Appointment of the ECB President
President.
The next item is the debate on the recommendation (A5-0307/2003), on behalf of the Committee on Economic and Monetary Affairs, on the appointment of Mr Jean-Claude Trichet as President of the European Central Bank (10893/2003 - C5-0332/2003 - 2003/0819(CNS)) (Rapporteur: Mrs Randzio-Plath)

Magri
. (IT) Mr President, ladies and gentlemen, Commissioners, it is a pleasure to speak today on a matter of great importance for the European Union: the appointment of the President of the European Central Bank.
The creation of the euro is a considerable success in the history of European integration in both political and technical terms. The euro is still a relatively new currency, and it will need to draw on the - widely recognised - experience of the European Central Bank to continue to be a success.
We are now replacing a President of the European Central Bank for the first time. It is crucial for the European Central Bank and the euro that the selection of a successor to President Duisenberg is carried out transparently and that it is based only on the criteria laid down in the Treaty establishing the European Community and in the Statute of the European system of Central Banks and of the European Central Bank, and on the agreement of the latter on the candidate most qualified for the job.
In appointing the successor, we must recognise and pay tribute to the excellent work carried out by President Duisenberg, and express our confidence that the European Central Bank will continue to perform all its functions as successfully as it has thus far.
The legal basis for the procedure for appointment of the new President of the European Central Bank is Article 112(2)(b) and Article 122(4), of the Treaty establishing the European Community, and Articles 11.2 and 43.3 of the Protocol of the Statute of the European System of Central Banks and of the European Central Bank.
In accordance with these provisions, the Ecofin 'Information' Council adopted a recommendation on 15 July 2003 advocating the appointment of Mr Trichet as President of the European Central Bank for a term of eight years with effect from 1 November 2003. The recommendation was forwarded to both you and the European Central Bank, in accordance with the Treaty, so that you could give your opinion before the recommendation was presented to the Heads of State or Government for the final decision.
The Governing Council of the European Central Bank adopted its opinion on 31 July and forwarded it to the Council and Parliament. This opinion confirmed that the Governing Council of the European Central Bank is of the opinion that the proposed candidate is a person of recognised standing and professional experience in monetary or banking matters, as required by Article 112(2)(b) of the Treaty.
I hope that the European Parliament will agree with the Council and the European Central Bank that Mr Trichet is an excellent candidate for this important job. The adoption of the opinion by Parliament will allow the Heads of State or Government to take a final decision on the new President of the European Central Bank's taking up office, within the time-scale set down in the Council recommendation.

Randzio-Plath (PSE)
Mr President, on behalf of the Committee on Economic and Monetary Affairs, I recommend that Parliament confirm the appointment of Mr Jean-Claude Trichet as the appropriate candidate for the office of President of the European Central Bank. The nominee has submitted a written statement and has given oral explanations to the committee in the course of a confirmation process. He has convinced the members of the committee not only of his personal integrity and professional competence, but also of his views on economic and monetary policy in the Eurozone. At the same time, he has shown that he is receptive to the demand for more transparency and democratic accountability for the European Central Bank.
Five years after its foundation, the European Central Bank has come of age. Its independence - in political, economic, financial, organisational and staffing terms - is guaranteed and is not challenged by the draft Treaty establishing a Constitution for Europe. Its high measure of independence, which exceeds that of America's Federal Reserve, means that the ECB has a high measure of responsibility for macroeconomic and social development. This requires the greatest possible transparency in the interests of democracy and integration policy. For this reason, the transparency of decisions and the decision-making procedure is integral to the European Central Bank's role. This effort to achieve transparency is reflected in the quarterly monetary dialogue with the European Parliament, in the regular publications and decisions, but also in reports, conferences and the inflation forecasts that are published every six months. A kind of cultural revolution has thus taken place in Europe. The culture of the national central banks in Europe did not have this kind of transparency. Incidentally, transparency is also in the ECB's interests because it is still a new institution, and is thus especially reliant on establishing and consolidating its legitimacy, credibility and trustworthiness as a European authority.
Ultimately, a nation's monetary system reflects all that the nation stands for and all that it aspires to and endures, to quote Europe's leading economist Josef Schumpeter. I believe that at the current stage of the debate, incorporating the Maastricht Treaty in its entirety into the draft Treaty establishing a Constitution for Europe was the right step. Over their centuries of existence, the role of the central banks has undergone radical change, starting with their private form of organisation in history to their changing status in the USA, the concept of combating inflation, and the role of an independent issuing bank. It may be too early to find answers to new challenges today. The task is to define the role of the Central Bank in a globalised world dominated by trade, commerce and international financial markets. That means not only dynamic markets, but also more and higher risks to international financial stability.
What role, then, can and should central banks play in order to contribute to financial stability, to avoid financial crises and to provide assistance? Is the ECB equipped for a role as a lender of last resort? Is this what we want? The euro has enhanced Europe's international status as well. The ECB will have to play an ever greater role in defining and implementing appropriate policies for the global economy. We are concerned about the dramatic imbalance in the US economy and the risks that may arise for every other part of the world in the mid to long term as a result.
Many issues relating to the ECB's future policy are tied in with the appointment of its new President. They include the definition of price stability as much as the issue of monetary policy instruments. Maintaining price stability as the primary goal must not result in the ECB removing support for growth and employment from its list of tasks. Monetary policy is not neutral, so the ECB must play a role, as a macroeconomic actor, in coordinating European policies. This is where willingness to engage in ex-post coordination is not enough. Decisions will have to be taken on this issue, and fresh impetus must come from the new President. The European Parliament expects other measures towards greater transparency as well, from the publication of summary reports of decisions, with arguments for and against the decisions adopted, to the (anonymous) results of voting in the ECB Governing Council. What is important is an open and transparent monetary policy in which access to the decision-making process is a given, because this is in all our interests and in the interest of the common good. The future President is able to build on the successful work undertaken by the first ECB President, Wim Duisenberg. The Members of the European Parliament are confident that he will face up to the new challenges and be able to find the right solutions.
Karas (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, my group has three economy and monetary policy criteria by which we also judge the proposal for the new President of the European Central Bank. Only last week, at our study days in Madrid, we redefined and laid down once again the crucial points of our policy.
The first is a clear and unequivocal endorsement of the Stability and Growth Pact. We regard the Stability and Growth Pact as the regulatory framework for the Member States' budgetary policies. We regard it as a prerequisite for price stability and therefore for sustainable growth and job creation. The Stability and Growth Pact is a driving force for reform, and it is the basis on which to achieve more transparency in the Member States' budgetary situations. It is also an orientation aid for the new accession countries as they move towards the common currency, in order to be able to fully accept the euro.
Our second cornerstone is the independence of the ECB. This independence must be expressed through the continuation of the policies that were guided by Wim Duisenberg's steady hand. It must be expressed through continuity, trust, credibility, professionalism, team spirit, and vigilance towards change, as well as clarity in its decision and a considerable talent for communication.
Thirdly, our group says a resounding 'yes' to the single currency. The single currency is the basis of a functioning internal market and the expansion of the internal market into a home market. These are also the criteria by which we judge the candidate. In both his written statements and oral answers, he voiced unequivocal support for the principles of the Stability and Growth Pact, price stability, independence and the single currency, and rejected any attempts to sabotage them as undermining currency stability, price stability, and a policy for growth and jobs.
When asked about the most important guiding principles, Mr Trichet said, and I quote: 'The highest level of credibility in the pursuit of the objective of price stability, independence, enshrined in the Treaty, vis-à-vis any power or type of influence whatsoever; lastly, realism and pragmatism in the assessment of a financial and economic environment changing rapidly, due to new technologies and changes in the behaviour of economic agents'.
Secondly, he said: 'Indeed, price stability is a prerequisite for sustainable growth and job creation.' He made it clear that price stability is not enough on its own, and that it must be supplemented by a judicious budgetary policy, by an appropriate balance of productivity gains and moderate nominal compensation growth, and by urgently needed structural reforms. He pointed out that the Stability and Growth Pact provides the overall concept and the common rules for the different economic policies of the Member States. In all his answers, he has thus clearly recognised and affirmed our principles as the correct ones. For this reason, my group, too, will endorse his appointment.
(Applause from the PPE-DE Group)

Goebbels (PSE).
Mr President, Commissioner, ladies and gentlemen, the vast majority of the Group of the Party of European Socialists will give its vote to Mr Trichet.
Mr Trichet was one of the architects of the Maastricht Treaty and is clearly qualified to head the European Central Bank, but because he is to some extent one of the inventors of the Maastricht criteria which led to 12 of the Union's Member States adopting the euro, he knows better than anyone that there is nothing scientific about these criteria, which were transferred largely unchanged into the Stability Pact: they are the product of a political compromise that reflects the economic reality and balance of political power of that time.
The Stability Pact is not the outcome of an exact science: like any agreement entered into freely, its terms must be complied with. Nevertheless, this pact is not as sacred as Mr Karas would have us believe. It can and must be improved, as Commissioner Monti stated in an interview: it is high time that we made what is an intelligent Stability Pact an even more intelligent Stability and Growth Pact.
The Group of the Party of European Socialists is in favour of a stability policy. The fight against inflation is crucial for protecting Europe's poorest citizens in particular. As, however, the Italian President, Carlo Ciampi underlined, there can be no stability without growth and no growth without stability. This dual policy is, therefore, necessary.
The European Central Bank must fight against inflation, but also against recession. The Bank has objective criteria for combating inflation, but none for combating recession. Furthermore, the European Central Bank must support the Union's other economic policies: in this regard, combating inflation is extremely important but not enough.
Europe must pull itself together. We cannot confine ourselves to constantly calling for stability. We must also invest in growth and allocate more money to research and development, to infrastructures in Europe, and to lifelong learning and training. We hope that the European Central Bank, with its new President, will give such a policy the appropriate support.

Lipietz (Verts/ALE).
Mr President, ladies and gentlemen, at the death of Louis XIV, King of France, the French people showered their devotion on his successor, Louis XV. We too wish to shower our devotion on Mr Trichet and will be voting for him, although there are no more objective reasons for supporting him than there were for feeling devotion in advance for Louis XV. The main reason behind our enthusiasm for Mr Trichet is the lethargy of his predecessor.
Mr Trichet will tell us that, throughout his mandate as vice-president, although it was his task to provide secondary support for the European Union's objectives - the Lisbon and Gothenburg objectives, which are full employment and sustainable development - he personally considered that pursuing the first objective: price stability, would be support enough. Consequently, during the three and a half years of his mandate, whilst achieving the same rate of inflation as the United States, we have done infinitely less well than the Americans in the field of investment and stability.
I hope that Mr Trichet will not say: 'this could last as long as I do, after me, the deluge'.

Abitbol (EDD).
Mr President, together with the majority of my group and, in any event, all the French members of the Group for a Europe of Democracies and Diversities (EDD), I will be voting against the appointment of Jean-Claude Trichet as President of the European Central Bank although I have been told that it is unusual to vote against one's fellow countryman. Nevertheless, as we all saw, Mr Trichet renounced his nationality in the Committee on Economic and Monetary Affairs, saying 'I'm not a Frenchman' - in order to gain the good graces of the Commission, in which he appears to have succeeded.
The reason for our opposition, however, goes deeper. Jean-Claude Trichet is, as every French person knows, one of the instigators of a policy that sacrifices, which has sacrificed and which continues to deliberately sacrifice growth to the Malthusian dogma of stability. For ten years we have been paying for the Central Bank's monetary policy at a rate of one growth point per year and I must say that I am astonished, Mr Lipietz, that you have become such an ardent royalist.
During the work of the European Convention, we and by 'we' I mean Mr Katiforis and many others, most of the socialists and the Greens, tried to change this dogma and to propose that, in the new European Constitution, as much ambition should be devoted to growth as to stability. We failed and I believe that this Parliament, at least those Members who took part in this struggle, would restore some pride by abstaining on Mr Trichet's appointment, because he is so emblematic of this policy which has caused and which continues to cause so much damage, as we see on a daily basis, to the European economy.

Villiers (PPE-DE).
Mr President, I shall be abstaining from voting on Mr Trichet's appointment partly because, as the UK is not a member of the eurozone, I tend to act cautiously in speaking on these internal matters of organisation in relation to the euro, and partly because I have mixed feelings about Mr Trichet's appointment. He is clearly an exceptionally talented, able and intelligent central banker. However, at the end of our discussions in committee, I felt that despite these qualities he really did not have anything new to say about the euro. He did not have any answers to some of the real economic problems that we are seeing in the eurozone.
There are increasing levels of unemployment in Germany and France and their economies are in trouble to the extent that neither are able to meet the rules of the Stability Pact. It is clear that there are real economic problems in the eurozone and I have heard nothing from Mr Trichet that would indicate his ability to solve them.
It came as no surprise to me that the Swedes have decided that they do not want to abolish their national currency. The continuing economic difficulties in the eurozone are one of the many reasons why the UK should not abolish its national currency either. For those reasons I shall be abstaining from voting on Mr Trichet's appointment.

Berès (PSE).
Mr President, I shall be no more of a royalist than Mr Goebbels or Mr Lipietz, and I will therefore be supporting Mr Trichet's appointment on the basis of his professional skills. I believe that his qualities are unanimously recognised by the central bank governors within the euro zone. He has all the qualities to make a rigorous president of the ECB. He does not receive full marks for the monetary policy he will be implementing but I have yet to meet a central bank governor who is open to any other monetary policy. I would say, therefore, that if we are looking for the Eurozone's economic and monetary policy to be overturned, we should look elsewhere.
I wish to add three observations to this statement. Firstly, I hope, and for the moment I have no way of telling whether this will happen, that Mr Trichet will be more open to what we must call economic policy coordination. Because he has been involved since the signing of the Maastricht Treaty, he knows very well that this is founded on two pillars: monetary union and economic union. This economic union cannot operate without governments that are able to understand that their budgetary and fiscal policy falls within the realm of the common interest. The role of a central bank governor today, unless he or she wishes to be a permanent scapegoat, is to remind governments of this responsibility. Telling governments that they can avoid having to coordinate economic policies by simply having a monetary policy and instructing them only to undertake structural reform will not enable the Eurozone to tap into a real potential for growth centred on investment in research, development and education.
My second observation is that, if we want to restore confidence, we will need this economic policy coordination and not just a central bank that applies the criteria strictly.
Lastly, I shall take the opportunity provided by this morning's debate to express my astonishment and my concern to see the position adopted by the European Central Bank yesterday, calling for non-inflationist growth and price stability to be included in the objectives of the draft Constitution. I believe that the balance of the wording of Article 3 as produced by the Convention is quite satisfactory and that it would be dangerous to follow the lead of the Central Bank on this matter.

Pex (PPE-DE).
Mr President, a hearing with the president or a governor of the Central Bank always leaves much to be desired, as this person has to be extremely careful in public on account of his position. For the rest, I enjoyed his expertise. Based on the response to the questionnaire drawn up by ECON, I have come to the conclusion that Mr Trichet is like a clone of Mr Duisenberg. I think it will be excellent if this comparison continues to be true in the long-term. The difference between the two was the use of language. You see, psychology is important in monetary policy. Mr Duisenberg never spoke Dutch because English is the main language of the ECB, and as far as I was concerned, Mr Trichet spoke French too much during the hearing. I hope that this does not mean that he will still be a little bit French from a functional point of view, because one would want him to defend the case of the euro in clear language in Paris. The euro will only exist if the people have faith in their currency. For this to happen, we need to have strict enforcement of the rules of the Growth and Stability Pact. I am extremely pleased that Mr Trichet is also of this opinion and is continuing Mr Duisenberg's policy. It is of the greatest importance that we adhere to the rules of the Stability Pact without political games and without interpreting the rules to promote our own interests. Those who argue for a flexible approach to the rules in order to stimulate growth - I am thinking here of Prime Minister Raffarin, for example, deny or do not understand, or even more seriously, do not want to understand, that the percentages mentioned in the pact already have a structural component which operates within all movements of the economy. I expect Mr Trichet to continue to follow this line in the future and to be consistent when it comes to the execution of the rules and to speak out clearly on this matter in Paris too. I expect the European Commission to do the same and if necessary to impose sanctions on Member States that do not abide by the rules. A tight policy promotes the credibility of monetary union and faith in our euro. According to the classical economy, die Massengewohnheit der Annahme [the mass custom of acceptance] is the basis for the functioning of money. Our willingness to use the euro in the European Union must be confirmed and increased every day.

Santos (PSE).
Mr President, taking Mr Duisenberg's place will be no easy task, since the current President successfully guided the Central Bank through the formative years of the single currency and, above all, since the need for a more generous monetary policy is becoming crucial for economic growth.
In his answers before the Parliamentary committee, Mr Trichet emphasised, among other things, the fundamental role of realism and pragmatism in assessing the economic and financial climate at a time of such rapid change. That realism and that pragmatism are, indeed, exactly what is expected of the new president. The citizens of Europe are calling for more economic growth and more employment. Most of the politicians who represent them are calling for more budgetary flexibility and monetary understanding, given the economic crisis which Europe is experiencing. We fail to heed or respond to these worries at the cost not merely of leaving matters unresolved, but also of giving impetus to the collapse of the single currency's credibility, in the wake of which citizens' loyalty to Economic and Monetary Union will be weakened.
The results of the Swedish referendum and the recent surveys of the level of commitment to Europe in Norway are a sobering warning. We can no longer gloss over the fact that citizens are starting to think that the cost of the euro is too high for Europe. The Stability and Growth Pact, of which the Commission is the guardian and the European Central Bank a fierce advocate, reflects a noble and fundamental ideal, but the way in which it is drafted is not satisfactory because it fails to address crisis situations such as we are in currently.
Defining broad guidelines for public spending is more important than the level of deficit. The pact does not take this principle into account. Encouraging the deficit in order to lower taxes - a policy which when implemented in isolation brings only a few economic benefits, and always creates inequalities - is one thing; accepting the deficit as the result of investment policies that really do help the economy recover is quite another. The Keynesian benefits of increasing public spending dry up over a certain level, it is true; it is also true, however, that the launch of subsequent initiatives to promote economic growth, which is absolutely crucial to recovery, will never be possible without increasing public spending.
Besides, it is very strange that there is so much talk today of economic growth initiatives, when the reforms and goals defined for that very purpose in the Lisbon Strategy are still so far from being attained. The ECB, then, is required to show the realism and pragmatism recognised as essential by its President-Elect if the economic system based on the single currency and the common monetary policy, which was constructed so laboriously and with such difficulty, is not to be threatened with collapse. That responsibility, moreover, is in the hands of Mr Trichet. Good luck!

Radwan (PPE-DE).
Mr President, on behalf of the CSU, I too would like to voice support for Mr Trichet. This is due firstly to his professional competence and secondly to his personal qualities, for he will continue the tradition established by Mr Duisenberg. Although my highly esteemed colleague Mrs Villiers criticised Mr Trichet on the grounds that he did not have anything new to say, that is precisely what we are looking for. We want him to stand for continuity as the head of the ECB.
This applies especially to the ECB's core tasks - low inflation, a commitment to the ECB's independence, and the struggle to uphold the Stability Pact. In this context, I especially hope that, as a Frenchman, he will deal critically with his home country. I also hope that the two Commissioners who are our guests here in plenary today, Mr Solbes and Mr Bolkestein, will fight to uphold the Stability Pact. Sweden showed us how the wrong budgetary policy in the Member States can influence the vote. What I really do not like about this debate is the constant criticism of the ECB. The ECB is being held responsible for meeting the Lisbon objectives. The main responsibility for meeting the Lisbon objectives lies not with the ECB or indeed with the Commission. They can both contribute to the process, but the chief responsibility lies with the Member States, and a great deal of time has been lost here because Member States have not done their homework. I would ask all of you who regularly hold the ECB responsible and voice criticism of it to be equally or even more critical of the Member States' failures. I think that would take us much further forward.
Katiforis (PSE).
Mr President, the appointment of the new President of the European Central Bank and the opinion of the European Parliament on this appointment are acts that exercise the sovereignty of the European peoples and must be addressed with all due seriousness. One would hope that the appointment would one day be made solely by Parliament. Then it would have greater validity and greater weight.
Today the House has the affirmative proposal of the Committee on Economic and Monetary Affairs and there is no doubt as to the professional qualifications of the candidate. On the contrary, his impressive career to date is a full guarantee of his personal qualifications. Unfortunately, the same cannot be said of the economic philosophy which the candidate President of the European Central Bank defended before the Committee on Economic and Monetary Affairs with such obstinacy. I am still having trouble understanding how an economist with Mr Trichet's immense experience could maintain that, in times of protracted economic stagnation, increasing public spending may damage the recovery of the economy.
He took recourse to various theoretical sophisms, while it has been known since at least 1910 that the classic antidote to depression and unemployment are public works. I imagine that even Mr Trichet would agree that, without investment, the economic machine cannot restart and I imagine that he himself will note the delay in private investment and the need for us to give impetus to public investment, as Mr Chirac and Mr Schröder have finally understood, albeit belatedly.
If, however, persistence with this philosophy was reason enough to vote against Mr Trichet last week, I greatly fear that it is no longer reason enough, because in the meantime the Swedish people have rejected the euro, forcing all of us to rally round the symbols of the stability of the single currency, which is why I feel it is my obligation - and I believe that I speak at least for my Greek colleagues with similar visions - to support and vote in favour of Mr Trichet.
Nonetheless, I hope that he will be forced by events to take a different attitude and stance because the central bankers cannot use their stance to say, as Mr Lipietz said, 'après moi le déluge', [after me the deluge] nor can they say 'avant moi le déluge, pendant moi le déluge, et après moi Dieu nous sauve' [before me the deluge, for the duration of my reign the deluge and after me, may God help us].

Magri
. (IT) Mr President, I would like to thank the Members for their attentive and authoritative speeches on this issue.
We are proud, honoured, privileged and aware of our good fortune to be part of the transition to an enlarged European Union, and, today, we are witnessing a moment which is certainly important for the strength and the stability of Europe.
In reiterating the Council's support for the candidacy of Mr Trichet, I would like to reassure Parliament that I will pass on all the opinions you have expressed today, both positive and negative, to my colleagues in the Council. Allow me to conclude with a word of encouragement: I would like to quote Seneca, who said in 'On Providence' that, fortunately, often 'the most dangerous enterprises are assigned to the bravest soldiers'. I am convinced that this will be true in this case too.

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

President.
The next item is the debate on the report (A5-0238/2003) by Mrs McCarthy, on behalf of the Committee on Legal Affairs and the Internal Market, on the proposal for a directive of the European Parliament and of the Council on the patentability of computer-implemented inventions (COM(2002) 92 C5-0082/2002 2002/0047(COD))

Bolkestein
. Mr President, on behalf of the Commission, I wish to begin by thanking Mrs McCarthy, the rapporteur on this complex and technical but important matter, for her excellent work on this report. I should also like to thank the rapporteurs of the Committee on Culture, Youth, Education, the Media and Sport and the Committee on Industry, External Trade, Research and Energy, who have also made a major contribution to Parliament's work on this issue.
Computers are becoming ever more ubiquitous in our everyday lives and, quite apart from the box that sits in almost all our offices and quite a few of our bedrooms, microchips are now commonplace in everyday gadgets, such as electric razors, cars and microwave ovens. The question of how to define the patentability of computer-implemented inventions is thus becoming steadily more important, especially as such inventions are estimated to cover 15% of new patent applications. Indeed, the potential patentability of computer-implemented inventions is already accepted in current European Patent Office practice. The proposed directive does not aim to abolish this practice or extend it to cover the patenting of pure computer programs, as many opponents of the directive have claimed. The directive is not intended to cover the patenting of pure computer programs. Indeed, many have - falsely - claimed that the directive introduces for the first time the notion of patentability of software inventions in the European Union's patent practice. That is not the case.
I am, therefore, all the more pleased that the rapporteur has been able to steer past these misconceptions and produce a highly constructive report which seeks to build on the objective of the Commission set out in its original proposal, namely to clarify the scope of patentability of inventions, which incorporates software, and to harmonise across the European Union, on the basis of existing practice, the proposal which seeks to achieve harmonisation and clarification. However, nothing will become patentable which is not already patentable.
It is in this spirit that the Commission would welcome the amendments to the text proposed in the report by Mrs McCarthy as a further step to clarifying that objective.
Opponents of the directive have mounted a very vocal and, at times, even personal campaign based on half-truths and misconceptions which play on legitimate concerns over competitiveness, especially for smaller firms. But the fact is that the proposal does not introduce software patents and will not have all the terrible effects that the prophets of doom would have you believe. It is a prudent, cautious measure which will clarify and, if anything, tighten the rules which already exist.
I am aware that a large number of amendments to the McCarthy report have been tabled, many of which seek to reintroduce ideas and themes already considered and rejected by the committee during the preparation of the report. There are some interesting points but, in the main, I am afraid that the majority of those amendments will be unacceptable to the Commission.
I am very concerned about this situation: many of these amendments are fundamental. There is a very real prospect that the proposal will fail if Parliament chooses to accept them. If that were to happen, I fear two possible consequences, neither of which, I suspect, has been foreseen by some Members of Parliament and neither of which would advance the objectives which seem to lie behind a number of the new amendments.
Firstly, in the complete absence of harmonisation at Community level, the European Patent Office and the various national patent offices would be free to continue their current practice of issuing patents for software-implemented inventions which may blur or even cross the line in undermining the exclusion from patentability of software as such under Article 52 of the European Patent Convention. The result would be not only continued legal uncertainty and divergence for inventors, but also a roll-back of the position adopted by almost everyone in this Chamber and, above all, the Commission itself, namely to maintain the exclusion of pure software from patentability. We do not want that. The proposal rejects that.
Secondly, in the absence of harmonisation at Community level, Member States are very likely to pursue harmonisation at European level instead.
Let me explain what I mean by that remark. Unlike many other fields, that of patents is unusual in that, as a result of the existence of the European Patent Convention and the creation of the European Patent Office, there is already a supranational patent system in place which covers the whole of the European Union and indeed beyond. This system can be operated independently of the Community's legislative process.
If we fail in our efforts to achieve harmonisation of patent law relating to computer-implemented inventions in the European Union, we may well be confronted with a renegotiation of the European Patent Convention. The process of renegotiating the European Patent Convention would not require any contribution from this Parliament.
The situation is clear: there is a single objective but a choice of means. Either we proceed using the Community method or we take a back seat and watch while Member States proceed by means of an intergovernmental treaty. It is clear that proceeding via this Parliament would give European citizens a greater say in patent legislation, an area which is so crucial to our economy.

McCarthy (PSE)
Mr President, the Commission proposal on the patentability of computer-implemented inventions before Parliament is not, as some opponents of the directive have suggested, a new phenomenon. Neither does it argue for the patenting of software, nor for extending the patentability and scope of protection in this area.
The fact is that some 30 000 patents for computer-implemented inventions have been handed out by the European Patent Office and indeed national patent offices. Computer-implemented inventions are present, as the Commissioner has said, in everyday household appliances, from safety devices such as airbags in cars to mobile phones, washing machines and an endless list of other devices with relevance going well beyond the traditional computer industries to the heart of our manufacturing sectors. Let us be clear: without this directive, patents will continue to be filed. Out of over 110 000 applications received at the EPO in 2001, 16 000 dealt with inventions in computer-implemented technologies.
In the USA, and increasingly in Japan, patents have unfortunately been granted for what is essentially pure software. An EU directive, by setting limits to patentability in this area, could stop the drift in Europe towards a US-liberal style of patenting software as such, and indeed of patenting pure business methods.
One oft-quoted example of such a bad patent is Amazon's 'one-click' shopping method. Clearly this technology is not new, nor is it unique, and patenting of software business methods such as this is not good for innovation and competition. It is unfortunate that the EPO has granted it a patent: this is an example of bad EPO practice.
Without a doubt computer-implemented inventions - genuine inventions which, in some cases, are the result of 10 to 15 years' R&D investment - are important for the European economy. At a time when many of our traditional industries are migrating to China and the Far East, we need to rely on our innovation and inventiveness to earn our living.
I have seen letters from small companies across Europe which are supportive of this directive. A small Belgian company employing 12 people has written to me saying that it needs patents to get a return on its investment, to grow its business and to ensure that others respect its technology. It is important for many European companies to grow their businesses through revenue secured by patents and licences. This is also the case for a ten-person company in the south-west of England, located in an economic blackspot with high unemployment. This company granted a licence to a US multinational for its computer-implemented voice recognition patents, which shows that in the world of global patents there can be examples of David meeting Goliath. Without patent protection the small company could have found itself in a perverse situation where its R&D efforts would have been free for the multinational company which, with its team of patent lawyers, would have gained the patent in this area. Consequently, the European company would not have reaped the benefits and, indeed, there could have been an infringement of a patent owned by a multinational.
I have tabled amendments in my report to underline my opposition to the patenting of software as such. We want explicitly to exclude computer methods, algorithms and mathematical models from patentability, as set out in a new Article 4. I have attempted to produce balanced legislation that takes account of the needs of all sectors of the industry, not just one vocal sector that is against this directive.
I would be the first to agree that we need more debate on and refinement of the proposed legislation. I therefore ask the Commission to look at the crux of this debate: how do we get good patent law which rewards our most innovative companies for their investment in R&D while, at the same time, not allowing companies to use patents to abuse a dominant position, lock up technology and stifle innovation and competition? I therefore ask the Commissioner to look at these amendments tabled in plenary today. They are very clear in suggesting that we need to limit patentability to genuine inventions in Articles 2 and 4. We want to ensure interoperability to enable computer programmers to engage in reverse engineering practices and to decompile programs for experimental purposes without risking infringement or legal action. It is vital that we address the perception that patents are only for big business: small companies can, and do, gain from patent protection. However, to have a fighting chance in such a competitive business they need access to affordable patents and assistance with legal fees to protect and enforce their patents.
Other amendments seek to ensure that the granting of a patent does not allow monopoly or abuse of a dominant position. We also want to protect the open-source community which makes a vital contribution to competitiveness in the area of software development.
Therefore, I ask the Commissioner to give serious consideration to the amendments and to recognise them in the spirit in which they have been tabled, as a genuine attempt to ensure that Europe develops good patent law in the field of computer-implemented inventions. This does not mean rubber-stamping bad practice in Europe, but developing good practice for the future, good law, good patent examiners, and a quick death for applications that are clearly not inventions. We also want to ensure that multinationals do not dominate in our EU markets. We need patents in order to protect our own companies and investments so that they can be effective global players in this fast-changing and rapidly developing software-development market.

Plooij-van Gorsel (ELDR)
Mr President, Commissioner, ladies and gentlemen. First of all, I would like to comment that in the nine years that I have been working in this Parliament I have never been lobbied by any acquaintance so aggressively, so often, so impolitely or so freely. There must really be a lot at stake, although I can understand that people are worried.
The aim of this proposal is to harmonise the European regulations. At present there is legal uncertainty on what is patentable and what is not in the area of software. This is because the rules of the European Patent Convention are interpreted differently in the Member States and are not being tested. This legal uncertainty has adverse effects in terms of the operation of the internal market. The Committee on Industry, External Trade, Research and Energy is therefore positive about the aim of this proposal: recognition of the patentability of computer-implemented inventions and more transparent rules. It is illusory to think that no patents have been granted for software in Europe up to now. The European Patent Office has awarded more than 30 000. The directive now being proposed will not make patents for computer programs possible as such and will thus restrict the existing practices of the European Patent Office. In general terms, nothing will be made patentable that was not patentable already. The Committee on Industry, External Trade, Research and Energy is of the opinion that the directive must be strictly limited to unambiguous cases. The condition of technical innovation is essential. This is characteristic of an invention, as opposed to an idea. Unlike in the USA, we want to prevent so-called trivial patents being awarded, for example on business matters. The possibility of linking equipment in order to achieve interoperability is a method of achieving an open network and preventing the misuse of dominant positions. I am therefore asking you to support the standpoint of the Committee on Industry, External Trade, Research and Energy, article 6A of the report, and of course the other amendments as well.
Finally, I am asking for your support for the introduction of a grace period. This will prevent an inventor from being cheated out of his invention if he publicises it in order to sound out interest in the market shortly before applying for the patent.

Rocard (PSE)
Mr President, Commissioner, this directive and this debate are horrifyingly complex, and also doubly complex, in both legal and computing terms. The stakes, however, are extremely high: in economic terms, tens of billions of dollars, in philosophical terms, respect for human knowledge. Throughout the 6 000 years of our history, it is by means of copying that the enormous body of human knowledge has increased. The prerequisite was that access to the products of science, music, mathematics or of any other field should be free and without charge. Copyright compensates the author without calling these principles into question. When individuals use materials or harness natural forces, the costs change, the remuneration required is much higher, and patents make such remuneration possible by prohibiting the unremunerated use of the invention. A piece of software is nothing more than a collection of mathematical formulae; the creation of new software can use hundreds of pieces of existing software. Prohibiting or slowing down this creative development would constitute an attack on the dissemination of knowledge and nevertheless, in future, human knowledge will increasingly take the form of software.
The 1972 Convention prohibits the patenting of any software but the needs of big business, which has taken advantage of the vagueness of definitions, have led to a surge in the number of such patents. The legal position of these thousands of patents is unclear and this is extremely dangerous for millions of individual creators or small businesses. You were right to want to put an end to this. We need a directive and your draft provides a good working basis, as you reiterated this morning. You were right to insist and to write that this is not about extending the scope of patentability, as you stated in some quite recent articles.
We therefore support your motives, Commissioner, but as we have just heard, many of us, including my own group, consider that you have not followed your ideas through to their logical conclusion. You conclude your recent article by this admirable phrase which I applaud: 'existing users of free software can continue to use this free of charge, regardless of future patents filed in this area'. Well done! This is what we want to hear. The technical provision of your directive, however, does not guarantee this freedom.
We have, therefore, tabled amendments that make a distinction between an invention and a pure product of the human mind. The reference to materials and natural forces is not universally accepted and that is the subject of this debate. And yet this reference is the only one possible for preventing companies that are powerful enough to create and protect an enormous portfolio of patents from capturing an infinitely expanding amount of knowledge.
When I read your words, Commissioner, I had the pleasure of thinking that you will agree with us and that you will thank us for having clarified your text.

Wuermeling (PPE-DE).
Mr President, Mrs McCarthy, ladies and gentlemen, I would like to start by expressing my warm thanks to the rapporteur for her excellent work on this report. Mrs McCarthy, you had to overcome two major problems not usually faced by rapporteurs. Firstly, this is a highly complex topic, involving both legal issues and complicated technical matters. Secondly, you also had to deal with a sometimes very aggressive, but sometimes also very irrational lobby, yet you ultimately managed to establish an ongoing dialogue, even though you undoubtedly found this difficult at times, as the rest of us did occasionally as well.
No, ladies and gentlemen, we do not want any general patenting of any software. We do not want to strengthen the market power and monopolies of the software giants. No, we do not want to threaten the commercial bases of small and medium-sized software companies. And no, we do not want to undermine the successful open source community and Linux technology in any way. So what do we want? We want to make a sensible distinction between computer-implemented technical inventions, on the one hand - which must of course be patentable - and pure software for ordinary data processing, which should not be patentable, on the other.
It is true that in the past, the European Patent Office has handed out far too many patents far too lightly. Mrs McCarthy has cited the most recent example of Amazon's 'one-click' shopping method. However, only the legislator can bring this harmful trend to a halt. It makes no sense whatsoever to be opposed to this directive, because then these practices will simply continue. I am therefore at a loss to understand how anyone - especially the open source community - can be opposed to any form of directive in this area, as this would simply allow the current practice, which this community views very critically, to continue.
On the other hand, it is also true that an invention, in the classical sense, deserves to be protected by legislation. The inventor has invested time and money in his invention, and it is of course quite unacceptable for the state to stand and watch while others exploit his ideas commercially. In this area, the issue of the European Union's competitiveness must therefore also be discussed, for if we go so far in our directive that virtually every software element results in an invention no longer being patentable, we will be at a major disadvantage in the global competition for innovation. We should be aware of this.
The proposal by the Committee on Legal Affairs and the Internal Market improves the directive on key points. It limits the tendency to issue patents too casually, which has been criticised here, and it does so more effectively than the Commission's original proposal. The new Article 4A, with its negative examples, creates watertight protection against the patenting of software, because we are saying quite clearly that pure software cannot be patented, business methods cannot be patented, and algorithms and data processing cannot be patented either.
What we need is a European patent law to promote innovation, one that contains clear and sensible rules and draws a watertight border against pure software. This directive achieves these goals.

Medina Ortega (PSE).
Mr President, the Socialist Group does not believe that the amendments approved in the Committee on Legal Affairs and the Internal Market reflect the current situation in the field of the patentability of computer-implemented inventions.
We must work on the basis that this is not a proposal for a Directive for patenting computer programs. The system for those, as the rapporteur for the Committee on Culture, Youth, Education, the Media and Sport, Mr Rocard, has pointed out, is already regulated by means of a Community Directive. We are talking about the field of intellectual creation, which have very different rules from those which govern the field of industrial protection. Industrial protection, as Mr Rocard pointed out, relates to the application of industrial uses, and we already have well established rules.
What has happened here has been a very dangerous tendency on the part of United States jurisprudence, which has allowed purely intellectual creations, which do not have industrial applications as such, to be patented. The attempt to establish a monopoly on computer programs by means of patents has caused justifiable indignation on the part of all those who are currently using the open network in Europe, and whose possibilities for action would be prejudiced. It would represent a backward step in terms of European progress towards the creation of an information society as laid down in the Lisbon Declaration.
The Socialist Group therefore believes that the proposal for a Directive must be substantially modified, establishing very clear limitations, so as not to undermine the nature of industrial patenting.
We cannot end up in a situation here like the United States situation, in which there are currently certain companies which in practice are able to prevent all work in the field of computer programming. As Mr Bolkestein has pointed out, the European Patent Office has allowed itself to take this dangerous route to a certain extent, as Japanese jurisprudence has also done, for example. And that is precisely why we need a Community Directive.
We believe that intellectual property in the field of computers must be maintained and that we need a Community Directive which just regulates industrial applications, not computer programs, and which regulates it in a sufficiently clear way to prevent us from taking that route, so that the jurisprudence of the European Patent Office does not drag the countries of the European Union along the road of the patentability of computer-implemented inventions as such.

Manders (ELDR).
Mr President, Commissioner, ladies and gentlemen, the subject we are discussing here is a difficult subject. There is a big difference between copyright and patent law. That this difference is difficult to define is evident from the amount of lobbying we have been experiencing. I therefore thank Mrs McCarthy, who has managed to clarify the line. Particularly in her briefing to aggressive lobbyists who I think have incorrectly interpreted this and who want to achieve exactly the opposite of what is intended with this directive. That is regrettable.
The aim of this directive, in my view at least, is to prevent legal uncertainty. Mr Medina Ortega and many other fellow MEPs have already given examples of this. The European Patent Office in Munich is already using the United States method at the moment and is already patenting software as such. I believe that it is necessary to put an end to this by way of this directive, if we get it. I think that this is also what the lobbyists who want this directive voted down want. I therefore think it is odd that they are calling for this directive to be totally rejected. After all, this would make it possible for the US methods referred to by some fellow Members to remain in place and the Patent Office to continue to issue patents for thousands of software methods. I think that would be a bad thing.
We have submitted a number of amendments. A large number of these have been approved by the Committee on Legal Affairs and the Internal Market in the debate on the McCarthy report. A large proportion of them relate to the protection of small- and medium-sized enterprises, while the purpose of others is to achieve improved definitions. I therefore think that the report before us is already suitably balanced. I would like to see a number of improvements implemented, however. Among other things, I am referring to the grace period which my colleague Mrs Elly Plooij-Van Gorsel has already mentioned. I think it would be a good idea to establish this in the directive. I would even like to call upon the Commission to go further and include a grace period in all directives pertaining to intellectual property rights we may get in the future. It seems to me to be a good thing for the not-so-powerful inventors in particular to be allowed such a period of time so that they can find out whether there is a market for their products.
I have also submitted an amendment concerning new inventions with software that is computer-implemented and which - to put it very clearly - is not patentable per se. This amendment intends to set a limited period for new inventions, if you separate them from the software, which - to put it very clearly - is not patentable. Why? Because with a patent application, even if you do separate it and even if the product is not patentable per se, you have a number of legal procedures at your disposal with which you can keep businesses out of the market for a long time. I think that would be a bad thing.
I am also of the opinion that such an approach does not conflict with the non-discrimination policy of TRIPS as it does not exclude a particular sector. I think that it will simply be sending a clear signal.
Now a few words about interoperability. Interoperability is necessary, but we must make a clear distinction between standalone inventions and inventions intended for use in conjunction with other inventions. We have applied this distinction in our amendment. I call upon fellow Members to support the directive in any event, in order to prevent legal uncertainty in the future.

Frahm (GUE/NGL).
Mr President, Commissioner, I should like to thank the rapporteur for the huge amount of work she has done. It does sound as if we, in actual fact, all have the same intentions. I should like to praise the Commission, and also the rapporteur, for having emphasised what the intentions are, namely to create still more development and still more investment in small- and medium-sized enterprises in this area.
What is odd is the simple fact that small and medium-sized enterprises are not pleased with this directive when those are what the intentions are. Why are they not shouting with joy and, upon being consulted, using their answers to praise the proposal for a directive? Why are small and medium-sized enterprises not demanding that we implement this directive in one go? Why are all the software industry's innovators not demanding that we introduce this directive at breakneck speed? Why are they doing almost the opposite?
That should, I think, in any case give rise to a certain amount of doubt as to whether we are in actual fact doing what we say we are doing. The ostensible purpose of the directive is to ensure that rights can be enforced. Being able, however, to enforce rights in this area or, perhaps, to protect oneself against others' maintaining that their own rights are being violated is so expensive that it is transparently obvious to small and medium-sized enterprises that this is not a method of progress for them. Legal cases of this type cost approximately one million euros and are not the kind of thing that small and medium-sized enterprises can get directly involved in.
We say that we shall not extend the existing provisions. That, I think, sounds wise, especially since the European Patent Convention does emphasise that software cannot be patented. Let us, therefore, stick with that. We are not in fact without rights now. We have a legal basis in the form of the European Patent Convention. The fact is, moreover, that the European Patent Office has extended the scope of its activities slowly and gradually. If we were now to respond by legalising that extension, we should in fact be heading in the wrong direction. We should then be heading in a direction in which it was more and more usual to demand patents on software, but not on pure software. My question is therefore: how pure must software be before it is pure? That is a question I have been in no position to obtain a clear answer to. Moreover, it is perhaps precisely such questions that should be clarified before we take definitive action in this area.
I very much want to invite reflection. I very much want to recommend that we allow doubts to be heard and that we listen to what the small and medium-sized enterprises in Europe have to say in this area.

Echerer (Verts/ALE).
Ladies and gentlemen, I will try to be brief, keep to the time available and not repeat anything that has already been said. I will therefore begin by stating that I support, wholly and unequivocally, everything that has been said by the draftsman of the Committee on Culture, Youth, Education, the Media and Sport, Mr Rocard. My group and I support the thrust of this directive, just as Mrs Frahm has already said.
You wanted to create legal certainty, and that is what we want as well, yet the Commission is wielding its rod against this directive's opponents and critics. I almost heard a threat in your words, Commissioner Bolkestein! None of us here is talking about software patentability here, oh no! We are talking about computer-implemented inventions based on software. You claim, and I quote, that opponents of the directive - I repeat, critics of this directive - have mounted a very vocal and, at times, even personal campaign based on half-truths and misconceptions. In fact, what we tried to do was to avoid the massive lobbying and find some neutral and objective legal experts who could explain this very complex subject matter to us. However, there is one simple question to which I have not yet heard an answer from you. Even if only a tiny component within a solution - and after all, software does consist of a multitude of solutions - in a computer-implemented invention is patented, it is patented and I cannot use it freely. As Mr Manders has said, we are running up against the border between copyright and patentability. It is a difficult problem and I think that the proposals that have been devised in the opinions by the Committee on Industry, External Trade, Research and Energy and the Committee on Culture are the basis for our decision-making. By 'our', I mean the critical members here in this committee who want to pursue the same approach as you, Commissioner Bolkestein, but who are perhaps going further and thinking it through. Possibly - as many legal experts have explained - this directive will not create any more legal certainty. It may close a few loopholes, but open up others. Let us be honest for once, ladies and gentlemen. We all know the reality of the market. We know how someone can use a patent as an instrument of market dominance and even as a weapon against his competitors, if he chooses to do so. We should think very carefully about how we can protect both investment and innovation here.
We have a copyright directive dating from 1991; perhaps we should have revised it. Perhaps there are points that can be brought up to date in legal terms. If we had arrived at a conclusion based on the European Patent Convention in this matter, you would have my full support. Nonetheless, I think the proposed amendments make a contribution here. Last but not least, the European Patent Office and the unfair patents that may have been granted or that will be granted in future are primarily the responsibility of the signatory states. It is laudable that Europe is showing responsibility here, but taking the first step on the basis of the European Patent Convention would have been enough, and then we could have given the matter further thought.

Mussa (UEN).
Mr President, ladies and gentlemen, information technology is the backbone of the future development of every country in the world and it is based on technology - hardware - and science - software.
At present, all technological innovations are protected by their patentability; but software development gives rise to copyright which protects its intellectual property. To make this clearer, let me draw a parallel with the music world. An electronic computer is an instrument which is used to create music, not composed of notes but of codes and commands, alternating with rhythm and a composed sequence, made by the developer, giving rise to different actions and results. What would happen to music if, one day, you could patent scales, chords, trills and everything else that makes the world of classical music so rich and exciting?
Information technology would suffer the same fate: with patents, every command, every sequence of codes and algorithms would be protected, and the market transformed into a web of restrictions. If all existing patents had to be validated, then all software development would be restricted, limited and increasingly inhibited, since all small and medium-sized enterprises and programmers would be forced to buy rights or licences and virtually pushed out of the market.
The intellectual property of a painting or a book is not protected by patenting the subject or argument, but by guaranteeing its distribution subject to copyright laws, stimulating other minds to produce original works, similar but not copies, improving, where possible, on the original work or reinterpreting it on the basis of different or more interesting models.
An expanding market, open to new horizons of lively criticism and fantasy, such as the European market, cannot allow itself to impose more regulations which would, in actual fact, further constrain development in the European nations.
We firmly believe that the McCarthy report cannot be accepted, since supporting it would seriously jeopardise the technological growth and development which can be generated only where people have a free spirit and mind.

Andersen (EDD).
Mr President, I am a trained architect and have worked as an architect all my life. The problem we face in this case is like that which would arise from the introduction of patents in my own field. Let us imagine that patents were taken out on stairs so that, in future, approval was needed and a licence had to be paid for before a house with stairs could be designed. In a way, that would be a very good thing, since we should not then have all these wretched skyscrapers. It is a grotesque idea, however, that an individual colleague of mine or a major firm within my industry should be able in some way to obstruct all development. In the design and architectural work I have done, I have of course been protected by copyright law so that my work cannot be plagiarised.
In actual fact, it is the same with software and all other artistic activity which can of course be compared with the design of software programs in which the design itself is protected by copyright law. Permitting the patenting of software in the EU would have negative consequences for the consumer, small and medium-sized enterprises, the whole 'open source' movement and innovation within the industry. One would have to be more than usually naive to believe that innovation in the EU were being encouraged by allowing an American firm to take out a patent on the use of the special Danish letters æ, ø and å in domain names, or that it would be of benefit to small and medium-sized enterprises if, before they began to develop their product, they had to invest in a department concerned with legal matters relating to patents. It should not be possible to patent either particular items of software or software per se.

Cappato (NI).
Mr President, I would like to thank the rapporteur and the Commission for the work they have carried out in all its difficulty. The Radical Members of the Bonino List will vote in favour of the amendments seeking to restrict the margin of software patentability and will vote against the proposal as a whole if the main amendments are not adopted. Why? Because we do not believe in the need for European harmonisation, perhaps? Not at all. We support the Commissioner and the rapporteur in taking note of a situation whereby the European Patent Office has actually received thousands of applications for software patents.
In the light of such a clear violation of the spirit and letter of the European Patent Convention, what was needed, what would be needed, what is needed is clarification and confirmation that software is non-patentable. Whilst the distinction between the patentability of software as such and the patentability of software as part of a computer-implemented invention is a subtle one - which means that we are running the risk of getting into a mess - the solution is, I believe, very clear: if a piece of software is an integral part of an invention, it is this invention that is patentable and is patented, not the software. It is, however, already possible to do this through laws on computer-implemented inventions that are defined as such.
Software is excluded from patentability for a very specific reason, for the same reason that mathematic formulae are excluded, for the same reason that theorems are excluded, for the same reason that musical formulae and symphonies are excluded: these are all part of the field of ideas, of the organisation and transformation of ideas. We know that a task that can be performed by software can be transformed into countless different types of codes by countless programmers using different programming languages. This is what makes patenting software dangerous, and even more dangerous if the patent is to last for 20 years, which is a geological era in software development. Independent programmers and programmers in general would now be authorised to use a function patented in 1983, the early history of computer software. This is the danger.
I do not believe that it was necessary to venture into the realms of complex formulae to define the distinction between software as such and software as a part of computer-implemented inventions. It would have sufficed to keep computer-implemented inventions as patentable and ensure respect for the regulations excluding software from patentability, which, in any case, provides for protection by copyright.
Hence our support for the amendments, in particular those on interoperability and those on the need for natural forces if software is to be considered an invention. I also believe that we cannot adopt the proposal now because, if we do, the States will do their own thing. We must try to do the best we can here. I also believe that the involvement of hundreds of thousands of people who have all expressed their opinion on this issue individually should be seen as a democratic contribution, not an inconvenience.

Fiori (PPE-DE).
Mr President, ladies and gentlemen, I must admit that, of the many subjects dealt with in this term, the subject that we are dealing with this morning has, for me, been one of the most complex, and I must acknowledge the enormous amount of work that Mrs McCarthy has carried out.
I do not have all the answers and I understand the Commission's need - as Commissioner Bolkestein explained clearly - to speak on this issue. I will, nevertheless, make a few remarks of a general nature, starting with the premise that we are dealing with an issue where identifying the subject of legal protection, and thus converting computer terms into legal terms and concepts, can already, in itself, be an extremely complex matter.
Now to a second point: we have, of necessity, to deal with a complex international legislative framework and, if we look at what is happening, not just in Europe but in the United States, in particular, the patent system is proving to have very many limitations, above all very many practical limitations. Having said that, I believe that this directive, although there is room for improvement, has addressed a serious political issue facing the European Union. We need to stand apart from the US positions and we may well also have to convince our main economic partners of the need for a measure harmonising all aspects of the legal protection of software in a form different from the current form. In this, we are not starting from scratch, because the characteristics on which patents are based have already been clearly identified in the TRIPs agreements. We therefore need to insist on the idea - from which we must not be moved - that software patents are only granted on solid grounds. We have seen an abnormal number of applications for software patents in the United States, and there are probably just as many in the EU, and this makes it clear that we are not dealing with genuine inventive activity and that we cannot afford to grant every type of application a patent. Furthermore, with the number of patent applications increasing uncontrollably, it will become virtually impossible to ascertain properly from the archives whether the application will genuinely lead to a new invention.
Of course, there are some legal aspects that could be improved upon; there are some discrepancies with Directive 91/250/EEC; we could certainly have reflected more from a legal point of view on Article 52 of the European Patent Convention, because one thing is certain: we will be forced to return to this issue because - as many Members have stated - development is so rapid that the European Union will have to adopt a measure in the next few years, when we will be able to revise our positions.

Gebhardt (PSE).
Mr President, ladies and gentlemen, it is rare for our legislative activity to be the focus of so much public attention at such an early stage as Mrs McCarthy's report. That has certainly not made it easier for her to complete her very demanding task, but it has generated a flood of information and arguments. Much of it was important and very informative, both for the rapporteur herself and for all of us. However, mountains of paper were destined for the waste paper basket from the outset.
Our intensive work and the fact that it was monitored so closely by stakeholders has produced the compromise which I would encourage you to support and which is reflected in my group's proposed amendments. It aims to release us from the pitfalls contained in Article 2 and Article 4, where a new definition of 'technical contribution' opened the way for the patenting of software.
Ladies and gentlemen, this loophole has now been closed to some extent. Admittedly, I would have liked to have achieved more, and the small and medium-sized enterprises in particular had hoped for more. Above all, I do not believe that we have made it sufficiently clear that we do not simply want to restrict software patents. We actually do not want to grant any more of them in future at all. This is because software patents make life particularly difficult for small and medium-sized enterprises, to whom we have always pledged special protection and support. To put it another way, anyone who patents software is playing into the hands of big business, not helping those with great intelligence. Let us therefore send out a clear message which goes beyond this compromise solution. Say no to software patenting!

Boogerd-Quaak (ELDR).
Mr President, ladies and gentlemen, Commissioner, I share the opinion of Messrs Rocard and Cappato and other fellow Members who think that software as such should not be patentable. Article 52 of the European Patent Convention excludes software as such and states that ideas and theories are not suitable for patents. It must be about technical innovation, and that is precisely the heart of the problem we are all facing. It is also the heart of the directive. The Patent Office recently concluded that all programs that run on a computer are technical by definition. Under the Patent Office's current practices, it has already awarded more than 30 000 patents, many of which are not actually legally valid. Mr Rocard has rightly mentioned that there is a difference between an invention based on the forces of nature and a product of the human intellect. I am of the opinion that we must therefore support some of the amendments, which have also been submitted to the Committee on Industry, External Trade, Research and Energy and also the amendments submitted to the Committee on Culture, Youth, Education, the Media and Sport in the past. These tighten the definition in such a way that, in my view, software as such is excluded. If these amendments are not accepted, I will vote against the directive.
There is a good deal of disquiet among small- and medium-sized enterprises and the open source movement. Human knowledge and the dissemination thereof is an important freedom which we in Europe must preserve. This must be done if only on account of human dignity, but not solely for that reason. We will be even more competitive than the United States and the directive will have to rule out the US situation completely. I therefore hope that many of you will vote in accordance with this line so that we will get a directive that is workable.

Caudron (GUE/NGL).
Mr President, ladies and gentlemen, this morning's debate follows a turbulent period in which the world of computer users, inventors and innovators has been fighting tooth and nail to protect its right to difference, freedom and creativity.
At the heart of this debate is patentability, with its advantages (when the patent rightly protects the inventor) and its major disadvantages, which involve often conservative monopolies being established to the detriment of young creators. Personally, I still support this movement, which I believe follows the same approach as all alternative movements fighting for a less rigid and less commercial society.
Since this debate opened, we have scored points by tabling proposals for amendments that substantially improve the original draft. Recognising that in order to be patentable, a computer-implemented invention must have an industrial application is a step in the right direction. A statement to the effect that patents must not be granted for simple computer programs was needed. Nevertheless, we cannot ignore the shades of meaning that have been introduced as well as the excessive vagueness. At this point in the debate, even at the risk of seeing these amendments fail to receive the vote or then fail to be included, we must state that not all problems have been solved, by any stretch of the imagination.
I personally shall, therefore, be vigilant during voting and I remain willing to vote against the draft if the improvements prove to be nothing more than a cosmetic attempt to conceal the hold that large companies have over creative minds. In this regard, Commissioner Bolkestein's last sentence, which smacks of blackmail, does nothing to alleviate my deep suspicion.

