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

Howitt
Mr President, on behalf of myself and several other MEPs, while I fully respect the solemn nature of today' s formal sitting, I wish to make a point of order under Rule 19 out of concern for human rights given that the Colombian President' s visit today is restricted to his parliamentary address until a formal dinner with heads of political groups.
Bearing in mind that the Colombian Government' s own public defender reports one massacre for every day this year and that the Commission of Colombian Jurists attribute 78% to paramilitaries with the knowledge of the official Colombian forces, will you, as President of this Parliament, in your private talks ensure that you discuss issues of human rights. Will you in particular ask when the law passed in June this year requiring crimes against humanity committed by the Colombian military to be transferred to the jurisdiction of civil courts will actually be implemented. Will you ask why instances of forced disappearance, extrajudicial execution and sexual abuse have been excluded from that law. Will you find an appropriate way to report back to Parliament on the responses given.
I ask this in the spirit of successive resolutions on human rights in Colombia passed by this European Parliament and in support of brave human rights defenders working under the threat of violence and of death.

President
Thank you very much, Mr Howitt. Of course, both the Bureau and the Presidents will present Parliament' s position in accordance with their traditional decisions in that regard. The results of these contacts will be communicated to you.
(The Minutes were approved)

EC and ECSC budgets for 2000
President
The next item is the joint debate on the following reports:
A5-0030/1999 by Mr Bourlanges, on behalf of the Committee on Budgets, on the draft general budget of the European Union for the financial year 2000: Section III Commission (C5-0300/1999);
A5-0031/1999 by Mr Virrankoski, on behalf of the Committee on Budgets, on the draft general budget of the European Union for the financial year 2000 (C5-0300/1999)
Section I, European Parliament - Annex: Ombudsman
Section II, Council
Section IV, Court of Justice
Section V, Court of Auditors
Section VI, Economic and Social Committee and Committee of the Regions;
A5-0032/1999 by Mr Pittella, on behalf of the Committee on Budgets, on the ECSC draft operating budget for the financial year 2000 (SEC(1999) 803 - C5-0017/1999 - 1999/2072(BUD)).

Bourlanges
Mr President, you will understand, ladies and gentlemen, that it is a great honour for me to be able to take the floor today. I have had a seat in this Parliament for ten years now, and I have never had the opportunity to speak for fifteen minutes before, which, considering my temperament, has been a long-lasting source of frustration, and is finally coming to an end today!
I would like to tell you, Mr President, Madam President-in-Office of the Council, Commissioner, ladies and gentlemen, that preparing the budget of the European Union is a strange process indeed.
What sort of budget is it, then, which is based on the principle that the budgetary authority and Parliament vote on the expenditure but not on the revenue? What sort of budget is it which necessitates making a distinction between two well-defined categories of expenditure, one being the compulsory expenditure determined by an authority - the Council - the other being the non-compulsory expenditure determined by Parliament? This distinction is patently absurd. What sort of budget is it which subordinates the budgetary authority to legislative texts to the extent that some figures and some amounts expressly stipulated in the legislation and in the programmes are so restrictive that they tend to reduce the budgetary procedure to a set of legislative adjustments which have already been carried out?
The situation is thus strange, to say the least. But it is even stranger still to draw up a budget within the framework of the interinstitutional agreement and the budget perspectives which we have. Effectively, we are working within the framework of the Financial Perspective decided in Berlin. Well, the least that one can say is that the programming exercise which took place there was quite strange, firstly in terms of its duration (setting a seven year programme in two days of Council meetings was perhaps risky) and vague in terms of the amounts. Today, we can see that however one approaches these needs there is only a very approximate matching of budget estimates and actual requirements.
In Category 1 on agriculture and market expenditure, we are already up to the limit of the margin. In Category 4 on external action - I shall return to this point - the Category is literally at bursting point. In Category 5, we do not know what the administrative reform of the Commission will cost, but it is with great concern that we see the problem of pensions taking shape before suitable expenditure has been envisaged; and in Category 7, intended for pre-accession preparations, the movement developing in favour of faster and wider enlargement, if I may say, is not supported by suitable appropriations. Countries such as Cyprus and Malta are in an uncertain situation already. The budget programming exercise was, therefore, vague, but also very restrictive for the European Parliament because, for the first time, we are working within a framework where we have obtained less flexibility in exchange for - not more money, as previously, but less money. The situation is inherently paradoxical.
The matter becomes thoroughly surreal when we tackle the subject of the financial year 2000, as the European Union is experiencing an absolute contradiction here. On the one hand, the Treaty of Amsterdam and the implementation of the single currency are creating new burdens, whilst on the other hand, the planned enlargement effectively entails an additional financial load. Finally, the increased weight of the Union' s responsibilities, especially as regards Kosovo, are also creating far greater tensions, far greater pressure on the budget. Well, confronted with this situation, some institutions, particularly the Council - I am wondering what the Commission will decide in the end - tell us that we are going to finance more policies, with more partners, take on more responsibility, with less money. I must say, Mr President, there is a paradox here, a contradiction which Parliament does not wish to accept.
This is the situation we find ourselves in. Budget 2000 is characterised by the paradox that I have just mentioned, of how to finance more with less money, but will also, I hope, be characterised by Parliament' s rejection of this paradox. How do the institutions seek to address this paradox? Well, by two methods, both very simple and equally reprehensible. The first involves cutting expenditure, and the second sacrificing traditional priorities in favour of new priorities. I find the draft budget, which the Council has submitted for our approval and whose inspiration we are objecting to, quite worrying from that point of view. When I speak of cutting expenditure, I am thinking, for example, of expenditure under Category I for which a cut has been proposed. The Commission already started off on the wrong track. Perhaps today it is starting to experience some regrets? In fact, across-the-board reductions have been proposed to us, which are not in line with the real situation. The same applies to payments. As regards structural funds, we have considerable payment requirements, due both to the implementation of the new instrument of Agenda 2000 but also to the vast weight of past commitments. This death rattle, which is the last gasp of the dying man - forgive me, interpreters, this is impossible to translate, it means the final hour has come - is the last gasp when the programmes of previous years finally expire.
All that entails considerable burdens as regards payment and, in this respect, the Council follows neither the Commission, nor us, and proposes a perfectly unacceptable reduction in relation to the preliminary draft budget.
Having demonstrated some vagueness on this question in recent months, the Commission seems recently to have returned to more laudable sentiments, which we are pleased to see. Thus, on the one hand, we have a cut in expenditure and the appropriations allocated to existing and future requirements. The same is true for expenditure under Category 5.
At the same time, the priorities of yesterday and today are being sacrificed, and this is unacceptable, in favour of the priorities of tomorrow. I think this is a serious point. In Category 4, the Council makes the completely unacceptable proposal to implement across-the-board cuts without any justification whatsoever. We have clearly understood that there must be reductions on condition that they are at least justified, but in this case they are not, I must insist. We have been told that it is necessary to finance Kosovo, Morocco, Timor and Turkey. Admittedly, Timor and Turkey are not in the draft budget yet, but we shall surely find them there in time. We have been told that all this must be financed and, in return, there will be cuts in all the traditional expenditure for the development appropriations for Africa, Asia, Latin America. Parliament says no. We shall not accept making Africa, Latin America and Asia, everyone bar Europe, pay for Kosovo. It is not acceptable.

More generally, we consider the fact that the Commission is undertaking this type of approach for the future to be very serious, since we shall have to bear the cost of these new responsibilities from structural funds. And we cannot expect to pay for the Balkans, for example, in a structural and lasting way by means of enlargement, etc. No, we cannot get out of it that way. You cannot get the foot of Charlemagne' s mother, Berthe au grand pied (Berthe Big-Foot), into Cinderella' s slipper. It is just not possible. You have to make the shoe bigger, to take into account the needs we must fund.
This is the situation as we see it. We are waiting for the Commission to make a statement on this point. The PDB obviously did not take some items of expenditure into account, but it was very clear. All we want to know now is whether the Commission is going to defend it. I should warn you, Commissioner, of a proposal which may be made to substantially reduce your own PDB, for it would be a serious matter if the Commission were not even to defend its own policy. We would be in a situation even more paradoxical than I am willing to accept, setting up Parliament as defender of the Commission' s preliminary draft budget, replacing the Commission as guardian of the major policies decided by the European Union. I should warn you on this point. It would be a serious matter.
What is Parliament' s response? It is quite simple. It rejects this attitude. It considers, on the one hand, that it is necessary to face up to the new priorities. There are essentially two of these. Firstly, administratively, it is necessary to deal with the consequences of the institutional crisis which we experienced last winter. This entails active support, and even an active demand for administrative reform addressed to the Commission. All the measures relating to TAOs have that objective, in the same way as all the appropriations for OLAF. The call for the creation of a new administrative instrument, a sort of executive agency or decentralised executive unit, fulfils a real need. We have initiated contacts with the Commission which seem to be productive. We have heard the words, we are now waiting for the deeds.
Internationally, our second priority is effectively to finance, by some means, the main priorities: Kosovo with up to EUR 500 million, the agreement on Morocco with up to EUR 125 million, the programmes for Turkey and Timor with up to EUR 50 and EUR 30 million. In this regard, we have voted on an amendment which corresponds to a serious political commitment from this Parliament, even if we vote it before Category 4, which means that it does not to date have the status of an amendment, but it does constitute a commitment on the part of this House to vote in these appropriations at second reading, especially regarding the Morocco agreement which is one of Parliament' s political priorities.
The second approach adopted by the European Parliament is not to sacrifice our traditional priorities. This is why we have rejected en masse all the across-the-board cuts proposed by the Council and we consider that we must face up to requirements in the areas of redevelopment, development, international development, social actions and environmental policy. We must face up to all these expenses with great energy and we must not accept their being sacrificed.
Just now, I left out one essential point, research, within the framework of administrative reform. We are waiting to formalise in writing and give concrete expression to the agreement which is in the pipeline between Commission and Parliament in order to guarantee better budgetary use of the appropriations under this sub-section.
We are therefore facing up to the new priorities but we are not sacrificing our traditional priorities. Thirdly, this requires us, and this is the essence of the problem, to respect fully the terms of the interinstitutional agreement, but in a dynamic fashion. We are respecting this agreement. We are respecting all the ceilings in all the categories and we are even leaving substantial margins in some of them, such as Category 1B on rural development. But we want a dynamic interpretation, in accordance with what has been said and, in particular, we want an ongoing structural review of Category 4, rather than an annual review. There are new expenses which must be funded. These expenses are not just for one year, they are ongoing expenses. This must be translated into a net increase in the appropriations allocated to Category 4 for the entire period and not just for the budget for the year 2000. This is a demand which Parliament is making and I would like to see it taken fully into account by the Commission and by the Council.
What is the way out of this situation? The Council still has time to think and a choice of means. There is the time to think as we are to meet on 25 November, Saint Catherine' s Day. There is a French saying "A la Sainte-Catherine, tout arbre prend racine" (on Saint Catherine' s Day, every tree takes root), so I hope that the budget tree will take root. As for the choice of means, Madam President, you and your colleagues have to choose, for I know that you cannot do everything, and I am sorry for this, between two avenues. One alternative is to review the Financial Perspective of Category 4 which will make it possible for us to vote in this budget by facing up to the new priorities in accordance with the commitments undertaken at the time of negotiating this agreement. If you do not want to go down this road, Parliament shall then be forced to resort to the strict application of Article 272 of the Treaty, and to assume the powers, which it is entitled to do, regarding both commitments and payments, and to vote for appropriations which match up to the level of the commitments which are the political commitments of the European Union and in strict observance of the Treaty. Madam President, the ball is in your court.
(Applause)

