemployment and this unemployment does not go down, something is not right. There are countries that have historically had high unemployment, whose unemployment is going down. On the other hand, there are other countries that have historically had low unemployment, whose unemployment is rising. This is especially the case if one part of such a country is doing well and another part is not. In Germany, for example, which is of course our greatest concern at the moment, there are states that are simply at the European level. How is that possible? That is a very interesting question. It is not a valid approach to only look at the countries, but also at the regions. That is the way to bring it together.

Van Lancker (PSE).
Mr President, Commissioner, ladies and gentlemen, to be frank, it gives me a bad taste in my mouth to be discussing a new employment strategy in the midst of an international crisis situation and maybe immediately before a war in Iraq, but it is perhaps important to do so. The Lisbon process must be kept on the rails even in difficult times.
On behalf of my group, I can tell you that the Commission's new approach to the employment strategy has been received very favourably in our camp. Increased stability in the employment strategy is indeed necessary. That does not mean that we must be less ambitious, but it does mean that, in future, we shall possibly have to concentrate more on depth and make the employment guidelines more results-orientated.
We also agree with the Commission that there should be more cohesion between the coordination processes. It is becoming increasingly the case that the broad economic guidelines are in practice playing the role of overarching instrument. In our opinion, however, that also means that the economic guidelines must take more account of the ambitions with regard to employment, the fight against poverty, the future of pensions, and health care. In our opinion, it also means that the economic guidelines should actually be economic and social guidelines, on which not only the Ministers for Economic and Financial Affairs express their opinion, but also the Ministers for Employment and Social Affairs, the Ministers for Education and possibly the Ministers for Science Policy. In our opinion, that means that, while the processes must run autonomously, a great deal more coherence is needed between the various political processes. That also has consequences in terms of content, because it means that, in our view, the economic policy must also stimulate economic growth.
Therefore, a lot more work must be done towards innovation, research and development, and investment in people. In the opinion of our group, this means that the Stability and Growth Pact must also fulfil its role as a growth pact and must enable counter-cyclical operation in the Member States and breathe life into the economy.
My group fully agrees with the Commission that greater coherence is also needed in the coordination in the social sphere; that is to say, between the pensions issue, the pension process, the poverty process and the health process. We should therefore like to lend our full support to the intention of the Greek Presidency to activate these processes and give them more continuity.
We fully agree that more attention should be paid to an effective implementation of the employment strategy. We must not let this strategy become a paper tiger. At present, the disparity between the Council's intentions and reality is still too great: not only with regard to the employment participation of older people, young people and migrants, but also as regards investment in people. For example, we see that there are serious shortcomings in businesses' training efforts and that people with low skills and older people are treated unequally. That is why we think that the involvement of all the stakeholders is very important. That is why we also say to the Convention that the open coordination method must be incorporated into the Constitution not only with regard to employment but also to the social process, in order to guarantee more democratic legitimacy and transparency.
My group thought that the Mann report was reasonably balanced, reflecting our main concerns, just as it came out of the Committee on Employment and Social Affairs. We have no intention of tabling any amendments, therefore. I have to be frank: the amendments that are now on the table threaten to distort the whole report. This is not, Mr Pronk, a question of political correctness or anything of the sort. In our opinion it is a question of the efficiency of this Parliament. A report like that, with a consensus in this Parliament, may not be sexy, but the intention is to present a report which applies to the whole of the Union and not just to one Member State, and which sets out guidelines for a common policy. Such a report does not lend itself to national political deliberations or ideological debates on specific points of this or that policy orientation. My group is therefore inclined to reject these amendments.

Jensen (ELDR).
Madam President, Commissioner, ladies and gentlemen, the spring summit of EU heads of state and government has been devoted to the development of the economy and labour market. It is, then, also only natural that the two topics be linked, since they are two sides of the same coin.
Success in employment policy is crucial to achieving the objective of economic policy. The fact is, moreover, that an economic policy that increases competitiveness and flexibility and so improves the economic incentives for creating jobs is the core of employment policy.
In addition, there are the factors so brilliantly emphasised in Mr Mann's report, which those of us in the Group of the European Liberal, Democrat and Reform Party are able to support and which we think will be improved by the amendments tabled by ourselves and the Group of the European People's Party (Christian Democrats) and European Democrats, amendments that we too shall of course support. Mr Mann's report emphasises that we must have a stronger commitment to training, to improved incentives for accepting and creating jobs and to less bureaucracy and more flexibility in the labour market.
Unfortunately, the common employment policy is seen, from the job figures and unemployment statistics, not to be an unqualified success. We are much too far from the ambitious targets set in Lisbon three years ago. It might be enquired whether they were too ambitious. No, they were not; but there are trend-setting countries that do not feel sufficiently bound by the promises. There has been progress in some areas, but this is overshadowed, I believe, by a general picture of too modest a desire to comply with the common objectives. I agree with the proposal you have tabled, Commissioner, for simplifying and clarifying the open coordination of employment policy with a view to having fewer guidelines. These are constructive reforms that have been presented, and I also think it good that we should have better coordination with the common economic policy.
Furthermore, we must also become much better at monitoring and ensuring that the Member States do in fact feel bound by the fine promises given at the Lisbon Summit, and this also applies to the large countries.

Schmid, Herman (GUE/NGL).
Madam President, when Mr Mann's report was discussed by the committee, many amendments were subject to major debate. There was disagreement over one area in particular, namely the conditions under which small businesses operate, together with their role in employment policy. Two different approaches were thus pitted against each other. Advocates of the one view wanted to make life easier for small businesses by means of tax relief, lower wage costs, less red tape, what are known as mini-jobs and such services as cannot be provided without government aid and public subsidies, for example household services.
The other approach was quite different. The representatives of this approach wanted to put their faith in small businesses with good business ideas, skilled management, possibilities of growth and ambitions to grow and to employ more people. We are concerned, then, with small businesses that are also strong or are able to become so and that can manage to pay good wages and ordinary taxes, provide their employees with good working conditions and maintain good union relations.
What we have here, then, are two different approaches, but not varieties of right- or left-wing policies, for I know that many people in industry prefer good, strong small businesses and that it is precisely to these businesses that they wish to provide capital, opportunities for growth and support in terms of knowledge. It is also precisely this route that my group too wishes to go down.
In actual fact, we of course have too many small businesses in Europe. By far the largest number of small businesses is to be found in those countries and regions which are weakest economically and in which unemployment is very high. We have a large number of businesses that can scarcely support one family. We have a large number of businesses that start up with the aid of state subsidies and that immediately disappear once the periods of subsidy have come to an end. In brief, we have a situation in which statistics show that, of ten new businesses, there is perhaps only one, or possibly two, that will survive the first three or four years.
We must put our faith in quality. We could unite all the political groups in this Parliament around a progressive policy in this area, a policy that would take our overarching objectives and the Lisbon strategy's objectives seriously, that is to say 'good jobs for all'. Such a policy would require that, in small businesses too, the jobs should be of good quality and be the source of sufficiently high productivity to provide a social surplus.
Mr Mann's report contains a number of constructive proposals for a modern and forward-looking policy of this kind towards small businesses. I hope that those amendments that point in the opposite direction will be rejected and that Parliament will send the Commission and the Council a clear signal to the effect that we want to see small, and not so small, businesses that are of good quality and in line with the Lisbon strategy.

Lambert (Verts/ALE).
Mr President, I too would like to thank the rapporteur. The report that eventually came out of the Committee on Employment and Social Affairs was indeed a reasonable report. However, my group had one major problem with it over the support for the rigidity of the stability and growth pact. Consequently we are going to be supporting the amendment on that which will be coming from another group this afternoon.
Because we felt that what came out overall had a sense of balance to it, we are not going to be supporting many of the other amendments seeking to reinstate certain parts of the original text, e.g. Amendment 17 concerning GATS. We do not agree that the General Agreement on Trade in Services will be a job engine, either here or in the developing world. That was the subject of the extensive debate that Parliament had on Monday.
What concerns us as well is that the present text again lacks a mechanism for sustainability, that is, an environmental dimension that really must be incorporated into all that we are doing. Too often we see that the poorest people in the worst quality jobs also live in the worst environment. If we are really going to do something to upgrade employment or our social environment, we need to take account of the physical environment.
We also agree with a lot that the Commissioner said about the ownership of this employment strategy. It would be very useful if national parliaments debated the national action plans that were put forward by governments. In our delegation visits from this committee, we have found all too often that national parliaments do not have a clue that these plans even exist and they certainly have not participated in them. That would be a welcome step forward.
To pick up on the issue of small- and medium-sized enterprises: yes, they are important, but only if - as Mr Schmidt said - they are of high quality. You can have a small sweatshop as well as an ethical business and regulation is there to support the latter, not the former.

Nobilia (UEN).
Madam President, Commissioner, there is no doubt that Mr Mann has done an excellent job. Indeed, his proposals are based on the highest Community tradition in social matters and employment policy and, in terms of proactive measures, incorporate a broad range of innovative points and fields such as the knowledge-based society and its strategic implications. I am certainly not making the points that follow out of a desire to criticise, therefore, but, if anything, in order to share our hopes, although I fear that they may be quite insubstantial in areas such as small and medium-sized enterprises, with regard to which a number of different points have been made.
Indeed, we all know that, as regards taxation, if we want to implement the recommendations made we have three options, which can either be treated as alternatives or employed in parallel: the Stability Pact and its durability, particularly with regard to the possibility of complete exemption for SMEs for the first three years, in view of their substantial contribution to national GDP; a review of the areas covered by the subsidiarity system; or, again, a review of the areas requiring a unanimity vote in the Council. I am not being pessimistic here, just realistic.
Another good example in the area of financial matters is the proposed policies for making credit available to small and medium-sized enterprises, which would appear to be in contrast with the contents of the 2002 Basel agreement, which does not allow the necessary raising of sufficient venture capital for small and medium-sized enterprise and for the internationalisation thereof. The same may be said of incentives to promote employment, as the rapporteur calls them, which are considered to be a different matter from flexibility and bureaucratic relief. If they are, then they are direct examples of State aid pursuant to Article 87(3)(a) and (c) of the Treaty of Amsterdam, which, as the rapporteur is aware, only apply in areas identified in 1998, apparently without possibility of amendment, not even where situations have changed with the passage of time.
The role of the social partners, however, which the rapporteur has rightly emphasised, is a consideration worthy of mention. Called upon to implement forms of local partnership and contractual flexibility within a coherent framework of principles, the social partners are now, despite the European social dialogue, in a position where they do not, in practice, have the bodies or policies to lay down minimum social standards for enterprises, particularly in the countries of Central and Eastern Europe, notwithstanding, inter alia, the fact that a great many of these enterprises originate from current Member States. This is a situation which, in these countries, usually combined with lower taxation and a gradual increase in the consideration given to the Community acquis in environmental matters, is certainly creating new jobs, although it does mean that there is no hope of narrowing clear social gaps, even in the medium term.
A further point concerns the knowledge-based society itself, aims and objectives of which we support. As the rapporteur is aware, the knowledge-based society cannot be achieved just by increasing the number of computers in families and schools or by introducing better, more focused training, although that is needed, but it is based on both the full, appropriate exploitation of useful information and the availability of this information.
In conclusion, what I fear is that, despite all the emphasis continually and repeatedly placed on the importance of employment and social policies and their horizontal integration with other policies, they will remain merely a kind of by-product, a by-product which, within the Member States which are unmindful of the content of the European social agenda, combines the sterile display of positive or negative quantitative results with, I am sad to say, constant rhetoric and equally persistent erosion of quality.

Lang (NI).
Madam President, the economic doctrine of the European Union in general and this report in particular create an impression of total disassociation between, on the one hand, declarations of principle, good intentions and an honourable debate on employment, and, on the other, the terrible, distressing social reality of global competition and the economic war.
Of course, we all recognise that encouraging investment and enterprise fosters job creation; that reducing fiscal pressure and bureaucratic constraints boosts activity; and that training young people and older people to enable them to enter or remain in the world of work is a good thing.
Having broken down these open doors, however, having explained that, in addition to employment and growth, a third, environmental dimension is required, not to mention the objective of promoting health and well-being in the workplace, having listed all these good intentions, we must wake up, leave behind our daydreams and come back to reality. And that is a severe shock: instability, social plans, delocalisation, social dumping, increasing unemployment, mass immigration, falling growth, demographic collapse and a social protection system about to implode. We owe all of that to a European political class that has managed to combine the problems of bureaucratic socialism with the problems of ultra-liberalism and globalisation. In other words, we are struggling with the worst of both worlds.
Furthermore, it is clear that eastward enlargement will now throw the doors wide open to large-scale delocalisation and mass immigration. It is clear that the Union's economic policy of opening up its internal market to global competition is selling off what is left of our labour-intensive industries. Allowing irresponsible free-trade extremists and globalisation fundamentalists to take charge of the future of our economies and our social structures is dangerous. Economic and social recovery is to be achieved through the recovery of our internal markets, through national and Community preference, through national and Community protection and by redefining WTO trade rules, and certainly not within the framework of the terrible nation-grinding machine that the European Union has now become.
Sacrédeus (PPE-DE).
Madam President, I want sincerely to thank Mr Mann for the work he has put into this report and for all the compromise amendments through which considerable agreement was brought about in the relevant committee.
For ourselves as Christian Democrats, it is extremely important that an employment strategy and a strategy for social welfare in Europe should combine fixed, stable values, built upon the ethical and moral basis that is European cultural history, with a social, market-oriented economy. I would emphasise that, in this context, we are concerned with both social and economic values and not, therefore, with a free-market economy devoid of ethical, moral and social values.
I would particularly draw the Commission's attention to item 37, which emphasises the importance of making it easier to combine family and professional life by creating greater opportunity for parents to spend more time with their children, by extending childcare facilities, by enabling parents to take parental leave and by providing tax concessions for childminders and foster parents and care and assistance facilities for the elderly. This item is also about allocating greater resources to programmes for combating female unemployment.
I want really to focus upon what is in actual fact the biggest issue for Europe, namely the demographic challenge. I know that we have a Commissioner with a strong personal commitment to finding ways of solving the issue of obtaining a large enough European workforce and population in the future. Item 37 indicates the value of combining working life and family life and of giving more time to children. This report is therefore about seeing the Stockholm European Council's decision of March 2001 on the demographic challenge as one of the absolutely most important issues for Europe. Item 37 emphasises this extremely clearly.

Weiler (PSE).
Mr President, Commissioner, ladies and gentlemen, Mr Mann observed during the discussions in committee that his report had not enjoyed the support to which he had previously been accustomed. This of course is partly due to a number of demands which have a very specific national character and which do not really belong in the European debate at all. I support the intention expressed in his report, which is that the guidelines should concentrate on what is essential and that annual reports should also continue to be produced in future.
Also in terms of the objectives, I believe that we have achieved broad consensus, especially as regards flexibility on the labour markets, without subjecting the workforce - the employees - to any unnecessary dismantling of their social protection. The path towards this goal is undoubtedly a matter of debate. Fresh ideas would be all well and good, Mr Pronk, but in some areas, we can detect very clear retrograde steps, starting with the involvement of the national parliaments. Mr Mann has called for the national parliaments to be allowed to exercise greater control, yet we agreed some time ago that they will not only exercise control but will participate through the framework of legislation - which goes much further. Indeed, Sweden and Denmark have already applied this in principle. Moreover, Mr Mann calls for implementation of the national further training plans to be pushed through. Here too, we agreed that there should be legislation imposing a binding obligation and setting out workers' rights to further training.
Furthermore - and this, of course, is where we cannot agree with him - he calls for indiscriminate tax cuts and wage subsidies. These are not fresh ideas. They are completely obsolete. Nor do they promote the entrepreneurial creativity that we urgently need.

Bouwman (Verts/ALE).
Mr President, I should like to make a couple of brief remarks. I think that, in the context of economic development, demographic developments, technological developments, enlargement, and a possible war, we have together ended up in a complicated situation in which the things we like, such as a comprehensive approach, will become increasingly difficult. That was something I just wanted to say on this day when elections are being held in the Netherlands. For, although we have taken pains over it, it will not be easy, for example, to continue in the coming period to attain the standards of employment creation to which we have become accustomed. In any case, I concur with remarks such as those by Mrs Van Lancker with regard to the linking of economic and social policy. In my opinion, we should also adapt the economic policy to the social policy. I also concur with a number of remarks by Mr Pronk regarding the frequently erroneous comparison between the United States and Europe. You have to have a much better, much more careful look at this.
I am in agreement with the main objectives of the new employment policy and should like to call attention in particular to the second objective. The first objective, full employment, needs be elaborated, including with regard to the social economy, but of course it is also necessary to devote attention to better employment, and that will become even more difficult in this period. Looking at the priorities, it is funny to see that some eleven remain of the original eighteen guidelines. I think that we have to look very carefully at how to present and systematically secure the new fields, such as immigration and undeclared work. If we look, for example, at those elements which the evaluation of employment policy revealed to be relatively poor - the improvement of the organisation of work, and better work, for instance - we have to ensure that we do not break these down again into all manner of categories, when we are presently just at the stage of initiatives in this field. In other words, I think that we need to do some work on this in the coming period. With regard to the streamlining of the whole package of guidelines, which makes sense to me, this also means that - as I said at the beginning - we have to adapt these to each other.
Lastly, I think - and hope - that the Council will also commit itself in the coming period to implementing the method of working which we have adopted together, namely the open coordination method, without any kind of deviation.

Crowley (UEN).
Mr President, I also wish to join with the others in thanking the rapporteur for his work on a very important topic which has become even more so in the last year because of the increase in unemployment across many economies in the European Union.
If we wish to be serious about how we develop people's opportunities and give them the tools of freedom and independence, then giving and assisting in employment is one of the most important tools for combating poverty and exclusion. Whatever side of the political divide we come from, we all agree that more needs to be done to achieve a more effective Europe-wide employment strategy. Many of the proposals in Mr Mann's report and some of the amendments will help towards this final goal.
However, we must also learn from the mistakes of the past. In particular, the guidelines need to be simplified and reduced. Appropriate targets have to be put in place to guarantee the delivery of proper results rather than a mere tinkering with figures. We need to create proper conditions for full and stable employment to improve quality and productivity at work and labour market cohesion. We need to ensure that all employment policies are people-centred, not merely a response to an urgent need in one or other Member State.
Our strategy requires not only that people be given training and skills but also that there be no discrimination between men and women. This year, in particular - the International Year of the Disabled - we should also be working more actively towards integrating people with disabilities into the workforce.
We must maintain and improve the incentive to work. The most effective way is by guaranteeing proper wages and ensuring that people can maintain as much of their own earning potential as possible to reduce labour taxes. However, this is where we differ from some of the speakers and from the proposal in Mr Mann's report, in particular Paragraphs 11 and 13, which deal with taxation. These issues are exclusively for Member States. If a Member State, or a group of Member States, wishes to follow the best practices of another Member State, then so be it. However, you can look at all the models that you wish and analyse all the processes that have been put in place but the only way of increasing employment that has been successful is the reduction of labour costs.
My last point concerns my own amendment to Paragraph 24. The purpose is to boost consumer confidence through proper corporate social responsibility, which can create and contribute to higher innovation performance. The idea is to distinguish between how an enterprise relates to internal stakeholders, shareholders and employees. Corporate social responsibility can also have beneficial effects in terms of building good relationships with consumers, suppliers and others. If we can deal with the question of taxation, we can all support this report. However, the question of taxation has to remain outside the responsibility.

Bastos (PPE-DE).
Mr President, first of all, I wish to congratulate Mr Mann on this report, which makes an excellent contribution to defining a future strategy for employment and social policy in the European Union.
Now that five years have passed since this strategy was launched, this is the right time to assess the experience, to evaluate its weak points and to try to provide responses that are both realistic and bold, to the emerging challenges that are common to the current and future Member States and bring them into line with the aims of the Lisbon strategy.
The strategy for employment has undeniably contributed to reducing unemployment, but we are today facing a different scenario, with Europe's economy in a period of stagnation, a situation to which the Member States must pay particular attention. We must also focus on clear issues, on adopting global priorities in the medium term and on achieving results. One of these issues is that of active ageing as a response to the demographic challenge, whilst not forgetting young people and the least-favoured social groups. Recent history has shown that the greater the involvement of regional and local policies in policies adopted at national and at European level, the more the strategy for employment has to gain. The importance of the role of the social partners, civil society and non-governmental organisations in achieving the objective of full employment and of better jobs for all cannot be over-emphasised.
The report rightly highlights the role of the small and medium-sized enterprises in particular. These have indeed been the driving force behind job creation in Europe. Consequently, measures promoting the creation and existence of SMEs will surely have a positive effect both on the quantity and quality of jobs created. I also wish to highlight and express my total agreement with the idea of cooperation between the various universities, in addition to there being a genuine interface between universities and businesses. Lastly, I shall refer to the principle of equal opportunities: a lasting increase in the general employment rate is only possible if the female employment rate is strongly improved, and this will require effective measures to square the demands of family and professional life.

Gillig (PSE).
Mr President, Commissioner, ladies and gentlemen, following the conclusions of the Lisbon Council, the various reports voted upon here in Parliament dealing with employment have consistently highlighted the need to strike a balance between quantitative and qualitative development of employment, or between economic development and social development.
The strategy implemented has made genuine progress possible, and, as has been stated, Commissioner, we fully support the proposals regarding the way in which you plan to follow up this work. Today, however, in a difficult context, a context of waves of company restructuring and mass redundancies that are increasing instability on the job market, the European Parliament must once again send out a strong, clear signal. Mr Mann's own-initiative report, however, takes the opposite view to the message we should be sending, presenting to us an exclusively liberal creed, and the work carried out by the Committee on Employment and Social Affairs in order to balance the text is in danger of being completely nullified by the amendments reintroduced in plenary.
Mr Mann, what we need today is not just increased flexibility: we also need a policy that is both durable and flexible. We do not want second-class jobs or deskilled casual work, as you are proposing. We must focus on training and qualifications, and support the most vulnerable categories, which are women, young people and the elderly. Nor do we want a policy that insists on seeing fiscal pressure as the cause of all evils in this matter. Nor do we want deregulation, uncontrolled opening up of the service trade markets, sacrificing all the social acquis on the altar of free competition.
If the report were to be amended in the way you are proposing in plenary, we would have to oppose it. I shall end, Mr President, by saying that, in promoting employment strategy and social policy in the European Union, which is the title of the report, we cannot overlook the principles of solidarity and social cohesion, which are guarantees of the prosperity of our economies.
Flautre (Verts/ALE).
Mr President, ladies and gentlemen, I do not know whether I shall find anything much to add to Mrs Gillig's superb speech. I believe this report will not allow me to move towards workers at Metaleurop, Alstom, France Télécom or many other companies, who are currently clearly threatened by mass restructuring and harsh, unacceptable mass redundancies, often due, furthermore, to shareholders' completely uncontrolled actions.
In this context, the endless calls for social dialogue are a rather surreal figure of speech. The commitment we must make today is very clearly to a policy of democratisation within companies that breaks with this unacceptable way in which employees are currently hired and fired, given intermittent work or made redundant. I believe that the social situation, which is further exacerbated by the economic recession, is currently creating a despicable climate to which this report is certainly not capable of responding in a credible way.
Must we, in this kind of situation, forbid ourselves from investigating, from taking a closer look - I am well aware that it is rather unusual to talk about this in this House - at certain experiments in reducing working hours, negotiated experiments which create jobs, which have considerably improved the economic performance of certain large companies, which have considerably improved the quality of social relations in the workplace and the quality of work? Must we prevent ourselves from taking a look at these experiments and drawing the conclusions that, in my opinion, are generally extremely interesting?
Must we stop ourselves examining the capacity to develop many activities that are useful socially or for environmental management and whose potential we suspect, but which, I regret to say, receive very little support or recognition. I believe it would be far more interesting to show imagination, rather than to keep trotting out old-fashioned ideas that we have heard all too often. We must start to show an interest in this kind of debate and initiative.

Rovsing (PPE-DE).
Mr President, since the Lisbon European Council set itself the target of making the EU the world's most competitive and dynamic knowledge-based economy by 2010 - an economy that can create sustainable economic growth with more and better jobs and greater social cohesion - we can ask ourselves how matters have developed since then. In short, nothing has happened. The increases in the United States's and our own competitiveness have been so markedly different that the discrepancies between the United States and the EU have increased, rather than decreased, since that target was set.
We therefore have a very great problem, and all we can say is that, up until now, the Lisbon strategy has not worked at all and that the target is now even further away than it was when it was adopted. As will have become apparent from the debate in Parliament, there is too much bureaucracy and there are too many regulations. What we lack is training, better access to capital and a long list of structural changes to enable us to cope successfully in the new knowledge-based economy. The key to progress will be more basic research so that the new knowledge can quickly be converted into exciting, well-paid and interesting jobs.
I want to say that Mr Mann's report is a step in the right direction in promoting economic growth and increasing the number of jobs in the Member States. He emphasises the importance of small and medium-sized businesses and sets out a long list of initiatives that I believe will enhance the process.

Ghilardotti (PSE).
Mr President, unlike the rapporteur, who spoke earlier, I believe that the European employment strategy has played a major part in combating unemployment thus far and that it has had a positive effect on national labour market policies - not in all the Member States, of course, but certainly in some.
Then, because of the ambitious goals we set ourselves, the Lisbon Summit was a decisive step, with the goals being updated each year by specific indicators, just as the Commission's assessment of the national plans and the respective recommendations are a point of reference and an incentive to follow the example of those countries which are more successful than others in obtaining positive results by means of a proactive policy involving the social partners at all levels.
Each year, the European Parliament has consistently succeeded in its resolutions in finding the right balance between flexibility and security and putting economic policy, employment policy and social policy on an equal footing. Now, in the face of the new generation of guidelines proposed by the Commission, which seek, as has been said, to achieve three objectives - to bring the employment rate further into line with the Lisbon objectives, to improve the quality of jobs and to promote a labour market which is open to socially vulnerable groups - it is a little surprising that the rapporteur proposed in committee and is proposing once again in the form of amendments in the House a series of instruments - reducing taxation across the board, recourse to what is known as 'minor work', the introduction of excessive flexibility - which are incompatible with improving job quality, investment in human resources or effective reconciliation of family and professional life which is not detrimental in terms of security.
I feel that these instruments serve the purposes of the ideological debates taking place in some of the Member States - Italy, for example - rather than stimulating and coordinating the Union. This line was partially adjusted in committee and the result is more balanced, and that is why, as has been said, we do not support the amendments.
I would like to end with a comment. Mrs Bastos rightly upheld the paragraph of the resolution which calls for greater cooperation between universities and research centres. It is a shame that her group has tabled an amendment seeking to replace cooperation with competition.

Pérez Álvarez (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, I do not think I am in danger of being complacent, as figures are not really open to interpretation. I might only be looking at one side of the coin, however. Nonetheless, it is pleasing to note that the number of people unemployed in the European Union has fallen dramatically. The total stood at 17 million in 1997 but by 2002 it was down to 13.5 million. The scenario and pace are now quite different.
Of course, I have to admit there is another side to this coin. A hard core of 7.4% of the unemployed have never actually worked, have lost their job, or face major obstacles in getting back into work. In general, these are older people. At least, they are likely to be too old to benefit from schemes for the young, and too young to be considered for early retirement. Alternatively, they might be young and lack the necessary experience and training.
I have already referred to two groups in particular need of protection or initiatives, namely the young and older people who have lost their job. Turning to a third such group, on 8 March we celebrated International Working Women's Day, and its memory should still be fresh in our minds. Women also need support. It is important to honour the commitment given at the Lisbon Council, namely to ensure that over 60% of women are in employment by 2010 at the latest.
The proposal we are debating today encompasses three main objectives. These are to increase the rate of employment, to improve job quality and to open up the labour market to the most disadvantaged groups in society. 2003 is the year of the disabled, and this should be in the forefront of our minds. In addition, the horizontal policies so frequently referred to in the House must permeate all our activities. It is difficult to rank these horizontal policies, but health and safety in the workplace, equality and sustainable development are certainly amongst the most important. It is also vital to ensure the involvement of society as a whole and of all levels of administration, regardless of how close they might be to the citizens. The enlargement countries will be watching our activities with interest too.
Mr Mann's report takes account of all these considerations. The report is to be commended in its original version, and also as it now stands following the improvements made in committee. I congratulate Mr Mann and call for a vote in favour of this report.