MacCormick (Verts/ALE).
Mr President, many of the amendments - and certainly all those to which my group has given its name - are clearly and directly aimed at preventing any leakage from this directive into the patenting of computer software itself. That is very important to us.
It is quite clear that a body of intellectual property law which protects computer software by copyright, and leaves patents for other purposes, works well from the point of view of the software industry, and of the creative minds which develop computer software. Neither Mrs McCarthy nor Mr Bolkestein disagrees with me on this point. Nobody wants a leakage resulting in the patenting of pure software.
There is some risk that genuine inventions which involve a software element would not be adequately protected without a new directive. So be it. But then the burden of proof lies with the Commission to show us which of Parliament's proposed amendments would over-protect us against the risk that we see and under-protect against the danger which the Commissioner is anxious to avoid, namely the danger of 'real' inventions not being adequately patentable within the European Union.
The strategy of those of us who are amending this directive is to prevent any leakage into software patents as such. That would be a real disaster. We have been lobbied heavily about this, but we have been lobbied heavily because we have very many able, hardworking constituents who see the leakage which I have mentioned as a threat to their livelihood. Let us be absolutely sure that what we send back from this debate and from tomorrow's vote - and Mrs McCarthy has worked very hard on this report - really does provide a completely watertight seal against such leakage and protects what Mr Bolkestein wants to protect without creating the danger which so many of us have been taught to apprehend by our constituents.

Van Dam (EDD).
Mr President, Commissioner, our starting point is also that we do not think that the patent is the right way to protect computer-implemented inventions. Up to now, copyright has offered reasonable protection for this. With the awarding of patents in this area we are running the risk of actually discouraging innovation and putting small- and medium-sized enterprises at a disadvantage, something that other people have already pointed out.
Regrettably, this discussion has actually been overtaken by the practices of the European Patent Office. For years this office has been issuing so-called software patents, and these have already been enforced up to the highest international level.
The proposal that is now before us is really a sort of emergency measure designed to keep the awarding of patents in Europe within certain limits. I have some sympathy for that. The question is whether there is any point in doing so any more. The European Patent Office has already awarded 30 000 patents on the basis of regulations which go further than the present proposal for a directive. As far as that is concerned, this directive comes too late in the day.
On the positive side, the directive will lead to harmonisation and clarity in the Member States. The danger that small, innovative businesses will lose out to the monopolies of the big ones will not go away, however. This is inherent in the patent system. We are sorely aware of this. We therefore find the fact that the Commission and the rapporteur are laconically bulldozing over this here disturbing. It proves that they have little affinity with European small- and medium-sized enterprises, the backbone of our economy.

Gollnisch (NI).
Mr President, ladies and gentlemen, what is the real issue here? The real issue concerns protecting the intellectual property that is the result of innovations in computing. There are two conflicting legal procedures in play: on the one hand patentability and on the other, copyright. We and I believe the vast majority of speakers in this House, Commissioner, believe that the standard form of protection is copyright. Whereas journalists or novelists know that their text is protected by copyright, they cannot then claim the syntax, the morphology, the vocabulary and the grammar of the language they are using as their own. The same must apply to software, because software also uses language.
You claimed in your statement, Commissioner, which was extremely aggressive and even threatening with regard to the criticism inspired by your draft directive, that software as such was not covered by patentability. You must not, however, treat people like idiots. Furthermore, your directive is at best ambiguous, because your definition of a computer-implemented invention in Article 2(a), can just as easily apply to software. Of course, in Article 4 of the draft directive, you appear to limit patentability to inventions, and I quote, 'susceptible of industrial application'. This is a concept, however, that you have been very careful not to define. We all know that US multinationals have managed to patent aspects as trivial as clicking a button to close a window on a screen, or the idea of alerting users by means of a tune to the fact that they have received an email, or even using a colour to underline words that need to be corrected when a text is revised - and textual revision is susceptible of industrial applications in typography or printing. I will also mention the electronic 'shopping basket' used in e-commerce. Young creators have even managed to patent the 35-hour working week imposed by the previous government of my country.
Why, then, is such a text being proposed in this Parliament? Do the interests of the European Patent Office, which is funded according to the number of patents filed, have no part to play in this? The fact is, Commissioner, that there was a strategic choice to make: either to fall in line with the patenting practice of US multinationals - which is what you appear to be starting to do - or to protect the specific characteristics of European law and refuse to let abusive patents have any effect. You have clearly not taken the latter choice and it would be reasonable to believe that your directive does not tally with the legitimate interests of European creators.

Harbour (PPE-DE).
Mr President, in all my time on the Committee on Legal Affairs and the Internal Market, this is the first time that I can recall that one of our major directives has received such prominence in the Parliamentary agenda. I hope that trend will continue. In fact the report was called so early that I was not here on time, and I apologise to both the Commissioner and the rapporteur for not being here to hear their speeches.
I have listened with interest to what Members have had to say and at this stage in the debate I would like to reflect on what this report is really all about. We have an objective to create the most dynamic and competitive knowledge-driven economy in the world. Patents are an indispensable part of that. I want to remind all of you here, and everyone listening to this debate, that there are hundreds of thousands, maybe even millions of people across the European Union working on inventions that have been protected by patents. That patentability has stimulated investment to develop those inventions into products that the world wants to buy. What we are talking about here is a regime that is legitimately going to encourage invention in all fields.
Part of the problem we have had in dealing with this is that a lot of the issues that have been raised have come from one particular direction of creativity: writing elements of computer programs. Actually, patents are about protecting a genuine invention, a new way of doing something, something that is - as this directive says - susceptible of industrial application. I would like to remind colleagues that when you apply for and are granted a patent it does not have to include all the details.
In today's world almost every technical and industrial innovation requires some form of computer-aided activity. Why should we deny protection to people who are working on inventions in that field? The Commission has made a persuasive case, supported by a lot of research, that we need a consistent framework so as to ensure that people know that they can get patents for these types of invention. They will also know that they cannot get patents for trivial business process inventions that should not under any circumstances be patented, and will be discouraged from applying for them.
We know this is difficult to do, which is why we have argued about the wording. That is why Mrs McCarthy has done such a good job as rapporteur on this directive. She has consistently seen the importance of this in a knowledge-driven economy and has led us in looking at ways of improving and making this work better. She has not allowed herself to be diverted by all the noise around her.
I hope that you will support this directive, and that you will support the thrust of the Legal Affairs Committee's amendments. There will be some other amendments but I hope you will resist some of the complicated and abstruse concepts that have been put forward by some people which will make an inventor's life far harder. It is invention and creativity that we are here to support and nothing else.

Berenguer Fuster (PSE).
Mr President, this is a political chamber and I believe that as a political chamber the first question we should consider, as should the Commission, is why this proposal has caused so much commotion and so much reaction.
It is not fair to discredit any person not agreeing with it and to say that there has been aggressive opposition on the part of lobby groups. Because, at least on the part of those who have been in contact with me, university teachers of information technology, experts in patents and industrial property and also representatives of small businesses, what I have heard, rather than aggression, has been concern; concern at the way things are progressing and the danger being faced in terms of the possibilities for inventions.
The people who advocate this initiative tell us that the only intention is to unify practice on the part of the national patent offices, in a field in which there have recently been contradictory resolutions. And that is true; what is not true, or at least what is not certain, and please allow us to accept this intellectual doubt at least, Commissioner, is that this proposal for a Directive is going to resolve the problems which the intention is apparently to resolve.
Because it is very easy to do so, the practice of the European Patent Office, in a break with what was the traditional approach of European law, has tended towards a practice very similar to that in United States law. All the honourable Members know, all the experts know, that European law demands that an invention must be of an industrial nature if it is to be patentable, which means that not only must the method be industrial, but also the result of the product must be industrial, while in US law it is sufficient for it to have a useful application.
This has allowed certain innovations and certain patents of software programs. We therefore insist on this point. It makes no sense to say that with the report of the Committee on Legal Affairs and the Internal Market and the Commission's proposal these problems are resolved, because they are resolved by means of the amendments approved in the Committee on Culture, Youth, Education, the Media and Sport and in the Committee on Industry, External Trade, Research and Energy. Therefore, if the amendments such as those proposed by the Committee on Industry and the Committee on Culture are not approved, it will be very difficult for us to support this proposal.

De Clercq (ELDR).
Will we all still be able to use our computers in the future without having to pay patent rights to do so? This is the question that is occupying all our minds. What we do not want is the United States situation, one in which patents can be granted on simple computer languages or software. We are, however, less able to agree with each other when it comes to describing this. We also often lag behind reality; you just have to look at what is happening at the European Patent Office. We cannot therefore afford to postpone this any further and must seek proper clarification of what is patentable and in particular of what is not. Personally I think that the right balance has been found in the standpoint of the Committee on Industry, External Trade, Research and Energy and in the amendments put forward by my colleagues Mr Manders and Mrs Plooij. Any form of software is explicitly excluded from patenting. Only genuine inventions must be patentable. They must thus involve a worked-out technical process with industrial applications and not simply an idea or a language. The piece of technology that contains this new technical process must then be protected. Not the fact that you need a computer to use it.

Fraisse (GUE/NGL).
Mr President, Commissioner, ladies and gentlemen, there are a number of things I do not understand. I am not sure, for example, that I understand the reasons for deciding to draft this directive. If this is simply a problem for the European Patent Office and for applications for patents, I believe that this is really quite a limited starting point.
What is completely beyond me is that the European Commission, which is so concerned about preventing concentrations in industry, is proposing - if we are to believe a number of experts - support for industrial concentration. This appears to contradict the Commission's objectives.
Nor do I understand the amnesia we are seeing here with regard to the disastrous directive on patenting life. No one knows how to implement this directive and its validity is universally questioned. Can one patent the cells of a leaf without patenting the leaf itself? The problem of software and of technical contributions is identical. The legal uncertainty we faced with regard to the directive on patenting life reappears in connection with the patenting of software, programmes and technical contributions. I am struggling to find the right words because the directive gives no clear definition of a technical contribution. In light of these uncertainties, I find it hard, Commissioner, to understand what is happening here.
Mr Rocard referred to 6 000 years of history, but history has speeded up as rapidly in the field of biotechnologies as in those of software and computing. Are we going to be able to pursue these rapid developments when economists are predicting that we will have a number of problems to face?
In the field of pharmaceuticals, we are told, it is easier to see what is an innovation and it is easier to determine what is covered by copyright or a patent.
With regard to software, it is still extremely hard to tell. Publishers and teachers fear that this type of directive threatens the knowledge-based society, transparency and the circulation of information. I thought that the European Commission and Europe had made preventing such threats one of their aims. I do not understand what is going on here.

Dhaene (Verts/ALE).
Mr President, ladies and gentlemen, there has been heavy lobbying around this report because there is much at stake. I understand this very well and I share this concern. This directive, which is probably well-intentioned, is a threat to scores of small- and medium-sized enterprises in Europe who are at risk of losing their creativity as a result of all these patents. These small- and medium-sized enterprises are the avant-garde of the business sector. We must nurture these small- and medium-sized enterprises because they deliver innovation. This innovation enables us to maintain our position in the world market. We are against this directive because it represents over-regulation. The present protection offered by copyright is sufficient. We Greens are often reproached as being busybodies. Well, here is the proof that we are not. As a matter of fact, there is talk in the USA of toning down patent laws, which are regarded as counterproductive. So why should we have to approve an outdated law in Europe?

Oreja Arburúa (PPE-DE).
Mr President, I would firstly like to congratulate the rapporteur, Mrs McCarthy, and the rapporteur from our group, Mr Wuermeling, for the effort they have made to reach a consensus and, in the case of Mr Wuermeling, to explain the complicated proposal within our group.
The protection of computer-implemented inventions by means of patents is not a new problem and it must be made clear, as other Members have said in this House, that there is no intention to establish rules allowing computer programs to be patented, but to extend the classic doctrine of patents to computer-implemented inventions. We want to apply the existing arrangements for patents to computer-implemented inventions.
It is clear that we must expressly exclude, as certain amendments do, the patentability of inventions solely because they use a computer.
With regard to the scope, I would like to focus on a very specific aspect: that of interoperability. Interoperability and communication between programmes should be excluded from the scope of this Directive. This aspect should be reviewed in a few years time.
The exclusive use which the law allows holders of patents obliges the holder to explain their invention so that it may be comprehensible to an average expert in the field. I believe that in this case as well we must stress this aspect and oblige the person applying for a patent to sufficiently explain the object of that patent, though perhaps not until the publication of the source code, as Mr Harbour has said. That would be excessive. As I have said, it is especially important in this field to oblige applicants to describe their invention.
Finally, many people have criticised this proposal and have said that it may harm small- and medium-sized businesses. However, what we are doing is applying traditional patent law to small- and medium-sized businesses, in the knowledge that patents have increased growth and have made it possible for all types of companies - including small ones - to carry out research and invest in new developments.
We are competing today in a globalised market in which the United States and Japan develop many patents and inventions. We cannot be left behind and we must regulate here in Europe as well the possibility of registering computer-implemented inventions as patents.

Ghilardotti (PSE).
Mr President, I would also like to thank the rapporteur for her work because I feel that - as this morning's debate has confirmed - this is a very complex, sensitive issue.
As has already been said, software plays an important role in countless industries; it is a basic form of creation and expression. Software is, in addition, a field of specialised engineering and a basic human activity, with more than ten million professional developers throughout the world and tens of millions of people creating software.
Independent software developers and small businesses play a fundamental role in innovation in this area, above all in Europe. Europe is at the forefront of the culture of information technology: 71% of open source software developers work in Europe and only 13% in the US. Patents should not, therefore, permit the monopolisation of tools for the expression, creation, dissemination and exchange of information and knowledge, must not hold back the development of research and knowledge.
The stakes are considerable because this is a matter of guaranteeing that research and innovation continue to be free and - according to the spirit of Lisbon - to stimulate economic growth based on knowledge, to bring about the stimulation of software-based innovation and inventions at all levels and to avoid production and trade monopolies for products that use the software. Thus, some fundamental points of the Commission proposal need to be modified and improved on, so that the regulation is a step towards clear, severe limitation of the conditions for patentability.
A great deal has been said about technical contribution, industrial application, the meaning of computer-implemented invention; the conditions for the industrial use of an invention based on software filed for a patent must be extended to the product as well as the method. This is why Commissioner Bolkestein said that he is concerned that the amendments tabled in this House will be adopted, For my part, I have to say that I am concerned that, if they are not adopted, we will not be able to support the proposal on the table.

Figueiredo (GUE/NGL).
Mr President, our debate today is of the utmost importance not only for software developers in the European Union, but also for all those with an interest in knowledge. This is because, by proposing the patentability of computer-implemented inventions, the Commission is preparing the ground for the patentability of human knowledge. It goes without saying that human knowledge cannot become the birthright of large multinationals, which are almost synonymous with Microsoft in this case.
We all know that this proposal for a directive responds neither to the economic, scientific and cultural challenges facing the software sector, nor to the imperative to promote innovation, technological development or the interests of SMEs. We know how important it is to maintain a supply of free software, and how important it is to give the public sector tools for developing a content and service industry, in order to protect the common interest. For that reason, and to give voice to the strong opposition of scientists and software publishers, this proposal for a directive must be rejected. I hope that this plenary will send a clear message by approving the proposal for a rejection, which I endorse and which was tabled by my group.

Karas (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, a directive which regulates the uniform application of the law by patent offices and patent tribunals is to be welcomed unreservedly in the interests of a well-functioning internal market and for the sake of avoiding distortions of competition. However, we must not forget that the development of new software must not be impeded, the position of SMEs must not be made more difficult, that we must create legal certainty, and that we want to prevent new distortions of competition.
I took every letter and every discussion very seriously. Some fears are rooted in misinterpretations. Some points of criticism are based on American realities and not on the content of the directive. However, I do endorse some of the arguments. The European Patent Office is violating the laws between EPAT, the Member States and the European Patent Convention.
The definition of 'technical contribution' is too vague. A clear distinction between technical and intellectual inventions is required. I therefore support some of the amendments and compromises proposed by my friend Mr Wuermeling and the rapporteur. I would like to thank my fellow Member Mrs Echerer for the large quantity of material that she supplied. I support some of the amendments proposed by my colleague Mrs Kauppi: Amendments Nos 107 and 108, which clearly define the term 'field of technology', Amendments Nos 112, 114 and 117, which make it clear that computer programs do not, in themselves, constitute patentable inventions, Amendment No 116 on the limits of patentability, and Mr Wuermeling's compromises in which reference is made to the current EPAT legal framework and there is a clarification to the effect that trivial inventions and business methods are not patentable. I hope that we can all live with these amendments.
Sousa Pinto (PSE).
Mr President, in the absence of a clear legal framework, the rise of the abusive and opportunistic exploitation of legal provisions designed to protect patents, with the aim of profiting from advances made in information technology to do business, constitutes an unacceptable way of privatising human knowledge.
Privatising knowledge in a field which cannot, even in the broadest terms, be confused with that of technical and industrial inventions simply means creating new business opportunities. Progress in information technology results, by definition, in advances which are as a rule unpatented, or which cannot be patented by anyone in particular, being added to the sum of knowledge. The right to make a profit of those who are most assiduous in appropriating common property should not be protected by law, much less should their interests take precedence over the interests of the general public, the interests of the economic and scientific communities, and the interests of civilisation, in knowledge not being commercialised.
The application of true software inventions, resulting from investments, to the process of production should, of course, be protected. There is a world of difference, however, between protecting these legitimate interests and using that protection as a pretext to patent software indiscriminately. The proposal on the table today, with the compromise amendments suggested by the Group of the Party of European Socialists, manages to reconcile these different concerns in an acceptable way.

Niebler (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, I would also like to start by expressing my warm thanks to the rapporteur, Mrs McCarthy, and our shadow rapporteur.
Ladies and gentlemen, do we really need this directive? Like many other Members, I too have received many worried letters expressing serious concerns about the Commission proposal. I have taken these concerns very seriously, because no one wants to stand in the way of innovation in Europe or impose additional burdens, especially on the small and medium-sized IT companies. After weighing up all the pros and cons of this directive, however, I am convinced that we will make the right decision tomorrow if we adopt this directive with the amendments proposed by the Committee on Legal Affairs and the Internal Market and various other clarifications. 
We need this directive. It is simply designed to harmonise existing practice governing the granting of patents in Europe, and in this context, more stringent criteria are to be adopted, particularly for the granting of patents.
I have a number of reasons for supporting the directive. Firstly, the directive will ensure that we do not end up with US conditions in the granting of patents. Simple business methods and pure software will not be patentable in Europe. The directive states this quite explicitly, and it is also prevented by the fact that patent protection for computer-implemented inventions requires a technical contribution. I am grateful to Commissioner Bolkestein for stating this quite explicitly again today, and would like to reiterate that we have no doubt about this. This House should also not act as if someone might interpret the report in a way which conflicts with the clear statement by the Commission and the proposed amendments, which are also very clear on this point.
Secondly, the directive is not meant to protect trivial software. Patents on trivial software, such as progress bars, are a cause for concern and are not desirable. The directive also makes it clear that we do not want to grant patent protection to trivial software.
I would ask you, in tomorrow's vote, to support the proposed amendments in which we clarify a number of points, but also to give your endorsement to Mrs McCarthy's report as a whole.

Zrihen (PSE).
Mr President, Commissioner, ladies and gentlemen. At a time when we want to encourage innovation, growth and competitiveness within the European Union, in the form of a simple legal harmonisation and clarification of the varying practices and interpretations in this area, this directive represents a real step backwards, a real change of approach in relation to the European Patent Convention and to the directive on software copyright, because it seeks to extend to the limit the possibilities of patenting this software. We should consequently reject this directive, because it contains too many vagaries.
First of all, computers have become a crucial tool in transmitting ideas, thoughts and knowledge. Excessive private appropriation of this tool is, therefore, dangerous. Copyright is more suitable.
Secondly, from the economic point of view, innovation in the field of software is often accomplished by SMEs or by independent researchers, for whom patenting is not a suitable instrument because it is too expensive, too involved and will create a legal nightmare. It has not been proven that protection will increase innovation, growth and competitiveness. Lastly, in the context of the economic rivalry that pits us against the United States, adopting this directive would allow some large corporations, which act as monopolies, to maintain their dominant position in the market.
We shall, therefore, continue to wait for a directive drafted after a more detailed study has been undertaken into the economic effects on innovation, competition and intellectual property policy in this sector.

Thyssen (PPE-DE).
Mr President, Commissioner, if it were up to the EVP (Evangelical People's party), there would be no software patents at all, and if it were up to you, Commissioner, there would not be any either. This is how I understood it, after I received the proposal and after I read the existing legislation - and the innumerable letters we have all been receiving - more than once. Many people in our group support the starting points and the objectives in the Commission's proposal. Commissioner, I hope that you will be able to support a number of amendments which have been submitted on behalf of our group and which - building on Mrs McCarthy's report and the report by the Committee on Legal Affairs and the Internal Market - define matters more clearly and put more flesh on the bones of the monitoring task.
I do not believe the assertions that are persistently doing the rounds that this proposal would be a bad thing for small- and medium-sized enterprises. More legal certainty and uniform application of the legal rules in the internal market are things small- and medium-sized enterprises have a particular need of. In my view, small- and medium-sized enterprises do not have a specific problem with this directive, but they do have a general problem with the patent system as such. Much of the criticism in the letters boils down to that. This is true both when they enjoy the protection of a patent themselves and when they have to deal with the patent rights of others.
Hence my question, Commissioner, as to whether you and your administration could not think creatively about how we can achieve a European approach that will enable small- and medium-sized enterprises to improve their position in patent land. I have not submitted an amendment on this as I think that this text is not an appropriate place for this from a legal point of view. I do, however, think that it is important enough to make this suggestion now from a political point of view, and I would therefore appreciate it very much if you could give me an answer.

Paasilinna (PSE).
Mr President, I would like to thank the rapporteur. If we try to complicate the work of the open-source community, software houses, those toiling away on their own and small associations by extending patentability, we shall be destroying the whole basis of the information society. Innovations that benefit all of us, such as Linux, show just how big an issue this is: it is about narrowing the digital divide.
Of course, copyright already protects software codes. Software patents have their downside in that designers can by no means always know they are infringing patents and may indeed become liable for damages on a huge scale. The limits of patentability must be defined in such a way that programs, algorithms and business methods are, as such, precluded from patentability, and so that patents may not be used to hinder competition. We support small-scale entrepreneurship in this sector.

De Rossa (PSE).
Mr President, this is one of those areas where those of us who are neither legally nor technically expert address debates of this kind with our fingers crossed behind our backs, hoping that we are getting it right. I say that particularly in relation to this debate because so many hundreds of thousands of livelihoods depend on this Parliament and the Commission getting this issue right.
There are very few absolutes in this debate. Perhaps the Commission is right to some extent, and perhaps Parliament is also right to some extent. What is absolutely certain is that doing nothing is not an option; we cannot allow the current situation to continue as it is.
Therefore, I hope that the Commissioner can find a way to accept many of the excellent amendments that Mrs McCarthy has brought forward. The rapporteur has done tremendous work in teasing out the issues and presenting, certainly within my group, a very clear position. She has made every effort to find a consensus position.
It is important that we ensure that the open-source area is encouraged and that the whole IT industry is maintained in a vibrant and innovative way. However, it is not right that we should allow the current legal uncertainty to continue.

Bolkestein
. Mr President, since there are many amendments, I do not propose to go through them all one by one, indicating the Commission's response. With your permission I should like to provide you with a list of the amendments by number, showing which of them the Commission can accept, which we cannot accept and which we could accept with suitable rewording

President.
Thank you very much, Commissioner.
Our rapporteur wishes to add a few words.

McCarthy (PSE)
Mr President, I did not want to make this point during my speech, but it is necessary that it should be made. In the ten years that I have been an MEP I have never encountered such a personal, aggressive and abusive campaign as I have with this particular directive. I have been bullied and harassed by lobbyists. My staff have been bullied to the extent that one of them had to take days off with a stress-related illness.
I am now asking you, Mr President, to ensure that you conduct the vote tomorrow in an orderly way, to ensure that Parliament and its Members are permitted to vote as they are empowered to do by their democratic mandate to draft and make legislation.

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

Kauppi (PPE-DE)
The proposal for a directive on the patentability of computer-implemented inventions must have aroused more passion than any other matter debated in Parliament in recent times. From the outset my opinion of the directive has been critical. I do not, however, object to it totally, as I think it is good that the present confused situation regarding conditions for granting software patents is to be clarified. At present, with the regulations being so unclear, the decisions taken by national patent offices and the European Patent Office may well have been very different, and therefore common European rules could be needed. There have to be quite a number of amendments made to the report, however, before it can be adopted. The amendments I have proposed would make the directive less harmful to independent software developers and small- and medium-sized companies.
My main arguments are as follows:
In its present form the directive could significantly harm independent software developers and European small- and medium-sized software houses, which may find it impossible to survive in the 'patents jungle' of the great software giants. Patent processing times are very long and application is expensive. That is why they could slow down and even obstruct the development of the European software sector, dependent as it is on innovation and speedy reaction.
Software interoperability and communications should, furthermore, be possible without huge licence fees. I am in favour of open interfaces. Algorithms, business prototypes and computer programs should not be patentable as such.
One of the main purposes of granting patents has always been to make society aware of the existence of inventions. Patents on computer-implemented inventions are virtually useless as data sources if the source code is not published. In the United States of America the source code is published in the patent application in the case of most software patents, which is established business practice in the industry. This should also be possible in Europe.
I hope that tomorrow's vote will have a favourable outcome and that as many of my fellow Members as possible will show their support for a creative and innovative European software industry.

President.
The next item is the vote.
Report (A5-0309/2003) by Klaus-Heiner Lehne, on behalf of the Committee on Legal Affairs and the Internal Market, on the request for defence of parliamentary immunity and privileges submitted by Jannis Sakellariou (2003/2023 (IMM))
(Parliament adopted the text)

Report (A5-0283/2003) by Gianfranco Dell'Alba, on behalf of the Committee on Constitutional Affairs, on insertion of a new Rule 29a in Parliament's Rules of Procedure: activities and legal situation of the political groups (2003/2114 (REG)) 
(Parliament adopted the text)
Report (A5-0285/2003) by Göran Färm, on behalf of the Committee on Budgets, on the Draft Amending Budget N° 4/2003 of the European Union for the financial year 2003, Section III - Commission (SEC(2003) 626 - C5-0339/2003 - 2003/2113(BUD)) 
(Parliament adopted the text)
Report (A5-0288/2003) by Carlos Coelho, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, 
1. on the initiative by the Hellenic Republic on a Council Decision on procedures for amending the Sirene Manual (7180/2003 - C5-0149/2003 - 2003/0808(CNS)) 
2. on the initiative by the Hellenic Republic on a Council Regulation on procedures for amending the Sirene Manual (7179/2003 - C5-0148/2003 - 2003/0807(CNS)) 
Before the vote:

Coelho (PPE-DE)
Mr President, ladies and gentlemen, the report on which we are about to vote is not what it appears to be. What it appears to be is a set of amendments to the Sirene Manual, which regulates the exchange of information between Member States in relation to the Schengen Information System. Underlying this vote, however, is something a little more complex.
This Parliament was initially asked to express an opinion on two initiatives, but was refused access to the relevant documentation, the Sirene Manual. At a meeting of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, the Greek Presidency promised to grant that access so that we could express our opinion. The Council agreed to nothing of the sort. The Presidency gave in and the ban remained in place.
The Council eventually agreed to reveal in committee the nature of the contents of the classified documents. On the basis of that information, I proposed the report which will be put to the vote today, approving the two initiatives with amendments. My committee accepted that proposal.
By voting in favour, however, we are sending a political message to the Council, a message of good faith and collaboration, but also a message saying that it is time to stop playing hide-and-seek with the European Parliament. The Council has delayed opening talks with Parliament on how to deal with classified documents within the area of freedom, security and justice. This situation cannot continue. This type of information is usually available for Council work, but is not passed on to us in Parliament. There are other cases, too, in which information regarding a Member State is not passed on until the Member State in question decides that the information should no longer remain classified. If we are to prevent these situations from reoccurring, clear rules should be drawn up on dealing with classified documents in the legislative area, laying down an appropriate level of security and accepted by all the interested parties. That is the message we are sending the Council through this report.

Schmidt, Olle (ELDR)
Mr President, I propose that we now vote on the draft legislative resolution, to confirm the rejection of the Austrian initiative.

President.
Therefore we will vote on the legislative resolution, the adoption of which will close the procedure.
(Parliament adopted the legislative resolution)

Recommendation (A5-0307/2003) by the Committee on Economic and Monetary Affairs, on the appointment of Mr Jean-Claude Trichet as President of the European Central Bank (10893/2003 - C5-0332/2003 - 2003/0819(CNS) (Rapporteur: Christa Randzio-Plath) 
(Parliament adopted the text)
Report (A5-00282/2003) by Harald Ettl, on behalf of the Committee on Employment and Social Affairs, on the Commission's communication on 'Progress on the implementation of the Joint Assessment Papers on employment policies in candidate countries' COM(2003) 37 - (2003/2105(INI)) 
(Parliament adopted the text)
Report (A5-0295/2003) by Peter Michael Mombaur, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a directive of the European Parliament and the Council concerning measures to safeguard security of natural gas supply (COM (2002) 488 - C5-0449/2002 - 2002/0220(COD))
(Parliament adopted the legislative resolution)
Report (A5-0297/2003) by Hans Karlsson, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a European Parliament and Council directive concerning the alignment of measures with regard to security of supply for petroleum products (COM(2002) 488 - C5-0448/2002 - 2002/0219(COD))
(Parliament rejected the Commission proposal)
President. We must now ask the Commission if it intends to withdraw its proposal.

Bolkestein
. Mr President, I shall certainly report this to my colleague, Mrs de Palacio, and ask the Commission to act accordingly.

President.
Commissioner, I am afraid we need the answer now, so that we can complete this part of the voting procedure. Parliament has rejected the Commission proposal. I assume that for the moment the Commission is going to maintain its text.

Bolkestein
. Mr President, I am informed by people who are competent in this matter that, according to the framework agreement, I should refer to my colleagues and after that I shall of course inform Parliament correspondingly.

Chichester (PPE-DE).
Mr President, perhaps I can assist the Commissioner here. Last night Commissioner de Palacio gave the House an assurance that if the proposal were to be rejected, she would not seek to reintroduce it.

Bolkestein
. Mr President, this Commissioner is always grateful for any assistance he is given.

I can assure you that it happens very infrequently!
(Laughter)
I would not wish to deny the truth of the statement that has just been made. Once again, I assume that matters will develop as indicated by the honourable Member.

President.
Colleagues, under the circumstances I propose that we refer this matter back to committee.
(Parliament agreed to the proposal)

Report (A5-0293/2003) by Hans Karlsson, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a Council directive on repealing Council Directives 68/414/EEC and 98/93/EC imposing an obligation on Member States of the EEC to maintain minimum stocks of crude oil and/or petroleum products, and Council Directive 73/238/EEC on measures to mitigate the effects of difficulties in the supply of crude oil and petroleum products (COM(2002) 488 - C5-0489/2002 - 2002/0221(CNS)) 
Before the vote:

Karlsson (PSE)
Mr President, as a consequence of our previous decision to reject the proposal for a directive, I believe that we should not vote on the following report because it is about cancelling the previous directives.

President.
As these two reports are closely linked I believe that we should follow the rapporteur's advice and refer this back to committee as well.
(Parliament agreed to the proposal)

Report (A5-0236/2003) by Luis Berenguer Fuster, on behalf of the Committee on Legal Affairs and the Internal Market, on the proposal for a Council regulation amending Regulation (EC) No 40/94 on the Community trade mark (COM(2002) 767 - C5-0009/2003 - 2002/0308(CNS)) 
Before the vote:

Berenguer Fuster (PSE)
Mr President, I do not know whether the procedure would be appropriate, but in Amendment No 3, relating to paragraph 5 of Article 8, there has been an error on presentation. If we take account of the justification for the amendment, which is aimed at increasing legal certainty and protection of holders of earlier trade marks or geographical indications, on drawing up the text, earlier trade marks have been mentioned on five occasions and on only one occasion are earlier Community geographical indications mentioned.
I would therefore like, if possible, to introduce an oral amendment now, to the effect that each time the text of this Amendment No 3 mentions an earlier trade mark, it is followed by 'or Community geographical indication', because that was the purpose of the amendment, but for some mysterious reason, caused by printing gremlins or I am not sure who, Mr President, it has not been included.

President.
We now continue with the vote.
Report (A5-0278/2003) by Dirk Sterckx, on behalf of the Committee on Regional Policy, Transport and Tourism, on improving safety at sea in response to the Prestige accident (2003/2066(INI)) 
Before the vote on Amendment No 11:

Sterckx (ELDR)
Mr President, Amendment No 11 concerns a temporary committee. It is an amendment which I submitted myself, because although the two main groups had submitted a proposal for a temporary committee, there was no agreement on the content. I am trying to keep out of a political discussion that is taking place in one of the Member States of the European Union. I have always tried to do so, and I am now trying to do so again. Hence this oral amendment, which I think should combine various proposals better. I will read it out in English as that is the language in which the amendment was drawn up.

President.
Are there any objections to that oral amendment?

Hatzidakis (PPE-DE).
Mr President, I should like to thank Mr Sterckx for his initiative and to say that I regret the stand being adopted by the socialists. Obviously, we shall return to vote on his initial amendment which, I am sorry to say, contradicts Article 193 of the Treaty and Rule 151 of our Rules of Procedure, because it basically makes provision for a covert committee of inquiry. Consequently, I think that we are voting for something which contradicts the Treaties and the Rules of Procedure.
(The President cut off the speaker)

President.
Mr Hatzidakis, that was not a point of order.
It is quite clear that more than 32 Members objected to the oral amendment. It is therefore not accepted.
Before the vote on Amendment No 3:

Sterckx (ELDR)
, rapporteur. (NL) Mr President, on the basis of previous information I had written that there was still 13 000 tonnes on board the wreck. Yesterday I spoke to the people who are trying to bring this oil up to the surface, and they told me that there was still 14 000 tonnes in the wreck. I would therefore like to amend these two figures.

Marchiani (UEN)
. (FR) Inserting new provisions on the legal position of political groups constitutes the umpteenth time that these groups have been recognised.
In principle, there is no reason why the statute of the political groups in the European Parliament needs to be enhanced any further, although one can condemn the desire that has been expressed in recent years to eliminate any form of national representation in the Chamber, which would only lead to a highly partisan form of representation.
Nevertheless, let us not go too far by making Parliament the seat of a future 'government of the parties'. The influence exerted by the major political groups in this Parliament is already very - or even too - large; it should not in future become a kind of monopoly, which would be inimical to pluralism.
We have recently seen disturbing abuses committed by certain groups that are in a dominant political position, mainly due to their federalist ideology. I am thinking here of the dissolution of the TDI Group, which was an extremely serious political act given that even Member States no longer ban political parties!
There should be no more shifts of this type. I am concerned, however, when I see that the proposed text gives further consideration to this idea, which threatens people's freedoms. Let us show some moderation!

Berthu (NI)
. (FR) Austria, using the right of initiative that Member States still have in the field of immigration policy, has just submitted a useful proposal: to draw up a list of European countries considered to be safe in terms of their respect for human rights in order to determine whether to allow them to examine applications for asylum lodged in a Member State by persons that have passed through their territory first. This measure appears to simplify matters, to be common sense, to match the need for closer cooperation between European countries in light of the influx of refugees of all sorts.
This Austrian initiative, which we supported, has not been fortunate enough to meet with the favour of the European Parliament which, in rejecting it, invoked various legal grounds, all of which are quite specious. One of the reasons given is that this text would anticipate a future, broader directive on asylum procedures.
The real reason is quite different. As we can see from the explanatory statement, the European Parliament is clinging to a narrow interpretation of the Geneva Convention, which was founded on the principle of 'non-refoulement'. This principle is absolute and without shades of meaning or conditions. It is this narrow interpretation that must be called into question if we genuinely want to address asylum-related issues.

Bordes, Cauquil and Laguiller (GUE/NGL)
. (FR) We have voted against this initiative of the Republic of Austria, which advocates a particularly restrictive application of the right of asylum.
As to the Schmidt report, we do not support its call to 'arrive at a solution to the issue of safe third States'. Indeed, we believe that it is not a question of drawing up a slightly longer list of States whose decision to grant the right of asylum would be acceptable to the European Union. The right of asylum must be unrestricted. We also reject any restrictive application with regard to the 'Geneva Convention and the principle of non-refoulement'.

Figueiredo (GUE/NGL)
. (PT) The Republic of Austria's initiative, motivated by a need to respond to 'a dramatic increase in asylum applicants' in that country, 'contrary to the European trend', fits into the logic of building 'Fortress Europe'.
The initiative aimed to produce a list of third countries which qualify as safe for the purpose of taking the responsibility for examining an application for asylum, on the assumption that the country responsible for studying an application was the country where the applicant entered the Union. Of the countries on the proposed list, Switzerland is the only non-EU Member State and non-Schengen country. It can therefore be deduced that Austria's immediate targets were the EU candidate countries with which it shares a border.
As the rapporteur points out, however, there is a fundamental principle at stake here, namely that the Geneva Convention allows any applicant for asylum to have his or her case individually examined. Even if a list of 'safe third states' could be established, therefore, an application for asylum could not be automatically rejected because of the provisions of the Geneva Convention.
Besides, in accordance with the principle of subsidiarity, a regulation would not be the right instrument to use in relation to such a vital aspect of the sovereignty of the Member States.

Krivine and Vachetta (GUE/NGL)
The reasons for rejecting the Austrian initiative are more fundamental than those relating to the rapporteur's recitals. Basically, the concept of 'safe third States' runs counter to the international obligations arising from the 1951 Geneva Convention. This is most striking in the case of gypsies fleeing the racism and discrimination that they suffer in countries such as Romania or Slovakia - States that the EU considers to be 'safe'.
As the rapporteur acknowledges: 'Even if a list of safe third states were to be established, an application for asylum cannot be automatically rejected, as this would override the Geneva Convention'. Declaring that a request for asylum is 'clearly unfounded' is already common practice. The list of 'safe States' will be used as a pretext for further encouraging a hasty examination and the systematic rejection of requests.
The idea of keeping refugees in their regions of origin breaches the principle of non-refoulement. This is refoulement by another name. In France, the Villepin law calls this 'internal asylum'! This means choosing refugee camps over welcoming refugees.
The Austrian initiative must be rejected on the grounds that it authorises attacks on the right of asylum in Europe and anticipates the way in which, in the context of drafting European legislation, the Member States intend to abandon any consideration of the right of asylum and of the Geneva Convention.

Ribeiro e Castro (UEN)
. (PT) I support the rapporteur's arguments, since I believe that the scope of the Austrian initiative is indeed limited. The rapporteur observes that this regulation would only apply to Switzerland, which is clearly insufficient justification for drawing up such a legal instrument. At the same time, the inflexible nature of the proposal makes no provision for mechanisms allowing the list of 'safe states' to be revised and countries added or removed. That might lead to the proposed system being paralysed ab initio, without any benefits flowing from it, either for those making asylum applications or for those implementing the law.
The rapporteur notes that underlying this Austrian proposal is the problem of a 'dramatic increase' in applications for asylum in that country, which is regrettable. Here, however, is where I part company with the rapporteur, since I have to say that I consider it normal and even positive for a Member State to try to exercise its rights and solve its specific problems even if, at times, this might breach the abstract principle of 'Community interest', which is very often elusive when it comes to security and justice.
I also support the rapporteur's contention that the concept of safe third European states should not be targeted by a separate regulation, but should rather be dealt with as part of the comprehensive approach established by the framework of the Directive on asylum policy.

Fatuzzo (PPE-DE).
I was at the Campione d'Italia casino, a distinguished casino which is well-known in Europe. At a table, a little set apart, the governors of the fifteen national banks of the European Union were playing cards, and with them was Mr Trichet, candidate and now elected President of the European Central Bank. Mr Trichet was very young, whilst the fifteen governors were elderly, not only did they have white hair, but they were genuinely weary: they were pensioners.
I asked myself then whether this vision that I had was not a warning sign. What is there for the national banks to do when there is a Central European Bank? What is there for the national governors to do? Would it not be good if they went and had a rest, if they retired?

Berthu (NI)
. (FR) We have voted against the appointment of Jean-Claude Trichet as president of the European Central Bank because during his hearing he expressed no desire for there to be any political reorientation given the semi-stagnation in which the heart of the Eurozone is currently plunged. Instead, he stressed that there is no recession in the strict sense of the word, which is true, and that the Eurozone's key interest rates are ' the lowest for fifty years', which is also true. His implicit message was that he could not, in his capacity of president of the ECB, do much more than that.
He is not completely wrong, moreover: the slowdown currently enveloping France and Germany probably cannot be corrected by the tools of traditional monetary policy, because this is the result partially of the single currency - a rigid framework applied in a uniform way to economies that are quite different.
In light of this situation, the room for manoeuvre available to the President of the ECB is perhaps limited. Is entrapping one of the very people responsible for inventing the Maastricht Treaty, however, not a fitting punishment for history to mete out?

Bordes, Cauquil and Laguiller (GUE/NGL)
. (FR) We have voted against 'the appointment of Jean-Claude Trichet as president of the European Central Bank' partly because of the institution but also because of the man himself.
The ECB is responsible, in the field of money and credit, for applying a policy which is entirely favourable to employers in the European Union and, consequently, entirely unfavourable to the working classes. We oppose the very purpose of this institution, whoever is in charge of it.
Nor, however, did we want to let the man himself off. Before being nominated for this position, Jean-Claude Trichet was the governor of the Banque de France. In this capacity, he is responsible for a 'restructuring' plan at this bank that has resulted in half of the branches being closed and the loss of over 2 000 jobs, in other words more than a quarter of the bank's staff. A man who is happy to carry out such jobs deserves no more support than the institution whose reins he is about to take over.

Figueiredo (GUE/NGL)
. (PT) Predictably, Mr Trichet, President-Elect of the European Central Bank (ECB), has reaffirmed and reinforced the EU's current economic 'triangle', based on price stability, the Stability Pact, and the 'Lisbon strategy', despite the increasingly obvious incompatibility of this 'triangle' with economic growth and employment.
In his answers to the questionnaire, Mr Trichet reaffirms that price stability is a prerequisite for growth, 'by limiting the rise in unit production costs' - in other words, through wage restraint, reductions in real wages and increases in productivity, but only for employers, in this case. Mr Trichet also mentions the consensus among EU governments on the 'Lisbon strategy', and the need to emphasise the approach based on structural reforms, by which he means liberalisation, increasing the flexibility of the labour market and gradually privatising pensions.
Finally, he reaffirms the Stability Pact's 3% threshold, claiming that no government has called for it to be altered and that the Commission has shown it to be essential. This is rather ironic, given that France is about to fail, for the third year in a row, to comply with that very requirement. Mr Trichet also supports amendments to the ECB's voting procedures, which fundamentally distance countries like Portugal from the financial decision-making process.
That is why we voted against this report.

Krivine and Vachetta (GUE/NGL)
. (FR) We have voted against the appointment of Jean-Claude Trichet as president of the European Central Bank, because for fifteen years he has embodied the doctrine known as 'competitive disinflation', which has inspired the neoliberal policies that have been implemented in our countries. It is under his influence that salaries were frozen in order to allow an increasing share of the wealth generated to be channelled into financial profit. This policy has stifled growth and stimulated the rise in mass unemployment. We do not, therefore, want to see this disastrous dogmatism transferred to the European level.
We are not making this an issue of personality, however: we would probably vote against any other candidate, because it is the concept of the European Central Bank itself that we dispute on two key points. An institution of this nature should not be given a needlessly rigid target of 2% for inflation, which blindly prioritises finance over employment. The ECB should also be placed under genuine democratic control that goes further than the caricature of democracy that consists, as it does today, of voting for full powers to be given to a man over whom we will henceforth have no control whatsoever.

Meijer (GUE/NGL)
. (NL) Today we have to choose a new president of the European Central Bank, but there is not really any choice at all. From the outset the intention was for the bank to be located in Germany with a Frenchman at the helm. As the Dutchman Wim Duisenberg had done the groundwork for the ECB, he was ultimately given the presidency for a short time. It was known when he was appointed that a compromise had been reached in which the eight-year term would be shared between Mr Duisenberg and Mr Trichet. Mr Trichet was thus assured of this post, albeit for only half the period, from the start. That threatened to go awry when it looked as if Mr Trichet was going to go to prison. It has now been suggested that he be given a further period of eight years. As an argument in favour of his appointment it is now being said that, unlike the government in his country, he will adhere strictly to the 3% ceiling for national budget deficits in the Stability Pact. That ceiling is turning into a recipe for disaster. Large Member States are not managing to achieve it; poor Member States will certainly not be able to. In the Netherlands, which is adhering to it, everything that is valuable is being cut back to nothing. Against this background I see no reason whatsoever to approve the candidature of Mr Trichet.

Pasqua (UEN)
. (FR) The appointment of the next president of the European Central Bank is an act of the utmost importance because, in addition to the personality of the candidate, it is also, and above all, on monetary policy that we should comment.
In the event, although I am clearly pleased that a Frenchman is soon to become president of the ECB, I cannot avoid the fact that Mr Trichet, for he is the person we are discussing, embodies a strict budgetary orthodoxy and demands that this be implemented. Mr Trichet put this quite bluntly during his hearing with the Committee on Economic and Monetary Affairs: come hell or high water, he intends to continue the approach he has inherited from Mr Duisenberg, in other words, a form of monetarism that is as rigid as it is inappropriate.
This decision should not be endorsed, however. At a time when many Member States are unable to comply with a Stability Pact, the limitations of which appear, in the current situation, to be completely out of step with the harsh realities of the economic climate, I cannot sanction the appointment of a candidate who is clearly afflicted by the same disease: autism.

Purvis (PPE-DE)
. I voted in favour of confirming Mr Trichet as President of the European Central Bank because it is in my country's and my constituents' interest that the ECB be well managed and that the euro succeed as a currency.
The euro zone is by far the most important destination for Scottish exports and source of our imports and tourists.
I am adequately persuaded by Mr Trichet's reputation, and by the way he responded to the questions in the Committee on Economic and Monetary Affairs, that he will maintain the stability of the euro. He will also maintain the requisite pressure on the Member States to pursue prudent financial policies and to reform their social structures in order to foster economic growth and development. This is what matters to Scotland.

Figueiredo (GUE/NGL)
. (PT) Unemployment is one of the main problems facing the candidate countries. In six of the 12 candidate countries, unemployment exceeds 10%, leading to social exclusion and poverty. Economic and monetary policies promoting economic growth and employment are needed, therefore, and should be driven by the public and cooperative sectors.
This unemployment can be blamed on the rapid destruction of planned economies, linked to waves of privatisation and the complete opening-up of markets, which have caused severe disruption not only of economic activity but also of public services themselves, in particular in the field of social security.
This very transformation is confirmed in the report's explanatory statement, where it is said to have 'further increased the proportion of the population who are threatened with poverty' and caused the rise of 'employment on insecure terms, e.g. on a temporary ? basis'. This Commission communication, then, aims to transpose the European Employment Strategy, in its 'post-Lisbon strategy' form, to the candidate countries.
The latter do not appear to require greater occupational flexibility and mobility. Once again, the solution lies in a thorough revision of the EU's entrenched neoliberal economic and monetary policies. The EU's efforts to achieve economic and social cohesion should be redoubled.

Ribeiro e Castro (UEN)
. (PT) I voted in favour of this report on the Commission's communication on the progress made by the candidate countries in relation to their respective employment policies. Its aim is to ensure that the candidate countries define employment policies which prepare them for EU membership.
As we know, employment, employment policies and their coordination constitute one of the main challenges facing the EU today. Above all, it is one of the demands of the people of Europe. The Lisbon strategy, indeed, defined the challenge of creating more and better jobs as essential to promoting truly humane progress, concerned not only with questions of economic growth, but also with the individual fulfilment of its citizens.
Among the central messages of the European Commission's communication, I would emphasise those which lay particular emphasis on the strategic significance of education and training, from basic level up to the increasingly important lifelong learning. Lastly, I would also like to mention the importance attached to special programmes on equal treatment for disabled people and provisions to promote equal opportunities. These measures make it possible to reconcile family life with a professional career.

Fatuzzo (PPE-DE).
Mr President, I invited the supporters, the fans, and the enthusiasts of my explanations of vote for dinner. There were more than 300 of them. In the kitchen, Mr Fatuzzo was preparing the meal: spaghetti with garlic, olive oil and chilli. What a wonderful aroma there was, Mr President! Right at that moment, however, the gas ran out and there could be no more cooking. That was a bit of a problem, and I wondered what would happen if there was no gas across the European Union. The Mombauer report is therefore welcome and I voted in favour of it for this very reason. Who knows how Europe would be affected, when it took so little to spoil a meal!

Figueiredo (GUE/NGL)
. (PT) The Commission's proposal aims to implement natural gas supply measures, in the wake of recent crises or impending crises, particularly as a result of the United States' attacks on countries like Iraq. There are so many relevant issues here that it is impossible to deal with all of them in this speech. The Commission even attempts to appropriate the right to intervene in the workings of Member States, an ambition quashed by Parliament, thus ensuring that the Member States retain their prerogatives in this area and in relation to their international obligations.
As researchers suggest, the substance of these documents is not explicit but implied, the point being that world oil production has more or less peaked, or even passed its peak, and that although natural gas production may indeed continue to rise, it will peak in about 25 years at best. Both face inevitable decline.
In view of these facts, the establishment of a European Observation System for supply of hydrocarbons, charged with solving this key problem, could make a contribution, in particular, to our knowledge of the state of world stocks and to essential research into other energy sources, such as renewable ones.

Ribeiro e Castro (UEN)
. (PT) As in the case of the concerns addressed by the Karlsson reports, which deal with a different set of substances, there can be no doubt that it would also be beneficial to begin aligning measures on securing natural gas supplies. The enforced harmonisation proposed by the European Commission is an altogether different matter. This harmonisation finds its highest expression in a power which the Commission would like to claim for itself: 'shall closely monitor the degree of new gas supply import contracts from non-EU countries' (Article 6(1) of the proposal).
Regrettably, the Commission's proposal is based on the assumption that, in a competitive market, security of supply cannot be entrusted to the sector responsible, an argument it takes too far. For my part, I agree with the rapporteur that market operators - businesses and Member States, in other words - are perfectly capable of safeguarding security of supply. Recent studies confirm this.
For that reason, I was forced to abstain.
I feel that the European Commission should respect the legal nature of the proposed legislation - a directive - and, therefore, suggest general minimum safeguards and precautions, which could then be adopted by the Member States and operators in this sector, with enough flexibility to accommodate the specific circumstances of each country, and with the political freedom to enact concrete legislation in that framework.

Fatuzzo (PPE-DE).
I was in my car - a Renault Scenic - taking a pleasure trip in the company of Miss Italy, that is the most beautiful woman in Italy, Miss France, that is the most beautiful woman in France, and Miss Spain, the most beautiful woman in Spain. We were going to Madrid, where I took part recently in a meeting of the Group of the European People's Party (Christian Democrats) and European Democrats, for a night on the town alla spagnola. However, Mr President, at the height of the evening, we ran out of petrol. Again, I thought: 'a bit of a problem this lack of petrol and petroleum. What would have happened to the European Union if we had not thought - with the Karlsson report - of securing petroleum supply? There would have been a real problem!' As a result, I voted for the motion.

Figueiredo (GUE/NGL)
. (PT) As in the Mombaur report on natural gas supply, the substance of this report too may be found not in its explicit concerns but in the underlying ones, namely in the fact that world petroleum production has more or less reached or even already passed its peak, and natural gas production will go the same way in time.
The report suggests various measures, which amount to a set of palliative steps. This approach does not get to the heart of the matter or tackle the larger problem, which is our falling capacity to produce petroleum.
While the European Parliament's proposed Amendments Nos 2 and 5 point to the need to reduce the demand for petroleum, mentioning renewable energy sources, researchers claim that what is actually needed is a reduction in supply over time.
Various researchers claim that there is a need to bring demand into line with supply capacity, to restrain demand according to the rate at which the resource is being exhausted, thereby avoiding any imbalance. Saying that demand 'must' be diversified and reduced is not enough. We need to find an objective basis to substantiate that reduction. A target for reducing consumption, something similar to Kyoto - not made into a mystery or a big deal - is a most essential and pressing requirement.

Ribeiro e Castro (UEN)
. (PT) I voted in favour of the proposal for an amendment whose approval by a majority meant that the European Commission's proposal was rejected. This really was the best solution, and will spare us a great deal of inconvenience and conflict. It is not so much that I opposed the overall aims set out in the proposal, which do in fact respond to serious current concerns. The problem, however, is that the European Commission was using those concerns to mask an attempt almost to assert its right to interfere directly in managing the Member States' energy resources and to nurture a desire to affect the market on its own account. True, the rapporteur nevertheless attempted to introduce some 'damage limitation': he proposed more realistic transition periods (2007), he left it to the Member States to decide what percentage of stocks should be held by private or public bodies, and he removed the right to intervene if prices rise significantly (that right will apply only during supply crises). After everything that happened in the specialist Parliamentary committee, however, and after the various proposed amendments were tabled, stiffening opposition to the Commission's ambitions still further, this was a predictable outcome, and a fortunate one, particularly if the principle of subsidiarity is to be respected.

Vlasto (PPE-DE)
. (FR) I have tabled an amendment calling for the European Commission's proposal concerning the alignment of measures with regard to security of supply for petroleum products to be rejected.
I do not believe that this proposal would provide an appropriate or effective response in the event of an oil crisis. Increasing the level of minimum stocks from 90 to 120 days would be an expensive measure to put in place in many States, due to the current inadequacy of stock infrastructures in the Union. Furthermore, increasing the level of these stocks would not make a difference significant enough to give the Union a greater influence over the oil markets than the producer countries.
Lastly, setting up public oil stock bodies would impose substantial costs on the Member States whereas the European Commission would increase its intervention capacity for managing these stocks. Such an approach, which deprives States of their powers in the field of managing energy supply is, therefore, unacceptable. In rejecting this text, we have rejected an idea that wrongly appeared to be a good one, based on solutions that were both simplistic and ineffectual.