Virrankoski
Mr President, the 'EU budget for the year 2000 - other sections' , which we are considering, follows the rigorous policy of recent years. The budget for institutions other than the Commission and the Council for the year 2000 will be EUR 1.286 billion. The increase is EUR 44 million, or 3.5%. The margin for manoeuvre calculated from Category 5, as referred to in the Financial Perspective, is EUR 135 million.
This draft budget focuses mainly on rental arrangements and renovation solutions for the places of work of the institutions. The intention is for the Economic and Social Committee and the Committee of the Regions to move into Belliard buildings I and II once they have been vacated by Parliament and renovated. The joint organisational structure for these committees will be accommodated in the Bertha von Suttner Building, the former Montoyer building. The rented premises that have been in use until now will be given up. For these solutions to be successful, seamless cooperation is required on all sides.
The budget provides for new posts to be created at both Parliament and the Economic and Social Committee to render the administration of the buildings more efficient. One condition of adequate administration, however, is that the division of labour and of responsibility of both Parliament and the Economic and Social Committee be clarified both interinstitutionally and with regard to the individuals involved. This division of responsibility must be considered a pre-condition of the project' s success. There are two reserves attached to the buildings, which are still in the budget. A reserve of EUR 7.4 million has been entered in Parliament' s expenditure for the rental of the Belliard buildings, as the rental agreement between the owner and the Economic and Social Committee and the Committee of the Regions is still under discussion. If the rental agreement is finalised before the end of the year, the amount mentioned will be deducted from Parliament' s budget, as the European Parliament budget is, at present, 20.11% of Category 5, whereas Parliament has itself declared a ceiling of 20%.
There are two reasons why this ceiling has been exceeded. The first is the double budgeting relating to rents, as explained above. The other reason is the reserve related to the Statute for Members. In the spring a reserve of EUR 60 million was included in the parliamentary budget for remuneration related to the Statute for Members. Parliament has demanded that Members' remuneration be paid from parliamentary funds, and the Council has supported this initiative. Because at present it is the Member States that pay the salaries of MEPs, this will mean that the payments are transferred from the Member States to the European Union. It is quite natural to suppose that a new expenditure item of this kind, which at the same time would diminish Member States' costs, cannot be included under the ceiling for formerly approved expenditure. If we take these two expenditure items into account, Parliament' s share of Category 5 would be 18.97%, which is in line with the principles of budgetary discipline.
Another priority of this draft budget is increasing the resources of the Court of Justice of the European Union, especially their translation resources. According to the Council' s proposal, the Committee on Budgets has recommended that altogether thirty new translator' s posts be established, and that a substantial appropriation be earmarked for paying freelance translators. As appropriations have been proposed for improvements to the electronic office, the Court of Justice can expect a clear increase in resources. After this, we expect that the Court of Justice will be able to cope better with its workload, reduce the number of documents left untranslated, and serve Member States, citizens and businesses better in the interpretation and application of European law. Parliament has both the right and the obligation to demand clear results.
Discussion of this year' s budget made it clearer than ever that there is a need to move towards activity based budgeting. The institutions have an abundance of staff, and it is to the benefit of all that they be used efficiently. The present administrative model, however, gives cause for criticism. The institutions seem extremely interested in inventing new requirements and job descriptions, so as to be able to justify their ever-growing need for staff. It is very difficult for Parliament, as a decision-making authority, to scrutinise the chart of its own four thousand strong organisation and draw conclusions as to what new posts are needed for what jobs.
Every Member State, however, has had to radically reorganise personnel structures. Jobs have been reallocated, as have posts and staff. That is why in many cases the establishment of new posts is no longer the responsibility of the budgetary authorities. The budgetary authorities only allocate appropriations to the institutions. There are two advantages to this. Firstly, the overall work of an institution is seen clearly, which means that there is less danger of getting swamped in details. The work of the institutions can be assessed more clearly, on the basis of results, and can be better managed. On the other hand, comprehensive budgeting also makes it possible to clarify and increase personal responsibility. This encourages better and more efficient work, as everyone can find a way to work more effectively and use resources sparingly where the need is greatest. It is high time the European Union switched to activity based budgeting, result-oriented management, delegated power and responsibility downwards, and clarified personal responsibilities. We must require managers and heads of department to bear the responsibility for their own areas of revenue, and for their development and improvement.
Finally, I would like to thank all those who helped me to prepare this report. I would especially like to thank the Chairman of the Committee on Budgets, Terence Wynn, who has given me his support in so many ways, both in practical negotiations and at meetings of the Committee on Budgets, and in personal discussions. At the same time I wish to thank the main rapporteur, Jean-Louis Bourlanges, with whom I have enjoyed seamless and smooth cooperation. I would also like to thank all the coordinators, especially Reimer Böge of the European People' s Party and Ralf Walter of the Party of European Socialists for their constructive and pertinent cooperation. Finally, I wish to thank my own group for their unreserved support in every respect, as well as the secretaries and employees who were involved in the project.

Pittella
Mr President, as we all know, the European Coal and Steel Community was the first institutional body. The structure of Europe was gradually built up around it, and in recent years it has provided substantial assistance, in terms of both social aid and research to coal and steel firms. The approach of the expiry of the ECSC Treaty in 2002 presents Parliament with some significant decisions to make. In terms of budgetary decisions, how should the concluding stages of the Treaty be managed? Even after 2002, will adequate attention be given to the firms and workers in the sector? What bridging measures between the ECSC budget and the Union' s general budget can be devised to facilitate the transition to new procedures for access to financing for potential beneficiaries? The Committee on Budgets invites Parliament to give a clear answer to these three questions, mindful of its prerogatives and eager to make the most of the experience gained so far under the Treaty, through dialogue with the Council and the Commission, which we hope will be positive.
The Committee on Budgets - and I thank all my colleagues, from the chairman to all the group representatives for their participation - unanimously proposes the following recommendations:
1. to reinstate the amounts laid down in the 1999 budget. 2. to redistribute the allocations to the coal and steel sectors according to needs, and in particular, to increase social aid in the coal sector, and research funding in the steel sector;
3. to ask for additional appropriations to be allocated to finance measures to promote health and safety in coal mines, and to ensure the development of clean technologies and of products with a high added value, in the steel sector;
4. with enlargement in mind, to ask for part of the PHARE programme appropriations to be earmarked for activities connected with the steel and coal sectors of the applicant countries;
5. to reiterate clearly the request for a reduction in administrative expenditure, as the sum calculated 19 years ago is clearly excessive for current requirements, and to carry out an assessment of real staffing requirements in light of the Union' s current and future political priorities in this sector;
6. to insist that the research fund for coal and steel, which will receive the interest from the reserves and provisions determined by the balance sheet is managed by a specific structure - be it a foundation or an agency, according to the wishes already expressed by Parliament - in order to guarantee a degree of visibility of the activities in the coal and steel sectors and to ensure that the representatives of both sides of industry will be fully involved in the use and planning of this fund;
7. to reaffirm that the transfer of the ECSC assets to the general budget will entail a budget entry against both revenue lines and expenditure lines and will therefore necessitate a technical adjustment of the current Financial Perspective;
8. to provide for 'bridging' pilot projects between the ECSC budget and the general budget in order to facilitate the transition between the activities financed by the ECSC and the Union' s programmes, in particular as far as structural funds and research are concerned. The Commission will have to give the greatest importance to the actions for which adequate instruments at Community level have not yet been provided.
Mr President, ladies and gentlemen, on the basis of this comprehensive outline, may I ask Parliament for a vote which is as extensive and united as possible. This would certainly give more weight to our decisions.

Siimes
Mr President, Members of the European Parliament, the discussion of the budget for the year 2000 has progressed significantly since I presented the Council' s draft budget here in Parliament on 14 September. Today, I have heard detailed perspectives and justifications regarding the content of Budget 2000, with particular reference to the European Parliament. The Union appears to need diverse resources, and the most essential questions are gradually beginning to be resolved. With the new trialogue practice, we have been able to discuss many major problems in a positive spirit. The speeches that have been made here indicate clearly the main priority of Budget 2000. It stresses particularly the many current challenges presented by Category 4 on external action, which call for joint solutions by the budgetary authorities.
First, I will speak generally about the budget, on the basis of contributions from various quarters, and I shall return, at the end of my speech, to the Kosovo or Category 4 issue. First, I would like to comment on the compulsory agricultural expenditure, that is to say, Subsection B-1. The view of the Council is that the Commission' s proposal overestimates requirements for the year 2000. Therefore the Council in its own deliberations reduced this item by EUR 375 million. Overestimation by the Commission has been the regular practice throughout the 1990s. That was also shown in this year' s figures. The same can be said with regard to subsection B-1 on rural development action. In matters of appropriations relating to structural operations, the difference between the Council and Parliament concentrate on two areas: firstly, the size of the advance payment in respect of new structural operation payments, and, secondly, the timetable for attending to old, unpaid, committed funds. I believe that both matters are purely technical. Setting the advance payment at 3.5%, instead of the 4% proposed by the Commission does not require amendments to the legal effect measures. Neither does it in any way affect the total amount of new Structural Funds that Member States will be receiving over the period 2000-2001. As regards old, unpaid commitments, it is necessary to take account of the new spending criteria the Commission has just announced. In addition, we should note that the level of expenditure proposed by the Commission - 48% -clearly exceeds the 45% held to be the basis of the European Council' s own decisions at Berlin.
In internal policies, there are many problems that are presently being discussed in the codecision procedure. It is important that the budgetary authorities respect the ceilings for expenditure adopted in the interinstitutional agreement. This will require even more effective coordination.
There is significant pressure to develop administration in the Union. The new Commission has promised to issue a report on administrative development in February 2000. We can all agree that only on the basis of the Commission' s views can we comprehensively evaluate the need for human resources. As the OLAF commences its work, we should set great store by the qualitative aspects of this work. Regarding the importance of pension funds stressed by Parliament, we must also expect a comprehensive report from the Commission on, inter alia, reform of the acts on human resources, and other concrete proposals. Regarding the so-called BAT issue, or the issue of technical assistance offices, perhaps the time is not yet ripe to conduct such a laborious reform as Parliament is proposing in the budget for the year 2000.
Funding for action in Kosovo and in connection with other external relations will be a challenge for the Union in terms of budgetary procedure and financing. It is noteworthy that the direct financing needs of the Kosovo area are considered to be mainly covered. This was established at the first donor conference in July. The budgetary authorities should now wait for the final, reliable, assessment of needs, which, in my opinion, cannot be expected until next year. The Council, for its part, is committed to attending to the financing needs occasioned by the earthquake in Turkey with the help of a loan from the EIB, macro-financing aid, and the funds targeted at the MEDA programme. This being the case, perhaps there will be no need for a separate financing programme for Turkey. As for East Timor, aid has been channelled there via ECHO. The donor conference on East Timor is to be held in November, so more detailed assessments will be available only later.
As I mentioned earlier, Kosovo has become the main priority of the budgetary procedure for 2000. For this reason, the Council has demonstrated flexibility in its own procedures, resulting in a reallocation of appropriations in the draft budget for the reconstruction of Kosovo. It would seem appropriate to reallocate appropriations of humanitarian aid for Kosovo, especially as a large number of refugees have now returned to Kosovo, and to a certain extent humanitarian aid in Kosovo would seem to be the first step on the road to reconstruction, offering people at least shelter for the winter. For other budget headings that concern external action under Category 4 of the Financial Perspective, fixed-rate reductions for appropriations granted are a means of preventing hurried decisions to amend the excessiveness threshold of this Category. The reason, as I said, is that there do not yet exist any assessments of the genuine reconstruction requirements.
With regard to the concern expressed by Parliament regarding the possible consequences that might result from the reallocation of appropriations under Category 4 regarding Union aid for the least developed countries, we should not forget that, by virtue of the Lomé Convention, the European Development Fund channels EU aid to many of the countries in question. The European Development Fund is not included in the general budget for the European Union: the Member States contribute directly to it and it has its own internal financing rules. Thus, the reallocation of funds for the reconstruction of Kosovo did not affect the European Development Fund. Subsection B7 of the budget is only partly aimed at the poorest countries, and the fixed-rate reduction thus harms countries other than just the poorest. In the sitting of the Budget Committee on 16 July, the reallocation of appropriations for Kosovo was discussed, and it was stated that the Commission should not burden the least developed countries and poorest groups. Furthermore, we were reminded of the Commission' s commitment to an international development strategy, whose purpose it is to halve world poverty by the year 2015.
I have noted that the European Parliament also intends to propose appropriations that exceed the excessiveness threshold under Category 4 of the Financial Perspective, so that funds would be allocated to finance operations in East Timor and Turkey and to adopt the new fisheries agreement with Morocco. On this matter, I would like to make the following observations. The Council is also very worried about the situation in East Timor, but until now no precise assessments of the amount of aid needed there have been presented. The consequences of the Turkish earthquake have required our assistance already this year. This assistance was provided for in the supplementary and amending budget no. 4/1999. It is, however, too early to determine the total amount of aid appropriations required for the year 2000. Appropriations to fund action in Turkey and East Timor should also be found within the framework of the excessiveness threshold under Category 4 of the Financial Perspective determined at Berlin. The Council, furthermore, has accepted that the Commission be empowered to negotiate a fisheries agreement with Morocco. The outcome of these talks is not yet known. I might, however, remind everyone that, in adopting the draft budget, the Council has also reallocated some Category 4 appropriations in order to create a reserve for the funds required under the new agreement.
Finally, I will briefly comment on the overall increase in the budget and the frameworks for drafting it. On the basis of votes taken by Parliament' s Committee on Budgets, the payment appropriations would increase by over 6%. The corresponding figure in the Council' s draft budget is 2.8%. We have a responsibility to European taxpayers. It should be clear that Union expenditure should comply with the call for budgetary discipline and cost-effectiveness. The Union budget should observe the same degree of rigour as those of the Member States.
At the start, I emphasised the need for a swift response from the budgetary authorities in ever-changing circumstances. I believe that the new interinstitutional agreement also contains sufficient means to deal with unforeseen needs. The spirit of the new agreement is clear: we cannot right away rely on the new funds for aid that exceed the total sum in the financial framework. Let this also serve as a basis for adopting the budget for the year 2000.
I believe that, through sound cooperation among the institutions, we will successfully steer home the decision-making process with regard to the draft budget for 2000. I would like to thank the President and the Members of Parliament.