Cercas (PSE).
Mr President, there can be no doubt that Europe was in need of an employment strategy in 1997 even though the economic cycle was at a high and it was possible to argue that the market itself would provide for our needs. In the light of the present situation, however, it is even more necessary to make every effort to improve this strategy, particularly as we face up to a war situation and its aftermath. The Commission's communication and reform must therefore be more than welcome. Let us hope that the second half of the decade that began in 1997 will actually surpass the first.
I must begin by echoing what other Members have said. I do not know whether to start by commenting on Mr Mann's report or on the amendments to it. Further to the statements made by the rapporteur and by Mr Pronk, I find I am bound to state strong opposition to all the amendments.
Mr Mann's report does indeed contain a number of positive ideas. These enjoyed broad support in committee. Unfortunately, the amendments amount to a strong reaction against the most sensible and balanced ideas of the European strategy for ideological reasons.
I should like to focus on the objectives and point out that there can be no valid strategy if the objectives are scaled down. As the Commissioner stated, the Lisbon objectives are crystal clear. There is no doubt that the objectives for the coming five years are more jobs, better job quality and better social inclusion.
Mr Mann, more jobs is not synonymous with full employment. It is not acceptable to maintain that it was over-ambitious to hope to attain the rates of employment set at Lisbon. That is backtracking. Similarly, better quality is not synonymous with lower taxation, nor is more social inclusion synonymous with fewer fiscal demands. Public resources will be needed to launch proactive policies and to ensure those in danger of being excluded from the labour market are drawn into it.
If these amendments are adopted, I shall therefore be obliged to vote against your report, Mr Mann, along with many other Members in my delegation.

Bushill-Matthews (PPE-DE).
Mr President, I hope that my good friend Thomas Mann has forgiven me for not voting for the report in committee, and indeed that he will forgive me again, as he knows I will not be supporting it in the plenary. There are many points that I welcome in his report; the recognition of the need to deliver the Lisbon conclusions, the encouragement and support for SMEs and the need to improve employment of disadvantaged groups in society. But I do not accept the basic thrust of the report that one of the solutions is to strengthen the roles of the social partners.
I am all for social dialogue, but this should be between employees and employers within their companies. The rapporteur confirmed the importance of SMEs as the motor of employment, but SMEs have only a tiny voice within UNICE and most of their employees do not have membership of trade unions. So within the social partners their voice goes virtually unheard, and yet the social partners presume to speak for them.
There was an interesting report in the UK press at the weekend about Germany: Chancellor Schröder was apparently finding it increasingly difficult to get acceptance of much-needed labour market reforms because the social partners were blocking them. A German minister was quoted as saying 'when it becomes necessary to drain the swamp, you don't stand around asking the frogs'. With unemployment approaching 5 million in that country, the swamp is getting bigger and the need for change is very clear.
So I am all for social justice and social inclusion, but the biggest enemy of both is unemployment. Governments need to do what is necessary to address this. Clinging on to outdated concepts does not help; strengthening the role of the social partners simply leads to more paralysis. If some countries wish to persist in this, it is of course up to them. But please, rapporteur, please, Commissioner, do not inflict such concepts on the rest of us.

Karamanou (PSE).
Mr President, Commissioner, today we are debating the future of the European Employment Strategy, at a time when the economy is seriously overshadowed by the threat of war in Iraq, rising oil prices and economic problems in the countries in the eurozone.
Unfortunately, the current labour market is not dynamic enough to create new jobs. As far as women are concerned, to whom you alluded extensively, despite the increase in the number of working women, who now account for about 41%-42% of the total workforce, and the gradual increase in the number of women in purely male-dominated sectors, unemployment is far higher among women than it is among men.
The Lisbon objectives to improve the position of women in the labour market would appear to be some way off, given that unemployment is still about double among women: 14.6% compared to 8.7% among men. We also note that exploitation is rife among women, with over 250 000 women working at home with absolutely no social protection. At the same time, the black market is flourishing, relying heavily on hundreds of thousands of mainly female foreigners who are left out of labour and unemployment statistics.
The European Employment Strategy recognises the role that women can play in increasing employment rates, and we are delighted that it is moving towards eroding the differentials between men and women as far as wages and the representation of women in all sectors of the economy are concerned. We are also delighted, Commissioner, with the importance you have attached to gender mainstreaming in all sectors. However, it is clear from the statistics on the number of women in work that the policies already being applied require greater momentum and evaluation. Most importantly, quantifiable, qualitative and quantitative targets need to be introduced at both European and national level. For example, we could set ourselves the objective of halving the current differential between men and women on pay, training, pensions and promotions and the length of time women stay in work by 2010.
I hope the forthcoming spring Council will accept your proposals and that we shall have new national employment plans by the autumn, as you said in your speech.

Diamantopoulou
Mr President, as we have discussed the individual subjects broached by the honourable Members on several occasions, I have just three brief comments to make.
The first concerns the objectives of the spring Council. It is important that the Greek Presidency has made employment a priority at the spring Council. This will be the second time since Lisbon that employment has been one of the Council's priorities. Interestingly, it would appear from a series of initiatives between prime ministers over the last month that they are all promoting employment as a priority and at the spring Council, war permitting, it will be top of the agenda. However, we must bear in mind that the quantitative target of full employment by 2010 set in Lisbon depended on two basic preconditions: 3% annual growth and the implementation of a reform package.
As far as the first target is concerned, we are clearly behind schedule. In several countries growth is below 3%; in fact, a number of countries have almost zero growth, which by definition will make it very difficult to achieve our targets.
On the second issue, the positive evaluation of the employment strategy notwithstanding, numerous reforms need speeding up. The message, as far as reforming the Employment Strategy is concerned, is that we cannot insist on reforms relating to the labour market and to the modernisation of social systems and to another set of policies relating to the employment strategy. I think this is where the main difference lies; in other words, labour market reforms are part and parcel of the Employment Strategy, which is much wider and which, as many members said, ranges from taxation to education.
So we believe that it is very important that the spring Council and Parliament will be sticking to the Lisbon objectives; it shows that we all hope to be able to make up the last two years' lack of growth over coming years.
My second point has to do with discrimination. Briefly, one of the three basic objectives is a non-discriminatory job market, and what we are proposing to the Council is that there should be individual quantitative targets for groups vulnerable to discrimination.
My third point has to do with women. For the first time, more women than men have entered the labour market. Of the ten million jobs created between 1997 and 2001, 75% were filled by women, a clear signal that our targets are being achieved and our polices are effective. I shall of course be insisting on gender mainstreaming in all measures and priorities.

President.
 The debate is closed.
The vote will take place tomorrow at 12 noon.

President.
 The next item is the debate on the report (A5-0063/2003) by Mr Friedrich, on behalf of the Committee on Economic and Monetary Affairs, on the ECB recommendation for a Council decision on an amendment to Article 10.2 of the Statute of the European System of Central Banks and of the European Central Bank (6163/2003 - C5-0038/2003 - 2003/0803(CNS)).

Friedrich (PPE-DE)
Mr President, this is indeed an important issue. What is at stake, after all, is the stability and development of our single currency, the euro. At present, the voting modalities in the European Central Bank are as follows: we have twelve central bank presidents - or governors, if you will - plus six central bank directors, making a total of 18 votes. That is a relatively small and manageable body. Every member has full and unrestricted speaking and voting rights.
We can assume that sooner or later, other countries will join as well. I hope that Great Britain will be one of them, but some countries from the Central and Eastern European accession candidates will undoubtedly join too, which means that it is essential to consider how these voting modalities can be amended and adjusted to the new dimension, given that in future, some 15, 20 or 25 countries may be part of the euro-zone. The Council has now asked the ECB to draw up its own proposal on this issue. Under pressure of time, a proposal has been drafted which really is not acceptable. Let me cite just a few examples: it proposes forming three groups of countries, although it is very difficult to explain why any country is in a specific group. I could do so, but it would take about ten minutes.
Of course, this system is not remotely transparent, especially since a rotation system would then be introduced. This means that the first group comprising the 'biggest' countries would not take part in 20% of the votes, but would take part in 80% of votes. In the other groups, it is entirely possible that a country, that is to say, a central bank governor, would not participate in as many as 40% of votes.
In practice, this could mean that a large country belonging to the first group would look precisely at when it is not entitled to vote, in a bid to influence the agenda and ensure that important items are excluded from the agenda when it has no right to vote. This will mean that there will be massive debates about the agenda. What is more, the details of this rotation system still have to be hammered out by the Central Bank's Governing Council. As we can imagine, it is quite likely that a country which is not entitled to vote will make even greater efforts to influence the voting behaviour by delivering lengthy speeches during the debate.
The Committee on Economic and Monetary Affairs - quite rightly, in my view - has now said that this model is not functional, transparent or efficient for such an important body as the Governing Council. We have also taken the trouble to speak with academics from France, Germany and Great Britain because we believe that the academic sector should have an input here as well.
Last Monday, at 7.15 p.m., the Committee on Economic and Monetary Affairs accepted my proposal which - without any prior discussion on our part - is also endorsed by many other bodies and parties in this House. We say this: we are not under any real pressure of time! We say this: Let the Convention and the Intergovernmental Conference, put forward a new and better proposal. It will be 2006 at the earliest, and most probably 2008 - in other words, four years - before any of the new Member States joins the euro. So take time to work out a new, transparent and viable proposal!
We have presented two options in this context. We have said that even if weighting is needed, there should be no rotation system. Give us a 'one country, one vote' system every time, but with a weighting system based on population size, GDP and the relative size of the financial services sector - we were thinking to some extent of Luxembourg here. We have also said that in the long term, you really do need to get down to brass tacks. If confidence in the euro has increased to an adequate extent in a few years' time, the academics' proposal could be adopted. This entails differentiating between short-term operational decisions and long-term institutional/strategic decisions. The short-term decisions could then be taken by the board of central bank directors - currently six, but in future perhaps nine people - while the strategic decisions, such as the overall monetary strategy and monetary policy instruments, could remain the responsibility of the Governing Council as a whole.
For this reason - and let me cite the relevant passage in English to conclude my brief speech - we are asking for 'calls for proposals to be made by the Convention in view of its adoption'. I just want to say that the ideas I have put forward here have been drawn together in writing as a compromise amendment, for we anticipate that a new proposal - if these principles are accepted - will produce a better voting procedure than the untenable solution which has been put forward at short notice by the Governing Council, and which is not acceptable to anyone.

Solbes
Mr President, in this my first intervention I should like to say a few words about the Commission's ruling. I shall outline our differences with Mr Friedrich's report and refer also to our final position.
Any reform of the Central Bank must comply with four conditions. Firstly, decisions have to be taken quickly and efficiently. Secondly, decision-making bodies have to act taking account of the interests of the Eurozone as a whole. Thirdly, the system has to be impartial and fair to present and future Members. Fourthly, the markets and the public as a whole have to be aware of transparency. This is crucial to understanding the operation of the system.
The model advocated by the Central Bank does help to ensure efficiency. Nonetheless, the key feature of the Central Bank's proposal is based on the enabling clause in the Treaty of Nice. It is therefore based on the premise that the system legally in force may not be modified. I should like to return to this when I have heard what Mr Friedrich has to say. The Commission is of the opinion that taking the European Central Bank's proposal as a point of departure, the rotation model may be improved by reducing the maximum number of voting rights on the Governing Council. Such improvement should be substantial. It should involve adjusting the method of classifying countries into groups. There is no need to develop new types of weighting. The Bank's own classification should be used instead. This takes account on the one hand of population and, on the other, of GDP. Improvements are called for, however, to clarify the frequency and order of rotation in this type of voting. This is the thinking behind our proposals.
Having considered the proposals in the report, we believe them to be ambitious, but find they pose a fundamental problem. They envisage interpretations going beyond the enabling clause. We differ on this in two respects. Turning to the most significant first, the report rejects the Central Bank's model and presents a counter-proposal. The latter is no doubt technically valid, but it is not in line with the enabling clause. The notion of a double key, involving double weighting of the vote, is not in line with the clause either. This is because according to legislation currently in force, every Member of the Council must have a voting right. Such adjustments are therefore better suited to a different context, to a more ambitious position, like the one you yourself referred to, Mr Friedrich.
The decision we have to take in the near future is whether or not to go ahead, following the accelerated procedure, and adopt the Central Bank's proposal. A decision must be made within the next few weeks if it is to comply with the enabling clause. Were this to be the case, a unanimous vote in the Council of Ministers would be required. As you are aware, this is still outstanding. Nonetheless, the Commission agrees with the House that a more thorough reform is called for. Such reform should go further than what is envisaged under the enabling clause. We should be prepared to tackle it at the next Intergovernmental Conference on the basis of a different model. As has been rightly pointed out, this can be done at the Intergovernmental Conference, but not under the current enabling clause.

Karas (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, we will all - institutions and politicians alike - have to review and reshape our communication strategies, priorities and working methods, but also our decision-making and opinion-forming processes in the light of the European Union's enlargement to what will probably be more than 30 states - if we include the Balkan countries - but also in the light of the political challenges which are being set for us and which we are setting ourselves.
Against this background, we welcome the fact that the ECB has put forward a proposal unanimously. We also welcome the fact that a clear political message has been sent that the ECB should in future regulate its decision-making mechanisms itself, and that we do not want to make any special provisions here. There is absolutely no reason why this decision should be adopted hastily, as the rapporteur has already pointed out.
We can continue in familiar fashion and prepare a fundamental reform with the next Intergovernmental Conference. The fundamental reform which is necessary, and which we intend, differs in one key respect. We say: everyone should remain on board; there should be no rotation principle; in a common Europe, everyone should have a say in the ECB. The solution is not rotation but weighting. This weighting could be based on the weighting in the Council, but must build primarily on economic and financial market policy parameters.
Rather than more complexity, we want greater transparency. We do not want new forms of discrimination, but more integration and therefore greater clarity for the public. Take us up on our offer, which is to prepare a comprehensive reform instead of an over-hasty short-term solution!

Randzio-Plath (PSE).
Mr President, I agree with the rapporteur: the proposal submitted for reform of the voting in the ECB Governing Council is not a step in the right direction. It is because it was developed from the perspective of national representation, not a European perspective, that it must be rejected. What we actually need is an ambitious European solution. Here, no Member of this House can be neutral, for the way in which such a key macroeconomic partner arrives at its decisions is important. We must therefore know how the decisions are shaped, but there is still time for that at the next Intergovernmental Conference.
Specifying that representation should be on a national basis conflicts with the aim of an integrated monetary policy. However, I should point out here that when drafting its proposal, the European Central Bank's hands were tied, for the paltry spirit of the Treaty of Nice is also reflected in the enabling clause contained in Article 10.2, and we therefore do indeed need a proposal from the Convention for the Intergovernmental Conference so that a number of issues become clear: should the Executive Board have a special role? Should we differentiate between monetary policy and operational decisions? Where should the strategic decisions be taken? This is possible with a unanimous amendment to the Treaty.
I really do think it is important for us to make this distinction, simply because it is necessary. As the European Parliament, we also have a particular interest in doing so because we attach importance to transparency. Like our colleagues in the USA, we want to be able to follow how decisions are taken and also how weightings occur in the discussions. In this respect, the difficult proposal by the ECB, which we in the Socialist Group cannot endorse, sends out quite a hopeful signal - for up to now, we have always been told that the outcomes of the votes in the ECB's Governing Council could not be published because no votes take place. I think that in a democratic system, majority voting should apply, and then the voting behaviour of the individual members of the central banks or the Executive Board can also be published.
I am all in favour of anonymity, so that no names are mentioned, as in the USA. Our key concern is to gain an overview of the various perspectives on monetary policy. This will remove confusion and insecurity, create the clarity that is required, especially at present, and underline the Central Bank's democratic duty of accountability.

Huhne (ELDR).
Mr President, the European Liberal Democrats also reject the European Central Bank's proposal for a change in the way it takes decisions once the 10 candidate countries join the eurozone. The ECB proposal would create a third class of Member State with fewer chances of voting and, outrageously, only candidate countries would be in this inferior grouping.
Tiny Luxembourg gets a special lift into the second group thanks to its financial markets, even though it has had a central bank for substantially fewer years than many of the candidate countries, including Poland and Hungary. This is a proposal designed to protect the vested interests of the eurozone's existing central bankers. They are just trying to pull the ladder up behind them.
We support instead an Executive Board of nine members, as Mr Friedrich has mentioned, taking operational decisions, plus a wider Governing Council that would involve all Member States' central bank governors in strategic decisions, such as the definition of price stability, and the emphasis on other objectives, such as monetary reference values.
As regards the proposal of the PPE-DE and PSE Groups that the Governing Council should decide by a double majority system, giving more weight to the members from the big Member States, we beg to differ. We support the principle of one member one vote when it comes to decision-taking, and a double majority system implies that a Governing Council member from a big Member State is representing that Member State, rather than voting for the eurozone as a whole. This would be retrogressive and would undermine the collegiate outlook of the Governing Council. However, there should be some checks and balances on the Executive Board, which is why we propose that the Governing Council should be able to overturn decisions of the Executive Board by a two-thirds majority. The Convention should look at this issue so that it can be discussed as openly as possible and with full consultation of all the interested parties.

Della Vedova (NI).
Mr President, Commissioner, before us is a compromise which has achieved only one clear objective, that of unanimous consensus in the Governing Council, which is not exactly what the European Central Bank needs to prepare for enlargement.
The distribution of powers and responsibilities between parliaments, governments and independent authorities - the independence of the European Central Bank is a valuable asset which has worked well and must be safeguarded - does not give independent authorities the power to decide on their working procedures or, as in this case, on changes to the working mechanisms, particularly where it is a question of enlarging a club. It is clear that the current members of the club have presented a proposal which, first and foremost, affords themselves and their prerogatives some protection against the prerogatives of the members who will join the club in the future. It is absolutely obvious.
I believe there is a serious procedural defect that has led to this situation and to a proposal containing a number of shortcomings, which have already been pointed out by Mr Huhne, who said that the hierarchy of countries is dubious. I hope Mr Goebbels will forgive me if I say, just by way of example, that I too believe that Luxembourg must not have a greater role than Poland.
Of course, the presentation of the European Central Bank's proposal is in line with the Treaty of Nice, which, moreover, stipulated that the Council could decide on either an ECB proposal or a Commission proposal. I believe that we must somehow go back to square one and that the Commission must produce its own proposal, taking Parliament's recommendations into consideration. The ECB will be consulted, but it cannot be allowed to be the promoter of this decision which concerns it so closely.

Langen (PPE-DE).
Mr President, ladies and gentlemen, we have adopted a clear position on the ECB Governing Council's proposal, Commissioner, but the Commission, unfortunately, has not done so. You have shied away from it!
We want the Council of Heads of State or Government to devise and adopt a different model, with other weighting criteria being used in this context. The draft on changes to the voting modalities proposed by the ECB Governing Council and endorsed by the European Commission, is unnecessary and unjust. It is unnecessary because we are certainly not under the time pressure that you, Commissioner, have described. Summer 2006, in a best-case scenario, is theoretically the earliest that we will achieve a figure of 15 eurozone members. We therefore do have enough time.
With this model, you will create a two-class system among the members of the ECB Governing Council, with the governors of the smaller countries' central banks suffering a severe curtailment of their rights. In a single currency zone, it is essential for every member of the ECB Governing Council to have a permanent and equal vote. To ensure that this is guaranteed in future too, and thus to retain the existing rules, we have proposed that other weighting criteria should be used. Our colleague Dr Friedrich has already spoken about this. My proposal to use population as one of these criteria has not found support among a majority in the committee so far this time. Since the rules have to be agreed unanimously, there will be no movement without a compromise.
The rotation system, Commissioner, is a bad compromise. I have proposed that in addition to a simple majority of votes, at least half the population of the Member States of the eurozone must be represented. This will avoid majority decisions being taken in the ECB Governing Council without taking sufficient account of the economic realities in the European Union. Population as a criterion is more appropriate and more representative, for a variety of reasons, than other criteria such as the relative size of the financial services sector or GDP. Current and precise population figures are available for all Member States; they are calculated on a per capita and therefore absolutely comparable basis, and take account of the fact that the primary focus of a rational monetary policy based on the EU treaties must not be on the capital markets, but on the people affected by it.

Goebbels (PSE).
Mr President, Commissioner, the European Union, or at least some representatives of countries that are allegedly more important than the others, is suffering from a mystery illness, Gulliver's syndrome.
Whether within the Convention or in bodies such as the European Central Bank, representatives of the large countries believe they are under threat of being tied up by a gang of small countries, which are by definition irresponsible and which, following enlargement, will form the majority within the Council in terms of numbers. Although it is true that the European Union theoretically brings together States that are equal in rights and duties, some, like George Orwell's pigs, believe themselves to be more equal than others.
The history of the European Union does not provide a single example of an alliance of Lilliputians against the Gullivers of Europe. In fact, every case of obstruction in Europe, from de Gaulle's empty chair policy to Maggie Thatcher's famous 'I want my money back', has been the work of the large countries.
The Stability and Growth Pact was invented to establish budgetary discipline in the so-called 'Club Med' countries in order to guarantee the external value of the euro. The Pact is respected by the small countries, but far less by the large countries. Gulliver's syndrome, however, leads some capital cities to believe that governors from small countries might be led to impose a lax monetary policy. The result of all these fears is the ECB proposal to restrict the number of governors deciding on monetary policy.
President Duisenberg claims that governors do not vote according to their national interests, that there are, in fact, no votes and that monetary policy is decided by consensus. Why, therefore, this proposal to change the voting system? We are told that it will no longer be possible to vote when there are 25 Members. Although a discussion between 25 Members would certainly be longer, a vote for or against a change to key interest rates can take place just as easily with 25 as with 18 or 9 governors.
This is not, therefore, the real reason behind the proposed reform. In fact, the five large States, which represent approximately three quarters of the Community GDP, want to be able to define monetary policy themselves. In this regard, the ECB's proposal is ingenious, since it would set up a system of rotation between three groups of countries which would ensure that the large countries are able to vote in 80% of cases.
The Friedrich report proposes to restrict monetary policy decisions to an Executive Board of nine Members, which would be selected on the basis of the two-fold criteria of the population of each country and the total size of its economy and the relative size within it of the financial services sector. As regards this latter point, the Friedrich report is in line with the unanimous proposal of the Governing Council. However, there are still some doubts in relation to all these proposals. As this is not a matter of urgency, why not grant us an additional reflection period?
Mr President, I would also like to respond to Mr Della Vedova that, according to the ECB proposals, Poland would still be ahead of Luxembourg.

Schmidt, Olle (ELDR).
Mr President, Commissioner, we all know that, in a larger EU, the ECB must be reformed, but the proposal presented by the ECB has not been sufficiently worked out. It has also been severely criticised.
Mr Friedrich's report is along the right lines but, in common with others in Parliament, I wonder why there is all this hurry. We should stop and reflect and produce a securely founded proposal for the next intergovernmental conference. It is a requirement of democracy that voting rules be fairly simple and comprehensible. Ordinary people too must in fact be able to understand them and how they work. The principle should be one of 'one member, one vote'.
As Mr Huhne pointed out, the important requirement of efficiency can be met in an enlarged EU. Commissioner, we must prevent an unduly divided Europe. A division into A, B and even C teams is not acceptable. The ECB must demonstrate greater openness, with public reporting of discussions and votes. That is a requirement that cannot be abandoned. Finally, we must in fact also strengthen Parliament's role.

Grönfeldt Bergman (PPE-DE).
Mr President, I want to thank the rapporteur, Mr Friedrich, for his sterling work on this matter. The issue of the voting rules for the ECB's Governing Council is very important, especially in view of the forthcoming enlargement and, so too, of the probable expansion of EMU cooperation. The present rules must be reformed. Everyone seems to agree that reform is necessary. It is not, however, entirely clear what that reform is to look like.
Mr Friedrich's report rejects the proposal put forward by the ECB on 3 February: a model with 21 votes on the part of 15 Central Bank governors and six auditors, and a rotating system once 16 or more countries have entered the currency union. That means that, in the extremely near future, not all Member States' voices will be heard. There will be a system in which not everyone participates, but which is nonetheless unwieldy and complicated. If decision-making is unduly complicated, this will lead either to the Bank's not being able to respond quickly enough to economic changes or to decisions' not being seen as legitimate. The rotation system will make it difficult to demand accountability, because it will become almost impossible to decide which individual or individuals is or are responsible for a decision.
Mr Friedrich's report, considerably compromised by the Committee on Economic and Monetary Affairs, proposes fundamental principles: the principle of one member one vote and principles concerning representativeness, transparency and accountability and about taking the lead in devising a new decision-making model that will be more efficient but also designed in such a way that all members still participate.
I think that this will be important for the small countries. It will also be significant for the new Member States. For myself, coming as I do from a country that is facing a crucial referendum on exchanging the krona for the euro, it feels only right and sensible to recommend a decision-making model that can be efficient and responsive in the long term and, at the same time, give everyone the opportunity to participate in a process in which it is also possible to demand accountability.

Berès (PSE).
Commissioner, ladies and gentlemen, we knew that this matter would arise. For a long time, it was too early to discuss it. This was true, in particular, when, by means of a report presented in autumn 2000, we tried to discuss it within the context of our work on enlargement. The report was by Mr Brok. Today, it would be hasty to take a decision solely on the basis of the work of the European Central Bank. The truth is that, in fact, the institutional solutions we adopt with regard to the Central Bank are sometimes frightening, because we sometimes have the impression that they could be imposed on other institutional mechanisms, or even the Union itself. That is the reality of the debate we are holding here.
Essentially, I believe that the Convention can undo what the Treaty of Nice has done. The Convention must be able to reverse proposals from the Central Bank because what is basically proposed is a change to the system, whether this involves the establishment of a rotation mechanism or differentiation between the decisions taken within the Central Bank. Essentially, once again, I believe that we cannot reject the entire proposal made by the Central Bank, for example the idea of restricting the number of members of the Governing Council if we want this body to be able to continue to take decisions. Essentially, I also believe that we should examine these proposals and try to extract what we consider to be the main points.
I believe we can extract some information, some criteria, from the experience gained by the Central Bank in its short life. The first criterion is that the distribution of power between the Executive Board and the Governing Council must be examined carefully to ensure that the Bank is in a position to take decisions. The second criterion, which the Chairman of our committee, Mrs Christa Randzio-Plath, has mentioned, concerns the transparency of decisions within decision-making bodies. The third criterion concerns the Bank's ability to define monetary policy in the interests of the whole euro zone.
I believe we should examine the Central Bank's proposal in light of these three criteria, and, in particular, it is in light of these three criteria that the Convention - because I think this decision is principally the responsibility of the Convention - will have to propose a solution for the future of decision-making within the Central Bank.

Maaten (ELDR).
Mr President, I am disappointed by the proposals for reform of the management structure of the European Central Bank, under which different classes of member will be created and a small group of large countries will in practice make the decisions. Nor do I see how it is possible to reconcile the fact that a few large Member States that now happen to be obstructing the implementation of the Stability and Growth Pact should have a prominent place in this lead group, while smaller Member States, which from the beginning have conducted a responsible and correct monetary policy, are relegated to second class. These proposals affect the equality of the Member States. Must those in the second and the third groups simply keep quiet in the discussion or stand aside while the great of the earth cast their votes?
No, Mr President, I think that the situation as we know it at present is perfectly all right. The rapporteur rightly says that we still have plenty of time to look calmly at a better system. Let us first acquire some experience of enlargement before we turn things upside down and subsequently opt for a simple and transparent management system with a European and not a national perspective. My own country would find the whole situation even more disagreeable. The Netherlands is one of the countries that have conducted a strong monetary policy for years. Initially we will be allowed to go along with this lead group, but as soon as the United Kingdom joins the euro zone we will be thanked for services rendered by being returned to the bench. Whilst I fervently hope that the United Kingdom will join at some stage, it is a rather sorry state of affairs when it entails consequences of this kind. Countries that have for some years been sawing more or less vigorously at the legs of European monetary stability are seeing themselves rewarded. It is nonetheless inconceivable, Mr President, that we throw away the euro in this way.