Bordes, Cauquil and Laguiller (GUE/NGL)
. (FR) Whatever nationalists of all hues might think, it makes more sense to establish energy reserves at the level of the entire Union than at the level of each small- and medium-sized Member State that comprises it.
So why do we need to build up stocks? According to the authors of the report themselves, it is not to protect against any type of natural disaster that would cut off supply routes but 'more importantly, the economic risks due to market instability'. The Union must, therefore, protect itself against the consequences of the economic system on which its very existence is founded.
We will consequently take no part in this debate which is for those who worship the market economy. We do not worship at that altar.
Ribeiro e Castro (UEN)
. (PT) I am glad that this report met the fate it did, after the European Commission proposal addressed by the other Karlsson report was rejected. I hope that the decision in plenary to refer the matter back to the specialist Parliamentary committee will allow for improvements to the text of the proposal for a directive. It will need to become more realistic if this legislative process is to continue. It is particularly important to consider the grave economic and financial repercussions of increasing the level of minimum stocks from 90 to 120 days, which would entail intolerable or unjustifiable management costs for various Member States. The best strategy might perhaps be to leave this matter as it stands today and concentrate above all on promoting real mechanisms for linking stocks together, for encouraging a community of interest and connections between European energy networks.

Figueiredo (GUE/NGL)
. (PT) This consultation procedure, which aims to amend Regulation (EC) No 40/94 on the Community trade mark, may seem unimportant. That, however, is not the case.
There is in fact a relationship here between Community trade marks and designations of origin or geographical indications, which brings to mind the case of Limiano cheese, from Ponte de Lima, and even the question of wines.
That is why Amendments Nos 1 and 2 in this report are dangerous. Although he states that a commercial trade mark may in no event be at the same time a geographical indication or designation of origin, the rapporteur also says that the indication or designation may be included in the trademark when the products covered have the right to bear it. The problem with this is that it may lead to trade protection for trade marks belonging to a titular holder, usually a company, thus threatening the designation of origin, as in the case of Limiano cheese. That is why we abstained from the vote.

Fatuzzo (PPE-DE).
Excuse me, Mr President, but I feel unwell here because of the shouting and the noise from the very large number of Members present, who are always attentive but this time chattering rather.
Well, I was on an aeroplane from Brussels going I do not know where. I saw many passengers in first class being served copious, tasty, delicious repasts: champagne, beautiful hostesses and stewards serving them, armchairs, comfort ? A dream, Mr President. I approached them and asked them who they were to be travelling in such luxury on the plane. 'Ah' was the response, 'we are illegal immigrants and we are on this plane because we are being sent back to where we came from. We are treated so well on the aeroplane, though, we like it so much, that we keep coming back and we keep being sent back to our country of origin.'
It was a dream, Mr President, because things are much less refined in reality; but it is good to take care of the comfort of illegal immigrants too when they are being returned by air to their state of origin.

Berthu (NI)
. (FR) We have supported Mr Kirkhope's report on the German initiative to increase cooperation between Member States when measures need to be adopted on the removal, by air, of third country nationals residing illegally in the Union. These are useful, but relatively technical measures that, Mr Kirkhope, a former Secretary of State for immigration under the UK's last Conservative government, has nevertheless found it extremely difficult to admit to the Commission and the European Parliament.
We have heard, from the benches on the left, unreasonable speeches denouncing the 'deportations', 'inhumane methods' and 'mass expulsions'. This is a view that is out of step with the reality of the situation, because these removal measures have a clear basis in the law. In particular, these are not mass expulsions (expulsion of an entire social group without taking individuals into account). These are individual expulsions, overseen by the legal system, of persons in an illegal situation.
On this subject, the minority opinion of Mr Krivine, Mrs Boumediene-Thiery and others, who see these expulsions as a 'violation of the rights of migrants', and who clearly wish to open Europe's borders to immigrants from the entire world, is quite enlightening.

Bordes, Cauquil and Laguiller (GUE/NGL)
. (FR) We share the minority opinion of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs condemning this report, which proposes to organise more effectively the deportation mechanisms applicable to migrants 'residing illegally'.
Parliament is asked to make the scope of the original initiative even harsher by removing a passage that rejects transit for the purpose of expulsion in the event that the expelled migrant 'faces the threat of inhumane or humiliating treatment, torture or death'.
By voting for this report, the European Parliament claims for itself and endorses the policy of most national States seeking to expel migrants for whom the local authorities refuse to grant the necessary papers.
We, on the other hand, call for a complete halt to deportations, the immediate release of all persons being detained pending deportation and for all those in Europe without residence permits to be given the permanent right to remain.

Figueiredo (GUE/NGL)
. (PT) This initiative by the Federal Republic of Germany with a view to adopting a Directive on assistance in cases of transit for the purposes of removal by air - which is to say expulsion by air of people accused of being 'illegal immigrants' - is one of a set of initiatives and measures whose aim is to build 'Fortress Europe'.
As the group of honourable Members who put their names to the 'Minority Opinion' appended to the report point out, the real objective of this initiative is to make a cynical attempt to improve and render more effective the machinery for expelling people accused of 'illegal' residence, with as little resistance as possible.
An amendment seeking to safeguard the rights described in the European Convention for the Protection of Human Rights and Fundamental Freedoms has been tabled, by inserting a clause. This amendment does not change the fact that the status quo will now de facto - if not de jure - violate the rights of men and women migrating in search of a better life.
It is impossible, and even intolerable in human terms, to address the tragic situation of thousands and thousands of men and women by applying repressive measures designed to increase security.

Ribeiro e Castro (UEN)
. (PT) I voted in favour of this report. Assistance in cases of transit for the purposes of removal by air is a sufficiently important issue to justify laying down a code of conduct and clear provisions on the rights and responsibilities of transit states, as well as of the escorts accompanying third-country nationals during expulsion. The state of 'legal limbo' in which both states and escorts accompanying persons in the process of being expelled found themselves was of no help in defining their roles and responsibilities.
I cannot, however, support minority arguments which irresponsibly advocate lifting all border restrictions.
If I may, moreover, refer ironically to one of the rapporteur's proposals, I do not consider it 'inappropriate' to refer to third-country nationals as 'persons', because that is what we all actually are, regardless of our nationality. That is exactly why it is justifiable to insert clauses forbidding transit when there is a risk of any third-country national suffering inhumane or humiliating treatment, torture or the death penalty, or when his or her life or freedom is threatened on grounds of race, religion, nationality, social group or political conviction.

Stirbois (NI)
. (FR) Instead of being concerned with security, the text now before us seeks to regulate the conditions of transit for persons residing illegally within Union territory and subject to an expulsion order.
Already rejected in April and referred back to committee, this proposal for a directive has clearly caused an outcry amongst the far left, the greens and the third world activists for one simple reason: it is immoral and inhumane to expel illegally-residing foreigners to their country of origin! Consequently, these individuals do not hesitate, in the minority opinion appended to Mr Kirkhope's report, to express their horror and denounce fortress Europe and even the deportation mechanisms illustrating the cynicism of a racist policy that places state interests above people's interests in a better life.
This might appear to be funny but the fact is that we are sick and tired of hearing endless repetitions of all these speeches stuffed with human rights diatribes, these fine sentiments which mean that throughout Europe today, we are seeing the same things, such as uncontrolled immigration and States that are swamped and no longer know what to do with their illegal immigrants and whose only solution is to open temporary accommodation centres, which are temporary in name only.
(Explanation of vote abbreviated in accordance with Rule 137(1) of the Rules of Procedure)

Fatuzzo (PPE-DE).
Once again, whilst I was taking part in a programme on a major Italian commercial television channel and was answering the questions of pensioners who were asking me for information on how to claim their pensions, being so used to giving such replies, I fell asleep whilst we were on air. I saw again Fatuzzo the seafarer who, aged 20, was sailing a magnificent cruise ship from New York to the Bahamas and back - the good ship Oceanic - flying a European flag: there were dances, elegant clothes, money being spent everywhere. In short, a trip on a luxury ship, and - unlike the Titanic - in complete safety.
Mr Sterckx has done a good job with this report, but I voted against it because, despite its good intentions, it does not succeed in ensuring this safety. I would also like to ask when we will have the security of always being able to draw our pensions?

Goodwill (PPE-DE).
Mr President, earlier this year I visited Galicia to see the environmental catastrophe that was the wreck of the Prestige. The only word to describe it is devastation. In particular it was very distressing to see the seabirds; the endangered Galician guillemot is even more seriously threatened now because of this.
It is true that mistakes were made in the early stages and a lot of these mistakes were due to confusion between the regional and national governments. I am concerned that this inquiry will not be constructive but will be used by the Left in Spain as a stick to beat the government.
We already know the facts, we do not need a post-mortem. We need rapid action to ban rust-buckets like the Prestige and we also need to defend sensitive coastlines, for example the Beverley and Holderness coastline in my region. That is the reason we voted against this report.

Alavanos (GUE/NGL)
. (EL) I voted in favour of the motion for a resolution, which makes provision for a series of important measures for safety at sea, such as:
the creation of refuges for ships in distress,
the creation of a European coastguard for strict monitoring, compliance with rules and prosecution of persons responsible,
frequent surveys of high-risk ships,
the creation of a special anti-pollution fleet,
the creation of special zones for ecologically sensitive areas.

Darras (PSE)
. (FR) The sinking of the Prestige, which caused a large-scale environmental and economic disaster, is a cruel reminder of how crucial it is to attach the utmost priority to maritime safety at both European and world level.
We must rapidly adopt an entire range of measures designed to prevent future accidents similar to that of the Prestige. Heading the list of these measures are implementing the Community and international legislation in force and monitoring compliance with these regulations. The measures set out in the two Erika packages must be implemented without delay.
These agreements, which have already been concluded, can be built on and they will be built on more effectively if those working in the fishing and fish farming industries are involved in the negotiations.
This disaster is not, therefore, as some would have us believe, 'just' a Spanish matter.
I believe it is crucial to set up a temporary committee. This is indeed crucial if we are to prevent similar disasters from occurring again, to find out the causes and the consequences of what has happened as objectively as possible: what is at stake is Parliament's credibility and the dynamic role that Europe must play in the field of maritime safety.

Esclopé (EDD)
. (FR) I have voted for Mr Sterckx's report, which provides a detailed overview of the information currently available on the Prestige accident and whose proposals have proven to be appropriate.
Member States must indeed transpose the Erika legislation into their national legal systems as quickly as possible and ensure that it is complied with. If these rules had entered into force sooner, the sinking of the Prestige could have been avoided. By the same token, international legislation in force must be strictly observed and monitored.
On the basis of the 'polluter pays' principle, I support the rapporteur's idea of criminal liability applying to all actors involved, including the political decision-makers, in maritime disasters.
It is of the utmost importance that all Member States ratify the protocol on additional International Oil Pollution Compensation Funds (IOPC) totalling EUR one billion for the compensation of victims from 2004 onwards.
I am, however, unhappy that the compensation fund for victims of oil spills in European waters (COPE) is blocked in Council, when it would have enabled the victims of the Prestige and perhaps of other disasters to be compensated quickly.
A high level of compensation must be assured for the victims of maritime disasters, this must be provided by means of the IOPC fund, with the COPE fund being able to provide a more flexible method of European participation.

Figueiredo (GUE/NGL)
. (PT) The Parliamentary committee incorporated some of our proposals into the report. They were:
the need for Member States to have at their disposal the appropriate means for carrying out checks, which should be achieved by increasing the number of inspectors and improving their working conditions and methods;
the importance of qualified seafarers, in order to ensure that the required preventive maintenance of vessels is carried out;
the existence, aboard vessels carrying dangerous goods, of means for instantly combating small-scale pollution;
providing safe havens with the appropriate means for implementing the relevant emergency plans.
Some important proposals were rejected, however, including the following:
tabling a proposal on the social, living and working conditions of seafarers. These conditions are to be respected aboard ship;
delegating the authority to award qualifications to companies which have the technical expertise needed for the job, and which are independent of shipowners;
setting up a European Parliament committee of inquiry.
The votes in plenary, however, went in favour of setting up a temporary committee, which shows that our stance did eventually prevail, in a sense. That is why we voted in favour of the report.

Grossetête (PPE-DE)
. (FR) I have voted in favour of this report.
There is absolutely no question here of one Member State in particular being targeted; what we are trying to do is to become aware of the loopholes that exist in the implementation of the Erika I and Erika II packages, to discover the reasons for the delays in the texts' transposition and to resolve them.
There is still a considerable risk of seeing 'floating dustbins' - genuine weapons of mass destruction - continuing to pollute our coastlines, destroy our beaches, attack our fisheries resources, massacre birds and bring our economies to a standstill. As we know, such destruction cannot be repaired simply by throwing subsidies at it.
The European Union does, however, have a legislative arsenal at its disposal in the field of maritime safety. These texts must be transposed, harmonised and fully implemented. There has been too much shilly-shallying. Today, no State with a coastline should fail to respond to this call, and this is why I have voted the way I have.
Lastly, I wish to make an observation on the possible establishment of a European coastguard service. I am in favour of such a development.

Krivine and Vachetta (GUE/NGL)
 - (FR) Let us hope that the provisions recommended by this report do not suffer the same fate as the Erika and the Prestige. Since 1999, there have been countless reports on safety at sea. The Erika packages only entered partially into force on 23 July 2003. It would have been heartening to see the European Union being as diligent in its fight against the 'sea thugs' as in its fight against terrorism. Now, the oil from the Prestige continues each day to pollute the whole of the Atlantic coast up to the Channel. Moreover, there are still more than 37 500 tonnes of heating oil in the wreck.
We have supported the principle of a parliamentary committee of inquiry to shed as much light as possible on the ways in which responsibility for this disaster is to be apportioned. Above and beyond this, however, we have to outlaw the liberal logic that, thanks to the system of flags of convenience, permits the use of dustbin vessels and the exploitation of sailors outside the framework of any social legislation. We are voting in favour of this report because it strengthens the safety rules by demanding an increase in the number of ships inspected, the training of crews and the unlimited liability, in the event of disaster, of the oil companies and of the whole 'flagships of convenience' chain. What is missing, however, is a system of monitoring and penalties that gives effective expression to everything for which we are voting in this House.

Marques (PPE-DE)
. (PT) The sinking of the Prestige oil tanker off the coast of Galicia on 19 November 2002 caused a huge ecological and economic disaster, to which, I am very glad to say, Parliament devoted its full attention from the beginning. A Parliamentary delegation, of which I was a member, travelled to Galicia in March of this year and observed the scale of the disaster at first hand.
I therefore share the concerns expressed by the Commission and by the Members of this House about maritime safety. I appeal to all parties to make firm commitments in the vital area of maritime safety, since the quality and safety of vessels sailing in European waters, and of European vessels the world over, depends on them, as does protecting the coasts and citizens of Europe from further disasters.
Safety is down to us all and demands all our commitment! I am speaking, moreover, as Member for a region where many of the shipping lanes running between the Americas and Europe come together, and which is thus extremely vulnerable to this type of disaster. The island of Porto Santo has already suffered the terrible consequences of such accidents. Let us hope that these measures will mean that my region or any other will experience them NEVER AGAIN.

Meijer (GUE/NGL)
. (NL) The world pays the price for keeping maritime transport artificially cheap. Ships from rich countries sail under the flags of poor countries, with minimum taxation and minimum protection for the crews, who are paid at developing-world levels. The ships are inspected on a commercial basis and by agencies who are in competition with one another and who fear that they will lose their customers if they are too strict. The coastal states try to limit the problem of cargo loss and shipping disasters by keeping transport in which they themselves have no interest as far as possible away from their coast. In the case of the wreck of the tanker Prestige off the coast of Galicia, the disaster was made worse by the Spanish authorities chasing the ship away from the coast instead of quickly accommodating it in a safe haven. Now, six months after the disaster, there is still oil coming up from the sunken wreck. The Spanish Government is persisting in its mismanagement and the rapporteur has largely chosen to ignore this. I support his proposals to promote safe havens, make guidance by pilots compulsory, encourage investigation, refrain from criminalising seafarers, make the polluter pay compensation and give money for cleaning up oil-covered animals. They remain inadequate, however, as long as companies chase after maximum profits and countries try to keep costs to a minimum.

Ribeiro e Castro (UEN)
. (PT) I supported this report and cast my final vote in its favour, in line with the speech I made during the debate.
It is deplorable that the socialists and other left-wing Members should have rejected the proposal for an oral amendment, tabled by the rapporteur himself just before the vote on a sensitive amendment - Amendment No 11, on the setting up of a temporary committee - which might have produced an even broader consensus on the final wording of this excellent and comprehensive report. Sadly, the European left is still more interested in petty political chicanery, serving the interests of sectarian squabbles within Spain, than in serving the common interest effectively. Developments such as the adoption of Amendment No 23, whose partisan language is unmistakeable, prove as much.
Despite all of this, I voted in favour of the report, and of Amendment No 11 in the rapporteur's original formulation.
The coasts of Portugal are always vulnerable in these situations. This is true both of the mainland (which was nearly struck by the Prestige disaster) and of Madeira and the Azores. Clearly, we must always be in the vanguard in matters of maritime security, therefore, and in making progress and substantial demands in this field.
Congratulations once again to the rapporteur on his excellent work.

Ries (ELDR)
 - (FR) Marine safety must be reinforced in Europe. It must even become a priority. Otherwise, there is the risk of seeing, in the near future, all our seas and oceans polluted, as the Atlantic coast is by the successive losses of the Erika and Prestige oil tankers.
That is why the Member States must, as soon as possible, withdraw from service the single-hulled tankers that are often the cause of disasters, but also make port inspections more stringent and impose stricter rules upon the companies that issue certificates of seaworthiness. In short, they must apply the Erika package of December 1999 indefinitely.
That is why, too, I have voted in favour of the excellent report by my colleague, Mr Sterckx. It includes a whole series of innovative measures to prevent oil slicks and effectively combat them: a European coastguard service, a victim compensation fund and ports of refuge made available for welcoming ships 'in distress'.
I have also voted in favour of setting up a temporary parliamentary commission to cast as much light as possible upon the Prestige disaster, to discover who was responsible and to take action for the future. In this way, it will, once and for all, be the polluter who genuinely pays, as it is in the United States with its Oil Pollution Act.

Souchet (NI)
 - (FR) I am delighted by the decision just taken by our Assembly to create, as I myself had requested, a temporary commission of the European Parliament devoted to safety at sea. This decision shows how important it is for us that this issue - which is of profound concern to our fellow citizens, particularly those on the Atlantic coast who have been doubly hit by the last two oil slicks - should be handled, at the appropriate levels, with all the rigour and consistency required, in order to prevent the occurrence of other, similar disasters.
The mandate of this temporary commission would have been perfectly clear and would have appeared devoid of petty political ulterior motives if the oral amendment presented by the rapporteur had not been the subject of genuine obstruction by the socialist MEPs. On a subject as important as this, petty manoeuvring should not be acceptable.
Whatever the case, it is, in actual fact, following the double disaster of the Erika and the Prestige that it appears necessary to take stock of the relevance of the measures adopted, of the initiatives taken by the Member States and regions affected by the oil slicks, of the issues of liability and compensation and, above all, of the persistent gaps in international law concerning ships in transit outside territorial waters.

Vairinhos (PSE)
. (PT) Water quality in seas and rivers throughout Europe and all over the world is crucial to people's welfare.
Political decision-making should not be faltering, fragile or equivocal.
The Council, the Commission and Parliament should assume a united, clear and unbending stance to ensure that cases like the Prestige disaster do not happen again. Never again!
We cannot and must not underestimate the value of strengthening vessels' hulls, monitoring their routes (shipping lanes), a high degree of professionalism among their crews, moving shipping lanes further out to sea, and of using corridors correctly.

Vlasto (PPE-DE)
 - (FR) I voted in favour of the creation of a temporary commission, for it is evident that we must maintain absolute vigilance on the subject of safety at sea in Europe, so that the measures we adopt in this House might be fully and effectively applied in the Member States. That must be the purpose of a temporary commission, which will only be of use if it endeavours to improve Community legislation and to check that it is being applied.
The Prestige disaster hit our coasts and our populations hard. A temporary commission will certainly have lessons to draw from this tragedy, but certainly not lessons to give to any government. This petty political objective, which has been pursued by a number of left-wing MEPs, has unfortunately sullied the conclusions of Mr Sterckx's report.
I regret this all the more, given that, following the loss of the Erika, our Parliament had marked itself out by its non-partisan work. Out of respect for the victims, in Spain and France, of the oil slick from the Prestige, I hope that we shall fittingly pursue our work in the interests of safety at sea.

President.
That concludes the explanations of vote.

Wieland (PPE-DE).
Mr President, I would like to register my formal protest. I had to be in my constituency early this morning, which is not far away - around 150 km - and would have arrived in time for the vote had it not been for the demonstrations that were being held in front of the building. This is why I did not arrive here until half way through the Sterckx report and missed most of the roll-call votes. I would ask you formally, Mr President, to discuss in the Bureau how it can be ensured that Members are not prevented from attending the vote. In terms of my journey time, I should have arrived punctually, but this was impossible due to the demonstrations blocking access to the building. Most parliaments in the European Union have laws defining a zone around parliament where demonstrations are prohibited. Unfortunately, we do not have anything of the kind here, and apart from the matter of my expenses, the Bureau should give serious thought to this issue and how we can ensure that Members are not prevented from attending votes. I know that in Westminster, which you know well, it is an offence to prevent a Member from voting. I have been prevented from taking part in at least five roll-call votes today, and I want this to be noted specifically.

President.
I will certainly make sure that your complaint appears in the Minutes and is raised in the Bureau. I will point out to the services that you were present, but not voting, during the vote on the Sterckx report.
(The sitting was suspended at 1.10 p.m. and resumed at 3 p.m.)

President.
Mr Staes has the floor for a point of order.

Staes (Verts/ALE).
Mr President, we were all a little hasty because we did not want to delay the forthcoming debate on the submission of the budget needlessly. I have a genuine procedural motion. I am making a point of order as I think that the Conference of Presidents and the President of this Parliament are violating the Rules of Procedure, in particular Article 3 of Annex XIII.
Yesterday, the Commission President, Mr Prodi, sent the President of this Parliament, Mr Cox, a letter setting out how the members of the Committee on Budgetary Control and the members of the Conference of Presidents should debate the documents on the current investigation into Eurostat. Mr Prodi drew up a form for this purpose in accordance with Annex 3, Article 3.2, Line 2. With one exception, that is the least strict rule, in accordance with which we will be looking at the matter behind closed doors tomorrow evening. According to the agreement between Parliament and the Commission, however, the President of Parliament and the President of the Commission have to negotiate on this. I would therefore like to ask Mr Cox and the Conference of Presidents to argue for a more favourable regulation.
My second comment is that the meeting between the Conference of Presidents, the members of the Committee on Budgetary Control and the Commission President, Mr Prodi, is to take place behind closed doors next Thursday. All the people from the press in the room downstairs tell me, however, that Mr Prodi's spokesman said that if Parliament wants this meeting to take place in public, it can be. I think that it is befitting for our dignity and is also in our interest to ask most emphatically that this meeting be held in public. I think that all citizens of Europe are entitled to this and that it would be counterproductive if it were not to happen. I would therefore like to ask you, Mr President, to put these two questions to Mr Cox very emphatically. I will be extremely grateful to you for doing so.

President.
Mr Staes, I take note and naturally your comments will be communicated to President Cox, but I would remind you that that procedure is not a decision by Mr Prodi, but a decision by the Conference of Presidents of Political Groups, including yours, on the procedure for dealing with the issue. Your comments will therefore be passed on but please be aware what the basis for it has been. No, thank you, I will not enter into debates.
Mr Parish has the floor for a point of order.

Parish (PPE-DE).
Mr President, on a point of order, I am sure you will be aware of the recent announcement by the UK Electoral Commission that the people of Gibraltar should vote in the South-West of the United Kingdom at the next European Elections, following a decision by the European Court. Will you join with me in welcoming an end to the historic wrong that has denied the people of Gibraltar a voice in Europe? I should like to ask you to write, on behalf of this Parliament, to Mr Peter Caruana, the First Minister of Gibraltar, offering his citizens a warm welcome and congratulating them on their hard-fought campaign to secure their rightful democratic representation in Europe.

President.
Mr Parish, I take good note and I will be very happy when the citizens of Gibraltar can vote for the Westminster Parliament first.

President.
The next item is the presentation by Council of the draft general budget for 2004.
Mr Magri, President-in-Office of the Council, will take the floor first.

Magri
Mr President, ladies and gentlemen, it is a great honour and privilege for me to present, on behalf of the Presidency of the Council, the draft budget of the European Communities for the year 2004, as established by the Council on 18 July 2003.
The budget for the year 2004 is of historic significance, first and foremost because it takes into account the enlargement of the European Union to 25 States next May. The preparation of the institutions for enlargement started with the current budget. At the same time, this is the first budget to be established according to the new Activity-Based Budgeting presentation.
The draft budget that I am going to present to you incorporates a number of items that were discussed at length during the traditional conciliation meeting last July. I am sure that cooperation in budgetary matters, as set out by the Interinstitutional Agreement of 6 May 1999, initiated with trialogues and the July conciliation meeting, will continue for the rest of the year, and that it will allow the two arms of the budgetary authority, with the assistance of the Commission, to adopt a budget for 2004 which is satisfactory in all respects by the end of this budgetary procedure.
The Council used the preliminary draft budget of the European Communities submitted by the Commission on 30 April as the basis for establishing the draft budget. The preliminary draft budget contained figures for the 25-Member State Union but, for purely legal reasons, the Council adopted a draft budget for 2004 for the 15-Member State Union, while also agreeing on a position for the 25-Member State Union with a view to achieving a political agreement with the European Parliament by the end of the budgetary procedure. The figures concerning the draft budget established by the Council that I will mention today thus relate to the 15-Member State Union. The transition to a budget for the 25-Member State Union will then be made during the first part of 2004 by means of a specific amending budget.
The Council established a draft budget for 2004 that includes commitment appropriations for a total of EUR 100.066 billion. This represents an increase of 0.4% over the 2003 budget. It should be noted that this is the first time that the draft budget has exceeded the EUR 100 billion mark in commitments. It includes payment appropriations for a total of EUR 95.034 billion. This represents a decrease of 2.54% on the 2003 figure.
The total payment appropriations provided for in the draft budget amount to 0.98% of Community Gross National Income.
The draft budget for 2004 established by the Council takes into due consideration the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure. Moreover, it is fully in line with the Council's conclusions on the budget guidelines for 2004 adopted in March 2003. Lastly, it takes into account the conclusions of the conciliation meeting of 16 July 2003 between the European Parliament and the Council, with the participation of the European Commission.
In particular, we endeavoured to comply with the annual expenditure ceilings set by the Financial Perspective for 2002-2006, to leave, where possible, adequate margins below the ceiling for the various headings, with the exception of headings 2 and 7, and, lastly, to provide sufficient funding for the European Union's various priorities.
Concerning more specific points, the Council made some changes to the nomenclature proposed by the Commission in the preliminary draft budget and, as in the past, rejected the inclusion of the European Development Fund in the general budget. Generally speaking, it followed the classification proposed by the Commission in its preliminary draft budget, while emphasising that all expenditure concerning pensions, the common agricultural policy, veterinary and plant health, and international fisheries agreements constitute compulsory expenditure pursuant to the Interinstitutional Agreement.
In addition to the above, the Council was guided by the following principles in establishing the draft budget for 2004: examination in the autumn, as provided for in the Interinstitutional Agreement, of an amending letter concerning agricultural expenditure, in order to take account of the updated estimates of requirements, without immediately ruling out a reduction in appropriations for agricultural expenditure. The letter of amendment should also take into account the effects of the revision of the common agricultural policy and any requirements related thereto.
The second guiding principle was honouring of the commitments written into the Financial Perspective for structural measures. Regarding the level of payment appropriations, the Council, like last year, invited the Commission to present a preliminary draft amending budget if the appropriations included in the 2004 budget for the Structural Funds - as well as for agricultural expenditure - prove insufficient to cover the payments to be made. Moreover, the Council noted that the payment appropriations included in the 2004 budget concerning programming periods prior to 2002 are intended for financing measures which have been suspended for legal reasons and similar situations.
The third principle was the identification of genuine requirements within the financial envelope for internal policies, taking into account the possibilities for implementation of appropriations and bearing in mind the need to maintain a margin below the ceiling for that heading of the Financial Perspective.
The Council applied the same principle when deciding on amounts for external action. In this connection, the Council asked the Commission not to pre-programme the equivalent of 15% of the appropriations for humanitarian aid.
Concerning, more specifically, the common foreign and security policy budget, what is known as the CFSP budget, the Council included in the draft budget a CFSP budget amounting to EUR 52.6 million in commitment and payment appropriations, transferring EUR 2 million for the peace and stabilisation process - budget line 19 03 03 - to line 19 07 04 and also creating a new line to contain appropriations (transferred from the Council's section of the budget) for the Special Representatives. The new line for Special Representatives is allocated EUR 3.1 million.
A fifth principle was the acceptance of the preliminary draft budget for expenditure on pre-accession aid concerning commitment appropriations. Regarding the level of payment appropriations, the Council has asked the Commission to submit a preliminary draft amending budget if the payment appropriations entered in the 2004 budget for pre-accession aid are insufficient to cover the payments to be made.
Finally, with regard to administrative expenditure, the Council stresses the importance of maintaining a sufficient margin below the ceiling of heading 5 of the Financial Perspective in line with sound financial management.
While agreeing to a rigorous approach for heading 5, the Council stressed that the appropriations and the items necessary for the success of enlargement should be provided for in the 2004 budget. The end result must, without a doubt, be a margin very close to the margin which resulted from the Council's first reading. The Council considers that the opportunity afforded by the accession of ten new Member States should be exploited and additional endeavours made to increase the effectiveness of the organisational structures and management of the institutions.
I must also add that the Council reserves the right, as provided for in the budgetary procedure, to return to the question of the posts requested by the Commission, provided that the Commission presents new arguments, in particular as regards vacant posts.
In the establishment of the draft budget, there was particular focus on the possibilities for implementation of the appropriations. Thus, in deciding the amount of payment appropriations to be entered in the draft budget, the Council duly took into account the rate of implementation of previous years.
Concerning the rate of growth of the overall payment appropriations, the Council stresses, in particular, the importance of budgetary discipline and sound financial management, and the need to keep the rate of increase of the overall payment appropriations as low as possible, taking into account the results of its first reading. Recent examples of huge surpluses and reimbursements of unused payment appropriations should certainly guide us in the direction of sensible budgeting with regard to the total amount of payment appropriations, resulting in realistic estimations of payment appropriations which are genuinely needed during the budgetary year.
The Council's concern regarding the level of payment appropriations is even more understandable and important in the current economic climate, in which - as you are all aware - national budgets are facing serious difficulties.
As you have all received a comprehensive explanatory memorandum, I do not think that it is necessary to make a detailed presentation now. However, I would like to underline the main points of this draft budget in the fields covered by the different headings of the Financial Perspective:
As regards heading 1, relating to agricultural expenditure, the Council has accepted an across-the-board cut of EUR 160 million in the appropriations requested in the preliminary draft budget for all budget lines under subheading 1a - Market expenditure - where the amount of appropriations is greater than EUR 1 billion. This reduction is in line with the overall approach of controlled growth of payment appropriations. I must stress the fact that this approach concerns both headings that include compulsory expenditure and headings that include non-compulsory expenditure, like subheading 1a. As regards subheading 1b, dealing with rural development, the Council has accepted the amounts proposed by the Commission.
Regarding heading 2, relating to structural operations, commitment appropriations have been fully budgeted as proposed by the Commission, in accordance with the conclusions of the March 1999 Berlin European Council. Concerning payment appropriations, an across-the-board reduction of EUR 138 million has been applied for the budget lines concerning Community initiatives, due to the under-implementation of corresponding budget headings in previous years. Moreover, EUR 22 million in payment appropriations proposed by the Commission for the scrapping of fishing vessels have not been accepted, consistently with the rejection of corresponding commitment appropriations in 2003.
As regards heading 3, concerning internal policies, the Council has accepted the amounts proposed by the Commission for the 15-Member State Union relating to multiannual programmes adopted under the codecision procedure. As regards appropriations included in the draft budget relating to codecided programmes for the 25-Member State Union, I must, of course, stress that they are provisional, pending an agreement on new reference amounts, which are currently under discussion. In addition, it has increased the proposed amounts for some budget lines that are not based on multiannual programmes. Appropriations have also been reduced for subsidies for a number of agencies while, at the same time, account has been taken of the special situation of agencies that are new or starting up. It has decided not to accept two new areas of preparatory actions relating to chemical products and to the security of supply of conventional forms of energy. At the same time, the Council has accepted only partially the new preparatory action for European security research. It has decided on an increase in appropriations for the Argo programme, to take account of the conclusions of the European Council of 19 and 20 June 2003, for the forest protection programmes and for Prince, an information programme, specifically the part dealing with the promotion of the European Union's role in the world.
I feel that the Council has provided adequate funding for priorities within heading 3. A margin of EUR 77.78 million has been left below the ceiling of the heading, allowing the European Parliament to finance its own priorities and preserving the possibility of financing future requirements.
As regards heading 4, relating to external action, I can assure you that the Council has accepted the appropriations proposed by the Commission across the board. However, the Council has reduced some appropriations, making small cuts in a limited number of non-geographical budget lines; it has made a slight cut in the appropriations for geographical headings other than those relating to the Balkans, for which the amount entered in the preliminary draft budget has been accepted. It has accepted the amount proposed in the preliminary draft budget for the CFSP budget, together with two transfers of appropriations, one from the CFSP budget to transitional civilian administrations for the Stability Pact and the other from the Council budget to the CFSP budget, giving a final total for the CFSP budget of EUR 52.6 million, as already explained. It has also accepted the appropriations proposed by the Commission for international fisheries agreements.
The Council has left a margin of EUR 145.95 million below the ceiling of heading 4, allowing the European Parliament to finance its own priorities and ensuring that it will be possible to finance future needs.
As regards heading 5, relating to administrative expenditure, the Council's scrutiny of the institutions' administrative expenditure was based on the following principles. One: leaving an adequate margin within the ceiling under heading 5, in the interests of sound financial management. This margin should incorporate an amount for the future budget of the European Data Protection Supervisor. Two: making allowance, in expenditure, for the impact of the revision of the Staff Regulations following the political agreement reached within the Council on 19 May 2003. Three: limiting the increase in current expenditure to 2.7% in 2003, this being the maximum rate of increase for the 15-Member State Union. Four: accepting exceptional expenditure put forward by institutions, such as the move of the Commission to the Berlaymont building or the replacement of members of the Commission or of the Court of Justice. Five: not accepting the creation of new posts or upgrading of posts for ordinary purposes, save in exceptional cases. Six: accepting all the new posts requested for enlargement according to language requirements; the minor reductions in other posts requested were mainly for C and D posts; the period for which posts approved have been budgeted for in the draft budget is 6 months. Seven: accepting most of the appropriations requested for enlargement. Eight: accepting the pensions appropriations, after making allowance for the impact of the revision of the Staff Regulations. Nine: placing in reserve the appropriations intended for subsidies under the former Chapter A-30, in the absence of legal bases, which are currently under discussion. The result is that a margin of EUR 128.45 million is left below the ceiling for heading 5.
I will end my presentation of the different headings of the Financial Perspective with heading 7, relating to pre-accession instruments, for which the draft budget includes the proposed commitment appropriations. As regards payment appropriations, the Council requested a cut of EUR 100 million, in order to take into account underimplementation in previous years.
In conclusion, I think that this draft budget provides adequate funding for the European Union's various priorities while, at the same time, preparing the Union and its institutions so that enlargement can take place under the best possible conditions.
We all know that this budgetary procedure is only at the beginning and that there is still a long way to go until the final adoption of the budget for 2004 in December. I believe that all the necessary conditions are there for a satisfactory budget to be achieved at the end of the year.
I am sure that all three Institutions represented here today - European Parliament, Council and Commission - will do their utmost to give the European Union the necessary means to take up the challenges that await us, bearing in mind that this budget is ultimately financed, as always, by the citizens of the European Union. In particular, I hope that we will reach agreement not only on the 2004 budget for the 15-Member State Union but also on the figures that will be entered in an amending budget for the 25-Member State Union to be adopted in 2004, so that the integration of the new Members States into the Union will be a success.

Wynn, Terence (PSE)
. Mr President, I should like to thank Mr Magri for his speech. I do not need to remind Members that this is the last budget of this Parliament. If we look back over the last four years, we can see that there have been significant changes to the way in which the budgetary procedure has taken place.
Those of us who have been here for a long time have seen many changes, not least in the relationship between Parliament and Council. We now have a minister who will sit here for three hours or so in a budgetary debate, as we had last year, which says a lot about the Council. At one time we never saw a Council minister here at this point in the budget process. I say that to be complimentary, not to be insulting. There have been a lot of cultural changes in the way the process has evolved. I suppose that we are now less confrontational. There is now more codecision between the two arms of the budgetary authority, especially when we talk about the flexibility instrument.
The conciliation process that takes place in November each year is a real conciliation. I am not too sure whether the July conciliation still serves much purpose, but the November conciliation proves its worth. There has been respect on both sides for the fact that we are the two arms of the budgetary authority. I hope that the changes we have seen over the past four years will be taken forward when the Convention is finally ratified and Parliament given its rightful place as one arm of the budgetary authority, thereby maintaining its strategic role for future years.
Over these last four years I have had the pleasure of being Chairman of the Committee on Budgets. This will probably be my last budget as Chairman - I hear one or two boos at the back there - but I am looking forward to seeing this budget through.
It has been non-stop ever since we were elected in 1999. The first thing we had to do was try to get an agreement on the flexibility instrument for the rebuilding of Kosovo. That was quickly followed by successive discussions and arguments with the Council about how to fund Serbia, Afghanistan, the notorious fisheries agreement, and even this year we had the problem of Category 5 and how we were going to fund the administration expenditure that was needed.
This period has not been without its moments. At the beginning of this year, someone asked me whether there were any problems ahead for the 2004 budget. In a moment of weakness I said, 'no, not really'. That is, however, if we do not include enlargement, potential problems with Iraq later on or activity-based budgeting. But, since we do have to include these matters, we have to try and sort them all out.
All those issues need to be resolved. The 2004 budget will be far from easy for a variety of reasons, firstly because it is in the ABB - activity-based budgeting - format. The fact is that we now have to vote in a different way for a different structure, and hopefully get it right, as well as deal with enlargement. We are voting on a new structure and then we will be voting for 10, 15 or 25 countries, depending on the way you look at it. It will be difficult because of the different amendments from the groups and committees, not least including the extremely interesting amendment by the PPE-DE Group requesting EUR 500 million for the rebuilding of Iraq. I will touch on that shortly.
The new Financial Regulation is also complicating matters, especially the A-30 lines. Whilst these matters are just peanuts, they seem to take up a lot of time in the committees, as every member of the Committee on Budgets knows. There is also the real question of what the real needs of enlargement are, especially within the institutions. How do we determine that reality from the proposals of the Commission as well as of all the other institutions? The two rapporteurs, Mr Mulder and Mrs Gill, have striven manfully to try to get answers to that - I am not excluding Parliament here either.
The fact is that this budget has to ensure that enlargement is a success and that we treat the applicant countries as equal partners and not as second-class cousins. We have to ensure that this is done correctly. We also have to ensure that, within this new format, this debate is meaningful. Let us hope these next few hours give a real chance for dialogue and trialogue between our three institutions. In the pursuit of solutions, it is important to address questions to the institutions, rather than to produce formal set-piece statements.
I should like to start that ball rolling in relation to the amendment from the PPE-DE Group that I mentioned earlier. I will be interested to know how the Commission and the Council would react if we voted through this amendment to give an extra EUR 500 million next year for the rebuilding of Iraq.

Mulder (ELDR)
. (NL) Mr President, firstly I would like to express my thanks for the presence of the Council and the Commission. I see that both institutions are represented here by a very large staff. I have been allocated five minutes in which to speak. When I look at the budget before us, this means that I can speak for about three seconds on each billion euros of expenditure. That is not very long, so I will have to restrict myself to the main issues.
Firstly, I am pleased that the Council has said - and Mr Terry Wynn has also emphasised - that 2004 is a crucial year. It is the first year of the enlargement and we must do everything we can to make the enlargement a success. Now that the last referendum in the ten new countries has taken place in Latvia, we know for certain that ten new countries will be joining on 1 May next year. We must immediately make them feel at home and that they are welcome. Mr President, you and Mr Böge have been given an important role in working out the budgetary envelopes for the codecision programmes. I think that it is of vital importance that we reach agreement on this before November of this year.
There are signs of recession all over Europe at the moment. I think that we must try to develop more economic activity. I myself have high expectations of the initiative, which is even mentioned in the directives, to further develop the small- and medium-sized enterprise sector by way of guarantee facilities, via banks in Eastern Europe. If Parliament approves this, I hope that the Council will take a more favourable stance despite its policy of not changing the allocations for the ten new Member States from what was agreed in Copenhagen. This side may submit amendments asking for more attention to be paid to certain developments in the new Member States.
Now the budget in general. It has already been said once or twice before; we want to be a responsible Parliament when it comes to expenditure. Unnecessary expenditure is something we do not need. As far as I am concerned, we should hold each item of expenditure up to the light to see whether the expense in question is justified or not. Last year's expenditure pattern will play a particularly important role in this. I think that this is especially important, now that there is strict budgetary discipline in all Member States.
It has been said once or twice before, but the Iraq question casts a shadow over Heading 4 of the budget. What do we do about Iraq? I think that the Commission must come up with a very clear proposal and must indicate clearly why it thinks a specific amount is necessary and how it intends to finance it. I do not only mean certain amounts that are going directly from the Commission to Iraq. Would the Commission be able to look into what other facilities there may be at some stage? Could there be a role in the long term for the European Investment Bank to encourage businesses to invest in Iraq? Could there be a role for the European Investment Fund and other businesses of this kind? I understand that change is not possible from one day to the next, but perhaps the Commission could make a statement about this. We will have to try to finance this mainly from the 2004 budget, but I think - I do not know - it is going to be close in that area.
What role does the Commission envisage for the flexibility instrument, and what is realistic in the attempt to reach agreement with the Council? Perhaps the Council can say something about this. One point that affects the whole budget is that it has been customary over the years for Parliament to include certain amounts in the budget for preparatory activities, trials and so on, and that the Commission was then free not to implement them. Other actions that were also proposed in the budget were not financed by the Commission. We want to try to avoid this state of affairs this year. We should therefore put certain amounts of money in the reserve and only release them if we have the impression that the Commission - in other words the budget authority - is taking Parliament's decisions seriously.
A lot of discussion will also be needed on the Commission's human resources policy. The Council has announced that it does not agree with the Commission's proposals regarding additional human resources. Parliament's position is not yet clear, but it might be possible for us to put specific items in the reserve and only release them once the Commission has met certain conditions. One of the interesting things this year is that this is this Commission's final year. In this case it is often customary to give various people in the Cabinet of Commissioners attractive positions in the Commission administration, the practice known as 'parachuting'. We would like the Commission to give us an overview of the promotion policy over the past few years and the plans they have in this area this year.
My last point; may I say how impressed I am with the good cooperation with the Council, the rapporteurs of the various committees and the Commission itself thus far. I hope that this good cooperation will last until December.

Gill (PSE)
. Mr President, as we have heard, the 2004 budget will have some profound changes as a result of the historic enlargement due to take place in May 2004. My objective has been to balance the needs of the institutions so that they can fulfil their tasks and equip themselves to meet the challenges that will be presented by an EU of 25 Member States. At the same time, however, we must ensure that the principles of budgetary rigour and prudence are at the core of all our budgetary decisions.
The budget will present the other institutions with major challenges, because it will significantly change many of them. Some of the institutions will receive additional 50% increases in their budgets, which will lead to doubling or trebling of the staff within them. This will require sensitive and intensive management to absorb this change seamlessly. Therefore, I would like to start by welcoming the submission of the Third Report of the Secretaries-General on the evolution of Heading 5. This has become a useful tool for the decision-making process, and although we have an annual budgetary procedure, it is important to be aware of the likely multi-annual situation, so that the right strategic choices can be made, for example in buildings and staff policy.
I would like to remind everybody that we call upon the Commission and the other institutions that we have this annual report submitted to us by 1 September every year.
The Council's reading of the 2004 budget has been quite a surprise. I am totally perplexed by the Council's approach: there does not appear to be a clear strategy other than the doubling of the margin. On the one hand, the Council continues to apply an across-the-board approach, of which the Parliament has always been critical. In the past we have said that the Council made horizontal cuts in the institutions without looking into real needs. This has happened again this year on the Commission's budget. On the other hand, however, the Council has been surprisingly generous, to the extent that I have to question whether all requests that it has endorsed are well justified. This year it will be for the Parliament to ensure that the budgetary rigour is applied and a more critical examination of needs is undertaken. Therefore, I would like to ask the President-in-Office's opinion about the approach that I have taken on his decisions. We will be proposing to put money in reserve for two committees - about a million euro for each committee - and to cut back further posts in most of the other budgets.
My concern is that the Council has agreed to everything to do with enlargement, and enlargement should have resulted in greater economies of scale. I am a firm supporter of enlargement, but that does not mean that everything that is demanded is required. It is important that we do not have 'carte blanche' as regards enlargement and at the same time reject existing posts and existing staff policy issues - such as upgrading - which are important for the staff who are already working. We need to have a balance here.
I do not wish to go into detail on all of the Council's decisions, but I do want to ask about buildings, which is the second biggest item of expenditure after staff. I want to understand the Council's strategy.
We have always agreed on a policy of purchasing the premises of European institutions because it tends to give greater value for money to the European taxpayer, therefore we need to look at building expenditure, taking a multi-annual approach rather than a piecemeal approach, and to try to purchase the buildings as soon as possible. We know that the margin in Heading 5 will be under pressure from 2006 or 2007 onwards. However, we have a considerable margin in 2004. I was disappointed that the Council rejected my proposal to use this to finance buildings to cater for enlargement. This would lead to more savings, including savings for taxpayers. On buildings we do not need piecemeal solutions, we need to take a multi-annual strategic approach.
My next question is to the Commission. It is about the importance of the adoption of the new Staff Regulation. This issue has been dragging on for some time and it has implications for all institutions and for our staff. However, all the establishment plans in the budget pertain to the old Staff Regulation, so I call on the Commission today to confirm that it will propose an amending budget for the implementation of new Staff Regulations and what the likely timing of this may be, because next year, with the elections, the parliamentary calendar will be restricted.
Finally, I would like to call upon all the other institutions to take account of some of the changes and demands affecting them in the light of enlargement. They should start planning now and start introducing controls that are absolutely essential.

Schreyer
. (DE) Mr President, Mr President-in-Office, honourable Members, overall, we are living through a very exciting time for the European Union, involving a great many changes, especially for the European Union's budget policy experts. We are jointly preparing the historic 2004 budget - the first for a European Union of twenty-five Member States. All the lights are now green, as the last referendum has also produced a positive result. In most cases, the general public in the accession countries has said a resounding - indeed, a very forceful - 'yes' to the European Union.
Next year, the priority for policy-makers will be the successful launch of common policies in an enlarged Union. Together, we - the European Parliament, the Council and the Commission - have put the conditions in place for this enlarged budget by adapting our financial planning to the needs of enlargement. The budgetary framework for the next three years is therefore fixed and the 2004 draft budget naturally operates within this new framework as well.
Promoting stability in Europe and encouraging sustainable economic development - these are the further priorities for new initiatives in 2004. They include, for example, immigration policy measures, the new Intelligent Energy for Europe programme, and measures to improve safety in the transport sector. My fellow-Commissioners Mrs de Palacio, Mr Fischler, Mr Barnier and Mr Vitorino will tell you more in their own contributions about these initiatives and about the specific programmes which have recently been agreed, such as the financial assistance for the closure of nuclear power plants or the assistance with compliance with the Schengen Agreement, which, after all, are new initiatives for the accession countries. Of course, my colleagues will be pleased to answer any questions posed during the course of the debate.
The Commission's priorities for the budget proposal are in fact very much in line with the priorities set for 2004 by the European Parliament and, indeed, the European Council. It is a good procedure. The method by which priorities are discussed and elaborated jointly at such an early stage has proved its worth. This is undoubtedly one reason, Mr Wynn, why the budgetary procedure is no longer confrontational and has become far more constructive in tone. I would like to convey my thanks to Mr Mulder, the general rapporteur, for his excellent cooperation, as well as to Mrs Gill, the rapporteur, and especially the chairman of the Committee on Budgets, Mr Wynn. I would like to thank the other members of the Committee on Budgets and, of course, the other committees' budget policy experts as well. I would also like to express my gratitude to the President-in-Office of the Council for his cooperation and the swift completion of the budget's first reading in the Council. As far as it is possible to sum up the most recent budgetary procedures at this stage, I too would like to say that it really is time for the European Parliament to have a stronger role in the budget process, as envisaged, indeed, in the Convention's draft Treaty establishing a Constitution for Europe. I certainly do not share some finance ministers' fears that it would be contrary to budgetary discipline if this House had the final say on the overall budget. On the contrary, my experience over recent years has shown quite clearly that Parliament fully respects the guidelines on budgetary discipline in its proposals and decisions. The Commission's preliminary draft budget for 2004 envisages expenditure of EUR 100.7 billion. The increase compared with this year would thus be 3.2%, which demonstrates that all the fears about enlargement being unaffordable were entirely groundless.
Indeed, next year's European public budget ratio will be even lower than this year's, showing that the necessary scope to fund enlargement has been created in the financial planning process. At the same time, we can be certain that all the new Member States will be net recipients. The fears of some new Member States that they would be net contributors are quite groundless, especially in view of the decisions that have already been taken, as well as the adjustment of the Financial Perspective and the proposals now on the table, which were not challenged by the Council in the first reading.
In its first reading, the Council made relatively few changes to the Commission's preliminary draft budget compared with previous years, and I would like to thank the Council for that. However, there is one point where I must register the Commission's complete opposition, and that is on the issue of staff increases for the Commission. We face the imminent prospect of enlargement and the accession of ten new Member States with 75 million people, and the Commission must guarantee, from the outset, the full integration of the new Member States by all the means at its disposal. Surely it is obvious that more staff will be needed? My fellow-Commissioner, Mr Kinnock, will take up this issue as well, and Mrs Gill will talk about the budgetary implications of the new Staff Regulations. The Commission has certainly not been extravagant in its demands for new posts. Indeed, we have examined the situation very carefully and calculated very tightly. DG Budget, which is the directorate-general responsible, can be relied on to produce a very accurate calculation in this particular area. The 780 new posts are the minimum required to manage integration. I would like to thank Parliament for its very supportive position. I will of course ensure that all the additional questions and requests for information which you may have at this time are answered in as much detail as you require, for I believe that it is also in Parliament's interest to ensure that the Commission functions effectively.
In the foreign policy field, we face a new challenge as a result of the situation in Iraq. Next year, we must also launch a strategy for closer cooperation with our new neighbours, but also with the European Union's old neighbours, as part of a genuine neighbourhood policy. Within the Union, the challenge we face is ensuring a new growth dynamic at a time when the general public also expects more vigorous measures to guarantee internal security. We also intend to push through the successful implementation of our common policies, such as the agricultural policy, in an enlarged Union and help the new Member States make up substantial economic ground. At the same time, we know that the Council is watching to make sure that there is no widening of the gap here. It is everyone's task to do our utmost to ensure that enlargement is a success, that the Union offers the stability which is sought by old and new Member States alike, and that through sustainable growth, positive living conditions are safeguarded for every citizen of the Union. Thank you for your attention.
Elles (PPE-DE).
Mr President, it is certainly good, as Mr Wynn said, that we have this kind of generalised debate. We hope it will not be his last time for presenting this report to Parliament as the chairman of the Committee on Budgets, but there may be life after 2004. We congratulate the two rapporteurs, as always, but we would like in this particular budget to take a cautious approach to the budget overall. As the Commissioner and the President-in-Office of the Council said, there will be major changes as a result of enlargement, as well as activity-based budgeting.
We will also have three different Commissioners between May and November 2004. It is going to be a turbulent year. For this reason, my group does not wish to see any opening of the revision of the Financial Perspective over the next 12 months. This would be an unnecessarily complex thing to start at a time when we will be out on election campaigns and the present Commission will be in its last year. We had great problems, in the last legislature in 1999, with negotiating a financial perspective which then tied not only the current Parliament and Commission, but also subsequent ones, to a situation where they could not revise it. It smacks of Soviet-style planning that we should start now to think of what financing will be like in 2013. We, as a group, would like to have a five-year financial perspective negotiated from 2005 to apply from 2006 onwards.
I should like to refer to two points in particular. One is Commission reform. Last year we linked the Commission's request for new posts to a comprehensive review on what had happened on Commission reform. It produced a very impressive numerical report. What we would like this year - and we have tabled an amendment to this effect with one or two other points - is to have not only a report about what the Commission has done, but also a report showing what has gone wrong with the reforms and what still needs to be done to ensure that there is proper communication - Eurostat is only one example, though a rather high-profile one. The report also needs to show, quite clearly, where the reforms have not taken place. Is it true that, as Mrs Andreasen stated in a press release today, if the accounting systems had been put in place before, we might not have had this kind of problem? Who knows? We wish to clarify it and to have a document to that effect.
The other point is the question of Iraq. Mr Wynn asked what the purpose of this amendment was. We believe that, at this stage of international development, Europe needs to show that it is not only capable of acting on the world stage and assisting with humanitarian aid and reconstruction in Iraq, but can also put a figure for this item in its budget. This figure pales into insignificance compared with the EUR 30 billion which the President-in-Office of the Council has said has been reimbursed over the last three years from the budget to Member States. A figure of EUR 500 million for next year focused on Iraq would show very clearly Europe's willingness to cooperate with the United States and others in bringing that country to the path of prosperity.
In conclusion, we wish, as a group, to be able to be principled and responsible in this budget process. We want to ensure that parliamentary priorities will be maintained. All three issues which I raised are ones on which Parliament has the final say. You can expect us to be constant in the process which is now opening out ahead of us to the end of the year.