Schreyer
Mr President, ladies and gentlemen, the budget is the political programme cast in figures; this is the short-and-sweet summary normally used to explain the budget plan. Although many decisions are taken at European level which are not directly reflected in the European Union budget, nevertheless Budget 2000 is a crucial and defining basis for many areas of European policy in the coming year.
Since the drawing up of the preliminary draft budget in the spring there have been important events which could not have been anticipated at the time but which will and must be reflected in Budget 2000. Most importantly, this year we have had to experience a war on European soil necessitated by the most atrocious violations of human rights and by a policy of expulsion and ethnic cleansing on the part of the Milosevic regime; a policy which could not be tolerated by a democratic Europe and by a democratic international community committed to human rights.
Europe at the close of the 20th century must not accommodate any policy of expulsion, or indeed murder of minorities. The European Union has assumed the responsibility for financing reconstruction in Kosovo, where it is not just a matter of reconstructing bridges, schools and the technical infrastructure, but rather the total reconstruction of a democratic and peaceful civilian society in the region. I am glad, therefore, that there is absolute consensus, absolute agreement between Parliament, the Council and the Commission, on making available in the EU budget the necessary funds for Kosovo.
I think it is worth stressing the point that everyone is aware of the responsibility and stands by the commitment to finance the reconstruction of Kosovo. The preliminary draft budget of the Commission from April of this year provides for a total of EUR 92.8 billion for all expenditure commitments which may be entered into during the coming year and EUR 89.6 billion for payments. However, as I have already said, this preliminary draft budget of the Commission does not take into account Kosovo, East Timor, Turkey and the fisheries agreement with Morocco.
The Council draft reckons with EUR 92.4 billion for commitments and EUR 87.9 billion for payments and the amendments adopted by the European Parliament Committee on Budgets give overall commitments of EUR 93.4 billion and payments of EUR 90.8 billion. Then in addition there are the funds needed for Kosovo, East Timor, Turkey and the fisheries agreement. I would like to add that there are a further EUR 15 million to be financed in the budget 2000 (directly, i.e. not from the development fund) as a contribution by the European Union to debt redemption initiatives for the poorest countries.
I have given these aggregate figures for four reasons. Firstly: for all three sets of figures in question, i.e. those of the Commission in its preliminary draft, of the Council and of Parliament, the expenditure to be appropriated for the year 2000 in fact exceeds the totals for this year. The reason for this, which must be stressed, is as follows: the necessary payments, e.g. for structural operations in particular, are increasing next year due to the commitments from previous years and the Commission fully agrees with Parliament that it is not right in these instances to appropriate lower amounts than the standing commitments require. That would be a dubious policy.
Secondly: in all three sets of figures some of the appropriations for commitments which may be newly entered into are, conversely, far below the corresponding amounts for this year even though, for example, the appropriations for pre-accession aid, i.e. in the case of the funds which are being allocated to the applicant countries, show a large increase. In short (and I would like to say this in reply to the speech of the Council also) this means that budgetary discipline is not just required of the Member States, but is clearly also being exercised at European level.
Thirdly: the aggregate figures also show, however, that ideas on budgetary appropriations, in particular those of the Council and Parliament, are still far removed from one another and, consequently, intensive debates lie before us in the coming weeks. Fourthly: the aggregate figures are, of course, also an indication of the work which has been carried out by the committees, in particular by the rapporteurs, and, on behalf of the Commission, I would therefore like to thank Mr Virrankoski for his report on the individual plans of Parliament, the Council, the Court of Justice, the Court of Auditors, the Economic and Social Committee and the Committee of the Regions, Mr Pittella for his report on the operating budget of the European Coal and Steel Community and particularly Mr Bourlanges for his report, which again shows him to be an excellent rapporteur and a master of highly sophisticated proposals.
Besides budgetary appropriation levels, the report deals with important issues of budgetary economy and administration.
I would like to mention the issue of the TAO, i.e. the issue of when external offices should be brought in to help. Mr Bourlanges, you quite rightly point out that this is not just a matter of better supervision and better contracts, although these are important issues, but also of the basic questions: "what should be handled by the public administration and what can be done and under what conditions by private enterprise? Therefore, these questions obviously concern the entire Commission staff. The new Commission has been able to meet the initial staffing requirements for the newly established Directorates-General through restructuring. However, the total staffing requirement now obviously depends on the institutional reforms for which the Commission will submit a blueprint, a proposal, in February.
I hope that in the coming weeks we will be able to bring the proposals in the report into line with the Commission' s schedule for reforms.
Regarding the OLAF staff, the Commission will incorporate into its letter of amendment the proposal of the Committee on Budgetary Control and the Committee on Budgets to provide 75 new jobs next year.
A brief word on agriculture. The Commission fully agrees with Parliament that the second pillar, the measures for rural development, presents a great opportunity, in particular for agro-ecological development. It will therefore propose in its letter of amendment, an appropriation increase which, although lower than that of Parliament, is nevertheless considerable. The Commission will also take account of the request to provide funds in the budget for the fisheries agreement with Morocco.
We are agreed that Budget 2000 should ensure EUR 500 million in commitment appropriations to finance the reconstruction of Kosovo. The Council decided at the first reading to finance an across-the-board cut in the appropriations for external action. You have made it known as a parliament that you consider this course to be untenable. The Commission has authorised me to inform you that the Commission will propose another course which will take account of both the ideas on policy prioritisation and the ideas on budgetary discipline. The Commission proposes financing the necessary funds firstly by making adjustments within the external action Category, secondly by using the smaller part of the flexibility reserve and thirdly by making adjustments between policy areas, which will entail a change in the Financial Perspective. This is a course which was established in the joint agreement, the interinstitutional agreement between Parliament, the Council and the Commission, in May of this year.
European taxpayers would, I believe, not understand it if we simply requested additional funds to finance work in Kosovo without taking the difficult course of prioritisation, which means in practice reallocating funds.
On the other hand, the increasing tasks of the Union in external action will also need to be reflected in the structure of the budget. The budget should be an expression of political tasks and priorities, which ultimately means an increase in the external action Category.
I hope that, on the basis of preliminary work carried out by all institutions and, in particular, the reports of Parliament before us, we will reach agreement on Budget 2000 through a positive, open debating process which befits the major political responsibility we have for European policy.

Titley
Mr President, I should like to extend our congratulations to the rapporteur, Mr Bourlanges, and to the Chairman of the Committee on Budgets, Mr Wynn, on the way these proceedings have been conducted.
Regretfully I cannot offer congratulations to the Council for their part in this process. The message the Foreign Affairs Committee has taken from the Council is that they believe we can only pay for Kosovo by taking money out of the hands of those who are even worse off than those in Kosovo. We want to rob the very poor in order to pay the slightly less poor. We want Africa to pay for the Balkans. I do not believe that is the message the EU should be sending out to the rest of the world.
To find the EUR 500 million for Kosovo the Council has proposed an across-the-board cut of 10% in Category 4. Some cuts are even worse. For humanitarian aid, line B7-21, they are proposing a 20% cut. They are cutting EUR 70 million from NOVA: in other words, a 40% cut in assistance to Bosnia, so Bosnia has to pay for Kosovo. We are cutting support for the Middle East peace process just at the time where there is hope for a long-term solution to that process. What sort of political message is the European Union sending out about its commitment to that process?
Of course there has to be financial responsibility and we have to set priorities, but a 10% cut across the board is not a proper setting of priorities. It is an exercise in indifference and irresponsibility. No wonder the EU' s reputation at the moment is not very high with the public.
There are two other areas that the Foreign Affairs Committee would like to draw your attention to. First, we would like to see proper funding for the Royaumont Process, particularly ensuring that it is a Pillar I activity, not a Pillar II activity. Hence we propose that we should set up a line on the Stability Pact and take some money away from the Meda line in order to pay for it.
Finally, we would also like your support for the conflict prevention network, set up as a result of Parliament' s work, particularly the work of Mr Rocard. Now that we have a similar organisation in the Council its work is even more important. I would urge your support for increased funding.
I urge that financial prudence is not made an excuse to drive more people down into poverty.

Morgan
Mr President, I would like to thank the Budget Committee and Mr Bourlanges for their work. I am grateful to the commitment that they have shown in the fight against fraud in the European Union and, in particular, with the extra commitment they have made - an extra EUR 9 million has been voted by the Budget Committee for OLAF. This will allow for the creation of an extra 50 to 75 new posts in the year 2000 on top of the 30 new posts voted for in the supplementary and amending budgets.
I should remind you that OLAF needs 300 posts to carry out its duties. This was endorsed by the report of the Committee of Independent Experts. Let us not forget that there are raised expectations in terms of the public' s attitude towards reform of the European institutions. It is essential that OLAF is given the appropriate resources. I should like to remind the Commission that we will not allow OLAF' s independence to be compromised by budgetary gains - a little note there for the future. I am disappointed that the Council Presidency has not referred to this. Are you committed to the extra 75 posts or not? I would be grateful for some kind of feedback on that. You need to show the same commitment to fighting fraud as we are within the European Parliament.
Another issue for the Budgetary Control Committee is the use of technical assistance agencies. In its budget guidelines for the year 2000, Parliament called for the phasing out of the agencies. And for the Commission to provide it with an assessment of its staffing needs. That has not been done. The Budget Committee has entered expenditure on logistical support and technical assistance in a separate section, with 90% of those appropriations in reserve. The Budgetary Control Committee would support this approach. It is absolutely right that those appropriations should not be released until the Commission has defined those categories of tasks that need to be outsourced. We look forward to receiving that information from the Commission.
On another matter, in 1999 there have been large under-spends in the Community initiatives, the cohesion fund and many other areas. In some cases this is the second or third consecutive year when there has been a large transfer away from particular lines. This demonstrates the need for Parliament to monitor budget implementation more closely throughout the year. The subject committees must take more responsibility for monitoring the budget lines within those areas. If we do that then we can feed that into the budgetary process and make sure that we are more on track during the course of the year.

Deprez
Mr President, ladies and gentlemen, I would like to join the two previous speakers in expressing my thanks and praise for the work done by the general rapporteur and the Committee on Budgets.
As regards Budget 2000, the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs was working towards four objectives. The first of these objectives was to align the budgetary nomenclature with the priorities defined by the Treaty of Amsterdam and, in particular, the fact that henceforth the creation of an area of freedom, security and justice is one of the fundamental objectives of the Union. This is the reason why we proposed, with the support of the Committee on Budgets in this matter, to gather all the policies and budget lines relating to the creation of this area of freedom, security and justice under a single title comprising five chapters corresponding to the main policies dedicated to the establishment of the area of freedom, security and justice.
As our second objective, we wished to rationalise and restructure the budgetary instruments in the sector of asylum and immigration policy. When drawing up the budget for 1999, we managed to create the European Fund for Refugees. Unfortunately, following events in Kosovo, the Council was forced to mobilise virtually all these resources in order to deal with the emergency situation in Kosovo and in the Member States.
This is the reason why the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs has proposed that, henceforth, in the area of asylum and immigration policy, there should be two budgetary instruments: firstly, a European Refugee Fund intended to finance by structural means the necessary measures relating to the reception, integration and voluntary repatriation of refugees in the event of a normal flow of refugees, and secondly, a second budget line with the objective of making it possible to take emergency measures in the event of a mass influx of refugees. Indeed, with this, we anticipated the request of the European Council at Tampere, as the Council considered it appropriate to envisage creating a financial reserve, in some form or another, intended to offer temporary protection in the event of a mass influx of refugees. Mr President, this instrument is something we have already proposed.
Our third objective was to strengthen resources in the area of the fight against crime, and our fourth objective was a budget line making it possible to undertake measures within the framework of the Commission Action Plan 2000-2004 for combating drugs trafficking.