Kauppi (PPE-DE).
Mr President, I am pleased that the European Parliament's Committee on Budgets yesterday opted to support what is also the Finnish Government's policy, according to which any reform proposed by the Council cannot serve as a basis for decision-making. The work of the European Central Bank's main decision-making body must be reformed in order for effective decision-making to be possible after enlargement. The model proposed by the ECB Governing Council, however, is overly complicated and vague, and will not make it any easier for the general public to follow how monetary policy is formulated. We all want to make decision-making on monetary policy more effective, but the system must be more transparent and comprehensible.
The problem at present with decision-making in the ECB is not how votes are cast, but the fact that the Governing Council is trying too hard to avoid voting in general. The existing version of Article 10(2) of the Statute of the European Central Bank states that the ECB Governing Council takes its decisions by a simple majority. Proposals for decisions are not, however, put to the vote before there is consensus in the discussions. According at least to the statements made in Parliament by the President of the ECB, Wim Duisenberg, consensus means more than a majority but less than unanimity. For the ECB to be able to react more swiftly to market changes it should practise majority voting. From this point of view, it is not sensible for the voting procedures to be made complicated and off-putting with even less voting happening than before. Moreover, the rotation model being proposed by the ECB violates several principles which both Parliament and the central bank governors themselves used to consider of vital importance.
The preparatory work to reform the ECB's voting procedures is to be postponed until the Intergovernmental Conference takes place. Two proposals by Parliament are worthy of support. The first is the call for double key voting and the second the proposal that operational decisions concerning practical monetary policy should be distinguished in decision-making from longer-term institutional and strategic decisions. We hope that Ecofin takes Parliament's opinion into consideration when it makes its decision.

Lulling (PPE-DE).
Mr President, let me make it clear from the outset that I did not vote for the report that was adopted yesterday evening in the Committee on Economic and Monetary Affairs. Certainly, our German rapporteur relinquished his initial proposal to give each eurozone country a vote in the ECB Governing Council but to counterbalance this exclusively with the represented population. I would remind you that the ECB Governing Council examined a similar proposal by the Bundesbank during its lengthy deliberations and finally rejected it. Why? Because in a eurozone enlarged to 25 or 27 members, it means that four large Member States would have a de facto veto in the ECB Governing Council at the other countries' expense. This is unacceptable. Even if - as was agreed yesterday as a compromise in the Committee on Economic and Monetary Affairs - the two objective criteria of GDP and TAPs were additionally considered, this would result in a far less balanced system than the ECB model, which only uses these two criteria for ranking the Member States that are granted voting rights in a rotation system.
Of course the ECB model is new and takes time to adjust to, but it is not so complex and lacking in transparency as to make it incomprehensible to those who have to deal with it. That would be an indictment of the Member States' politicians and their central bankers! Ultimately, a currency is influenced by economic and financial strength rather than by a country's population. The ECB's proposal reflects this truism.
Another reason why I did not endorse the so-called 'compromise' amendment is that it would lead to what amounts to renationalisation. It envisages even more enhanced competencies for the enlarged Executive Board of nine members at the expense of the ECB Governing Council, which currently meets twice a month, but which - with as many as 27 members in line with the Committee's proposal - could henceforth naturally only play a subordinate role. I hope that the Council will endorse the ECB Governing Council's far more balanced recommendation and that this can be ratified before enlargement - for the scenario which is now being proposed would deal a fatal blow to confidence in the euro.
Solbes
Mr President, I shall be brief. Two different issues have emerged during this debate. The first concerns the system proposed by the Central Bank, based on the implementation of the enabling clause. The question arises as to whether it is logical or not and whether a better system could be devised. The second issue concerns what a better system might involve. It might be the system detailed in Mr Friedrich's report or it might be different again.
What we are concerned with at present, however, is the enabling clause established at Nice. The governments are referring to it authorising the Central Bank to present a proposal which must be unanimously approved. They are also referring to it in connection with a Commission proposal, which must also be unanimously approved.
The enabling clause only provides either for all the members of the central banks to be present and for all of them to vote, or, alternatively, for a system of restricted voting. Such a system would have to involve rotation. Clearly, a system of rotation means that not everyone would be involved in everything. The issue of the nature of the system of rotation then arises.
There is no doubt that the model presented by the Central Bank does provide for a weighting of the countries based on their respective financial and economic significance. As a result, the smaller countries are given a significant role.
The Commission is of the opinion, however, that there is not sufficient justification for the proposed system of rotation. The Commission therefore proposes adjusting the system of rotation only. All the Commission has done is to propose using the current Central Bank criteria to define its voting system. As I said, all this means is using the system the Bank has in place at present.
This system will of course involve a change. Not everyone will be present. The enabling clause does however provide for this. It would not make sense to table a further proposal for a different system of rotation, instead of suggesting an amendment to the Central Bank's proposal.
It has been argued in the House that the enabling clause will not resolve all the problems, and that a more ambitious stance is called for. I sympathise with these views. The Commission has adopted a similar position in some cases. Nonetheless, if a vote or decision is taken on the basis of the enabling clause, there is no doubt that the Central Bank's proposal, suitably amended, could prove useful. It would resolve the potential problem of the transition. It is worth remembering that any alternative model would also require unanimity and ratification, and would not be easy to implement.

President. -
The debate is closed.
The vote will take place next Thursday.
(The sitting was suspended at 5.05 p.m and resumed at 5.20 p.m.)

President.
 The next item is the statement by the Commission on the neighbours of the enlarged Europe: a new framework for relations with the neighbours to the east and south.
Ladies and gentlemen, I should like to inform you of a slight change in the order of business. The next item will be the statement by the Commission, and the debate will continue until 5.45 p.m. Question Time will follow at 5.45 p.m.

Prodi
Mr President, I will be extremely brief, just making a few points regarding the document presented today on proximity policy. This is an extremely important document which clarifies our proposals for European and Mediterranean relations after enlargement. The enlargement process has, in fact, given the countries near to the Union great hopes, but it has also generated frustration and tension which can be summarised in a number of quite clear, quite comprehensible comments made by the countries of the East excluded from enlargement. They have reproached us for merely shifting the iron curtain eastwards, while the Mediterranean countries have reproached us for concentrating primarily on the East rather than on the Mediterranean countries.
Our neighbours have many hopes and I have always believed that they must not be disappointed, that we should create a proper policy for the Union's relations with them too, both in their interest and in the interest of the Union. The communication approved by the Commission today on proximity policy meets this need, the need to create a reference framework within which we can develop ever closer relationships with our neighbours to the East and South, to create what I have described on several occasions, initially intuitively and then after increasing analysis and reflection, as the ring of friendly countries, the ring of friends which stretches from Russia to Morocco, a ring with which we can share everything except the institutions, in other words with which we can share programmes, market, rules and political dialogue but not Parliament, not the Council and not the Commission. In short, our aim is to develop a policy for these countries which are calling for a special relationship with the Union but for which the Union cannot foresee an enlargement strategy, at least in the short term.
Clearly, then, the western Balkan countries are not included in this ring: the prospect of their membership has already been agreed, although the date has not yet been set. The reference framework we have outlined in the communication complements rather than replaces the relationship the Union has with individual countries or groups of countries. Clearly, the intensity and, above all, the speed with which relations between the Union and the individual countries develop within this reference framework will depend on the abilities of each individual country. In other words, the principle of differentiation will apply in this case too. The objective is twofold. Firstly, to create, together with our partners, an area of prosperity and stability based on the principle of economic integration, strengthening of political bonds and cultural cooperation, and on this last - cultural cooperation - I insist. Secondly, to make the development of these preferential relations dependent upon the gradual adaptation of the countries to our rules and our set of values in both the economic and political domains. Thus, we want to develop with each individual country, on the basis of experience and our current contractual obligations, an agreed action plan which sets out the path we intend to pursue together.
These action plans will include objectives, timeframes, procedures and monitoring mechanisms applying equally to both parties. With a view to this, therefore, we will assess whether there is a need for us to create a specific contractual instrument - a proximity agreement - and an ad hoc financial instrument - a proximity instrument. In practical terms, we will work with our neighbours to create a single market, to promote the free movement of persons, goods and services, to strengthen cooperation in the fight against common threats, to strengthen our cooperation in conflict prevention and crisis management, to promote human rights, to step up dialogue between cultures and religions, to integrate transport, energy and telecommunications networks and to create a wider research area, in short to bring about ever greater integration based on the shared values and principles of tolerance, peace, freedom and solidarity - the very principles on which our Union is founded.

Swoboda (PSE).
Mr President, the Commissioner obviously wanted to say something just now, and perhaps I can ask him a question at the same time. I fully endorse the proposals that Mr Prodi has outlined here.
What would interest me is this: what will be the institutional framework for all this? You mentioned the financial instruments and the treaties with neighbouring countries. However, my question to the President or the Commissioner is this: are any specific institutional arrangements required?
Theoretically, after all, there is still the European Conference. There are various possibilities. In connection with the Mediterranean region, we have discussed the option of establishing closer parliamentary cooperation as well. We must not leave this in abeyance, and we must also ensure that the responsibility is clarified within the Commission, for what we are dealing with here, really, is an interim phase between normal traditional foreign policy and integration in the European Union. In my view, this interim phase must be defined very precisely, and the Commission should submit specific proposals to deal with it, setting out detailed arrangements and describing which institutions are involved. Will the European Conference be revived? Will there be specific responsibility within the Commission for this area of cooperation? Will it remain with Commissioner Patten? These are the questions that interest me. Perhaps you could explain the situation in more detail.

Patten
Mr President, we have just had an extremely interesting discussion in the Commission in which the leitmotif of most of the contributions - the strongly-held argument of most of those who spoke - was that it was absolutely imperative that we give the question of the relationship with our new neighbours the priority which in the past we have given the whole process of enlargement; that, in other words, it becomes part of everybody's responsibility to promote the concept of an institutionalised ring of friends to whom we can offer ways of sharing in our security, stability and prosperity.
The honourable Member will see from the communication we are publishing today the practical ways in which we try to give expression to this notion. It is not easy. We have tried it in the past. To some extent it has been like the philosopher's stone; we have never quite found a way of expressing our views about our neighbours that does not involve offering them all membership of the European Union. That is not the subject of this communication. However, the honourable Member will see from our proposals that we have put forward sensible and concrete ways in which we can encourage our neighbours, both on our land and our sea borders, to share in our market, to share in our policies, not to share in our institutions but to share in the prosperity and political stability which have been the hallmark of the European Union.
The simple answer to his question is that there is no disagreement. The Commission believes that this is a responsibility for the whole Commission and that responsibilities will have to be shared between us.

President.
 In view of the short time remaining and of the number of Members who wish to speak, I shall give the floor to sets of three Members at a time, preferably one from each group. I have a long list of Members before me. The Commissioner will reply once the three Members have posed their questions.

Callanan (PPE-DE).
Mr President, I have listened with great interest to the Commissioner's statement on the enlargement countries. I am sure if they join the Union, they will wish to ensure transparency and accountability in all the institutions.
To this end, the President of the Commission this morning promised Parliament that he would publish the note to Commissioner Kinnock from Mr Jules Muis of the Internal Audit Service. This afternoon the Commission spokesman said that the Commission now had no plans to publish that note. Could the Commissioner please tell us why the Commission's line has changed from this morning and why it is refusing to publish this document so that the discharge of the Commission's budget can proceed as urgently and speedily as possible?

President. -
This is not relevant to this afternoon's debate. Mr Prodi is welcome to respond if he so wishes, but I would urge Members to keep to the order of business.

Prodi
I want to confirm what I said this morning: the document will be made public as per the interinstitutional agreement.

Lagendijk (Verts/ALE).
Mr President, I have followed the Commission President's introduction very closely and have also read the speech he made on the same subject in Brussels in December. In both his introduction today and in that speech he vacillates dreadfully between the position that we must not entirely rule out the prospect of membership and the view that we must not initiate it either. That I understand perfectly well and that is no criticism of Mr Prodi either.
There is a ring of friends in which Morocco and Russia will be treated on the same terms, in the same way. My question - it is an open question to the Commission - is whether it is not better or would be better to say in even clearer terms: 'in this ring of friends there are friends who are ever so slightly closer to us'. Ukraine and Belarus might become members in the future for example, while we cannot imagine the same of Russia. We must be perfectly clear about this. The same applies to North Africa for example. Does that not create the clarity that these countries demand of us and is it not better to make a distinction between potential members and countries or neighbours who will never be eligible for membership?

Wiersma (PSE).
I should like to endorse Mr Lagendijk's question. I understand perfectly well what the Commission is doing and also what priority it wants to give its policy with regard to the countries around us. In this Parliament we shall be returning in detail to the announcement that the Commission is making today. I really only have one question. The objective of course is to prevent the creation of a new divide, a new Iron Curtain, in Europe. If this is what we want to prevent, then we are going to have to help countries such as Ukraine or Belarus to undergo the same development as countries such as Hungary or Poland.
Does the Commission think it will be able to develop sufficient influence on and cooperation with these countries with its proposal, so that the same reform processes take place there as in the present candidate countries and in time a kind of equality will develop that opens the way to answering the question as to whether these countries can also become members of the Union?
For me, what it comes down to in the end is whether, by means of what you are proposing, we can achieve the same positive effect on those countries as we have achieved with the enlargement process in a number of other countries in Central and Eastern Europe. Given what is currently happening in those countries, I think that this is the only way to prevent a new divide in Europe.

Berlato (UEN).
Mr President, the accession of the new Member States will expand Europe's borders further, in that the Union will exert even greater influence over the continent, with the development of proximity policies which will create new potential partners which might become new Member countries in the future, as has happened in the case of the current accession countries.
We find it hard, however, to imagine enlarging Europe even further without launching a debate which is now urgent: ultimately, how wide can Europe's borders stretch? If we look southwards, towards the African shores of the Mediterranean, we see situations which have always been such as to make it clear that those countries cannot share development criteria, ideologies or political or religious beliefs with Europe, except, perhaps, Libya and Israel. If we look eastwards, we might consider granting membership to the Republics of Ukraine and Georgia. The same may be said of Norway, to the North, while, to the West, the Atlantic is in itself already a border.
What are the widest borders that we can consider if we are not to drown the Union in an area of free trade, given the need to have a Union which does not go under whenever it has to address major international issues, as, I am sad to say, has been the case in recent days? The debate on which countries will be destined to become part of the Union and with which countries we should just form preferential cooperation relations will have to be addressed very carefully, given that cooperation cannot concern trade measures alone but must cover relations on sensitive issues such as respect for human rights and the control of migration flows too.

Prodi
I will respond very briefly to the three related questions. I want it to be clear that this objective of building a ring of friends does not imply any commitment or any exclusion as regards enlargement: none of these countries has the right to membership and none of them is excluded. However, clearly, this does not resolve the issue raised in the last question. Here, I want to reiterate a request - which I have already made to Parliament many times and which I am told has been heard - for a debate to be held in the near future precisely on the Union's borders. However, the ring of friends is a different project, a project which is not concerned with the enlargement of the Union but which still offers a relationship of close cooperation, which offers gradual integration, which genuinely offers the Union and the countries around it a future of economic and political security. Membership is something different.
To turn to the second question, Mr Wiersma , this was done precisely in order to avoid the accusation that we have merely moved the iron curtain eastwards, as I said in my previous speech. There is no longer an iron curtain. There is no exclusion any more. There are Member countries, but countries which have a relationship of increasing active cooperation with the countries around them, with the ring of friends. It is an organic strategy that will increase the number of Members of the Union through enlargement and create an ever stronger and closer proximity policy through the ring of friends.

Brok (PPE-DE).
Mr President, I am pleased that the Commission has now put forward a proposal for us to discuss, on whether there are alternative options to full membership of the European Union. This will undoubtedly be a key issue for the future after enlargement and the accession of ten new countries.
I would like to ask two questions. Firstly, I am not altogether clear whether what is being proposed is a flexible system of bilateral relations between the EU and the various countries, or a multilateral approach - a kind of a 'European Economic Area plus'. I think this is an important point. My second question relates to the Balkans. I know that a highly differentiated approach is essential when considering the Balkan countries and that some of them will be able to join the European Union earlier than others. However, the other countries will still need a long period of internal development. It would therefore be wrong not to include them in a strategy of this kind, for during the interim period - which could last a long time - they could be included in this network as well. Perhaps the Commission could review this position once again.

Souladakis (PSE).
Mr President, the general framework set out by the President of the Commission for relations with other countries following enlargement generally has my backing. However, general principle policies do tend to fail in practice. This being so, I have two questions: first, what other good can come out of relations with the Mediterranean countries of North Africa in practice, when general policies have not, in my opinion, been particularly successful. And secondly, on the subject of the candidate countries of the former east bloc, because the quality of relations is sometimes determined by neighbouring countries rather than general principles and because, as we recently realised, many of the candidate countries have proceeded as they see fit on strategic policy matters - we are talking about the problem of Iraq, irrespective of what position you agree or disagree with - the question is: how can we influence these countries so that they do not set their own criteria for relations with their neighbours, which we see as countries of collaboration and peace and which others perhaps see as enemies.

Schroedter, Elisabeth (Verts/ALE).
Mr President, our discussions have focussed exclusively on the broad outlines, and, whilst these are, of course, very important, the problems lie in the detail. One of the central issues in the neighbouring countries is what will happen at the borders. Will there be new, decentralised instruments to facilitate practical cross-border cooperation? Will the border arrangements be eased, or will the borders lead to a real and tangible division by separating ethnic groups and severing existing relations?
What interests me is what the Commission's strategy says about this issue. What form will the financial instrument take? Will it be a centralised instrument, as is currently the case, with the problems that we have, or will it be a decentralised instrument?

Patten
Mr President, I can answer the three questions on the principle of work-sharing.
Firstly, the Chairman of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy will recall that I have agreed to come to the committee on 25 March to have a full discussion on the Commission communication, which will enable us to follow up in more detail a number of the points being debated this afternoon.
He raised a couple of points. Firstly, what we want to provide is a coherent global framework. However, we recognise that one cannot argue that there should be a one-size-fits-all policy. We must have a policy that is able to accommodate the different levels of economic development and of commitment to our value system. Therefore I hope that there is coherence which is sufficiently flexible to ensure that the policy works.
He also referred to the Balkans. We have specifically excluded from this communication the countries that are involved in the stabilisation and association process, i.e. Croatia and the countries of the west Balkans, Turkey, Romania and Bulgaria. They have already been given the perspective of membership of the European Union and we are focusing in this document - as we were asked to do by the Copenhagen European Council - on those countries that do not have the perspective of membership. As the President has said, I am sure there will be a debate in due course on the geographical limits of the European Union. The President was making speeches about this around three and a half years ago. However, this is not the time or the document for that debate. I would just add that it is our intention that the accession candidates themselves should be involved in this debate in which many of them have a larger stake than us.
On the question of how the Mediterranean countries and the Eastern European countries can be involved in our policies, we very much hope that we can involve them in everything from the internal market, trade, migration and the movement of persons to justice and home affairs, financial assistance and issues like governance, human rights and the rule of law. We have been trying to do that through the Barcelona process by, for example, giving more encouragement to those countries that are already involved in the Agadir process, encouraging them to move on from that and to start trying to harmonise their regulations with ours, and involving themselves more in our own internal market. That will be the policy that we continue.
There are a number of countries in Eastern Europe - the western NIS one could call them - who have been unable to join the European Union, even though, like Moldova and Ukraine, they express their European vocation. I hope that what we are proposing to them in terms of trade, economics and political dialogue will increase the size of the common economic and political space around our borders. However, we do not seek to resolve the question of membership for those countries of the European Union in this document.
Finally, I am pleased to have the opportunity to answer the honourable Member's question on this because it is one we have discussed in the past. She quite sensibly asks about coherence in our financial instruments for dealing with cross-border issues. I can assure her that she will find in our document the proposal for a neighbourhood instrument, which will deal with the sort of problems she has referred to. My colleagues who work on enlargement and regional matters will be working with my own directorate-general and others to try to bring this new instrument into operation in the most effective and least disruptive way possible.

Beazley (PPE-DE).
Mr President, I was unaware that British Members of this House had a reputation for being verbose!

The President of the Commission introduced the communication in broad outline, so perhaps I could ask Commissioner Patten about two points of detail since he has touched on them. Could we have an assurance that, as the President has said, we are not attempting to create a new iron curtain and that, for example, the present visa arrangements between Poland and Ukraine will not be made more difficult once Poland becomes a member of the European Union? I see the President of the Commission is nodding, so that will cut down the time for his answer.
The second question to Commissioner Patten is that, since the acceding Member States have tremendous experience of relations with countries such as Ukraine, Belarus and Russia, would it not be timely now to set up some sort of working party? Those acceding Member States could then begin to feed in their experience in foreign policy relations with our new neighbours, perhaps reporting to Commissioner Verheugen or indeed to Commissioner Patten himself.

Tannock (PPE-DE).
Mr President, I strongly believe that at least offering Ukraine, Belarus and Moldova prospects of potential long-term membership will encourage the necessary reforms needed in their economies, their systems of governance and human rights and also support those politicians and parties who share our values and aspirations.
Will Commissioner Prodi retract his statement - if it is true - that Ukraine is no more European than New Zealand? It was clearly seen by the Ukrainians as a geographical nonsense and a signal to their government that they were much better off making their bed with the Russian bear. Fortunately Russia does not want to join the European Union, but Ukraine does. We should not exclude this possibility, particularly if at the end of next year the Commission sanctions the much weaker case - to my mind - for Turkey's membership.
Can the Commission provide more funds to combat illegal immigration and border flows through these countries, irrespective of our disapproval of their governments in office at the moment?

Flautre (Verts/ALE).
Mr President, President of the Commission, I support and welcome the Commission's statement which expresses the political desire to build closer relations with neighbouring countries. I feel, however, that the issue of borders constitutes an element of discord in this climate of rapprochement. We have established a series of measures relating to relations with third countries, particularly our neighbours, in order to integrate the management of the flow of migrants. These concern border controls, the control of illegal immigration and agreements on readmission. I wonder whether we are really in the process of subcontracting the management of migration to our neighbours, so creating a buffer zone between the European Union and the rest of the world, which would probably be less laudable. In my opinion, these measures serve to promote the establishment of detention zones in these neighbouring countries both within and on the borders of Europe. I am referring to zones run in a heavy-handed and arbitrary manner, where the kind of rights enshrined in the founding values we wish to share, are, more often than not, flouted. I would therefore urge you to consider the risks currently involved.

Hannan (PPE-DE).
Mr President, we are in some danger of begging the question. The current enlargement round depends on the outcome of eight referendums which have yet to be held across central and eastern Europe. Does the Commission believe that it is right for these countries to be left to take that decision on their own, or does the Commission believe that it is acceptable to intervene politically and financially in that decision? So far there has been one referendum, in which the European Commission admits to having spent EUR 700 000, a sum which in per capita terms is equivalent to spending EUR 100 million in Commissioner Prodi's native Italy or in Commissioner Patten's native United Kingdom.
If the terms that we are offering these countries are so favourable, why do we need to deploy colossal resources on this scale in order to help them make up their minds?

Patten
Mr President, I think the House is going to have the benefit of the President after the External Affairs Commissioner has made one or two points.
Firstly, I should like to assure Mr Beazley that there is no question of us seeking to create another iron curtain in Europe. Indeed, part of the intention of this communication is to prevent any notion of a fortress Europe being created with the 25 Member States.
When one talks about easing visa regimes, it is important to consider the conditions under which interior ministers are likely to regard that as a tolerable option. One of the things that they look at is not simply the border between the country making the application and Europe, but the other borders for which that country is responsible. When, for example - I hope after we have concluded a re-admission agreement with the Russian Federation - we begin discussing the question of visas, one question which will be raised again and again is the security of the thousands of kilometres of borders which Russia has with other countries. There are a number of conditions precedent to any serious discussion of visas.
The honourable Member also asked whether we were going to try to involve the applicant countries which have not yet joined, and whether we were involving those countries in the debate. We have the democratic process to go through, as the honourable Member said a moment ago, but the simple answer is 'yes, we are'. A number of applicant countries, for example Poland with its recent discussion document on the eastern dimension, have made very sensible and thoughtful proposals. From April the candidates for accession will be sitting in the meetings of the General Affairs and External Relations Councils and listening to the debates, so I hope that will inform their contributions in due course.
I am aware of Mr Tannock's concern about the Ukraine which he has expressed on a number of occasions. As Mr Prodi said, this document itself is not a definition of the geographical boundaries of the European Union, but I hope that our friends in the Ukraine will recognise the real efforts that we have made to help create a common political and economic space which will be to their advantage.
I would wish that we were able to have a closer and more benign relationship with Belarus. It is not our fault that does not exist. The honourable Member knows the style, objectives and policies of the regime in Belarus which led to the unfortunate visa ban not long ago. At the moment we can still provide Belarus with support for civil society developments, and I look forward to the day - perhaps after the next elections if they are conducted freely and fairly - when we can develop our relationship with that country. We do not want any country on our borders to be isolated by its own will, or by the will of its regime. I have attempted to answer the honourable Member's point about a buffer zone. One has to take account of all the borders of other countries.
Finally, I say to the honourable Member - whose interest in these matters I readily acknowledge - that he should recognise that many of us believe passionately that when we discuss enlargement we are not just talking about a matter of money. We are not just talking about commercial, economic or even geostrategic interests. For many of us the case for enlargement is a moral one.
The honourable Member should not worry too much if we think it is worth expressing that case as vigorously and as comprehensively as possible. Though I have intervened in their debate myself, I do not believe that the people of Malta, who have a certain reputation for courage and independent-mindedness, are likely to be swayed by the occasional advertisement in one of their newspapers, or even, I must confess, by the occasional interview with the Commissioner for External Relations. They might be much more swayed by interviews with the Commissioner for Enlargement who has a much more silver tongue than I do, but I hope, as this democratic process rolls across Europe, that the honourable Member will see one country after another voting to come home.
Prodi
Just two further comments, for the Commissioner has answered almost all the questions in full.
I reiterate: this offer, this proposal, this political strategy does not mean accession for these countries, it does not mean that they will become members of the Union. It certainly does not imply that but nor does it exclude it. I would also, however, like to make it quite clear that I do not accept - or rather, I accept up to a certain point - the argument that the possibility of becoming a Member of the Union furthers the democratic process and the internal development of these countries. This gives me great pleasure, it is beneficial, but it is certainly not a sufficient basis on which to judge whether or not a country should become a Member of the Union.
Membership of the Union means sharing specific political objectives too, sharing roots and identities, sharing much more than just democratic sentiments. This was the point I made with regard to New Zealand. I have never said that New Zealand is more European than Ukraine. I merely said - and I will say it again - that, if we consider democratic criteria alone, there is no reason why New Zealand should not become part of the Union. However, there are geographical and historical considerations and political goals that a country must share in order to become a Member of the Union. It is therefore clear that this possibility must be conferred where these goals are identified and consolidated and are shared by ourselves as well as the countries involved. That is why I am anxious for the debate on the Union's borders to be opened.
Lastly, I would like to reassure Mrs Flautre that the objective is precisely the opposite of creating detention centres for immigrants from these countries, which has rightly been identified as a dangerous course of action. There are different ethical considerations where immigration is concerned: cooperation with these countries would make it possible to deal with the issue of immigration more compassionately, more thoroughly, less traumatically and with greater involvement of the countries concerned. Clearly, this can only be achieved with the ring of friends, while we know that immigrants are now coming to Europe even from very distant countries. Having a group of countries with which we can cooperate on these sensitive issues too is extremely important, and it is, of course, our responsibility to ensure that this is achieved with due regard for the rights of the migrants. It is much easier to achieve this objective where there is cooperation than where such cooperation is lacking.

President. -
The debate is closed.

President. -
The next item is Question Time (B5-0085/2003)
The following questions are addressed to the Commission.
Part I
 President. -
Question No 50 by Bill Newton Dunn (H-0095/03):

Subject: Reports of national quotas for soccer players inside EU
Newspapers in the UK, some of which are notorious for reporting EU matters inaccurately and sensationally, are reporting that 'a deal is close between UEFA and the European Union' to limit the number of 'foreign' players in each team to 50 per cent - so that soccer clubs inside the Union could be forced to field teams which include at least half from their own Member State.
Will the Commission kindly confirm that these reports are incorrect, because such a deal would conflict with the Union's basic principle of free movement for its citizens?