Walter (PSE).
Mr President, Commissioner, Mr President-in-Office of the Council, we have a budget before us which - contrary to what we otherwise hear about budget proposals - is shrinking, not growing. That may be a response to conditions in the Member States. Certainly, this budget is equipped with fewer resources. As a response to what is happening in the Member States, we must undoubtedly say: yes, we must manage the taxpayers' money prudently, and as the Group of the Party of European Socialists, we will do that. However, we must also set priorities for the budget. That is something which we will certainly do.
Let me start with an issue which - if Commissioner Schreyer is right, and I hope she is - will fall to us too as a task for the future. Let us talk about the revenue side of the EU budget. The revenue side - that means: where is the money coming from? Who pays? We pay from the taxpayers' money. As we have observed, some estimates in Europe suggest that as much as twenty billion is being lost as a result of VAT fraud. Anyone who accepts this VAT fraud also accepts the shortfalls in revenue at European level. We are not prepared to accept that - because all these shortfalls must be made good out of the ordinary taxpayer's pocket. During this budgetary procedure, we will therefore be proposing that the campaign against VAT fraud be stepped up in order to ease the burden on the ordinary taxpayer, so that the money that should be flowing to Europe can actually do so. We will have to debate this issue more often as part of the budget process from now on as well.
In future budgetary procedures - including the next one - we will ensure that citizens can see for themselves that dependability is guaranteed as one of our fundamental values. This means dependability in combating the economic and social gap, and it means dependability in tackling unemployment. We have heard that the Council has slashed payments for the Structural Funds in particular. This raises a number of questions, in our view. On the one hand, the Member States are registering the substantial amounts of money which they intend to spend in the coming years, and especially next year. Yet at the same time, the Council has agreed, in its draft budget, that spending must be kept below these same figures. We wonder which of these figures is correct. We know that arrears have arisen in respect of commitments undertaken in the past, where payment has not yet taken place. The Council neatly sidesteps this issue and claims: 'We don't need the payments.' We will not get involved in this game. Anyone reaching agreement, after tough negotiations, on the Financial Perspectives, especially in relation to the Structural Funds and therefore structural and economic development in the European Union, must also accept that when it comes to implementation, he will be reminded of his commitments and we will demand payment of the appropriate amounts.
In the next budget year, we will take care to ensure that the European Union, as an economic area, is not just an economic area for major companies and corporations. We will push for intensive support for SMEs in future too. They are the backbone of the European economy. They are creative, innovative and willing to take risks, and we must give them our support so that even though they have no legal departments and no tax departments, they can benefit from the European Union and the internal market.
Fourthly, in the budgetary procedure, we will ensure that enlargement is shaped on the basis of certainty. There have been various references already to the staffing issue. We will be looking very closely at what staffing levels are actually required in order to ascertain whether every one of the stated vacancies is genuinely needed. However, we will not allow enlargement and the accession countries to become the European Union's piggy bank. I agree with all the previous speakers here. There must be equality. Decisions like this are the best indicators of whether or not equality genuinely exists. Anyone can voice noble intentions, but it is the decisions themselves that show whether there really is equal treatment, regardless of whether an old or a new Member State is involved. We will monitor this very carefully.
In other areas too, we will continue to maintain continuity to some extent, but we will also have to shape our policy in a future-oriented way. This applies especially to foreign policy. Here, it has been our frequent experience in recent years that whenever a crisis situation develops anywhere in the world, we have responded in the heat of the moment and immediately pledged to make additional resources available, sometimes at the expense of established policies. If we look at some parts of the world which we supported in the past, we see that fewer resources are available than in previous years. We have had to restructure. We have done so because we have also recognised, of course, that we cannot increase the funding indefinitely. However, I would like to cite two statistics which, while not relating directly to our budget, do give us food for thought. Today, the United States of America and the countries of the European Union spend 460 billion every year on defence. 460 billion! Yet we spend just 37 billion on development. Is this really a forward-looking policy, one that is aimed at conflict prevention? Is it the kind of policy that developed states should be pursuing? The answer is 'no', which is why we want to develop European policy further within the bounds of what is possible - and that is modest enough. We want to work preventively. We want to develop conflict management strategies that will stop such conflicts from occurring in the first place. We are not so naive as to believe that there will be no more conflicts in the world. There will always be conflicts and our region, our Member States, must deal with that. Nonetheless, we will focus more intensively on prevention.
A further area in which we must work preventively is demographic change. The European continent is changing dramatically. We see that the average population is ageing considerably, not only in individual countries but in all countries. That has an impact on all institutions and agencies. It not only means that there will, in future, be fewer kindergartens, or that we will need fewer kindergartens at local level. It will also have an impact on us. Let me once again give as an example the pensions burden, which we will have to shoulder. In many other areas, too, we will see that the numbers of young people are steadily dwindling and there are more and more older people. We must deal with this situation by shaping it positively. It should be viewed not as a threat but an opportunity.
We in the Group of the Party of European Socialists will apply a number of criteria to this budget. The first is financial prudence, because we are dealing with our citizens' money. The second is dependability. Everyone must see that what we start, we finish, and that we do not drag our feet or drop it half way through. The third is this: we will shape European policies in a way which enables us to work preventively instead of being caught on the hop when situations occur. We will endeavour to monitor developments early on, structure them appropriately and thus shape the European Union, our European continent, so that we have a good and secure future together.

Virrankoski (ELDR).
Mr President, the European Union budget presented by the Council shows a very disciplined approach. Payment appropriations account for just 0.99% of GDP, or, in terms of cash, EUR 11.4 billion below the financial perspective.
The Commission's budget has been drawn up as an activity-based budget concerning 31 policy areas. This has long been our group's clear objective. It will facilitate the monitoring of EU activity. The costs associated with each policy area are clearly visible. Administrative and operational costs are itemised. Efficiency can be more easily assessed, as can the relation between achieved results and money spent. Excessive bureaucracy is a glaring signal of immoderate administrative costs.
The biggest problem with EU budgetary policy is outstanding appropriations. Year in, year out, Parliament struggles to adapt the budget to the financial frameworks. In the financial statements we state that arguments over a few euros are totally superfluous when there are billions in outstanding appropriations, easily exceeding as much as EUR 10 billion every year.
Next year's budget will be dominated by the enlargement of the EU. The Council has had a strict view on posts in the Commission that are required for enlargement. It is the opinion of our group that enlargement requires an adequate number of posts but it must not be used as a pretext for swelling the ranks of officialdom. The administrative success of enlargement will depend not only on the creation of posts but also how existing resources can be reallocated and used more effectively.
Our group supports the priorities that Mr Mulder has proposed. We are worried about funding for human rights, as we are too about funding in respect of the International Court of Justice in the Hague. We also hope that the Northern Dimension Action Plan will be taken proper account of in the budget headings. We should also step up cooperation with our new neighbours within the framework of the Wider Europe programme, and the administration of appropriations connected with that should be simplified.

Seppänen (GUE/NGL).
Mr President, the grand total for next year's budget for an EU of 25 countries will fall to less than 1% of the total GDP for the Member States. The Union does not seem to have any ambitious plans to support social cohesion between Member States. Many new Member States, or at least their nationals, will be disappointed in their expectations, when there is no manna from heaven for them after all. Differences in standards of living cannot be reduced without money.
The Commission is underrepresented in this parliamentary debate. I would have liked to see at least Mr Michel Barnier and Mr Chris Patten here, without in any way meaning to disparage Mrs Michaele Schreyer's expertise. In relation to next year's budget I would have liked to hear these Commissioners speak about the Commission's plans to reduce outstanding commitments on the basis of the 'sunset clause'. The President-in-Office of the Council had no clear idea regarding a reduction in outstanding commitments. The Commission should have.
Our group in the cohesion countries would like to clarify on the basis of what condition of the 'sunset clause' the outstanding commitments to be cancelled have come about. If they have come about owing to the inaction of the Commission, that is a matter of failing to carry out the will of the budgetary authorities. If they have come about through miscalculations on the part of Member States' governments, then cutting them is justified. Member States have to obey the rules, and we demand an explanation of how the outstanding commitments have come about.
Reconstruction aid for Iraq will probably be charged to next year's budget. We are to have the same sort of division of labour as in Afghanistan. The United States of America, in this case aided by Prime Minister Blair, attacks and destroys, and the EU pays for the reconstruction. Our group takes a very critical view of that. We want instead to use Union finances for the reconstruction of Palestinian targets destroyed by Israel. There has been no oil war going on in Palestine.
Objects of criticism by many members of our group in the end are the expenditure associated with the common foreign and security policy and the funding of Europe-wide political parties. One feels the EU is pushing for liberalisation of the markets and the development of privatisation, and hence, the neo-liberal 'made in the USA' policy.

President.
Thank you very much.
Mr Seppänen, you have made personal references to several Commissioners. According to our agenda, some of the people you have mentioned will be present during this debate, but later on. For example, Mr Barnier, who you have referred to, is scheduled for this afternoon, but not for a little while. I mention this for your information.

Buitenweg (Verts/ALE).
Mr President, I am very pleased that this debate is taking place as it enables us to put a number of questions to the Commission before we vote on the amendments in the budgetary procedure. In my first contribution of the afternoon, I would like to pause, as Mr Virrankoski did, at the implementation of the budget, as the political decisions which we take here with a lot of fuss often falter on that point. Money is shelved, or red tape hinders recipients of subsidies from spending the money properly and effectively. Mr Mulder, the rapporteur for the forthcoming budget, said just now that he wanted the Commission to be encouraged to increase the percentage of the money spent by putting part of the administrative credits in the reserve. Mr Mulder, and also possibly a majority in this House, are not yet convinced that all the items that the Commission asked for before enlargement are really necessary. A Commission official said the following in this regard: you are tying our legs together and still expecting us to be able to run the 100 metres faster.
I think that the rapporteur's concerns are legitimate, but I have doubts as to the means. I would therefore like to ask the Commissioner whether she can give us her opinion on this. What are the consequences of the reserves? How can you use them in a positive way? Even more importantly, do you think that we are on the right track by spending the money slowly? Up to now we have always put the emphasis on the quantitative side of this. Is it not time we focused more on the qualitative side of the solutions, like Mr Pittella is doing with the structural funds? That means that procedures would have to be simplified, that we would need less paper and more responsible officials.
My last point with regard to spending the money properly concerns the fact that we often find that projects that are financed with EU resources often do not respect European environmental legislation. What happens when you discover this? Will the money be frozen or will some other more-or-less soft solution be found? One example of this is the bridge over the Tagus River. This was a project financed with EU funds in which the bird and habitat directives were not respected. There are more examples like this. I would like to know what the consequences are if it is discovered that EU-financed projects are violating EU legislation.

Turchi (UEN).
Mr President, ladies and gentlemen, on a general note, this is a historic budget, for we are preparing for eastward enlargement.
I would like to start by thanking my committee and its chairman - from whom I have learned so much - the staff of the Secretariat, my fellow Members and the rapporteurs, both for this budget and for the budgets of previous years. As a young Member, I have been able to accrue a great deal of experience in the field, even becoming vice-chairman of the committee.
I believe that, as far as we are concerned, this is a fundamental budget, for it lays the foundations for the future Europe and for the future European Parliament, and I feel that, in political terms, the crucial issue is precisely expenditure for eastward enlargement. In this respect, the budget has the full support of both our committee and all the Members of the House, but only where expenditure related to staff and structures for eastward enlargement are concerned.
I would, however, like to focus on what may be a painful aspect of the budget - we must exercise caution when it comes to the appropriations for Iraq. Personally, I have some misgivings about these appropriations: there is a danger that they will grow out of all proportion. Moreover, I would call for there to be close monitoring of these funds, an effective monitoring structure which will prevent reoccurrence of what has already happened with respect to the PNA - the Palestinian National Authority - whose funding is currently being analysed in depth. I would like to flag this point because this kind of monitoring will be essential.
I believe that an experimental phase will be necessary for the new Financial Regulation too. As a wide-ranging, complex instrument, it will inevitably cause mounting tension in the Commission above the level of Director-General, although I hasten to add that I have greatly appreciated the way we have worked together over this recent period.
Lastly, I must mention the initiative that has led to a major debate within our committee: health insurance for Members of Parliament. This is an issue which we will be able to address when we get the results of a study we have commissioned. In this and in all other matters, I would like to wish the Council, in particular, good luck in its work, proud to be able to say that I, too, am an Italian representative.

Van Dam (EDD).
Mr President, Minister, Commissioner, we welcome the proposed reduction in payment appropriations. In view of the economic recession, Member States are having to tighten their belts, and the European Union cannot lag behind in this. The Council has made a number of substantial reductions in the draft budget. We do not share the rapporteur's position of categorically opposing this. Particularly in Heading 2 - Structural measures, 3 - Internal policies, and 4 - External action, we do not consider it necessary to earmark more money than the Council is proposing. We must not close our eyes to the enormous payment arrears in several items of the budget in these headings. The arrears in the structural funds are impossible to explain to voters; they amount to more than EUR 66 billion, two-thirds of the current total EU budget. A Swedish market research bureau came to the conclusion that the effectiveness of the structural policy is clearly not up to the mark. Does the Commission know the results of this survey, and what is it going to do about this persistent problem?
The European Parliament must also look closer to home and check critically whether certain policy sectors do in fact belong at EU level. For example, the fact that some people in this House want to use money for the EU budget for tourism is just one example of something that is preeminently a matter for the Member States. Money for development aid is also going to countries in the southern hemisphere, whilst that is a duty of one or more Member States which have historical connections with these countries. We are of the opinion that the 8.4% increase in the budget for the common foreign and security policy is inadequately explained. The European Union must not set up an organisation in parallel with NATO. That is throwing money away.
The EUR 18 million increase in subsidies to the Palestinian Authority is actually unwarranted as long as it refuses to unequivocally condemn and stop terrorist attacks on innocent people. Is the Commission aware of the IMF report, which shows that Arafat had USD 900 million deposited in secret accounts between 1995 and 2000? Finally, the Commission must be more critical when supporting third countries in the Mediterranean region. We must apply the human rights clause consistently in such cases.
We wholeheartedly support the amendment for a substantial contribution to the rebuilding of Iraq. At the same time we must stress that the extent of this necessary humanitarian aid should not be contingent on political differences of opinion between some Member States and the United States.
My group thinks that it is a bad thing that the reformation of the European Commission will deliver much smaller savings than originally forecast. The difference of EUR 8.8 billion is really very substantial. How does the Commission explain that?
Where we could also make savings is on the supervisory boards of the agencies in which each Member State has three members. Would it not be excessive if these bodies were to expand to 75 members per agency?
I must also comment on the management of the budget. It concerns us that expenditure on audits has fallen by 6.4% in the common agricultural policy. This reduction is unwise, given the problems surrounding the management of this policy and the intensity of manpower required for proper control of agricultural expenditure. This spring the European Court of Auditors presented a report on support for the so-called 'problem areas'. What lessons has the Commission learned from this? Is it, for example, willing to tighten up the vague definition of 'good agricultural practices'?
Finally, according to the people involved, the fraud at Eurostat is partly related to the limited resources the European Commission releases for proper statistics. Better cooperation between Eurostat and the national statistical agencies is certainly to be desired. Eurostat needs more independence for this, so that the impartiality and scientific objectivity of the statistics continues to be ensured. After punishing the fraud and improving administrative control of Eurostat, we need to pay attention to this. What is the Commission's response to this?

Dell'Alba (NI).
Mr President, this is a historic budget - as one of the previous speakers has said - a budget proposed by the Council for the Fifteen which, with a view to enlargement, is 2.7% down on last year. Although yet another statistic, this is a sign which speaks volumes, the sign of a Europe which is afraid of itself, of its budget and of addressing the problems of the world.
From this perspective, we welcome the amendment on Iraq, which, at least, sends out a signal, rather than of inconsistency, that Europe does exist, that it wants to do its part and that it has to equip itself to do so. For the time being, it would appear that the budget heading in question is a token entry; subsequently we will do what we can to find the funds to address what is clearly one of the major political challenges before us and which therefore calls, not least in symbolic terms, for an immediate, convincing, substantial appropriation.
Many of the Members have highlighted the European Parliament's priorities. It is important not just to state our priorities but - and I am addressing the Commissioner here - it is important that the Commission acts in accordance with Parliament's priorities. I am afraid that the impression we often receive is that the priorities established by Parliament are not adhered to. I am not just referring to the EUR 13 billion which we are giving back to the Member States this year; although this does, of course, need mentioning as it reveals a flaw in the system: while this is largely funding earmarked for the Member States, a substantial amount of money has not been spent and a considerable number of priorities, of measures laid down, often together with the Commission, have been carried forward, because of a crisis that we might define as structural. I see this as a major issue, the importance of which must not be underestimated in our assessment of both the current budget and the budget to be adopted for 2004, for the measures actually adopted often fail to be consistent with Parliament's priorities.
Then there is the section on external aid, which I will comment on, if I may, during the second part of the debate.

Van Hecke (ELDR)
. (NL) Mr President, the subject of the budget. The Council has 'only' cut the European Commission's original proposals for Heading 4, External action, which contained a 3.9% increase on the previous year, by 0.3%. As we all know, the European Union will be taking on more and more new commitments. These relate to the fight against terrorism and organised crime, the reconstruction of Iraq, badly governed countries such as Afghanistan and Congo, the enlarged Europe, conflict prevention in the Middle East, and so on. These are important matters and it is also clear that the people are in favour of a more assertive external policy: 67% of Europeans state that they support more European Union in the world.
On the other hand, it is crystal clear that the financial limits of the possible commitments will have been reached unless more money is made available. In a few weeks' time the European Union will be participating in the international donor conference on the reconstruction of Iraq. Mr Patten is suggesting a possible EU contribution of about EUR 200 million in 2003-2004. Others are suggesting an amount of EUR 500 million. Either way, our Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy does not want this to be at the expense of other geographical zones or commitments, such as Afghanistan, or non-geographical budget lines such as the rapid response concept and landmines. If the European Union wants to assume its share of responsibility for peace and security in the world, it must also be prepared to earmark the necessary financial resources. If not, Europe is at risk of becoming a political dwarf on the international stage.

Sanders-ten Holte (ELDR)
. (NL) Mr President, Commissioner, ladies and gentlemen, I would like to make a couple of comments on the budget proposals for 2004 from the point of view of development cooperation. Although we are dealing with activity-based budgeting in this case, I cannot get away from the impression that this split has more to do with the Commission's internal structure. Funds intended for development cooperation should also fall under this section. Yet we have seen that budget lines for Asia, Latin America and the Middle-East have been placed under the heading 'External relations'. My committee finds this unacceptable. After all, fighting poverty is the main aim of European development policy. If these budget lines are placed under 'Foreign relations', this will be lost from sight.
My second comment concerns our support for the reconstruction in Iraq. Regardless of the amounts mentioned, it must be made clear that this money cannot come from the pot for Heading 4, External action, which is limited as it is. In my opinion the flexibility instrument must be used for this.
The third and last point I would like to mention is the target percentage of 35% for social infrastructure. The Commission has pointed out that it has achieved this figure in the last few years, but education and healthcare, which are after all two of the very important objectives of the Millennium Development Goals, still come off worst. I would therefore like to call upon the Commission to adhere to what was agreed at the social summit in Copenhagen in 1995.

McNally (PSE)
. Mr President, I should like to congratulate Mr Mulder for the very collegiate and cooperative way in which he has worked with other committees, and Mrs Gill for the same reason. The budget lines dealt with by my committee are the most complex of any committee. We cover something like 120 budget lines with reference to ten different directorates-general. Because of that complexity, plus the changes in nomenclature, the activity-based budgeting and enlargement, it has been a difficult task to give an overall view.
I would like to thank the Commission and those staff in its directorates-general who have been patient in their explanations and have explained their rationale for preparing the preliminary draft budget.
I cannot offer the same praise to the Council of Ministers, because in our committee we have seen a whole succession of very large cuts with no rationale whatsoever provided as to why they should have taken place. I find it impossible to work on that basis. You cannot have a dialogue when one side does not explain its reasoning for what it is doing. There may be some sense behind the suggestions, but it is not at all clear to us.
Let me take as one example the preparatory action for security research, of enormous interest to the citizens of Europe. Why has that been cut? I am delighted that Mr Mulder is prepared to support us in reinstating the money which was suggested for this action, which many of us on our committee think is important. We want an explanation about Chernobyl. We lay great emphasis on SMEs, as you will see, and I look forward to some sort of rational discussion with the Council about its motivation for making cuts which appear to contradict every policy of the European Union.

Grönfeldt Bergman (PPE-DE)
Mr President, the Commission's preliminary draft budget contains few surprises when it comes to those issues that fall within the area of responsibility of the Committee on Economic and Monetary Affairs. We therefore support its main features and have also clearly expressed our support for the amounts proposed by the Commission. I nonetheless wish to make a few comments and recommendations.
Those measures that are supported within the framework of budget line 02 05 01 ('Industrial competitiveness policy for the European Union') - for example, for the purpose of analysing the effect of the information society on competitiveness and of stimulating the development of electronic trade - involve no genuine European added value and should therefore be discontinued. We therefore propose that these appropriations be transferred to budget line 02 02 03 ('Programme for enterprise and entrepreneurship, particularly for SMEs'), where the funds could be of direct use to European businesses.
We are also concerned about the problems and irregularities in connection with Eurostat and therefore want the European Parliament to ask for 25% of the appropriations to Eurostat's administrative expenditure to be placed in Title 31 ('Reserves') until the Commission has given Parliament sufficient assurance that the problems have been solved and that the people responsible have been identified and appropriately penalised.
We also support the information campaign concerning the euro and welcome the fact that the Commission has proposed increases in the funding for this. These extra resources will be needed, given that the EU is to acquire ten new Member States that have all undertaken to introduce the euro as soon as possible. We are nonetheless still concerned about the implementation of this budget line in recent years and therefore want again to call upon the Commission to report each quarter to Parliament's relevant committee on the implementation of the programme in the current year and on the planning for next year.
We also want to call upon the Commission to ensure that additional funds for the information campaign concerning the euro are available if further needs should arise, for example as a consequence of referendums in any of those countries that do not at present have the euro. As an aside, I regret that, following the result of the referendum last week, my own country, Sweden, will not be eligible for funds for the information campaign concerning the euro.
The committee nonetheless supports the Commission's draft budget, but with the reservations I have expressed.

Schreyer
. (DE) Mr President, Mr President-in-Office of the Council, honourable Members, recent years have already seen the common foreign policy become a priority in the Budget debates, and that will be the case in the 2004 Budget too.
The number of foreign policy areas in which the EU is involved in common action is reflected in its Budget. Together we have taken on responsibility for rebuilding Kosovo, and for bringing political stability to the Balkan States, and this is reflected in the Budget just as much as is support for the reconstruction work in Afghanistan. The 2004 Budget provides aid for the Balkans to the tune of some EUR 600 million and EUR 184 million for Afghanistan, which, together with other funds, means that the aid we are proposing for Afghanistan amounts to EUR 214 million. I might point out, by the way, that the European Union is doing all that it undertook to do at the donors' conference in Tokyo.
I would also like to mention that the accusation referred to earlier to the effect that nothing happens for years after the European Union promises aid, is no longer accurate in such sweeping terms. It is here in the area of overseas aid that financial management reform has made a very positive and visible impact. This is one reason why the Commission greatly regrets the way in which the Council has cut the funding for the Commission's delegations, which play an ever-greater part in implementing the Budget.
A major feature of the 2004 Budget will be the crisis in Iraq and the European Union's aid for the people there. This year already, the European Union has allocated EUR 100 million from the Community Budget for humanitarian aid. Reference has already frequently been made in this House to the fact that, on 24 October, the donors' conference on aid for the reconstruction of Iraq will be taking place. Commissioner Patten, who is today attending the UN General Assembly in New York, has made it clear to this House the great relevance of the budgetary constraints to effective aid in Iraq. An independent Trust Fund or a UN agency should guarantee that the aid given by the European Union is multilaterally applied.
Next week - on 1 October - the Commission will propose the amount that we intend to pledge at the donors' conference, that being EUR 200 million. This proposal will provide for funds amounting to EUR 40 million to be mobilised this year, for the margin under heading 4 to be used next year and for the partial mobilisation of the flexibility reserve as well. That, then, will be our proposal for the donors' conference for up to the end of 2004.
I believe that, in terms of its size, this promise of aid stands up well to comparison with the EUR 214 million for Afghanistan next year. Our promising EUR 200 million for Iraq has to be seen in context, in that Iraq is less populous than Afghanistan, which is a wretchedly poor country lacking access to income from oil reserves.
Let me also take this opportunity to thank the budgetary authority for approving the support grant for Turkey, estimated at EUR 250 million for next year, and to be paid from the funds for pre-accession strategies; I mention the amount for Turkey only in relation to our aid for Iraq. I believe that these things always have to be seen in comparative terms.
The Commission's draft envisages a total of EUR 507 million for humanitarian aid. The Budget sets aside EUR 82 million for the fight against Aids, malaria and other communicable diseases, which have a catastrophic effect on many countries in Africa; this amount will also be used to fund our further donation to the Global Health Fund - that, too, will be the same amount as this year. The reason I mention this is that it figured prominently in this debate last year.
Let me announce right now that my fellow-Commissioner Mr Nielson and I will, in a few days' time, be presenting a communication to the effect that, in future - from 2007 onwards, to be precise - resources for the European Development Fund will be incorporated into the normal Budget. Although the priority will still be the fight against poverty, the needs of the ACP States in particular require of us that we adopt a coherent policy approach. The simple fact is, though, that comparisons have revealed that the mechanism for implementing the ordinary Community Budget is much better than that for the European Development Fund.
As part of the development policy measures, new resources are being provided specifically for the integration of gender issues into the aid programmes. Overseas aid in particular involves support for many projects particularly targeting the - often dire - situation of women in poor countries and crisis-hit regions. This is described in the reports on the aid programmes.

Salafranca Sánchez-Neyra (PPE-DE).
Mr President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, I would firstly like to thank the draftsman of the opinion of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, Mr Van Hecke, for his work and his wonderful spirit of consensus and for his choice of the difficult priorities which have been included. What we need now of course is for these priorities to be accepted by the Committee on Budgets and by Parliament as a whole, with any modifications which the Committee on Budgets may have to make.
Some speakers such as Mr Wynn or Mr Walter have explained very clearly the pressures which have been facing heading 4 of the Budget and the urgent issues which the European Union has had to deal with over recent years. We have had the case of Kosovo, of the Balkans, of East Timor, of Afghanistan and this year we have the problem of Iraq.
Since this has been discussed during this debate, I would like to say that my political group believes that the European Union must make a significant contribution to the rehabilitation, reconstruction, pacification and democratisation of Iraq, because we believe that the democratisation of that country must not be the exclusive responsibility of the United States, but that it must also fall to the whole of the international democratic community.
Nevertheless, Mr President, tomorrow the European Parliament is going to approve a resolution on Iraq which states very clearly, as Mr Van Hecke has quite rightly said, that the action in Iraq must not be funded to the detriment of other areas or other commitments made.
I have listened with great interest to the comments that the Commissioner has just made and I note that the Commission's intentions or forecasts are not going to go as far as that EUR 500 million. I would ask you, Commissioner, whether you intend to consider the complete mobilisation of the flexibility instrument, which was not used last year or this year, and whether you intend to consider other very interesting possibilities such as those referred to by the general rapporteur, Mr Mulder.
Next year, with the incorporation of the candidate countries, there will be lines within the external action of the European Investment Bank which could perhaps be used for that priority. It may perhaps be worth considering that possibility.
Mr President, the problem we are facing this year with Iraq is a recurrent problem, we cannot live from hand to mouth, we must try to find a permanent solution to the urgent issues which arise in the field of external action and try to mobilise instruments which, in a flexible manner, allow us to assist with these priorities but without, I would insist, prejudicing others.
Mr President, as the President of Romania said this morning, or as the President of the Convention, Mr Giscard d'Estaing, said the other day in this Chamber, if our aspiration is for the European Union to play a key role on the international stage, we will have to seek permanent solutions to these problems, because otherwise we will have to be content with being a non-governmental organisation or a kind of international Red Cross which has no other purpose or job than to pay the bill for the great dramas of our times.

Gröner (PSE).
Mr President, ladies and gentlemen, enlargement is not merely a project for the ruling classes, but will also, if it succeeds, be an enormous triumph for democracy. The EU will soon have 450 million citizens, and over half of them are women. If women are to take their share in building Europe, information must be targeted at them and they must be involved in specific ways. This parliamentary term has seen us developing our strategy for gender mainstreaming and finding room for it in the Budget process, but its successes are not as evident as they could be, in that women are still generally not visible in the policy areas and we still generally do not see them occupying positions of leadership in the institutions.
Women make up only 14% of the observers from the candidate countries, only 17% of the members of the Convention, and only 25% of the Commissioners. Whilst women make up 70% of the staff in category C, not one of Parliament's Directors-General is a woman. Our resolution on gender mainstreaming proposes a whole range of actions to set benchmarks for the horizontal task of deliberately bringing women into the institutions, such as monitoring the success of leave for educational purposes, retraining, career and personal development, and so on.
Commissioner, you are now encouraging high expectations of gender budgeting, the implementation of which will mean the professional 'gendering' of every committee, every policy area, and every one of the Directorates-General. We need to identify women as a target group when thinking in terms of the visibility of information campaigns, particularly in elections, and that we should involve women in every area of foreign policy - for example, in the reconstruction of Afghanistan and Iraq. DAPHNE was a good challenge, and so, of course, are the internal policy areas such as the Structural Funds, for example.

Figueiredo (GUE/NGL).
Mr President, I would like to draw attention to three different issues in relation to this debate. They are forest fire prevention, East Timor and economic and social cohesion.
The tragic fires which have devastated southern Europe, especially Portugal, where 5% of the land area and 11% of woodland has been consumed by flames, makes clear the need to increase assistance for measures to prevent forest fires. Sadly, a retrograde step has been taken in the form of the new Forest Focus programme. In its resolution of 4 September, the European Parliament insisted that the amount of appropriations for the European Union should, within the framework of the draft Forest Focus regulation, be the same as in the previous 1992 regulation on the protection of forests from fires with a view to funding appropriate forest fire prevention measures. We have, therefore, made a proposal suggesting that another EUR 6 million be allocated to the programme and that prevention issues be clearly included in it. We hope this proposal will be approved. I would like to know, nevertheless, whether the Commission agrees with increasing the amounts and including preventive measures in the Forest Focus programme.
Turning to East Timor: in its preliminary draft budget, the Commission has removed the specific aid line and reduced aid by around 70%. This is unacceptable. We have, therefore, tabled another amendment with a view to restoring the amount of aid to the EUR 25.5 million programmed in 2003. We hope that Parliament will support this amendment, as in the past, but I would also like to know how the Commission can justify this cut, given the discussions held on the budget during 2003 and the various difficulties and areas of instability still existing in East Timor.
Finally, in view of the fact that this draft Community budget is the lowest, in relative terms, since 1987, representing less than 1% of Community gross national income, I would like to know how the principle of economic and social cohesion in the European Union will be safeguarded. I would ask, in particular, how we will fight for social inclusion and employment growth, given that enlargement in 2004 will see the accession of 10 new countries whose average per capita income is only about 40% of the Community average. As I believe it is impossible to achieve economic and social cohesion with this budget, I would like to ask the Commission whether it wants to abolish economic and social cohesion through future amendments to the Treaties.

Buitenweg (Verts/ALE).
Mr President, various people have already complained about the Council's reduction of the money for Afghanistan. I think that this is primarily also an example of the short-term vision of many governments, who seem to be engaged in 'crisis hopping'. From Kosovo to Serbia - the money transferred along too - and from Afghanistan to Iraq. The Member States will therefore not keep the promises they made at the donor conference for Afghanistan, despite the fact that it is increasingly turning out that these promises were on the low side anyway. I assume that common sense will prevail in this House and that we will fix a higher amount than the Council has in mind.
I would like to ask the Commissioner another question, this time concerning a different amendment from the one on Afghanistan, namely an amendment from the PPE. They suggest putting an amount aside until they stop growing poppies and start growing legal agricultural products. Is it not true, however, that the aid provided by the EU hardly reaches the remote areas where these poppies are grown? How do you intend solving this problem? I also note that the committees and groups have submitted amendments for external policy which amount to EUR 841 million more than the Commission's proposals. I would like the Commissioner to tell me how she can explain this discrepancy. Is it true that we simply agree massive amounts, or do you in fact adhere rigidly to the ceiling of the financial forecasts after all, conflicting with the EU's priorities in the process, because there are many more needs in the area of external policy than you suggest?
My last question - very brief - is about North Korea. The money for the KEDO project has been frozen and we are doing absolutely nothing else about energy provision there. Is it possible to use the money or part of the money which was previously intended for nuclear energy provision to subsidise alternative energy sources in North Korea?

Dell'Alba (NI).
Mr President, ladies and gentlemen, as well as the draftsman's work and the line he has taken on external relations, we support many - if not all - of the amendments tabled by Mr Van Hecke on behalf of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, some of which we have been able to contribute to specifically. In particular, I would draw your attention to a whole set of amendments on the human rights clause.
As Parliament, we have called - and we have battled for years with success - for our relations with third countries to incorporate a human rights clause imposing - and I do not wish to offend anybody by using that word - mutual respect for the most well-known and most supported agreements in force, the cooperation and aid programmes for emerging countries and, more generally, for countries with which we sustain relations.
In actual fact, this clause, formally included in agreements with third countries, is often disregarded by those who should be enforcing it. It is disregarded for various reasons, probably because there is no specific monitoring mechanism in place. However, the fact remains that, very often, we continue blithely to implement our budget on the basis of these agreements - which, as such, must clearly be observed - despite frequent disregard for one of the clauses.
That is why there are a number of amendments seeking to ensure that the budgetary authority is provided with timely information on the situation as regards the human rights clause, so as to place Parliament in a position to decide, should this prove necessary and in the appropriate manner, to request formally the suspension of the agreements with a country. There are serious, significant cases of systematically violated rights and of countries whose economies depend greatly, if not on European Union aid, certainly on the rich tapestry of relations they sustain with the European Union: I refer to countries such as Vietnam, Laos and Cambodia itself, where, as you are aware, the situation is currently very serious and there is a danger of a coup d'état taking place within the next few days, in contempt of the results of elections which Parliament itself declared - maybe rather prematurely - to be perfectly above board.
These are the reasons why I believe it is possible, not least through the lever of the budget, to send a clear signal to the beneficiary countries so as to make the human rights clause a genuine reality and to reassure Parliament, which is one arm of the budgetary authority as well as the promoter of the idea, that the Commission is not implementing the budget as if nothing had happened but is carrying out pre-emptive monitoring. This is one of the most important aspects. I welcome the exchanges on the subject of Iraq, which would appear to be an indication of a desire for constructive dialogue on the issue. I believe that the consideration which I have just illustrated deserves, in all respects, as stated by the draftsman of the opinion of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, the support of the House in the final vote on the budget.

Poos (PSE).
Mr President, in the framework of preparing the priorities for foreign affairs, defence and security matters, the rapporteur, Mr van Hecke has had broad support from the members of our committee, in particular when he reinstated a portion of the Commission's proposal and further encouraged NGO activity.
Our rapporteur placed the emphasis on the role of the European Union as promoter of human rights in the world. The Group of the Party of European Socialists recommends that all the lines concerning countries benefiting from an association and stability agreement on the Balkans be transferred from the category of 'external actions' to that of 'pre-accession aid'. In addition, we request that realistic appropriations for the Israel-Palestine line be provided, instead of the practice being continued of a posteriori transfers.
We fully support Amendment No 445 which proposes EUR 47 million for conflict prevention activities - and, in my view, prevention is always less expensive than cure - and Amendment No 118, which proposes EUR 2.5 million by way of additional appropriations for information programmes in third countries.
An amendment by Mr Elles proposes establishing a line of EUR 500 million for the reconstruction of Iraq. There are two reasons why this amendment is unacceptable to the PSE Group. While remaining open to the creation of a new budgetary line, we cannot envisage providing funds in the absence of any mandate from the United Nations for the reconstruction of Iraq and in the absence of reliable estimates from the Commission. In our view, it is important that the UN have exclusive control over the reconstruction fund.
Finally, I should like to invite the Commission to inform Parliament regarding the use of the funds in Latin America and to tell us if the considerable increase proposed by a series of amendments is realistic.

Boudjenah (GUE/NGL).
Mr President, the solemn calls for budgetary rigour and discipline entail devastating constraints when it comes to development aid. The promises remain, but there is a difficulty in getting actions to follow. That, in the end, is the thought inspired in me by this 2004 budget on development cooperation. I agree, on this matter, with our rapporteur, Mrs Sanders-Ten Holte, that any subordination to the external actions heading cannot but accentuate this phenomenon.
Indeed, how is one to believe that the objective of eradicating poverty between now and 2015 will be achieved when - and this is only one example - the financial commitments to the Middle Eastern, Latin American, Asian and ACP countries that are the concern of the OECD's Development Assistance Committee have not been honoured by the Commission, particularly when it comes to the health and education sectors? One is permitted to have doubts. The sums allocated still offer very little basis for fulfilling the declared wish of achieving the millennium objectives.
How can approval not be given to any demand made of the Commission to give attention also to the rights of the most vulnerable people and to provide for a specific budgetary line when necessary? I am thinking, for example, of the rights of children.
Any reduction in, or financial pressure upon, the fundamental elements of Community policy, such as human rights or the duty to give assistance to those who are weakest, would have the effect of sending out a very negative signal indeed to peoples already largely excluded from the march of world progress - victims, no more nor less, of a globalisation that has more in common with the law of the jungle than with growth and the equitable distribution of wealth. Developing countries are waiting for the European Union's ambitions to change, a fact witnessed to, I think, by the reactions at the last WTO conference in Cancún. As a final word on the subject of development aid, I remain convinced that, without a serious review of the financial perspectives, the pressure upon this heading will become unbearable.
As for the proposals concerning reconstruction in Iraq, they also call, at any rate in the long term, for an increase in overall resources to avoid the need to draw on the reduced sums for development aid. That being said, I agree with Mr Poos: the announcement of such a financial commitment cannot in any case precede Europe's indispensable adoption of an independent policy in favour of the sovereignty of the Iraqi people and of the role of the UN.
Regarding the amendments, I approve of those that could favour an annual evaluation of the results and anticipate a joint dialogue between the Commission, Parliament and the Council on the methods to be put in place in order to achieve the objectives. In the same spirit and in the interests of genuinely democratic and effective development cooperation, I am in favour of encouraging the widest participation, at all levels, of all those active in civil society.
Finally, I am going to support my group's proposal aimed at creating a specific line of aid for the rehabilitation and reconstruction of the territories under the administration of the Palestinian Authority. The Israeli army's destruction, to the tune of almost EUR 40 million, of the infrastructure funded by the EU or the Member States was the product of criminal fury. The Palestinian population's conditions of life have deteriorated considerably during the most recent period. We know that the Commission's delegation on the ground is doing a remarkable job in difficult conditions. If, however, the EU is to be an active member of the quartet in the manner suggested by the speeches, the EU would do well to accord its budgetary lines as it intends.

Garriga Polledo (PPE-DE).
Mr President, Mr President-in-Office of the Council, Commissioner Schreyer, Mr Fischler, ladies and gentlemen, I would like to begin by welcoming the fact that we are holding this new budgetary debate, which has already shown itself to be a useful and profitable experience for the Commission and Parliament. It is a good opportunity which we Members of the European Parliament are grateful for and take a very positive view of.
From a general point of view, this is the year in which we should avoid the conflict between national and Community interests. The principles of budgetary austerity in national budgets, which are at the root of the Stability Pact, must be reconciled more than ever with the complete implementation of the Community policies contained in the objectives of the Community budget.
It is perhaps we, as Members of the European Parliament, who have the greatest interest in the Stability Pact being complied with and respected. Compliance with it must not be an excuse to interfere in the development of the great areas of expenditure of the Union's budget, but it must be another incentive to improve its implementation.
Providing our budget with sufficient payment appropriations does not mean failing to comply with the austerity objectives, but to help the European Union's growth by means of its policies. Otherwise we would be preventing the correct absorption of the leftovers or hindering the efficient implementation of the structural policies.
The Union's best budgetary policy is not one that allows for a high budgetary expenditure, but one which implements the commitments in the Budget well. We would therefore like to ask the Commissioner whether she agrees with this approach and whether the Commission believes that the level of payment appropriations in the Council's draft budget is sufficient.
On the other hand, our group has no particular reasons to disagree with the Council on this Budget. We would like, and this will be agreed in the sectoral debate, to go further into certain questions of agricultural or internal policy.
In external policy we are still seeking a more active role for the Union in the world, because that is also part of the programmed objectives of the Group of the European People's Party (Christian Democrats) and European Democrats. This must be seen not only in relation to the strengthening of the common foreign and security policy - both its objectives and its budgetary appropriations - but to particular reconstruction actions in Iraq and Afghanistan, as part of the European Union's moral commitment to promote peace, security and human rights. We would therefore like to know, Commissioner, whether there is really sufficient room in the budget to be able to take account of the approach taken by the PPE by means of its amendment.

Sauquillo Pérez del Arco (PSE).
Mr President, firstly, from a conceptual point of view, we legitimately wish the new nomenclature for the Budget to be a technical instrument which rationalises it, and not a cunning way to modify the political orientations of Community action.
The Committee on Development and Cooperation is therefore, under the heading 'Development', restoring the cooperation lines with Asia and Latin America, which had been diverted to the external relations heading. Development policy is not only directed towards the ACP countries, but towards all developing countries with a view to eradicating poverty.
Furthermore, Commissioner, we thank you and we congratulate and support you, as well as Mr Nielson, in relation to the budgeting of the EDF.
Secondly, our policy for assisting certain groups such as the Saharan people, who for years have been objectively in a situation of humanitarian need, should not be called into question for administrative reasons.
And finally, the integration of the gender perspective into the Budget is one of our objectives.
With regard to the figures, our priorities are the funding of actions to promote children's rights, funds for combating AIDS and malaria, increasing funds for Latin America and the Mediterranean: between the 2000 Budget and the draft 2004 Budget the funds intended for cooperation with these regions have plummeted; they have been reduced by 10.8% for Latin America (EUR 37.2 million) and 16% for MEDA in real terms (EUR 193.9 million), despite the new priorities for these two regions and the summit which is going to take place. Their reflection in the Budget should not conflict with the ceiling corresponding to us, provided that there is no intention to fund any other new action or initiative through development funds.
And it is for this reason that we are also concerned about the reconstruction of Iraq or any other issue which may arise.

Laschet (PPE-DE).
Mr President, Commissioner, Mr President-in-Office of the Council, ladies and gentlemen, I would also like to say something about some of this Budget's foreign policy aspects and will start by responding to Mr Poos, who said that the amendment tabled by the Group of the European People's Party (Christian Democrats) and European Democrats is unacceptable in terms of the amount that it proposes for Iraq, as a UN mandate is required. Mr Poos has evidently not read this amendment, which takes as its reference value the resolution that this House will be adopting tomorrow, it being a minimum precondition for the European Union's involvement in Iraq that there should be a UN resolution, that the money should be put in a trust fund controlled by the World Bank and the United Nations, that the Iraqi people should be involved in the processes of democratisation, in the adoption of a constitution and of the establishment of institutions, all of which are now needed, and, above all, that the oil industry should be placed in the hands of the United Nations, in order that it may be a source of funding for the country's reconstruction. The budget allocation we have proposed is dependent on that condition, and, even if we are talking in terms of one single euro rather than five hundred million of them, it matters that we should get this general concept and these framework conditions right. From that point of view, the Budget today and Parliament's resolution tomorrow must be seen as very closely interconnected.
Secondly, if this leads us to say that we want to get the United Nations more involved, then we must give more attention to it and to our relations with it overall - and that is what Parliament and the Commission are currently working on. I believe it is tomorrow that the Italian Presidency of the Council is signing, in New York, an agreement on crisis management and crisis prevention, but this needs to be mentioned in the Budget. At present, our programmes for the United Nations are all shared out between a whole load of items in the Budget, without there having been a policy debate to set priorities. As an issue in this House, the subject of the United Nations has been dormant in recent years, and the Commission's new document gives hope that we will now be defining our relationship with the UN in more political terms, even though the Commission has achieved the masterly feat of producing a document of nearly fifty pages that refers not even once to Parliament and the budgetary authority. I think that any redefinition will also necessitate dialogue between the Commission and Parliament.
Now for a third comment, addressed to the Council. As we do in every Budget procedure, we have put a number of Budget lines in reserve, as the Council still refuses to provide the information agreed on in the November 2002 agreement between Parliament, the Council and the Commission. This sometimes seems as if we are battering our heads against the Kremlin wall in the way we used to do. We are sure that we will overcome this obstacle and come to an agreement with the Council that will guarantee the public and Parliament greater transparency in future concerning what is going on in the common foreign and security policy.

Herranz García (PPE-DE).
Mr President, firstly, and as a Member of the Committee on Budgets, I would like to thank the two rapporteurs, Mrs Gill and Mr Mulder, who are present at the moment, and the President of the committee, Mr Wynn, for the work being done at the moment in that committee, which we hope will have a favourable and happy outcome in December.
I would like to refer to the agriculture chapter, and I would also like to thank Mr Fischler for being here and say to him that, despite the lack of success in Cancún, I am particularly grateful for his defence during these meetings of the interests of European farmers and breeders, of all Europeans and of the whole commercial world.
The amendments proposed to the agriculture chapter are aimed above all, in my view, to the promotion and quality of European products. It is important to bear in mind the amendments I have presented, because one of our fundamental tasks is to protect and defend European products, because their production involves stricter methods with regard to quality and respect for the environment.
We must also promote information in relation to the common agricultural policy. At this moment, when the whole of the common agricultural policy is being changed, it is important that the citizens know what this policy is and, above all, the opportunities it represents for European agriculture and livestock.
I have placed particular emphasis on the introduction of agricultural insurance systems and I would like this to take place and for it to be reflected in the 2004 Budget.
Finally, I would like to refer to the restoration of funds for the 'Forest Focus', for the prevention and combating of fires, because, as we have seen this summer, the absence of prevention and combating of forest fires may lead us into very dramatic environmental situations.

Schreyer
. (DE) Mr President, Mr President-in-Office of the Council, honourable Members, I do not propose to discuss agricultural policy, as much more has been said - by Mr Poos, Mr Laschet, and Mr Salafranca - on the subject of Iraq.
I am glad to see consensus on the need for the conditions to be met. Aid, including that given by the European Union, must be provided under the aegis of the United Nations. The Trust Fund must not be confused with the fund administering the yields from oil deposits, but must be separate from it. I also believe that we can also achieve consensus on other points relating to the conditions. The EUR 200 million proposed by the Commission would also express well our sense of obligation, our awareness of the need for us to take on responsibility, and our willingness to do so together on the basis of the EU Budget. It is also very important that this aid for Iraq should be seen in relation to the shared commitments that we have made in other areas. Let me reiterate that EUR 214 million have been allocated to Afghanistan for next year, thus discharging in full the obligations into which we entered at the donors' conference in Tokyo. I would also like to again lay stress upon the fact that we are allocating, next year, EUR 250 million as additional aid for Turkey, Iraq's neighbour, with 65 million inhabitants, and that must also, of course, be seen in its context.
Next week - on 1 October - we will have the opportunity to debate this in a joint meeting of the Committee on Budgets and the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, when the Commission will be putting forward a proposal that the margin and also part of the flexibility reserve be used for Iraq, and will be submitting an amending budget.
Mrs Figueiredo asked about the Forest Focus programme. For this we have allocated the same amount as this year. Both the Regional Development Fund and the Structural Funds can be used for reforestation measures and also for measures to prevent natural disasters. The question has been raised as to whether cohesion policy can be pursued at all successfully using a European Budget amounting to some 0.99 per cent of the Community's economic product. The answer to that is in the affirmative. The European Budget and its effects demonstrate that our support for cohesion policy is yielding fruit. Last week, I presented what we are calling the 'allocation report', which shows who is paying what and where the money goes. The four cohesion countries are the four net recipients from the EU's Budget, which is only right and proper. The two poorest countries receive the most funds expressed as a percentage of their gross national product, and the cohesion reports do indeed show how successful that is, and that the European Union is successful in its efforts to reduce the economic gaps between one country and another.
Mrs Buitenweg addressed the issue of the Korean Peninsula Energy Development Organisation. This year, these funds - which, by the way, your House had blocked - will be reallocated to other purposes, whilst this breach of the agreement means that we have allocated no funds in the preliminary draft Budget for next year. North Korea is not, unfortunately, offering to abandon its atomic programme and to invest instead in renewable forms of energy. This is also relevant to Mr Dell'Alba's question on the human rights clause. Countries such as North Korea, in which humanitarian emergencies exist at the same time as human rights are being abused, always put us in a very difficult position. Indeed, the Commission had also decided to step up humanitarian aid for North Korea, concentrating this aid on mothers, who are worst affected by the terrible conditions in that country.
The Commission did of course bear in mind administrations' capacity for implementing them when making its proposals relating to Latin America, but we will of course look at Parliament's various proposals as well.
Next, Mr Garriga Polledo asked whether the means of payment cut by the Council are still adequate. As it usually does in October, the Commission will shortly be proposing a revision of the agricultural policy, with new assessments of market developments and taking due account of the exchange rate. We will also be submitting an estimate relating to the old Structural Funds programmes, but I can tell you even now that the Commission cannot accept that the means of payment for pre-accession aid should be cut back. Next year, although the candidate countries will be Member States, they will still be getting help with their pre-accession programmes, as these will still be in progress. It is fortunate that the pre-accession programmes are now at last being better implemented, and this of course means that we need the means to pay for them. We would be very glad if Parliament and the Council together were to restore the former amounts.

Maat (PPE-DE).
Mr President, before discussing the budget, I would like to convey our good wishes to our Commissioner, Mr Fischler, on his birthday today. We are particularly pleased that he is here for the budget, but also that he is celebrating his birthday with us. We appreciate that very much.
This is not the only support I am giving this Commissioner, as my words will also be critical of the Council and will contain support for the Commission's policy. For the sake of clarity, much has changed in the budgetary system. Amongst other things, pre-accession aid for the new members has been added to the agricultural budget. What is particularly striking, though, is that the Council has cut the Commission's original preliminary draft of the budget right down to the bone. For a start, a distinction has again been drawn between the old or existing Member States and the new Member States. The Committee on Agriculture and Rural Development regrets that. A linear reduction has also been made, however, which amounts to a considerable sum in many cases. A linear reduction has been implemented ruthlessly in budget amounts of more than a billion in particular.
I would like to say this to the Council: you must realise that the Committee on Agriculture and Rural Development stands four square behind the Commission. It wants the approbations included in the preliminary draft of the budget reinstated. I can understand that the general rapporteur, Mr Mulder, wanted to submit a block amendment that includes this. This is also urged in the Committee on Agriculture and Rural Development's report. It would be a good thing if the Council were to realise this, particularly given the fact that next year will be a difficult year; a complete review of our agricultural policy and the accession of new Member States. The Council must therefore realise that it is essential that the Commission be given sufficient financial leeway to implement this policy.
I would like to mention some of the various items. It is true that we are aiming for a more market-compliant policy, but at the same time the Council wants to make too many cutbacks, which the Committee on Agriculture and Rural Development considers unacceptable. To begin with the school market programme; we propose earmarking an additional 10.3 million for this. We also refer to the support for young farmers and for future-oriented and innovative projects. I am referring to the LEADER programme and the SAPARD programme. If it were up to the Committee on Agriculture and Rural Development, there would be an extra 144 million.
The same applies to promotion, control and prevention. With regard to the latter point, I would like to say that we must not allow more cutbacks on the veterinary funds and the emergency funds for animal diseases to be made. We want 30 million extra for these two items.

Goodwill (PPE-DE).
Mr President, a number of amendments to the budget were adopted by the Committee on the Environment, Public Health and Consumer Policy. A main objective was to restore or increase the budgets of the agencies on which we rely to carry out statutory and other tasks set by Parliament, namely those of the European Medicines Evaluation Agency, the European Environment Agency and the fledgling European Food Safety Authority. New tasks are continually being delegated to these agencies and it is vital that they are adequately resourced.
Secondly, once again we expose the hypocrisy of a European Union that pays lip-service to health promotion by combating smoking-related diseases but continues to pour EUR 1 billion per annum into subsidising the production of low-quality tobacco, much of which is exported to developing countries. How can this be justified?
Lastly I turn to CAP reform. European Union and US farmers are subsidy junkies and although the agreement does not spell an end to this transatlantic addiction, it may be a step in the right direction. We applaud moves from direct aid to aid linked to environmental objectives, but we know very well that many environmental directives are not being complied with. For example, the Nitrates Directive, despite being 13 years old, is only being complied with in two Member States. Does Commissioner Fischler foresee individual farmers, regions or Member States having their cheques cut back because of this non-compliance? Are we only paying lip-service to a link between the CAP and a cleaner, better environment?