Katiforis
Mr President, the first reading of the budget by Parliament, which we have been following today will, as always, have a significant impact on the policy of the European Union, of which Economic and Monetary Union forms a part. The budget contains internal policy lines concerning the Prince programme. This programme covers the public information campaign with regard to the euro which was, is and should be a priority for the European Union.
The Committee on Economic and Monetary Affairs (ECON) believes that this endeavour should continue to be a vital policy priority and that a great deal of work is still required before the banknotes and coins can go into circulation throughout the European Union. That is why we support and welcome wholeheartedly the proposals tabled by the Committee on Budgets for an increase in the Prince budget. ECON also believes that funding measures in the field of taxation should be an absolute priority as it is still an area which displays some irregularities in the internal market, and as a consequence, budget line B5-3001 for the completion and development of the internal market should be kept at the level proposed by the Commission in its draft budget. ECON also endorses the amounts recommended in the draft budget as regards the Fiscalis programme in line B5-305. This ensures stricter coordination of the current taxation system. The committee also believes that the provision of quality statistical information should be a priority for the Union, particularly now that Economic and Monetary Union has been introduced in the euro area and we have prospects for a further enlargement of the Union. Therefore, line B5-600 on statistical information should continue to be funded.
Finally, speaking as a member of the Greek delegation, I would like to express my regret at the European institutions for not yet coming up with an appropriate legal basis to enable us to provide assistance to a particular Member State recently struck by natural disasters. There is no such legal basis in the budget and I believe this to be a serious oversight. As in the case of Greece, and in other cases, this shows a lack of sensitivity towards our fellow human beings who are victims of such accidents and to whom we should show at least some generosity.

Rothley
Mr President, with all due respect to the rapporteurs, the Committee on Budgets will not take seriously the fact that the Committee on Legal Affairs and the Internal Market is applauding it for its work! The Committee on Budgets has let down the European Court of Justice, as has the Council! I know that in the political process law is frequently considered irritating. However, to disregard in such a way the work of the European Court of Justice on European integration and legal protection of the individual is verging on scandalous!
The question arises as to what role a specialised committee should continue to play when the Committee on Budgets, in a generous gesture, simply sweeps all the carefully considered, moderate proposals from the table? So what role should specialised committees continue to play? I fear that legal protection in this European Union will continue to be limited. It is all too clear who is responsible for this. We should not expose ourselves to the danger of limiting legal protection in the European Union, not least when we constantly talk of wanting to create an area of freedom, security and justice.

McNally
Mr President, I took over the job of committee draftsman following the heart attack of Mr Desama who was originally to have done the work for the committee. We hope he will soon be back with us.
My thanks and congratulations to Mr Bourlanges for his painstaking work on behalf of the Members of Parliament. The Committee on Industry covers 120 budget lines - so you can see our task is fairly complex! We cover the energy programmes, those relating to industry, including small and medium firms, the research programmes under the framework programmes which of course amount to more or less 60% of the internal policy expenditure of the European Union, and the trade and technical assistance lines.
As far as the energy lines are concerned, we were sorry that the Committee on Budgets did not follow our line in increasing the expenditure for Altener and Save. Those are renewable energy and energy efficiency programmes currently in conciliation. If we get, as expected, an increase as a result of conciliation more money will, of course, be asked for next year.
As far as research is concerned, and after very many long discussions with Mr Bourlanges, I am interested to know what he intends to do. We, in the Industry Committee, do not want the research programmes broken down into dozens and dozens of lines, one for each key action. But we do want to monitor each key action. I think we have reached an agreement with the Commission that information will be provided to us at intervals and in a form that allows us to monitor that spending in the way we want to.
I am also sorry that the Committee on Budgets did not approve moving the training of the nuclear inspectorate in the former Soviet Union from the external policy to the energy line where that training could be done far more efficiently. We have made this argument very clearly and we will make it again.
As far as monitoring is concerned, we intend in our committee to take one member responsible for monitoring each of the 120 lines. They will be expected to follow the spending, to look at the way the projects are organised, to visit the projects and to be in a position to let us know how things are going.

Hughes
Mr President, I would like to thank my colleagues on the Budget Committee and the Budget rapporteur in particular for the good cooperation we have had with them in this first reading. That is code for saying that the employment committee got pretty much what it was looking for in this first reading and I am grateful for that.
Others have referred to the Structural Funds. We are broadly happy with the fact that the Budget Committee agreed with our recommendations, so I would like to look instead at a number of subcategories of lines. One that is important to the Employment Committee is that of Social Dialogue. There we have ended up with EUR 4.5 million more than the European Commission were looking for initially. That I think is more in line with the tasks that we are facing in that important area and it includes appropriations to involve representatives from accession countries in Central and Eastern Europe which we think is very important. We have less than we wanted on B3-4003. That is a cause of disappointment because it is an important area with the expected implementation of the European company statute and, we hope, progress on the general framework for information and consultation of expenditure. We are happy that what we were looking for in relation to NGOs has been agreed in the first reading. This, we think, is a very important area - the idea of developing civil dialogue. I am particularly pleased that funding will continue for the NGO platform which I think is an important part of developing civil dialogue.
Employment, of course, is one of the most important issues from the point of view of the Employment Committee. And here, with budget lines B5-502 and B5-503, we have combined some EUR 24 million more than the Commission' s original proposals. We think that is an excellent outcome. We are looking to implementing the employment chapter from Amsterdam and making progress in relation to the macroeconomic dialogue agreed at Cologne. We are therefore grateful that we have the funding to move those important issues forward. Two slight problems in conclusion, President. One is that we still have no enduring legal base for NGOs. I hope the Commission and the Council will make progress on that, otherwise the civil dialogue will end at the end of next year. That would be catastrophic.
The other difficulty relates to technical assistance and the funds that have been transferred into the reserve. I hope that the Commissioner for Social Affairs will act quickly to provide the information necessary to release 50% at second reading.

Bowe
Mr President, firstly I congratulate the rapporteur of the Committee on Budgets on the work he has done this year. I also thank Mr Wynn for the cheerful way in which he conducts the Budget Committee, a new experience for me. The rapporteur has done very well given the constraints he has been under this year. Whilst the budget lines under the responsibility of the Committee of the Environment, Public Health and Consumer Policy are not great in monetary terms, they play a vital role in facilitating the development of the Union' s policies, and particularly in bringing closer to the Union and realising the needs and desires of the ordinary citizens.
The Budgets Committee rapporteur has acknowledged a number of points we have made and has enabled us to maintain spending in most areas and develop it modestly in one or two. I cannot thank the Council in the same way when I examine their PDB. They have to give greater priority to the interests and needs of citizens.
Utilising the amounts determined last year through the conciliation on the Whitehead report, the consumer affairs budget lines will continue to build confidence amongst the public, reassuring them that we are not just a Europe open for business but are also campaigning for citizens' rights as consumers. The additional monies granted for the additional posts in the Veterinary Health Office in Dublin will reassure our citizens that we are taking steps to protect the quality and safety of the food on their plates. The new health responsibilities put into the Amsterdam Treaty can be developed using the additional monies granted on the health budget line. I particularly welcome the possibility of developing new strategies for dealing with mental health problems and neurodegenerative diseases such as Alzheimer' s and CJD. Equally, as we come to the end of the fifth action plan on the environment, the monies available to begin development of the sixth action plan are most welcome.
If I have a disappointment, it concerns the rapporteur' s approach to the various agencies of the Union, set up by the Commission. I was the only draftsman, along with Mr Bourlanges, to meet the representatives of the agencies and I heard good arguments for increasing monies available to those agencies for the work they are doing with the applicant states of Eastern and Central Europe and for bringing on to the market orphan drugs that are so vital for a relatively small number of people with diseases difficult to treat. I feel that perhaps more consideration could have been given to the arguments they made. I am very disappointed the rapporteur of the Budgets Committee did not accept the validity of the arguments as I have done. I can only hope that in the following years we can address the problems they have identified.

Görlach
Mr President, ladies and gentlemen, relations between the Committee on Agriculture and Rural Development and the Committee on Budgets were always tense during preliminary work on the budget. That is clear and, given that the greater part of the budget falls within the agricultural sector, it was only to be expected. Which is why it is particularly pleasing that, on this occasion, we can state that cooperation has been a whole lot better than in the past. This is in no small measure owing to the committee chairpersons and, above all, the rapporteur, Mr Bourlanges, but also, it should be added, to senior members of all groups.
Nevertheless, not all the wishes of the Committee on Agriculture and Rural Development would manage a majority today; we know that. All the same, we place particular importance on not accepting the Council proposals for across-the-board cuts and, above all, on providing for a moderate increase in veterinary and plant health expenditure and in sales promotion. Veterinary and plant health expenditure is not just agricultural expenditure, but also expenditure in terms of sensible, forward-looking consumer protection.
The new second pillar in the matter of rural development is, of course, a special concern of the Committee. Here we simply cannot understand the reservation of the Council. We are pleased that, in its letter of amendment, the Commission opposes Parliament' s position. The multifunctional tasks of agriculture relating to food, maintaining the countryside, nature conservation and tourism as a job sector of the future which will expand rather than diminish are a major concern for the whole Parliament.
The Council really must accept that, in future, changes will be made to agricultural sector expenditure across the individual blocks of which it is made up. But that must not lead to us pursuing the cheap option and imagining that we can simply free up money for other policy areas by making across-the-board cuts in the agricultural sector, which not only covers expenditure on farmers but also that on all rural matters.
It should be noted that recent years have seen a convergence of Parliament and the Commission in this sector. The previous lack of vision on the part of the Council must give way to a more realistic approach, not least with a view to what the future holds for us in terms of the powers of Parliament, also where the budget is concerned.

Langenhagen
draftsman of the opinion of the Committee asked for an opinion, the Committee on Fisheries. (DE) Mr President, Commissioner, ladies and gentlemen, the Committee on Fisheries has studied in detail the figures in the budget relating to fisheries. The debate was tense and lively. There were many differences of opinion, firstly on FIFG, secondly on support for the common European fisheries policy by the Council and the Member States, above all in relation to international fisheries agreements such as the most recent one with Morocco, and thirdly on relations between the EU and other international organisations.
We appeal for the European Parliament at least to try to maintain the level of appropriations allocated to the common fisheries policy in recent financial years. On my initiative, we in the Committee have drafted three amendments which have all recently been adopted either directly or indirectly by the Committee on Budgets. In particular, the Committee on Fisheries is concerned about line B2-901 concerning supervision and monitoring measures by the Member States, line B2-903 concerning support for the common European fisheries policy and line B7-8000 concerning international fisheries agreements.
The budgetary policy variously affects the three following core issues. Firstly: structural operations. At the Berlin Summit, EUR 161 million were earmarked for regions outside Objective 1 areas. That is a truly considerable amount, yet the commitment and payment appropriations increased in 1998 and 1999 and might, in all probability, increase further.
Secondly: the draft budget does not allocate sufficient money for the implementation of an effective supervision and monitoring policy. In 1999 alone, the Member States applied for more money than was available in the EU budgets. This explains why the Committee on Fisheries applied for an additional sum of EUR 2 million. At the same time, we are understandably reassured by the fact that there is sustainable management of resources, systematic recording of basic data and an intensification of dialogue with the industry. Accordingly, the Committee on Fisheries then made this application a high budgetary priority.
The third matter is obviously Morocco. We welcome the negotiating mandate which the Council has finally awarded. Finally, I would like to point out that the common fisheries policy - but I do not really need to tell you that - requires major support by the Community. I do not just mean financial support. We are facing major challenges. We must all make it perfectly clear that that the EU, which constitutes a superpower in the fisheries sector, is prepared to stand up for an industry which concerns numerous regions, States and citizens of the Union. The number and quality of jobs is of significant added value to the EU and, as we all know, also plays a crucial role in enlargement.

Watts
Mr President, on behalf of the Committee on Regional Policy and Transport and Tourism I would like to endorse warmly the approach adopted by the general rapporteur, Mr Bourlanges. In particular I would like to thank him for the attention he has paid to liaising with my committee over recent months and our predecessors in the past year.
My committee has advanced five budget priorities: Objective 1, 2, Interreg, transport safety and sustainable mobility. I will deal with the regional policy priorities first. I agree with the general rapporteur' s comment that the cuts to Structural Fund appropriations are completely unacceptable. So what are the cuts proposed by the Council? The Council is proposing that the payment appropriations are cut by EUR 433 million for Objective 1, EUR 95 million for Objective 2 and EUR 33 million for Interreg. This Parliament enthusiastically endorsed the Agenda 2000 Structural Fund programme. We expect the new Structural Fund programmes to be launched in the coming year with a flying start. This simply will not be possible if these cuts proceed. The Council is advocating a reduction in advance payments to new programmes to just 3.5%. In contrast, this Parliament has previously considered that advance payments at the time of first commitment should be in excess of 10% of total funds.
In our view, if these cuts proceed regional regeneration will be put at risk. Existing programmes will stall before they are transformed into new programmes. Momentum will be lost. Inevitably the poorest communities in the poorest regions will suffer the most. The bottom line is that new jobs will not be created and existing jobs will be put at risk.
My committee has proposed 100% restoration of these three budget lines to the level of the provisional draft budget. This EUR 561 million increase in Structural Fund appropriations will allow us to honour properly historic commitments and ensure the new Agenda 2000 programmes hit the ground running. We also endorse, incidentally, the proposed 20% entry into reserve pending the successful outcome of our discussions over the guidelines.
I will now turn briefly if I may to transport and just say to members that I hope they are able to support the Committee on Budgets' moves to restore the cuts to the transport safety line and the cuts to the line on sustainable mobility.
I would like to conclude by thanking all my colleagues on the committee for the support they have given me through this budget process.