Diamantopoulou
. The Commission is not aware of the United Kingdom press reports to which the honourable Member refers.
As far as any enforced limit on the number of foreign players is concerned, I should like to recall the following.
The application of the Community rules on the free movement of workers in sport was decided by the European Court of Justice in the 1974 Walrave case, in which the Court held that sport was subject to Community law when it constitutes an economic activity, whether by professional or amateur athletes. This was confirmed by the Court in its now famous 1995 judgment in the Bosman case. In this case-law the Court also held that nationality clauses could only be justified in relation to specific official matches between teams representing countries - such as the Olympic Games - or certain world or European championships.

Newton Dunn (ELDR).
Mr President, I would like to thank the Commissioner for what seems to be a very satisfactory answer and to congratulate her on the newspapers she chooses to read, or rather chooses not to read.

 President. -
As the author is not present, Question No 51, 52 and 53 lapses.
 President. -
Question No 54 by Alexandros Alavanos (H-0066/03):

Subject: The Annan plan for Cyprus and the 'acquis communautaire'
Referring in its resolution concerning 'the progress made by each of the candidate countries towards accession' to the Annan plan for a political settlement of the Cyprus problem (EP Minutes of 20 November 2002), the European Parliament 'calls on the Commission to certify whether the plan can provide the basis for a viable and operational settlement in the framework of the European Union in accordance with the acquis communautaire'.
Now that the Commission has studied this plan, can it certify that it is consistent with the 'acquis communautaire'? Does it intend to communicate its considered opinion to Parliament and, if so, when?

Verheugen
Mr President, the honourable Member will of course be aware that his very important and interesting oral question has sadly been overtaken by events over the last 24 hours. I would therefore, with his permission, like to take this opportunity to inform you about the latest developments.
The Commission regrets that the efforts made by the Secretary-General of the United Nations, Mr Kofi Annan, to seek a comprehensive solution to the problem of Cyprus have proved unsuccessful. The Commission gave this process its full support, and it recalls the European Union's readiness to facilitate a solution in accordance with the principles on which the European Union is based.
Notwithstanding the European Union's preference for a political solution, the Commission confirms that the accession process will continue as planned in line with the existing timetable. All the preparatory legal steps to enable this to take place have already been taken. In other words, we will now submit to Parliament a protocol supplementing the accession treaty with Cyprus and setting forth how Cyprus's accession will be organised under the present circumstances.
The Commission notes and endorses the UN Secretary-General's statement that the peace plan will stay on the table. The Commission is also ready to support all further endeavours in this context. The Commission encourages all the sides concerned, including Turkey in particular, to work actively to achieve a solution.
The Commission underlines its solidarity with all Cypriots and appreciates the courage with which the Turkish Cypriots have expressed their European convictions. The Commission will continue to promote projects in Cyprus to the benefit of both communities, so that economic inequalities on the island are reduced and confidence is built between the two communities.

Alavanos (GUE/NGL).
May I start by thanking the Commission and expressing my appreciation of all its hard work on the accession of the whole of Cyprus to the European Union, acknowledge the importance of the announcement it has taken this opportunity to make and ask the following question: given that negotiations with Turkey are scheduled to start at the end of 2004, is resolving the Cyprus question one of the preconditions, the implementation of which will require a positive and constructive contribution from Turkey if it wishes to integrate? Also, now that this stage of the Annan plan has come to a close, does the Commission think that the European Union and the Commission will perhaps take on a more substantive role in negotiations between the two communities?

Verheugen
Mr President, Mr Alavanos, when I visited Ankara at the end of January I left the Turkish authorities in no doubt about the possible consequences of a failure of the Cyprus talks. In my discussions with the Prime Minister and the leader of the AK party and also with other leading figures in Turkish politics, I made it clear that the Commission is expected to issue an opinion and a recommendation at the end of 2004 stating whether or not Turkey meets the political criteria for accession and, if so, recommending when accession negotiations with Turkey should start.
I have to say very clearly that the Cyprus problem is part and parcel of these political criteria for accession. We have also expressed this unequivocally in the accession partnership with Turkey. Today, what I can say, with all due caution, is that if, at the end of 2004 - when the Commission has to table its report and recommendation - the situation in Cyprus were to remain unchanged, that is be exactly the same as it is today, then we would have a situation where a country, namely Turkey, wished to negotiate accession with us but did not recognise one of our Member States, namely Cyprus. I find it very difficult to imagine how, in such a situation, the Commission could issue a positive opinion on starting accession negotiations with Turkey.
I apologise for my inability to be any clearer, and, indeed, for my not wishing to be any clearer, but I think that what I have said is clear enough. If you consider what I have just said in connection with what I have said about the protocol, then this means that there is obviously still an opportunity for a solution to be reached between now and the end of 2004. That is why both the United Nations and the European Union are saying that yesterday's failure does not mean that the Cyprus problem is a closed book, but that as soon as the political situation allows, obviously, talks about the plan can be resumed. It is very important for the United Nations plan to remain on the table.
Allow me to make one further point: the most recent version of the United Nations plan was an extremely favourable offer, especially for the Turkish Cypriots. I am firmly convinced that there will never be a better offer or a better solution for the Turkish Cypriots than this one. That is why it is extremely important from the point of view of the Turkish Cypriots for the United Nations to say that the plan will stay on the table. We can only warmly welcome this.

Alyssandrakis (GUE/NGL).
Commissioner, allow me a brief comment, if you will, before the supplementary question. Not only has the process to integrate Cyprus into the European Union failed to resolve the Cyprus question; by integrating the free part of Cyprus, it has resulted in de jure partition and recognition of the Turkish occupation. Not that things would have been much better had the two sides accepted the Annan plan which, unlike the UN resolutions, attempted to impose a particular form of federation which was not so very different from the recognition of two states in Cyprus, in other words partition.
Under these circumstances I wonder, Commissioner, how the Commission is going to deal with a situation in which a candidate country, in this case Turkey, has forces occupying and has colonised part of a country which is already a Member State of the European Union, in violation of numerous UN resolutions. I am not just talking about resolving the Cyprus problem, I am talking about dealing with the occupation. Will the European Union accept responsibility for liberating the occupied part of Cyprus?

Verheugen
Mr Alyssandrakis, I do not agree with you that Cyprus' accession, in the form currently proposed, will mean a de jure division of the island. The protocol that I have already mentioned several times makes it absolutely clear that Community law will not be applied in those parts of Cyprus over which the Government of the Republic of Cyprus cannot exert effective control. But this is not tantamount to recognising two Cypriot states. Like the rest of the international community, we still regard the Government of the Republic of Cyprus as the representative of the whole of Cyprus, as its only legitimate representative under international law.
From a purely legal point of view, the whole of Cyprus will become a Member of the European Union. In practice, Community law will not be able to be applied in part of the territory of Cyprus for as long as there is no political solution.
Once there is a political solution - whenever this may be - all that will be required will be a unanimous decision by the Council and the whole of Cyprus will be a Member, both de jure and de facto. We would not need to hold further negotiations. Neither would another Treaty be required, or renewed ratification. All of these matters are settled in the protocol, which is part of the Act of Accession.
What can the Commission do to improve the situation? I think the most important thing that we can do is to continue to cooperate intensively with Turkey, to continue to use all of the means at our disposal to encourage Turkey to drive forward political, economic and social reforms and to meet the political accession criteria. That is the only thing that we can do. At the end of the day it is also the only thing that will help.

Posselt (PPE-DE).
Mr President, I would ask you to call my question again, and for the following reason: I was here at 5.30 p.m. and the debate was still in full swing. I then went to another meeting. As soon as I saw that Question Time was starting and Mr Prodi had finished speaking I rushed here from that meeting, but the first part - which according to our documents was supposed to last 30 minutes - was already over. I really would therefore crave your indulgence.
In such cases it is extremely difficult, even for someone like myself who endeavours to attend Question Time on every occasion, to be here on the dot ready for this procedure. I would therefore ask you to call my question again.
President. -
Mr Posselt, believe me that I am sorry because you are one of the most committed Members during this Question Time, but there are several Members in the chamber who have thought the same thing and the Rules of Procedure state that the Member must be present when their question is replied to. The question has lapsed and the Rules of Procedure do not leave any other option since that would amount to setting a precedent.
I understand your argument, but I cannot do anything, either for you or for Mr Salafranca who is now going to speak. I will give the floor to Mr Salafranca for a point of order; but, for example, Mr Lamy has already left.
I know that we have started late, because Mr Prodi arrived late. I know all of this. But the Rules of Procedure lay down that the questions lapse.

Salafranca Sánchez-Neyra (PPE-DE).
Mr President, I am very glad that you know what I am going to say, because I did not intend to say what you have suggested. I simply wish to say that your interpretation of the Rules of Procedure is correct and that, when the Member asking the question is not present, the question lapses.
I wanted to stress that I was paying great attention in an opposite room watching the screen, which indicated the order of speakers and that Question No 51, the one previous to mine, did not show up on the screen. I saw the first one, but I did not see the second. The speaker was not present and Mr Lamy did not wait very long, because I ran into him leaving.
Therefore, Mr President, without wanting to accuse you of having any responsibility for the way the debate proceeded - although it would be desirable not to change the agenda - I would request that you ask the services of the House to ensure that the screen and the monitor work correctly so that this kind of situation does not happen again.

President. -
Thank you for very much improving on what I thought you were going to say. It is always important that the President can be mistaken in his judgments.
You have many reasons and you have explained them to me. I will ask the Commission to answer these questions in writing given the extraordinary circumstances, but there will be no oral reply.

Posselt (PPE-DE).
Mr President, I just wanted to clarify three points: firstly, Commissioner Verheugen is still here. Secondly - and this is also an important point - you made an exception at the last part-session. I will check in the Minutes to see which Member was concerned. I have a very clear recollection of this precedent being set. Thirdly, I should like to say that I would request that Question Time begin, as in previous years, at 5.30 p.m. precisely, regardless of what is happening in plenary. That was the practice in this House for almost 20 years and it was something that we could rely on. But being sloppy about the start time, only then to be strict when applying this rule, and extreme when interpreting it, is not something that I can accept. Either you are liberal in both cases or strict in both cases!

President. -
I would ask that this be the last point of order, since we are going to spend more time on this than we would have done answering the questions.

Salafranca Sánchez-Neyra (PPE-DE).
Mr President, I would like to thank you for kindly suggesting that the Commission should reply to my question in writing, but I would prefer my question to lapse in accordance with the Rules of Procedure. I will present it again for the next part-session since I would prefer there to be a debate in the Chamber.

President. -
I can only say to Mr Posselt that in that case, which was very different from today's case, I made it very clear that I was not setting a precedent and I hope that that is recorded in the Minutes. But you will remember that I said that I was not setting a precedent.

 President, -
Question No 55 by Brian Crowley (H-0082/03):

Subject: Breach of the free market in the Czech Republic in the distribution of newspapers and magazines Article 81 of the Treaty specifically prohibits agreements between undertakings which may affect trade between Member States and prevent, restrict or distort competition within the common market.
Is the Commission aware of the agreement between a number of media companies which operate in and have their registered offices in the EU which has enabled them to become the major shareholders in První novinová spolecnost, a joint stock company in the Czech Republic, and is the Commission aware that this agreement allows them to monopolise the market, dictate the price of distribution and the composition and content of newspapers and magazines and in effect, take over 100% of the distribution market in the Czech Republic of newspapers and magazines, thus undermining media pluralism and diversity? Does the Commission recognise that their activities are seriously jeopardising the future of their only competitor, Mediaprint and Kapa Pressegrosso, not only on the territory of the Czech Republic but also in relation to its imports of newspapers and magazines from Germany, Austria and Italy and its distribution of newspapers and magazines to other EU Member States? What action will the Commission now take to ensure free competition and an equal market in the Czech Republic?

Verheugen
Mr President, Mr Crowley, the point you raise in your oral question corresponds exactly to the subject of a formal complaint that has been submitted to us. The formal complaint came from the Media Observatory Czech Republic, and has been endorsed by the company Media Print & Kappa Pressegrosso. It stated that alleged violations of EC competition law had been observed in the Czech Republic. Both I myself, and the EU delegation in Prague, have also had this matter drawn to our attention in conversations with the chairman of the Media Observatory Czech Republic. And I can tell you that immediately afterwards I had the opportunity to raise this issue with the Czech Government at the very highest level.
For the time being, the Commission is of the opinion that it is first and foremost the Czech competition authorities and courts that are responsible for the matter, because it mainly concerns distortions of competition on the Czech market in print media. Nevertheless, the Commission services have contacted the Czech competition supervision authorities. The Czech supervision authorities are currently examining the case and recently issued a temporary order against the company Prvni Novinova Spolecnost and its parent company for possible violations of the Czech competition rules. I hope I pronounced that correctly. I am not quite sure. Czech is a difficult language!
Implementation of legislative provisions by the Czech competition authorities is being closely monitored in the run-up to accession, and with this in mind the Commission will continue to observe progress on this case.

Crowley (UEN).
Mr President, I would like to thank the Commissioner for his brief response. However, Commissioner, you did not answer the basic aspects of the question. The reason I gave so much information - like you I had access to this information - was that it could be an attempt by a private company or by groups of private companies to distort the market before the full impact of European Union law becomes legal and to interfere so that no action can be taken afterwards.
Commissioner, I should like to know, firstly, your own directorate's response to this type of action and, secondly, whether there are any other mechanisms, besides going through the Czech authorities, that can be utilised in future to prevent this particular instance and also similar instances which are currently threatened in Poland, Hungary and Slovenia.

Verheugen
Mr Crowley, the different roles that we play here explain our different accounts of the situation. As a Member of Parliament, you are of course free to express a political judgment. As a Member of the Commission, I obviously cannot make a political assessment of a case when the legal proceedings are not yet concluded. You will understand this and you would certainly object - and rightly so - if the Commission were to express an opinion in other cases that are sub judice and where the proceedings have not yet been concluded. I must therefore say that I simply do not know today whether we do in fact have a breach of competition law on our hands. The question of whether competition law has been violated is being investigated at this very moment by the Czech authorities, and the Commission services are in contact with the Czech authorities because it is our job to ensure that in the pre-accession phase the relevant instruments are correctly applied and the relevant procedures adhered to. That is the connection.
Incidentally, if this had happened after accession it would not have made any difference. There is no doubt that this is a case for the national competition authorities and not for the European competition authorities because it is only the domestic Czech market that is affected by this dispute. The Commission is therefore already doing what you asked me to do at the end of your statement. We are acting on this matter. I can even go a step further and say that given that this is about media pluralism and given that media pluralism plays a significant role in promoting democracy in a country, the Commission is also taking this case particularly seriously.

 President. -
Question No 56 by Anne E.M. Van Lancker (H-0125/03):

Subject: Accession negotiations with Slovakia and the Roma minorities
In its resolution of 20 November 2002 (Paragraph 114) the European Parliament urged the Slovak Government to undertake decisive action to overcome the problems of discrimination against the Roma minorities, in particular with regard to the elimination of possible discriminatory practices by state institutions and public authorities. In late January 2003, the Centre for Reproductive Rights published an investigative report confirming that forced sterilisation was being practised on Roma women in the Slovak health-care system.
Does the Commission share the questioner's view that these practices amount to a violation of the Copenhagen criteria and of Articles 1, 3, 4 and 7 of the European Union Convention on Fundamental Rights? Will the Commission ask the Slovak Government to launch a searching investigation and adopt measures to put a stop to the practice of enforced sterilisation, which constitutes a serious infringement of human rights

Verheugen
Mrs Van Lancker, yes, I must say that this is a particularly depressing question. I also found the reports to which you refer deeply disturbing. I read the report on the alleged forced sterilisation of women from the Roma minority in the Slovak Republic with great concern and consternation. A practice of this kind would in fact constitute a serious violation of human rights if it were either ordered or at least tolerated by the state or any other public institution, or if the state were to refuse to investigate the accusations and call those responsible to account.
Immediately after this report appeared I therefore expressed my concerns to the Slovak Prime Minister, both verbally and in writing, and asking him to ensure that light was shed quickly on the accusations, which have been made by various human rights organisations.
I am very pleased to be able to tell you that the Slovak Government responded immediately and without hesitation. The Deputy Prime Minister of the Slovak Republic responsible for human rights issues acted straight away to instigate the necessary steps under criminal law. A special investigation team was set up. This investigation team is supported by the Home Affairs Minister's advisor on Roma issues. This Home Office advisor for Roma issues himself belongs to the Roma minority. In addition, the government has invited the Vice-Chairperson of the Council of Europe Parliamentary Assembly's Committee on Health to the Slovak Republic on a fact-finding mission.
In the meantime I have also received a written reply from the Slovak Prime Minister in which he assures me that there is no state-sponsored practice of this kind in the Slovak Republic, that the accusations are the subject of a meticulous investigation and that should they prove to be true the full force of the law will be brought to bear in taking action against the perpetrators.
I can assure you that the Commission will closely monitor the progress of the investigations. Obviously we will do all we can to ensure that any abuses are remedied forthwith and that the necessary steps are taken under criminal law, should the accusations be true.

Van Lancker (PSE).
Mr President, I thank the Commissioner for the steps that he has already taken in this matter. If he will allow me, I will shortly be handing him a copy of the investigation. You will see, Commissioner, that absolutely nothing of what the people of the Centre for Reproductive Rights, which carried out this investigation, are saying is either nonsense or invented. So I am really shocked by the Slovak Government's response to the effect that these practices do not go on. I should like to urge you yourself to demand an independent inquiry of the Slovak Government and also to demand that they discontinue the proceedings against this organisation, which has produced serious work. The fact is that, at the moment, it is the complainant who is in the dock.

Verheugen
Mr President, Mrs Van Lancker, you have clearly misunderstood me. At any rate your supplementary question does not reflect what I said. I did not say that the Slovak Government had dismissed the accusations as untrue. I simply said that the Slovak Government stressed that there was no state-sponsored practice of this kind, that the state did not tolerate these practices and that the accusations that you and others are making were the subject of a meticulous investigation by the competent authorities. If the Slovak Government were to say that there was no truth in these accusations then it would not need to order an investigation. I would ask you not to be too quick to condemn another country. So far, in my opinion, there is no proof that this is a systematic state practice. Instead the suspicion that is uppermost in my mind is that what we have here are individual cases of abuse, admittedly of the gravest kind.
I must draw your attention to the fact that the Commission does not have any executive power in the countries that will be joining us. It is therefore completely out of the question for us to undertake a criminal or criminological investigation in a future Member State, just as we would be unable to do so in a current Member State. We have done what we can to use our political influence to make the Government of the Slovak Republic aware of the urgency of this matter and to ask it to carry out a thorough investigation.
I really must insist on stating here that the Slovak Government responded immediately and has complied with all of our requests without hesitation.

Evans, Robert J.E. (PSE).
Mr President, I would like to thank the Commissioner for his answer and I would like to congratulate Mrs Van Lancker for bringing this forward. On a slightly wider point, I visited, albeit a year or so ago, Bratislava and Kosice with a parliament delegation and we looked at the conditions of the Roma people there. What I saw was that, despite the commitments of the government, the discrimination continues, partly because it seems to be ingrained in the society and almost institutionalised. There are poorer conditions for Roma people, fewer facilities, nowhere near the same number of opportunities and generally they are far more alienated from society, for example in schools where there was no evidence of mother-tongue teaching, no evidence of any Roma teachers at all.
As a criterion for membership of the Union, is respect for minority languages and cultures being seriously independently monitored and if so by whom and how? How is the Commission responding to any criticisms that may be coming up?

Verheugen
Mr President, I am a little taken aback by Mr Evans' question, because there is hardly an issue that I have reported on more often to Parliament than the issue of the situation of the Roma in the Slovak Republic, the Czech Republic, Hungary, Bulgaria and Romania. There is barely no other issue either that I myself, and the Commission as a whole, are working on as intensively as this one.
First and foremost I must remind you that discrimination against Roma is not only a sad fact of life in the future Member States, but that unfortunately we also find this in a whole series of current Member States. It is just that it is not as noticeable in the figures because there are not as many of them in the Member States.
The crucial point here is whether the constitution, the judicial system and the state administration system in the future Member States really do discriminate against the Roma or not. Our investigations - in agreement incidentally with the Council of Europe and a considerable number of human rights organisations - show that there is no as it were institutionalised discrimination against the Roma in either the constitution, legislation or administrative structure of these countries. What we do find is deeply rooted, traditional discrimination in society, which in some parts of these countries has taken on really tragic proportions. However, I must repeat that this is nothing new.
Our efforts have focused on ensuring that these countries develop a strategy to reduce the discrimination against the Roma. We have made it a political precondition for the conclusion of the enlargement negotiations for such strategies to exist and be in force. I have, however, always said - including here in this House - that we cannot expect social discrimination against the Roma to have been completely eliminated at the time of accession of the new Members. Neither can we say that there is absolutely no discrimination in the present Member States. I could name a series of cases of discrimination in our current Member States where we are also not saying that the fact that people are being discriminated against constitutes a violation of the Treaty. Instead we say that European Community law requires measures to be taken to put an end to this discrimination. That is the situation that we find in these countries.
In its pre-accession instruments the Commission addressed the needs of the Roma minorities in a big way. It has deployed a great deal of money, made significant human resources available and provided considerable advice to help the future Member States to develop and also apply a strategy to combat discrimination against the Roma.
I do not think that you will find anyone for miles around who is better acquainted with the reality of the situation faced by the Roma in these countries than I am. I never let a visit to these countries go by without addressing this problem directly and on the spot. I do not do this because I believe that I can solve the problem by visiting a Roma settlement, a Roma school or whatever it may be; I do it to make a powerful and symbolic contribution to shaping political ideas. I want the people in these countries to see on their television screens that when the Commission comes to their country it does not regard the Roma as untouchables, but as a section of the population that needs particular attention and particular care.

Flemming (PPE-DE).
Mr President, I should like to thank the Commissioner very much for his answers. He really is very convincing on this issue. I should also, however, like to thank the questioner for even raising this matter. I have a small and perhaps naive supplementary question: would it not be possible then for either the Commission or perhaps even Parliament's Committee on Women's Rights and Equal Opportunities to invite one or other of these women to visit us and describe to us what is actually happening there? I would be interested to talk to this woman in person. Perhaps it would not be without interest for the Commission either to hear a personal account of the situation on a one-to-one basis.

Verheugen
Mrs Flemming, Parliament is of course free to make its own decisions and I would consider it a worthwhile initiative if it were to go along with the suggestion that you have just made. If it did then the Commission would be very grateful to have this opportunity to receive information of this kind first hand.

President. -
We shall now proceed to the second part of this Question Time, during which Commissioner Fischler will respond.
Part two
Questions to Mr Fischler
President.
Question No 57 by Bart Staes (H-0067/03):

Subject: Guarantee of food distribution to disadvantaged groups
In his answer to Question E-1695/02

Fischler
Mr President, ladies and gentlemen, the question posed by Mr Staes concerns the distribution of food to those in need in Belgium. This is clearly a matter for the Member States, so, in this case, it is a matter for the Belgian authorities. The funds that were provided for the 2002 programme in Belgium were no lower than in 2001. On the contrary, funding was increased from around EUR 2.3 million to EUR 3.5 million, precisely so that beef, which was available again in 2002, could be distributed without this entailing a reduction in the quantities of the other food that had been made available.
The decline in the quantities made available to the Belgian Federation of Food Banks is due to the fact that the Belgian authorities divided up the food available differently from in previous years.

Staes (Verts/ALE).
Mr President, Commissioner, I am rather surprised by your answer, because it is of course all a matter of juggling with figures. All I know is that these food distribution organisations are manned by people who are highly committed, very socially aware, and also well disposed towards Europe. In any event they have told us, in response to an earlier question, that problems had already been reported and I asked a question about this together with Mrs van Lancker, Mrs Maes and I believe Mrs van Brempt as well. In response you said that just as much food is being distributed as before and then we have the disconcerting assessment that in fact 750 tonnes less are being distributed.
I repeat my question: can you confirm here that in terms of quantities - I am not talking about figures or about values - just as much food was made available in 2002 as in the years before? Have I understood that properly? If I have indeed understood that properly, then I shall be putting further questions to the Belgian Government through the federal advisory committee for European affairs in the Chamber and Senate and with fellow Members of the European Parliament.

Fischler
Mr Staes, in my statement I was talking about amounts of money and not about tonnes. I also said, however, that you need to bear three different things in mind here. First of all, as I said, it is the Belgian authorities that are responsible for dividing the food between various charitable organisations, which then pass this on to disadvantaged groups.
How much each organisation gets is therefore decided by the Belgian authorities, and it may well be the case that the organisation that you mentioned received less, but this would mean that another organisation would have received more. The only way of finding this out is, however, by contacting the Belgian authorities.
The second point is that there is also a link between the Community and Belgium because, as you know, we have provided a financial grant, but we do not give this grant to the individual organisation, we give it to the Member State. We then leave it up to the Belgian State to divide these resources amongst the individual charitable organisations in accordance with its particular priorities.

 President. -
Question No 58 by Dirk Sterckx, which has been taken over by Mr. Vermeer (H-0080/03):

Subject: Calculation of a 'fishing day' to limit the fishing effort in accordance with Regulation (EC) 2341/2002
Annex XVII to Regulation (EC) 2341/2002

Fischler
Mr President, ladies and gentlemen, the problem raised by Mr Sterckx in his question is one of which the Commission is very well aware. I agree: it is true that the definition of fishing days in the temporary recovery plan for cod is very inflexible. We accept this and are working on amending Annex XVII because in this way we can resolve the problem.
I can also tell you that we invited all those with responsibilities in this sector to Brussels on Monday morning. We discussed this issue with representatives of the Member States on Monday and also today. We are sure that we will find a solution to this problem that takes account of the practical situation.

Vermeer (ELDR).
Thank you very much for that answer, Mr Fischler. Yet I would ask you to be more specific. You say that you are expecting a result to be achieved. The grassroots, the people who go to sea, are asking: when are we going to do something concrete? Could you give a date on which we can specifically introduce a very practical policy, for example a policy with hours instead of days, so that someone who sets sail in the evening and only actually starts working the next day is then dealt with according to the number of hours? Can you be more specific? What kind of result have you achieved with the agreements that you have made during the meetings today and yesterday?

Fischler
Mr Vermeer, if you wish I can be even more specific. We are not putting off dealing with this problem; we want to change it straight away. We were simply waiting until we had met with those involved, the representatives of the fishing sector. It goes without saying that this is something that we intend to change within the next few weeks.

Purvis (PPE-DE).
Commissioner, Scottish fishermen and others north of 55o north are being restricted to 15 days, which they find difficult to accept, all the more when they see the industrial fishermen scooping up a million tonnes of sand eels and Norway pout, which are both the feedstock for their whitefish, and in many cases, immature haddock and other whitefish. How can you justify this to the fishermen of Scotland?

Fischler
Mr President, the question that Mr Purvis has raised is actually completely unrelated to the issue that we have been discussing here. The debate is a general one about the means by which we can on the one hand rescue our endangered cod stocks and on the other hand do so in such a way as to avoid the fishermen concerned suffering severe hardship.
Turning now specifically to industrial fishing, I can only say that we have been working on this issue for years. We have also obtained relevant reports from scientists to ascertain whether fishing for sand eels does actually as it were take the food from the mouths of young fish and young cod in particular. We were told that this is only true to a very limited extent. In addition, you will also see from the stock surveys that the sand eel stocks continue to be very large and are not in decline. These stocks are in fact stable; we do not have a problem there.
There is one problem with industrial fishing and that is the risk of cod being caught as a by-catch. It is certainly important to monitor what happens here. The experts are telling us, however, that these by-catches have fallen significantly thanks to new fishing technologies and that in the future it will be possible to virtually eliminate them.

 President. -
Question No 59 by María Izquierdo Rojo (H-0090/03):

Subject: Young farmers and recognition of historical farming rights in the new proposal for reform of the CAP
In connection with the new proposal to reform the CAP and with reference to the forms of aid totally decoupled from production to be paid to farmers on the basis of farming rights, how are young farmers to be incorporated in the proposal? Will they too receive aid based on historical rights? Has the Commission forgotten young farmers?