Fischler
. (DE) Mr President, honourable Members, ladies and gentlemen, as Mr Maat has already mentioned - amendments adopted by the Committee on Agriculture and Rural Development are restoring the estimates for various Budget lines under heading 1a to the levels envisaged by the preliminary draft Budget. Although the Commission welcomes these amendments, I would like to remind you that, at the end of October, the Commission will be approving a letter of amendment to the preliminary draft Budget in respect of the European Agriculture Guidance and Guarantee Fund, in order to update the resources required. It would certainly be premature to give precise figures for the amendments that we will be proposing, but I am already able to tell you something about the important factors that make these changes necessary. These include, first, the depreciation of the US dollar against the euro, which has had consequent effects on certain export refunds or on aid; then, the decision to grant, as early as 2003 - that is to say, in the Budget year 2003 - certain advances against animal premiums for those regions that suffered particularly from the summer drought; and, finally, an agreement on the reform of the common agricultural policy, which, however, is expected to have little effect on the Budget for 2004.
Let me now return to the amendments that the Committee on Agriculture and Rural Development adopted. The amendment relating to subheading 1b on rural development increases the estimates to such an extent that they would exceed the upper limit in the Financial Perspective by some EUR 100 million. Whilst the Commission shares your view that there is an absolute need to strengthen the second pillar - after all, this is also the general tendency of the modulation agreed on as part of the reform of the common agricultural policy, and, moreover, funds will be reallocated from subheading 1a to subheading 1b with effect from 2006 - you will understand that, where the 2004 Budget is concerned, the Commission is unable to go beyond the upper limit in the Financial Perspective.
Turning to SAPARD and to the introduction of a new Budget line for the funding of a sort of 'Leader East', I would like to say that, in the short time available, I see it as neither feasible nor desirable to provide, in the 2004 Budget, for 'Leader'-type measures in a new preparatory instrument. We are, however, currently examining how SAPARD's basic rules can be altered in such a way as to do justice to your concerns.
Finally, I would like to discuss some of the priorities set by the general rapporteur. Firstly, the resolution on the Budget for 2004 states that funds are to be made available for the further development of opportunities for the use of environmental indicators. In this context, the rapporteur demands that a study be drawn up on how these indicators are worked out. I take a favourable view of this. The second point has to do with the implementation of a preparatory measure to promote the introduction of insurance schemes to cover economic losses resulting from epizootics. As the Commission is very much in favour of a public debate on this issue, to involve all the stakeholders, we are planning for next year a series of consultations and seminars, which will involve all the services and parties affected.
As regards the development of marker vaccines and discriminatory tests for pathogens such as those causing foot and mouth disease or classical swine fever, let me say on behalf of my fellow-Commissioner Mr Byrne, that the Commission is working on a directive in this area, which is to create the legal basis for funding to be made available for the development of standard serums.
Once the Commission has approved this directive, there will be an invitation to tender for the manufacture of these standard serums. After evaluation, a decision will then be taken on the manufacture of other serums and the funding that this will require.
Turning to the proposal for the examination of systems for the quality assurance and certification of what is termed integrated supply chain management, I am able to assure Mr Mulder that the Commission is in favour of budgeting half a million euros for the purpose of funding new studies and a conference.
I would also like to respond to the accusation that we are continuing to fund the tobacco sector. Let me draw your attention to the fact that the Commission has today decided that we will carry out a reform of the tobacco sector, which will result in these financial resources being completely decoupled. As regards non-compliance, in certain situations, with the nitrates directive, let me point out to you that the Commission has for some time already been taking legal action on this, but this is primarily to do with the way in which the Member States have only partly complied with the requirements of the nitrates directive and have therefore not implemented it. It follows that this cannot be laid at the door of individual farmers.
I would, finally, like to point out to you that the Council has reduced the number of posts for expenditure connected with enlargement. As you will all be aware, the common agricultural policy will be applicable in the new Member States from the day of their accession, with nothing left out. This makes it absolutely necessary that the Commission should have enough in the way of personnel resources to be able to effectively implement the common agricultural policy.
Let me turn now - very briefly - to fisheries and to the report by Mrs Langenhagen, Mr Mulder and Mr Färm, the motion for a resolution in which I can very largely endorse, so that I would now like simply to pick up on only a few of its aspects. As long ago as March, when we had the resolution on the white fish sector, Parliament called on the budgetary authority to draw up a plan for allocating EUR 150 million to compensate for the losses sustained by coastal communities as a consequence of the crisis in white fish stocks. On several occasions, I asked the Member States to tell us how much additional funding they required. With the exception of the United Kingdom and Denmark, though, not one Member State reported itself to be in any need. The Commission is therefore unable to put before Parliament any proposal for additional funds.
The same is true of the attempt to have scrapping funds funded to the tune of an additional EUR 32 million. That, too, proved unsuccessful, as the Member States did not provide the necessary data. Mr Färm asked why funds could not be reallocated to provide the EUR 32 million, and so I would like to remind him that there is no longer any margin in heading 2, quite apart from which, all funding commitments were finalised right at the beginning of the programme planning period in the national and regional programme planning documents for all four of the Structural Funds. There can therefore be no reallocation before next year's mid-term review.
I can confirm that we will, in the coming weeks, be submitting a proposal on the Regional Advisory Councils. I agree with the statement in Mrs Langenhagen's report that fisheries agreements should be endowed with appropriate funding and that their budgets should be as transparent as possible.
On fisheries inspections, I am able to inform you that we will, in the weeks to come, propose that the current Regulation on the Member States' expenditure on inspection work be extended to run until 2005, and provision is made for this in the draft of the 2004 Budget.

Kreissl-Dörfler (PSE).
Mr President, Commissioner, we Socialists welcome Mr Maat's report, on which I would like to make the following comments. As young people's health is always of very great importance to us, we should be building up the school milk programme, rather than virtually freezing its current funding in the way that the Council has decided. Existing funds will not be enough for ten new Member States, and adequate funding for rural areas and their development, along with assuring the quality of food production, are equally indispensable. This is another area in which money must flow, and it is also important that it should be possible to move from measures to regulate the market to support for rural areas, which, at present a fragile sapling, may thus be enabled to put down strong roots and to flourish.
As rapporteur of the temporary committee on foot and mouth disease, I can see that the enlargement of the European Union means that there must be significantly more investment in the prevention of epizootics. I am glad to hear Commissioner Fischler tell Mr Byrne that more money should find its way into research, as a calamity such as the one we have witnessed in Great Britain must not be allowed to happen again. What I would say in general terms to the Council is that trimming budgets as if you were mowing the lawn serves no useful purpose whatever, for the agricultural budget is not a quarry to be worked for the benefit of this or that other project. The right road ahead does not go by way of across-the-board cuts, and this House wants what was provided for in the Convention's draft constitution - full powers of codecision and the abolition of the clear-cut dividing line between compulsory and non-compulsory expenditure. You can be certain that expert decision-making in both the Committee on Agriculture and Rural Development and the Committee on Budgets would then be guaranteed beyond doubt. Thank you for your attention.
Graefe zu Baringdorf (Verts/ALE).
Mr President, Commissioner Schreyer, Commissioner Fischler, I want to focus on rural development. By topping up the funds for this area, the committee has made it clear that it is to this that we attach a higher value and that the cutting back of the market organisations demands that there should be compensation for farms that take themselves to market. We note with concern the evidence that the groups - and, so one gathers, the Commission - are discussing how to use long-term financial planning as a means of trimming this area rather than extending it, or the possibility of putting it under the Structural Funds. Commissioner Fischler, I see the fact that there is now a structural line devoted to 'rural areas' as a great triumph on your part. It would be fatal if the forces that want to put things back the way they were were to prevail, as the Structural Funds criteria for rural areas are not very favourable.
When expressing your view of the 'Leader East' issue, you pointed out that you wanted to adjust the SAPARD programme accordingly. We have had this discussion before. I hear what you say, but I lack the faith to believe that the administration will actually put it into practice and that a sensible practice will be the result. A 'Leader East' programme should therefore be set up for Bulgaria and Romania, in order to involve the ordinary population in the development of rural areas.
Let me conclude by saying that it was also with great disquiet that we heard - as we shall shortly do in the committee, when you will give us your comments - that the offer was made to make the Green Box a subject for negotiation. Such a development we really would regard as crazy. If something that is necessary from the point of view of rural development is now to be seen as a subsidy currently laid off and liable to be cut back, then we should discuss that in this House and make our position clear in the next round at the WTO.

Hyland (UEN).
Mr President, the common agricultural policy remains the single biggest item of expenditure in the Community budget. Along with most colleagues, I welcome the fact that a series of reforms under the current and past Commissioners have brought agricultural expenditure under control. It is also welcome that the Council agreement in Brussels in October 2002 brought stability and predictability to farmer spending up to 2013. Furthermore, the most recent Luxembourg agreement on CAP reform ensures that payments will shift away from trade-distorting subsidies to payments based on services to society provided by our farmers in areas such as the environment, food safety and animal welfare. I strongly support this trend.
I also strongly support the need to maintain export refunds as a crucial stabilising tool within the budget. The amount of money given has been a decreasing portion of farmer spending over the past number of years. Nevertheless, this will remain an essential mechanism for assisting heavily export-dependent sectors to maintain a position in export markets in periods when prices are plunging and markets are uncertain.
In conclusion, I welcome the statement from Commissioner Fischler on the proposal to decouple aid for tobacco producers, which will hopefully lead to a reduction in the production of this health-damaging crop.

Haug (PSE).
Mr President, Commissioners, comrades, ladies and gentlemen, in the areas of environmental protection, consumer protection and health, we keep on, at European level, we keep on attempting to tackle very ambitious projects that are intended to improve the public's quality of life in every area: environmental action programmes, action programmes in the field of public health, consumer protection strategies, strategies for the environment and health, and so on and so forth. But what about the resources that are needed if we are to be able to successfully bring these projects to fruition?
This is where the Commission's preliminary draft Budget is rather timid, characterised by willing submission to the Council's mania for indiscriminate austerity measures. How else is one to imagine the genesis of this PDB, which the Council or - to put it a better way, the functionaries in COREPER - have tightened up? That, let me add, for a year in which the Budget is to be drawn up not for fifteen Member States, but for twenty-five, for which it must be adequate. That, though, is the Council with which we are familiar, ceremoniously signing treaties, but refusing to put its name to the budget appropriations for them. Just do not let the Commission get into the same way of doing things. We know that the ten new Member States' institutions are in need of a great deal of reconstruction where the protection of the environment, consumer policy and health care are concerned; these are areas in which, despite the funds made available under the pre-accession strategy, they have as yet achieved nothing of any substance. Not only have we learned that from the Consumers International report, but the Court of Auditors has also enjoined us to take good note of it. Of course we want 'greening of the budget', consumer protection as a mainstreaming principle in all European policies, and awareness at every level of Europe, but, to do that, we need operational resources and resources in terms of personnel, and these have to be made available. That will not be done only by pithy strategies or action programmes written down on paper - which, of course, does not blush!

Miguélez Ramos (PSE).
Mr President, Mrs Langenhagen, the draftsman of the opinion of the Committee on Fisheries, has clearly communicated the concerns of this committee with regard to the draft Budget for 2004.
In the view of the Socialists, and in my view as their spokesman, three of the issues of the many which the rapporteur indicates in her report are the most prominent and my group fully agrees with them. The first relates to the socio-economic crisis in the white fish sector, which results from the recovery plans for a series of species including hake and cod and to which we must now also add halibut in the fishing grounds of the NAFO. We agree with the sum of EUR 150 million proposed by the rapporteur.
The second, ladies and gentlemen, relates to the scrapping fund, for which the Committee on Fisheries proposes a sum of EUR 32 million. I would like to say to the Commissioner that he, as Commissioner, and the Commission itself, has promoted a reform of the CFP of a highly destructive nature, scrapping fleets, and that the Commissioner for budgets should perhaps tell us now how much additional funding is going to be allocated by the Commission to pay for this policy of scrapping.
The third issue I would like to focus on is the fisheries agreements. The new ones: Tanzania, Kenya, Libya, etc. for which additional funds will be needed, and the old ones, for which the Committee on Fisheries maintains its former demand that the part corresponding to compensation for fishing opportunities be separated in this budget line from the part corresponding to development cooperation with third countries.

Fischler
. (DE) Mr President, Mr President-in-Office of the Council, honourable Members, I do not want now to repeat all the things I said in my speech earlier, but just to deal with a number of the issues that have been raised.
For a start, I believe that we are, in principle, in entire agreement where the issue of rural development is concerned, but we must, on the other hand, all abide by the boundaries set by the Financial Perspective. As regards what Mr Graefe zu Baringdorf rightly described as a long drawn-out debate on additional measures in connection with a sort of 'Leader East', I do not know if I can now, so to speak, convert him, as he has said he lacks the faith, but I am quite serious in saying ?

... that we will rearrange the basic regulation in such a way as to do justice to your concern. Taking up your suggestion that we should discuss the things that were said in Cancún about the Green Box, I really would greatly welcome a discussion of this sort, which we could perhaps extend by inviting various representatives of NGOs to join in. I did in fact get the impression from Cancún that this is where what one might term the sustainability department and the development department in some of the NGOs sometimes put forward quite contrary points of view, and I believe that this is something we should really hammer out together.
I have already indicated that the Commission can make a proposal on fisheries policy only if the Member States are willing to give us the necessary figures. Their needs are obviously not that great, or else they would have provided the figures. I am not, therefore able to say at present how much of the Budget is to be allocated additionally to the scrapping policy; my only guide is what we have actually been told is needed.
We are meant to - and we will - draw a distinction between the development component and that element in which we pay for the acquisition of fisheries rights under an agreement, but no new subheadings are needed for this in the Budget; it can be quite sensibly organised within one Budget line, and that is what we are going to do. You will very soon find your requests being complied with in the proposals that we are going to submit.
(Applause)

Heaton-Harris (PPE-DE).
Mr President, I am delighted to speak to the House - and in public - as a member of the gagged and muzzled committee of this Parliament which has been unable to conduct its business properly because of a decision by the Conference of Presidents about interviewing Mr Prodi on one of the subjects I will be raising shortly.
Following the normal practice within my committee, this year I have used the matters that we found during our discharge procedure to draw some budgetary amendments to get what the Committee on Budgetary Control would like to see from the Commission and other institutions.
It breaks down into three different areas, two are related and will be touched on later, and the other is the Committee of the Regions. We have yet to grant discharge to this committee for the 2001 set of accounts and, as more revelations appear about the state of its accounts and what has been going on within that committee, it is highly unlikely that we will do so. Therefore we have tabled an amendment asking for 25% of members' allowances within the Committee of the Regions to go into the reserve until the rapporteur provides us with much of the information we have requested.
The main point concerns Eurostat and OLAF. We have tabled an amendment asking for a significant sum of money to be placed in the reserve for OLAF. This achieved near-unanimity in the committee, because we have been unhappy with the way OLAF has been reporting to the budgetary authority, in many cases contravening its own rules.
Finally, I turn to Eurostat. We are very concerned about some of its activities and the way in which the Commission is dealing with it. We have tabled a number of amendments and, when it comes to the main budget debate, more amendments - that we shall be pushing on behalf of our committee - may be tabled by the political groups, because it is about time that someone took responsibility for the problems within Eurostat.

Rothley (PSE)
Mr President, the Committee on Legal Affairs and the Internal Market, when dealing with the issue of European jurisdiction, limited itself to seconding the proposal for the Commission's preliminary draft, which provides for increases for two reasons; the first being in consequence of enlargement, and the second in response to new tasks for European justice, in which context more funds are allocated for the purposes of documentation and translation. What that means - no more and no less - is that the Commission's preliminary draft does not include any structural improvements in the conditions under which the European justice system functions.
Nevertheless, we went no further than doing this, and I would like to urge the Committee on Budgets not to reduce this still further, for, if we allocate only the funding relating to enlargement, and not the funds for the additional tasks, the situation cannot fail to deteriorate still further. The Committee on Budgets will have to decide whether to take sides with the Council or with the Commission and the Court of Justice.
The second point that I would like to address has to do with the Academy of European Law, the work of which, over the past ten years, has met with immense success. Its founding members, Germany and Luxembourg, have since been joined by Ireland, Poland, Greece, Spain, Portugal, Italy, the United Kingdom, the Netherlands, Hungary and Sweden. Finland has announced its intention of joining.
Over the past ten years, a total of 38 000 people from the European Union and the new countries have taken part in seminars and training courses. The Academy of European Law has, in that time, become the secretariat of the European Judicial Training Network, and it will, in future, be particularly involved in promoting cooperation between judges in Eastern Europe. All this justifies a commensurate increase in the grants to the Academy of European Law under the financial programme, not only for 2004, but thereafter.

Kinnock
. Mr President, I am extremely grateful to you and indeed to Mr Rothley for speaking long enough to enable me to get through the door. Mr Rothley did this without any pre-arrangement or knowledge, and, I guess, by extra-sensory perception.
As the House will know and as my colleague Commissioner Schreyer has said, the Commission's Annual Policy Strategy for 2004 has identified three policy areas as priorities, namely enlargement, stability and sustainable growth. We also made it clear that on the second and third of those priorities the work is to be staffed by internal redeployment of Commission personnel.
The Commission also decided that in the further implementation of reform, the redeployment of resources should be accomplished with the assistance of the time-and-numbers-limited voluntary early retirement scheme.
In the case of enlargement, we recognised the reality that new human resources - new posts - were needed in order to meet the fresh and very substantial demands arising from the historic change. The rationale for the proposed increase is very straightforward: the accession of ten countries on 1 May 2004 will bring a 66% increase in the number of Member States, a 20% increase in the population of the Union and an 82% increase in working languages.
The Commission will handle the very diverse and substantive new demands with just 13% more staff: 3900 extra qualified people recruited over a transition period of five years from the beginning of 2004 through to the end of 2008. For 2004 - enlargement year - after 500 deployments of existing personnel within and between existing services, the net addition needed is 780 new posts.
To establish this figure, all current tasks performed by Commission services were classified on the basis of 'activity-based management'. Calculations were strictly based on the additional workload that we know will have to be borne by the Commission as a direct result of enlargement. This systematic approach was applied across all services and the information provided was then carefully screened for extra certainty. In short, we based our request for additional human resources on a rigorous and comprehensive analysis of real and proven operational needs.
I am very glad that representatives of the Council are here. I thank them for their courtesy in attending this debate, but I have to say candidly that, against this background, the cut of 272 posts proposed by Council in its judgment on the provisional draft budget is unwelcome and, in the light of enlargement, unrealistic.
I believe that it is vital for this Parliament to be made aware of the sombre reality that providing less than the 780 enlargement-related posts which we have proposed as essential for 2004 would have a major and very negative effect on the Commission's ability to manage the fresh task arising directly from the accession of ten new Member States which, universally and unanimously in Commission, Parliament and Council, we strongly advocate and stoutly support.
In making our proposal we were not seeking to grab posts. We were simply being realistic about what has to be done in and for a bigger Union. I am therefore pleased to see the horizontal amendment - Amendment No 3053 - tabled by Mr Mulder, which would facilitate the re-establishment of the number of posts requested. However, the fact that those posts would be in the reserve would produce significant practical problems. By definition, it would mean that the new posts would be made available to the services later, thereby further delaying the recruitment process. In the meantime, the resulting uncertainty and delay would seriously inhibit proper fulfilment of the tasks of the Commission.
I want to make it clear to the House that the list of criteria given by Mr Mulder in his Amendment No 3053 is realistic, but those criteria could usefully be clarified further. For instance, concerning the second criterion, I want it to be plainly evident that the proposed recruitment figures will enable the Commission to ensure geographical balance across the institution after enlargement. That is fundamental. In any case we want to avoid the addition of any further criteria which the Commission could not, frankly, feasibly meet in time for the second reading in this House.
The Commission has manifestly shown great care and deliberation in calculating needs. The minimum necessary number has been proposed. No-one in this House appears to be motivated by any intention to destabilise the already demanding processes of fulfilling the tasks arising from enlargement. When all of those facts are self-evident, I hope that there will be further reflection on the proposal to put posts in the reserve with all that implies in practical terms.
The House is also considering amendments which seek to make changes to the establishment plan. Amendment No 3502 proposes to reduce administrative and staffing costs by 10% in a number of policy areas and to place that 10% in the reserve with the aim of fostering the operational part of the programmes. I am bound to say that this would lead to a substantial delay in future recruitments. While I understand the political intention behind this amendment and realise that it is consistent with similar amendments in previous years, the Commission will have great difficulty in trying to fulfil the relevant programmes effectively without the appropriate level of administrative resources.
I do not need to tell Members who have been involved in efforts to introduce activity-based budgeting and greater transparency that we are not debating a technical matter. The Commission's responsibility for allocating resources to activities and for accounting for those allocations is a profoundly political issue.
As the internal allocation of human resources is decided, the Commission will give proper consideration to the concerns expressed by this Parliament in its budgetary resolution. But, for the sake of effective operation and responsibility, the administrative autonomy of our institutions must be maintained. That means that the conclusive decisions on establishment plans must, in the final analysis, continue to be for the Commission to make on the basis of properly calculated and manifest needs. I know that many Members will recognise the principle and its practicality. I have huge respect for the many qualities of Mr Mulder, but he is pre-eminently a practical man. I hope that those considerations will recommend themselves to him. I only give praise where it is due ...

... lavishly to Mr Mulder, but nevertheless, when it is due.
Apart from the cuts relating to the appropriations for posts, the Council has made a number of other cuts in the administrative budget of the Commission relating to delegations, auxiliaries, missions, meetings and representation offices. Faced with that I want to be absolutely clear: cutting the budget of our delegation offices would damage the last phase of the deconcentration, which is a process strongly favoured by this House and by the Commission. The proposed reduction on missions, meetings and representation offices will also inevitably have a negative impact on the enlargement process. The Commission needs the preliminary draft budget to be re-established in order to meet the administrative challenges of 2004 arising inevitably and foreseeably from enlargement. Expenditure in that area is neither excessive nor decorative. It is absolutely essential to good performance.
Also essential to good performance is the continuation of the normal transformation of posts needed for career development. If, as the Council had proposed, the transition to the new career structure - strongly and rightly supported by this House and indeed by the Council - was to be accompanied by the withholding of conventional patterns of promotion, the effect would understandably be confusing and demoralising for the staff of the European public service. However, I understand that the rapporteur proposes tabling an amendment to re-establish this routine practice. That would be a most welcome proposal and one that would give a reassuring and strongly cooperative signal to our staff, whose active and confident engagement in modernising change continues to be absolutely vital, as it always will be.

Casaca (PSE).
Mr President, Commissioner, allow me to begin by telling you in public what I have already taken the opportunity to tell you in private, namely that I profoundly admire the courageous and direct manner in which you are facing up to your responsibilities in the Eurostat case.
Allow me also, however, to say to you just as directly that I would describe the way in which the Commission is hiding the internal audit report from Parliament, and especially from the Committee on Budgetary Control, as a deeply irresponsible act. I must alert you to the consequences of that act as of now. We required that report as part of the discharge procedure, as the essential condition on which discharge was to be granted. The Commission itself, as a body, must consider where the responsibility lies here.
I would also like to let you know, Commissioner, that I fully agree with what Mr Heaton-Harris has already said about the cuts in the amounts for both OLAF and Eurostat. I also believe that it is essential that the principle of political responsibility should be implemented, in practical terms. I believe that Commissioners should assume their responsibilities and be given the means to do so. I believe, in particular, that each Commissioner should have at his or her disposal an inspection, an audit, or whatever else they need in order to address the questions asked of them.

Virrankoski (ELDR).
Mr President, firstly I wish to thank Commissioners Schreyer and Kinnock for their successful reform of the Commission and the reshaping of the Financial Regulation connected with it. They create a basis for the clarification of personal accountability, taking responsibility and the creation of activity-based budgeting and management.
This budget is in fact the first activity-based budget. How to improve activity-based management is a continual challenge. The objective must be that the different policy areas be given room for manoeuvre in creating the most efficient administrative structure possible. This means that in the future we can very likely abandon the practice where Parliament decides separately on the establishment of a post or changes to it. Parliament will only decide how much money is available in a particular administrative area. This may then itself decide on the creation of the most appropriate administrative structure.
In the future, defining and bearing personal responsibility will be of key importance, because activity-based budgeting and management lead to the downward delegation of power of decision. As regards financial management, we have to be able to establish exactly what we require of the careful management of finances.
Different organisations and NGOs make up their own areas of specialisation, which the European Parliament has given its support to. These 'earmarked' A-30 budget lines have been the budget's bugbear. To be honest, access to them on the part of organisations has been on an arbitrary basis. Often the European dimension to these organisations has not been any better off than that of hundreds of other organisations that have been operating without support. Now a legal basis is being established for the system and the question of assistance is to be for the Commission to decide. This measure must be implemented as soon as possible.

Ferber (PPE-DE).
Mr President, ladies and gentlemen, Commissioner Kinnock, I am glad that you have been able to get back to your roots as transport commissioner by delivering your speech to us just in time. When you took up your new responsibility in 1999, you promised to create the most modern and most efficient administration in the world. Now you are trying to get us to buy the idea that, as your term of office in this Commission draws to a close, you have actually achieved this exalted objective, but, Commissioner, things in the garden are not quite as rosy as the glowing colours in which you have depicted them would suggest. There are many dark clouds overshadowing it, and a number of points that I would like to take up.
The first is that it is, in my view, unacceptable that the Commission's administration does not reflect what the budgetary authority wants. I am glad to see that Commissioner Vitorino has now arrived; we discussed this under the heading of information policy this morning. We have topped up the funds for this, leaving nothing in the reserves, but, at ground level, there is no administration and the decentralisation to which you referred does not work either. Agreements with the Member States are not concluded and there are no funds for things - like the outcome of the Convention - in which the Commission has no political interest. You have EUR 10 million at your disposal, and only EUR 1.5 million have been spent.
It is not your job to decide for yourself how the Budget is to be administered, but to ensure that the administration actually carries out what the Council and Parliament have decided. You are failing to do so, and, as Commissioner for personnel, you share the responsibility for that. I could give you many other examples of this.
Secondly, this is also about those areas in which the Commission itself bears financial responsibility. The excuse is always given that it is the dastardly Member States who administer 80% of the budget, but, where you yourself are responsible, you have to maintain order and, the members of the Committee on Budgetary Control have given you the clear message as regards the way you do that: that is your responsibility and you have to answer for it!

Kinnock
. Mr President, I am grateful to Mr Ferber for his kind remarks on my timely arrival. It reminded me of the time when I used to have to get to a 10 a.m. division in the House of Commons and narrowly make it in, practising my side-step around the policemen. It was not quite as complicated on this occasion.
I am grateful for constructive contributions and I can reply very briefly but I hope reassuringly to the honourable Members who have contributed. Firstly, I am grateful for the kind remarks by Mr Casaca because they are based on very thorough analysis of everything we are seeking to do. I wish that was a universal characteristic, but I find that some people writing in the press, for instance, have a confidence and an assertiveness in what they write, which is in inverse proportion to the amount of knowledge that they have.
I regret his understandable view that the Commission, to use his term, is hiding the internal audit report from Parliament. I understand the force of what he says when he reminds us again that the internal audit activity, the examination of contracts, was a direct product of the discharge resolution drafted, in fact, by Mr Casaca himself and some of his close colleagues. I fully recognise the force with which he puts the point. I only say this: we are having to use the Annex III procedure for a very basic reason which I am sure will be understood.
We have to observe strict confidentiality whilst trying to maximise information to the people who are most entitled to know, including Members of this House, simply because those reports which are now being completed contain a potential for disciplinary and even more grave procedures. That is not an excuse, it is not an evasion. It arises from the proper observance of the rights of natural justice and the presumption of innocence, and also from our strong desire not in a precipitate fashion to release details into the public domain which could then compromise the integrity of a case or cases we may wish to bring against individuals.
I hope that on examination it will be understood that I say this in a mood of explanation and transparency, not apology or evasiveness, and it is necessary simply because of the material we are dealing with. I realise that if there had been a historic background of trying to keep confidentiality to a minimum, and transparency to a maximum, then it would be easier for this House to understand that, when it is critically essential that we use confidential procedures, it is done for absolutely the best reasons.
I hope that, amongst other products of activity-based management and budgeting and the transparency that Mr Virrankoski spoke about, we will see a further evolution of the readiness of the Commission to make maximum disclosure whilst trying to safeguard the integrity of necessary procedures. The report will be available under Annex III of the framework agreement procedure when it is ready. It is being finalised literally now, so that it can be available in the proper form at the time promised.
As regards the consolidation of political responsibility I do not yet envisage the full implementation of the architecture that Mr Casaca desires, though I have a lot of sympathy for it. That architecture consists in the establishment of a full financial control unit, as it were, in the office of every Commissioner. But I consider that we have made substantial progress towards achieving that, on the one hand in the general ambit of the Financial Regulation, but more specifically in the reforms adopted by the Commission, in some cases as recently as July 2003. Those guarantee an absolute requirement for reporting on management conduct and financial operation in a DG at least twice a year, specifically to the responsible Commissioner, so that Commissioners will in future continue to be au fait with the practical operational management of the directorate-general, as well as bearing their straightforward and obvious political responsibilities. It will not diminish political responsibility, portfolio responsibility or policy engagement: it is likely to add to those. Commissioner Schreyer and I sent a letter to all DGs in July 2003. The response we got from the DGs - with very thorough analysis seeking to detect any practices remotely related to what we have observed in Eurostat - was rigorous and encouragingly thorough. I know that Mr Casaca, with his interest in these matters, and probably Mr Mulder, will want to examine that. That will be very welcome.
Mr Virrankoski obviously shows great understanding and I know his background really gives him an authority in this area. I would simply say to him that I agree with his forecast for future structures and the practices that he anticipates, and express confidence that they will come to pass. Culture in an organisation of human beings is substantially a product not of ethnic or national origin or regional origin or language. Culture is a product of the systems and structures in which people work. By making massive reforms that radically change systems and structures, we foster the kind of culture of transparency and accountability which is fundamental to the successful operation of activity-based management and of the activity-based budgeting which reinforces that process.
To Mr Ferber I would say: it is a matter of record that my promise at the outset of the Commission - and I am not trying to denounce or go back on any catchphrases about the best in the world, etc. was that we would strive to achieve, through radical modernising reform, a well managed, high-performance, service-orientated, independent European Commission in the service of the peoples of the European Union. I do not think that was modest, and yet we are accomplishing it. To use his phrase, I do not imagine that the sky is as blue as he says I have painted it. We acknowledge in our frequent progress reports the shortcomings, the target dates that we have missed, as well as the ones that we have bettered. We acknowledge where further development needs to take place. It was, after all, this Commission which - as soon as we had prima facie evidence that gave us legal security in undertaking certain actions - suspended contracts, opened disciplinary proceedings, established the strongest, biggest ever inquiry task force in the history of the Commission, increased the staffing of the internal audit examination of contracts from 9 to 24 persons and has had those reports coming in absolutely on schedule. This is not evidence of a slothful or lax Commission, but neither does it mean that we imagine that the sky is permanently blue, nor do these glasses have any rose tint. I am impatient for further change. I want to see total implementation. That ambition is shared universally by my colleagues and we could not have made the progress we have unless we had had massive cooperation from staff assuming these obligations in addition to their normal workload and if we had not had the full-hearted commitment of every single Member of the College of Commissioners. Therefore, I do not try to pretend that we have done more than we have. I simply ask for a factual examination of what has been achieved. For instance, automatic mandatory mobility for senior management and for people in money-handling, contract-handling posts will in itself provide a safeguard against a repetition of the double accounting that we have detected in Eurostat. More than any other measure, but in addition, reforms of structures and systems of audit control and management control that give us - insofar as any human organisation handling money can get it - real, strong safeguards against any form of repetition of what we have detected and are acting upon now.
As far as the response to Parliament and the Council is concerned, I respect it. I come from a parliamentary tradition where an elected House of Commons obtained its strength by having the vote on the budget. Therefore I fundamentally respect and want to endorse that democratic procedure. I do not plead for us to depart from that. I do not make an argument for being insulated against the representations and judgment of Parliament or of the Council which represents the taxpayers. I do not ask for that for one second. I simply say that it is a practical reality that, without autonomy, it is difficult to exercise responsibility, and when we have autonomy our responsibility must be fully accountable. However, if we do not have the resources or the people whose presence, qualities and qualifications we can totally justify, then it is very difficult to see how the Commission can undertake the tasks it has now, let alone the ones that are to come as a consequence of this glorious enlargement, but which nevertheless we recognise to be additional obligations which we must discharge with efficiency and honesty.

President.
I would like to make a comment on the way this debate is structured. Our Rules of Procedure state that Commissioners may speak for as long as they wish. Personally, though, I feel that something is out of balance if a Commissioner speaks for twice as long as the three Members before him. Without wishing to restrict their rights under the Rules of Procedure, I would urge the Commission to give some thought to what I have said.

Kinnock
. I rise to do two things. First, I apologise if you feel that I have abused the Rules of the House. I would certainly not repeat that. I believe that people in this House know that my occupation of time is, generally speaking, very disciplined. There were fundamental points raised on a budget about which I feel passionately. We need people!

President.
Do not take it personally Commissioner. It was just a general remark.

Weiler (PSE).
Mr President, Commissioners, ladies and gentlemen, along with continuity and accountability, planning a budget requires that any necessary adjustments and reforms be made; more than anything else, it also calls for political vision. In a constructive dialogue, this House's specialists in social policy have made a package of these objectives and adopted them by an overwhelming majority in the Committee on Employment and Social Affairs. Our priorities include industrial safety, by which I mean that our agencies should be adequately equipped and enabled, above all, to press on with the programmes for small and medium-sized enterprises and also micro-businesses, something that is especially necessary in the candidate countries. We also seek a moderate increase in funding for the Community initiative EQUAL and for non-governmental organisations.
The Community initiative EQUAL is a specific instrument, within the framework of the European Social Fund, for realising our ideas and achieving our objectives, which are also those of the Lisbon process. We have to make progress towards these goals, and to do so, we have to guarantee that the initiative is endowed with the necessary funding. We need more jobs - sustainable jobs - and we also want to promote training - training with qualifications - and strengthen its role in the Member States, while at the same time offering businesses incentives to discharge their obligations.
Until such time as there is any change, we will keep on criticising the flow of funds from the European Social Fund, which, this time round, is still a scandal - not one attributable to Parliament or the Commission, but, we believe, one for which the Member States bear responsibility. This is something that we want to change in the forthcoming reform of the Structural Funds, rather than taking action in the course of this Budget. Our political vision is of course not just about making enlargement a reality, but primarily about the creation of a social Europe, which is where we still have a lot of catching-up to do in amidst the other tasks that Europe has to accomplish.

Dell'Alba (NI).
Mr President, I am speaking on behalf of the Committee on Constitutional Affairs, which has presented a certain number of amendments that I can combine in several chapters. The first concerns the perspectives and priorities of the European Parliament, notably in the framework of the Prince programme. We talked about the subject this morning in the course of the meeting on the issue of interinstitutional information, and we are very concerned about the non-implementation of a fair portion of the appropriations made to the priorities that Parliament recommends, has already recommended and will again recommend for next year. I would appeal to the Commission to place this non-implementation at the heart of its concerns. Commissioner Barnier is well aware of the matter. I think that we are in a decisive year for the integration of Europe and for the image of Europe. The Constitution will, we hope, be adopted, and the elections are approaching. The credits in question must, therefore, be implemented and put to good use.
So much for the first chapter of the amendments by the Committee on Constitutional Affairs. There then follows another chapter of amendments that I would call 'image of the institutions'. We would put forward the idea, which we would ask the general rapporteur also to support, that the Internet should become the tool by which Europeans can really take an interest in, and get up to date with, what is happening in Europe. I am thinking not only of the written Internet, which obviously makes a lot of things possible already, but also of the broadcasting of debates such as the budgetary debate, the committee debates, the public meetings of the Council, when these take place, and the daily conferences of the European Commission. We think that this tool, which is actually very cheap to use, really can enable people to keep up to date with what is happening in the European institutions.

Barnier
Mr President, ladies and gentlemen, we are about to vote on a 2004 budget which is, in a manner of speaking, historic because it will be the first budget of a reunited Europe.
Before mentioning three points, I would like to say to Mrs Weiler that I have noted the perspectives that she outlined, which have in fact more to do with future regional policy, its appraisal and how that regional policy and cohesion policy can be made to serve the Lisbon or Göteborg objectives. That is precisely what the college is discussing at the moment in preparation for future financial perspectives and for the content and proposals of the third cohesion report. Thank you very much for the impetus you have given.
Mr President, I would, therefore, like to mention three points:
the 2000-2006 programmes,
the closure for the period 1994-1999, and
the structural policy consequences of enlargement.
My first point is that the 2000-2006 programmes are honestly making up lost time. This is the fruit of the simplifications we have proposed and undertaken with the Member States. The payments for 2000-2006 were made more quickly than before. At the end of August, we had already paid 25% more than at the same time in 2002. For the first time, the 2000-2006 payments could even be higher than forecast and I anticipate asking for at least EUR 1 billion more in objective 1 appropriations when the overall end-of-year transfer is made. We can also see here the effect of the n+2 rule about which we alerted ministers on 22 April last, as I informed your committees. Between 1 January and 1 September, the governments reduced the backlog of payment appropriations that had to be dealt with in order to avoid decommitments. To avoid any decommitment, I am also going to write to every government again and they will have to present us with another 5 billion in payments by the end of the year. If their forecasts are to be believed, it will be done, but, ladies and gentlemen, to be perfectly honest I no longer give much credence to Member States' forecasts when I get them. Having said that, Italy, which has got us used to miracles, accounts for 40% of the effort that still has to be made. Three states alone account for 80% of the remaining effort. Conversely, in Austria, Spain and Greece the risk is very low and there is therefore nothing inevitable about it.
My second point is the 1994-1999 closure. This is a difficult point, as I have often said in this House. This closure will in fact be longer than expected. It was only on 31 March last that the Commission received virtually all of the some 2 000 files to be closed for these 1994-1999 programmes. I want the necessary checks to be made and any corrections that may be necessary as a result of those checks to be completed. I do not therefore want to rush the closure of those programmes. In view of the time required to guarantee the quality of the checks and the consultations that the procedures require, ladies and gentlemen, despite the best efforts of my services and those of the Commission we shall be unable to pay all the appropriations earmarked for 1994-1999 in 2003. That is the main reason for the delays just highlighted by Mr van Dam. There is therefore a risk of under-implementation in 2003 of at least EUR 5 billion for the Structural Funds as a whole. As soon as I had identified this risk in July, I alerted my colleague Commissioner Michaele Schreyer. Together, we will shortly be proposing that the Commission submit a draft amending budget to the budgetary authority in order to cancel without delay the appropriations that would be unused. The actual amount that will have to be cancelled still needs to be clarified by Commissioner Schreyer's services, they being the only ones with an overall picture of the budget, in order to identify any needs that will have to be covered under other budget headings between now and the end of the year.
Nevertheless, ladies and gentlemen, I confirm my commitment to reducing the amount remaining to be settled in two ways: firstly by cancelling commitments not covered by a request for payment, for example when the project has been abandoned or cost less than expected (in this connection, decommitments are already being prepared; they will represent at least EUR 1.5 billion for the European Regional Development fund (ERDF) alone) and, secondly, by making as many payments as possible where the dossiers are now in order. Between payments and decommitments, I confirm that I have set myself the target of cutting by at least half what remains to be settled for 1994-1999 for the ERDF in 2003.
I think these few explanations on this point will satisfy Mr Seppänen's request. The flaw in the 1994-1999 management was precisely the lack, Mr Seppänen, of what you called a sunset clause. We now have one with the new n+2 rule and it is starting to bear fruit.
My third and final point is the structural-policy consequences of enlargement. The success of this enlargement, taking in 10 new Member States, is the Commission's top priority.
Cohesion policy is also a top priority. The big challenge facing us is to complete negotiations with all the new Member States before the end of 2003 on the programmes that will have to be operational in a few months' time for the very short period 2004-2006. Enlargement is therefore already part of the everyday lives of our directorates-general responsible for the Structural Funds and your constant support - which I will still need for the crucial period ahead - has enabled me to anticipate the Commission's commitments.
What are the budgetary effects of this enlargement? For commitment appropriations, for the structural funds and the Cohesion Fund, in addition to the 34 billion provided for the present Member States, an additional EUR 6.7 billion is earmarked for the new Member States. That is an increase of around 20%. In terms of human resources, the number of posts requested to guarantee the success of this enlargement is, it seems to me, modest. If you accede to the Commission's requests, the directorates-general concerned will increase their staff by only 7% to manage a 20% increase in appropriations. This increase in our administrative capacity is a minimum because these countries are not yet used to Community programmes. They will therefore need more support, more advice, and more controls, too, than the present members. That is my objective answer to Mrs Gill's comment that she would like us to make economies of scale. Quite honestly, a mission to Poland cannot be combined with a mission to Spain. However that may be, I thank you for your support in obtaining the human resources essential for guaranteeing the success of our cohesion policy in 2004 and beyond.
In conclusion, Mr President, what are the consequences of all this for the payment appropriations needed for 2004? So far as enlargement is concerned, it is not really an issue. As was decided in Copenhagen, payment appropriations for the new Member States in 2004 have been confined to advances. For the 2000-2006 programmes, your rapporteur, Mr Mulder, suggests increasing payment appropriations by 3 billion. If Member States' forecasts are to be believed, that will be necessary. It is true that if the Member States manage to avoid any decommitment under the n+2 rule, we would then need an extra 1 billion for the ERDF alone. As you see, the Commission has adopted a prudent and realistic approach in the light of the implementation of earlier years. I think some decommitments under the n+2 rule will be unavoidable in 2004. We will also have to get used to including them in our forecasts. If the payment appropriations turned out to be insufficient for the 2000-2006 Structural Funds and for closing the 1994-1999 period, the Commission would then ask for an additional amending budget during the 2004 financial year.
Finally, for the 1994-1999 programmes it is clear that we will need appropriations in 2004 to complete the closure beyond the Commission's preliminary draft budget. I cannot yet say how much those appropriations will amount to. The checks currently being made will certainly result in reductions in the amounts to pay, either by excluding amounts which are not legitimate or by applying financial corrections. Over all, on the basis of the information I have available, an increase in heading 2 payment appropriations would not be illegitimate while not perhaps going as far as Mr Mulder suggests. At this stage, however, I would prefer to confront the Member States with their responsibilities and get them in the end to make realistic forecasts, even if that means increasing the appropriations under management in an amending budget when we have all the data.
Finally, Mr Dell'Alba, we have had a very important dialogue and, like my colleague Mr Vitorino this morning, I have paid great attention to it. I can confirm that of the 12 million available this year for information on the great debate on the future of Europe, 8.3 million are in the process of being or have already been committed. There are 3.7 million remaining, which can be redeployed. Like Mr Vitorino, I will endeavour to propose a use for this money by the end of the year, perhaps in partnership with Parliament, for an information campaign or to compile documents that will help to explain the outcome of the Convention and, I hope, the outcome of the Intergovernmental Conference, but also to show how this new institutional architecture we are going to have can be useful for specific policies to benefit the citizens. We are thinking of a new document - we discussed it with some parliamentary officials this morning - that could be made available to Members of Parliament and European election candidates to show specifically what this new Constitution consists of and how it can be useful for specific policies to benefit the citizens. That is the information I wanted to give you on this specific point that Mr Dell'Alba raised.

Hatzidakis (PPE-DE).
Mr President, speaking about issues which concern the Committee on Regional Policy, Transport and Tourism, I should like to start with the issues touched on by Commissioner Barnier, the issues of regional policy, and to say here that, as far as the previous period from 1994 to 1999 is concerned, as he himself admitted, developments are not the most propitious. There is a delay in closing dossiers, the basic responsibility for which lies with the Member States, which are late submitting all the information required or, in all events, when they do submit it, do not submit it in the proper form. That is why there are funds which have not yet been paid to the Member States and that is creating a problem both with the Community budget and, of course, with the national budgets.
By contrast, there are more positive developments in the new programming period from 2000 to 2006, although here too, of course, we must be very, very careful. I noted with satisfaction that this year we are doing better than last year from the point of view of the take-up of appropriations and trust that the n+2 rule, despite the criticism it sometimes receives, even here in Parliament, is a rule which will result in proper management on the part of the Member States as regards programming and managing the sums of money. Besides, we should not forget that it was the Member States themselves which, in unanimously adopting the current Structural Fund regulations, came to accept this n+2 rule.
These, broadly speaking, are also the reasons why, in our committee at least, we propose to return essentially to the preliminary draft budget initially submitted by the Commission as far as category II of the budget is concerned.
As far as the other matters are concerned, I should like to comment in particular on the trans-European networks and to say that, even after the van Miert report of 30 June this year, and pending the proposal to reform the trans-European networks, our committee wishes to note their importance and to stress that words and deeds must coincide at some point. If we want to promote the trans-European networks, we need to find ways of funding them and one of these ways is obviously the Community budget.
I should also like to comment on the issue of the European Maritime Safety Agency, the headquarters of which have not been decided. The fact that the headquarters of this agency have not been decided should not lead us to conclude that we should also not fund it. We need to put sums of money in reserve so that, when the headquarters are decided, we are ready to fund this agency, which will play a particularly important role in these issues of safety at sea which we debated this morning.
I should also like to underline the importance of two issues to which we are not, I think, paying proper attention. One is tourism, where we consider that a number of pilot programmes which will strengthen small and medium-sized enterprises in the sector in particular should be funded and, the second, which is sometimes undervalued, is safe transport where, here too, we believe that we could proceed to increase the funds somewhat.

Guy-Quint (PSE).
Mr President, Commissioner, President-in-Office of the Council, ladies and gentlemen, first of all, still on the subject of regional policy, transport and tourism, I have to say to you that we are quite worried, not to say disillusioned, by our reading of the draft budget. The problem has been clearly explained: to see the budget lines for essential policies cut so drastically by the Council worries us extremely.
I have to say to you that it worries us because it happens all the time. Whatever the decision-making procedures, whatever the reports highlighting the European Union's development needs, the same thing has happened for years: whenever budget time comes the Council makes the most astounding cuts to its programmes, which are nevertheless among the most important ones for encouraging development in the European Union. Time passes and nothing changes in this. Hence our concern and hence the Commission's unanimity in seeking to use amendments to get the level of expenditure provided for in the preliminary draft budget reinstated.
I will return for a few moments to the issue of the Structural Funds and I would like to thank Commissioner Barnier for all the explanations he has given us. We can indeed see that the simplifications made are bearing fruit. We also note a qualitative and quantitative improvement in the management of those funds.
In short, we want the European Union's budget to take account of the reality of expenditure, which will avoid the Commission having to present supplementary draft budgets, which would be damaging to the peaceful implementation of these essential funds.

Jensen (ELDR).
Mr President, Mr President-in-Office of the Council, Commissioner Barnier, I wish to begin by congratulating you, Commissioner Barnier, for the results achieved with the n+2 rule, by the efforts at simplification and by the fact that matters are now apparently such that, within structural policy, there is more success in implementing expenditure and getting money used.
We do in fact see, however, how the budgets and the payment appropriations have been significantly cut back, both in the Commission's and the Council's proposals, and, in the light of what you are saying today, it has of course to be wondered whether it is right to take matters so calmly, confident that there are enough payment appropriations, and whether a proposal for the supplementary budget is enough to solve the problem, if it emerges that the money is being used up more quickly than we anticipated. In recent years, we have of course seen that there has been a huge amount of money left over from the agricultural budgets in the autumn, but will that continue, with a falling dollar and other growing expenditure? That is a matter for reflection.
I also think it right to look at the problem constituted by the fact that it is not possible to have confidence in the reports we obtain from the Member States. Neither the Commission nor the Member States' finance ministers have confidence in the reports obtained as to what needs exist. This is therefore worth investigating more carefully. I nonetheless think Mr Mulder has the right idea in saying we should increase the payment appropriations so that we might be sure that the projects can be implemented within the agreed time frames, even if those of us in my group have never supported large increases in the payment appropriations.
I want to mention something else, namely the issue of the cutbacks we see in a range of budget lines where small and medium-sized enterprises are concerned. In particular, we see how, within the action programme for the working environment, the budget is being drastically cut back, and that, I think, is a completely wrong signal to send out prior to enlargement. I want to attach a lot of importance to our being able to obtain an exchange of knowledge and development of experience in the area relating to the working environment, so that free competition in the EU is not at the expense of a good working environment.

Pronk (PPE-DE).
Mr President, I should like to make one or two observations with regard to social policy. I totally agree with what Mrs Jensen said on this subject a moment ago. It is regrettable that some areas leave something to be desired.
I should particularly like to ask for attention to be paid to the European Year of the disabled which we are celebrating at the moment and which is also reasonably successful. It is, in my view, very important that we should provide an opportunity for follow-up next year. I also hope that provision can be made for this in the budget during the course of this budget procedure.
I should also like to make a brief comment further to what Commissioner Barnier has stated. Needless to say, we have all looked into the figures. It is indeed satisfying to see that the situation has improved particularly over the past few months and that a little more money is being spent than during the period immediately preceding it. Despite this, I do think that we have not solved the problem by a long way. Neither am I completely convinced that we need an additional budget. I myself do not expect this at all.
What can we see happening? Countries are working out how much money they would need to spend in order to use up all the money that has been allocated to them. Those countries are saying: well, it should be this or that amount, which they subsequently find impossible to spend. They are far too optimistic and there is no monitoring procedure of any kind. I think that we ought to be extremely grateful to the Commissioner for having introduced all kinds of gentle mechanisms that will hopefully rectify the situation to some degree. For years, I have been indignant about the fact that everyone knows that there are too many payment credits and that the money is not being spent. The only thing we notice at the end of the year is that a great deal of money is retuned to the Member States. I think we should put a stop to this. This is probably more important than approving the occasional additional budget.

Iivari (PSE).
Mr President, we can be glad that the Lisbon Process is working in spite of everything. Two multiannual programmes that become effective from the start of next year are an indication of that. Erasmus Mundus is a master's course programme to improve the attractiveness of Europe for nationals of third countries. E-Learning, which Parliament has been active in setting up through a pilot project, will provide inter alia schools and universities with new opportunities for cooperation.
Now we have to ensure that the programmes get the necessary level of funding. Likewise, we must guarantee the financing of the European Year of Education through Sports and improve opportunities for youth organisation activities in the new Member States. It is a positive sign that enlargement is being taken into consideration in the Socrates-Youth programme and Culture 2000 programme.
Switching to an activity-based budget will mean the opportunity to establish a legal basis for the financing of European cultural organisations. If we are firm and prudent we will create legislation that serves the cause of cultural cooperation and at the same time goes further to meet the requirements of transparency and good management.

President.
Rule 19 in our Rules of Procedure states that the President shall possess all the powers necessary to preside over the proceedings of Parliament. Rule 120 (6) states that the President shall attempt to agree speaking times with the Commission and the Council. Commissioner Barnier, I will now agree to give you eleven minutes, the same that Parliament has had.

Barnier
As I took ten minutes, does that mean that I only have one minute left? I do hope that that is not the case, but do not worry, I will not take advantage, I will answer as quickly as possible.
I would like to thank everyone who has expressed an opinion on Structural Funds policy, for which I am responsible together with Mrs Diamantopoulou and Mr Fischler, in particular regional policy.
I am not going to go back over the figures I confirmed today and which I sought to give as the most sincere and honest answer possible to the questions put by the Committee on Budgets, the Committee on Budgetary Control and Mr Hatzidakis' Committee on Regional Policy, Transport and Tourism. The first assessment I outlined before you confirms what I said on 22 May about the period 1994-1999, which for me is the black spot, or at least the grey spot: the procedure used for this programming was so unwieldy that control and certification became concentrated at the end of the period. Mr Hatzidakis, what applies to this period is not n+2 but, you might as well say, n+11. That is the objective reason for the amount of work we have to do to process and check the 2 000 files received. I repeat that my colleagues and I will not skimp this certification period; I shall have no hesitation in taking any measures that may be necessary.
I do not want to lower the quality of the controls or the level of information and certification required by rules with which we are all familiar. Mr Hatzidakis is right when he says that the n+2 procedure adopted for new programmes in 1999 is more efficient and is already producing better results, creates an impression of continuity and results in a smaller number of regular cancellations.
Mr Pronk, I am not satisfied either, even if progress has been made. I am not going to act self-satisfied in front of you, believe me. I am simply noting, like you, a better use for the period 2000-2006. This improvement is due mainly to the n+2 rule and our ongoing cooperation with the governments.
Mr Hatzidakis, I will pass on your comments on the matter of transport and road safety to Mrs de Palacio.
I would like to thank Mrs Guy-Quint and Mrs Jensen for their appraisal of our management under your supervision. Mrs Guy-Quint, we are at this moment making progress on programme appraisal. I am thinking in particular of the efforts being made by Mr Likanen, Mr Monti and myself to make it easier to use the Structural Funds to cover areas not yet served by mobile telephones or the Internet. Let us have less padding and more quality. We are doing so already, but with the future regional policy we are working on and for which I need your support we can go a lot further. The future objective 2 policy in particular will enable us, in partnership with the regions and governments, to implement directly the major objectives of Göteborg and Lisbon relating to competitiveness and sustainable growth.
Mrs Jensen, I shall be continuing the efforts we have begun. The commitment appropriations that you regretted were cut do not fall under heading 2 for which we are responsible. They are transport appropriations, like those for small and medium-sized undertakings. I therefore think that Commissioner Schreyer understood those comments correctly, but I cannot answer this point because there is no reduction in the commitment appropriations, which, incidentally, were safeguarded for the whole period in Berlin.
Mr Pronk, I have answered your question. I am not sure that we will need the supplementary budget I mentioned just now, but as I am being transparent with you I am mentioning it to you at this stage. So far as 2003 is concerned, we do need an amending budget. We may need a supplementary budget next year, but that is not certain. It is simply that we have to be able to pay when the time comes. I do not want States that are capable of consuming and implementing to be penalised on the pretext that there are some bad pupils in the class.
Mrs Iivari, your comment was addressed more to Mrs Reding, but I have heard it. Regarding the cultural cooperation of which you spoke - even though it is not my subject, I am sensitive to what you have said in this regard - in the forthcoming debate on regional policy after 2007 I intend proposing an increase in our appropriations for Interreg and a simplification of that programme's rules, in order to target cross-border cooperation in transport infrastructures in particular. In that field, too, we need cultural and university cooperation.
There you are, Mr President, I have taken more than a minute but less than 11 minutes and I thank you for your understanding.

Ceyhun (PSE)
Mr President, I make this statement on behalf of the Committee on Home Affairs and as its rapporteur. I am very glad that this House's rapporteur, Mr Mulder, has noted that everything related to home affairs and justice policy in the European Union has a close connection with enlargement, and that he himself has already made some necessary proposals. It makes things much easier for those of us who deal with home affairs and justice policy if the rapporteur who understands us best is right alongside us. I must, secondly, extend warm thanks to Commissioner Vitorino for the excellent cooperation with his staff, which has gone outstandingly well. Although our proposals relating to the 2004 Budget were adopted unanimously, I must simply point out, now that we are debating them in plenary, that this year, we have a priority issue in the shape of our three agencies. What particularly makes our agencies in Vienna, Lisbon and the Hague very important to us is the fact that we will soon have ten new Member States, which will make more work for the agencies in the areas of combating racism, drug crime, criminal activities and terrorism. Our monitoring centres in Vienna and Lisbon, along with Eurojust in The Hague are three agencies in need of active support, and that will cost money. I take it as read that my fellow-MEPs who sit on the Committee on Budgets will join with us in seeing the need for this and in giving us their support in this House. Thank you.

Perry, Roy (PPE-DE)
. Madam President, I would like to place on record my appreciation to the general rapporteur, Mr Mulder, for his attention to our concerns.
This committee takes less than 1% of the EU budget, but I would not want anyone to think that we should see education, culture, media and information as optional extras. The creative industries in Europe contribute some 12% to Europe's GDP.
There are two points I would particularly like the Commission to heed. Firstly, in its culture budget each year, Parliament helps a number of cultural organisations and networks such as the European Youth Orchestra and the Yehudi Menuhin Foundation. If these organisations are to survive, let alone flourish, then they not only need our financial and moral support, they need legal certainty. I am appalled that at the end of September, there is still no guarantee they will get their money for 2004 and sadly, as usual, some have not yet been paid for 2003. I urge the Commission to resolve this legal base problem.
Secondly, if EU citizens are to know about the EU they require information. 25% of Britons do not know their country is in the EU. 31% of Germans have never heard of the European Commission and 90% of Spaniards do not know what the European Convention is! The public learn about Europe through television. We have Euronews, an excellent independent channel, but like all public sector broadcasters, it needs funding. This year Parliament voted EUR 3 million for Euronews. As far as I am aware, that money has not yet been paid. We have proposed in our budget suggestion for next year that it should receive EUR 5 million.
I am afraid that we could enter the year of enlargement - the year of European elections - with no European Youth Orchestra and no European television. I hope the Commission will take these points seriously.