Perry
Mr President, this is the third occasion I have been asked to be draftsman for the Committee on Culture, Youth, Education, the Media and Sport. It is not an easy job, there is never enough money, but it is one I would rather do than be the general budget rapporteur. I would like to add my thanks to those already expressed to Mr Bourlanges for the support he has shown to the Culture Committee.
Culture has not come out of the budget process as well as it wished, but we are doing rather better than the Council of Ministers' proposal and have figures close to the 1999 level.
Our main education programme, Socrates, and the programmes of Youth and Culture have been mauled by the Council of Ministers. I would say that the EUR 238 million proposed for Socrates is simply not enough to do a sensible job. Last week I met the Committee of British University Vice-Chancellors. They told me that no-one - student or university - gets involved in Socrates because of the money. They do it because they believe in Europe and they want to make the single market work. But we have to ask ourselves, are the figures now so low as to make the objectives unrealistic? Let us hope that the conciliation procedure taking place tomorrow will recognise the need to give a higher priority to Europe' s students and increase the funding.
The total for our share of the budget is approximately EUR 600 million, a lot of money until you divide it by 370 million people - less than 1% of our budget, not a bottomless pit. In the year 2000, the EU will spend less than EUR 2 per citizen on education, encouraging young people to participate in exchange programmes or to acquire knowledge of different languages and cultures, on informing its citizens about the future developments of the Union while supporting our audio-visual industry. Of this scant EUR 2 support for Europe' s cultural heritage will be less than 20 cents. The call for the millennium must be EUR 1 per head on Europe' s culture.
What we are currently engaged in is tokenism and symbolic expenditure only. Even there we manage to get it wrong. I do not criticise individual staff, but I receive too many complaints from prestigious organisations like the European Youth Orchestra, the European Youth Parliament, the Yehudi Menuhin Foundation - renowned organisations doing a wonderful job for Europe and our young people. Not one of those organisations covered by budget lines 3021 or B3-2005 has received a single euro yet in 1999 for their budgets. Can we make the millennium the year when our systems work. Mr Prodi, Mrs Reding and Mrs Schreyer, we are relying on you to do it better this coming year.
I will finish by telling you a story. I live in a small village in Hampshire with a population of 2 500 people. My wife is the chairman of the parish council. I asked her what she spends on cultural, sports and social activities for the village. They spend EUR 50 000, or EUR 20 per head. So if anybody comes to me for European support, I tell them they are much more likely to get realistic support from their village council than they are from the EU.

Carlotti
Mr President, the budget debate is always a key moment to express one' s political will. For the European Union, it represents the opportunity to reassert its firm moral duty to extend a helping hand to the developing world; the opportunity to show how much we wish to combat poverty, injustice, discrimination of all kinds, the lack of democracy, violation of human rights and attacks on freedom. In short, it is the opportunity to show our determination to pursue our development policy, even if we must review it here and there in order to make it more efficient and more transparent.
From this point of view, the draft budget for the year 2000 gives rise to serious concern. In saying that, I am of course referring to Category 4, which Mr Bourlanges has just discussed at length. In addition to the fact that first the Commission and then the Council have proposed very significant reductions in all the budget lines concerned, we now have to respond to a great number of tragic situations throughout the world. We have to respond to the tragic situation of the Kosovar people and commit considerable resources to the reconstruction of the country. But we must do this by freeing up new appropriations and not by amputating all the Category 4 lines by approximately 10%. We cannot make the very poorest people pay for the operations of the European Union. We cannot set the poor of one country against the poor of another country or distinguish between good victims and bad victims, and I am very sorry that the Council to some extent presented the problem in these terms, by setting different cases of poverty against each other. We need sufficient appropriations to finance reconstruction in Kosovo, of course, but also for East Timor. And, believe me, ECHO appropriations will not be enough to fund everything, no more than transferring appropriations from one line to the next according to current priorities. We also have to finance the fisheries agreement with Morocco, which is a priority for the European Parliament.
We must therefore invite the Council to review the Financial Perspective for our external policies in Category 4. I believe that Parliament is fairly unanimous on this point. I must also thank, on behalf of the Committee on Development and Cooperation, both the general rapporteur for the budget, Mr Bourlanges, and the Committee on Budgets, as well as its chairman, Mr Wynn, for the stance they have taken on this matter. Nonetheless, on behalf of the Committee on Development and Cooperation, we have decided to submit three amendments. The first involves the question of gender. Throughout Africa, women are taking action; they are the driving force, the hope of Africa for the next millennium, and we must support this movement. The second amendment concerns the lines of health, reproduction, and the fight against AIDS, which we propose to merge. This merging must not, however, be grounds for a reduction in appropriations. Twenty-five million people in Africa are going to die of AIDS, twenty-five million potential patients, nine tenths of whom, due to lack of scanning and lack of sex education, are unaware of the danger lurking in their body. AIDS will be the next tragedy in Africa.
The third amendment which we wish to submit concerns line B7-6000 on the Community contribution to the operations of NGOs. The draft budget envisages a drastic reduction in the appropriations allocated to this line. Mr Bourlanges proposed instead to increase them, and I thank him for this. What we propose is to amend the wording. This is an amendment which does not have financial implications but which is going to enable the Liaison Committee ...
(The President cut the speaker off)

Klaß
Mr President, Madam President-in-Office of the Council, Commissioner Schreyer, ladies and gentlemen, according to an ancient Chinese proverb 'women are half of Heaven' and it is only right that in the European Union women should also be involved in the budget in the same proportion. Perhaps that is why the Committee on Women 's Rights and Equal Opportunities is the last in the series of Committees to be heard this morning.
We in the Committee on Women 's Rights and Equal Opportunities have few priorities: firstly, actions specific to women and, secondly, gender mainstreaming in all Community policies. The Fourth Action Programme for Equal Opportunities expires at the end of the year 2000 and I would like to remind Commissioner Diamantopoulou of the promise which she made to the Committee to submit as soon as possible a proposal for continuing this programme so that the Fifth Action Programme can follow on seamlessly.
DAPHNE, the programme for combating violence against children, youths and women, must pass through the second reading as quickly as possible in order to retain here also continuity with the promotion period which is expiring. The Committee on Women' s Rights and Equal Opportunities is asking here for a broad interpretation of the term "health" which covers not just physical but also mental and social well-being. The Community initiative NOW is expiring and therefore funds must be made available in the new Community initiative EQUAL specifically for promoting women. The labour market, education and training are key areas for the active promotion of women and accompanying measures, e.g. support for dependants, play a major role for women in particular and help to make access to the labour market easier.
Unfortunately it is still the case that in the European Union, we need special promotional opportunities for women also. The same also applies to public relations work and the information society where we should direct our attention to women in the applicant countries in particular. The funds for the European Women' s Lobby, which also represents the interests of women in Europe, must also be made available in Budget 2000. Europe is facing up to its responsibility in development policy and therefore the funds here must not be cut under any circumstances. It makes sense to group together the budget lines B7-631 and B7-6211 into a single line. But this must then be allocated the corresponding monies.
Family planning and health care for mothers and children are among the most important principles of population policy. Here, women are a key factor which we must use to lead developing countries out of poverty. The involvement of women in social, economic and political life must be expanded. By purposefully promoting women within population and development policy, we can help to produce a stable social background, to modify existing structures and to develop new structures. The Committee on Women' s Rights and Equal Opportunities is proposing only a few amendments and I would invite you to support them.

Böge
Mr President, firstly, on behalf of my group I would like in particular to warmly thank the two general rapporteurs for the correct points of focus and the correct strategy which they have developed.
If in a public debate concerning budgetary reorganisation and savings measures we advocate a limited revision of the Financial Perspective, we are doing this as a Parliament with a clear conscience because in the past, we have always maintained that Parliament was able to responsibly set the necessary European political priorities whilst striving for greater efficiency and transparency in the budgetary procedure.
Of course, it is not a matter of financing new political needs simply by increasing funds. But, on the other hand, current development makes it clear that parts of the Berlin Agreement were not quite so prudent and forward-looking and that there is a need here for further improvement.
I would like to address the following comments to the Council and the Council Presidency: you do not need to remind us that we have a responsibility to the European taxpayer and that we too have a responsibility to exercise budgetary discipline. I would much prefer it if in the future the Council did its share of the homework rather better. It really was scandalous that the Council recommended to Parliament granting discharge of the budgets for 1996 and 1997 to the Commission. Since a major part of the Community budget is handled by the Member States, I would recommend that, in the interests of good housekeeping, the Council pay attention in this matter to efficiency, transparency and tidy implementation so that the Commission is not forced in future to repeatedly resort to the funds of the charging procedure. If this part of the job is done, then the Council can feel free to make new proposals to Parliament on how we should conduct ourselves in matters of budgetary procedure.
I am very grateful to Commissioner Schreyer that she opposed the figures. What was the preliminary draft? What proposals did the Council lay on the table? How is this to be assessed in connection with the ceilings on financial expenditure on which we jointly agreed? We certainly do not want to use up the margins which, in terms of the 1.27% of the gross national product of the Member States, now comprise EUR 9-10 billion. But I would also like to say very clearly that there are international commitments which we have undertaken towards developing countries, towards third countries, which cannot simply be cut across-the-board by 10%! That is visionless and politically indefensible. That is nothing but bookkeeping! The Council really should distance itself from this!
In this regard, I would also like to make clear that it is not just a matter of setting in motion the necessary priorities for external action, such as the reconstruction of Kosovo, but, so that it is reasonably organised and initiated, the Council must also meet Parliament halfway in the matter of how we should organise this aid and how the future reconstruction agency for Kosovo should really operate? I believe that here also the Council must compromise with Parliament.
The rapporteur correctly pinpointed the problems of the Technical Assistance Offices. We are prepared to give the Commission the necessary funds for administrative expenditure and the management of all these projects if in return Parliament is involved in the deliberations on reform. I believe that we can have good dialogue here.
I would also like to take up what my Mr Perry said: multiannual programmes such as SOCRATES and LIFE are indeed programmes which the citizens outside expect from us and here also we should provide the quality and the necessary funds as a contribution to European development, the European integration process.
The Commission has taken a first step towards Parliament in the form of the comments of Mrs Schreyer that we should strive for reallocation, the use of a smaller portion of the flexibility reserve and possibly an amendment to the Financial Perspective. This is a first step but, where cuts are concerned, there is an onus on the Commission and the Council to provide evidence line-by-line, whether it is genuinely the case that funds are not being drained away, or whether the intention is to block the politically desired priorities of Parliament. The onus is on you. Then we can have various debates. I believe that we still have a lot to do before December, before the second reading. Parliament is agreed: we need a limited revision of the Financial Perspective so that, unlike this year, we do not need to again crib our way through x number of different supplementary and amending budgets!