Fischler
Mr President, as Mrs Izquierdo Rojo has rightly said, the Commission proposal on establishing Community rules for direct payments under the common agricultural policy provides that the single payment arrangement is open to all farmers that can show that they have a valid claim. All eligible farmers, including of course young farmers, who have already received direct payments under the old system, have an equal claim.
Furthermore, under Article 49 of our proposal, these claims can be passed on, either through specific bequests or by anticipating the line of succession. This provision takes account of customary practice in Europe when a holding is taken over by young farmers. In addition the proposal also specifically accommodates new farmers. Article 45 provides for a national reserve in the Member States. Reference amounts can be allocated from this reserve for the single payment to farmers who started their farming activity only after 31 December 2000. Finally, it goes without saying that reference amounts need to be allocated to new farmers in accordance with objective criteria and according to the principle of equal treatment, so as to avoid distortions of the market or competition.
Finally, if a farmer - and that obviously includes a young farmer - can prove that his production has been reduced in the reference period because of force majeure or other unusual circumstances, then he can claim that his case is one of hardship. The possible cases when hardship pertains are described in more detail in Paragraph 4 of the relevant article.
As you can see, Mrs Izquierdo Rojo, there are a whole series of ways in which we want to use our proposal to give a special helping hand to our young farmers.

Izquierdo Rojo (PSE).
Thank you very much, Commissioner, for that very positive and illuminating reply, at a time when there is great uncertainty in the countryside. However, given the importance of the issue, I believe more information should be provided. So my supplementary question is: does the Commission plan to provide the farmers with direct information and guidance on the advantages and improvements represented by the reform you are proposing?
I say this with knowledge of the facts, because in my country there are many parodies in which farmers are constantly being told that decoupling means that the less they work, the more they earn and that they will earn more the more they 'scratch their bellies', to employ the terminology actually used.
Therefore, Commissioner, if we want the farmers to understand your proposals, bearing in mind that the Spanish Minister for Agriculture's strategy is head-on opposition, I believe you should consider this question and that the Commission must propose measures to provide direct information, because what we have in Spain at the moment are ridiculous parodies.

Fischler
Mr President, Mrs Izquierdo Rojo, I can tell you that what you said about parodies certainly rings true with me. It is actually sometimes the case - regrettably, I have to say - that when you listen to the comments of some national politicians you can barely recognise the Commission's proposals. We do actually need to do much more here.
We have prepared a public relations strategy specifically so as to ensure that the proposals are discussed in the public domain. We do however expect - and quite rightly in my opinion - the national governments to at least provide correct information. Whether a government representative likes these proposals or not is of secondary importance. We have an entirely legitimate expectation, however, that no false information is put into circulation. Unfortunately, this requirement is not always respected. I would therefore say that this is a task for all of us. I can only ask you, in your capacity as a Member of the European Parliament, to make the facts known for example in Spain and to keep farmers informed. In any case I will continue to do everything in my power to send this information out directly from Brussels, particularly through the media.

President. -
Question No 60 by Mrs María Esther Herranz García, which has been taken over by Mrs. Redondo Jiménez (H-0109/03):

Subject: Imports of agricultural products and reform of the CAP
Under the reform of the common agricultural policy proposed by the Commission a few weeks ago, Community aid is to be made strictly subject to the requirements of food safety, animal welfare, the environment, and safety at work. If the proposal were to be accepted, farmers would be penalised if they failed to comply with any of the directives, of which there are about forty, that they would be called upon to observe. The Commission's proposed reform will entail a substantial increase in production costs, which will be offset only in part by the new accompanying measure provided for under the heading of rural development in order to help farmers obey the rules. The new rural development aid being proposed by the Commission is a partial and temporary solution because it will decrease over time.
Does the Commission intend to apply the same requirements to agricultural products imported from non-member countries so as to ensure that Community producers will not have to compete on the market in a position of weakness? What steps is it proposing to take to alleviate the situation?

Fischler
Mr President, ladies and gentlemen, Mrs Redondo Jiménez is right to say that, according to Article 3 of the Commission proposal, a farmer in receipt of direct payments has to comply with the basic requirements of farm management in accordance with Annex 3 of the proposal and has to ensure that the land is kept in good agricultural condition. This is intended to guarantee that farmers that receive direct support comply with binding EU standards on the environment, food safety, animal health, animal protection and also safety in the workplace and that they keep their land in good agricultural condition in accordance with good agricultural practice. The EU standards included in these basic requirements have all been legally binding for a long time; they are nothing new. This Commission proposal cannot therefore directly create any additional costs.
Furthermore, the measures that are available to Member States under rural development have been extended to include instruments to improve quality and also achieve better animal protection. In the context of these newly proposed measures to achieve compliance with standards, farmers can receive aid for a new standard for five years, if applying it involves additional costs and obligations for the farmer. The aid that is granted for applying a particular standard is limited in time, but the measure itself is not.
As far as funding the measures on rural development is concerned, by introducing modulation the Commission is also laying the foundations for increasing the relevant budgetary funds. Despite our efforts to secure the future of European farmers and promote important European trade interests, one of the most important objectives of the European proposals made in January for the WTO negotiations is that in the current negotiating round non-trade-related matters - such as food safety or the protection of designations of origin, or animal and environmental protection - be treated on an equal footing. The Commission has already responded several times in no uncertain terms to the first proposal of modalities for the agriculture negotiations that was tabled on 12 February by Mr Harbinson, and it will continue to defend the European negotiating position.

Redondo Jiménez (PPE-DE).
The Commissioner has just told us only what he was able to tell us.
Other things have been left out, however, which have already been debated in the special committees on agriculture. For example, with regard to rice, he knows that the subsidy price has been reduced by 60%, that internal production has stabilised and that consumption has increased by 20%. However, for five years the situation has been unsustainable for rice producers, who are facing an increasingly bleak future, as a result of the Everything but Arms decisions and imports of basmati rice, which do not correspond either in terms of their characteristics or their origins.
We could also consider garlic, mushrooms, honey, tomato, rice, wine, concentrated juices, etc., and we would see that the quality, the safety of products imported, as well as the production methods, both in terms of animal welfare and in terms of guaranteeing quality and the environment, are not subject to any control.
I would therefore ask you what supplementary measures are subject to the supervision of the Commission, but do not tell me that control falls to the Member States.

Fischler
Mr President, Mrs Redondo Jiménez states that I did not mention various points, but I could just as easily reply that she did not ask me about them either. In your question, Mrs Redondo Jiménez, you did not ask for example what is going to happen to the rice regime or what the situation is with food safety for imports. What is more, this is not even a subject for which I am responsible.
I would however like to comment briefly on what you said. Firstly then, why do we need a rice reform? We do not need it because of imports of basmati rice, which are I might add very limited, something which incidentally greatly annoys the Indians, who are therefore constantly trying to have their export quota to the European Union increased. We need it as a result of the decision - which by the way was also made here in Parliament - to give the world's poorest countries the right to export all of the goods that they produce, without any restrictions, to the European Union.
Of course the world's poorest countries include a whole series of rice producers. That is why our current rice regime will no longer work in the future and why we need to change it. The objective of the reform has to be on the one hand to address the consequences of this external trade policy and on the other to ensure that at the same time the typical landscapes are preserved in traditional rice-growing areas, such as in southern Spain, where there is of course even a national park where rice is the main crop.
I turn now to the question of import controls. This may not be what you want to hear, Mrs Redondo Jiménez, but products that are imported through Spanish ports or via any other border post in Spain by train or lorry have to be checked at the border to ascertain whether they meet plant health and veterinary requirements. All that the European authorities, for example the Veterinary Office in Dublin, can do is to introduce a control plan to check that the border inspections are actually working. This is, however, as I said, the responsibility of my fellow-Commissioner Mr Byrne.

Bautista Ojeda (Verts/ALE).
Let us continue with rice. EBA: Everything but Arms. If the 40 poorest countries are so poor and are dying of hunger, why do they have to send us rice? Let them eat it and then they will not be hungry! But my question is this: how can the Commissioner and the European Commission prevent Vietnam, for example, which falls within the Everything but Arms countries, from introducing its rice via its borders with Thailand and then Thailand from introducing it into the European Union? How can we guarantee that? How can it be controlled? Will we put a label on every grain of rice? How can we prevent the 40 poorest countries in the world, by means of multinationals we all know, which import rice, some of them here, from introducing these products via the poorest countries and wrecking our markets?

Fischler
Mr President, Mr Bautista Ojeda, firstly, under the Everything but Arms initiative the world's poorest countries have the right to export their own production, that is their entire production, to the EU if they so wish. And if they wish they can also import rice for their own use. That is part of the decision that was made in this House. Incidentally, I might add that I expressed my own misgivings about this from the outset. But the decision was made and I stand by it. Now there is only one thing that we can do, and that is to be vigilant and ensure that no foreign rice that has not even been produced in these countries is exported to the European Union. How can we ensure that this is the case? We can do so by using those instruments that we also use in all other areas to check the origin of a product. This requires proof of origin, certificates and checks by the appropriate teams of inspectors, and in some cases on-the-spot checks or analyses are also necessary. In some cases it is certainly possible to tell by analysing the imported rice whether it really is from the country of origin indicated or not, and this does happen in practice.

President. -
As the time allotted to Question Time has elapsed, Questions Nos 61 to 95 will be replied to in writing 
The following questions are addressed to the Commission.
(The sitting was suspended at 7.10 p.m. and resumed at 9 p.m.)
President.
The next item is the joint debate on economic and monetary union:
Report (A5-0051/2003) by José Manuel García-Margallo y Marfil, on behalf of the Committee on Economic and Monetary Affairs, on the state of the European economy - preparatory report with a view to the Commission recommendation on broad economic policy guidelines ((2002/2287 (INI));
Report (A5-0047/2003) by Bruno Trentin, on behalf of the Committee on Economic and Monetary Affairs, on the annual assessment of implementation of stability and convergence programmes (2002/2288(INI));
Report (A5-0037/2003) by Olle Schmidt, on behalf of the Committee on Economic and Monetary Affairs, on the Commission report: Convergence Report 2002 - Sweden (COM(2002) 243 - C5-0326/2002 - 2002/2170(COS));
Report (A5-0018/2003) by Manuel António dos Santos, on behalf of the Committee on Economic and Monetary Affairs, on the Commission communication on Public finances in EMU - 2002 (COM(2002) 209 - C5-0324/2002 - 2002/2168(COS)).

García-Margallo y Marfil (PPE-DE)
Mr President, I would like to welcome the Commissioner to this sitting. I would like to start by thanking all the parliamentary groups which have cooperated closely so that we can offer Parliament a clear text today, which focuses on action and not on words, on speeding up and not slowing down the strategy agreed in Lisbon, in Gothenburg and in Stockholm, to restore confidence to the European markets and thereby speed up our growth with a very clear objective, highlighted in the first paragraph: increasing job creation, which is a necessary condition if we are to compensate for ageing and maintain our social model.
Secondly, I would like to point out three strict limits to demand policies, which are included in the policy in the short term: to maintain macroeconomic stability, to maintain European competitiveness in an increasingly globalised world and to reduce public debt, in order to free up resources which must be destined towards investment and to create resources for future social needs.
The second of these key ideas is to increase coordination; we therefore welcome the strategies aimed at jointly examining the economic guidelines and the employment guidelines, but we would also like to integrate budgetary policies and supply policies, which remain in national hands, in order to create a framework which could provide a basis for the discussion of budgets, both European Union and national budgets.
In the field of monetary policy, which is the next section, the report stresses that the European Central Bank must closely follow the evolution of prices, in view of the underlying inflation in the services sector. But it says something further. It says that everybody else, particularly the national governments, must do their duties: they must maintain the evolution of salaries linked to productivity, introduce measures in terms of the transparency of prices and reform their structures in order to increase productivity, in order to give the European Central Bank a margin, an additional margin, in the event that it is considered necessary to reduce interest rates, particularly if we want to bring interest rates into line with European export needs.
In the field of budgetary policy, the message seems to me to be equally clear. This Parliament is stressing its commitment, which it has always maintained, to the Stability and Growth Pact. Secondly, it welcomes the Commission's efforts to interpret this pact, to assess the budgetary situation of each Member State, taking account of volume of debt and quality of expenditure, particularly when it is investment expenditure, which is coherent with the Lisbon, Stockholm and Gothenburg strategies.
Thirdly, it regrets the lack of application, the lack of diligence of those prodigal governments which, while running the risk of excessive deficit, do not appear to want to make any effort to reduce structural deficits. And finally, as an express appeal to the Commission, it urges it to play a more vigilant role at times of boom in order to ride out the storm at a later date.
With regard to structural reform policy, we stress that the lack of investment is key, and is the most definitive explanation of our lagging behind the United States, particularly investment in new technologies. We therefore call for the establishment in the economic guidelines of quantified objectives in the field of public and private investment and for the promotion of investment by the private sector in these technologies, essentially by means of the tax deductions, linked to obtaining profits rather than subsidies, since we have no very clear idea of which activities those subsidies are used for. We call for a new industrial policy, because people cannot live on services alone, as well as an effort in the field of renewable energies, on which I do not need to insist given the international climate.
In the field of small and medium-sized businesses, the Commission is urged to continue with the objectives of the Feira Charter, to facilitate their creation within 24 hours by means of new technologies, to advocate a postponement of taxes during the early years of operation, to simplify their operation, particularly in an administrative sense, and to exercise strict vigilance in the field of funding in the Basilea II negotiations, to stress the role of the European Investment Fund and to establish a network of guarantees which allows them access to the markets.
In the field of the liberalisation of the markets, transposition and therefore stressing the penalty mechanisms for States which do not comply, increasing competition in the privatised sectors, liberalising energy networks and particularly their connection.
On financial markets we are essentially in agreement. We welcome the efforts in the field of taxation and we would ask for further effort in order to achieve VAT at source and a consolidated basis in taxes on companies and we ask for stricter representation of the euro in international fora and a denomination of energies in this currency.
Thank you very much, Commissioner, I hope that the message is clear and that it is well received. Thanks once again to all the groups and the President for their patience.
 Trentin (PSE)
Mr President, Council representatives, Commissioner, ladies and gentlemen, Mr García-Margallo's excellent report has highlighted the need to pin, from now on, the broad economic policy guidelines and the objectives relating to the coordination of Member States' economic and social policies to the goals set by the decisions of the Lisbon European Council, particularly where investment in research, lifelong learning and European infrastructure are concerned and as regards ensuring the efficiency of public services while safeguarding the general interest which they must serve, and, in addition, as regards an active ageing strategy which will help to bring about a substantial increase in the active population and employment.
This decision, which requires that binding stages in the implementation of the Lisbon strategy be provided for as an integral part of the broad economic policy guidelines, cannot fail to affect - and this is the subject of my report - the Stability and Growth Pact, which is still devoid of binding indicators relating precisely to growth and the quality of growth or to the coordination of budgetary policies, as Mr dos Santos rightly points out.
My explicit question on this point, Commissioner, concerns the compatibility of the Lisbon objectives with the objectives of the Stability and Growth Pact. Do the Lisbon objectives also concern the EMU States and to what extent, and, if they do, how can we make them as binding as the objectives set in the Stability and Growth Pact? If the answer to this question is yes, as I believe it is, the problem then arises of how to coordinate and reconcile the different areas of Union intervention as regards economic policy, social and employment policy, sustainable development, financial stability and growth and achieve synergic interaction between them. Clearly, this is not a question of procedure but a choice which must impact on the objectives of the Stability Pact and the way it is applied.
Indeed, in this new context, the application of the Stability Pact cannot just be concentrated in those periods in which there are clear risks of a shift away from the objectives and constraints of the Pact as regards budget deficit or public debt, constraints that we have no intention of questioning, especially during this difficult, uncertain period. Indeed, the Stability and Growth Pact ought to curb the behaviour of the EMU States in periods of growth too, in order to prevent decisions leading away from the Lisbon objectives paving the way, in precisely those periods, for further departure from the objectives of the Stability Pact.
The Commission must acknowledge the difference between an economic policy which favours regular expenditures over public and private investment in periods of growth and a policy seeking to meet the Lisbon objectives in clear stages between now and 2010 in the areas of research and development, training and integrated European infrastructures. It must also realise the difference, at times of crisis or in the event of war, between an economic policy which seeks to reduce fiscal pressure across the board and a policy of boosting public and private investment, which the Commission itself should be able to see is in the common interest, not least in that it is bound up with European projects in the spirit of Lisbon.
At this point, it is necessary to ascertain whether investment intended to contribute to the achievement of the Lisbon objectives makes things worse rather than better in the event of the danger of a shift away from the 3% constraint and whether it cannot be made compatible with greater financial rigour in order to comply with the criteria of the Stability Pact.
I hope that similar considerations and opportunities will all be taken into account together at the forthcoming Spring Council, and I would quietly point out, by way of conclusion, that there has to be institutional coordination of economic and social policies in the euro zone, coordination capable of taking majority decisions and showing, not least in the work of the Convention, that the enlargement of the Union which we are determined to make every effort to achieve will not hinder the progress or dampen the vitality of the European Union in the search for new, more advanced forms of integration.

Schmidt, Olle (ELDR)
Mr President, those politicians who launched EMU were bold and far-sighted. There were many who believed that the project would fail. Some even hoped that it would. Their fears have nonetheless proved groundless. EMU has been very successful. Now, further reforms are needed, however, as well as compliance with the Stability and Growth Pact by the Member States.
Overall, the introduction of the euro has been a painless process, especially in terms of the huge logistical work involved. Certainly, there have been complaints about price rises, but the general price level has not increased. Further investigations may, however, be needed, something that we are now also requesting in this report.
Three of the EU Member States are still outside the third phase of EMU: Great Britain, Denmark and Sweden, there being no special exemption rules in the case of Sweden. Today's report concerns Sweden and the Commission's biannual convergence report.
I believe that, as I hope you already know, Sweden ought already to have been a fully fledged member of EMU. When my work on the report began - and I want to take the opportunity of expressing my thanks for all the support I have received - there was still a lot of uncertainty about the Swedish Government's views. Now, the situation is different, I am happy to say. In a referendum on 14 September 2003, the Swedish people are to say yes or no to the euro. Fortunately enough, events have taken on their own momentum, independently of both the report and myself.
Both the Commission and the ECB have recognised that Sweden has fulfilled three of the five convergence criteria: those relating to price stability, public sector finances and long-term interest rates. In two areas, Sweden is considered, however, not yet to have fulfilled the criteria. The most controversial of the convergence criteria is that relating to the rate of exchange because, unlike the other criteria, it has been so unclearly formulated. ERM membership must be viewed as a requirement, but the period of membership may be relatively short. The exchange rate criterion has, of course, also been applied flexibly to countries that have already introduced the euro. I am thinking in particular of Finland and Italy which were not, of course, a part of ERM2 for two years. The issue of membership of ERM2 is also significant and, of course, also very sensitive where the candidate countries are concerned. Because quite a few of them are well on the way towards adjusting to EMU, I would certainly advocate a degree of flexibility. I also noted that, in the course of a speech in Hungary the other week, the Commissioner was thinking along similar lines.
Another area in which the Commission and the ECB consider that Sweden does not meet the requirements of the Treaty is legal convergence. This has to do with the independence of the Swedish Central Bank. The issue has also been taken up in an exchange of letters between the President of the ECB and the Swedish Finance Minister. The ECB expressed particular concern about the lack of clear rules concerning transfers of reserves from the Swedish Central Bank to the national treasury. In his reply, however, the Finance Minister stressed that the necessary amendments would be submitted when the introduction of the euro was imminent, together with necessary changes to the constitution, even if time may be short, given Sweden's requirement for an interim election in the case of constitutional changes. In my opinion, this does not mean however that Sweden is disqualified from the third stage of EMU right through to 2006 or 2007. One of the most important principles of the Union's legal system is, of course, that EU law takes precedence over national law.
I would make bold enough to say that Sweden needs the euro. At the same time, I would also venture to say that the euro in fact needs Sweden. The Swedish economy is in good shape and can meet the necessary requirements. That is something I am able to say, even though I am a member of the opposition in my country. As I see it, it is a necessary and obvious step for Sweden to become fully a part of European integration in its entirety and to have the euro as its currency and coinage. Now, it is the Swedish population that will decide this on 14 September. The 'wait and see' approach championed by some of my fellow MEPs in Parliament richly deserves to be criticised. What would have become of European integration if Robert Schuman's natural inclination had been to hesitate, or if, when the Berlin Wall was torn down, Helmut Kohl had been governed by short-term economic interests, or if Jacques Delors' distinguishing characteristic had been anxiety? Nothing at all would have become of it. It is my hope and my conviction that, on 15 September, I shall be able, with my head held high, to come back to you, Mr President, and to you, Commissioner, with the message: 'It was a ?yes?' vote. The Swedish people want to be fully involved and to exert influence over both the new and the old Europe'.
In conclusion, I want to say that there is a certain confusion where the amendments are concerned. I nonetheless want to say, however, that I hope to be able to achieve as large and as broad a majority as possible. I have listened to the criticism and am able to accept that Amendments Nos 12 and 14 should be removed because their subjects are covered elsewhere.

Santos (PSE)
Mr President, ladies and gentlemen and most particularly, Commissioner Solbes Mira, the presentation of the Commission document on Public Finances to which my report is dedicated shared at the time the firmly-held conviction that the economic forecasts for the European area should then be systematically revised downwards. The economic context of budgetary surveillance has indeed proven to be much less favourable than initially predicted and is demonstrated, specifically, by the doubling of the Eurozone's deficit between the years 2000 and 2001, by the 'fact' that this imbalance grew and became more serious in 2002 and by the explanation and real scrutiny of the serious budgetary difficulties that have occurred in four of the Member States.
For this very reason, the Commission drew up recommendations and stated its intention to send early warnings about deviating from the budget to Member States that could potentially fail to comply. Although this was not carried out, it ultimately anticipated the true situation seen at the end of the year in those countries.
The tone of the speech President Romano Prodi gave this Parliament is therefore fully justified. In this speech he expressed his concern at the downturn in the economic cycle, but also emphatically criticised an inflexible and dogmatic enforcement of the Stability and Growth Pact regardless of changing circumstances and consequently called for adjustments and the introduction of more sophisticated criteria for implementing the Pact. Since then, many politicians, experts, research bodies, academics and leaders of public and published opinion have contributed their thoughts on the matter. The Commission itself has stuck to the prudent but ambitious interpretation of its President, redrafting a less rigid and more active framework of budgetary supervision that now adheres to the principle that the Pact's implementation must make it an ever more valuable instrument in promoting stability, growth and employment.
The report endorses this viewpoint to the extent that it considers this to correspond to an intermediate stage between the rigid application of the Pact and the crucial development towards an interpretative model, which it considers to be inevitable in future, taking account of more sophisticated criteria such as inflation, employment, public debts and changes in these debts, financial burdens arising from the ageing of the population and investment requirements. Finally, the quality of public expenditure must serve to bring the SGP into line with the objectives laid down in the Lisbon strategy and with the principle of sustainable development as agreed in Gothenburg.
The political prevalence of budgetary constraints and a rigid interpretation of the financial balance under multilateral surveillance have led in recent years to a steady decline in the ratio of public investment to GDP, although it must be acknowledged that private investment has followed the same trend. All of this coincides with the increased difficulties that the European economy has been displaying. The solutions proposed initially or which are now being adopted are not unheard of in the context of some developed economies in the OECD where the 'golden rule' is a crucial element, not only for consolidating public finances, but also for launching and sustaining a process of economic and social development.
Following the enormous step that was the creation of the single currency, the Union appears today to be in a genuine state of paralysis. The excessive restrictions on monetary and budgetary policies, which were designed with the intention of strengthening the European economy and its single currency and to allay the suspicions and fears of the Union's most powerful countries, could turn into unexpected limitations that will make the sought-after recovery entirely dependent on the smooth operation of the driving force that is the US economy.
The flexibility and rationality that are being advocated are not incompatible with the need to ensure compliance with the real spirit of the Stability and Growth Pact, and nor does a public debate on the matter diminish the scope of its objectives. The financial consolidation of the States that accept a common monetary policy and a single currency and which reject any self-sufficiency that hinders open relations with countries outside their own zone is crucial and must be pursued. Many countries, incidentally, have enshrined principles and rules in their Constitutions establishing rules - some more rigid, some less so - for budgetary deficits. This is also crucial in the political framework of the Union, but if this type of commitment is to be effective, priority consideration must be given to the interests of the zone as a whole - a very substantial area - with the use of discretionary instruments being acceptable in exceptional circumstances to aid the recovery of the least developed regions or countries.
We will otherwise face the risk of seeing only formal compliance with budgetary obligations, with countries in difficulty resorting to the most varied and creative accounting systems (which also makes their rapid harmonisation a necessity), in the sole aim of keeping the Commission satisfied, as guardian of the Treaties, or of temporarily deceiving the financial markets and for a while escaping their rightful punishment.
This, unfortunately, is the situation seen in many European economies at the end of 2002. Determining the current problems of the European economy when drawing up the balance-sheet of the degree to which the objectives outlined at the Lisbon Extraordinary summit have been attained is, therefore, absolutely crucial. It is also necessary to make it clear to Parliament, to the Council and the Commission that it is possible to achieve a balance between healthy financial consolidation in the countries of the Union and full compliance with these objectives.