Vitorino
Madam President, ladies and gentlemen, this is the second time that the justice and internal affairs sector has been invited to this budget debate, but when it comes to figures those for which I am responsible seem so small that I almost feel ashamed to be standing here alongside my colleagues from agriculture or cohesion.
Nevertheless, from a statistical point of view the budget for justice and internal affairs has increased by 252% this year. In reality, however, much of that increase is the result of the decision taken in Copenhagen to create the Schengen facility, at a cost of EUR 317 million, to help the seven future Member States to adopt and incorporate the Schengen acquis. Another EUR 13 million are for transitional measures for Lithuania in connection with transit to and from Kaliningrad.
So far as justice and internal affairs are concerned, the most important changes from the budgetary point of view are therefore the enlargement-related increase in appropriations for programmes (EUR 16 million) and the increase in appropriations for control of the external frontiers, which has been a major European Union priority since the Seville and Thessaloniki summits. I would like to stress the importance of the ARGO programme in support of frontier control operations carried out jointly by the Member States; this is given an extra EUR 15 million. I would also like to highlight the creation of a new budget line for development of the VIS project, a visa information system, to which EUR 10 million will be allocated initially.
This year 2004 will be marked by a number of important factors affecting budget management. It will be the last year of operation for the European Refugee Fund. We therefore need to learn from experience in making a new allocation after 2004. Then there is the doubling of the amount allocated to the Daphne programme, which will be 10 million for 2004. In this connection, I want to stress the importance of reaching a conclusion concerning the legal basis as quickly as possible in the codecision procedure between Parliament and Council. Finally, as rapporteur Ceyhun points out, the budgets for Eurojust and the Drugs Monitoring Centre in Lisbon are increased in particular in order to enable those bodies to adapt to enlargement.
Regarding the proposed amendments voted unanimously by the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs - for which I want to thank Mr Ceyhun - I am particularly pleased about the increase in the budget for the European Refugee Fund. However, I would like to draw your attention to the fact that doing so today will allow voluntary return actions to be paid for and that there is absolutely no question of using this money for forced returns. There is therefore a contradiction between the fact that capacity is being increased and the comment. I would like to draw your attention to that.
I am also pleased with the two amendments which the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs has proposed concerning the VIS system and the new generation Schengen information system, SIS II. Following the feasibility studies, it is in fact necessary to reprogramme expenditure for these two systems so as to spread the cost over the following three financial years 2004 to 2006, 2006 being the deadline for the SIS II system to become operational and therefore ready to fully integrate the countries that will join on 1 May 2004.
Finally, I would like to thank Parliament for its idea of creating an Erasmus programme for judges; the Commission will try to conduct a pilot project.
I turn now to the field of information and communication. Following the adoption of the Bayona de Perogordo report, 2003 was the first year in which we developed a new information and communication strategy for the general public. You will remember that the cornerstone of this strategy is cooperation with the Member States, the establishment of partnerships with the Member States. I am pleased to say that the interinstitutional group on information and communication has managed to reach broad agreement on what should be the priority subjects for such public information and communication campaigns. I am speaking not only of the euro, but also of enlargement, the future of Europe, the area of freedom, security and justice and, for next year 2004, the role of Europe in the world, including a specific line to support information campaigns in the field of defence.
Let us be clear, however, and in saying this I am trying to answer the comments made by Mr Ferber just now. This is in fact the second time I have tried to answer him today, but he is never there to hear me. I nevertheless hope that the message will get to him. When we are talking about partnership, we have to rely on the Member States being available to take part in such a partnership. For example, EUR 4 million were reserved for such partnerships with the Member States for the information campaign on the Future of Europe. Up until now, however, only three Member States have said they are willing to reach an agreement with us in order to develop the campaign on the future of Europe. Since partnership is built on a voluntary basis, what the Commission has done is to allocate those EUR 4 million that were not used by the partnership with the Member States to other funds. Until the end of this year, therefore, we are covering the expenditure for the entire budget for the Future of Europe programme, including an invitation to tender for an audiovisual campaign on the future of Europe, amounting to EUR 4 million, and the reallocation of EUR 3.7 million for the production of printed objective information material for distribution at the end of this year and early next year on the conclusions of the Convention.
I would also like to stress, as Mr Perry has said, that we attach great importance to the use of audiovisual systems. For this year 2003 we therefore have EUR 4 million for an audiovisual information strategy on enlargement, EUR 4 million for the Future of Europe and EUR 8.5 million for audiovisuals providing general information about the European Union, including the Euronews channel. I agree with you entirely, Mr Perry, that we should meet Euronews' request as Parliament agreed.
What have we done? We have granted Euronews EUR 1.5 million in accordance with the framework agreement signed with Euronews in 2001 and we have taken into account the further sum of EUR 3 million voted by Parliament. Having said that, Parliament has clearly said that those three million euros were not to finance Euronews's administrative costs but to pay for its activities. We have therefore suggested to Euronews that it submit to us programmes for information activities and we are perfectly willing to assess them and finance them by releasing the EUR 3 million by the end of the year.
You raised the question of the legal bases. This aspect is not my direct responsibility but I do know that the Commission has already put forward proposals for the creation of legal bases for a number of entities, including Euronews. I think that will be the best way of proceeding and the best approach for giving stability to such funding. I will eagerly await Parliament's position on this matter.

Guy-Quint (PSE).
Madam President, President-in-Office of the Council, Commissioners, the way speaking time is organised is so mischievous and bizarre that I now have to speak again about transport problems and agencies. Having said that, I very much support what my colleague Mr Hatzidakis has said, namely that we must keep the lines as they were in the preliminary draft budget because there are no savings to be made on these policies for the present.
I would like to take the opportunity, Commissioner, to respond to the problem of the policy of providing information to European Union citizens. This subject will really be one of the most important in the years ahead. You may know that several of us have tabled amendments to restore the lines to what they were last year.
The most important thing, however, is that all institutional communication should get as close to ordinary citizens as possible. What worries me the most about the present communications policy is that we do not have the necessary tools to reach those who are going to vote. The citizen's ignorance of the present machinery and the institutions as they will be is quite appalling.
You have the resources, Commissioner, but for goodness sake let us ensure that they go to the heart of our present-day society. That would be a great step forward for the democratic future of our Union.

Dover (PPE-DE).
Madam President, I should like to talk about two matters: first, in my capacity as shadow rapporteur for the PPE-DE Group on various transport matters; secondly, as shadow rapporteur on the other institutions. So firstly, I should like to address Mrs de Palacio and secondly, Commissioner Schreyer.
The TENs programme is a wonderful one, which allows transport, energy and telematics projects throughout Europe to be decided upon by the nation states themselves in order to connect the 15 countries now in the Union with the 10 countries coming in, embracing the whole of the European Union and making sure that each nation can build its part within the trans-European network. I have nothing but full confidence in that programme. I would just point out that there is an item of some EUR 225 million for studies relating to it in the budget, whereas the Committee on Regional Policy, Transport and Tourism, of which I am a substitute Member, says that they do not want more studies but more action and implementation on the ground.
With regard to the Marco Polo programme on transfer to other modes of transport, away from road traffic and the congestion which it causes, I give that my full support. We need to have more telematics and computer information technology used to advance the efficient movement of goods and passengers throughout the European Union.
Touching upon the Galileo project, we need to maximise the use of the private sector. I welcome this project. I hope that we will not use it for automatic levying of tolls on lorries, but rather allow individual drivers of private commercial vehicles to avoid congestion by knowing their best route from where they are to where they want to go: in other words, to help the motorists rather than tax and hinder them.
On the other institutions, we have had useful discussions in the last day or two. I was delighted to attend the conciliation meeting in July and pay tribute to Mr Magri and his superb chairmanship of that committee. There was one matter that was left. That was where our rapporteur, Mrs Gill, thought that the Commission and the Council were being generous - I would say extremely generous - in their attitude to the budgets proposed by three of the other institutions: the Court of Justice, the Committee of the Regions, and the Economic and Social Committee. Whereas Parliament's budget is only going up by 13%, the Council's by 21% and the Commission's by 8% or 9%, the Court of Justice, for example, is asking for 57%. I am delighted the Council has knocked that figure down to 46%. But in an amendment that we tabled from the United Kingdom delegation, we are asking for a further, similar reduction. The same applies to the Economic and Social Committee. It asked for 33%, knocked down by the Council to 27%. We want it down by the same percentage again. The Committee of the Regions asked for 63% and was knocked down to 54%. We want a further reduction to 46%.
We can afford these increases, but that is not the point. We must get the best possible value for money from these other institutions and ask them to re-examine their budget spending.

Buitenweg (Verts/ALE).
Madam President, in the preliminary draft budget, a sum of EUR 39 million has been earmarked for the European Refugee Fund to cover the present fifteen Member States. This is EUR 3 million less than in the budget for 2003. This, despite the fact that the objectives of the fund are rather bold: promoting the integration of newcomers and organising solidarity between the EU Member States when receiving refugees. In actual fact, a much larger fund is needed to share the responsibility effectively and put an end to the negative policy rivalry between the Member States to adopt the strictest asylum policy. As long as three years ago, I, backed by this House, asked the Commissioner to make an assessment of how much money he would actually need in order to realise the Fund's objectives. As I have never seen this assessment, I should like to remind him of this request. It is particularly important to give this a lot of consideration, because the Commission will be presenting its plans for the financial perspectives in mid-November. Mr Vitorino, I therefore rely on your courage.
Not only is there insufficient money in the Fund structurally speaking, the Fund's objectives are also at risk of being contaminated. Less funds for the distribution of the cost of reception, but more emphasis on sharing the burden of repatriation policy. In fact, the Member States now want forced repatriation to be paid for from the Refugee Fund. However, the question as to who can stay and who has to go is still the subject of a debate between Member States, and is simply a national decision. It therefore seems very wrong to me to pay European tax money for national decisions. As long as we have not reached agreement on who can stay on European territory and who has to go, it seems wrong to cover the cost of forced repatriation from the European budget.

Rübig (PPE-DE).
Madam President, ladies and gentlemen, Commissioner, I believe that today finds us again at an important and decisive point in the history of Europe. It is quite clear to us that small and medium-sized businesses are of particular significance in terms of Europe's economic development. Whilst we have heard that in many contributions to today's debate, we know that we are directly affected by many developments on the international stage, one example being Basel II. That is why we have decided to seize the initiative and introduce a pilot scheme facilitating guarantees through the European banks for especially small businesses. I believe that such guarantees will play an essential part in the future of small- and medium-sized enterprises. Support of this kind is especially important when businesses are being set up.
My second point is that we have just got through the failed assembly in Cancún, the failure of which is attributable to the presence in the ministerial conference of certain persons who make a very healthy profit from their own system and are therefore unwilling to do for their national economies something that we would see in a favourable light. This leads us to believe that there is an urgent need for a parliamentary assembly in this area. We want to lend our active support to this in future and to discuss the possibilities with parliamentarians from the countries in question, with the opposition in certain countries also being given the opportunity to state its position on international issues. With this in mind, we should concentrate on representing Europe on the international stage, taking a share in decisions rather than just sharing in paying the bills. Thank you, Madam President.

Vitorino
Madam President, first of all I would like to say to Mrs Guy-Quint that I agree with her entirely. I think a successful information policy is a policy that gets as close as possible to the citizens.
That is why we developed this strategy of partnership with the Member States, including regional and local authorities. It is an approach which also enjoys the support of the Committee of the Regions. But if this approach is to succeed, there must be the political will for a partnership. There must be at least two partners. That is why I hope, so far as the campaign on the future of Europe is concerned, that the European elections, the national debate on ratification of the Constitution and the referendums that will be held in some Member States will next year all be further incentives, further reasons for the Member States to join in partnership with us to conduct information and communication campaigns on the future of Europe, on the content of the Constitution, and to conduct those campaigns as closely to the citizens as possible. I am expressing here my complete agreement with the strategy that Commissioner Michel Barnier has just explained in answer to Mr Dell'Alba's question.

De Palacio
Madam President, I am going to be very brief because Parliament has supported all the proposals I have presented. I would like to take this opportunity to expressly thank Mrs McNally and Mr Collins for their contributions to this work.
We have been working in great harmony over all these years and this has been the case once again in the discussion of these budgets.
I thank Parliament for its support for the proposals I have presented.

Pohjamo (ELDR).
Madam President, Commissioners, Union support is needed in energy policy for the Trans-European Energy Network, the Intelligent Energy - Europe programme, sustainable energy systems and also nuclear safety projects. The Union has set ambitious targets to promote renewable energy sources and combined heat and power production. With regard to reaching these targets it is unfortunate that cuts in the area of research into energy have been proposed in the budget. If we support the diverse use of local renewable energy resources we will improve security of energy supply and reduce dependence on imports.
The basis of transport policy must be the development of a versatile transport network, decongestion, improved safety and the promotion of sustainable transport. The development of trans-European transport networks has not progressed in the way that was hoped for, owing to inadequate funding. Only three of the 14 Essen projects have been finalised, and in the summer Mr Van Miert's group listed a number of new TEN-T projects. The Union, for its part, must set aside the necessary funds for both the old and the new projects and take account of the needs of an enlarging Union.
For the internal market to function there have to be flexible transport connections between the different regions of the Union. Transport connections in the peripheral regions are a vital necessity. In the summer the Commission issued a communication on the development of transport in the Mediterranean region. I think a similar communication should also be drafted with regard to transport in the north.

De Palacio
Madam President, I would like to thank Mr Pohjamo for his support, despite the fact that he is calling for more resources. I would also call for more resources, of course, but we must be aware that we are dealing - my colleague Commissioner Schreyer has just discussed this - with specific financial perspectives and we have specific limits.
With regard to the support for renewable energy sources, as the honourable Member is well aware, we are dealing with this jointly with support for energy efficiency by means of the intelligent energy programme.
The honourable Member will think that this is not much money. The truth is that we have approved it on a multi-annual basis and, in the end, we reached agreement with the Council. Once we have agreements, I believe that we must conserve them and maintain them and I would therefore refer back to what we approved and adopted at the time.
With regard to the trans-European networks, I have said very clearly, with a view to the next financial perspectives, that the amount dedicated to trans-European networks must not be increased by 5, 10 or even 15%, but, in my opinion, by 600 or 700%. In other words, it should be multiplied by 7. As simple as that. We need some EUR 4000 million if we are really going to be able to act as the driving force behind the construction of networks of a trans-European nature, and not of a solely national nature.
These trans-European networks of a trans-European nature are necessary in view of the reality of the internal market and for the competitiveness of the European economy as a whole, and I can therefore only agree with the honourable Member but, I would insist, this cannot be done by modifying budgets, but by reviewing the new financial perspectives, given the great importance of the issue.
With regard to the transport networks, in relation to the energy sector, I have already presented specific projects for Euro-Mediterranean energy networks, which must allow, firstly, for the rationalisation of investments made in a series of countries and greater coordination and efficiency in investments, thereby achieving not just purely national benefits from certain investments, but providing a broader continental-type perspective.
When I talk about these Euro-Mediterranean energy networks, I am talking about Europe as a continent, not the European Union. These networks also take account of neighbouring countries such as Russia, Belarus or the Ukraine. In other words, the whole ring of friends included by President Prodi in his strategy.
Secondly, in the transport sector we are working on it, and I hope that in the near future we will be able to make it a reality. Specifically, I was in St Petersburg a week ago discussing these very networks, and in this case they were even Euro-Asian, because we should be seeking systems to better integrate, in a continental sense, the European Union with our neighbours.
I would like to thank Parliament once again for supporting the proposals we have presented.

Magri (PPE-DE).
Madam President, as the day draws to a close, I would like to thank the Commissioners and Members of Parliament who have taken part in the debate and reflect briefly on what has been said.
This is clearly a constituent phase and, not least in the new Constitution, for instance, the European Parliament will be given wider, more extensive powers. This is a welcome, inevitable, historical fact, and we have, without a doubt, given fresh impetus to the process which will certainly give the European Parliament greater autonomy, more clout and greater representativeness in the near future.
That said, we must focus for a moment on the points made during the debate. Without mentioning any one issue in particular, I would like to stress that the Council is quite prepared to look at all the recommendations made. Moreover, it must be said that, even in the introductory report and in the meetings which have taken place thus far on all the issues - including that of the availability of new posts for Commission staff and other matters such as the cut in preaccession funds and so forth - the Council has been completely open to reassessing the proposals on the basis of new approaches, new information and new decisions.
I would therefore like to say a word in defence of the Council - which has been somewhat ill-treated, so to speak, by some of the Members in their speeches - and explain that, in cases such as this, the Council has the task of seeking to realise and harmonise many different expectations. Since the European budget is, of necessity, the result of prioritising and compromise, it is not always possible to say 'yes' to everybody immediately. For precisely this reason, I would ask the Members not to make the mistake of attempting to criticise the intentions of others, for we all have the right to criticise our own intentions but, above all, we have a duty to display full confidence in others. I believe that this is one of the principles of democracy, of our political culture, and I believe it is a principle that we all share. It is precisely because we do have shared cultural models, because we believe in a united Europe, that we realise that there is a great difference between the management of power and politics. Politics is the management of power harmonised according to a cultural model. I believe that our shared cultural models will help us to achieve an excellent result at the next reading.

Schreyer
. (DE) Madam President, Mr President-in-Office, honourable Members, I too wish to be brief. The importance of enlargement goes without saying, and it has also become clear how important the other priorities are for the 2004 Budget. The debate has also, I believe, made it clear that the Commission must have the necessary human resources at its disposal. This is an area in which I am grateful to the President-in-Office of the Council for being so frank in what he said.
I am quite happy to provide any information required by the members of the Committee on Budgets, by the Council, or by Parliament, and the Budget Directorate-General is also at your service.
If I might take up again the issue of the quality of public service at the European level, the Budget Directorate-General has a department with seventy staff to handle everything to do with drawing up the Budget - the drafting, the hearings, all the information, the transfers, the supplementary budgets, the lot. When I compare that figure with the numbers required in the Member States and compare the quality involved, I can say loud and clear and with a clear conscience that the service is first-rate. Those who have any dealings with it will, I think, be able to back me up on that.
I would like to say how very grateful I am for this debate, and that I am confident that we will be able, once more, to produce a good European Budget for 2004, one that will do a good job of promoting enlargement.

Wynn, Terence (PSE)
. Mr President, I just want to thank those Members who have taken part in this debate. I thank in particular Mr Magri and his officials for being here all this time. As I said at the beginning, it is rare to have ministers here. The Danes set this trend, and I congratulate Mr Magri for keeping it up. I also congratulate the Commissioners who have participated in this debate. On the whole, it has gone quite well. However, occasionally we have strayed from the subject. The idea of having the Commissioners here is to question them directly on specific issues, and not all Members have done that. Perhaps we need to refine our act for next time. All in all, although it has been long, it has been well worthwhile.

President. -
Thank you, Mr Wynn.
The debate is closed.

President. -
The next item is the Commission statement on the situation of the Alstom Group.
Before that, I am giving the floor to Mr Harbour for a procedural motion.

Harbour (PPE-DE).
Madam President, am I right in thinking that there will be an opportunity for questioning the Commissioner under the catch-the-eye procedure at the end of his statement? You did not actually say so at the beginning, but I very much hope that I and other colleagues here will have the opportunity to do so.

President. -
Thank you for your question, Mr Harbour. The decision has, however, already been taken: you will not be able to ask the Commissioner questions at the end of his statement. However, people have their names down to speak and will no doubt ask the Commissioner questions in the course of what they have to say.

Monti
Madam President, ladies and gentlemen, I would like to thank the European Parliament for inviting me this evening. I am always pleased to be offered the opportunity to examine competition policy issues with Parliament in greater depth, issues relating to which, incidentally, I have the honour to appear periodically before the Parliament's Committee on Economic and Monetary Affairs.
The subject of your invitation this evening, Madam President, is a specific file which is currently under examination and about which I must therefore observe a measure of discretion. Within those limits, I am at your disposal to provide the explanations that will be asked of us.
What has the European Commission done about the Alstom file so far? It has taken a decision and it has decided not to take another. The decision to initiate the review procedure regards the support measures adopted by the French State on 2 August under an agreement with Alstom and a number of banks then the Commission was notified. This decision to initiate this procedure was taken by the college on 17 September. That was a perfectly normal decision.
I come now to the decision that was not taken. It concerns one specific part of the support plan that was decided and announced on 2 August but has not yet been put into effect: state participation in Alstom's capital.
The Commission was unable to agree to an immediate participation by the French Republic in Alstom's capital because a measure of that kind, unlike other contributions of liquid assets, was likely to have irreversible consequences for the markets on which the Alstom Group is active.
On 17 September, the Commission therefore found that the conditions were such that the French authorities should be asked not to go ahead with a State holding in Alstom's capital. The Commission, however, wanted to give France one last opportunity before proceeding with that injunction. It therefore authorised me to adopt and execute, by 22 September at the latest and by agreement with President Prodi, an injunction for the suspension of certain aids unless the French authorities publicly agreed not to take measures automatically and irreversibly entailing a State holding in the capital of the Alstom Group without the Commission's prior approval as required by the Community rules concerning State aids.
Following speedy and fruitful contacts with the French authorities, I was able to note yesterday that they had agreed to amend the support plan in a way that satisfies the Commission's condition.
The French state will not therefore become an Alstom shareholder in the immediate future and will not adopt any measures likely to constitute equity capital, that is structural measures to which the Commission cannot agree without prejudicing the findings of the competition inquiry it will be conducting.
The state participation in the capital increase will be replaced by a fixed-term floating-rate note redeemable in shares. It is a liquidity measure that may be converted into equity only if the Commission decides that the state participation in the capital increase presents no problems for competition on the markets in question.
Since France had agreed not to automatically acquire a stake in Alstom's capital and had promised that it would no longer present the Commission with a fait accompli, there was no longer any need for me to exercise the power given me by the college of Commissioners to order a suspension. So that is the decision the Commission did not take.
The Commission is pleased with the constructive attitude taken by French authorities and in particular, I would like to stress, by Mr Francis Mer, the Minister for the Economy, Finance and Industry. It was our duty to prevent the conditions of competition on the market from being immediately and irreversibly changed in Alstom's favour before the Commission had even been able to begin looking at the effect of the aids on the markets in question. The changes made would probably have entailed an increase in the overall amount of aid granted. This shows the knock-on effect of a capital increase and its irreversible effects. In other words, it would never have been possible to restore the status quo. I would like to point out that the amount of aids will also be one of the key factors that the Commission will take into account when examining the matter in depth.
The fact that it is not necessary to implement the suspending injunction does not, of course, at this stage mean that the Commission has approved the aids. The measures as a whole are now going to be examined. We will be able to undertake the in-depth scrutiny in a constructive spirit and will do so as quickly as the complexity of the matter allows. The aim is to enable the undertaking to be restructured while at the same time preserving the proper working of the internal market, which is the only guarantee of sustainable employment. In the course of its assessment, the Commission will check the undertaking's long-term viability and the proportionality between the amount of aid granted and what France will be willing to accept in return in order to preserve the conditions of competition on the markets in question.
Ladies and gentlemen, I would like to emphasise that there is absolutely no position of principle involved on the part of the Commission concerning the system of ownership of undertakings in the Member States. You know as well as I do that the Treaty provides for and therefore imposes on us the strictest neutrality in the matter of public or private ownership of undertakings. I am therefore very much aware that the suspension was not designed to prevent the French state's entry into Alstom's capital as such. The Commission's desire was to prevent aid-constituting measures from producing irreversible consequences on the markets in question without the Commission's prior approval, that is in violation of the rules of the Treaty concerning state aid.
Please do not let it be said that the Commission is against the public ownership of undertakings. As I have always stressed, it is not the Commission that asks a Member State to open the capital of public undertakings like the French Government is doing with Électricité de France, for example. Those choices are entirely up to the Member State concerned. What the Commission does have a duty to do under the Treaties is to ensure that undertakings, whether public or private, comply with the competition rules.
As I said, I would like to stress the quality of our cooperation, based on a constructive spirit and one of confidence, with the French Government and Minister Mer in particular. Some of the reactions and remarks heard from French political and economic circles recently would benefit from a more detached analysis. I understand the feelings of the trade unions perfectly. I am well aware of the Alstom Group's importance in the European industrial and social fabric. On the other hand, I find it harder to understand the reference made here and there recently in the French debate to the European Commission acting like a lawyer and allegedly having no political awareness.
Can people not see the political value of preserving a single market with no distortions of competition, a necessary, not sufficient, true, but necessary part of a social market economy? Can they not see the political merit of preventing a State from bypassing the rules of the single market the chief beneficiaries of which are European undertakings themselves and the possibilities for growth, including growth in employment? Can they not see the political necessity of inspiring confidence in Europe as a whole by demonstrating to the citizens of the small and future Member States that the Commission, in its role of guardian of the Treaty, is not strict with the small ones and weak with the big ones?

Karas (PPE-DE).
Commissioner, Madam President, ladies and gentlemen, speaking as I do on behalf of my group, the Group of the European People's Party (Christian Democrats) and European Democrats, I would like to make three things very clear, especially to those who, following Commissioner Monti's statements, have forced today's debate upon us. Any criticism of the Commission is unfounded, and there is no reason to change competition policy; on the contrary, indeed, we owe a debt of gratitude to the Commission and, above all, to Commissioner Monti, whose actions over recent days have been marked by calmness, consistency and frankness, and who has been willing to engage in dialogue.
On 17 September, we read in Agence Europe that Commissioner Monti had said, 'We are open to dialogue, and I am still confident that we will find a solution capable of safeguarding the integrity of the Common Market without distorting competition. This is a necessary condition for healthy European industry and for lasting employment.'
On 22 September, again in Agence Europe, Mr Monti had this to say: 'The Commission has never had negative prejudices against France and Alstom, but it was our duty to check that no direct and irrevocable change was made to conditions of competition in the market.' He went on to say: 'I am happy to let it be known that the French authorities have fully complied with the Commission's conditions'. End of quotation.
This is, of course, a sensitive case, but it is an issue of state aid. Yes, of course this company is of enormous importance on our continent. The Commission cannot, however, make adherence to EU law conditional on the size of a company and the number of people it employs. When questions are raised or something goes wrong, it has to intervene. All over the media, we read today's headlines: 'All banks agree rescue plan.' 'French industrial giant Alstom saved!' 'Alstom shares fall after initial rescue.' 'Paris urges Alstom industrial conglomerate to restructure.' 'Battle for the future of 110 000 jobs.' This is a sensitive issue, but can we really claim that we would have wanted or expected the Commission to act in a different way? I can speak for my group when I say that no, we would not, even though our hearts are in the right place where the associated problems are concerned and there is adequate awareness of the problems associated with it.
Let me remind you of three articles in the new constitution. Article 3(2) will read: 'The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, and an internal market where competition is free and undistorted'. In Article 4(2), we adopt and put on the record our prohibition on discrimination within the internal market as a domestic market. In Article 5(2) we lay it down that 'Member States shall facilitate the achievement of the Union's tasks and refrain from any measure which could jeopardise the attainment of the objectives set out in the Constitution.' In Lisbon, we resolved to become, by 2010, the most competitive continent in the world. Let me emphasise that state subsidies need to be approved. Anything that distorts competition cries out to be investigated by the Commission, after conditions have been fulfilled and time limits have elapsed. Anything that goes against EU law must be prohibited. All discrimination is banned. Whatever weakens the internal market is irresponsible, as it damages growth and employment.
My group has committed itself to the social market economy, and hence also to social responsibility. We are committed to the internal market and to competition, on which the creation of new jobs and growth depend. Commissioner Monti is its independent regulator. He has our entire support, and he has done the right thing.

Wurtz (GUE/NGL).
Madam President, Commissioner, at our initiative, the Alstom trades union representatives have visited the European Parliament on several occasions. As long ago as 1999, they condemned serious management errors committed by the group's directors. On 17 February 2000, here in Parliament, we adopted a resolution expressing a warning about the future risks facing the business. At the time, certain people stood up to speak and, in the name of the sacrosanct principles of liberalism, condemned this as an incongruous and, inevitably, incompetent intrusion of politics into economics - an experience that should give us all pause for serious thought.
The coordinator of the Alstom Europe unions, Mrs Francine Blanche, was telling me yesterday evening that the employees were naturally pleased about the Commission's approval, in principle, of the rescue plan. However, they remember the many warnings given by their elected representatives, warnings that have never been taken seriously at any level. They are not about to agree to be the victims of this rescue now. Mrs Blanche gave me to understand that, since his appointment in January of this year, the new chairman of the group, Mr Kron, had devoted no more than two hours to discussions with the European representatives of the employees. Such arrogance is no longer tolerable. The need is enormous, and the demands are loud for those employees to exercise their rights as employees.
Already, Commissioner, Alstom's European trades union coordinators are asking to be received, heard and listened to by the Commission. In the meantime, they will have studied the plan in detail and will be in a position to propose measures to achieve savings which will not take the form of job losses. That is what will happen in the immediate future.
After that, this enormously important affair places certain major questions squarely on the agenda of the debate on the future of the European Union. I shall mention three of these.
The first of these issues is the social dialogue, or rather the essential new rights of employees. Those timid and dust-covered directives on informing and consulting workers and on the European Works Council must be revised. Real rights must be established, even the right to suspend a restructuring plan so as to enable a second expert opinion to be obtained and all the available options considered.
The second issue is that European industrial policy does not exist. All that exists is a race for state aids in the name of the competition rules. Yet in the present case, conversely, if there had not been any state aids, world economic competition would have been seriously distorted, given, on the one hand, what would be left of European industries in the strategic sectors of energy and the railways and, on the other, American giants such as General Electric, or those of Japan such as Mitsubishi.
Thirdly, the democratic functioning of the Union makes it necessary to review the discretionary powers granted to the Commission in competition matters. It is essential that the social partners, the national parliaments and, of course, Parliament should have their say as regards the criteria to be met, the objectives to be assigned, and the controls to be exercised. Where would have been the legitimacy, in the minds of our fellow citizens, in implementing the Commission's initial threat to refuse the rescue plan for a strategic business which employs 118 000 people?
Finally, the Alstom case is a powerful reminder of the essential political choices to which the public debate on the European constitution will be leading us. For all these reasons, it was well worth adding this item to our agenda.

Lipietz (Verts/ALE).
Madam President, Commissioner, ladies and gentlemen, let us be clear about this, the Alstom affair, in its European dimension, is first of all a matter of form. The Commission was perfectly right to sanction the French Government for the arrogance and contempt for the common rules which it has demonstrated in this affair. This incident is only part of a long series of incidents. The way in which Mr Raffarin's government openly flouted the provisions of the Stability Pact, even though President Chirac had been one of its initiators and unconditional supporters, will make it difficult to renegotiate that pact, something that even Mr Prodi himself describes as stupid. There are other examples, such as the Raffarin government's contempt for the Directive on the conservation of wild birds and the Natura 2000 Directive, which resulted in the massacre in the wetlands of Poitou. The icing on the cake is Mr Raffarin's statement in which he talks about the legal requirements for the executive authority of the European Union as if it were some office in a foreign country. For this shameful statement I should like, on behalf of the great majority of French people who are aware of the fact that Europe is not a foreign country but rather our joint home, to offer our apologies to the Commission.
Agreement has been reached today, and in this I rejoice. It will make it possible to save Alstom from imminent bankruptcy, something for which the directors, and those of ABB, are entirely responsible, despite warnings from their union members. It will give the French Government and the Commission time to negotiate formally a final solution. Having said that, Competition Commissioner, I should like to say a few words about the substance of this affair.
You are aware that our group, the Greens, has loyally supported your efforts to defend consumers against the abusive practices of monopolies. My report on competition in 2001 bears witness to that fact. Nevertheless, I made certain observations which we have discussed in detail face to face, not only between Commissioner and MEP, but also between one economist and another. The Alstom affair once again gives me the opportunity to tell you this.
Consumer protection consists, first of all, in guaranteeing consumers the existence of the supply of goods or services, before even thinking about the price of those goods or services. In other words it consists in implementing an industrial policy. The disappearance of Alstom, which would have caused the collapse of Asean Brown Boveri, would have greatly reduced the European supply of electricity turbines and high-speed trains, just at the time when the climate crisis and the Kyoto Agreement are calling for enormous investment in these two areas.
Then again, what applies in the case of network infrastructures, where economic theory shows that monopolies and public subsidies are sometimes preferable to pure competition, often applies, ipso facto, to the oligopoly which is responsible for constructing and maintaining those networks.
Finally, the brutal way in which the Raffarin Government was put in its place was perceived by the employees and the people who live in the regions concerned as a piece of brutality and inhumanity directed against them personally by a Europe which is once again being experienced as a foreign and hostile institution. In the final analysis the position of the Raffarin Government means privatising profits and nationalising losses. I do not approve of that and neither do you. You need to be able to demonstrate that European competition policy is aimed at keeping excessive profits in check and promoting the supply of public goods.

Pasqua (UEN).
Madam President, Commissioner, the people of France have had the feeling that, quite apart from the debate about any aid which the French Government may or may not decide to provide, there is an ego problem between Mr Mer and yourself. I should like to say right away that that is a matter which is of no interest to us. We are not here to give you our support, any more than we are here to give Mr Mer our support.
The question we have to consider is simple: does Europe, the European Union - and more specifically the Commission of which you are a member - have a clear industrial policy? Ought we to have blind faith in you? The answer is 'no'. I do not see any clear industrial policy. As for having blind faith in you, the decisions which have been taken by the Court of Justice, which have overturned three of the decisions which you had taken, demonstrate only too well that this is not possible. I do not doubt your good intentions, but I do doubt the efficacy and the justice of the decisions that you take. At all events this affair has revealed that even the European Commission, whatever its claims, when confronted with an exceptionally serious problem involving one country, cannot do anything either. I would be the first to admit that the French Government has presented its case badly. However, I would also like to say that the way in which you yourself have reacted is not calculated to help Alstom either. Finally, it would seem that both sides have now seen reason to some extent.
I would add, in conclusion, the Mr Lipietz is in the wrong place. If he wants to criticise the French Government, he should not do it here, because it is not the job of this House to judge the French Government. Come and do it in a different forum, Mr Lipietz, in our own country, where people will be able to give you an answer.
Abitbol (EDD).
Madam President, Commissioner, our experiences of recent days involving the Alstom affair remind me a little of the story of the man who, when he was asked why he kept hitting himself on the head with a hammer, replied that it was because it felt so good when it stopped. Admittedly, Mr Monti, your strong-arm tactics enabled you to impose your will on the French Government. Let us admit it: you even made it look ridiculous. That government, which had rejected all the figures on the Friday, then spent the weekend producing a whole lot more, with the support of every bank in the country.
You have won then, but at what price? All Europeans now know that Brussels can sacrifice 120 000 jobs without losing sleep over it, that it can ruin such prestigious industrial sites as Belfort or St-Nazaire, simply in order to get its own back. Mr Pasqua mentioned this a moment ago - the wounded pride of a European Commissioner. You are playing with communities, Mr Monti, simply in order to satisfy unimportant dogmas and your own vanity. You are not a lawyer, Mr Monti. Indeed, to call you a lawyer would be a compliment, since there are many lawyers who are actually working in the interests of families and their inheritance. You are only a bailiff, the man who carries out the process of seizing this social market economy, which can best be summed up as follows: the market is economising on society.
Mr Monti, we, the people of France, already have you to thank for the fact that Péchinet was abandoned. You did not allow us to buy back Alcan, even though you could have done so. We might have had you to thank for the ruin of Schneider and of Legrand. Do you not sometimes think that you are to European industry what Torquemada was to the Catholic religion? In other words, you are playing the grand inquisitor in hunting down state aids just as the good Torquemada, if I may put it this way, hunted down heresy, sodomy and to some extent, let us admit it, Jews.

Lang (NI).
Madam President, following on as it does from the debate in France about the budget austerity pact, the arrogant and dogmatic handling of the Alstom affair by the European Commission is symbolic, and full of lessons to be learned for the future. It is an extremely bitter foretaste of the future that lies in store for a Europe of nation states in thrall. The people of France, surprised and shocked, have suddenly discovered the reality of Europe, a technocratic and imperialist octopus, which puts balance sheets before people, and Community legalism before enterprise. It is not a Europe of industry, growth and employment that the Commission is preparing, but rather a vast industrial wasteland, a Europe of delocalisation, unemployment, economic decline and social vulnerability. France has gone from independence to dependence, from liberty to submission, to the extent that it is now reduced to sending its government to beg our lords and masters in Brussels for new conditions and for new time limits - a pitiable and humiliating spectacle! Finally, an agreement obtained only after a hard fight will not hide for long the vital need for the French people to recover their freedoms, their economic and social independence, their political sovereignty and, quite simply, their dignity.

Konrad (PPE-DE).
Madam President, Commissioner Monti, ladies and gentlemen, the threat of the Alstom Group's imminent bankruptcy has been averted through a compromise solution between more than thirty lending banks, the French Government and the Commission. The support package amounts to EUR 2.8 billion. EUR 2.8 billion, that is a generous package, and it could also be said that it is, for the most part, a generous present from the state that is of doubtful benefit.
In my view, it is impossible to eradicate from Europe the erroneous belief that money can be used to prop up uncompetitive structures. I would argue for temporary support to avoid structures breaking down and to allow them to change, but I am concerned that even in this way uncompetitive structures will continue to be supported. The convertible loan, which is on the cards as a compromise, is nothing more than an invitation to the French state to exchange this for shares after this enquiry, which would once again result in the re-nationalisation of Alstom.
It is precisely this mindset in Europe of not wanting to allow structural change, the belief that state money should, as a matter of principle, be used to avoid structural change, that is damaging for Europe as a business location. The International Monetary Fund has once again pointed out that it is the large states, Germany, France and Italy, that act as bottlenecks on the continent and are thus responsible for the fact that the next boom will probably pass Europe by.
The elimination of businesses that cannot sustain competition is part of the market economy, and, let me add, also part of the social market economy.
Something else of importance for me is that today, Mr Monti, we can read the headlines saying that the test of strength has been passed. I see that as positive and I should like to congratulate you on this in this House. It was important that the French state should not put before the Commission a fait accompli without being asked. No, this European Union is a Community based on the rule of law and this includes competition law. I can only invite all national states to heed this law. From 2001 to date there has been an increase in state aid - EUR 88 billion to date within the European Union - that is revealing and something to fear. I think that the nation states are well advised to adhere to competition law, in particular on the eve of the enlargement of the European Union.

Cashman (PSE).
Madam President, firstly I wish to tell Mr Monti that I will not be engaging in any personal attacks on him - he has an extremely difficult job.
However, let me just say, in reaction to the previous speaker, that businesses just stop - they go out of business. That is the reality. We have to remind ourselves of what we are trying to address tonight, which is the reality of 110 000 jobs. The reality is that if you do not have a job, you cannot pay your bills or support yourself. This House needs to recognise that we must come together to create better social dialogue and a better awareness and social responsibility for those in employment.
In the United Kingdom alone, 10 000 jobs rest with Alstom. We need to support Alstom. The uncertainty over the aid is not helpful. There are already concerns that plants in Washwood Heath (Birmingham), Rugby and Stafford face an unnecessary and uncertain future. We need to give them certainty and encourage development and investment. We are not doing that.
We need flexibility of application in the rules on state aid. When we are dealing with huge social upheaval we must also look at the costs.
I support this refinancing package, but it must not be at the expense of British workers and British jobs. There is real concern for those in the transmission and distribution businesses that their business is likely to be transferred to Arriva. There is real concern about the final salary pension schemes of those workers. We must give them some form of certainty. My big fear tonight is that we will conclude that Alstom may survive and get the support of the European Union. What we need to say is that Alstom will survive, and we must do everything possible to ensure that survival and protect those 110 000 jobs. We owe it to ourselves and to those people in those jobs.

Berthu (NI).
Madam President, Alstom, that great and excellent undertaking, has almost been done to death on two occasions, the first time by the management mistakes of its former chairman, and the second time by the intransigence of the Commission.
Admittedly the Commission has just told us yet again that it is only applying the Treaty and I have to admit, Mr Monti, that that is true. The Treaty itself poses a problem, because its wording, in the 'competition' part, goes back to the Treaty of Rome. It proves that our vision of competition is now too narrow, too focused on the internal market, whereas we should be taking a more global view of the strategic, national and European interests at stake in what is now worldwide competition.
This is why, in the Alstom affair, the French Government was defending, in the last analysis, a more balanced and more global position than the Commission. In this way it was demonstrating that a nation state, democratically responsible, was perfectly capable of assessing whether state aid should be given in order to save, in exceptional circumstances, industries that are strategically important for the economic independence or cultural identity of the country. It would have been better if the Commission had helped it and cooperated in achieving that objective. Any future reform of the Treaty ought to take this into account.
In the meantime, we deplore the fact that Mr Monti, in his statements just now, has continued to allow the sword of Damocles to hang over the plan to rescue Alstom, and we deplore the fact that the Commission has absolute power in this area. On that too it will be necessary to reform the Treaty in the near future.

Harbour (PPE-DE).
Madam President, I would like to thank my colleague, Mr Konrad, for generously giving me a minute to talk on behalf of the constituents Mr Cashman and I share in the United Kingdom, and who are affected by the uncertainty over Alstom.
I will come straight to the point; it is perhaps a reflection of our different views that I want some answers from the Commission about the way forward. It is clear this business has to be restructured and that it must change in its present form because of the lack of demand for its products.
However, I would like to ask the Commission, firstly, its views about the sale of the transmission and distribution division to Arriva. Could the Commissioner confirm that this will not be subject to any further delays for competition purposes or, if that disposal or sale is to be referred to him, that he will speed up the procedure as much as possible, so that the employees and that very important division with a long-term future are not affected by any more uncertainty?
As far as the other parts of the undertaking are concerned, will he confirm that the Alstom management will be free to consider offers and to sell other parts of the business to whomsoever they choose and wherever they come from? We know that there are businesses in Germany and potentially in Japan and America which would be interested in giving a future to employees by reconsolidating the sector.
Finally, will he look at the competition implications in the transport business, and at the fact that within the United Kingdom the majority of railway rolling stock is manufactured outside the country, whereas other countries seem quite capable of introducing into their contracts provisions to ensure that rolling stock is made in their own country? That is a crucial issue that will affect the future of an excellent railway assembly plant in Birmingham where there is no future work. At any rate, as part of a restructuring process, we would like to see those people employed in making trains for the United Kingdom market.

Savary (PSE).
Madam President, Commissioner, we welcome with relief, even if it is only a stay of execution, the Commission's decision to allow the Alstom rescue plan to take its chances.
Let us not deceive ourselves: behind all the good reasons put forward by one side or the other, this issue will be a political test of the first order for the European Union as far as public opinion is concerned. This issue, which concerns one of the jewels in the crown of industrial and technological Europe, on which hangs the future of 118 000 employees throughout the world, is a practical test of both the European project and the Commission.
Commissioner, we do not underestimate the extent to which the French Government, forced into a corner, making its clumsiness and its attempts to lay down the law even worse, has presented us with a fait accompli by publishing a rescue plan before negotiating with the Commission, as it is obliged to do under the Treaties. However, Mr Mer must be aware that in the past, on the basis of the same Treaties, another French Government, that of Mr Fabius, succeeded, without any difficulty and without any vain polemics from Brussels, in saving the French steel industry in circumstances which were difficult in other ways. Believe me, we are the first to suffer, we the elected representatives of France, when we see the Prime Minister of our country prostrating himself here in order to ask you to accept record deficits, and, at the same time, the reduction of VAT for his voters in the restaurant trade. It is true to say that in this behaviour, on the part of a country like France towards the European Union, there is something similar to, and as unilateral and arrogant as, the behaviour of Mr Bush towards the United Nations. Unfortunately, however, he needs a diversion and a scapegoat. He needs the old trick of treating himself to false victories when faced with the bureaucracy of Brussels.
For all that, Commissioner, this episode, which can only be the herald of others like it, given the worrying movements towards deindustrialisation and delocalisation which are affecting the brightest jewels in our industrial crown, should make us, as Europeans, ask ourselves about the place and the status of our policy on competition within the Union. It is becoming increasingly outrageous and intolerable that our competition policy, in a context that is quite different from that of the Treaties by which it was established in 1986 and 1992, should remain bound by the impassable horizon of being simply a policy of the European Union. Many voices - too many, and increasingly credible - are being raised to claim that Europe cares more about the inexorable law of the market than any of the most free-market countries in the world, starting with the United States of America.
Today, faced with the inexorable affirmation of the new major powers of tomorrow, Europe needs to look at things and judge them from an angle other than that of unbridled competition. It needs an industrial policy which is capable of protecting its national champions, of safeguarding its priceless technical heritage and its precious savoir-faire. It needs a social policy which aims to maintain living standards and the employment of the greatest possible number of Europeans. What is at stake here is, first and foremost, a social issue of primary importance, but also the competitiveness of Europe in the world at large.
Finally, how can we make our peoples understand that an administrative authority over which there is no parliamentary control should alone take a decision of such importance that thousands of workers' families are now awaiting it with bated breath and with anguish in their hearts?
Above and beyond the decision that you take - and I cannot imagine that it will be a second negative - the whole meaning of the European project and the structure of the current Treaties are being called into question here. In this respect, we can only hope, if such a thing is possible, that the next Intergovernmental Conference will tackle this need to push forward, side by side and on equal terms with competition policy, a social policy of employment and an industrial policy which will enable the Union to defend its economic and social interests in the global world in which we shall be living from now on.

Monti
. (IT) Madam President, I would like to thank all the Members who have spoken on a subject of great economic, social, institutional and political importance.
I would like to start by thanking Mr Karas for expressing his full support for the Commission's work: he mentioned the new draft Constitution and the Lisbon strategy. I believe that we must also take note of the fact that, whenever the Heads of State or Government meet in the European Council, they send out clear calls for state aid to be cut and channelled into horizontal objectives rather than into supporting any particular sectors or businesses. Therefore, it is not just the fantasies of the European Commissioners that are taking this direction. Mr Karas also pointed out - and I agree with him fully - that competition is, although not the only factor, of course, an essential element in the social market economy.
Mr Wurtz, thank you for pointing out the different occasions - 1999, February 2000 - on which the trade unions brought to the attention of the European Parliament, inter alia, the deterioration of Alstom's financial situation and position within the industry. This helps us to place the issue in its historical and chronological context and to eliminate the over-simplified view - expressed by some malicious rumourmongers in recent days - that it is the European Commission who will be responsible for any unemployment problems.
I, too, Mr Wurtz, am extremely sensitive to the need for the trade unions to be fully informed and made aware of these issues, just as the public authorities need to be aware of how the trade unions are coping with them. I therefore have no hesitation in agreeing to your request for a meeting with the Coordination syndicale Alstom and I can tell you that I have, in any case, already agreed to a request for a meeting which is to take place in the next few days with the European Trade Union Federation, to which this association belongs.
Mr Wurtz, together with almost all the speakers - Mr Lipietz, Mr Pasqua, Mr Savary and others - mentioned the need for a European industrial policy. I hope I will not cause offence if I say that I fully agree with them. A European industrial policy is something which has as a foundation stone, as an essential component, the promotion of a single market under conditions of competition. Please let us not create confusion by saying that the single market and competition are contrary to the requirements of an industrial policy. An industrial policy needs other things as well, but if you ask French, German or Italian entrepreneurs what the European Union's essential contribution is to their industrial activities and their expansion and export activities, etc., they will reply: the single market, a single market in which the conditions for competition are preserved.
Of course, other things are necessary too, and, in the Commission, I always support the initiatives of Commissioner Liikanen, Commissioner Busquin and the Vice-President, Mrs De Palacio, seeking to find other ways of boosting Europe's industrial development, but I feel that it would be an extremely serious error to think that we can further industrial policy by eating away at the foundations of the single market and competition.
Mr Wurtz said that the Commission has discretionary power in the field of competition which is not subject to control. Mr Pasqua provided part of the answer when he pointed out that there have been cases in which judicial control, which always applies to all Commission decisions, including in the field of competition, has rejected some of the European Commission's decisions. The Commission certainly does not claim to be infallible and still less do I. Our actions are subject to two levels of judicial control: the Court of First Instance and the Court of Justice. In the great majority of cases, these judicial bodies rule in favour of the Commission's decision; in others, they do not.
With regard to political legitimacy, Mr Wurtz, decisions relating to competition policy are taken in the individual Member States at national level by bodies which do not have the political legitimacy which the European Commission has conferred on it at European level by the European Parliament, in particular, with individual hearings for each Commissioner.
Mr Lipietz made a number of points relating to French internal politics, on which I do not believe he expects me to express an opinion. I welcome the support given by both the Group of the Greens/European Free Alliance and by Mr Lipietz, personally, as he has stated on many occasions, to competition policy as an essential tool for consumer protection. By the way, I would like to say that one of the tasks of competition policy is, without a doubt, to guarantee a secure supply of products, and there is even a specific legal instrument, what is known as 'failing company defence', which makes it possible for the potential disappearance of operators from the market, which could jeopardise security of supply, to be taken into account in competition policy decisions. It is not, therefore, such an inflexible, blinkered policy as might be imagined at first glance.
Mr Pasqua - who appears to have left the Chamber - said that he is not prepared to place blind trust in the Commission. I would point out, if I may, that, even if he were prepared to do so, the Commission would not want blind trust to be placed in it at all. It is extremely important that the Commission acts in close cooperation with Parliament and in accordance with Parliament's basic guidelines and, in any case, in particular in these matters, under the strict control of the judicial authority based in Luxembourg.
Mr Pasqua, too, mentioned the need for a clear industrial policy for Europe. President Prodi and the Commission as a whole, all the Commissioners, are reflecting on the effects of the deindustrialisation of Europe, which we all feel cannot be dealt with just by giving the Member States licence to breach competition rules or state aid legislation.
Mr Abitbol talked of the 'orgueil blessé d'un commissaire européen'. Quite frankly, I do not believe it is a matter of any particular orgueil, nor that it has received blessures. Then, as regards to the difference between the professions of notary and huissier, I do not think it is at all relevant: they are both, in any case, occupations, professions, which deserve the greatest respect, as, I believe, does the job of European Commissioner.
Mr Abitbol's comment on European Commission decisions which have allegedly harmed the development of French industry is interesting: interesting and curious, for I always mention France in my speeches as an example of a country whose industry has benefited greatly while observing European competition rules.
Here are some examples, Mr Abitbol - and I am addressing Mr Berthu, too, here - of cases in which French companies, with the authorisation of the European Commission, have succeeded in becoming either French national industry leaders or European industry leaders or world industry leaders. These are genuine examples, and I will confine myself to mentioning cases from recent years. Total-Fina-Elf, the result of a merger authorised by the Commission, has become a major industry leader, to say the least, in France, as has Carrefour-Promodes. The merger in the field of nuclear plant engineering between Maton and Siemens created Arriva, which a number of Members have mentioned this evening, a major European industry leader, and, thanks to the then Managing Director, Francis Mère, the Usinor group, with the authorisation of the Commission, merged successfully with other European iron and steel companies to create Arcelor, which is not the European industry leader but the world industry leader, the largest iron and steel group operating in the world today. I therefore believe that it is possible to reconcile consumer protection, which is the primary task of competition policy, with the creation of large structures which can compete at international level. In this, therefore, I agree with Mr Berthu that we need to have a global vision for global markets, although not, of course, where the markets are still national or local.
Mr Lange described the European Commission's attitude as 'arrogant and dogmatic' - I believe these were the words he used. I would not presume to disagree with him if this is his opinion; I think I have explained today and on other occasions how and why we act as we do, and that we are convinced that our work is not so much based purely on legal formalism but on the need to give the European economy strong foundations and to ensure respect for rules, not least as a principle of democratic peaceful coexistence, if I may use that term, at European level.
As Mr Konrad rightly pointed out, the European Union is a community of law - I do not feel this is a pejorative term - which is founded on respect for rules in a number of fields, and since the Commission is the guardian of the Treaties, I believe that it also has a duty to ensure that they are observed. Mr Konrad pointed out that, ultimately, state aid often leads to loss of money without bringing any significant tangible benefits.
At the same time, Mr Cashman is in favour of aid to the Alstom group, provided that this does not harm the British workers. This would appear to be a very respectable position on the matter, taking a specific point of view. Our task is to attempt to preserve the jobs of the employees of the Alstom group by facilitating a restructuring plan and, at the same time, while preventing excessively serious distortions to trade, to stop the employees of competing firms from losing their jobs. This is the task of state aid control. Of course, the loss of currently existing jobs from a specific area is always going to have a higher profile than the other jobs we manage to save elsewhere in Europe by ensuring respect for the rules. In any case, I can assure you that the preservation and expansion of employment is something to which the Commission attaches great importance.
Mr Harbour asked me some actually very specific questions, in particular whether the Commission will have to decide, I imagine in the context of concentration control, whether the sale of Alstom's transmission and distribution division to Arriva is to take place quickly. If that task falls to us, I can assure you that we will decide quickly for, as Mr Harbour knows, the regulation on concentration control in Europe, unlike that in force in the United States, for example, lays down extremely short, unextendable deadlines for such decisions.
I have to apologise, for I am not qualified to comment on the issue of the Birmingham establishment or on the varying degrees of dependence of the different Member States on foreign manufacturers in the purchase of railway rolling stock.
I will end, Mr President, with a simple observation. If we look back at cases of state aid authorised by the Commission for restructuring plans and at the occasions when it was employed, we see that, in many of those cases, the state aid did not help: in other words, those companies, those jobs, were not saved in spite of the state aid. In those - numerous - cases, the end result was, nevertheless, job losses, plant closures and, what is more, increased taxation to replenish the state coffers, affecting taxpayers.
That is why the matter before us is not an easy one to resolve. I can assure you that the Commission will endeavour to exercise due control with all due responsibility. Thank you very much for your thoughtful contributions to this debate, both those expressing support and those expressing criticism.

Cashman (PSE).
Madam President, I merely wish to correct something Commissioner Monti said. He is right that I referred to the 10 000 jobs in the United Kingdom and specifically those in my constituency, Birmingham, Rugby and Stafford. However, the record will show that I said we had a care of duty - a responsibility - to the 110 000 jobs. Therefore, whilst I recognise that I looked at the British consequences, I am extremely concerned about the effects on those jobs across Europe.

President. -
Thank you Mr Cashman.
The debate is closed.
The sitting is suspended until 9 p.m.
(The sitting was suspended at 8.50 p.m. and resumed at 9 p.m.)