Walter
Mr President, Commissioner, Madam President-in-Office of the Council, firstly, Mr Böge, a minor correction: I would like to thank the three rapporteurs, not two. Mr Pittella also submitted an extremely important report to us; I would therefore like to thank the three rapporteurs for the genuinely constructive cooperation which has accompanied the budgetary procedure this year. I must also thank all those who have approached us from the individual committees with their requests and who, in the majority of cases, in the vast majority of cases, have shown a great deal of understanding for the fact that in a limited framework much is desirable but not everything is possible.
We are dealing here with monies which are of course limited, and indeed limited with our approval, but which must reflect the tasks which we have carried out at European level. The European Union budget for the year 2000 is a special budget, not just because it was initiated by the old Parliament, but because there was also a binding interinstitutional agreement which we adopted at the same time and which has had to be continued after the re-election. It is this interinstitutional agreement which restricts us, but which has also opened up additional opportunities for us; I shall come back to this.
Thirdly, Budget 2000 is noteworthy because this year we are entering the period of the next Financial Perspective, which runs to 2006, and today we must put down important markers for the coming years. Fourthly, following the Treaty of Amsterdam, the European Union is in a situation of facing many new challenges, for example in matters of internal policies, the area of freedom, security and justice, the employment chapter or increased opportunities in health protection and even consumer protection.
However, additional tasks also require that we make available the necessary funds, since otherwise it is nothing more than lip service and budgets should not be mere lip service. We must, therefore, clearly define our priorities and make it very clear what they are. We have done this in the past and will do it in the future. Turning to the President-in-Office of the Council, I must say: obviously for us this is about people, people in the form of the taxpayer who must raise what we spend here, but also the people to whom the money must be made available, for whom we are deciding policies. We are not making policies as a game between the Commission, the Council and Parliament for our own benefit, but in order to create the best possible conditions for the development of the European Union and for the people with whom we are dealing.
In the past we have placed great importance on the citizens being able to verify that we ensure careful handling of our taxes. In terms of appropriations which concern commitment appropriations, Budget 2000 is lower than the budget 1999. Just go to the finance ministers in your Member States and tell them that they must submit a budget plan which is lower than the plan for the previous year. I would like to see that. That is the first thing we must get on top of. Here we are acting accordingly and anyone should be aware of this if they come to us and say that we only want increases. That is not the case. We handle the money very, very carefully.
However, because we are working with and on behalf of people, one of our particular tasks is Category 4, external action. Here the Council has actually come up and said: we want to finance an important future task and an important current task which must be spread over the coming years, i.e. aid for the people of Kosovo. To finance that we are carrying out a 10% cut in all lines.
Mr Böge said that this is visionless and this is a neat term. Are you aware, for example, that in these lines we must then cut by 10% financial aid for Israel and the Palestinian people, i.e. the aid for establishing peace in the region? Are you aware that we must cut by 10% population programmes and funds for combating the scourge of AIDS in developing countries? Are you aware that tackling anti-personnel mines, which is also in our budget lines, will have to be cut by 10%, or that we must cut by 10% measures by non-governmental organisations in developing countries, e.g. for street children in Guatemala or in other regions of the world because we do not want to have any vision, because we do not want to take a close look at where these funds ought to come from? This cannot be the policy which we want to pursue. An across-the-board cut with the lawnmower is indefensible and, therefore, we must and will fight it and we will cite Category 4 as part of the interinstitutional agreement. Although it is difficult, we will observe the other parts of the interinstitutional agreement.
We also have problems with other categories, e.g. Category 3, which contains the traditional focal points of our policy: environmental policy, youth training programmes, research and trans-European networks with their possibilities for creating jobs and improving our competitiveness in global dealings. Here also things are very tight because we are outlining ever more tasks but are not getting the necessary funds. We are shifting tasks from national to European level, expressis verbis, but then we are not getting the appropriate financial resources. This cannot be a sound policy. We need to discuss this. All the same, within this Category we will not endeavour to increase the funds.
Within the interinstitutional agreement, we have established that, in future, agricultural policy too can be definitively co-decided by us. In future, we cannot just promote the production of individual products, but the development of rural areas. This is an extremely important matter for us, and finally, allow me to say something on staffing policy. In this too we have acted extremely responsibly, as in previous years. Except in two central areas, we have not provided for additional jobs. OLAF must be strengthened, whilst the second area concerns veterinary protection and food controls, where we have made a very modest increase of five staff. This much we owe to the people, who demand that we ensure that they have safe food to eat. These, in brief, are the focal points.
(The President cut the speaker off)

Mulder
Mr President, I too would like to begin by thanking the three rapporteurs for leaving no stone unturned in their work. I would particularly like to thank Mr Bourlanges. I have often noticed that it takes him less than 15 minutes for him to win various people over with his eloquence. We adopted the Financial Perspective in May this year and it is a shame that we did not manage an absolute majority. We managed an ordinary majority. But at least we managed some kind of majority and so I think we should respect the Perspective.
My group believes that we should in fact do this as often as we possibly can. There is one category in which this it is difficult to do so and I intend to take this up again at a later stage. It is Category 4. In broad terms, I would like to lend firm support to the position adopted by the rapporteur where his policy on TAOs, the Technical Assistance Offices, is concerned. If we look at the events of the past year we have no choice but to make this issue as transparent as possible. We must know what concerns the public sector and what concerns the private sector.
Let us just go through the various categories. Firstly, Category 1: agriculture. For around three years now we have had a new procedure for this: the ad hoc procedure. We are due to receive a report from the Commission at the end of this week containing the most recent estimates of how much agriculture will cost in the year 2000. I have no idea how the Council is able to determine where cutbacks can be made as early as July. A percentage cut in agricultural expenditure in all the lines is out of the question. It simply cannot be done. We must wait to see what the estimates are and after next week we will be in a position to talk about what exactly it is that agriculture needs. I feel that the course of action taken by the Council is very much against the spirit of the agreement.
As far as the innovations in agricultural expenditure are concerned, Category 1B, we firmly endorse those amendments that say that we must do something about the nitrate problem in Europe. We also feel that something must be done in terms of a quality-control policy for European agricultural products. Exactly one year ago a report on this was unanimously adopted in this Parliament and it happens to be the case that I was the author of it.
As far as Category 2 is concerned, we believe that the payment appropriations must reflect actual needs and I think that we need to have another exchange of ideas on the subject.
Category 4 is something my group has discussed intensively and indeed it continues to do so. I believe that I can put the rapporteur' s mind at rest. A majority of people supports his position. The majority of people believe that it will not do to make cuts in funds for other countries that need help. We must pay this money. The same group of people feels that Kosovo is part of Europe and ought to be given priority. Turkey must be helped and East Timor must be helped. There is also another group of people, probably a minority - and the rapporteur will not be surprised to hear that I am one of them - that believes that the figures need to be scrutinised once again. Can Kosovo really absorb the 500 million when its gross national product is between EUR 800 million and EUR 1 billion? I would be pleased to have another look at exactly how this has been calculated some time. I also feel that as much attention as possible must be given in the coming months to seeing if we can still solve the problem.
I would now like to say something about expenditure on administration. We consider it to be essential that the rapporteur and the rapporteur for the year 2001 get down some time to answering the question as to what exactly comes under part A of the budget and what comes under part B. Turning now to Category A-30 in particular: when can an aid organisation call upon EEC funding? The criteria for this are far too opaque to our mind. What does have a bearing on expenditure on administration? We hear this day in day out and many of us are uncomfortable with it. The proportion of elderly people within society continues to increase. The pension problem in Europe must be given serious consideration at some stage. I too believe that this will be a fine task for the Commission to attend to.
The phase we are about to enter between first and second reading will be particularly interesting this time round. I feel we must carefully examine all the headings once again for whichever way you look at it, a rigorous budget is what we need at this moment in time and that is what we are all going to have to strive for.

Buitenweg
Three rapporteurs and many draftsmen of opinions. Mr President, on behalf of the Green Group I would like to say how obliged I am to them for their endeavours, which have resulted in the piles of reports that I have here before me. Unfortunately I am only in a position to single out a few points and I intend to start with expenditure in the field of external action, since it is this area that is at the heart of this discussion on the budget.
I share the rapporteur' s disapproval of the European Commission' s proposal to organise development cooperation under geographical headings from now on and to reduce thematic budget headings. It is by using the horizontal approach that we are in fact able to boost precisely those activities relating to subjects which we make our political priority: human rights, the environment and emancipation for example. Four years after reproductive rights were fought for at the United Nations conference in Beijing, the European budget heading on this is being torpedoed. I am very pleased that the rapporteur still put this right in his report. What is a pity is that this subject is going to be added to the budget heading on AIDS. Condoms seem to me to be a common denominator but there are also other aspects to the right of women to self-determination over their bodies.
I fully support what the rapporteur has to say on financing the reconstruction of Kosovo. Minister Siimes reminded us of our obligations to the taxpayer and that the money must be spent wisely. I think that is precisely our point. The Kosovo pot is being filled at present by means of an across-the-board cut of 10% in expenditure on external action. This drip-feed method is, in every respect, a short-sighted approach of the kind used in accountancy and does not testify to a serious weighing up of priorities. The question that needs to be asked most is whether or not this amendment to an EU external policy area will also have its advantages in the long term. Mr Walter has already mentioned a number of examples. There will be less money for the peace process in the Middle East; less money for projects aimed at reintegrating demobilised soldiers into society. The lesson Kosovo has to teach us is not being taken to heart. There is less money being invested in conflict prevention. My group therefore believes that the reconstruction of Kosovo should be financed by raising the ceiling on Category 4.
The financial assistance for East Timor and Turkey will, however, be more limited in scope. I agree with Mr Mulder that there is a case here for looking at the possibility as to whether the money can be found in the existing budget. This will certainly mean setting priorities, and that being the case, using the European budget to subsidise large enterprises' exports will not be one of my first priorities. It may also be possible to create some room for manoeuvre - and that is perhaps something for discussion with the Council - by taking the EUR 89 million destined for humanitarian activities in Kosovo out of the humanitarian aid pot and carry it over to the total financial package for the region. These differences must not, however, be allowed to conceal - and I said earlier that I share the rapporteur' s opinion - the fact that more money must be made available for external policy because it is unacceptable to allow Kosovo to suffer on account of the developing countries.
Another major point of discussion in the Committee on Budgets was the subsidising of non-governmental organisations. Budget heading 3021 - Mr Perry has already made reference to this too - contains a list of organisations awarded a precise amount. I do not intend to call the work of these organisations into question here, but I do feel that it is appalling that Parliament is going to have to be drafted in where the granting of individual subsidies is concerned. It is understandable though, from the point of view of the organisations concerned, for the Commission is failing badly in its tasks if organisations have to wait a year and a half for subsidies to be awarded or if criteria are changed in the meantime. The amount of red tape involved has to be seen to be believed. That is precisely what puts a brake on initiatives from EU citizens. The reform of the Commission is therefore also going to have to play its part in improving service provision by ensuring that money is spent efficiently, in a transparent manner, and also in accordance with the political choices of the budgetary authorities. That is not to say that the choices made by the budgetary authority itself are always rational. The cultivation and export of tobacco is being subsidised to the value of almost EUR 1 billion for example. In addition, we spend several millions a year on informing people about the negative consequences of smoking tobacco. How can we still justify this? Accordingly, my group proposes that we should reduce this tobacco subsidy by 10%.
My final point, Mr President, relates to the Members' voluntary pension scheme. This became the talk of the town because the affiliated Members were receiving extra pensions from European resources through this arrangement. This will all be gone into at length during the negotiations on the Statute and I will not attempt to prejudge any decision on this at this early stage. What I do want us to achieve in the course of these negotiations is to see the pension fund become independent of Parliament, both in terms of its administrative and political structure.

Wurtz
Mr President, Madam President-in-Office of the Council, Commissioner, any budget is the expression of political choices par excellence. From this point of view, I think there is a singular contradiction between piling on the tasks assigned to the European Union, while subtracting the resources necessary to fulfil these tasks. The iron logic of the budgetary Stability Pact does not go at all well with the ambition for a Europe of greater social justice and greater solidarity.
Let me sum up as follows for the benefit of the uninitiated, by which I mean our fellow citizens, in order to make explicit the main themes of the draft budget submitted to us by the Council of Ministers. Agricultural expenditure: a systematic 10% cut of all the credit lines in relation to the Commission' s preliminary draft budget, without even examining the specific requirements, case by case. Structural Funds: appreciable reduction in the regional aid appropriations. Internal policies, that is, excluding research and networks, all policies supporting employment, youth, training, the environment, culture: a reduction of nearly 18% in relation to our current budget. External policies, especially in the area of cooperation with the countries of the South: the chop. Examples have been given already, but let me add: food aid down by 9% in relation to the present, cooperation with Africa down by 12% and aid to NGOs down by 35%.
This choice is completely unacceptable in the opinion of my group. The reason put forward to attempt to justify these swinging cuts is the unexpected appearance of new priorities, which are incidentally perfectly legitimate, such as aid for the reconstruction of Kosovo, our contribution to the construction of East Timor now that it has been liberated, our solidarity with the earthquake victims in Turkey and financing of a fisheries agreement with Morocco.
This argument is inadmissible, in my opinion. It is not acceptable to rob Peter to pay Paul. While my group is by no means arguing in favour of recklessly increasing Union expenditures, we still think it necessary, if the need arises, as is clearly the case, to utilise the margin for the increase in expenditure which is authorised under the agreements signed between the Member States themselves. Yet, as a percentage of the gross domestic product of the Union, the volume of the Council' s draft budget is less than that of the Commission' s preliminary draft budget, which was already less than that of the Berlin Agreement which in turn was less than the ceiling set by the Edinburgh Agreements. Where is it all going to end? We have to know what we really want to achieve and allocate appropriate resources, within reason.
This is why my group is requesting, within the limits envisaged under the agreements signed by the Member States themselves, a review of the Financial Perspective for all the items I have just mentioned. And, Monsieur Bourlanges, since he who can do more can do less, we are at all events supporting the rapporteur' s proposal for the review of the Financial Perspective for external policies.
In addition, I would like to draw the attention of my fellow Members to some amendments proposed by my group in favour of a study on the application of the Tobin tax in support of the world cultural heritage classified by UNESCO within the countries of the Union, in favour of a freeze on aid to Turkey, excluding, of course, aid to the earthquake victims, until the Turkish authorities change their attitude to the Kurdish people, on the question of Cyprus and on the subject of human rights in general.
Finally, we urgently demand that the appropriations allocated in the 1999 budget to the European Women's Lobby, which unites 1400 women' s organisations and which performs work of a high quality, are renewed in their entirety in the 2000 budget. As you can see, these are common sense proposals on which all progressive Members of Parliament, and even others, can and should agree.