Solbes
Mr President, I will try within the time available to me to comment on the four reports presented to us. I will deal initially with the three relating to the general economic situation, the Stability and Growth Pact and public finances and finally I will comment on the report by Mr Olle Schmidt on the specific case of Sweden.
I would firstly like to thank Mr García-Margallo for the work he has done and, as he has said, for the clear message contained in this report with regard to the broad guidelines for economic policies.
I would like to stress that the document for this year is of a more strategic nature than usual, insofar as it is a document which intends to define the broad European strategy for the next three years. It is true that it is being produced in a situation of particular economic uncertainty, it is true that we have given certain indications on how to act in the event of asymmetric shocks, where naturally monetary policy must be used, when there may be sectoral repercussions, a situation in which we will undoubtedly have to use specific instruments of a different nature or if we experience those unusual events which are laid down in the Community legislation and which allow us to act also in terms of budgetary policy, while accepting however, the limits of 3% laid down in the Treaty.
Mr García-Margallo has insisted on the need for a healthy macroeconomic policy and clearly supports the Stability and Growth Pact. I believe we take the same approach and we have no great difficulty in accepting his recommendations.
He also refers to a point which we all believe to be fundamental and that is how we can increase the growth potential in Europe. Unquestionably through an increase in employment and productivity. We know that increases in productivity - you have referred to this yourself - and growth in employment are also closely related to the evolution of salaries, and that it is essential that salaries are compatible with reasonable evolution of employment and with increases in productivity. But it is also essential - and this is the approach we adopted in Lisbon - to improve education and training. We believe it is also essential to implement more appropriate taxation in order to achieve these objectives and of course to carry out more public and private investment. I will discuss this in more detail when I come to the report by Mr Trentin.
In this regard, we consider it essential, within the Lisbon framework, to define the appropriate framework for both public and private investment to be carried out and to make progress on certain fundamental elements. In recent weeks there has been an element which I would like to stress, which is the approval of the Community patent, which will undoubtedly be an innovative element and which will allow for greater European innovation and of course to define public expenditure according to criteria which will improve productivity or production.
The broad guidelines for economic policy, however, should not be seen independently from the Stability and Growth Pact. Mr Trentin refers to this point when he points out the need to approach the Stability and Growth Pact jointly in Lisbon. I believe we all agree that restructured public finances are essential not only in terms of allowing monetary policy to play its role, but also in order to provide the necessary margin so that the automatic stabilisers can function in a cyclical situation. However, Mr Trentin raises something else: what more can we do, in relation to the Stability and Growth Pact, in terms of growth? How can we ultimately improve the quality of public finances?
In his report, Mr Santos also stresses this point, which I would like to focus on further. I believe that the key lies in greater investment in research and development. We have set certain specific objectives on this point, since public investment in this sector functions satisfactorily but nevertheless there are more deficiencies with regard to the functioning of the private economy.
The Stability and Growth Pact, however, as modified in the Communication in November, introduces an additional element in relation to this policy so that it may further promote development in Europe. It is true that the pact provides us with the initial means for achieving budgetary balance or a situation of surplus in the medium term.
In its analysis of the pact, however, the Commission has seen that in certain cases temporary deviations are justified provided that they are for reasons aimed at improving growth.
Our view is that physical investment and, above all, public investment is not the only element which can allow a temporary deviation in budgetary balance to be carried out within the framework of the pact.
We believe that all actions which ultimately allow us to increase our growth potential must be treated in the same way.
The Commission therefore proposed in its Communication that there could be temporary deviations in countries which fulfil certain conditions; essentially those which have low levels of ratio in relation to public debt; which furthermore have already achieved a situation of budgetary balance and which, of course, establish this type of deviation in order to increase growth. And here we are talking about investments in infrastructures, investments in knowledge, but also measures of a fiscal nature, for example tax reductions, which may eventually allow us to improve growth.
Those are the essential elements which the Commission raised in its Communication, which have not been taken up in an entirely exact form in the final conclusions of the Council, but which nevertheless have allowed, or are allowing, sufficient progress to be made in order to achieve a result which we believe must allow us to improve in terms of growth.
What the Council says is that we must carry out analyses on a case-by-case basis, that there is no rule for this type of deviation; it does not impose any condition with regard to how the Commission must implement its proposals and naturally the Commission remains convinced that the proposals we have made so far, in a couple of specific cases, with regard to these temporary deviations, are still valid and they are the criteria we will use in the future.
With regard to the coordination of our budgetary policies, I would say that the system has improved, but that, nevertheless, we cannot be completely satisfied, since we have too many deviations. I believe it is essential to make progress on coordination and in this regard the broad guidelines for economic policy are intended to make improvements, not only by means of the tri-annual approach, but also by paying more attention to application reports than to general approaches. And I believe we must improve our multinational coordination systems, since - as we have highlighted in our proposals to the Convention - there are certain deficiencies in the current system which prevent 'peer pressure' from functioning in the manner which was drawn up in the Treaty.
Finally, I would say to Mr dos Santos that I am grateful for his support on the analysis of the public finances for 2002 and the quality of public finances. That report is a key to understanding what is done subsequently, in November, when we present our proposal for a communication to the Council.
In our Commission Communication to the Council we do not intend to modify the pact or to make it more flexible. Our intention, on the basis of our experience over recent years, is to ensure that the application of the pact is better suited to the specific situations of each of the countries involved.
We also believe it essential in our Communication that the Member States confirm their commitment to the pact. That is why we requested a European Council resolution to allow this progress.
Though I have said this several times, it is perhaps worth repeating that we insist in our communication on certain fundamental points. 3% is still the nominal deficit limit; however, we have to take account of the evolution of the cycle and therefore the evolution of cyclically adjusted deficits is an essential element.
Secondly, in order to achieve budgetary balance in the medium term, those countries which have not yet achieved it will have to make budgetary efforts to the tune of half a point per year, as a minimum, or more in the event that there is a difference.
Thirdly, we are aware that there has been a relaxation of the budgetary policy at good times in the economic cycle, which has created subsequent problems and it is therefore essential to pay more attention to ensuring that there is no further procyclic behaviour in these circumstances.
We believe it is essential to pay attention to debt and as Mr Trentin pointed out previously, I believe it is essential to consider the specific situation of certain Member States, in such a way as they have greater room for manoeuvre.
All of this has been approved by the Ecofin Council, with the corrections which I referred to in relation to the report by Mr Trentin.
I come to my final comment on the report by Mr Schmidt. It is true that in our convergence report on Sweden we referred to compliance with the convergence criteria with two exceptions: the legal convergence criterion, particularly in relation to the Swedish Central Bank, and non-compliance with the exchange rate convergence criterion.
We are pleased to note that, when we talk about the figures relating to development in Sweden, the remaining convergence criteria are being complied with even more comfortably than in the past. However we have yet to deal with those two elements which I hope can be resolved in the future. You know what our position is in relation to them. In the legal field, the Central Bank's independence system must be adapted. With regard to the exchange rate criterion, we have to apply the Treaty; but, as I have said many times, we will have to take account of past experiences without a doubt.
I personally believe that the adoption of the euro would be beneficial to Sweden and I hope that that country will soon fulfil the necessary conditions. I also believe it would be beneficial for the European Union and for the eurozone in particular, since it would represent a significant advance in our process of integration.

Langen (PPE-DE).
Mr President, I should first like to thank the Commissioner and applaud his clear statement in the debate on these four reports. He said that the Commission did not wish either to make the Stability and Growth Pact more flexible or to adapt it, but that it simply wished to impose stricter standards when assessing the situation in the Member States. I consider this to be a better policy than the proposals made by Members from the other groups, in particular those put forward by Mr Trentin and Mr dos Santos.
What Mr Trentin said here bears no relation to the report tabled by the Committee on Economic and Monetary Affairs, nor are his comments appropriate in a debate on the subject of the annual assessment of the stability and convergence programmes. In school I would say to Mr Trentin that he had strayed from the subject. In his draft report there was not a single word about it, and it was only the amendments tabled by the various different groups that brought the report closer to the issue at hand. Today you clean forgot about it once again.
I am also grateful to the Commissioner for reminding us once more of the Lisbon objectives, which are not at odds with the Stability and Growth Pact and budgetary consolidation, but in fact encapsulate all of the framework conditions: a flexible labour market and the need to increase investment, reduce taxes, and invest in research and training. This cannot however absolve the Member States from applying strict standards in their budgetary policy, as prescribed by the Commission.
In the Trentin report we have at least demanded that in future the Commission be able to send out the blue letters on its own, without this being dependent on a vote in the Ecofin Council in which the offenders are indirectly involved. We want to strengthen the Commission's independence. The proposals that have been made in the reports are inconsistent in many respects. This is shown by the fact that for two years now there has been a consistent policy of calling the Stability and Growth Pact into question and of undermining it in every possible respect and with every possible proposal, with the sole aim of ensuring that the consolidation of state budgets in several Member States is no longer recognised as a necessary precondition for stable finances and a stable economic and monetary policy.
It is of course not the case that there is insufficient room for manoeuvre. Eight out of twelve Member States in the euro zone have already managed to balance their budgets. The offenders who are not sticking to the rules are the ones who are now calling for the Stability and Growth Pact to be changed. Those that have stable budgets and that are even making a surplus are penalised because in the euro zone everyone is in the same boat, my own country, Germany, as much as any other. If Germany with its considerable economic power does not comply with the Stability Pact then it puts the stability of the euro at risk. We cannot deflect attention away from the Member States' responsibilities by correcting and retouching the rules. The golden rule that appears in some of Mr dos Santos' amendments is of no use here either.
There is no such thing as good or bad debt. There is just debt: debt in investment and infrastructure and consumer debt. Mr Trentin, I am sure that you are familiar with the scala mobile, the debt that brought the Italian State to its knees over the last twenty years, when new debts were repeatedly accumulated, with the unions playing along with it, but no way out was found. The European model has brought lower inflation and stable monetary policy conditions. That is what we should keep as our basis, what we must be rigorous about keeping as our basis.
Finally, I should like to say to our Swedish Members that we welcome the fact that Sweden wishes to join the Economic and Monetary Union. We will do all we can to help it to do so, but we ask that it be under the conditions laid down in the Maastricht Treaty. If the government does not yet meet them - independence of the central bank or even the issue of two-year membership of the European Monetary System - then it needs to address that; it must not be allowed to let it slip. In this respect we have every reason to thank the Commission for the line that it is taking.

Randzio-Plath (PSE).
Mr President, proactive and resolute leadership is needed on economic policy at the EU's spring summit. We cannot go on trotting out the same old formulae. Unfortunately they fall far short of what is required at a difficult time, which is not only characterised by an economic downturn but also, regrettably, by the shadows that an approaching war is casting over economic and employment policy. That is why Parliament's reports - and I mean all of those on the table this evening - show a glimmer of hope but at the same time make demands that mercilessly expose the weaknesses in the European economy.
I should like to underline that it is out of the question to eliminate a Stability and Growth Pact that has been created to bring order to the economy. Instead we need to apply it taking into account the Lisbon objectives in a time and a place and in such a way that it makes sense, because the people of Europe deserve no less.
I think that we need to make every effort to halt the economic slide. We cannot deny either that even the European Central Bank is now talking about risks of a downward trend in the European Union. This means that we need to pursue a proactive policy and to that extent the repeated references to structural reforms do not serve any purpose either.
Besides, we do not yet know what economic benefits these structural reforms will bring to the European Union and we have no idea what impact they will have on employment policy. Economic institutes, national ministries and also the Commission have not answered this question. But we need this answer to know which direction is the right one. I believe that the saying still holds true: employment creates growth, but growth also creates employment. We have to work on the basis of real growth and not only on the basis of potential for growth.
I should like to point out once more that it is absolutely right - as the reports also state - for us to refer repeatedly to the lack of investment in both the private and public sectors. We are not honouring the Lisbon agreement about 3% growth. Neither are we respecting the agreement to invest more in research and development, and that too applies to both the private and public sectors. Japan and the USA are streets ahead of us in both respects. At the moment we perhaps do not really need an economic government, but coordination up and across our governments, coordination that is worthy of the name, is in the interests of growth and employment.

Gasòliba i Böhm (ELDR).
Mr President, ladies and gentlemen, Commissioner, I would firstly like to express my group's agreement with the text of the reports we are discussing, but not with some of the statements which have been made on presenting them to this plenary session.
The immediate aim of this debate is essentially to prepare for the Spring Council and it is intended to respond to the corresponding assessment of the so-called 'Lisbon process', complemented by the decisions of the Gothenburg and Barcelona Councils. Within this context, I would firstly like to express my concern and that of my group at the fact that the aim established for 2010 of being a more competitive economy with higher quality and greater levels of employment has not been achieved. When assessing these three years, despite the difficulties of the American economy, we find that, in terms of growth, productivity levels and employment levels, we are further behind than three years ago. It is therefore clear that there is a very worrying difference between what is preached in the Councils and what is practiced in the Member States, and this prejudices the Union's overall result.
We in the Liberal Group believe that the main problems principally stem from the lack of compliance with the liberalisation processes agreed, since, as the report by Mr García-Margallo y Marfil points out, there are still significant structural reforms to be carried out and certain basic markets, such as the labour market, must be made even more flexible.
In the current situation, which is not exactly one of the best economic situations the European Union has been in in recent years, there are three key aspects which particular attention must also be paid to. Firstly, we must improve the level not just of research and development but of its application within the productive system. Let us hope that this historic agreement on the European patent, as Commissioner Solbes has mentioned, will provide promotion in this area, but that it will also pay special attention to the creation and development of small and medium-sized businesses based on the application of new technologies, because, as was demonstrated in the 1990s, they are significant sources of work.
I do not have the time to mention other issues, Mr President, but I would like to end as I began: rather than making grand statements in Spring Councils, we must comply with what has been agreed.

Herzog (GUE/NGL).
Mr President, Mr García-Margallo y Marfil calls a spade a spade. He stated that the European Union does not have an economic policy. He has contributed to a good debate and I thank him for this.
In considering causes and solutions, the notion of inflexibility and structural reform are often bandied about. We are forever asking the Commission, the ECB and the experts what they mean. I have been struck by the imprecise and inconsistent nature of the responses. At a remarkable conference, Mr Adair Turner, the Director-General of the CBI, said that we must be careful about dismantling the Welfare State and that the agenda for liberalisation in Europe, although useful, represents only a partial response to present challenges. Clearly, the problem of pensions will not be resolved unless there is a large increase in employment rates in Europe. It is essential to mobilise all human potential. A great deal of work will have to go into reforming the labour markets, especially as regards training and qualifications. We must, however, remember that this involves reorganisation and there will be a price to pay.
We must consider why there is a lack of productive public and private investment. One of the reasons relates to the flow of capital, much of which ends up in the United States. Though the financial market might have stimulated global investment over the last decade, I think it is a fallacy to believe that the market itself will initiate a new round of investments in Europe. It does not provide for local development or for the development of SMEs and infrastructure. The European Union should be able to finance effective networks of services of general interest and develop policies on productive enterprises.
We do not only have a supply problem; we also underestimate the problem of demand. Hundreds of billions in paying off goodwill are putting a serious strain on business and are hampering recovery. Far from fearing inflation, the European Central Bank should amend its target and reduce its real rates below zero. Furthermore, even if some Member States have not known how to reform their public finances or been unable to do so in time, the seriousness of the present climate justifies taking measures to support activity, including waiving the 3% rule as a temporary measure.
There are two more points I would like to make. I believe war against Iraq is not just madness, but economic folly too. It will increase public deficits pointlessly in both the United States and Europe, when we want to reduce them. As one of our experts said, the United States is skating on very thin ice. The future growth of that country will require us to make even greater demands on our capital reserves. This is yet another contradiction. Europe cannot therefore just tag along with the United States. Europe must devise a policy of her own. We in Europe have our backs against the wall. The Convention, however, is silent. As for the calls for economic government, they bring to mind a scene from the film Shoulder Arms. In it a military unit is engulfed in fog, everyone is stumbling around and a soldier is heard calling for his captain.

Lipietz (Verts/ALE).
Mr President, ladies and gentlemen, I have to recognise that there are a number of reports on broadly the same subject. This being the case, we will not support the report drafted by Mr Trentin, whom I greatly admire. We will consider instead Mr García-Margallo y Marfil's report.
The Committee on Economic and Monetary Affairs is faced with a real operational problem. When a rapporteur from the left and a rapporteur from the right decide to address the same issue, the report from the left is pulled to pieces by honourable Members on the right. With a bit of luck, the report is approved when it is put forward by a rapporteur from the right. We must therefore recognise that the García-Margallo y Marfil report is much better and much more useful than Mr Trentin's, now that it has been cut to ribbons by the Committee on Economic and Monetary Affairs. Be that as it may, I have long acknowledged that Mr García-Margallo y Marfil has demonstrated considerable qualities in his role as a rapporteur. As Mr Langen said, the Trentin report is clearly not actually a report drawn up by Mr Trentin. Mr Trentin's speech almost entirely contradicted the contents of his report.
I will therefore only comment on the contents of the García Margallo y Marfil report, in its present form. It is my belief that the Group of the Greens/European Free Alliance support all the objectives and comments on the subject as included in the García-Margallo y Marfil report. It has the virtue of bringing the objectives of economic policy back into line with the Lisbon and Gothenburg objectives. We want to ensure that Europe is a model of economic growth. Growth should be based on high-quality investment in human resources, high-calibre public investment and on the use of environmentally-sustainable technologies. Given the size of the continent of Europe, which has one of the highest population concentrations in the world, it is my belief that this is the only way forward for the European Union.
The García-Margallo y Marfil report does contain discrepancies. It is forced to juggle the fact that the Stability and Growth Pact must be welcomed, while also acknowledging the need to finance investments. It acknowledges that the article in the Treaty of Maastricht which prevents European institutions from criticising the European Central Bank must not be undermined, while also stating that it is nonetheless necessary to provide credit at special rates for the required investments. It mentions taxation, not interest rates. In short, the report tends to skirt round the real problems of institutional impasse we are currently experiencing within the European Union. Next year these problems will catapult us back into the situation of so-called europaralysis we experienced during the dark years of working towards the euro from 1990 to 1997.
As we cannot control the interest rates fixed by the European Central Bank, interest rates will be too high. This will present problems for Member States wishing both to invest and pay off their debts. These excessive interest rates will also make the euro too strong. It will hamper exports at a time of global recession. Unless we resolve to tackle the Stability and Growth Pact as it currently stands, we will be unable to finance the investments Mr García-Margallo y Marfil calls for.

Blokland (EDD)
 . (NL) Mr President, in this joint debate on a number of reports, we are discussing the progress of Economic and Monetary Union, a Union that exists by the grace of compliance with agreements made. The Stability and Growth Pact is an agreement, an agreement that we must hold one another to. The words that Mr Trentin writes about the Stability Pact in his report are worth reading. He says that even in periods of economic recession the pact must be adhered to closely and I am in complete agreement with this. Nor must we now go back on that.
Likewise Mr Garcia-Margallo y Marfil rightly says that the European leaders at the forthcoming spring summit must dispense with vague and self-satisfied declarations and must speak plainly. Clear agreements about the way in which we wish to achieve the economic objectives remain necessary to comply with the pact even in this period of recession.
I am therefore greatly amazed when it appears once again that France is unwilling to comply with the agreements made. Last Thursday it again became clear that this Member State would make no attempt to put its 2003 budget straight. Where Germany, Portugal and Italy are trying to put their budgets right within the agreements made, France, on the contrary, does not even express its intention finally to give account for the agreements made.
Let me conclude, Mr President, by saying that if this Parliament wishes to make a serious contribution to policy-making in the economic field, then it is high time that we summoned the Member States and politicians that are unwilling to comply with these agreements to this place to give account.

Della Vedova (NI).
Mr President, Commissioner, the reports being discussed today are major, substantial documents - before I start I must pay tribute to the rapporteurs for that - and they represent a major contribution to the debate on the policy guidelines for public finances in Europe. The radical Members will support them in their present form.
I do not want to go into the details of the individual resports, but I would like to take this opportunity to make some more general comments. Firstly, I believe that we should be a little mistrustful of high-sounding slogans and goals such as the Lisbon objectives, to which we are constantly referring. I do not feel that the fact that Europe decided at a certain juncture to set itself, and I quote once again: 'a new strategic goal for the next decade: to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth' and all the other goals we are familiar with is either a great leap forward or the basis for a new economic policy for the Member States, unless we think that, in the past, the States did not want to make their countries competitive countries and did not want to aim at full employment.
In addition to constantly stressing these objectives and performing analyses - the European Parliament is a political body, not a research centre - I feel we should discuss the reason why these high-sounding goals are not being met and which are the political costs which we in Europe do not have the courage to face in order to achieve them, to convert them into practical reforms, the reforms discussed in the reports before us today. I feel that the European economic structures need to be completely overhauled.
We are continually referring with pride to the European social model and the social market economy, but then we state explicitly in the reports - I think this is the case with Mr García-Margallo's report - that the fate of the European social model is dependent on US economic recovery: if there is no economic recovery in the United States there will be no economic growth in Europe, and the social model we are so proud of will experience much more difficult times than those we are already experiencing today.
The economic crisis in Germany is an indication of the crisis of an old economic model, the model of an old Europe which has nothing left to invest. We state repeatedly in the reports that we need more public investment - although we do not say where we are to find the money - and more private investment. I do not believe that private investment in Europe is low because of interest rates or, therefore, that our only objective should be to pressurize the European Central Bank to give us a more flexible interest rate policy, thereby facilitating private investment. Private investment will not increase because of lower interest rates: it will increase if and when we have a more flexible economy, with flexibility introduced in large doses.
Reforms to make the economy more flexible carry a political cost, and we are failing to discuss that cost: there is a price to be paid for meddling with the structure of the labour market and going against the powerful lobbies constituted by the monopolies - half of the European Union's budget is tied up in agricultural subsidies and protection - and there is a political cost for considering using these resources to spark off a new wave of investment in high technology and scientific research.
I will end with a comment on the subject of pensions: the need for rigorous national budgets arises, first and foremost, from the need for national budgets to have the capacity to deal with the problems related to the aging of the population and the costs derived from the structural reform of the pensions systems. We owe this to the future generations of European citizens.

Grönfeldt Bergman (PPE-DE).
Mr President, I want to keep my speech on the Convergence Report 2002 - Sweden fairly short and, first of all, thank the rapporteur, Mr Olle Schmidt, on a sterling piece of work.
On 1 January 2002, the euro was introduced as the currency, in notes and coinage, of 12 European Union countries. The transition was very successful, and people accepted the new currency in a positive way. Worries about price increases proved to be more or less unjustified. As everyone knows, Sweden is not among those countries that went over to using the euro as a currency. The reason for this was, of course, mainly political. If Sweden is to be able to introduce the euro as a currency, we must however formally meet five convergence criteria.
The Commission and the ECB consider that Sweden fulfils the three criteria relating to price stability, public sector finances and long-term interest rates. That is all well and good, but Sweden does not fulfil the remaining two criteria, that is to say those relating to the rate of exchange and legal convergence. With regard to the rate of exchange criterion, the Swedish krona has obviously fluctuated in value in recent years. It should however be borne in mind that, when Sweden formally requests a reappraisal, this will be carried out in the course of a second reference period and against a background of expectations that may tend to increase exchange rate stability.
When it comes to legal convergence, it is essential for Sweden as soon as possible to introduce the change in Swedish legislation that is required if the euro is to be introduced. The outcome of the forthcoming referendum must of course be respected but, in my opinion, Sweden should, in the event of a 'yes' vote, already be prepared to prevent a delay in the introduction of the euro due to the absence of legal convergence.
With all due respect for the convergence criteria, the decision concerning Swedish participation in the third phase of EMU is political. It is a decision that will be made by the Swedish people. In the referendum of 14 September 2003, the Swedish people will decide for a long time to come which currency is to be used in Sweden. On the other hand, Sweden is obliged, under the Treaty of Maastricht, to become fully involved in EMU cooperation once the convergence criteria have been fulfilled. Unlike Denmark and Great Britain, Sweden has no special exemption clause, but we shall hopefully obtain a 'yes' vote from the Swedish people on 14 September. As a result, the Swedish Government need no longer, either intentionally or unintentionally, delay or avoid taking the measures whereby Sweden will fulfil the remaining convergence criteria.
I noted with satisfaction that Mr Olle Schmidt accepted Amendments Nos 3 and 4 by the Group of the European People's Party (Christian Democrats) and European Democrats. This will make it possible to obtain that broad support for the report desired by both the rapporteur and myself.

Berès (PSE).
Mr President, Commissioner, ladies and gentlemen, three of the reports before us this evening provide an opportunity for us to assess the functioning of economic and monetary union prior to the Spring European Council.
Turning to the situation of public finances in France, one cannot help remarking that economic policy is not considered as an issue of common interest. The Treaty is not being respected. One cannot help remarking too that economic and monetary union does not actually exist, certainly as far as economic union is concerned. The Stability and Growth Pact is at the heart of these mechanisms. Nevertheless, it appears to be more of a safeguard rather than a tool of economic policy. The adoption of the Lisbon strategy could subsequently have been the catalyst that would have provided the economic and monetary union with an economic policy. In short, the Stability and Growth Pact has not proved to be a dynamic tool for implementing this strategy.
In principle, the tools we have at our disposal are the famous broad economic policy guidelines we are discussing again this evening. These will galvanise approaches on European Union economic policy in the weeks and months to come. What could the outcome be, Commissioner? At present these broad economic policy guidelines are functioning as an academic exercise. They are not having any impact on the public finances of the Member States, which simply wait for penalties to be imposed through the implementation of the Stability and Growth Pact once it is too late.
Europe needs a strategy for growth. You said so yourself in your speech. This means we need more tools than we currently have available. Commissioner, the Council has just expressed its opinion on your statement. I think we need to go further and we must do so at the Convention. I think that we must work together to establish mutually acceptable proposals. We should draw up measures which will at long last endow the European Union with the means not only to develop a genuine economic policy, but also to conceive of it as serving the common good and to implement the objectives of the Lisbon strategy.

Nordmann (ELDR).
Mr President, I do not have the time to delve into the possible differences between the text of the reports and the personal views of each of the rapporteurs. I will therefore focus my comments on the Commission's statement and on the contribution of the Commissioner, and will offer both my strong support. In my view, the Commission is fulfilling its role as guardian of the treaties on this matter perfectly. I believe the Stability and Growth Pact is not dead. I believe that above and beyond the arguably controversial statements made at the end of last year on formulas that could be perceived as risky, it is important to insist upon the distinction between the letter and the spirit of the Stability and Growth Pact and to ensure that its spirit is kept alive. The Maastricht criteria mean we are committed to a monetary union that is also a political union based on a number of values. The stability on which the euro is based goes beyond the technical definition of the concept. It amounts to a mutual agreement on a form of social contract. As well as being a strong currency, the euro must above all be a stable currency. In proclaiming this principle, Europe is setting aside its bad habits of the twentieth century, characterised by inflation, which represented a tax for poor people. Europe has decided to commit itself to being a confident society with a stake in the future. These are the values we are presenting to the countries about to join the European Union. Herein lies another reason not to alter these values by taking imprudent action which would undermine them. When players are not doing well at a game, they do not ask for the rules to be changed, but learn them instead.

Schmid, Herman (GUE/NGL).
Mr President, as you will appreciate, Mr Olle Schmidt's report is being read with great interest in Sweden, which is to hold a referendum on the introduction of the euro in September. Item 6 of this report states that the introduction of the euro is part of the Treaty obligations for all the Member States, including Sweden in other words. Item 5 states, however, that referendums are to be held and that the outcomes of these must be respected, even if they entail rejecting the introduction of the euro.
This comes across as being extremely self-contradictory. Mr Olle Schmidt hopes that the Swedish people will vote 'yes' and so resolve this contradiction. There is not much, however, to indicate that they will do so. On the contrary, the 'no' camp is at present very clearly in the lead, by ten per cent according to the latest poll. The trend suggests that this lead will become ever greater. It may also be worth Parliament's knowing that, among those who say 'no', are quite a few ministers in the Swedish Government, including the minister for trade and industry, Leif Pagrotsky, at least two former presidents of the Swedish Central Bank and a long list of highly regarded economists, who all believe that Sweden should vote 'no'. The situation does not therefore reflect the classic picture of an educated Europhile élite and an uninformed populace. What we have instead is a political debate demanding objectivity and arguments on both sides.
Sweden has a well-run economy. In the years during which Sweden has not been involved in cooperation concerning the euro, its economy has, in almost all respects, been strengthened in relation to those of the eurozone countries. Swedish industry traditionally asserts that the euro community is at all events good for trade. The business 'paper, Affärsvärlden has recently shown that this too is not the case.
The economists sympathetic to EMU cannot deny this state of affairs. They therefore say, as Mrs Grönfeldt Bergman just did, that the arguments in favour of EMU are not economic but political. It does not sound especially convincing when it is economists who say this, as if they were arguing in favour of entering this political union on grounds contrary to those of practical economic sense. It is not easy to sell this message to the Swedish people. The truth is that EMU has not been the success it was expected to be. The Stability and Growth Pact is coming up against evermore criticism, and economic stagnation is increasingly widespread. For Sweden, the German economy is particularly important, but it is a difficult task right now to convince the Swedish people to make their future dependent upon the German economy.
This issue concerns not only Sweden, but also the UK and Denmark. We shall soon also have a range of new Member States that are also outside the framework of cooperation concerning the euro. In those countries, too, there may perhaps be referendums on the euro and, as a result, the euro may be rejected there. In that situation, the definitive question must be asked: what should the EU and the European Central Bank do if Sweden and perhaps other Member States were to elect to stay outside the currency union? Is it possible to contemplate a euro community that is voluntary in character? What, in actual fact, do the Commission and the Council have to say about these matters?
(The President cut off the speaker)

Mayol i Raynal (Verts/ALE).
Mr President, our group voted against this report in the Committee on Economic and Monetary Affairs. In its current form, this report fails to challenge the principles of the neo-liberal credo, which unfortunately are at the heart of many Community policies. Yesterday, the dock workers brought this home to us forcefully in this very city and with every justification. The report does not query the validity of the stability and growth programmes to any significant extent. It is worth considering the meaning of the terms 'growth' and 'stability'. By definition, things that are 'stable' do not grow. Growth means movement; stability means the opposite. Certainly, the reality is dialectical in nature. On the other hand, this use of words could be construed as an attempt to resolve a contradiction.
The report appears to reject any initiative to make the stability and growth criteria more flexible, and particularly the famous 3% criterion. Given the present economic difficulties, some Member States, and not just the smallest among them, are finding it increasingly difficult to comply with the 3% rule. Will this remedy kill the patient? We should note that experts from both the European Union and Member States gave overly optimistic predictions of growth. We hoped that the American economy would show signs of recovery, and that the European economy would follow suit. This has not happened, however. The policies pursued by Member States and the European Union were therefore based on inaccurate data. In this respect, the rigidity of the criteria of the Stability and Growth Pact seems to run counter to the fundamentals of good governance. People better qualified than I on this subject have spoken strongly on the matter.
We should envisage policies of Keynesian cyclic recovery. We should also consider policies aimed at achieving long-term improvement of the bases of the economy. These include, for example, energy efficiency and the provision of training. I would like to add that good governance implies reliable economic data, meaning the State must benefit from the Rule of Law. The fact that the Basque newspaper Egunkaria has been banned for six months makes one wonder whether the Basque country is still within a country where the Rule of Law prevails.