Ion Iliescu
. Mr President, Members of the European Parliament, ladies and gentlemen, I am deeply honoured to be here today. It is a privilege to address you in a plenary session of the European Parliament, and I am grateful to Mr Cox and all of you for giving me this opportunity.
I speak to you today at a time of great hope for my country and for its European destiny. Almost a year ago in Bucharest, Mr President, you spoke before the Romanian Parliament and shared with my fellow Romanians your vision for Europe's future and Romania's destiny within Europe. It is this Europe of values and principles that we wish to join.
Today I stand before the European Parliament to let you know that we have faced countless challenges. We have overcome many of them and our political will is to overcome them all. But my main message today is that Romania is a country that the democratic community of nations can count on. Romania will be a consistent and reliable European Union member. The European Union will gain much more than just a new EU Member State of over 22 million inhabitants; it will gain a firm believer in European integration, a Euro-optimist by choice.
Connected to Europe throughout our entire history, we believe in the system of positive values now underlying the European construction: democracy, respect for citizens' rights and liberties, justice and social equity, tolerance, solidarity within and among nations and accountability to future generations.
For us Romanians, sidelined by history for more than half a century, natural evolution within the European Community, whose values served as a beacon, was an aspiration which came true upon the revolution of December 1989. Coming out of totalitarianism - both fascist and communist - was neither simple nor easy. We had to face a twofold handicap, the first of which was institutional: the institutions of a totalitarian state are incompatible with democracy and the market economy. The second handicap was represented by our isolation from the world and our autarchic tendencies. All this occurred against the background of a deeply-rooted, historical delay in economic and social development.
We had to build up institutions, see them in place and functioning, confer on them power originating in their legitimacy and functionality. Assisted by friends and partners of Romania - who are very many, and some of whom are present in this Chamber today - we have mapped out and adopted a modern and democratic constitution, we have trained people to cope with the new demands of a working democracy.
Politically, over the past 14 years, Romania has developed its functional democracy, which has twice successfully passed the test of alternative governance. Meanwhile, civic society has emerged and asserted itself ever more strongly, thus presenting - by way of its organisations - a necessary and useful counter-power, and forming a catalyst for public debate.
The formulation of a national strategy on the relationships between the majority and ethnic minorities, including the implicit representation of such minorities in parliament, has been highly successful for this political transition. The treatment that ethnic minorities enjoy in Romania is exemplary and meets every European and international standard. Our country is a realm of tolerance and dialogue and of fruitful cooperation between various ethnic groups; such treatment has become a tradition and a culture of dialogue and consensus has developed. There is an important party belonging to the Hungarian minority, just as there are parties and organisations representing, politically and culturally, the interests of the Germans, Roma, Jews, Ukrainians, Polish, and so on: citizens of Romania. At the moment, we are focusing on making better use of the programmes for the economic and social integration of the Roma minority.
We have scored significant progress in the field of economic reforms, although most delays in our transition occur in that sphere. Such delays are the result of a whole host of factors, both objective and subjective, as well as the consequence of a particular historical reality. We have often been criticised for not having carried out shock therapy, and for our gradual approach to reforms, which has prevented us from scoring the results envisaged. We consider such accusations to be unfounded.
The first days of 1990 saw the most astonishing shock in the Romanian economy: the complete and unconditional renunciation of the planned, centralised economic system, the dismantling of the institutions and mechanisms characterising the state-controlled economy. When harking back, we realise that this brought about deeply entrenched economic imbalances, caused inflation and enhanced de-industrialisation and increased unemployment and the migration of the labour force from the city to the countryside. All these consequences were entirely inconsistent with the mainstream world economy. Moreover, a lack of domestic capital and the extremely low volume of foreign investment in the Romanian economy have made privatisation an even more difficult and lengthy process.
We needed more than a decade to redress the macroeconomic balances and to resume - over the past three and a half years - a steady economic growth of about 5%. The economic reform which began in the absence of the market institutions and mechanisms has entailed extremely high and hardly bearable social costs. As a matter of fact, the process of economic recovery is not over yet.
Poverty is our main problem in the social sphere. We are aware that we cannot succeed in alleviating poverty significantly without continued economic reform, without speeding up the creation of new, more stable and better paid jobs.
Responses to the economic and social problems facing Romania need to be formed, first and foremost, from within the country, mainly through a concerted effort by all the accountable political forces, so that the principles and institutions of good governance can be established. That means that we must reprimand corruption and red-tape efficiently and firmly, and give to the public servant a professional status that should no longer be used to reward political clients.
Such efforts need to result in the Romanian State's modernisation. They must enhance its institutional and administrative capabilities and turn it into a genuine and friendly partner of the citizen. We have made good progress in that direction, but we are aware of the many problems that still await adequate responses.
The logic applied to state modernisation and the preparations for accession to the European Union also applied to the revision of our constitution, which has been carried out through the active participation of representatives of all parliamentary political parties and through consultation of civil society. The revision will soon be submitted for endorsement by national referendum.
Despite the hardships and flaws in Romanian society, I truthfully believe that Romania is now on the right track, that the Romanians have now come to understand that democracy is a better and more efficient political system than totalitarianism, securing higher levels of performance across the board. Freedom of choice and freedom to set up and implement alternative political, economic and social projects provide the democratic system with better opportunities. Conflicts can be settled by way of dialogue, negotiation and consensus.
Romanian society has grown up. It has acquired new foundations for national cohesion and social solidarity. It stands ready to assume the new responsibilities incumbent upon it in terms of Romania's new status as a Nato member and future Member State of the European Union.

President.
Thank you, Mr President, for that address. The calendar is foreseen; the pathway is known; the progress will be determined, as you have remarked, by Romania itself in preparation. We, in this House, look forward to the fulfilment of Romania's European vocation. We thank you for your presence.

President.
The next item is the report (A5-0232/2003) by Mr Whitehead, on behalf of the Committee on the Environment, Public Health and Consumer Policy on the proposal for a decision of the European Parliament and Council establishing a general framework for financing Community actions in support of consumer policy for the years 2004 to 2007. (COM(2003) 44 C5-0022/2003 2003/0020(COD)).

Byrne
. I wish to thank the rapporteur and the shadow rapporteurs for their very constructive efforts to reach a compromise between the institutions so that we can adopt this proposal at first reading. As you know, an adoption at first reading is of major importance for the timely execution of the 2004 consumer policy budget.
I very much appreciate your support for the key principle of this proposal - that the Consumer Policy Strategy sets the scope, political orientations and priorities for the programming of expenditure on consumer policy.
It is essential that we spend our money on actions designed to achieve the objectives of this strategy: a high common level of consumer protection, better enforcement of consumer protection rules and the closer involvement of consumer organisations in the making of all EU policies that affect consumer interests.
Regarding accession countries, I fully share Parliament's view that the application of the acquis communautaire in the accession countries must be given high priority in the consumer policy budget. The Commission will ensure that specific projects undertaken by consumer organisations and aiming to accelerate the effective implementation of the acquis communautaire on consumer protection in the new Member States can be eligible for a financial contribution of 75%.
As to independent European consumer organisations, you have, in your report, emphasised the need to support these organisations. Here also, I fully agree with you. I also share Parliament's view that the integration of consumer interests in other EU policies must be given high priority in the consumer policy budget.
Coming to grant applications, firstly, the Commission will ensure that consumer organisations are appropriately informed about the new requirements and their strict implementation. The application procedures for grants will be kept as simple as possible, and we will offer consumer organisations seminars to explain how they work.
Secondly, in order to improve the quality of project applications and project management, initiatives are already under way to offer professionals of consumer organisations training in project development.
Thirdly, in order to assist consumer organisations in finding project partners, the Commission is putting into place an on-line forum to facilitate networking and cross-border contacts.
In response to your report, Mr Whitehead, I also wish to assure you and the European Parliament that the Commission will speed up the decision-making on grant applications. Payments will also be made as promptly as possible. However, I must also plead here for your understanding. We will make every effort to complete the decision-making on grant applications within three months. But you must be aware that in the post-accession period, the workload and translation requirements will substantially increase. It is also probable that we will have more third-country participation in consumer policy actions than before.
Our efforts to streamline and speed up the grant application process cannot be made at the expense of proper evaluation of the proposals, and must comply fully with the rules governing budget management. I take the sound management of Community funds very seriously. The consumer policy budget must and will be executed in strict accordance with the rules set out in the Financial Regulation. On that, no compromise is possible, and I trust that you share that conviction.

Whitehead (PSE)
. Mr President, as this Parliament enlarges, Commissioner, you and I get physically further apart, but we are drawn closer together by the consequence of enlargement, which is that consumer protection is a prime concern now for a Community of 450,000,000 people.
Tonight, the House has the opportunity to carry through an agreement at first reading, which will guarantee that support for consumers' activities. It came to us a little late but we have made good progress. I would particularly like to thank you, Commissioner, for the effort you made to get here tonight, after the lengthy day you have had, and also for the work of your staff. I would also like to thank the shadow rapporteurs for their solidarity which includes their presence here tonight, my own assistant Laura Sullivan, the consumer NGOs and the Council Presidency, all of whom have brought us to a position where we can tonight demonstrate that the total support in Council is overwhelmingly replicated in Parliament.
We are presenting about thirty-one compromise amendments en bloc, all of which have involved give and take. If passed, the second bloc of amendments to the fifteen original ones would fall. That would leave about five remaining amendments which I would advise the House to vote down. I will deal with those last.
These compromises reflect the consensus view that we need to widen the scale and the proportionate limit of support for consumer activities. We stand on the brink of enlargement and all the diverse needs that will follow from it. We have had to find legally sound ways to extend those provisions up to 2007, in cooperation with our friends and colleagues on the Committee on Budgetary Control.
We also acknowledge that small - but equally deserving - applicants have been disadvantaged in the past by the arcane nature and length of the assessment process. The converse also applies. We need to be certain of the rules, qualifications and funding of all applicants, however obscure. Events unfolding today before other committees suggest that this caution is necessary.
The Commission has told us that it accepts with good grace the requirement to supply an assessment of applications within three months. When that is not possible, we will be told why. I am glad that the Commissioner has stressed that his best endeavours and those of his team will go towards making early consideration of all these applications as effective as possible and that there will be seminars and other instruction particularly for those making applications for the first time and, sometimes, from a country which is itself a new Member State.
It is an anomaly that we are having to discuss the pressing needs of enlargement at a time when, technically, we cannot consider the budget that we know must be used for that purpose post 2004. This is a first reading which can result in instant agreement between the three institutions if we all accept that none of the three have been pushed beyond their limits.
The Commissioner knows that there has been a certain exasperation over some of the committees that have been set up and the discussions that have been held about consumer protection, not just in this institution but elsewhere too. We have to accept the limits of what we can do in saying who can meet where and do what in relation to consumer advice.
My colleagues have wisely decided on that score that they would not push some of the amendments that came before the Committee, although we support and indeed sometimes salute the principles that inspired them.
I have to say to my good friend, colleague and namesake Mr Bushill-Matthews that his Amendment No 11 is an amendment too far. I supported it in the Committee because I felt that we needed to make this point: there is exasperation where sometimes - and the Commission I think accepts this as the case - applications have not been considered not just within three or four months, as the Commission would have preferred, but within five months and beyond. The worst offenders are not DG SANCO. Indeed, some of the examples Mr Bushill-Matthews gave come from other directorates-general. The point however stands, we need to improve on it and we need to be able to demonstrate a greater responsiveness on the part of the Commission.
I hope Mr Bushill-Matthews will tell us tonight with his customary subtlety that he understands the position we are in.
In conclusion, this is a modest proposal. The Commissioner will understand that I do not mean this in a Swiftian sense. We are not devouring our children; we are nourishing them with this proposal. I hope it is commended by everybody in the House.

Gutiérrez-Cortines (PPE-DE).
Mr President, I am very happy to see that the European Union and the Commission, and all of us together, are supporting the consumers' associations. They are, in a sense, the other element of the triptych which makes up democracy.
I would also, however, like to stress certain aspects which seem to me to be very positive. In accordance with this spirit of providing incentive, I believe it is enormously important to create networks and that they are not just made up of the European consumers' associations already consolidated. The danger with this type of aid is that we create a group of associations receiving preferential treatment which, in the end, creates an autonomous body, with no relationship with the grass roots.
To this end, we have introduced certain amendments mentioning regional and national associations, because it is extremely important that, particularly in relation to the management and implementation of the programme, the Commission ensures that the small associations can emerge, clearly linked to the scheme and the network. Since we also have the challenge of the new democracies in the Eastern countries, it is essential to incentivise the creation of small associations in every part of the Union.
I would like to praise the efforts of the small associations located in regions far from the decision-making centres such as Brussels. It often takes genuine heroism to create an association in these regions, in which the people feel alone and misunderstood and where they often have to touch raw nerves or denounce aspects relating to their immediate neighbours to the local authorities, bearing in mind the scant inspection the administration can carry out.
I therefore welcome this initiative and would ask that, when it comes to distributing aid, account be taken not just of the need to provide incentives for emerging associations and to strengthen the small ones, by linking them to the more consolidated associations, but that we also need to ensure that the more consolidated ones fulfil their duties and make contacts with all parts of the Union.

Thors (ELDR).
Mr President, Commissioner, as a Scandinavian, I do not usually go in for flowery language, but I wish to thank Mr Whitehead and the Commission's officials for the intensive work done so that we might quickly have this proposal turned into a reality. We have all worked in a spirit of how important it is to strengthen the consumer organisations and reinforce the objectives of consumer work. I therefore want to say thank you to Phillip.
The previous speakers have already mentioned the situation in the candidate countries. It is for the new Europe that we are developing the consumer area. In this area, as in many others, I believe there is an old heritage we must combat. I believe that strong consumer organisations are extremely important for enabling people to participate and for giving them the opportunity to exercise influence. For those reasons too, approval is important so that the candidate countries become part of the required network.
In Parliament's amendments, we indicate the importance of genuinely integrating consumer issues into other areas. This has been an issue especially close to my heart. As MEPs, we see how strong the lobbying is in other areas. We must give the consumer the power to study, inform and share best practices. The next issues must be those of mobile telephone conversations, price fixing or the ways in which billing operates in different countries. I therefore think it important for us to highlight this issue.
The previous speakers, especially the rapporteur and the Commissioner, spoke of the administrative procedures. The work we have done together - and I want to emphasise the word 'together' - may be genuinely groundbreaking in bringing about rapid procedures and quick responses in place of a situation in which applicants are constantly forced to communicate when there is no need to. I hope that the outcome of our work will serve as an example of better procedures.
We in the committee proposed that the committee, mentioned in Article 15, should be disbanded. We knew that the Council would not perhaps accept the proposal. I nonetheless hope that the Commissioner, the Commission and all of us are agreed about following up the question of what the committee costs. Does it give value for money? In an enlarged EU, it may be extremely difficult to have large committees of this kind that decide about quite small funds. I hope that the Commission will genuinely look into what the committee mentioned in Article 15 will, in reality, cost.

Rod (Verts/ALE).
Mr President, we are satisfied, on the whole, with Mr Whitehead's report and with the fact that the Council has generally taken on board our amendments. The clarification of the detailed rules for financing consumer protection organisations was essential. The definition of such bodies must be strict. The report follows this line, while at the same time guaranteeing the participation of a panel of organisations.
Of course we must keep those organisations which demonstrate the necessary technical competence, but we must also ensure the independence of representative bodies. It is absolutely essential to avoid a situation in which pressure groups - whether industrial, commercial, professional or any other kind - see those bodies as a means of indirectly influencing the Union's policy. On the other hand, we must maintain our relations with the cooperatives, which take consumers' interests into account in their charters.
Relations with consumer protection organisations have to be developed in close contact with the public. We cannot, therefore, be satisfied with giving preferential treatment to relations with Community or national organisations while merely offering support to regional bodies: the latter must enjoy proper representation within the Committee on the Environment, Public Health and Consumer Policy, as well as corresponding financial aid. That committee will also be responsible for ensuring even greater representation of civil society.
The expansion in the sphere of competence is important. The bodies in the food sector have now been joined by consumer protection organisations in the services sector and, more broadly, in the non-food sectors.
Access to information is an essential guarantee of consumer protection. This is why we asked for, and obtained, public data banks that would be easily accessible. The public must be able to find out about the precise history of products, their origin, their method of production etc. This means, amongst other things, improving labelling - an effective means of guaranteeing that consumers are informed.
We must go further, however. If we want to be sure that safe products are being marketed, we not only need to be informed about the risks: we also need to see about reducing those risks. That is only possible if we develop comparative evaluations with a view to sustainable and responsible production and consumption. That is the real consumer protection policy.

Bushill-Matthews (PPE-DE).
Mr President, I thank the rapporteur for his kind mention of my Amendment No 11, which referred to Article 6, paragraph 5a (new). This called for Commission officials responsible for non-payment in due time to be named in the official Parliamentary record after a three-week deadline. The purpose of this flowed from an experience of one of my constituents in the West Midlands who had to wait for over a year to get paid his due from - I have to say - the Agriculture DG rather than your own, Commissioner, but who none the less came across two particular individuals who were not only incompetent but also unhelpful. They know who they are. I think it is appropriate that other people should know who they are. So this amendment was not tabled out of malice, but out of experience and a desire to be helpful, in my usual style.
I was pleased that in your opening remarks you said that, perhaps as a result of this amendment, it is your intention to speed up decision-making. But I was concerned about your follow-up comments when you said that we have to take note of the possibility of enlargement slowing things up, that we still have to take care of evaluation, and so on. There were too many 'buts' from my point of view. I have to say gently, but firmly, Commissioner, that those are fine words but we shall be watching you.
It is important to say that this should go through at first reading, despite what I have just said. I agree with the rapporteur that this is an important issue. To help it on its way the PPE-DE Group is calling for a roll-call vote on this particular amendment but will then abstain so that the amendment will fall. Hopefully then, the report will go through but we will have put down a marker.
As MEPs we are each held accountable for what we say, what we do and what we fail to do. This is as it should be. But I must say to the Commissioner that such a policy should not just apply to us; it should apply to everyone in authority and especially to those in public service. Some Commission officials clearly believe that it does not apply to them. They are quite wrong.
If they fail to learn, then I am confident that Parliament will put forward another helpful amendment in due course that will not be voted down. Today and tomorrow we will have given a warning shot. If this fails to work, we shall use live rounds.

Schörling (Verts/ALE).
Mr President, I also wish to begin by thanking the Commission and Mr Whitehead for the work that has been done. It cannot be emphasised enough how important a proper consumer policy is for the EU. Consumer policy has, of course, many important purposes. It must contribute to sustainable development, sustainable production and sustainable consumption.
It is also necessary to change our consumer behaviour, and the small consumer organisations are very important in this context. I particularly want to discuss the aid given to small consumer organisations and, in particular, to the new Member States. They should not be discouraged by the fact that it takes some time for them to be informed about the co-financing projects. Instead, it must be ensured that the procedure is changed so that they are notified quickly and so enabled to continue their good work.

Byrne
. Mr President, I wish to thank all the Members concerned for participating in this useful and interesting debate, and for the constructive position they have taken.
I personally feel that the codecision process has resulted in significant improvements to this decision. The compromise amendments proposed have reaped the benefit of the combined expertise of all three institutions. The Commission can accept this compromise package, consisting of Amendments Nos 1, 2, 12, 14, 15, 22, 23 and 29 up to and including 59.
As far as Amendment No 52 is concerned, the Commission notes the Parliament's wish and the Council's unanimous agreement that there should be a three-month deadline for decision-making on grant applications. We are committed to reducing the time taken for such decisions to the absolute minimum and will work towards this deadline. Nevertheless, the Commission wishes to remind Parliament of the importance of not deviating from the imperatives of proper evaluation and the full respect of rules on financial and budget management.
In response to the comments from Mrs Gutiérrez-Cortines and Mr Rod on regional organisations, I should say that I am fully aware of the important role played by regional consumer organisations in certain EU countries. Their proximity to consumer concerns makes them an interesting partner for implementing the policy objectives of EU consumer policy. Regional consumer organisations are eligible for grants for specific projects and can also benefit from the capacity-building actions we offer to consumer organisations. For example, the training courses we offer to consumer organisations to help improve their managerial capacity and the contribution of consumer representatives to EU policy development are open to the staff of regional consumer organisations. Specific projects that promote the objectives of EU policy at regional level are eligible for cofinancing from the EU budget. I very much hope that regional consumer organisations will make good use of such opportunities.
In response to Mrs Thors' question regarding the integration of consumer issues in other policies, I want to stress that the integration of consumer interests into all relevant EU policies is enshrined in Article 153 of the Treaty. It should be pursued by all Commission services and by all EU institutions. We have been making progress on this issue. In the important debate about services of general interest, that followed the adoption of the Commission Green Paper, consumer interests are amongst the core issues on the table. We hope that the progress achieved so far - in air transport, for example, with the charter on passenger rights and the denied boarding regulation - will serve as a reference for the improvement of passenger rights in other modes of transport.
Actions in this proposal for a decision that will contribute to the integration objectives are many; to name but a few: actions to provide consumer organisations with the technical and legal expertise to effectively contribute to policy development in EU policy areas relevant to consumers, and actions to collect data that provide an evidence base for the integration of consumer interests into other EU policies.
On the question of comitology raised by Mrs Thors, I would like to say that since 1999 the Consultative Committee of the Member States has advised the Commission, in particular concerning the attribution of grants. It makes a useful contribution to coordinating EU and national policies for project grants. In addition, this Committee will become the essential forum for discussion and advice on the implementation of a new type of action - those that are jointly financed by the Community budget and the Member States. These joint actions will in particular be used for the Commission's future activities in the area of administrative and enforcement cooperation and to consolidate the existing networks of European Consumer Centres and the Extra-Judicial network.
The Committee, therefore, has a key role to play in the implementation of the proposed framework. I took full note when Mr Bushill-Matthews said that he will be watching me: that, of course, is his job and that of Parliament. We are accountable to Parliament and Parliament is of course accountable to the elected Members. I noted that Mr Bushill-Matthews also said that next time he will fire live rounds. I suppose that means that up until now he has been firing blanks!
To conclude, my special gratitude goes to Mr Whitehead, who has proved a master in negotiating at a high level to achieve a compromise with the Council. I take note of what he said in relation to us nourishing our children rather than devouring them. Of course you will realise, Mr Whitehead, that this proposal is not a modest proposal: it is quite a substantial proposal. Your reference to my fellow countryman points to the title 'A Modest Proposal', which, of course, is inappropriate in this instance.
I consider this exercise to be an excellent example of how the European Parliament, the Council and the Commission can work together constructively on consumer policy issues. I trust that the vote will confirm the orientations set out today.
I hope that other consumer issues pending before this Parliament can also, in due course, be resolved with equal skill and constructive spirit.

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

President.
The next item is the report (A5-0259/2003) by Mr Andersson, on behalf of the Committee for Employment and Social Affairs on the Joint Report by the Commission and the Council on adequate and sustainable pensions (COM(2002) 737 2003/2040(INI)).

Andersson (PSE)
Mr President, we are concerned here with the Commission's Communication on Adequate and Sustainable Pensions and with an analysis of whether, in their first Strategy Reports, the Member States have complied with the three overarching aims of the common pensions policy. The first of these is whether pensions are adequate and whether we have set future pensions at a level sufficient to prevent poverty and provide a reasonable standard of living. The second is whether pensions are economically sustainable in the long term so that future generations do not have an unnecessarily large economic burden placed upon them. The third is whether pensions are sufficiently up-to-date to cope with the new situation, characterised by atypical jobs and more and more women in the labour market.
We think that the Commission's communication is sound. The Commission has carried out a sound analysis. In Parliament, we have tried to distance ourselves from the national debates on various national changes to the pensions systems. We have tried to stick to our task at EU level, namely that of setting up objectives for the common strategy we are to have at EU level. The Member States must themselves deal with the purely practical proposals for the pensions systems.
We have a number of viewpoints. First of all, there must be a balance between social and economic considerations. It is important for economic development that we have sustainable pensions systems. That applies especially to those countries that are involved in cooperation in connection with the euro, but also to other countries, so that we obtain sustainable economic development. It is at least as important, however, for us to address the social aspects that affect people's living standards. We must ensure that people have a comfortable standard of living in later years, not hugely different from that they enjoyed when gainfully employed, and that they do not end up in poverty.
Pensions systems still reveal a lack of equality. Women's pensions are not as large as men's. In some cases, that has to do with the pensions systems, but the main reason is women's position in the labour market. Women have, to a larger extent, lower paid jobs, part-time work and a lower level of employment. That means that the Lisbon process is the most important thing in this connection.
The situation for those who have atypical jobs is not satisfactory either, especially when it comes to the supplementary pensions on which the two sides of industry are agreeing. There is good reason to address these problems.
The absolutely most important thing if we are to meet our commitments in the future is that we obtain growth and full employment. It is therefore important for us to link these aims to the Lisbon process and to the employment and economic guidelines and for us to take a global view. We very often talk about solidarity between our generations here and now, and it is important that there be solidarity right now between the generations. In view of demographic development, it is, however, at least as important that we talk about solidarity with future generations so that we ourselves - and I personally belong to the generation born in the forties - do not indulge ourselves too much now with the result that future generations of earners have to contend with unreasonably high costs when we become pensioners. We must ensure that that will not be the case with the new pensions systems. We must show solidarity with future generations.
What caused most discussion in the committee was the actual and/or statutory pensionable age. We are not interfering with the statutory pensionable age. It is paradoxical that the elder portion of the population is becoming healthier and healthier - which is a good thing - at the same time as it is working less and less. We are today working less than we did thirty years ago. There are many reasons for this. If something is missing from the Commission's communication, it is perhaps an overall picture of how the actual pensionable age is to be increased. We are concerned here with financial incentives, but we are also concerned with matters such as lifelong learning, the organisation of work and problems involving the working environment, so that older people can also remain in the labour market. We must change working life in such a way that people can remain actively in work and not be excluded from it.
We shall then also address the subject of enlargement.
Finally, I wish to thank all those who have helped us obtain a broad, if not complete, consensus in the committee. We have enjoyed sound cooperation in the committee.

Diamantopoulou
Mr President, I should like to congratulate and thank Mr Andersson. The report on adequate and sustainable pensions touches on one of the most burning issues in the hands of all the governments.
Reforms in each country are, of course, a national responsibility, but I would say that we are turning a blind eye if we fail to look at the European dimension and the need for cooperation, not only because there is a very close economic dependency between the economies of the Member States, but also because our analysis has resulted in convincing conclusions that the causes of the crisis in the pension systems are precisely the same in all the countries. They are demographics, longer life expectancy, the new working models and the new family models.
Using the open method of cooperation was the first important attempt made at European level for the countries to cooperate with each other. We agreed on three lines of approach. The first concerned the economic viability of the pension systems. The second concerned adequate pensions, meaning a dignified standard of living for pensioners, which is something Mr Andersson insists on in his report. And the third is the adaptability of the pension systems, so that they take account of changes.
The reference in the report to the link between pension systems and the labour market is important, and I shall explain how the Commission is meeting the demands made in the report with a series of initiatives.
First, the question of increasing the actual retirement age. It is clear, on the one hand, that it is important and necessary to change the age limit, for reasons of sustainability and, on the other hand, that this cannot be done on its own, without flanking employment policies which will help elderly workers to remain in the labour market, because today, due to the culture which exists in the labour market, the reality which has existed for many years, it is very difficult for elderly workers over 55 years of age to find work easily. Within this framework, both the European strategy on employment and the European Social Fund are being called on to play an important role.
The second important issue is that the Commission, on the orders of the European Council, is continuing to apply the coordination method. In 2005, we shall move to a new report on the monitoring of the systems, while the Social Protection Committee will examine the contribution of social systems to the extension of working life.
Finally, we are constantly monitoring the indicators to which we committed in Barcelona and we have agreed on the need to increase the actual retirement age by five years by 2010.
To come back to what Mr Andersson said about the gender dimension. The gender dimension is most important in pension systems, especially in the private sector. I should like to remind you, ladies and gentlemen, that in the private sector there is no equal treatment of men and women, while account is mainly taken of the gender criterion when calculating pensions.
Two more points: the issue of enlargement, on which we have constant communication with the Member States, so that they can also integrate the issue of mobility. The report refers in detail to how we can overcome the obstacles which exist in the labour market in Europe and with mobility, which is an issue for which we have drawn up a ten-year action plan.

Boogerd-Quaak (ELDR)
. (NL) Mr President, Commissioner, ladies and gentlemen, I too should like to thank Mr Andersson warmly for his excellent cooperation which is, among other things, evident from the fact that he has adopted the women's amendments and inserted them in his own report.
The Commissioner has stated that the pension schemes are in crisis, and I share her view. The costs of pensions will put pressure on the Stability Pact and, in a previous term of office, I occasionally referred to this as 'a bomb under the EURO'. Many countries are taking measures for that reason, and because of many of these measures, women are hit harder than other groups in the population. As a result of a lower participation rate in the labour force, a higher percentage of women working part-time, the lower incomes and the slower rise in income (due, among other things, to maternity leave), many women receive lower pensions than men, on average. According to the report by the Commission, this difference varies from approximately 16 to 45% depending on the Member State in question.
There is also the issue of equal treatment. In this context, I should like to make a reference to America. There is a judgment by the Supreme Court that stipulates that calculating contributions towards, and payments of, supplementary pensions differently on the basis of gender-based actuarial factors is in contravention of the Civil Rights Act. Hopefully, this view will be generally held in Europe too. The fact that, according to a recent hearing, it transpired that women no longer live all that much longer than men at all, should be added to this.
I should also like to draw your attention to a regrettable fact, namely that the Commission has never implemented Parliament's proposals to force Member States to make arrangements to deal with the problem that parts of the pension rights accrued during marriage are at risk of being lost in periods when one of the partners decides to care for the other. I should also like to urge Member States to ensure that people continue to remain part of pension accrual schemes during maternity leave or care leave for children or other dependants. This is already the case in a number of countries, and I think that those countries set a good example for other Member States that have not done this to date. Member States should promote the individualisation of pension rights, without abolishing the derived rights of the surviving spouse and children. As I have stated before, it is an all-embracing problem, in fact, whereby, often, women are at greater risk of losing out than others. I therefore agree that we should promote labour mobility and in the light of this, I should like ?
Thank you, Mr President, I notice that my three minutes are up.
Finally, I hope that the Commissioner will particularly take the position of women into consideration.

Fatuzzo (PPE-DE).
Mr President, I would like to start by thanking the rapporteur, Mr Andersson, for his endeavours and his achievement in putting together a report which received almost unanimous support in the vote in committee. I hope that the same thing will happen in tomorrow's vote.
I am equally pleased to pay tribute to Commissioner Diamantopoulou for having endeavoured thus far and for continuing to make every effort to ensure that the reforms which the 15 Member States are attempting to carry out do not bring extreme poverty for the elderly, who are already too poor and, in many of these States, whose only source of income is their pension.
That said, I would like to advocate a different course of action to fulfil the commendable desire to provide secure, funded pensions in the future. It is absolutely vital that we stop the wastage taking place in the different pension systems of the States of Europe. It is absolutely vital that we reduce the cost of labour, which is so great in many of our States as to make it difficult for European States to compete on the world market economy. In Italy, for example, each worker carries pension costs of 34%, in Switzerland, contributions of just 10% lead to pensions which are just as respectable as Italian pensions, and, in Portugal, for example, the figure is 7.6%. This means that we must investigate where it is that the money is being wasted, where the inefficiency lies and where changes need to be made.
Moreover, I would like to say that there are two ways of paying debts: there are debtors who, when they have to pay the debt which has fallen due, do not show up and run away; then there are others who do without a summer holiday and give up their car in order to pay their debts. The debtors are our 15 States and the creditors are people - pensioners and elderly people - who live off their pensions. We must not bury our heads in the sand but endeavour to pay off the debts we have incurred with the elderly people of today.

Cercas (PSE).
Mr President, few things concern the European citizens more than the health of their pensions, few things in their family life or their social life demands such constant attention throughout their lives, perhaps because for millions and millions of Europeans pensions are the only significant asset they accumulate and the only security they have against the risks of biological life or economic life.
This excellent report by Mr Andersson is the culmination of a legislature of the European Parliament during which we have brought our agenda into line with the agenda of the citizens. This is an important legislature because the European Parliament, also following excellent communications and excellent initiatives from the Commission, has introduced the issue of pensions into the Community agenda for the first time.
We are extremely happy that at the end of this legislature progress has been made on a philosophy which has radically increased the appreciation of this phenomenon. It is no longer just a concern inspired by financial considerations or the balance of public finances. We now have a doctrine, a strategy, which together with this important issue, we have enriched and supplemented with the objectives and needs of the European citizens.
We are therefore pleased that this report and the Commission's Communication have analysed the strategies of the Member States, taking account of financial viability of course! Perhaps in this way we are also demonstrating that we are responsible politicians. There are basically two categories of politician: there are irresponsible politicians, who only think about the next elections, and there are responsible politicians who think about the next generations.
The Andersson report is thinking about the next generations, but is also thinking about bringing things up to date so that social security, pensions, fulfil our objectives and combat poverty. It also thinks about modernisation and categories of workers, particularly women, who face such risks in the new social order and the labour market.
What does the Commission tell us about the situation of our Member States? We can see that there is a will, but we can also see that there is sometimes apathy and a lot of prudence; and I would also add that there is fear of reform in the Member States, perhaps because the population is afraid that reform may in fact be an excuse to talk about cuts in their social rights.
It is therefore very important that we help to overcome these fears amongst the population by presenting reforms which are not just cuts, but which are aimed at satisfying their current and future needs within a more secure, fair and equitable framework.
Tomorrow, the Socialist Group will support the Andersson report and the work of the Commission because we believe that in fact the changes proposed are not frivolous, or opportunistic, but that they respond to our social commitment to this generation of workers, to these citizens, and also to those who will live in Europe in the next generation.

Jensen (ELDR).
Mr President, Commissioner, I also wish to thank Mr Andersson for his very clear and well set-out report, and the Commission for a very interesting report on European pensions systems. How countries organise their pensions systems falls within the sphere of national competences, but I think that the report, with its objectives of adequate, sustainable pensions and flexible pensions systems may provide inspiration and give rise to sensible debates at national level. I also think that an interesting conclusion has been reached, namely that, in general, there is a high degree of redistribution and solidarity in the Member States' pensions systems, but that women are disadvantaged in many countries because of their special position in the labour market. Something needs to be done about this, and I am pleased about the strong emphasis placed here upon the need to press for something to be done about the matter. I therefore very much agree with the overall conclusion of Mr Andersson's report. On the other hand, I disagree with a number of the amendments before us from the left side of the House where the investment of pensions savings in shares and bonds is clearly seen as an evil in itself. It is true that there have been problems with pension funds, which have suffered large losses in connection with the large falls in share prices, but I do not think that the answer is to stop introducing savings schemes for pensions. On the contrary, I think that better control of the risk in connection with pension funds' investments must be ensured and that there must be stronger supervision on the part of the authorities. That is also something we can cooperate on at EU level in order to guarantee better risk management. We are all, of course, getting older, and it is not too much to ask that each of us take joint responsibility for saving up for old age and help ensure that future generations do not have unreasonable burdens placed upon them, for it is also a question of distribution between the generations.

Ainardi (GUE/NGL).
Mr President, Commissioner, the report by Mr Andersson stresses the need to take account of the poverty suffered by many pensioners and the inequalities between the pension entitlements of men and women. With this in mind he recommends a sufficient level of minimum guarantee pensions and increasing the employment level among women in a bid to promote equal opportunities. I and my group agree with these parts of the report. Mr Andersson even indicates that he is anxious to ensure that a balance is struck between social and financial concerns. Unfortunately, this undertaking is contradictory and causes the rapporteur to call into question fundamental social principles in the name of financial criteria.
Indeed the vote in the committee was not unanimous. We did not vote in favour of this report in the parliamentary committee because it supports the Commission's proposal to raise the retirement age. In so doing, it aligns itself with the liberal approach, manifest at many European Councils in the past, which advocates greater flexibility and increased working time. We are opposed to this kind of reform, which imposes increased working time and yet does nothing to resolve the employment issue. The report claims that the Member States have taken measures that are heading in the right direction, which is to say towards increased working time. Given that a majority of workers in France, Austria and Germany have demonstrated that they reject a move towards increased working time and funded pension provision, do we wish to settle the European debate on pensions without public involvement?
With my group's support, we are tabling amendments that seek to reflect these aspirations. In them, we of course oppose raising the statutory retirement age and extending the contributions period. We are also opposed to funded pension provision, which provides no guarantee of an income and undermines the principle of solidarity inherent in pay-as-you-go schemes. We propose that contributions be calculated taking into account how hard the work is and the number of dependent children. Finally, we propose studying new ways of financing legal pension schemes.
The argument of increased life expectancy is used to broach the issue of funded pension schemes; this does little to mask the financial appetites of multinationals in favour of this option. There are other ways to resolve the issue of financing in the long term that are more viable and characterised by greater solidarity. We propose, for example, extending social security contributions to all revenue, with the amount adjusted depending on whether the companies are creating jobs or not. These proposals do not appear to me to be entirely irresponsible.
In conclusion, I would say that faced with mounting criticism of the choices made in this field by Europe's Heads of State or Government, what matters now is to listen to the demands that people are making and not to go against them, unless we wish to see the people of Europe grow even more disaffected with the Union.

Bouwman (Verts/ALE).
Mr President, Commissioner, Mr Andersson, first of all, thank you for the work of both the rapporteur and the Commission. I welcome the fact that we are gradually applying the open coordination method to pensions. It is not so much a debate as a beginning. I do not know what we should do in the long term with regard to the accessibility, financability and modernisation of pensions. The proposal offers, among other things, a number of guidelines. In my view, the benefit of the Commission proposal is that it gives a good insight into what is going on and that it contains a first set of measures. However, as I have already stated, they are long-term measures. Mr Cercas may well make a comment with regard to the next generation, but that is precisely the problem that we will be facing. In the short term, we are having to deal with a labour market that is silting up in many parts of Europe and the solution of getting people to work for longer is not effective in the short term.
Mrs Ainardi has already pointed out that there are a number of problems in a number of Member States, including France and Austria. In the Netherlands, 20 000 people have taken to the streets in protest against the largely Liberal Christian-Democratic government that has thought out all kinds of measures to encourage the participation of the elderly in the labour market in the long term. For example, by cutting back on early retirement, the early retirement scheme (VUT), extended unemployment benefit (WW), general unemployment benefit and similar schemes. In this connection, it has, by the way, left no scope for circumventing these measures. This means that people are currently protesting against a government in the Netherlands that is intent on taking measures of this kind. As I stated before, 20 000 demonstrators have taken to the streets in protest.
Short-term policy is the missing link and, in that sense, the report by Jan Andersson is, in fact, a shallow report for problems of this type. I am stating the facts as they are. The report is not a disaster. It is a first step. In the coming period, however, something should be added. And this will bring with it all kinds of problems. I agree on increasing the effective pensionable age, but, at the moment, we should just see how things pan out, and alternatives will therefore need to be developed to ensure that short-term and long-term policy are balanced out more effectively.

Crowley (UEN).
Mr President, I too would like to thank the Commissioner and, in particular, the rapporteur for his work on this issue.
In one sense, we tend to forget what it was like at the end of the 19th century when the elderly, the sick or the unemployed had no protection whatsoever until a miserly amount of money was introduced in the late 1870s to try to give some protection to older people. Fortunately we, as a society, have developed in our attitude towards giving future protection to the elderly, those in need of pensions and the most vulnerable within our society.
One thing that we have all recognised in the past is that we have not made proper provision for the future needs of changing demographics, a reducing workforce in certain cases and limits in taxation expenditure. We are now faced with what appears to be a sudden problem on account of the large population. But if you ask an anthropologist or anyone involved in any of the sciences, this was highlighted 15 years ago as an issue to be dealt with by 2015. It is only now that we are beginning to take action on it.
In particular, I would point out that Mr Andersson has put forward a balanced proposal in his report. He has looked at creating solutions to the problems that we now face. In fairness to him - and I do not agree with everything that he says on most occasions - he has also brought forward short-term, medium-term and long-term priorities that must be carried out.
In Ireland we have a system whereby we are now putting 1% of GDP towards our future pension requirements every single year. It gives a guarantee to those people who will need pensions in the future.
One area we must look at is ensuring that the pension is set at a proper, reasonable standard of living to allow people to have independence and freedom of choice.

Pronk (PPE-DE).
Mr President, I too should like to thank the rapporteur warmly for this work that is partly his own and partly the work of others. This is why I should also like to extend a warm thank you to Mr Fatuzzo for his contribution. In my view, it is a little bit of a mixture of the best that the Italian and Swedish cultures have to offer. Milan meets Malmö, if you like. As far as I am concerned, this work should be kept more or less unchanged. It is extremely regrettable that the Confederal Group of the European United Left/Nordic Green Left should have tabled these amendments. I have to say, I have listened with great interest to Mrs Ainardi, who reminded me of Louis XVIII who returned after the revolution and of whom people said that he had learned nothing and forgotten everything. I find it even more deplorable that Mr Bouwman appears keen to associate himself with this statement.
We are facing real problems in Europe in the area of pensions. Naturally, we could maintain the pension system, but the best way of eventually destroying it is to do what has been proposed in the amendments by the GUE/NGL Group: to act as if nothing is wrong, while the system does show up inadequacies. After all, when this system was agreed upon, the average lifespan was 63 years, two years under 65. Fortunately, the average lifespan is quite a bit longer now. In the light of this, it is unacceptable for us to say that we could carry on as we are for ever. Mr Andersson is pointing in a certain direction, and this direction receives our support. Pension schemes are slightly different in every country and cannot be compared, but the worst thing is that some people are behaving as some did on the Titanic who, when the ship was sinking, thought that nothing was wrong. This is dangerous. I hope that the majority of this Parliament - and I have every faith in them - want to distance themselves from attitudes of this kind and want to commit themselves to the people who really matter. After all, poor people will not gain in any way if there is no money left in the end.

Hughes (PSE).
Mr President, I join with everyone else in congratulating Mr Andersson on the production of an excellent piece of work. I would also like to thank the Commission and the Council for their joint report. It really does provide an excellent overview of this very important subject. I hope that you, Mr President, can pass on a request to DG I that maybe one of these days they could organise a daytime debate for an important social dossier such as this one. We are supposed to be building bridges back to the citizens. This is a subject that matters to many millions of citizens. It is a shame that it is tucked away in a night sitting once again.
The Andersson report really underlines the need for both the employment strategy and the Lisbon strategy to begin to deliver in several important respects: continuing gross gender inequality in terms of access to and participation in the labour market is reflected in gross gender inequality in pension entitlement. Even if we achieve the Lisbon target of 60% for labour market participation by women, the target itself acknowledges the fact that women's participation will continue to be less than men's. We therefore need to consider flanking measures along the lines suggested in the report by, for example, promoting the individualisation of pension rights and urging Member States to guarantee continuity of membership of pension schemes during parental leave or leave to take care of children or other dependants.
A second problem highlighted by Mr Andersson, and one that we really have to redouble our efforts to tackle, is the need to raise the effective retirement age, not the statutory retirement age. There is some confusion in certain quarters on that. There is now a widespread early retirement culture within the Union. Sustained long-term efforts will be needed to change attitudes and tackle that culture. But there are few signs that we are even beginning to make a start in doing that. The joint employment report from the Commission for 2002 reported that only four Member States have put in place fully-fledged national active ageing strategies. The same report showed that the efforts of most Member States to provide education and training to older age groups are still woefully inadequate. The Commission must, in its next round of recommendations examining the achievements of Member States against the set guidelines, make the strongest possible recommendations against Member States who continue to fail to deliver in these and other important respects.
The final point of the report I should like to emphasise concerns atypical workers. Their insecurity in the labour market - and many of them are women - will be reflected again in continuing insecurity in their later years, in the decades ahead, unless something is done to lessen that insecurity. It is a terrible shame that several Member State governments - my own included - have set their hearts and minds against the proposed directive on temporary employment agency workers. The longer it is delayed the more the earlier directives on part-time and fixed-term working will be undermined, as temporary agency working becomes the favoured choice for employers for whom the word 'flexibility' means squeezing the maximum out of labour for the least possible reward. Temporary agency working would become an ever-growing bottom tier in a two-tier labour force. In the end the whole of European society would face the consequences.
I hope even at this late stage that the governments concerned - including my own - might see sense and help us put in place a sensible piece of legislation to reinforce the point that flexibility can actually be a positive concept for both employers and workers.

Figueiredo (GUE/NGL).
Mr President, pensions schemes, administered through common and universal public programmes, are acknowledged as a fundamental means of achieving social inclusion. Without pensions, benefits and other forms of social assistance, poverty levels in the European Union would exceed 40%. Any modernisation of state social security systems must, therefore, take this fact into account. This has not happened in most Member States introducing such reforms. The stubborn resistance of workers to measures threatening their fundamental rights in this regard is well-known. The cases of France, Portugal, Germany and Greece have already been mentioned here.
In this report, however, not enough is done to avoid these positions, which lead to the impairment of rights and welfare cover. Hence the set of proposals we have tabled, of which I would like to highlight the following:
a reference to the growing difficulties faced by pension funds in the wake of the worldwide stock market slump, which provides ample proof that the growing risks of the financial market have an adverse effect on the adequacy and sustainability of funded pension provision;
a critique of the antisocial nature of most reforms recently implemented by certain Member States, which have reduced state pensions considerably and attempted to raise the retirement age;
a note on the importance of adopting strategies for reforming pension schemes at European and national levels, promoting full employment along with social rights which strengthen and reinvigorate state pension schemes by broadening their financial bases, by ensuring that employers comply with their financial obligations, and by enhancing pay-as-you-go mechanisms;
lastly, a rejection of all attempts aiming to weaken or replace state schemes based on the principles of pay-as-you-go and solidarity, pointing out that, in order to guarantee pension schemes in the long term, it is vital to broaden the scope of their eligibility criteria and investigate new ways of financing statutory pension schemes, in particular by extending welfare contributions to all financial returns and establishing modulation for companies on the basis of the number of jobs created.

Bushill-Matthews (PPE-DE).
Mr President, I also congratulate the Commission and the Council on the quality of their joint report, and especially the rapporteur on his own powerful report on this key issue.
I trust that Member States in particular will take note that the problem of adequate and sustainable pensions is a problem today, will be an even bigger problem tomorrow, and requires action now. I particularly commend the rapporteur on the way he has worked hard to absorb amendments from colleagues from different parties, who also care strongly about this issue. Indeed I am grateful that he has seen fit to accept five of mine: on defining the objective; to provide adequate and fair incomes to older people and prevent poverty in old age; on defining the gravity of the problem; on the importance of promoting pension portability; and, in particular, on the disgrace that certain EU institutions continue to discriminate against allowing older workers to apply for jobs - a point I have raised on several occasions with Commissioner Kinnock with, I regret to say, only bluster in response.
Because the rapporteur has accepted so much it would probably be churlish of me to lament his non-acceptance of my amendment declaring that secure, inflation-proof pensions for public sector workers, such as Members of this Parliament, are seen as increasingly unfair by those in company schemes that depend on stock market performance in the real world. I believe we should show that we recognise this. It is, after all, the reality.
Having said that, his report recognises much that is a problem. It also seeks to focus attention on what needs to be done. In the next 50 years the number of over-65s will double from 25% to perhaps 50% of the population. In rural areas, including large parts of my own constituency of the West Midlands, the percentage could be higher still.
His report deserves support from across this House. He certainly has mine.

De Rossa (PSE).
Mr President, the key point that Mr Andersson made in his contribution tonight is the need to get the social and financial concerns in balance. Clearly there is a need for both. It seems to me that one of the key issues here, at least in relation to poverty in old age, relates to women. All the statistics show that because of intermittent work, breaks in their employment record, family care commitments etc. they by and large end up in a poorer situation than men. Add to that the fact that they also survive longer than men, and the result is greater numbers of older women than men after a certain age.
There is a need for us to address the question of funding of pensions. As Mr Crowley has mentioned, in Ireland we have introduced a reserve fund where 1% of GDP is set aside each year, and there are some billions in this fund now; in fact there is so much money in it that people are beginning to fight over how and where it should be invested. Nevertheless it is an attempt to ensure that there is a fund there for the future.
We are fortunate in that we have a demographic lag of about 20 to 25 years, so that the bulge that is hitting the rest of Europe at the moment will not hit Ireland for some time yet. Nevertheless we expect it will arrive.
Another attempt to deal with this issue is the introduction of personal retirement savings accounts, where individuals, with the assistance of their employer, can open an account and put money in it which will provide some pension funding for them at a certain point. The difficulty is that the financial institutions which are given responsibility for selling these products are in many cases resisting them because they cannot make enough money out of the categories of people that they are aimed at, mainly the lower income section of the workforce. There is a need to address that issue.
The point I am making here is that there is no need for us to be unduly pessimistic providing we make the policy choices now about what we are going to face in the future. It is not enough for us to wring our hands, it is not enough for Member States, as Mr Hughes has pointed out, to oppose the temporary agency workers directive - which provides some degree of security for certain categories of workers - and then pretend that they are going to do something serious about pensions, when in fact they are undermining the possibility for many thousands of people to have sufficient contributions, even for a State pension.
To conclude, there really is a need for some joined-up thinking in this area.

Schmid, Herman (GUE/NGL).
Mr President, I and the Confederal Group of the European United Left/Nordic Green Left take the basic view that a pensions system must be based upon solidarity between the generations. I am therefore in favour of a 'pay as you go' system, which is much more stable. Savings systems, which are dependent in one way or another upon the capital markets, constitute a much more unstable project.
In my own country of Sweden, which has been singled out as a model in certain quarters, we have moved in the direction of a capitalisation of pensions arrangements and of greater dependency upon the capital markets. With the victory for the 'no' side in the Swedish referendum on the euro, we have obtained slightly greater freedom when it comes both to economic and to pensions policy. I believe it was precisely that which the Swedish 'no' voters wanted: greater freedom of action, and solidarity as a feature of development in Sweden.

Pérez Álvarez (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, I too would like to congratulate the rapporteur. I would like to begin by saying that retirement, while still being a technical/legal and economic/actuarial issue, has become an issue of the greatest media interest and has won the status as a central issue within policy in general, and within social policy in particular.
Back in 1950, the age of sixty was regarded as the threshold of old age; the age of 65 implied retirement from active working life, and not to have a will drawn up by the age of seventy would unquestionably have been considered recklessly irresponsible. We can conclude from this that the population of our current society, which has doubled by the end of the twentieth century and into the twenty-first, includes many people of a very advanced age, who until recently were classified as 'old people', and those older people have a strong social image, they are real, they have active lives and have good reason to hope to continue living.
Within this context, a long-term perspective is necessary in the field of pensions and, despite the fact that dealing with pensions and pension policy are essentially the responsibility of the Member States, in accordance with the principle of subsidiarity, the European contribution appears to be necessary, both in the exchange of best practices and in increasing consensus, and in the common regulation of certain aspects necessary in order to ensure the possibility of transferring pension rights of all types and their viability.
Pension systems through public schemes linked to income - first pillar - through private professional schemes - second pillar - and individual retirement pension funds - third pillar - must offer Europeans the opportunities to maintain their standard of living following retirement.
A system which prevents or hinders the free movement of people must therefore be excluded, as must the European citizens' fear of ageing or physical or psychological deterioration. In the face of the weight of the third pillar, fear must be alleviated and business interests excluded. The viability of the pension system must be guaranteed, and it must respond to changes in society and in the ways in which production is organised: the greater presence of women, an older active population and atypical forms of contract.

Cauquil (GUE/NGL).
Mr President, the proposals contained in this report simply relay the retrograde policy pursued by all of the European Union's Member States on pensions. In seeking to increase the effective retirement age, in wishing to extend time at work, in proposing even to replace pay-as-you-go pension schemes with funded pension provision, the rapporteur vindicates and harmonises the attacks on workers. The rapporteur is cynical enough to observe that the increase in the number of pensioners and their increased life expectancy will put considerable pressure on pay-as-you-go pension schemes.
Should we therefore wish for lower life expectancy and for a fall in the number of pensioners so as to save money? If the fruits of productivity were distributed differently, with a little less being given to employers and the wealthiest members of society so as to enable workers who have spent their lives making them rich to grow old with dignity, there would be no problem in providing an increasing number of pensioners with a proper pension. However, your economy does not serve to satisfy the needs of a majority as best possible, but to make a minority rich more effectively.

Kauppi (PPE-DE).
Mr President, I wish in my speech to focus attention on Mr Jan Andersson's excellent report on adequate and sustainable pensions. It is good that Parliament is taking an active part in the pensions debate, because pensions and how we pay for them will be one of the biggest social and economic challenges of the decades to come.
Old age these days no longer means poverty, because statutory public pension schemes and the private occupational pension schemes and private insurance policies that supplement them are a guarantee to many Europeans that they can maintain their standard of living even after retirement. The generation gap must nevertheless be narrowed by means of vigorous pension scheme reforms, so that increased pensions do not become a burden on the shoulders of younger generations.
Four factors will jeopardise state pension schemes if no reforms are made. These are the ever-increasing life expectancy rate combined with low birth rates, substantial long-term unemployment and people entering employment late in life. The baby-boom generation is beginning to retire in this decade and by 2050 the number of those in receipt of a pension in relation to those of working age will have doubled. In some Member States pension schemes paid for out of public funds are estimated to rise to one fifth of GNP.
In my opinion, European pension schemes have, in the main, achieved their social goals. To strengthen pension provision, however, the priorities are that the age of retirement must be raised, the range of supplementary forms of finance must be increased, and there has to be an increase in long-term private savings. At Community level we need coordination in the taxation of occupational pensions to make it easier for people to move from one country to another and comprehensive internal market legislation for institutions offering occupational retirement provision. At European Union level we can play a part in defusing the pensions bomb by promoting the development of cross-border personal pensions and savings schemes. I hope that Parliament will, on the strength of this excellent report by Mr Andersson, also play an active role regarding these matters in the future.

Patakis (GUE/NGL).
Mr President, the European Union considers that pensions are yet another expense which needs to be cut back within the framework of the financial discipline imposed by the Stability Pact and is indifferent to the needs of those who have retired from work. On the pretext of the ageing population, it is promoting an increase in the retirement age, an extension of working life, cutbacks in pensions, the dissociation of pensions and wages and increased financial contributions by workers. At the same time, the European Union and the Member States, with the recent reforms, are using pensions to support the profitability of big business. They are reducing employer benefits and offering them the resources and reserves of the pension funds, promoting the spread of professional pension funds and forcing workers to rely on private insurance schemes, thereby exposing their pensions to the risks inherent in the financial markets.
We support a different policy, where pensions will respond to modern social needs. We and the workers are calling for a reduction in the retirement age and working life, for pension funds to be financed from the national budget and for an increase in employers' contributions, coupled with a reduction in employees' contributions. This sort of social insurance system can only be imposed by the workers, by fighting against the choices of big business and the European Union.

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

President.
The next item is the report (A5-0302/2003) by Mr Jonckheer, on behalf of the Committee on Economic and Monetary Affairs on the draft Council directive restructuring the Community framework for the taxation of energy products and electricity (8084/2003 C5-0192/2003 1997/0111(CNS)).