Kuntz
Mr President, the budgetary procedure for the year 2000 is henceforth included within the strict financial framework with the regulated expenditure for the period 2000-2006, as accepted by this House in the interinstitutional agreement. If the same stringency in budgetary matters prevails as much at the level of the States as in the Union, here it is chiefly a response to the demands of some Member States, and we know that the first victim of this stringency will be the common agricultural policy. A gradual decrease of expenditure is being organised deliberately, to the detriment of farmers.
As regards the Structural Funds, European regional policy has become a real handicap for France, contrary to the myth complacently propounded by some, including, alas, the current Commissioner responsible for regional policy.
On the subject of foreign policy, we are of course in favour of the fisheries agreement with Morocco, an essential agreement in European-Mediterranean relations, which are too often neglected by the Union. We are also in favour of financial support for East Timor and of aid for Turkey in the aftermath of the earthquakes. As for aid for Kosovo, let us one last time deplore the bombing of a European State by the countries of the Union. Yesterday we bombed the Balkans and today we must help to reconstruct the region and re-establish peace, but this means re-establishing peace for everyone, including the Kosovo Serbs. We can indeed clearly see what this increase in the total appropriation for foreign policy actions foreshadows. The austerity that the Financial Perspective herald will in fact be a sort of selective austerity: foreign policy rather than agricultural policy. The significant weakening of agricultural policy and the dubious regional policy are elements that our group could not possibly accept. And if there were further need, paragraph 20 of Mr Bourlanges' resolution, which considers the distinction between compulsory expenditure and non-compulsory expenditure to be seriously anachronistic, would be sufficient to justify our rejection of the budget.

Van Dam
Mr President, last May this Parliament endorsed the financial framework for the period 2000-2006. That implied a readiness to observe the necessary budgetary discipline. We must assess Budget 2000 against this background.
The rapporteur proposes that we should go way beyond the ceiling on expenditure on external action. He is playing for high stakes in so doing; seeing as this will only unsettle matters where the interinstitutional agreement is concerned. Financing important priorities such as Kosovo and East Timor is now becoming dependent on a political game that Parliament and the Council are playing over the Financial Perspective. Moreover, what credibility can a Parliament have when it wants to renegotiate the financial ceiling that it itself agreed with such a short time ago?
It is far too early to call upon Article 19 of the interinstitutional agreement. We must first look seriously at the various possibilities for financing these new priorities within the present framework. I am thinking, for example, of those areas where there was underspending in 1999 and of the possibility of making cutbacks in programmes with low expenditure figures such as MEDA.
Next a few words about the Structural Funds. The current problems with the payment appropriations are evidence of the fact that the budget for the Structural Funds has been pegged at too high a level in the past. The rapporteur proposes to incorporate 50% of outstanding payments into Budget 2000. I am very apprehensive about this enforced increase in the appropriations. Can such an amount be absorbed and is the Commission capable of managing this extra money effectively?
I cannot support those who are in favour of incorporating the resources of the European Central Bank into the European Union' s budget. After all, this would mean the budgetary authority gaining control over the European Central Bank' s capital, which would jeopardise the independence that the ECB needs to have. Furthermore, the European Union is not a shareholder of the European Central Bank. Any distribution of profits would then go not to the EU but to the national central banks.
We are amazed to see an amendment to the effect that the Commission is attempting to draw up a statute for European political parties. Only parties matching up to this blueprint would be considered for financial assistance. There is no way that we can go along with this attempt at centralism. Drawing up a statute of this kind is a matter for the political parties themselves in the first instance. Moreover, the party organisations reflect national cultures and diversity. Any attempts to squeeze the political parties into a European straitjacket will only serve to widen the gulf between Brussels and the citizens of Europe.
On a final note, the Virrankoski report contains the umpteenth declaration of intent to revise the regulations governing travel cost reimbursement on the basis of costs actually incurred. But are we not getting to the point when it is time to convert words into deeds? Our group put forward an amendment aimed at achieving this but the Committee on Budgets rejected it. That was a lost opportunity and it sends out the wrong signal to the citizens of Europe.

Dell' Alba
Mr President, I would first like to congratulate the rapporteur and, with a great deal of respect for the work he has done, thank him very sincerely for this draft budget which is courageous and innovative in many aspects. The rapporteur is to be praised for having achieved it by means of a budgetary procedure which has run its course with the utmost smoothness, even if Parliament is in the process of issuing a major challenge to the Council - a challenge which, in my opinion, is worth accepting. I am referring, obviously, to the Financial Perspective and the need for Europe to prove itself worthy of the role it wishes to play in the world, without making an over-complicated issue of the budget of the Union.
In 1999 we had a budget - I say this to the ladies and gentlemen of the Council in particular, I am reminding you of this because it is a matter which affects us all - in 1999, Commissioner, we had a budget of EUR 96 billion. This year, a milestone year, what with the war in Kosovo, the events in East Timor, the earthquakes in Turkey and the commitments of a Union that wishes to take on more responsibility in the international arena, the Council is proposing a budget of EUR 92 billion, that is, EUR 4 billion less than the budget for the previous year.
The Edinburgh perspectives set us an ever higher ceiling and the Council gives us an ever more limited budget, meaning that it will be necessary to cut back on actions in the field of development, for example, or human rights and many other actions, in order to finance the priorities which have been set, and it is not our fault if Europe is the great paymaster of foreign policy. We shall be responsible for the payments, while other people are responsible for the policy, and I hope that this is going to change.
Parliament will therefore do well, on Thursday, to ask you to go beyond these Financial Perspective. Do we wish to finance reconstruction in Kosovo? Fine. Do we wish to assist the integration of Turkey, including by subsidising its immediate dramatic needs? Do we have a new nation emerging into the international arena after all these massacres which have taken place? Then, let us finance these policies, for heaven' s sake. We have an interinstitutional agreement that allows us, if exceptional events require, to go beyond the Financial Perspective, so why not do it? That would be EUR 1.5 billion more. It will still be less than the 1999 budget, but I think that the citizens of Europe will clearly see that this endeavour is not only logical, but also perfectly feasible at the level of the budgets of our Member States. We would therefore do well to proceed in this way and I think that Parliament should follow through and, if necessary, demand that we have recourse to the former Article 203 of the budget.
A brief word on TAOs. There too I think we are demonstrating great pragmatism. I thank the rapporteur very much. We have an interim solution which, I think, will enable us, by means of dialogue with the Commission, to find an agreement on a definitive solution. I am pointing out this pragmatic aspect of our report for the year 2000 and I would compare it to policies which were rather more extremist in which a clean sweep was made of mini-budgets and then one found oneself with one or two thousand TAOs which could not be managed because the project had been axed in the meantime without any thought as to the consequences.
So, I congratulate the rapporteur. As regards political parties, may I say that, frankly, asking the Commission to lay down the status of political parties - I am referring to the contribution of the last speaker - is neither fair nor worthy.

Elles
Mr President, like others who have already participated in this debate I should like to congratulate the rapporteurs, but in particular Mr Bourlanges. In his opening remarks, he clarified for us the perspective for the 2000 budget in putting forward the idea that we have to have more programmes, we have to have more countries and we have to have less money. There seems to be a contradiction here which, in the longer term when we come to enlargement, when we come to a new intergovernmental conference, we are quite clearly going to have to resolve in the context of our budget procedures.
For my part, I would like to focus my remarks on three aspects which concern the running of European policies and the attitudes which we have taken in Parliament in previous years to these aspects. This is in the particular context of the Commission. We, as a parliament, want to make sure that accountability is seen to work for those who elected us and to make sure that we have value for money in the running of the programmes.
The first item in internal policy refers to information policy. In the last Parliament we wanted to make sure that we had proper functioning interinstitutional cooperation. We made progress in that respect by making sure that in terms of the general information lines, in terms of the specific campaigns, we had good cooperation on both sides. But we did not arrive at a common framework for this interinstitutional cooperation as we in Parliament had wanted.
There is some degree of concern at some of the initial moves the Commission is now making in its information structures which we in Parliament will keep a close eye on. In particular, we had asked in the last Parliament, and indeed in previous Parliaments, for the Commission and Parliament offices to work closely together in the Member States. I have put down an amendment, our group has put down an amendment, to make sure that we can have a report from the Commission on how far this has gone. There are still one or two countries where the Commission and Parliament are separate in terms of structure and we need to be particularly vigilant in instances where more than 75 or 80% of the appropriations go into paying for salaries and buildings rather than adequate information policies.
Secondly, in terms of external policy, particularly in terms of Kosovo, the hearing we organised a few days ago with the Committee on Foreign Affairs and the Committee on Budgets, was very revealing to me, in particular the fact that this is not a short-term commitment. We had evidence from Mr Bildt, Mr Kouchner, Mr Hombach and then from all the other agencies, that this is a long-term problem we have in front of us. We must, therefore, make sure not only that we get proper coherence between the agencies working on the ground but also Madam President-of-the Council, that we do not take decisions which mean that we are spending money futilely because of a Council decision that we must have some people removed some 100 miles away in another place. We must make sure that when we come to Mrs Pack' s report later this week we take the right decisions and that the Council understands Parliament' s feelings on that.
In the longer term, we must ensure that we have vision and - as you said Commissioner - we need to have the idea of building civil society in the longer term, not just as some kind of short-term project. Kosovo and stability in the Balkans must be a long-term project. It is us, as Europeans, who have to take that responsibility. We cannot expect others to take on that particular responsibility for us. I therefore welcome the idea of a working committee between the Committee on Foreign Affairs and the Committee on Budgets. We must make sure not only that funds are properly spent but that the ideas which are coming through are properly coordinated.
Lastly, in terms of administration policy, there are the Technical Assistance Offices. I would underline what Mr Böge said to the Council. The Council has been absent from this debate on discharge. With nonchalant ease, they have gone through approving the 1996, the 1997 discharge, and it has been up to us in Parliament to press for change at every turn. Therefore in terms of EU reform we are right, as a parliament, to say that we do not wish to see new posts until we know where the posts are going. What are the real needs of the Commission?
Secondly, we are right to say that we should not have Technical Assistance Offices performing tasks through temporary officials in what are meant to be permanent posts for the Commission. We must find some way of having a dialogue between the institutions over the next 12 months to make sure that these reforms take place and that we have the right kind of criteria for making sure that we are getting value for money from the staff. Otherwise - and I will end on this proposal: we must start cutting programmes if we do not have the proper staff resources available to run them, because ultimately we must make sure that these processes are accountable and we must make sure that we get value for money in the system.

Martin, David
Mr President, I speak on behalf of the Socialist Group in relation to the Virrankoski report. Firstly, I would like to congratulate the rapporteur on a very good approach to this issue and to say that the Socialist Group broadly agrees with the matters he has raised.
On the issue of staffing, which affects all the institutions, we take the view that we have to find a balance between financial prudence and the ability of the institutions to do their job properly. As we have just heard, there is a danger of the institutions taking on new tasks which they are unable to resource properly. Mr Virrankoski has just about got the balance right. We would have liked to be a bit more generous to Parliament in terms of staffing resources.
On the European Parliament section of the budget, we firstly welcome the fact there has been a marked change in attitude between the Bureau and the Budgets Committee. As someone who sits on both, perhaps I can comment on this. The way in which the Bureau and the Budgets Committee have worked together to come to a compromise on Parliament' s budget has been very constructive. I want to highlight just three issues within Parliament budget.
One is the issue of the Members' Statute. There was a suggestion that we should put money on the line for a Members' Statute. The Socialists rejected this idea, not in any way to weaken our approach to the Members' Statute; through our comments we indicate we strongly support the notion of a Members' Statute but believe it is now up to the Council to respond to Parliament' s proposals in this area.
Similarly with political parties, the Socialist Group strongly supports the notion of European political parties. But you simply cannot put money on the line without having an idea of who is going to qualify for this money, what purposes the money is going to be used for, and so on. Parliament has produced an excellent report - the Tsatsos report - in this area. It is now up to the Commission to bring forward a proposal on how we might implement the proposal for a European political party. Once that happens, again the Socialists would be happy to negotiate the idea of putting money on the line.
Finally, and perhaps something that you and I, Mr President, take a personal interest in, the notion of regional offices. The Bureau of Parliament last night decided that Edinburgh, Marseilles, Milan, Munich and Barcelona should all have regional offices. We have put money in the reserve in the budget. When we come to second reading, I hope we can release that money from the reserve and get on with implementing the policy of regional offices. They are vital in terms of Parliament' s strategy of bringing Parliament closer to the people.
The only other institution' s budget I want to talk about specifically and briefly is the Court of Justice' s budget. My view, and I am sure the view of many in this House, is that justice delayed is often justice denied. It is quite clear that the Court of Justice has not had the resources to carry out its tasks properly. The Council has made a limited gesture in terms of improving staffing of the Court. Parliament wants to go further. I hope we will support the rapporteur' s proposal here. In particular, delays in interpretation and translation are causing major problems for the Court. We should do all in our power to resolve this. The Virrankoski report does that.
I turn briefly to the Bourlanges report which is outwith my own remit. I put on record my support for Mr Bourlanges' approach to the 2000 budget. He is absolutely right to reject the 10% across the board crude reduction in development lines. It is true, as the Council says, that some development lines have not been used well. It is true that some suffer from underspend. But simply to say that we cut them all by 10% is a very crude mechanism. The Council needs to make a more refined proposal before we come to second reading. At the moment, the rapporteur is absolutely right. Money for East Timor, Kosovo and other emergencies like Turkey, has to come from new money unless the Council makes a more refined proposal.
To pick up Mr Elles' last point on the Technical Assistance Offices, again, the Council has been silent on this. It was the root of the problem with the Santer Commission. What the rapporteur has said in his report is absolutely right on this issue. Again, the Socialist Group gives him 100% backing.