Berthu (NI).
Mr President, we are currently engaged in a debate over the breaking of the Stability and Growth Pact. This mainly concerns just three countries, namely France, Germany and Portugal. We should remember that, when considering the budget or any other subject, we must not fail to see the wood for the trees.
The three countries with the highest deficits have one thing in common. They have all had socialist governments. I would add that Germany still has a socialist government. These governments have been lax on public spending and have failed to implement reforms which could have achieved savings. They have wasted the margins for manoeuvre achieved through the growth in the years 2000/2001. We are now dealing with the bitter consequences of this.
This particular tree must not obscure our vision. The real problem is the general decline in public balances in the eurozone. This stood at less than 2.4% of GDP in 2002, close to the 3% criterion.
The main cause of this is the slowdown in the growth rate, and the tide is not yet turning, even slowly. This goes against the somewhat unrealistic assertions of the reports we are considering this evening. One of the possible causes of this slowdown is the economic climate. The main cause, however, is to be found in the huge public payments and the lack of structural flexibility. No solutions have yet been found for the latter. In this respect, we must break the taboo and ask whether in fact the euro itself forms part of the rigid structures holding back growth. In view of the marked differences in performance between the eurozone and the countries outside the euro, the question certainly needs to be asked.
Given that we are losing ground, should the Stability and Growth Pact be made more flexible? I am aware that the response from the Commission, the European Central Bank and even the last Ecofin Council was overwhelmingly negative, although a number of minor modifications were put forward. With respect to both the Stability and Growth Pact and foreign policy, the European Union, as usual, does not want to face reality. Instead it wants to paper over the ways in which we are slipping behind on meeting fundamental criteria.
In our opinion, we should not lose sight of the objective of completely eliminating public deficits. This is certainly a laudable aim. We think, however, that the French Government is right to maintain their programme of reducing taxation in order to avoid aggravating the current crisis. We have to address a situation we have inherited and that is not of our making. We must at least try to do so in an intelligent way.

Karas (PPE-DE).
Mr President, ladies and gentlemen, I should like to thank the Commissioner very much for reminding us all once again of the corner stones - not only because these are uncertain times, but also because this has been a very confusing debate - and for not setting them against each other either, but reminding us that they are principles of European economic policy. I should like to start where Mr Gasòliba i Böhm left off. We are not setting new objectives. We are not making new promises or developing new hypotheses and analyses. What we are doing is finally taking ourselves seriously. If you do not take yourself seriously, then others will not take you seriously either. Some of us complain about the common principles of economic policy and at the same time criticise the fact that they are not respected. We regret the fact that growth, productivity and employment are falling, and that we are not making up ground but are lagging behind, and some of us think that the response to this diagnosis is more state intervention and more debt. Do the Members on the Left really believe this, even though at the same time we have to acknowledge that we do not even meet all of the objectives that we have set ourselves?
We talk about the rules, but at the same time we say - at least some of us do - that the rules should not be respected in such and such a case by such and such a country. At the same time, we regret the crisis of confidence in Europe about many economic policy measures and the principles and objectives of the European Union. You only create confidence with accountability and you only create accountability if you keep to and act on the things you resolve to do, both at European level and in the Member States. That is why I say very clearly on behalf of my group that we say 'yes' to the internal market. If we say 'yes' to the internal market however we must finally see to it that the barriers in the internal market are eliminated, that we really do create an action plan for financial services, that we really do implement the Risk Capital Action Plan, that we really do make the Charter for Small Enterprises a reality. We say 'yes' to competition policy. But that also means that we must, at last, eliminate tax provisions that distort competition. For some types of tax, such as value-added tax, energy tax, corporation tax and the taxation of pension funds, a convergence programme is necessary. We say 'yes' to the Lisbon strategy, but if we say 'yes' to the Lisbon strategy then we also have to say 'yes' to a model of the market economy that takes account of environmental and social concerns and does not constantly play the market off against social security. This also means that we finally need to ensure that with each piece of legislation we identify its economic impact and its impact on employment and the environment before we adopt it, rather than waiting until afterwards to be allowed to complain about the consequences.
We say 'yes' to a benchmark. We must learn from each other. And we say 'yes' to the Stability Pact because it provides an ordered framework, and that is why we also say 'no' to the golden rules, because they undermine the Stability Pact and we would thereby be stabbing the Commission, the guardian of the Treaties, in the back and betraying the Stability and Growth objectives.

Färm (PSE).
Mr President, my home country, Sweden, will be holding a referendum on the euro this autumn. In spite of the fact that we are still not part of the eurozone, we are nonetheless actively attempting to fulfil the convergence criteria and to respect the rules of the Stability and Growth Pact. The Commission and the rapporteur, Mr Olle Schmidt, point out that, on two issues - the rate of exchange and legislation concerning the Swedish Central Bank - Sweden does not meet the requirements. I believe that it will be possible quickly to fulfil the requirements regarding these issues if the outcome of the referendum is a 'yes' vote.
Our respect for these rules does not only have to do with the fact that they exist as external demands. Rather, it primarily has to do with the fact that we ourselves perceive that they are beneficial to the Swedish economy, which has also constantly been improving. At present, we have relatively low inflation and low unemployment, together with stable state finances. What is more, we have higher growth than many other countries. These are basically good rules. It would therefore be dangerous to begin to ignore these rules, together with budgetary discipline, as soon as some people have problems. That would undermine confidence in the euro and EMU.
Notwithstanding the approach pursued by the Group of the European People's Party (Christian Democrats) and European Democrats in certain amendments, there are reasons for developing the rules of the pact in the long term. Allow me to mention a few examples, for instance concerning the matter of price stability. Clearly, we must stick to the inflation target, but, for example, the two per cent requirement could possibly be the average for an economic cycle, so that inflation could be one per cent in one year and three per cent in another. That is something that would favour growth and increase flexibility. The same applies to state finances. The Commission has put forward an interesting proposal whereby countries with low national debts should be given increased opportunities to provide loans for long-term investments. That is something I believe would be constructive.
Allow me finally to say that, for both political and economic reasons, I hope that Sweden will soon be involved in cooperation concerning the euro. If we can strengthen and unify Europe in a situation in which the dollar's and the United States's dominance is so powerful and, at the same time, reduce the risk of new currency and interest crises, then I obviously think that the Swedes should vote in favour of the euro. I should like to express my thanks, especially to Mr Olle Schmidt who has produced a truly excellent report of which I shall vote in favour.

Figueiredo (GUE/NGL).
Mr President, what has surprised me most in this debate is that nothing shakes the faith of some Members in the rigidity of the criteria for nominal convergence. Neither the major economic downturn nor the reduction in private investment, nor the steady rise in unemployment and poverty shake their faith in the dogmas of the Stability Pact, whose budgetary and monetary rigidity has not only contributed to worsening the current economic crisis but has also limited the potential for growth in the European Union, with all the consequences this has for the increasingly high levels of inequality, poverty and social exclusion.
This situation is particularly serious, however, for the cohesion countries, such as Portugal, whose specific problems require a dynamic public sector and major public investment in order to attain a high level of real convergence, which is being hampered by the blind application of the Stability Pact's irrational criteria. As we all know, globalisation should make monetary and budgetary policies more flexible towards the specific needs of each country and not lead to the rigid approach currently being applied, which ends up imposing flexibility on salaries and the labour market, giving pride of place to monetary policies and attaching far less importance to social policies.
I regret the fact that the Committee on Economic Affairs did not consider the proposal I tabled, urging the Commission and the Council immediately to suspend the Stability Pact and calling for an in-depth revision of the EU's economic and monetary policy guidelines, particularly in order to take account of issues such as the sustainable economic development of employment and the implementation of all social rights through universal and high-quality public services.
It makes no economic sense to set the same budgetary deficit threshold for countries that have different levels of development, and nor is there any economic justification for sacrificing everything in the name of zero deficit. It is therefore clear that the fundamental objective of the pact is political, and this is why we are also unhappy about the proposals that have been put forward here, specifically by the Commission.

Schörling (Verts/ALE).
Mr President, my contribution relates exclusively to Mr Olle Schmidt's report. I wish to congratulate him on this work, even though I do not share his conclusions, for he has not only succeeded in responding to the Commission's Convergence Report on Sweden, but has also taken the opportunity of making a contribution to the EMU debate in Sweden before the referendum in September. I would ask my fellow MEPs to be alert to what is stated in the report, for I find certain parts of it both erroneous and startling.
Firstly, Mr Olle Schmidt writes that prices have not risen in those countries that have introduced the euro. According to both Wim Duisenberg and a report in the Swedish daily, Dagens Nyheter, prices have in fact risen following the introduction of the euro and contributed to an increase in inflation in the eurozone of 0.2 per cent. Secondly, Mr Schmidt offers a false picture of the Swedish economy. He maintains that, in terms of trade, Sweden has been slipping behind because we have not introduced the euro. He does not, however, mention that Sweden has higher growth and lower unemployment than most countries that have the euro, and without in fact having either high inflation or a budget deficit.
What I find startling, not to say of serious concern, in Mr Schmidt's report is item 6, through which he wishes to make voters feel powerless by stating right now that, sooner or later, we must at all events become members of the eurozone. To that extent, the report is a biased contribution to the EMU debate in Sweden.

Kauppi (PPE-DE).
Mr President, the downturn in the economy has proved to be deeper and longer-lasting than was first thought. The present situation clearly highlights how important the Lisbon strategy for growth and competition is. The Union was to have become the world's most competitive region by 2010 and an engine for growth, as our Member States' leaders put it so beautifully at Lisbon. It all seems to have gone differently, however. In the last three years Europe has become a continent where the sun is setting, one which cannot keep its promises, which is betraying the confidence of its citizens, and which is leaving future generations to inherit only debts and uncovered pension liabilities. Can we really not do any better than this?
Only three countries - Denmark, Sweden and Finland - have done what was agreed at Lisbon. Ireland, Great Britain and the Netherlands have also made considerable progress. The three biggest economies in the euro area, however, have not done enough up till now. If we were at school, ladies and gentlemen, Germany, Italy and France would be kept down a year. I would not use such harsh words normally, but this is a serious business. What in your opinion, after all, does a press report tell you which says that at present a hundred Germans lose their jobs every hour?
International business cycles obviously play their part, but this does not alter the fact that our economic structures are so constrained that they are a huge barrier to growth. Moreover, when we then try to eliminate these structural problems, for example with the directive on port services, a whole crowd of brawlers and egotistic anarchists gather in front of the European Parliament.
At the moment we do not need new targets or new complicated rules. Now is the time for action. This means genuine commitment to the Stability and Growth Pact and structural reforms. If Member States are to be allowed to deviate from the objective of balancing public finances under the Stability and Growth Pact, this will give out quite the wrong signal. In practice this would lead to rules that are open to interpretation, and would weaken our credibility and our ultimate objectives in coordinating economic policy even further.

Skinner (PSE).
Mr President, a fiscal responsibility for Member States is a must, inside or outside the eurozone. It would be disastrous for us to act recklessly and even worse for countries to consider themselves above an agreement which disciplines us all for the sake of a stable eurozone. Having said that, I am and have always been in favour of an intelligent and flexible interpretation. Clearly there is room for improvement. I am sure the Commission recognises this. The economic cycle calls for more than an annual disapproval. Monitoring over such a short period of time is incompatible with real-time analysis. I am sympathetic to Mr Santos' view that the cyclically adjusted deficit approved over the economic cycle is both sensible and prudent. Growth and stability are twin pillars. The Lisbon Summit gave voice to the possibility of a single market which was matched by investment in training and release of capital through the use of the financial services action plan, complemented by the risk capital action plan. However, we are still falling behind competitively. There are no high walls to keep the market out. The EU is increasingly in danger of being left out. The risk to the Community of not tackling substantial structural reforms is too great to be ignored. If we delay now, that will worsen, not ameliorate, economic downturns.
Today's discussions have been entertaining and humorous in many respects. In particular I thank Mr Olle Schmidt for the view that Sweden will join the euro and hopefully set a very good example for the UK, which will join very shortly afterwards.

Bordes (GUE/NGL).
Mr President, it should be noted that, though the institutions of the European Union happily preach to the smaller countries of Europe if they do not meet the convergence criteria, they take a much more moderate tone in addressing two of the European powerhouses, namely France and Germany! Maastricht criteria or not, these two Member States have taken it on themselves to increase their deficits in order to support capitalist ventures in their countries. The attitude of the French Government demonstrates how France and Germany will respond to the injunctions of the European institutions, if they do so at all. They may perhaps reduce their budgetary deficits, but they will not do so by reducing the considerable sums of money they give to employers.
In France, this amounts to at least 10% of the budget. There is certainly scope for making good a 3.4% deficit. In order to avoid reducing the money allocated to business, however, the French Government is cutting public spending. In truth, this means taking money away from public services. The requirement to balance the budget will mean less money for hospitals and schools. The population as a whole will suffer so that the wealthy can get away scot-free.
Although it is in fact the Member States, rather than the European institutions, who decide on their budget, we shall vote against this report as it serves as a cover and a justification for austerity measures and assaults on public services.

Konrad (PPE-DE).
Mr President, ladies and gentlemen, the Lisbon strategy can only succeed if we promote competition between the European systems. In other words, we are concerned here with competition between economic solutions and, above all, with the best solutions to emerge from competition between the EU governments. That also ties in with the basic idea of subsidiarity in Europe. To put it in plain language, there should simply be no further increase in cooperation concerning economic policy, meaning that macro-economic policy ought quite simply not to fall within the competence of the EU. Socio-political objectives too, such as bringing about full employment, promoting social cohesion or establishing a balanced relationship between competition and public service are contrary to the principles of subsidiarity and competition. Moreover, we should - in my view, anyway - also take care that such objectives do not find their way into the EU constitution.
What is more, we also need competition in the tax field, that is to say between European tax systems. Nor, above all, should we go on using the open coordination method in the form currently under discussion. In other words, we need, in the future too, an economic policy for which the Member States themselves continue to be responsible. In my view, only competition between economic policy objectives will, in the end, also lead to local conditions within the European Union that, against the background of general worldwide competition, may be further strengthened.

Solbes
Mr President, I would like to thank everybody who has taken part in this debate for the ideas and issues proposed and raised.
I believe we have dealt well with the Union's two great instruments for coordinating economic policies, the broad guidelines for economic policies and the Stability and Growth Pact, instruments which, although they are linked, must not be confused.
It is the case that, since the Lisbon strategy was drawn up, the broad guidelines for economic policy have essentially been aimed at improving the Union's growth potential. It is also the case that we often tend to compare what happens in the European Union with what happens in the United States in a rather simplistic way. We must not forget that, for example, it is not the same to compare growth in productivity in the United States and the European Union with growth in productivity per hour in the United States and the European Union. To put it another way, when we compare the United States with Europe, we know that in the United States the population is growing more, there is more active population and more hours are worked. There are clearly other factors involved in terms of productivity and which affect the labour market.
This apart, however, there are two elements which I do believe to be important. They are both in our synthesis report. What has happened between 1999, when we launched the Lisbon process, and now? We have seen that, in terms of employment growth, the Union has grown more rapidly than in the past and we have come closer to the activity rate of the United States. Nevertheless, our productivity has decreased in comparison with the United States. This highlights that there are certain elements which are failing in the European Union, which are clearly related to the labour market in a broad sense, but which also relate to the deficiencies in the internal market, to the financial market, to lack of investments and to training and all those elements we have tried to introduce in the priorities, particularly for 2004, which we presented to the Spring Council, in order to improve our capacity and productivity in the future.
Within this context, is the Stability and Growth Pact an obstacle to recovery in Europe? I believe not. I believe that the Stability and Growth Pact is a guarantee which will allow us, when we are able to improve our growth capacity and there is the possibility of growth, to make use of it in the best possible way.
The Stability and Growth Pact, by means of automatic stabilisers, has provided the Union with clear fiscal impetus. We must not forget that, in very broad simplistic terms, each point that activity falls implies more or less a half a point increase in public deficit, which is approximately double what usually happens in the United States.
Does a further discretional fiscal policy in the Union make sense? We believe that an asymmetric shock clearly raises problems which are not going to be resolved through elements of general taxation policy. Asymmetric shocks must be resolved through defining monetary policy and only in very exceptional circumstances does discretional fiscal policy make sense in the event of an asymmetric shock. However, we have introduced the room for manoeuvre into the pact which I referred to earlier, but we have introduced it in connection with that Lisbon growth potential.
I know that, in relation to the elements I have just mentioned with regard to the pact, you may say to me that these instruments count in those countries with budgetary positions below 3% in terms of deficit. And this is true. The Commission believes - and I am personally convinced - that the 3%, in nominal terms, should be the fundamental anchor of our entire system. We must define a reference which is untouchable for everybody and I believe that that is the reference we have to work on. But it is not a reference which we have defined and to which we are too stubbornly attached and which cannot be changed. Let us imagine simply what the budgetary situation would be in those countries which began with relatively low budgetary deficit definitions if we had allowed the growth in public deficit to function, as has happened in the United States for example.
It is the case that, in our system, those countries which exceed the 3%, at times with less fall in activity, must behave in a somewhat procyclic manner, but that situation is the result of not having fulfilled the obligations to reduce deficits in situations of higher growth. In summary, I believe the instruments we have will allow us to confront the current situation with a certain degree of coordination.
If I am asked whether we should be satisfied, I must say that we have made progress, but not that we should be entirely satisfied. You have raised some of the elements of concern to us all. You have said that it is essential that what is agreed is fulfilled. I completely agree with this principle and I believe it is one of the essential faults we currently have in our coordination system. Others have referred to the need to pay more attention to compliance with what is agreed and not to agree new things. This is why in the broad guidelines for economic policy we are paying much more attention to application reports than to the definition of new broad guidelines, which we propose should be tri-annual.
With regard to the Stability and Growth Pact, however, we have also constantly insisted on the need to achieve greater ownership on the part of the various Member States. It is essential that the Member States accept and reiterate their commitment to complying with the Stability Pact and that that commitment is not simply formal, but that it is made reality. Only if we are able to make progress on all these elements will we have a departure point which will allow us to grow rapidly when the economic context changes.
I believe that our fundamental balances are in a relatively comfortable position at the moment. We are aware that our growth rates are relatively low. We are aware that we are being very much affected by external factors and that we have not been capable of being more independent from them, but we believe this is an excellent departure point for confronting the problems which may arise in the future and for taking advantage of opportunities for growth in the best possible way at the point when they arise.

President.
The debate is closed.
The vote will be taken tomorrow at 12 noon.

President.
- The next item is the recommendation for second reading (A5-0042/2003) by the Committee on Economic and Monetary Affairs, on the Council common position with a view to adopting a European Parliament and Council directive on the activities and supervision of institutions for occupational retirement provision (11212/4/2002 - C5-0534/2002 - 2000/0260(COD)) (Rapporteur: Othmar Karas).

Karas (PPE-DE)
Mr President, Commissioner, ladies and gentlemen, I should like, at the beginning of my speech on this report, to thank three groups of people: firstly, and especially, the representatives of the Spanish and Danish Presidencies. The Spanish Presidency made the common position possible, and the Danish Presidency worked hard at seeking dialogue with us. I am also glad and grateful that, in the last week, the Greek Presidency has set aside its self-imposed ban on engaging in talks.
I should like to thank Commissioner Bolkestein's political staff and secretariat for their constant readiness to engage in discussions with us and to work with us on reaching compromises.
Finally, I should like to thank the shadow rapporteurs, Mr Kuckelkorn and Mr Huhne, together with my committee colleagues, who were extremely flexible and who conducted themselves in such a way as consistently to help us bring about this directive without our having to jettison the principles we laid down at first reading. I should like to thank them most sincerely for their contribution.
The second point I should like to make is that this directive has also clearly shown the problems we have where legislative procedure is concerned. In October 2000, we received the Commission proposal; and Parliament concluded the first reading in July 2001; but it was not until 5 November 2002 that the common position was made known to us. Today we have the second reading debate, and tomorrow the vote. As this needs to be recalled to mind, I would take this opportunity to state very clearly that we wanted to show our ability to conclude such an important directive at first reading. Parliament's first reading produced 458 votes in favour. If the Council had accepted this gesture of cooperation on our part, we should already have had this directive long ago.
My third point, which I make partly in response to a number of today's press reports, is that this directive is neither a pensions directive nor a directive concerned with social insurance products. Nor does it just have to do with occupational retirement provision. As its name suggests, it is a directive on the activities and supervision of institutions for occupational retirement provision. That needs to be stated, because we are concerned here with a financial services directive. That being said, many wishes have of course been expressed to me in terms of defining the benefits, designing the products, and so on. When they hear the words 'occupational retirement provision', people ask what the benefits are for themselves at a time of prevailing uncertainty in all the Member States where pensions are concerned.
In view of the fact that the financial services and internal market directives, together with the relevant institutions, play a key role in the funding of the European economy and the operation of capital markets, we have tried, in this highly charged situation, to follow the path laid down in Lisbon and to bring about not only competition but also a corresponding degree of social security. We also had the task of structuring occupational pension schemes as the second pillar of retirement provision and of dealing with the social aspects of this.
This directive is a success for the European Parliament. We amended the Commission proposal at first reading. At second reading, we shall amend the common position along lines that reflect our own thinking. This directive is not the end product. It is a first step. I believe that the directive will be of benefit to people because there will be more suppliers in competition with one another; that, with the creation of the European market, it will have more advantages for people on the move; that it will have more advantages for citizens and suppliers because the second pillar too will now be regulated on a European basis; and that it will benefit the capital market by moving sums to the tune of EUR 2 000 billion around the market and hopefully increasing that capital. The directive will be of benefit to the internal market due to the provision of venture capital, and it will be of benefit to the institutions because European regulations will exist, so making cross-border activities easier.
We have made amendments to six items as a matter of priority. The amount of information to be given to recipients of pensions has been increased. The biometric risks have been clearly formulated, and it has been made possible to cover these. It has been clearly specified that our objective is life-long pensions, which must be at the heart of our arrangements. The directive will lead to coordination of the work of the supervisory authorities, and it has laid the foundations for a level playing field. It has still not liberalised the assessment stipulations. Given the Council's position, that was not possible. Nor has the directive clarified the issue of tax harmonisation, and it has still not fulfilled our desire to see the second pillar structured in the same way throughout Europe, so providing for greater social security.
The directive is an important step in the right direction, however. I believe we have maintained the balance within the framework of our competences and the existing options. I should like most sincerely to thank all those who have contributed to the work.
Bolkestein
Mr President, the Commission would like to thank the European Parliament and especially the rapporteur. The rapporteur has been so kind as to thank my cabinet and my services. I am duly grateful for those compliments and shall certainly pass them on to my staff. I thank the rapporteur and the chairman of the Committee on Economic and Monetary Affairs, Mrs Randzio-Plath, for their judicious and efficient handling of this important file and for their very constructive and cooperative attitude during this second reading.
This directive is of particular strategic importance, not just for our capital markets, but also for our labour markets and perhaps, more importantly, for the sustainability of our public finances and our pension systems as a whole. This directive has clearly been identified as a priority by Heads of State and Government, notably at the Barcelona European Council.
The current situation in Europe is characterised by three aspects: first, a growing general awareness of what I would describe as the 'demographic timebomb'; second, a clear determination by all Member States to address the financial challenges without undermining the social objective of their pension systems; third, a strong desire by the Member States to preserve the specificity of the pension systems in their efforts to modernise them. After all, the responsibility for designing and managing pension systems remains with the Member States and there is no intention of changing that.
It is against that background that our efforts to create an internal market framework for the institutions offering occupational pensions must be considered. A directive aimed at creating a prudential framework for pension funds must fit in with this process of steady but gradual and coordinated reform of national pension systems.
This directive must also - and this has been of fundamental importance for the Commission - fully respect two essential principles: first, full respect for the very wide diversity of the occupational retirement business among Member States and, second, non-interference in the organisation of Member States' pensions systems.
I am very pleased to note that the package of compromise amendments tabled by the PPE-DE, Socialist and Liberal groups fully complies with those two principles.

Purvis (PPE-DE).
Mr President, I would like to pay tribute to our rapporteur, Mr Karas, who has shown superb judgement in reaching a broadly acceptable balance in this complex but vitally important directive. Our group was very concerned at any possibility of the directive failing for lack of consensus in Parliament or between Parliament and the Council. But the rapporteur has very successfully squared this very difficult circle. We in the PPE-DE Group are very pleased to support the compromise which the rapporteur and the Commissioner have engineered.
I should, however, flag up some residual concerns which we still have. For example, compromise Amendments 4 and 12 give Member States the right to provide an option for coverage of biometric risks. Certainly this is only an option, but we are concerned that differences between Member States might in any way impede cross-border occupational pension funds and the ability to transfer employees together with their pension funds around the European Union. I would appreciate the Commissioner's reassurance as to his understanding of the impact - or hopefully non-impact - of this option.
The other concern regards the requirement for a register which also has to show in which Member States the institution concerned is operating. The rapporteur has assured me that, under the agreed amendment, no such register would be required if instead the institutions were 'authorised'. Again I would appreciate the Commissioner's specific assurance that this is also his understanding. This would certainly be welcome to the financial services industry with a view to eliminating unnecessary red tape.
Apart from these two matters, we are very pleased with the outcome which provides ample flexibility in, for example, how pension benefits are paid out. The lump sum payment will continue to be permitted. We are taking a major step forward in providing a Europe-wide single market in financial services.
Mr Karas and Commissioner Bolkestein are to be congratulated for this achievement. Tomorrow we must ensure a resounding vote of support for this directive.

Kuckelkorn (PSE).
Mr President, since everyone has been so polite in thanking one another, I should also like to thank the rapporteur, Mr Karas, who has certainly made efforts in the first, and now also in the second, reading to reach a compromise in the committee and in plenary. I would also back this compromise that has been reached if, under the leadership either of the rapporteur or of a delegation from the Committee on Economic and Monetary Affairs, it were to be introduced into plenary immediately following negotiations with the Commission. In those circumstances, I would support it. A submitted compromise, or a wording presented by the Commission, has a history to it, however, and such compromises or wordings seem to me to be matters of dispute within the ECOFIN Council where, according to what I have been told, one or other of the Member States was, in the end, quite prepared to use another veto.
From the time of the Green Paper up until now when the second reading is imminent, the directive has had several names. The name of the directive really does not matter now, however. What matters, rather, is the content. Allow me therefore again to extract a couple of items from one of the Commission's or, as the case may be, Commissioner Bolkestein's proposals, for example from the proposal, as they put it, in expectation of reaching retirement age, which legitimises also those payments made before arrival at retirement age. What this has to do with pension payments, you will first need to explain to me again.
When it comes to the biometric risks, there is clearly no European solution, particularly not in terms of guaranteeing the amounts paid in. That means that the entire capital market risk has been transferred to the policyholders, which is to say to the employees, and that is something I am unable to accept. There is no justification for saying, as has already been implied once here in Parliament, 'Give me your money; trust me; I shall invest it and, if it disappears, that is your bad luck'.
I am particularly perturbed by the fact that, in the compromise proposal, the Commission has removed the policyholders' obligation, upon request, to provide information about their current pension rights. I do not think that what we have here is a good compromise, and I should have liked us to have had the opportunity of a conciliation procedure with a view to arriving in the end at a sensible European regulation.