Bolkestein
. Mr President, after more than six years of negotiation the Council has finally reached a compromise on energy taxation. Because the compromise text significantly modifies the Commission's 1997 proposal, the Commission has asked the Council to reconsult Parliament.
I am convinced that Parliament and the Commission share the same analysis: all of us would have preferred a more ambitious compromise, especially as far as the approximation of tax rates is concerned. This is mainly due to the decision-making process and the unanimity requirements in the Council. Co-decision and qualified majority voting would undoubtedly have led to a better result for the internal market.
However, I am very happy to see that Parliament's committees responsible for the analysis of the text - the Committee on Economic and Monetary Affairs and the Committee on Industry, External Trade, Research and Energy - have supported the compromise. This future directive remains a positive step, both for the internal market and for sustainable development policies.
To that extent, nothing has changed in comparison with the rapporteur's view on the initial proposal in the 1998/1999 session. As you may remember, Mr President, it was said then that the proposal was 'modest but useful'.
Now I should like to thank Parliament and the rapporteurs, Mr Jonckheer and Mr Caudron, for their speedy examination of the text. It is of crucial importance that the opinion of Parliament be adopted as soon as possible, so as to allow the directive to enter into force on the scheduled date, 1 January 2004.
I will reply at the end of the debate giving the Commission's opinion on some of the amendments.

Jonckheer (Verts/ALE)
Mr President, Commissioner, as you yourself underlined, this proposal goes back a long way. I will not go back over its entire history, but I would like to stress, in connection with what you have just said, that in 1999 the European Parliament adopted a report, for which Mr Pat Cox was the rapporteur, which improved the Commission's proposal, in particular in three respects: Parliament asked for an increase in all of the minimum rates stated in the Commission's proposal; it also called for these minima to be index-linked, and finally, it called for the number of derogations and exemptions to be reduced. As you yourself pointed out, we have had to wait four years for the Council to reach an agreement and for Parliament to be re-consulted.
In general, the report seeks to support the compromise struck in the Council - acting, as you said, under the constraint of unanimity - despite the text's serious shortcomings, the Council of Ministers not having in fact taken on board the proposals made in the Cox report in 1999.
I should like to focus on two points amongst many where the position adopted by the Council appears to us to be weak. Firstly, the minimum rates set by the Council to be applied from 1 January 2004 are, almost without exception, lower than those proposed by the Commission in 1997 and by the European Parliament in 1999. Such a step backwards stands in flagrant contradiction to the undertaking given by the Council, and in particular the European Council, to provide instruments that seek to break the link between economic growth and energy consumption.
The second issue that we have addressed is that of derogations and exemptions. The text of the directive is littered with them. The Council has added an annex with a virtual shopping list of individual exemptions and derogations so that each of the 15 Member States can find what they want in the list and can therefore agree to the text.
Having referred to the position adopted by Parliament in 1999 and taken into consideration new political material such as the Gothenburg European Council's declaration in favour of a Sustainable Development Strategy, as rapporteur I therefore proposed to the Committee on Economic and Monetary Affairs that we should reinforce Council's position on certain points, while retaining a moderate stance bearing in mind the different political sensitivities.
In particular, I proposed bringing forward the second step of motor fuel taxation and the revision of tax rates by two years. I also proposed a sunset clause for all derogations, whereby exemptions and derogations could only be maintained if the Council explicitly so decided. Finally, I proposed making it mandatory to support renewable sources of energy. In principle all renewable sources of energy should be fully exempt.
I confess that it came as an unpleasant surprise when all of the amendments were rejected by the Committee on Economic and Monetary Affairs - and I do not share your approval, Commissioner. It is true that in many cases they were rejected by a majority of one single vote and that not all Members of the committee were present. I therefore think that the logical step for me, as rapporteur, is to re-table these amendments in the plenary.
In addition, Commissioner, I would draw your attention to Amendment No 2, tabled by Mrs Kauppi and adopted by the committee. If it were to be confirmed in the plenary it would mean that Parliament was denying the very timeliness of this proposal for a directive because we recently adopted a directive on emissions trading.
In conclusion, I hope that Parliament's vote in September 2003 does not represent a retreat from its 1999 position, although this was adopted, it is true, during a different term of office.

Caudron (GUE/NGL)
Mr President, Commissioner, ladies and gentlemen, my task this evening is a simple one: it is to give you an account of the unanimous votes in the ITRE Committee in favour of my report for opinion and all of my amendments, apart from one, in relation to the Council's common position of 3 April 2003.
As everyone has said, the Council took a great deal of time to reach this agreement, since the Commission's initial proposal dates back to 1997 and Mr Pat Cox's report to 1999. Despite this, we agreed to play ball and treat this as a matter of urgency given that it is clearly in the general European interest to do so. Although there are many areas with which I and my fellow Members are dissatisfied, as rapporteur, so as not to threaten the agreement in the Council, I only proposed amendments that enhance that agreement. Although the agreement reached by the Council does not go as far as the Commission's 1997 proposal or the European Parliament's vote in 1999, it still remains a first step, in my view and that of my fellow Members, towards establishing a common framework for taxation in Europe. The amendments adopted by unanimity improve it by providing for time limits for exemptions, so that the exemptions do not become the rule; by specifying units of measurement and by reinforcing the political signal in favour of biofuels.
I dare to hope therefore, ladies and gentlemen, that when Mr Jonckheer's report is put to the vote tomorrow the plenary will confirm an agreement that is for the time being, admittedly, minimalist, by seeing it as part of an ongoing process to serve the interests of the environment in Europe.

Kauppi (PPE-DE).
Mr President, I would like to thank Mr Jonckheer for his excellent work and I think the directive, as it was approved in the committee, is very good.
In my opinion, it is a good and positive sign that an attempt is being made to harmonise the environmental point of view with healthy competition in the energy markets. Common minimal levels of energy taxation are needed and the polluter pays principle is important, as long as we remember to give attention to the effects on competition and employment. Furthermore, emissions trading, which is beginning to be implemented, is an important means of regulation, and we can therefore also avoid regulation overlapping with it, as would be the case with taxation of energy products and the various exemptions proposed thereto.
In the matter of energy taxation, in general renewable natural resources should be treated favourably, and in the same way there should be tax relief on new fuels that are particularly environmentally friendly. In this way we can use financial incentives to steer both consumers and industry in the direction of environmentally friendly energy use. The Commission proposal on tax incentives with regard to certain biofuels is worthy of our firm support.
Although this directive does not directly deal with hydrogen, for example, it is a good, and will in the future be, an important energy source that in time could clearly replace oil for transport in particular. It is obviously worth supporting hydrogen in matters of taxation. We have to remember, however, that any form of taxation that deviates from neutral taxation has an impact on market activity and for that reason any such support measures as these should be temporary and exceptional in nature, in order to promote new fuels and production methods.
The troubled aviation industry has enjoyed tax exemptions on air fuel for a long time. Taxation in this area is a problematic issue because aircraft can choose fairly freely where to refuel. If a tax were imposed on air fuel within the EU but not outside it, this would lead to refuelling outside the Union. That is why the international agreement on the tax-exempt status of air fuels should be respected. The Member States have a right they must not lose to decide themselves on taxes on fuels for local use. These fuels, such as peat, for example, which is important in my country, are of no importance to a viable internal market, but at local level they may well be very important and necessary sources of energy and employment.
In Finland and the other Nordic countries taxes on energy are already widely applied, so these countries would have no problem with even shorter periods of transition. I, however, have yielded to the will of the majority in my group. My group is not in favour of a shorter timescale, as Mr Jonckheer has proposed. In other words, I personally would have been prepared to go further in this.

Randzio-Plath (PSE).
Mr President, on behalf of the Group of the Party of European Socialists, I would like to thank the rapporteur for his work, and I share his disappointment on the minimum solution. Commissioner Bolkestein also made it very clear that this minimum solution is a small breakthrough, but that the European Union has not actually succeeded in a consistent approach to energy taxation. This consistent approach remains coherent though, and after the experience with fiscal coordination we can almost be grateful because once again we had to experience how much the unanimity rule in fiscal decision-making hampers the functioning of the internal market. It is extremely regrettable that the fourth Environment Action Programme, which envisaged that sustainable development and economy could be stimulated not only by environmental regulation but also by tax regulation, could not be implemented, and so this directive's tale of woe goes further back than just 1999.
Furthermore, the directive also has the defects - as has already been said - of low minimum rates, non-indexation of minimum rates and also the difficulty of derogations. We have already debated the issue of derogations on several occasions in this House. I believe that we have actually always agreed that there have to be derogations for energy intensive enterprises, but that these derogations should at least incorporate conditions enabling the situation to be tackled. This has not happened, and so this directive is bound soon to be followed by another.
What is positive is that this directive is not only a framework for the taxation of all types of energy, including electricity, but that at the same time it also supports the promotion of renewable sources of energy and thereby will surely be able to give additional impetus to further develop these renewable sources of energy. That is a good thing, because we know that it is renewable energy that gives not only Europe, but also world civilisation, a chance, since we all profit from the tax incentives for using environmentally friendly forms of energy. Actual primary energy generally costs nothing, and furthermore it can be obtained and converted where energy consumption takes place. Thus the steering effect of tax incentives for energy use is an important addition to the EU Environmental policy and, I believe, also to emissions trading. Rather than seeing this as a contradiction, here too, I see it as adding to the instruments that steer our European economies and lives towards sustainable development.
It is also to be welcomed that this directive will make possible the final implementation of measures for preferential tax treatment for biofuels, on which we have already agreed, but the regulation of which was, of course, coupled to general taxation. I can also see that the goals that we set can be achieved. I would just like to emphasise once again that in the past many Member States have taken advantage of the revenue effect of environmental taxes, in particular, energy taxes. I welcome the fact that in the meantime we can at least have the possibility of reaching a European agreement.

Schmidt, Olle (ELDR).
Mr President, Commissioner, I wish to begin by thanking the rapporteur for his work. I share his view that the proposal is a small step in the right direction. Mr Cox wrote a similar report as long ago as 1999. If the Council had followed his directions, the basic conditions would have been different now. Just as the Commissioner says, the long period required for discussing this issue shows how important it is for us to obtain a sensible decision-making procedure.
Today's environmental problems must be seen in a pan-European perspective. The EU is a unique tool for creating common environmental rules. The EU's environmental policy must be developed by means of more stringent minimum rules and environmental charges. It must be possible to take decisions on such rules and charges by qualified majority voting. As is well known, this is an extremely sensitive issue. Some of my fellow MEPs visibly shake when EU taxes are mentioned. I nonetheless hope that the Intergovernmental Conference can devise solutions when it comes to energy and environmental taxes, together with a robust decision-making system.
The EU's and the Member States' task in the energy sphere is to formulate requirements concerning safety and the environment, to check that the requirements are being complied with and to promote research and development in the energy sphere, aimed at replacing fossil-based energy production with environmentally friendly energy sources. We should nonetheless be very careful that, with taxes as a weapon, we do not seriously reduce competition in the energy sphere. A rational energy policy is best promoted through free trade and the free production of energy. The Group of the European Liberal, Democrat and Reform Party will support most of the amendments.

Blokland (EDD).
Mr President, Commissioner, Mr Jonckheer, ladies and gentlemen, last week, I was in Moscow with a delegation of this Parliament, where we tried to convince the Russian Parliament, the Duma, of the need to sign, as well as implement, the Kyoto Protocol, which was no mean feat.
We are asking the Russians to make an effort to combat climate change and environmental pollution. I personally experienced the need for this in the form of a serious chest irritation during my stay in Moscow. Even in Russia, a clean environment has a price tag, despite the pledges of financial support and cooperation. To bring this need to attention in Moscow is all the more difficult, given the fact that we in the European Union are already so reluctant to pay a price for a better environment.
The Council's draft directive for energy taxation is a striking example of the lack of unanimity in making efforts to bring about a better environment. An environmental tax on energy has been the subject of discussion and negotiation for more than ten years. Only in the past six months, under Greek Presidency, did it seem possible to agree on a compromise text. However, it became a compromise that left something to be desired.
My first observation is that the Council is still lacking the vision and audacity to take decisive action and move the tax pressure from the area of labour to environmental pollution. In this way, employment can be promoted and environmental pollution given a real price. A second point of criticism concerns the many interests of the Member States and industries which are taken into account in the proposal. As a result, the proposal contains too many exceptions and exemptions. As such, the amendments that aim to restrict the conditions for exceptions receive my support.
I should like to bring to your attention a few other matters. First of all, I should like to argue in favour of biofuels being made exempt from energy taxation. In that way, the development of these clean fuels is given a fair chance. It would be quite ludicrous to grant subsidies to promote biofuels with one hand and levy taxes on these fuels with the other. Secondly, I should like to point out that it is important for the proposal on emissions trading to be taken into consideration. Both instruments can co-exist and complement each other. I should like to warn the Council to ensure that the directives do not overlap during implementation.
Finally, in his report, the rapporteur argues in favour of abolishing the unanimity rule where tax matters are concerned. Although I consider energy taxation to be a valuable instrument for reasons of content, I cannot share the view on the unanimity rule. This is why I will not be supporting Amendment No 13 although I support the rest of Mr Jonckheer's report. The idea of energy taxation as a supplement to the agreements that have been reached with regard to emissions trading has been mooted before. It is time we were serious about its implementation.

Korhola (PPE-DE).
Mr President, the matter now before us has been an awkward one for the Council. Nevertheless, the long period of time during which the Council has considered the matter - one lasting more than five years - has been a disappointment. Now is the time to put the disappointment to one side; making headway in the debate on the directive is the next step in an inevitable direction. I am happy to note that it is just this sort of practical approach that we also see in the report drawn up by Parliament's rapporteur.
The Council has declared a commitment to adopt instruments to be able to decouple economic growth from energy consumption. The Commission has also committed itself to such aims, and so has Parliament. In principle it is therefore not an obstacle to significant change. In practice it is sorely needed. The directive now up for discussion offers an opportunity for this and it is our responsibility to implement it soon. In the integrated European economy the solution must be more coherent than ever.
While energy taxation satisfies the parliamentary needs of Member States, at the same time it provides the means to lighten taxation on labour and employment and is an effective and precise tool for guidance in what is, ecologically speaking, the right direction. Taxation on energy products is the link that has long been missing which ties all the small parts of sustainable development together.
I would furthermore like to raise the matter of the connection between energy taxation and the Directive on emissions trading that was recently completed. Independent studies show that responding to the challenge of climate change will be most favourable in overall financial terms if the reduction for sectors outside the emissions trading scheme is set at the right level. Cuts across the board will not bring that about: we need a comprehensive energy taxation system. We have to ensure that each branch of industry falls within the ambit of either energy taxation or emissions trading. That way, every company, through taxation, will be looking at a maximum price that is the equivalent of the marginal cost to society.
Europe needs an ambitious energy taxation system very quickly. It would seem that the Commission and Parliament are to shoulder the responsibility for establishing one.

Bolkestein
. Mr President, political realism has led the Commission to conclude that it is not appropriate at this stage to modify its proposal of 1997. A formal modification of the Commission's proposal would significantly postpone the entry into force of the Directive, and might even endanger its adoption during this legislature.
But as the Council will be examining the proposed amendments in early October, the Commission will do its best to have the relevant amendments included in the Directive.
In that context, the Commission could agree in principle with amendments 1, 2, 3, 7, 8, 12 and 13.
Regarding amendment 2, I would like to point out that it is my intention to make a dedicated proposal on this subject early next year.
The real issue behind amendment 4 is that of establishing a common definition for reference units in the Directive. The Commission is pursuing this goal in the Council's working group.
Furthermore, despite some sympathy with amendments 6, 9, 14 and 15, the Commission considers that reopening these issues might endanger the whole compromise. Therefore, the Commission regrets that it cannot support these amendments.
The Commission furthermore does not support amendments 5, 10, 11, 16, 17 or18.
Thus far about the amendments. I should also like to make a few general remarks. Firstly, Members of Parliament will understand that this whole business is increasingly made difficult by the existence of the unanimity rule. The Commission has proposed very modest changes to the unanimity rule in the form of qualified majority voting in the areas of simplification, modernisation, co-operation against fraud, and the establishment of a harmonised tax basis for company taxation. However I am pessimistic as to the possibility of those very modest proposals being accepted. It is regrettable, but it is the reality.
Lastly, I would direct a remark towards Mrs Kauppi. Mrs Kauppi has said that hydrogen is a source of energy, but I am afraid that is not true. Yes, one can use hydrogen in cars and maybe in the future in aeroplanes, but in order to use hydrogen one must first get it. In order to produce hydrogen one needs electricity. Therefore, I am afraid that whatever the advantages of the so-called hydrogen economy - and the Commission is fully aware of these advantages - let us not forget that in order to get hydrogen one must produce it and that costs electricity, a lot of electricity.
I would like to thank the rapporteur for his good work.

President.
Thank you, Commissioner Bolkestein.
The debate is closed.
The vote will take place at 12 noon tomorrow.

President.
The next item is the oral question to the Commission (O-0062/2003 B5-0277/2003) by Mrs Boogerd-Quaak, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the transfer of personal data by airlines in the case of transatlantic flights.

Boogerd-Quaak (ELDR)
. (NL) Mr President, Commissioner, since March of this year, the European Parliament and the Commissioner have come a great deal closer to each other in this matter. That is to say, Mr Bolkestein has written an excellent letter to Mr Ridge, but the upshot of this is somewhat less convincing. During your speech to the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, I gathered that you are serious about having Directive 95/46/EC and Regulation 22/99/89 observed. Despite this, Mr President and Commissioner Bolkestein, we yesterday held a lengthy discussion in the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs about a resolution in which we want to convey the fact that, in Europe, certain minimum standards must be observed. This resolution could have been approved yesterday thanks to the level of unanimity within the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs. I was of the opinion, though, that you should also have the opportunity of reacting to our questions, so that we can incorporate your reaction in our resolution. Our objective is to announce a common position that we could also take to the United States because the negotiations that fundamentally matter must be brought to a successful conclusion over there. In the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, a number of suggestions have been made, such as whether it would not be possible after all to put an end to the existing situation earlier than within the suggested two months, for example by imposing a push system on the airlines at this stage. I should also like to ask you - since I could not make out clearly what you were saying in your contribution in the committee - whether you agree with us that we should develop a European standard as soon as possible on the basis of the recommendation of the Working Party on the Protection of Individuals with regard to the Processing of Personal Data - Article 29 of Directive 95/46/EC. Do you agree with us that we should only transmit limited information, as indicated on the passport and airline ticket? The issue of data storage also requires further attention. In my view, the period of storage should not exceed the duration of the stay. Six to seven years is still far too long. During the purchase of tickets, passengers must be made aware of the fact that this data is required. It is also extremely important to our committee that passengers be given the opportunity of having incorrect data corrected promptly, efficiently and independently and that there be a clear judicial process in the US. It is unacceptable for citizens to get into difficulty over there.
This matter has, meanwhile, also been raised at international level. As you know, a conference took place in Sydney on 12 September last that involved the members of the data protection committee. A resolution was adopted on this matter, and I should like to hear the opinion of the Commissioner about the proposal to conclude an international agreement in this area. According to this resolution, such an international agreement should in any case contain the following components:
the required conditions for data protection;
the reason why the data is collated;
a defined list of the required data, which should not be excessive;
strict time limits for the storage period;
adequate information to the people in question;
and methods of rectifying any errors in the data.
This is, in fact, more or less what Parliament wants too. What is your opinion about this and do you consider an international agreement to be a viable solution?
Furthermore, I should like to find out from Mr Bolkestein what he expects to achieve in the next two months with the United States, since hardly any headway has been made in the course of six months? I should also like to point out to Mr Bolkestein that the course currently taken by matters has led to unrest in the US too. A few days ago, I read in the paper that it had become known in the US that the airline company, Jet Blue, has secretly transmitted personal data of more than 1 million passengers to a bureau of the Pentagon. The American Civil Liberties Association deems this a highly 'un-American system of border controls'. A US citizen who was working in the World Trade Center on 11 September, and luckily survived, says that he can understand that safety is important, but that it should not be done in this way, for that is ludicrous!
The US is lobbying for its own standards, but should we not be doing the same thing in the US? This brings me to another point which may not entirely fall within this Commissioner's remit: would it not be preferable for organised crime and terrorism to be fought by setting up a transatlantic system along the lines of the European Schengen system for the exchange of data on potentially dangerous persons?
In my view, the solution is two-pronged. First of all, we need to regulate data protection effectively and then look for another way of fighting terrorism.

Bolkestein
. Mr President, as I said to the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs on 9 September 2003, and in accordance with the messages I received from Members of Parliament on that occasion, the Commission is pursuing its negotiations with the American authorities which receive passenger name record data transferred from the European Union with a view to obtaining improved undertakings on four major issues.
First, I will touch upon purpose limitation. So far, the United States has refused to limit its use of passenger name record data to the fight against terrorism. The Americans also want to cover other serious domestic criminal offences. So far, they have not been prepared to further narrow these down.
Second, as far as the scope of the data required is concerned, the United States requires 39 different PNR elements, which it is hard to regard as necessary for or proportionate to the purpose. The Commission is seeking a reduction in the list of 39 data elements from the United States.
Thirdly, the data storage periods are still far too long. Mrs Boogerd-Quaak has stressed that they last six to seven years.
Fourth, American undertakings are insufficiently legally-binding, since the available extra-judicial redress mechanisms are not fully independent. Therefore we must insist that rights are, to the greatest possible extent, legally-binding and thus actionable before American courts.
Currently, we are working with the target date of Christmas 2003, the date that I set when I last spoke to the LIBE Committee. Ideally, an adequacy decision should be well on track by that time. An adequacy decision will only be possible, however, if the United States is ready to improve significantly its undertakings.
I must be frank with the House and say that I am not confident that we shall be able to secure the necessary significant improvements in order for the Commission to be able to make an adequacy finding. However, progress in the United States' commitments is in any case necessary for any kind of solution, whatever its legal form - be it an adequacy finding or, if supported by the European Parliament, a bilateral international agreement.
The most recent step in our negotiations with the United States was the meeting which I held yesterday with Under Secretary Asa Hutchinson of the US Department of Homeland Security - he is the number two person in that department. That was a useful meeting in which we discussed all the main issues and agreed to put our officials to work to make further efforts to find a solution in the coming weeks. When I am in Washington in mid-October I expect to meet with senior Homeland Security officials, including, hopefully, Secretary Tom Ridge. I emphasised to Mr Hutchinson yesterday the urgency of finding a solution - and of course I also referred to the serious concern with which PNR transfers are viewed in this Parliament.
I find it difficult to accept any remark that the Commission is tolerating the situation and not doing its job as Guardian of the Treaties. As far as the Data Protection Directive is concerned, applying the law is a job for the Member States and their data protection authorities. The Commission's immediate role is to ensure that it is the Member States that respect the directive, not the airlines. But the problem, in any case, is not one that we can solve via purely intra-European means. We have a conflict of laws with the United States and that is the heart of the matter. In my talks with the United States authorities, I hope to be firm. But being entirely inflexible on the European side will not necessarily obtain more flexibility from our counterparts.
Regarding passenger consent, which was mentioned by some Members as a possible way out - at least in the short term - this would not, in our view, constitute a legally-secure, longer-term solution. First, making consent unambiguous would prove very burdensome in practice. Second, the result would be a transfer of data that - despite being legal in the EU - would still lack any significant protection on the American side. Therefore, securing the best possible undertakings from the United States on the way in which they will treat the data collected from EU citizens is much to be preferred.
The oral question submitted by Mrs Boogerd-Quaak also refers to what should happen if an adequacy finding cannot be reached by the end of the year. She proposes to stop the data transfers that are not in accordance with the principles of non-discrimination, prior informed consent and an efficient appeals procedure, and to begin immediate negotiations on an international agreement with the United States. These measures reflect to some extent the options for possible courses of action that I outlined in my meeting with the LIBE Committee earlier this month.
However, as I stressed then, we should be very prudent not to shoot ourselves in the foot. Enforcement action may be superficially attractive, but it is not clear that its consequences would be those that we seek. Therefore, let us cross that bridge when we come to it. Political judgments will have to be exercised at the right moment. It is clear that the course we shall follow will fully involve the Parliament and the Council.
I am sure we can all agree on the need to unite to combat terrorism. But we equally agree on the need to avoid security concerns becoming an excuse for dismantling our civil rights and liberties. I should like to assure the House that the Commission will continue to devote its unstinting efforts to finding an agreed solution with the United States on this important but also very delicate issue. The solution needs to be found as a matter of urgency, and must respect the law on both sides of the Atlantic.

Santini (PPE-DE).
Mr President, ladies and gentlemen, a number of key dates have been mentioned repeatedly in this affair. The first is, without a doubt, 5 March 2003, when the United States asked airlines operating between the United States and Europe to make available all the data relating to passengers: absolutely all the data, not just, as had been the case thus far, the data necessary for air transport agreements.
The second date is 15 March 2003. Just a week later, with timing worthy of an even greater cause, Parliament adopted the resolution calling for enforcement of the 1995 directive and the 1989 regulation on the protection of privacy.
The third date is 23 September, today: six months after the adoption of the resolution, it would appear that nothing has changed; the United States has not responded to the Commission's demands. We might ask whether the Americans are deaf or whether it is the Commission that is unable to find the rights words to get through to them. Thus, still today, travellers to the United States find themselves asked, in addition to the usual general questions, about their religion, their taste in food, where they last went on holiday and their close and distant relatives. That is certainly going too far. It is right that the Commission should raise its voice, that Parliament should call for more resolute endeavours such as an international agreement, perhaps, as proposed by the resolution.
It would, however, seem appropriate to mention another date too: 11 September 2001. As we all remember, it was then that strict controls started to be enforced. Mindful of that appalling incident, I feel that perhaps we ought to be just a little more patient and realise that, behind what is certainly an annoying breach of confidentiality, there is still a great deal of fear. In any case, as the Commissioner said, a little flexibility might facilitate dialogue.

Paciotti (PSE).
Mr President, ladies and gentlemen, the current situation is clearly unlawful. There is no legal basis for giving the US authorities direct, unfiltered access to the personal data of European passengers and it is contrary to Article 8 of the Charter of Fundamental Rights; it is contrary to the Community provisions on the protection of personal data; it is contrary to the Community Computer Reservations Systems Regulation. Part of the responsibility for this unlawful situation lies with the European Commission, for the US legislation requiring the disclosure of this information dates back to November 2001 and was updated in May 2002, while the system did not enter into force until March 2003.
In the meantime, the Commission failed to inform Parliament of any of this and negotiated at senior-official level with the United States to achieve the joint statement of 18 February 2003 which, in practice, allowed the US authorities indiscriminate access to the personal data of European citizens collected by airlines for completely different purposes, even suggesting that national control authorities should not take action against airlines complying with the United States' requests. Only the firm reaction of the European Parliament and said control authorities induced the Commission, at last, to acknowledge that the conditions of adequate protection required by Article 25 of the directive were not being met as regards the transmission of data collected in the Union.
I would, however, point out that, in the case of Italy, the ban by the control authority on access to data collected by the company, Alitalia, has not met with negative reactions or sanctions from the United States authorities. The Commission must, therefore, make more vigorous endeavours to achieve a genuine international agreement with the United States as soon as possible which regulates the matter on the basis of fundamental principles: respect for the principle of reciprocity, on the basis of which, if the Union gives US citizens the same rights as its own citizens, then the United States must do the same for European citizens; respect for the principle of proportionality; respect for the principle of informed consent and the right of the person concerned to appeal to an independent authority or judge. In the meantime, pending the achievement of a satisfactory agreement, a situation of legality must be restored and access to data which violates Community law must be banned.
In future, then, a centralised system will have to be established at European level for the electronic collection of data relating to flight reservations, containing adequate filters which ensure that only data which may be lawfully disclosed is transmitted to third parties, with due regard for the fundamental rights of the European citizens which we, Parliament and the Commission, are under obligation to protect, not least against terrorism.

Buitenweg (Verts/ALE).
Mr President, I should first of all like to pursue in greater depth the news to which Mrs Boogerd-Quaak has already referred. It is about the airline company Jet Blue that recently had the dubious honour of being the first American airline company to be able to provide data about its airline passengers to the Pentagon. The latter had requested this information so as to be able to make a risk assessment of passengers based on the CAPS II programme. When this piece of information was leaked, a huge outpouring of indignation in the United States ensued. Apologies were made and the data tap was turned off immediately. Especially serious was the fact that passengers had not been previously informed of the violation of their privacy, but the wrath of public opinion was also directed at the very fact of registration on a massive scale. As already stated, the influential UCLA, the American Civil Liberties Association, qualified this as 'a highly un-American system' and condemned the fact that, in this way, every passenger is turned into a suspect.
I am giving this account of American indignation to press home to the Commissioner that he should not be fixated on striking a compromise between us and Minister Rich and company in the current negotiations with the United States, because the playing field is much wider and it is up to us to make it wider still. Apparently, the American public does not deem the actions and measures viable, and we must therefore also raise our objections.
Commissioner, I should like to ask you to try out an alternative route using an alternative strategy. You have easy access to the Anglo-Saxon press, and I therefore count on your written powers of persuasion, via American public opinion, to put the administration effectively under pressure. Consider it to be a kind of hearts and minds campaign. What are our specific problems? It would be useful to clarify this, because I think that we will find a ready audience in this respect, also among the public in the USA.
Mr President, the second point that I should like to bring to your attention is the proposals that are circulating to develop a passport with advanced electronic chips in which biometric data, including somebody's past travelling history, can be stored. If this travelling history is stored on this chip and somebody travels to America, then Bush will still have unfettered access to the information which is the subject of our bickering. My question to the Commission is therefore: how can we ensure that we are not fighting a rearguard action today? How much progress has been made with the discussion about these passports, and are you considering how this might affect the privacy of our citizens? This is, after all, how we can avoid being faced again with faits accomplis in a year's time and being indignant on a massive scale.

Cappato (NI).
Mr President, Commissioner, flexibility is highly appropriate in negotiations but highly inappropriate when it comes to respect for the law.
Article 2 of Regulation 22/99 bans the disclosure to third parties which are not party to a transaction of personal information on a passenger without the passenger's consent.
Commissioner, you stated that responsibility for enforcing legislation lies with the Member States. This is true where directives are concerned but not when it comes to regulations. You are vested with all the necessary authority to intervene and ensure that the law is enforced, under Article 11, which states that the Commission, when appealed to or acting on its own initiative, is to instigate proceedings in order to stop all violation of the provisions of the regulation.
Do we want to require respect for the law when that would actually be counterproductive? I believe, first and foremost, that where there is a law, it must be respected, and that a condition of any reform - even reform of an international agreement - is compliance with procedure.
Commissioner, you would acquire greater clout in international negotiations if the Commission were to demand respect for the law without delay, for it has the power to do so as well as the Member States.
The timeframe is not for us to decide: it is - and, in my opinion, should be - the timeframe laid down by Article 232 of the Treaty, which stipulates a period of two months from our request for action. If no action is taken, we have two months in which to appeal to the Court of Justice.

Posselt (PPE-DE).
Mr President, the thirty-nine data elements that we have been dealing with today can be divided into three categories. Firstly, superfluous data, the storing of which has already - in the GDR and elsewhere - caused intelligence services and whole states to collapse. In the interests of the fight against terrorism this data should not be saved. Secondly, useful data which would, on entry, be removed anyway. This data can be used in an appropriate and legal manner. Thirdly, however, there is sensitive data, on which we need precise rules, and which must either not be recorded, saved and passed on at all, or it must at least be deleted after a deadline, after the person leaves the USA.
Although we are all vehement advocates of the fight against terrorism, terrorism cannot be fought with anarchy, but rather in two ways. Firstly on the basis of the law, and this - rather than arbitrariness - we should step up. I regret to say that at the moment in transatlantic relations there is arbitrariness regarding these questions of data, and an absence of any legal basis. Secondly we can fight international terrorism only on the basis of trust between the USA and Europe, trust that was damaged through both sides apportioning blame and must be re-established. Trust can only arise when genuinely transparent rules are created, ones that the public can understand, otherwise we will fuel mistrust of both the USA and the European Union itself.
Commissioner, I do not think that we can wait until international rules are in place, nor can we rely on the current fifteen and future twenty-five Member States implementing the law. It is much more a fluke that the Commission, with you as a spokesman for the European Union, which will soon have more inhabitants than the USA and Russia together and must be a partner of the USA, is acting on this important issue, but intentionally and on the basis of the law. Therefore, Mr President, I would like to call out to the Commission: be tough in your conduct of the negotiations, Mr Bolkestein! Be firm, or be tough on these important questions of trust and the law!

President.
The debate is closed.
I would remind the House that the vote on possible motions for resolution will take place on Thursday 9 October in Brussels.

President.
The next item is the report (A5-0287/2003) by Mrs Villiers, on behalf of the Committee on Economic and Monetary Affairs on the proposal for a European Parliament and Council directive on investment services and regulated markets, and amending Council Directives 85/611/EEC and 93/6/EEC and European Parliament and Council Directive 2000/12/EC (COM (2002) 625 - C5-0586/2002 - 2002/0269(COD)).

Bolkestein
. Mr President, I begin by thanking the rapporteur for her report. It certainly improves the Commission's text in some places, while ensuring that the goals of high investor protection and market efficiency are adequately respected.
We know it was a very difficult debate, but Parliament has demonstrated a great willingness to compromise and find a workable solution. Let me also pay tribute to the Chairman of the Committee on Economic and Monetary Affairs, Mrs Randzio-Plath, who, true to her word, has helped drive forward on time the financial services action plan. In particular, we welcome the efforts of the rapporteur in reaching a compromise on two major points.
Firstly, as you know, pre-trade transparency was one of the principles of the Commission's proposal, in order to ensure market efficiency and investor protection. We are very pleased that the principle is kept in the proposal, but it has been adapted in a pragmatic way. Secondly, we appreciate the work carried out on the suitability test - Article 18. I consider this to be a good basis for working out a solution that is adapted to the specificities of each type of service and it will help to complete our proposal in this respect.

Villiers (PPE-DE)
. Mr President, I thank the Commissioner for his kind words and all the members of the Committee on Economic and Monetary Affairs who worked exceptionally hard on this. In particular I should like to thank Mr Karas and Mr Radwan, Mr Bourlanges, Mr Katiforis, Mr Goebbels, Mrs Cazalet from the committee secretariat and my assistant, Sarah McCarthy, for all the help that they have given me on this very demanding dossier.
The goals of the ISD should be competitive, integrated, liquid, transparent and efficient markets with a high level of investor protection. The ISD should not prescribe a particular market structure. It should recognise and be adaptable to the diversity of the different European market structures. It should properly distinguish between retail and professional investors. The type of regulation that is absolutely essential for consumers can be damaging, disruptive and unnecessary if applied to professionals. Rules should always be risk-based, they should be properly costed and they should be proportionate to the harm they seek to avoid.
I very much support the emphasis in the Commission's proposal on country of origin, with a qualification that in many cases and in many areas the host country is suitable to deal with branches. I also agree with the Commission's overall aspiration to abolish concentration rules and open up the business of executing share trades to competition between exchanges, between MTFs and between the internal execution platforms of investment firms. Exchanges are not public utilities and they should not be granted a monopoly. Allowing firms to compete with exchanges will lead to more choice for investors, more liquidity, narrower spreads, better prices and lower costs. The markets where competition is already allowed in this way are successful, transparent and highly liquid. Competition in this context will deliver a good deal for the consumer, as it has in so many other areas. I agree with the Commission that the best way to protect investors is through a strong combination of competition, conduct of business rules, conflict of interest rules, best execution rules and transparency.
However, there are important areas where the compromise agreed in the ECON committee has greatly improved the Commission's proposal. I strongly urge the House to support the ECON Committee's compromise because these amendments are essential to remedy or, at any rate, reduce some very serious problems caused by the Commission's original text. I strongly support the committee amendments and would only advocate a couple of fairly technical changes.
This compromise should be accepted as a package. I would appeal to the House not to seek to destabilise this carefully-balanced and hard-won compromise that was achieved after many meetings, with input from different MEPs from different political groups and of different nationalities. Indeed, at the very heart of the matter, the concept of standard market size was a concept contributed to the debate by the PSE group.
I genuinely believe that the ECON compromise would be good for all Member States. There are many people in my country who would say that the compromise does not go far enough to meet their concerns. I would have liked to delete Article 25, but I have conceded that it is not feasible or appropriate, and I have conceded the need for a pre-trade transparency requirement. I believe this compromise will be good for the national interests of Luxembourg, France, Italy, the UK and indeed all Member States. I believe it will be good for consumers.
I have had to make concessions, I have moved a long way from my initial position and I would very strongly thank everyone in the committee and in the House who have also made concessions. I can support some of the plenary amendments: 145, 148, 151, 156 and 157, and I will be delighted to continue discussing the other plenary amendments.
We had a very serious debate in committee on the word non-professional: a whole range of interest groups from around Europe said they could accept the compromise if non-professional was deleted; now it has been. It is now a balanced compromise which allows a significant pre-trade transparency requirement to go ahead whilst at the same time addressing some of the practical problems with the original proposal - as Mr Bolkestein says, 'in a pragmatic way'.
The original Article 25 would have severely damaged liquidity and liquidity is vital for the health of our markets and our economy. This compromise seeks to deal with those practical problems, and reduce any damage that may occur to liquidity, by exempting the small banks and focusing on systematic internalisers, and by reducing counter-party risk. It allows price improvement: without price improvement the compromise is not workable. Only with price improvement will retail customers get the good prices they deserve. The obligation to give the same price to everyone will make internalisation uneconomic. Why should we who are charged with representing the peoples of Europe pass a law to prevent firms from giving good deals to their customers?
Finally, it is vital that we accept the committee's amendments on execution-only business. The Commission proposal needs alteration, otherwise it would drive execution-only business out of business by making it uneconomic. I believe investors should continue if they wish to be able to take their own decisions about their investments. They should not be forced to buy professional advice they neither need nor want. This is unnecessary regulation and I would appeal to MEPs to reject it in the same way as the Committee did.

Radwan (PPE-DE).
Mr President, I would like to begin by thanking the rapporteur. The road has been long and, in parts, an arduous one, but we have now found a compromise that reflects the whole House, that reflects opinion, and we should do our best to ensure that, in this week's vote, the compromise as such is no longer challenged, but that there are only editorial changes to be made. We all accept that in future there will be competition between the different trading platforms, competition between stock markets and banks.
On the other hand, we cannot disregard specific criteria, for example, that in competition the same conditions apply to banks as do to markets. What that means is that, if I take markets as sources of prices - of meaningful market prices - then this cannot be allowed to lead to liquidity being damaged in future and markets no longer being meaningful. As for transparency, we must ensure that the market is transparent for all as a place where prices emerge, and that everyone can understand how prices evolve there. Supply and demand must be maintained. This is what our laborious discussions achieved, and also for pre-trade transparency. We gave some points to the Committee of European Securities Regulators (CESR) and we will listen attentively to what advice the CESR gives us.
I see it as crucial that there are no winners and no losers in this discussion. Neither the City of London nor any other financial centre in Europe has won. Also we cannot say that the markets or the investment houses should have won, but everyone should be in this market together in the future, in order then to attract customers with the best offer. From a German point of view it is also important for me that the market structure should take national factors into account. I would, therefore, also ask that you give broad support to the two amendments tabled by the Group of the European People's Party (Christian Democrats) and European Democrats so that small dealers in Germany are still protected. Thank you, Mr President.

Katiforis (PSE).
Mr President, ladies and gentlemen, Commissioner, the report we are debating concerns one of the most central issues of the economic unification of Europe, the unification of the financial markets. The principle that a large financial market offers greater liquidity and greater economic weight is well known. It can also offer greater competitiveness and, consequently, better prices to transacting parties. In this way, it encourages investors and investments and an increase in investments has an obvious economic importance on which we all agree. Our group is aiming for the maximum possible employment which can be created by increasing investments.
The Commission proposal is based on the unification of the financial markets, on the so-called 'European passport'; in other words, it offers investment banks the right to develop their activities in all 15 Member States, provided they comply with the rules of approval in just one Member State rather than in 15. But the Commission has complemented its proposal with the thought that, if a financial market really is to be able to operate without frontiers, the transacting parties must feel the same security wherever they place their money in Europe. This thought has given rise to regulatory rules common to everyone, which the Commission is also introducing in connection with the exercise of activities in a fair and transparent manner, the integrity of the market and the rights of investors to proper, honest treatment by banks and financiers.
Rules always regulate conflicting interests. The interests are fluid at the moment, because technology and the concentration of banking capital in large enterprises are creating new conditions, conditions under which banks are turning into stock exchanges with internal transactions and the stock exchanges are turning from infrastructures into companies. Thus, there is a risk of multiple fragmentation of the market which the directive, in one of its most controversial provisions, is trying to overcome, by forcing investment banks to communicate with the market transparently and before and after their commercial transactions are closed.
Generally speaking, the Commission proposal has again struck a good balance between the various interests and technological developments. The debate and the amendments by the Committee on Economic Affairs in general reinforce the Commission's work, thanks to the huge contribution by the rapporteur, whom I want to congratulate on her endeavour and her conciliatory approach. I hope that this conciliatory approach will prevail until the end and that the amendments proposed by our group will be supported, so that the report can be approved by a large majority.

Schmidt, Olle (ELDR).
Mr President, I want to congratulate the rapporteur on an exceptional piece of work. She has managed to piece together a sustainable compromise against all the odds. At present, the stock exchanges within the EU have a near monopoly on dealing in securities, especially in certain national markets. Now, we are obtaining competition and freedom of choice and, Mr Katiforis, sound protection of investors.
I want briefly to comment on the two sensitive articles, namely Articles 18 and 25. Where Article 18 is concerned, we think it important that the suitability test be reserved for services where advice is given and not, for example, Internet-based dealing in securities. These clients have consciously chosen a brokerage service in which they will have no need to pay for professional advice. That would just be more expensive. We shall therefore vote in favour of the committee's Amendments Nos 53, 54 and 55.
The most discussed article in the proposal is Article 25, which deals with the internalisation of trade and the publication of price information prior to transactions that take place outside the regulated markets or MTF platform. We view this as rather risky. It would reduce liquidity on the market and increase costs. There has not been sufficient political support for the removal of this article, but we think that the committee's Amendments Nos 33, 86, 87, 88 and 89 should remove the negative effects that the proposed rules on the publication of prices would have on the market.
Finally, I should like to ask why we are debating as important a proposal as this so late in the evening.

Herzog (GUE/NGL).
Mr President, the new directive on investment services seeks to order competition between three major structures: exchanges, the Internet and companies using internalisation. Competition between them over processing transactions will intensify as the European financial market becomes more integrated. Everyone knows that the City of London, which is also an aircraft carrier for American investment banks, has a strong lead where internalisation is concerned. Other companies such as Deutsche Bank or ABN-AMRO are launching out into the trade with ambitious business plans.
I observe that in carrying out our task as legislators we have singularly lacked a sound economic analysis clarifying the nature of the competition entered into and its implications. For example, do we want the small European markets stretching from the South to the East to be piloted by a handful of global players in London?
In this House we are accountable to the general interest and not the interests of individual countries. That is why we have supported two main principles: quality of information and fair competition. Businesses that use internalisation harness huge resources, but they do not form the market. They manipulate it but they need it, which is why pre-trade transparency is crucial to the quality of price formation, in particular to prevent volatility, speculation and insider dealing.
The Commission proposal applied this principle of pre-trade transparency that Mrs Villiers initially wished to abolish. Later she accepted it. She has shown great professionalism, it has to be acknowledged. She has given ground, but a large number of traps and mines were adopted in the committee on her initiative that drain this requirement for transparency of much of its meaning and create legal uncertainty. This applies to the definition of businesses practising internalisation, bonds and the size of orders, the exemption for eligible counterparties and the notion of price improvement.
As it stands, the report that was adopted proposes a system of regulation that is inferior to that enjoyed by the United States. That is why we have requested a number of separate votes so as to remove passages that we feel are harmful. Our aim is not to conclude this at first reading at any price nor simply to seek a compromise between the various interests, but to adopt a resolution that really does serve the common good.

Bourlanges (PPE-DE).
Mr President, confrontation lay at the very root of this report because of two different philosophies. The first considered that investment firms - businesses practising internalisation - should be authorised to forge a strictly bilateral relationship with their clients, which had the disadvantage of not enabling these clients to benefit from the best possible price on the market, or even to learn what that best price was, or even quite simply to ensure price formation, which can only emerge from a general confrontation of bids and offers. The second philosophy, the so-called philosophy of regulated markets, considered that consumer protection required competition on a single, transparent market between all bids and offers, so as to enable clients to know the price and to benefit from the best possible price.
Were these two philosophies compatible? Yes, provided that the policies of investment firms were subject to common rules. In this respect the Commission text was very satisfactory. I am not sure, unlike Mr Bolkestein, that Mrs Villiers's report does markedly improve your initial text. But we can live with this compromise, because it is, as we have just been reminded, relatively satisfactory. It allows us to defend true principles and to act on them.
This statement is however subject to two reservations. The first concerns the issue of price improvement. It is not a question of knowing whether the client has the best price. Of course he should have the best price! The issue with price improvement is that it makes it possible for investment firms to apply a different price from the one that they publish and thus to prevent the market from contributing to the formation of fair prices.
Secondly, we are also unable to accept transactions relating to portfolios that consist, for the purpose of removing a transaction from the constraints of the directive, of an amalgam of securities of different kinds bearing no relation to each other. Subject to these two essential reservations, where some of us will be voting against the proposal, we consider Mrs Villiers's report to be satisfactory. I would be happy to congratulate the rapporteur if I felt - and this is a reservation - that she had been completely fair throughout the negotiations between the groups.

Randzio-Plath (PSE).
Mr President, the negotiations on the directive on investment services and regulated markets have once again shown how difficult it is to bring together the different European market philosophies and traditions, in particular the continental model of stock exchanges, which have in the meantime lost their public-private character to a large extent and have been privatised, and the investment banks' new internal trading systems.
To allow these two systems to coexist at European level and to organise fair competition as well as protecting the interests of investors at the same time is a difficult task, and that will become particularly clear when we see what high sums are transferred every day and what effects the development of the financial markets will have on European and world economies. That being so, I hope that the compromise, which was reached through very tough negotiations in the Committee on Economic and Monetary Affairs, will encourage the Council to come to similar compromises so that this important legislative act on implementing an integrated financial services market can actually be passed in this term. I believe that we have tried to consider the interests of all market participants, including non-professional investors, and that we have implemented the principle of transparency in all key areas, just as the Commission intended.
For example, in the interests of price transparency and investor protection, it is necessary that contracts limited to internal trading systems, if they cannot be carried out by the internaliser directly, can be directly transferred to the regulated markets, unless the customer explicitly rules this out. A quick transfer offers the best chances for the best possible completion of the contract in the interests of the customers. I thereby believe that we have reached the right decision in this House, as is the case for the disclosure requirements in Article 25. I hope that with this directive competition of all trading systems will have a chance without the protection of investor interests being neglected.

Lulling (PPE-DE).
Mr President, the compromise that we agreed upon in the Committee on Economic and Monetary Affairs took a great deal of work and nerve for those involved. I would like to express my thanks to the rapporteur for her valuable work. Without her endurance and extreme patience we would not have achieved this compromise.
I would, however, like to make a few clarifications on this matter. The Commission proposal provides for pre-trade and post-trade transparency. This is just as costly as it is superfluous and would prevent financial institutions from investing in internalisation. This would mean virtually no more competition, and the abnormal concentration rule, which various Member States really have at heart, would - as Mr Bourlanges has just made clear - be brought in through the back door. It is regrettable that pre-trade transparency is provided for despite this. This, Mr Bolkestein, is where I agree with the Commission that this should only apply to private customers and should not be extended to professional customers.
It must, however, also be possible for internalised financial institutions to offer their customers better prices than those who give notice of them through pre-trade transparency. If the financial institutions concerned achieve this, then so much the better, it is in the interests of the customer.
Various Members also want pre-trade transparency extended to loan bonds. I am against this, as the two markets are structured in very different ways. Shrewd football fans will not then be prevented from investing loan bonds into their favourite clubs without having to weigh up the risks and potential profits, as was the case in Italy.
The proposal for the directive also requires financial institutions to get the go-ahead from customers when the order is to be executed. I think that this is excessive. The compromise as it was adopted in the Committee on Economic and Monetary Affairs goes a lot further than what was required to create a single market that functioned well for financial services. I regret to say that policy is the art of achieving. We are currently involved in the first reading and perhaps those who agreed with the rapporteur in her first version will come round and then perhaps we can find a better text than we have at this first reading.

Berès (PSE).
Mr President, everyone is congratulating the rapporteur, so I will do likewise, and I recognise the progress that has been made between what she referred to as the 'Prodi amendment' and the text that is on the table today, even if influences from outside the continent have had a significant bearing on our debate.
We are all familiar with the directive's objectives: to ensure that the financial sector allocates our economy's financial resources in the best possible way. On this basis, I believe that the text that we have drafted is expected by all traders. All that remains is for me to make a few essential observations.
To protect non-professional investors, financial companies need to take the trouble to check their level of knowledge and their resources. Execution only is not a continental practice and by suddenly imposing it we would run the risk of destabilising many investors. Secondly, for competition to be genuine, information must be made available to all players. Transparency is therefore essential. Pre-trade transparency should not admit of any exception and I can accept that it does not apply to limit price orders and is restricted to orders of a standard size, but the possibility of price improvement, already mentioned by Mr Jean-Louis Bourlanges, seems to me to be an extremely worrying development.
Finally, in the vote on Thursday, I think that we should try to restate the position that we in Parliament adopted on the 'delivery' regulation, which is to say that we should ask the Commission to draft a directive on this point.

Karas (PPE-DE).
Mr President, Commissioner, ladies and gentlemen, I would like to begin by thanking all of those involved in this compromise, beginning with the rapporteur and Mr Radwan. It was a very difficult task, but we were successful. Further, I would like to make it clear that Parliament wants to pass this directive in this term and we hope that this compromise will also help the Council to come to one of its own. The new directive for investment services and regulated markets will strengthen the single European financial market. Why do we even need a directive? Because inadequately harmonised rules, high levels of bureaucracy and antiquated provisions for investor protection have so far been considerable barriers to cross-border securities trading.
What are the main points of our compromise and the new regulations? Firstly, investor protection. Investors must be well informed and the rules on the conduct of business are one of the most important pillars of investor protection: the differences between advice and non-advice business. In future a suitability test will only be required for advice business. Thirdly, we want the best possible service. The Committee on Economic and Monetary Affairs have come up with a wording that is acceptable to both small and large financial institutions. Fourthly, the decisive point: the level playing field between banks dealing internally with securities and markets. In this compromise, it was decided that banks are subject to appropriate supervisory and transparency rules. The aim is that the internalisation systems are allowed but not to the detriment of markets and other market participants.
We hope that this compromise will make for fairer competition between banks and stock markets, from which the consumer will benefit most. I would ask everyone to vote in favour of the compromise the day after tomorrow.

Van den Burg (PSE).
Mr President, all honour to you for your stamina. In the short time that has been allocated to me and at this late hour, I can only formulate a few guiding principles that will determine my commitment to reach compromises and my voting behaviour on Thursday.
I should like to outline two objectives. First of all, promoting private investment in the European Union. We must make every effort to increase liquid assets for the benefit of economic activity and to recover from the economic decline once again. Secondly, protecting small private investors. On the one hand, by laying down unambiguous rules that are closely monitored and, on the other hand, by optimising these small investors' choices in terms of investment products, institutions and methods. It is the latter point that formed the subject of the debates concerning the directive.
In my view, the small investor should be able to have access to stock exchanges as well as his own home bank. In-house matching is a fully-fledged alternative to the monopoly of stock exchanges, something which causes me increasing anxiety, certainly if it transcends national borders and stands in the way of national supervision. This requires transparency, but must not adversely affect price forming and liquidity on the financial markets.
As far as the last point - the method of legislation - is concerned, I agree with the approach, based on the Lamfalussy method, of delegating a number of things to supervisors and regulators. I concur with everyone who has stated that it is important to reach compromises and to encourage the Council to do the same.

Skinner (PSE).
Mr President, this House is fast demonstrating that it can solve things that even the Council cannot solve. Maybe that suits us for what may happen in the very near future. I hope, Commissioner, you will take note of that. But if the financial services plan is to work, this directive has to be in place.
There is no point in acting on the issues of barriers of national protectionism if we look backwards. If we do not look at what is happening with the global financial position then Europe, its investment, its potential for growth, all the risk capital action plan issues of the Lisbon European Council go by the by. As in so many of these issues, as before, we in Parliament, as elsewhere, have often been distracted by our own national concerns as opposed to what happens with the European economy.
I commend the rapporteur for the work she has done. Acting in the way she has done - and I am being cheeky here - she is acting in the most European of ways. As we know, markets cross borders. I am glad that as a British Conservative she has acted in a European fashion.

Bolkestein
. Mr President, I shall briefly explain some of the points where we have some concerns with the amendments which have been proposed by this Parliament.
As regards pre-trade transparency obligations for investment firms, Article 25, all the amendments related to pre-trade transparency, that is to say Amendments Nos 33 and 86 to 90, can be accepted at least partially or in principle, but we are not convinced of the necessity to allow for price improvement. We are not convinced that in the way it is presented in the amendments it is necessary or beneficial for the interests of retail investors.
We consider that the current exemption for commodity derivatives and the dealers of such instruments should apply on a consolidated basis. As already explained, in the conduct of business obligations we accept - and this is in line with the Commission's initial proposal - the limitation of the obligation on investment firms to carry out a full suitability test only for certain services.
Regretfully, we do not agree with a number of amendments referring to comitology provisions. Some of them are against the principles set out in the report of the Wise Men - the Lamfalussy approach in particular. We consider that implementing measures should only contain detailed technical rules, not principles.
The purpose of adopting level 2 measures is always to ensure uniform application of EU legislation in all Member States, so any vague formulations proposed in that respect cannot be accepted.
On the division of responsibilities between competent authorities, in the case of branches we consider that in order to ensure a correct functioning of the single market the principle of the host Member State regulation should only apply as an exception for determining the conduct of business rules and record-keeping. In this context the Commission is in a position to accept a large number of amendments, some of them in their entirety, but also a large number partially or in principle and with adaptations.
To conclude, the Commission can accept 36 amendments in their entirety. Furthermore, 62 amendments could be at least accepted partially or in principle, with some changes needed in order to ensure the overall coherence of the text.
We consider that 60 amendments have to be rejected. The Commission's opinion on the individual amendments has been provided in writing

President.
The debate is closed.
The vote will take place at 12 noon tomorrow.
(The sitting was closed at 12.05 am.)

Lund (PSE)
I have today in the European Parliament chosen to follow the Group of the Party of European Socialists in relation to Mr Olle Schmidt's report (A5-0210/2003). I am, however, aware of the fact that the proposal is covered by Title IV of the Treaty establishing the European Community and does not therefore apply to Denmark, cf. the protocol on Denmark's position.

Lund (PSE)
I have today in the European Parliament chosen to vote in favour of Mr Kirkhope's report (A5-0291/2003). I am, however, aware of the fact that the proposal is covered by Title IV of the Treaty establishing the European Community and does not therefore apply to Denmark, cf. the protocol on Denmark's position.