Huhne (ELDR).
Mr President, I too should like to thank the rapporteur, Mr Karas, and the Commissioner and his staff for what I believe is a very good compromise reached between the European Parliament, the Council of Ministers and the Commission, which will allow millions of Europeans to accumulate better pension rights wherever they work in the Union.
This is an essential plank of the Financial Services Action Plan. It will cut the administrative costs of many multinational companies' pension funds, allowing people to have better pensions when they retire. It will help millions of European old people to retire in the sun.
At present, European citizens are effectively being denied their right to free movement during their working lives and during retirement because of the patchwork of national pension systems. These impose unacceptable barriers when people seek to change jobs or residence. This is a big step forward in dealing with them. We look forward to more progress, particularly on some of the tax issues.
Companies also suffer from a less mobile workforce and the additional bureaucracy, administration and costs involved in managing multiple pensions systems. Firms with a presence in all fifteen Member States face an estimated EUR 40 million a year in extra costs through having to deal with fifteen different pension providers and legal arrangements.
This agreement also provides more choice of pension funds because it opens up the European market in investment management and pension administration. In future, we can have a genuine pension savings market of 377 million people, expanding after enlargement to 450 million people. This is a vast potential market.
Funded occupational retirement schemes in the EU cover 25% of the EU workforce and are currently valued at more than EUR 2 500 billion. They are expected to grow to more than EUR 7 000 billion by 2010. This is a key plank in the opening up of the financial services market.
It is also a market-opening measure without using sledgehammers to crack nuts. It gives a passport to pension funds to operate throughout the EU without trying to harmonise everything. Member States are responsible for determining the social requirements - such as death in service benefits - for their own pension funds and the tax reliefs that they give, consistent with subsidiarity. For example, I am pleased that lump sums are specifically allowed.
In addition, the directive means that pension funds can now invest, taking into account their own beneficiaries' requirements rather than arbitrary rules set down by governments for the purchase of their own bonds and so forth. This insistence on the so-called 'prudent person rule' - the rule that investments are decided prudently - will open up the fund management market.
Overall this is an excellent measure. I commend it to the House.

Herzog (GUE/NGL).
Mr President, ladies and gentlemen, I believe a directive on supplementary retirement provision businesses should have been established to provide a degree of social protection. The European Union does not have such a mandate however. Consequently, this report forms part of the work towards the objective of creating an internal market for financial services. This is absolutely clear. Above all, this report will allow supplementary retirement provision institutions in Britain and elsewhere to benefit from their position and offer cross-border services.
We voted against this report at the first reading at the Committee on Economic and Monetary Affairs. The document certainly sought to correct the shortcomings concerning social obligations but it made investment risks worse. The common position of the Council better safeguards the prudential requirements for investment, but it does not meet Parliament's demands on social issues. We have called for this common position to be rejected. We think that this report must be reconsidered in the context of the serious crisis affecting the stock markets at present. This is affecting pension funds. It poses a risk to the level of benefits and is causing contributions to be increased. Confidence in these pension fund systems will not be restored without strict management rules and mutual insurance structures for the guarantees. It is also necessary for these structures to be covered by European collective conventions between social partners.
I would like to say that Mr Karas has worked very hard on this report and has ensured that the text is balanced. At the end of the day, however, we believe the amendments have a limited scope. This is down to the agreements between the different components of the political groups and what the Council deems to be acceptable to avoid conciliation. The report is an improvement on the common position, and the amendment proposed by the Group of the Greens/European Free Alliance strengthens the prudential requirements for investment. Nevertheless, the fundamental and essential slant of the text remains.

Lipietz (Verts/ALE).
Mr President, ladies and gentlemen, the Group of the Greens/European Free Alliance will vote in favour of the proposal of the Confederal Group of the European United Left/Nordic Green Left calling for the common position to be rejected.
We are not supporting this proposal because we wish to oppose the financing of supplementary pensions through accumulation of capital on principle. As Mr Kuckelkorn said, a pension is a pension. It is not a form of saving. Pensions are for life. They provide for workers when they retire. They also offer certain guarantees in case of incapacity. Reversion pensions provide for surviving spouses. Pensions are not financial products. It is quite possible that certain financial products and financial institutions may contribute to the management of certain pension schemes. Beyond this, however, we would be embarking on the search to establish European definitions of pension products and social mechanisms for the first time. We also need to consider in what circumstances financial institutions can make a contribution.
At present, we are just dressing up savings products in a very ill-defined way. I would like to thank Mr Karas for all the efforts he has made to make this dressing-up as convincing as possible. Savings products have been dressed up to resemble pensions. With Mr Karas' amendments, they were already far from being pensions. The compromise amendments, however, have made everything quite clear. They are purely and simply savings products and should be treated as such. It would amount to a violation of trading regulations to sell them as pensions.

Blokland (EDD).
First of all I should like to thank Mr Karas for his report. It has been no easy task to reach a compromise on such a complex issue as the supervision of occupational retirement provision. I can support the compromise reached in principle, although it is a weaker proposal than I would like to have seen.
I have submitted three amendments on behalf of the EDD Group, but also at the request of a number of fellow Members from other groups. I would like greater clarity from Commissioner Bolkestein on this. Is the European Commission prepared to promise that it will take account of the matters referred to in the amendments in the implementation phase of the directive? What promises can you make with regard to the subject of the annual reports and associated administrative burdens, as stated in the amendment to Articles 10 and 11?
A second question concerns the amendment to Article 18, Paragraph 2. Are you prepared to review the absolute prohibition of loans and to give Member States the option of prohibiting them if so desired? In Recital 8 there is after all clear reference to the principle of subsidiarity. This recital is not in my view consistent with the prohibition provision in Article 18.
If I receive a satisfactory answer to my questions, I will be prepared to reconsider my amendment. Finally, let me comment on the Dutch translation of the revised Amendment No 32, in which the words 'or has a licence' have been omitted in error. The English text contains the words 'or authorised' and I think that this is what must appear in the Dutch text too.

García-Margallo y Marfil (PPE-DE).
Mr President, I would like to join in thanking the rapporteur, Mr Karas, which I think is only fair. I have been a privileged witness of the ferocity of the bulls he has had to fight: the Council - which is very divided - the Commission, the other groups in this House and in particular my own group, which has given him more headaches than all the other groups together.
Secondly, I would like to stress the generosity of the European Parliament. It is true that we have managed to have many of the amendments we presented at first reading accepted, but it is also the case that we have sacrificed legitimate, well-founded and well-argued aspirations in order to achieve a text which can be accepted by the Council.
We have sacrificed these positions, however, because we have always been aware that this directive was essential, at least for three reasons. Firstly, to make the freedoms enshrined in the Treaty more effective and more real, particularly the mobility of workers. Secondly, in order to supplement the public social security systems at a time - as has been said - when the challenge we must face in the coming years is a demographic one, the ageing of the population and the sustainability of public finances. These professional systems of a supplementary nature - I would insist on this aspect - will serve to maintain the future incomes of workers. This is a social approach which my group applauds. And, thirdly, because it will help to increase European saving, to increase the depth of the European financial market, which is the global objective of the financial services action plan. That saving will allow us to fund - and this ties in with what I said in the previous report - the investments we need in order to grow, in order to increase our employment and our productivity.
Mr Karas has highlighted many of the amendments which have enriched the original text of the Commission and the Council. I would like to stress the increase in transparency due to the information obligations required of the providers of these services, of the people who provide and guarantee these pensions, both with regard to the authorities and the participants. Secondly, and contrary to what somebody said from the benches of the left, because it incorporates social orientations which are very dear to those of us who advocate a social market economy. And thirdly because it increases the coordination of the supervision authorities and promotes the possibility of cross-border activities.
I would like to end, Commissioner, by stressing some of the deficiencies pointed out by the rapporteur. It will be necessary to make progress on tax harmonisation - I pointed this out in the previous report - if we want these cross-border activities to genuinely be expanded and freedom of choice to be real.

Goebbels (PSE).
Mr President, the vast majority of the Group of the Party of European Socialists will vote for the package of amendments negotiated with the Council and the Commission by Mr Karas. I would like to thank Mr Karas for all his work.
The result of the second reading will probably be acceptable overall. We are going to create a European passport for pension funds. We are dealing with a financial instrument but one that has social objectives. Some improvements are therefore necessary in relation to the Council's positions. We need to guarantee European citizens decent pensions. Pension funds will have a role to play in this respect, especially if there is also biometric coverage for contributions, or protection against the hazards of life.
To present pension funds as a panacea however would be a deliberate lie. The press is today referring to a message from the European Financial Services Round Table to the Ecofin Council. It presents pension funds as a miracle solution to the problems of financing pensions in Europe in future. According to this association of large employers, it will no longer be possible to finance the first pillar of the pensions system, which involves redistribution, as there is an increasing number of recipients and a decreasing number of contributors. Pension funds that are based on the accumulation of capital, however, will experience exactly the same demographic problems once they reach maturity. In fact, pensions paid in any given year always involve transferring funds from working people to retired people, whether by redistribution or the accumulation of capital.
Since the bursting of the speculative bubble, most pension funds have shown negative yields. In the United States, pension funds provided by large companies are having to face up to a deficit of more than USD 300 billion. In Great Britain, the company pension funds deficit was estimated at between GBP 65 and 130 billion at the end of 2002. There are also significant deficits in Sweden, the Netherlands, Belgium and elsewhere. Even the modest pension funds for Members of the European Parliament have just amended contributions by three points. This type of exercise would also save all redistribution funds. Due to negative financial yields, companies with pension funds no longer have a guaranteed benefit system but a guaranteed contribution system. In a guaranteed benefit system, contributors save money which they will receive in their retirement. In a guaranteed contribution system, people know how much they are contributing, but receive no guarantee of the result of fund managers' investment policy. It also goes without saying that fund managers always take their cut of the funds, however the fund is doing.
This explains why the financial sector welcomes the directive so warmly. Once again, the Group of the Party of European Socialists are not opposing the second and third pillar pension funds. We do, however, think that we need to act very prudently and that very strict prudential requirements are necessary. Mr President, pensions based on the accumulation of capital should not undermine national pension systems based on solidarity across the generations.

Pronk (PPE-DE).
Mr President, it is true that first-pillar pension funds are more sensitive to demographic change and that second-pillar pension funds are more sensitive to changes in the conditions prevailing on the stock market and in the financial markets. That is of course clear, and so it is also right that we have two pension systems alongside one another, counterbalanced by the third-pillar system. Meeting our requirements as it does, though, this directive is extremely important. I am also very pleased with this compromise. In particular if you work cross-border - and more and more companies are no longer national companies, but have actually become European companies - there is an absolute need for this matter to be dealt with; you can actually describe this as a sort of constitution for occupational retirement provision in Europe. It is quite clear that not everything is regulated.
Some speakers have been addressing just one point, that we should do nothing social at all any more and that Member States should actually submit to the system that applies in the country that does least. Fortunately, that is not the case in this compromise, or, for that matter, in the proposals beforehand, which is why I think that the compromise on biometric risks is very fortunate. In my country it has up to now been customary to insure biometric risks. If someone from Great Britain suddenly appears on the market and does not insure any biometric risks and makes no mention of that and only talks of pots of gold, as appears to happen in the United Kingdom, then it could be that people quite mistakenly make inadequate retirement provision. It must be possible to prevent things of this kind and so that is why the compromise is exceptionally good.
With regard to the provision of information, there has been criticism of the fact that we have gained less than we originally sought. That is certainly true. It is perhaps a pity, but I believe that it is nonetheless a very significant advance that we are bringing about in this area certain common European standards rather than standards that are intrinsically American.
Finally, Mr President, the tax issue. This we have of course left aside, as is, I think, far and away the best thing to do in political terms. I believe that with its announcement the Commission has acted correctly, that is by examining the extent to which the present taxes are not discriminatory. We have recently had the Danner ruling. That is one of those rulings that lead to Member States thinking twice before taking discriminatory tax measures against pension funds that happen not to be established in their own country. While we still have a long way to go, I think that all in all we have certainly made a start. If we were to reject this compromise, then we will not even have a start and then I believe we will not be doing any good as regards the social objectives that are there as well.

Van den Burg (PSE).
The course of events surrounding this matter for codecision does not, in my view, deserve any beauty prize, but I can nevertheless agree with the compromise that has been achieved at the last moment and to which the Council has already given its approval. It shows that the Council and the Commission were in any event prepared to take Parliament seriously as a co-legislator. As far as the content is concerned, I am no great enthusiast either, but with the compromise proposals we are in any event certainly giving a sharper outline to the definition of the funds that fall under this directive and that are now acquiring a European passport to invest and to offer their services across borders.
In a European context, however, a far more profound discussion is needed about the content and the quality of second-pillar pension schemes. At the end of next week, at the European spring summit, a good start can be made on this not only by sharing information informally, but also by agreeing to reach a consensus on content and convergence of policy. If you want to propagate the second-pillar, fully-funded pensions, you also have to lead the discussion about the structure and the quality of these schemes.
In the Netherlands roughly half of the income of pensioners is provided by fully-funded second-pillar schemes agreed by social partners - in the future even more of it will be. You cannot simply deal with them as if they were financial market products, which invest in the capital market and which have to find their way in the internal market as commercial services. No, the second pillar in the Netherlands expressly belongs with the first pillar, with the social security schemes and must not be lumped together with the individual third-pillar products for those who can afford them. That is a subject for social policy. That was also always on the agenda in the discussion and that should also therefore be developed further by way of the spring summit and those discussions about open coordination.
I do however think that there is also more to do on the subject of internal market policy, because I do not agree with what a number of speakers have said, that is that this directive does not do so much to improve the mobility of employees and the opportunity to take pensions with you in the context of the free movement of employees. On this point far more must happen, not only fiscally, but also where the portability of pensions is concerned. Here too I would like to see a rather more ambitious approach from the Commission that finds its conclusion in legislation.

Kauppi (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, to start with, I wish to thank all the parties concerned for their excellent levels of cooperation in achieving what is a constructive solution. Commissioner Bolkestein and those officials reporting to him, as well as the rapporteur, Mr Othmar Karas, have done a magnificent job in particular. In addition, I would like to say to my friend, Othmar, that the Republic of Austria has reportedly overcome the difficult challenges of its history through a remarkable ability to establish consensus and find solutions to benefit all parties. I think with the work he has done with regard to this directive Othmar has shown he has the important qualities needed by someone who is influential in society.
Ensuring the existence of retirement provision will be one of the main political challenges of the EU Member States in the years to come. To address this challenge, however, we have a difficult message for the people of Europe. We must work for a longer period of time but at the same time the pension we receive from statutory occupational retirement schemes will be smaller than before. It will certainly sound like a kamikaze mission to any politician but it is nonetheless inevitable. The status quo is not an option.
Although the Member States have the main responsibility for retirement provision we at Union level can implement measures to help promote retirement schemes by creating a sustainable basis for financing them. This directive on the activities of institutions for occupational retirement provision will create a legislative framework for Europe-wide action and will be one of the measures needed to defuse the pensions bomb. The directive will encourage the development of retirement schemes that are financially durable, provide companies with the capital they need through investment, and meet the needs of individuals that vary from one to another more effectively than statutory systems do. This will be especially true on the day we make headway with decisions on taxation. The directive will, on the one hand, promote the development of European financial markets and, on the other, benefit employees, who will profit from a more efficient and more transparent investment policy regarding their pensions.
It took 15 years to establish common EU laws. The EU citizen has long been able to benefit from local social and health services in another Member State. Furthermore, there has been common legislation in existence now for years applying to institutions providing personal pension insurance. The differing views among Member States on this subject, however - something we are discussing today - held up for too long this directive, which hopefully we will adopt in tomorrow's plenary debate.
The directive now leaves the social partners in the Member States with a free hand to choose how to organise comprehensive voluntary retirement provision. This is a reasonable European compromise considering the differences that exist among pension systems in the Member States. Our negotiations were at times both very intensive and intense, but I believe that we will be satisfied with the end result. The most important thing was that we avoided possibly having to resort to the conciliation procedure.

Skinner (PSE).
Mr President, I congratulate the rapporteur, the Commission and the presidency on producing a package of compromises. It has been an issue of compromise all the way through. I understand all the hard work that has been put into it, but let us say straight away that many people have been involved, inside and outside this Chamber, perhaps more than we know. However, the people who have not been involved - as is so often the case - are the people most likely to benefit or suffer from our decisions. Compromise was very necessary.
This is not a directive aimed at replacing the first pillar social security-type pension provision. In the UK, for example, people aged 16 have recently been outnumbered by people aged 60. Throughout the European Union this must leave no doubt in anybody's mind that we have an ageing society, one that will gradually cost more and must be adequately provided for so as to avoid future pensioner poverty, a very real risk. The problem is that many people, even today, do not feel obliged or encouraged to save for their retirement. Many companies are hamstrung by administrative and legal costs prohibiting the promotion of such funds across the European Union. That is a statement of fact.
Even though this directive delivers a balanced view, taking into account the various factors affecting Member States, it is clear that the cross-border approach to supplementary pensions needs more in the way of liberalising articles. I hope that we will come back to this discussion at a later date.
Some companies in my country which believe that they can pull out of defined benefit schemes have even looked to this particular directive as an excuse, but Brussels gives no such excuse to those companies.
Lump sum payments have been dealt with in a way that pensioners in many countries will feel is a reflection of what already occurs. That is an important minimum.
It is clear that the changes we have introduced on transparency and registration are improvements that everyone in this House can live with.

Flemming (PPE-DE).
Mr President, Mr Karas deserves our admiration. My Spanish colleague Mr García-Margallo y Marfil talked in terms of Mr Karas's winning a bullfight, and that makes me angry with him, as I do not like bullfights. Moreover, he was the first and only MEP to talk about the greying of the population. If he had told me that I am an old lady - perhaps on the model of the one whose visit proves so dangerous in Dürrenmatt's famous play - I would not have minded one bit. What I am not at all keen on is being called grey.
What do old people want? Security, independence and autonomy. It is just that all this is very difficult to achieve in the framework of occupational retirement provision that is only offered on a time-limited basis. Even a one-off payment - however generous it might be - does not provide security. Lifelong payments do most justice to the wishes and also to the needs of old people, corresponding to what we understand to mean by social security. It is to Mr Karas's credit that he has clarified this very important idea and embedded it in the report, and I should like to thank him for his efforts.
Throughout Europe, we are in the process of discussing and solving the problems of a society in which people at long last ought to be living longer. With a whole package of measures for older employees, the freshly elected Austrian Federal Government has devised a range of options for giving older people the opportunity of being able to work longer. I say 'of being able to', please note. A reduction in incidental labour costs for those aged over 58, a push for higher qualifications and the promotion of part-time work for older people are just a few of these measures.
Mrs Lulling will certainly agree with me when I say that this society and this Parliament need us. Anyone who, like myself, has six grandchildren can no longer just relinquish this society of ours to other people. We ourselves have to take care of it. We oldies are not of course in the end fighting for ourselves, since we obviously already have an income. Rather, we are fighting for the young men and women whom we wish to see have much longer lives. A child born today may live until the age of a hundred, and we wish him or her an extremely long and, as far as possible, secure life.

Ettl (PSE).
Mr President, politics makes a qualitative difference when it is able to counter negative trends and uncertainties with positive measures, and surely no such difference is being made through the way in which the second pillar of the pension system is being structured, even when, as here, we are concerned with a financial services directive. In spite of his best efforts, the rapporteur has not succeeded in improving the common position, which really does not add anything in terms of quality. Devising a framework within which products are offered that, from today's point of view, may seriously impair living standards in old age has nothing to do with a sense of political responsibility. What is really needed here are regulations to reduce people's uncertainties at precisely the present time. In recent years, British pension funds alone have lost 35 million pounds, and rather more still in the years before that, so they too have not exactly excelled. Nor have matters gone significantly better for the other Member States. At a period such as this, people ought not, where the issue of pensions is concerned, to be led to expect quality when it is not present.
Quality regulation of the European market is certainly not brought about by a minimal duty to provide information, together with what is no more than discretionary wording enabling the Member States to define quality for a restricted market with reference to biometric risks. If - as you yourself always do, Commissioner - we want to see such quality or an increase in quality, then we can, at this stage, really make no better start than by agreeing to the proposal by the Confederal Group of the European United Left/Nordic Green Left to reject the common position. That alone would signify 'back to square one' and, for us, new opportunities of obtaining an improved directive.

Lulling (PPE-DE).
Mr President, I welcome the fact that, following years of tough negotiations between the Commission, the Council and Parliament - and thanks to our rapporteur, who has been indefatigable in his search for compromises - approval of this pensions directive is now within reach. The Council has given an assurance that it is able to agree to the package before us. That is crucial, because only in that way can a lengthy conciliation procedure be avoided which, for everyone concerned - employees, employers and financial service providers - might have the kind of damaging effect that this long overdue European regulation might have again postponed.
I could have lived with the common position because the directive concerned is of course designed primarily to regulate, without barriers to competition, the cross-border activities of pension fund providers, and not the product itself. It was essential to devise a directive that, on the one hand, did not, from the outset, force these financial service providers into a suffocating straightjacket of regulations, for example governing investment policy; and that, on the other hand, organised supervision in such a way that the benefits paid to policyholders were secured in the best way possible. I believe we have to some degree succeeded in doing this.
It is not our task here to prescribe what kind of supplementary pensions are to be provided and for what sums. Naturally, the directive can be made to reflect a pious desire for the arrangements concerning occupational retirement provision also to cover the famous biometric risks such as disablement, widow's and orphan's pensions etc. It should, however, be left to companies and their employees to determine what they wish to cover that is not already covered by the public social security system - in other words, the first pillar - in the full knowledge that higher and diversified benefit entitlements naturally have their price.
Naturally, it should also be possible - as, by the way, it is in the case of MEPs' pension fund - for capital to be paid out as a lump sum at retirement age, without its being prescribed what, specifically, the capital is to be used for. If, when I am old, I want to use the money concerned to fulfil a life-long dream, such as going on a long journey around the world, I should be able to use the money for that purpose. I must of course be certain that I do not then have to become a burden on the state.
I am sorry that we were unable to bring to fruition a concern, to which I and other MEPs had committed ourselves, that financial institutions in addition to pension funds and insurance companies should be able to offer their services in the field of occupational pensions insurance. That would have led to a level playing field and so to greater competition. The package does, however, oblige the EU Commission to examine how matters stand in the market for occupational retirement provision in order to make it possible for other financial services providers too to come within the scope of this directive.
That being said, this directive has done nothing to bring about a common market in supplementary pensions. We definitely need a regulation to prevent the double taxation of premiums and benefits, and I hope that we shall have the considerable judgment required in order to devise a sensible regulation quickly.
Bolkestein
Mr President, I hope it is not a disappointment to Mrs Lulling that the Commission has the last word.
I welcome the fact that the Committee on Economic and Monetary Affairs and Parliament agree on the compromise text, which may not satisfy everyone. At least it is an agreed text. That is what we need on this most important subject. Parliament is entitled to hear what the Commission thinks about the various amendments, but before doing that I should like to say something to three Members who have spoken.
First, the issue of taxation referred to by Mr García-Margallo y Marfil, Mr Pronk and Mrs Lulling. The follow-up to the pension taxation communication of April 2001 has developed along two tracks.
There has been a discussion process in the Council concerning the Commission's suggestions to improve the exchange of information on cross-border pensions and to deal with double taxation and double non-taxation. The process did not, I am sorry to say, lead to tangible results. A number of Member States could only accept any sort of agreement if the issue of residence taxation of pension payouts versus source taxation was also tackled. On that issue Member States remained deeply split.
Secondly, the Commission has been examining whether or not the national taxation rules on the deductibility of pension contributions are compatible with EU law. Here the Commission kept its promises to take action. Last month the Commission sent a reasoned opinion to Denmark and five letters of formal notice to Belgium, Spain, France, Italy and Portugal. In all those Member States pension contributions paid to foreign funds are not tax-deductible, while contributions paid to domestic funds are. That is a clear case of discrimination. The Commission is convinced that Community law prohibits such a difference in treatment. I can assure Parliament that these infringement cases are a priority for the Commission, which will do whatever is necessary to open up the markets effectively for cross-border pension provisions.
To Mr Blokland I say that, according to my information, the amendments which he has put forward have not been accepted by the Committee on Economic and Monetary Affairs and therefore do not - it seems to me - form part of the discussion tonight. Therefore the Commission has no opinion on them.
To Mr Purvis I say that this directive is based on two principles: first, the principle of compliance with prudential requirements of the home Member States and second, compliance with the social and labour legislation of the host Member States, i.e. where the company is established. That includes provisions on biometric risks, but that should not be an obstacle to cross-border activity.
Once again, the compromise arrived at means that there will be no conciliation. That is a good thing. One never knows where conciliation might lead. Personally, I have very vivid memories of conciliation from the takeover directive and am very anxious not to repeat that experience.
Let me turn to the amendments submitted to the vote.
I am please to say that the Commission can accept Amendments 1, 5, 13, 15, 22 and the package of amendments 25 to 37. The commission cannot accept the other amendments, which for the most part aim at widening the scope of the directive.
The directive does not intend to interfere in the way Member States organise their pension systems. It considers that the directive should not regulate in a restrictive way the products offered by pension funds. Nor should it define the precise arrangements for the payment of benefits. The directive must also respect the diversity of occupational pension systems while setting some strict standards to ensure their mutual recognition, but without imposing unnecessary costs for pension funds. That is why the Commission rejects Amendments 3, 4, 9, 11, 12, 14, 16 and 18.
The directive should not experiment by allowing for the possibility of extending the scope of this directive to institutions that today do not offer occupational pension products. Institutions that already benefit from a single market framework should not be covered by this directive, with the exception of life insurance companies, for which Member States must retain the option to apply this directive for activities linked to pension provisions. That is why the Commission cannot accept, regrettably, Amendments 2, 6, 8, 10 and 17.
The directive must make full reference to an effective system to ensure efficient exchange of information between competent authorities and promote consistent enforcement of the directive, but that must be done without prejudice to possible future structures. That is why the Commission cannot accept Amendments 7, 19, 20, 21 and 23.
The Commission cannot accept Amendment 24 tabled by the Group of the Greens and the European Free Alliance since it considers that pension funds, as very long-term investors with low liquidity risks, should not be overly restricted in their investment in non-liquid assets such as shares.
The Commission cannot accept the motion for rejection of the common position, since it considers the common position to be a finely balanced compromise and recommends its adoption to the European Parliament.

President.
I should like to thank all colleagues for their attendance tonight.
The debate is closed.
The vote will be taken tomorrow at noon.
(The sitting was closed at 11.50 p.m.)
WRITTEN DECLARATION (RULE 120)

Figueiredo (GUE/NGL)
The common position adopted by the Council forms part of the aim of applying the private capitalisation approach to the financial resources of national pensions systems, in other words, submitting these enormous financial volumes to the methods of the capital markets and enabling the financial sector to speculate on them. Creating a single market for occupational pensions was one of the priorities of the 'Lisbon strategy', under the Financial Services Action Plan, which seeks to achieve the integration or liberalisation of capital markets in the European Union.
The objectives of private capitalisation are clearly demonstrated in the lack of genuine prudential rules, in the liberalisation of investments and service provision at European level and in the absence of guarantees covering all risks, or allowing them only on an optional basis.
The rapporteur himself, in his explanatory statement, sets the tone, by stating that this proposal will contribute to the development of the financial markets, acknowledging that the common position lacks balance between taking into account the social security of the beneficiaries and the aim of creating a simple framework for capital markets. Hence the adoption of amendments from first reading, which fall considerably short of what we would wish to see and which do not call into question the approach of the original proposal. This is the raison d'être of my political group's proposal, which I supported, for an amendment seeking the rejection of the Council's common position.

President.
Today, in the Hague, delegates from the 89 co-signatory states of the International Criminal Court Treaty - the member nations of the ICC - will gather for a ceremony presided over by the Secretary-General of the United Nations, Kofi Annan, and Queen Beatrix of the Netherlands. The court's 18 judges will be sworn in and the court will be inaugurated today. It is expected that prime ministers, presidents, and foreign affairs and justice ministers of the member states will attend.
On behalf of the European Parliament, I should like to say in the clearest way that we, in this Parliament, have promoted and defended human rights. In so doing we have strongly supported the establishment of the International Criminal Court as a vital step forward at global level. We can be proud, as Members of the European Parliament, that the court will take shape today.
In my opinion, for those who have offended the international human rights order, a body such as the International Criminal Court is better than a Guantanamo Bay. The House will recall that we have already adopted resolutions in this regard on a number of occasions, including as recently as last October.
Bonde and Sandbæk (EDD)
 - (DA) The June Movement abstained from voting in the vote on Amendment No 8, tabled by the Group of the Party of European Socialists, the Group of the European Liberal, Democrat and Reform Party and the Group of the Greens/European Free Alliance, to item 12 concerning the place to be given to European political parties in the budget. That is because we are fundamentally opposed to the financing of European parties by the EU. We do not therefore wish to get involved in the technical elaboration of such a system.