Jensen
Mr President, I should also like first of all to express my appreciation of the sterling work which Mr Bourlanges, Mr Virrankoski and Mr Pittella have done as rapporteurs for the budget.
As a Liberal, I personally have the basic attitude that we should be thrifty when it comes to public expenditure. In fact, I also think we have tried to live up to that basic principle when discussing the budget. I therefore want to emphasise that, when a majority of the Group of the European Liberal, Democrat and Reform Party gives its backing to the strategy which the rapporteur, Mr Bourlanges, has devised and which aims at rejecting the 10% general reduction in external expenditure, this does not reflect an unwillingness on our part to make savings. It is, on the other hand, a rejection of the way in which the Commission and the Council have proposed financing the reconstruction of Kosovo. As has been mentioned many times today, it is unreasonable that poor countries in Africa should in this way finance the reconstruction of Kosovo. All the more so when, with the signing of the interinstitutional agreement in the spring, it was anticipated that there would be a need to find funds specifically for Kosovo and that the reconstruction would be expensive.
It is important that a solution to this problem is found, and it is my hope that, in the negotiations, the Council will show the required flexibility so that we might find a solution within the framework of the interinstitutional agreement. We have started with the assumption that EUR 500 million should be found for the reconstruction of Kosovo. That is the Commission' s figure. But, in the Committee on Budgets, we have also, through a conference among other things, received information to make us question whether that figure has not been set rather too high for the year 2000 and whether we might not be concerned here with a more long-term commitment. This also indicates that a great deal of effort will have to be made to find a solution involving all the various institutions.
As a new member, I have been very pleased, during the Committee on Budgets' negotiations, to experience the discipline which characterises its work. We have tried to live up to an unwritten rule about avoiding dotting the "i" s and crossing the "t" s too much when it comes to noting specific budget appropriations. These tie down the administration and can lead to far too little flexibility and a lack of accountability if we go too far in that direction. Noting specifically which funds are to be earmarked for which purposes is obviously an important tool for Parliament when preparing a budget. But any tool can become blunt and lose its power if it is not used with care. Despite our attempts at restraint, there are many examples of dotting the "i" s and crossing the "t" s in the budget, including many good examples. I think that in principle, however, it is goals and frameworks we ought to be aiming for to as great an extent as possible. It is our task as politicians to establish goals and set the general frameworks. We need to beware of specifying too much detail.
In this connection, I want vigorously to back up Mr Virrankoski' s proposal that budgets should be prepared and controlled on the basis of activities and in relation to goals, as he has recommended they should be in his report. Clearly, the circumstances of the past year - what with the Commission' s departure and the reports by the Committee of Independent Experts - provide a reminder that we need to secure for ourselves a foundation which can give us confidence that resources are being administered in a reasonable way. There have been good signals from the new Commissioners, and I think we are all looking forward to fruitful cooperation with both Mrs Schreyer and Neil Kinnock, but they must live with the burden of what we have experienced.
This is also the background to why so much money has been placed in reserve. The Technical Assistance Offices, or TAOs, have been established by the Commission as a roundabout way of getting administration into those areas which could not be administered with the given resources. And the Experts' report shows that the necessary follow-up and supervision was not in place. We need the Commission to provide realistic assessments of the need for administrative resources. This is the background to the situation in which payments into the technical accounts have been placed in a reserve, and there is a need for open dialogue concerning future administration.
As I say, those of us in the Group of the European Liberal, Democrat and Reform Party attach a lot of importance to a solution being found which all three institutions can live with. The next few years will demand a lot from us. There will continue to be major external tasks to consider. Enlargement of the European Union will necessitate a constant re-ordering of our priorities, and we need to continue tidying things up internally. The prior condition for tackling these things is constructive cooperation between Parliament, the Commission and the Council.

Rühle
Mr President, Madam President-in-Office of the Council, Commissioner, I think we are heading for some difficult debates given that Parliament is pretty much agreed - even my group - that we oppose the across-the-board 10% cuts in funding. We would like to thank Mr Bourlanges for his preliminary work, even though we certainly envisage the need to amend some points of the negotiations. It has already been mentioned by Mr Mulder that there must still be a critical review of expenditure on Kosovo, of the assessment of expenditure on Kosovo. As a group, we also consider that there must also be a critical review of the fisheries agreement. In these areas also we must ensure more efficiency, more ecological principles. There are some points where a critical review may be necessary, e.g. the export agreement with Japan. Nevertheless, we believe that additional tasks - and in this case many additional tasks would pass to the European budget - must also mean additional funds being allocated. We therefore need a critical review of the Financial Perspective. We would like to thank the Commissioner for intimating this. In any case, we are prepared to cooperate constructively in this matter. We think that Kosovo can certainly be financed with fresh funds, but we consider that the other points - Turkey, the fisheries agreement, etc. -must be financed by the budget for the current appropriations.
However, Parliament has also clearly shown in today' s debate that it is increasingly aware of its responsibility, not just insofar as concerns the effective use of funds, but also the discharging of funds. It is not just a matter of introducing new budget lines and critically reviewing whether all the budget lines can be used correctly and effectively; it is also about ensuring during the course of the year that the programmes are run properly. We are also responsible for this. I hope that these were not just isolated declarations today, but that in the coming year Parliament will also assume the responsibility of critically reviewing in all the Committees whether the appropriated funds are also being discharged properly.
I would like to briefly address another subject that has also been mentioned here and which will be important. We must, in order to increase trust in the European institutions, also increase the efficiency of parliamentary work itself. In this regard, we have already heard several key points today. Firstly, it is a matter of swiftly developing a Members' Statute, an Assistants' Statute. Also, and here I am opposing some of the previous speakers - it is a matter of developing a European Parties' Statute since I think that, in the area of party financing at European level also, we need more transparency, more efficiency. The voters must know what funds are available in these areas. This, of course, requires that we clearly define what a European Party is and what sort of work is done at European level. It also, of course, requires that we critically and precisely determine what in this case the term "European area" means. How far does the European Union' s coordinating task go? It cannot just be about the EU. It must also cover enlargement in the east. Funds must also be made available for this. But in all these areas we need more transparency.
Finally, one more area in which I think that Parliament must also do its homework properly is the whole question of estate management. Here, in my opinion, mistakes have been made in the past. We must therefore ensure that in future the monies in this area are used much more efficiently and purposefully!

Miranda
Mr President, the first budget of this new financial framework confirms and reinforces the grave apprehensions we had during the debates on Agenda 2000 and on the interinstitutional agreement that goes with it.
Indeed, the most striking point about this budget is its obvious lack of appropriations with which to confront specific objectives, given that it is in Category 4 on external action and cooperation that this shortfall is most evident.
On this matter, I would like to express not only my strong disagreement with the indiscriminate horizontal cuts that the Council is proposing in this Category, but also to state my general agreement with the strategy that the rapporteur is proposing to us. I also agree with the fact that in essence, it is aiming for a revision of the Financial Perspective so that they will respond to new priorities without previous objectives being affected as a result.
Within the scope of this strategy, we are pleased to note that Timor is one of this budget' s priorities, and we particularly welcome the fact that the rapporteur has accepted the insertion of a new heading in order to deal with the reconstruction of that region, which is moreover what we on the Committee on Development and Cooperation had proposed and approved.
This is, moreover, the only way in which we can respond to the new situation in Timor, whilst at the same time respecting the legal basis for intervening in the right way. The proposal of EUR 30 million in payment appropriations, however, seems insufficient to us. This is why we want to see this merely as the starting point for a final sum which will be established in the near future and in the context of the Conference of Donors, which is in progress and in which the European Union is participating. By the same token, we would only accept the insertion of this new heading for Timor in a multiannual perspective to be considered within an international framework.
One final, very specific point, which is nevertheless of great importance: it is essential to ensure - if this has not already been done - that under heading B7-6000, concerning non-governmental organisations, there is a reference to the Liaison Committee in the respective commentary. Indeed it would be absurd if this did not happen.

Turchi
Mr President, first of all, I would like to thank Mr Bourlanges for his competence and the great balance he has shown in preparing this budget. However, I must emphasise the fact that this year' s budget cannot fulfil the objectives set at the beginning, that is, a revival of the Union' s economy and, above all, growth in employment. Indeed, if we start by cutting back the budgets by 10% and we hit sectors like industry, trade, transport and in some cases, even agriculture, we will not be able to revive our economy and become more competitive with regard to competitors such as the United States and NAFTA.
We must not forget that these are our real competitors and that therefore, only budgetary policies aimed at protecting investments and economic growth will allow us to lay the foundations for a Union which will certainly be stronger from a structural and economic point of view. In view of this, I therefore propose that during the next period, we no longer analyse the programmes and their related credit lines for periods of four, five or six years but for shorter periods - one or two years at most - as the rationales of the market and investment in a now global economy no longer correspond to the criterion which the budget itself was built on. In fact, everything is moving much more quickly and much more competitively on the market. This will allow us to intervene immediately in specific sectors and, at the same time, to verify whether our budgetary policy is on course, moving in the direction we set out.
In short, this is a budget which must be revised by including new credit lines with regard to international interventions. I therefore agree with the line set out in Mr Bourlanges' report, although nothing must be taken away from the other credit lines that have already been allocated. At the same time, however, we must endeavour to alter the content and rationale of the budget to take into account the challenges that the Union will have to face over the coming years, in particular the fact that the real enemy to be overcome within the individual States is unemployment.

Sandbæk
Mr President, the budget line for reproductive health has been halved by the Council and the Commission. But, every minute, 380 women become pregnant. Of these pregnancies, 190 are unwanted or unplanned. One hundred and eleven women experience pregnancy-related complications and 40 have unsafe abortions. Every single minute, there is a death following a pregnancy-related complication. Approximately 300 million women suffer from short- or long-term illnesses because of complications in pregnancy. That is more than a quarter of all women living in developing countries. The risk of dying in pregnancy or while giving birth is 1 in 8 in Angola, while it is 1 in 8,700 in a country like Switzerland.
Only 53% of women in developing countries give birth with a doctor, nurse or midwife present. Seventeen per cent give birth completely alone. At least 60% of all pregnant women in developing countries are anaemic. We know what it means for a family if the mother is sick or dies. The mother' s income goes on food, clothes, schooling and health care. If there is no access to reproductive health facilities, there are consequences for the whole family, not least the children who, in the worst case, also die when the mother dies or else stop going to school and become malnourished.
Reproductive health is cheap, costing EUR 2 or 3 per woman per year. It is also cost-effective when one considers the consequences for the whole family. This year, almost 600,000 women will die in pregnancy or while giving birth. By far the majority of these fatalities could be avoided. It is therefore incredibly important to maintain this particular budget line for reproductive health.
A lot has been said about Kosovo. Of course, I completely share the view that it is outrageous to let poor countries pay for the reconstruction of Kosovo.

Martinez
Mr President, the draft budget for the year 2000, EUR 92 billion, a margin of flexibility for our Parliament of EUR 1.5 billion taking into consideration the Financial Perspective, the across-the-board reductions in all appropriations, or at least in appropriations for agriculture, the lack of ambition, and the usual thin spreading of resources and budgetary gimmickry; in other words, it is a draft budget with no great innovations. It is to Mr Bourlanges' great credit that he attempted to make the discussion more lively by introducing technical objections. He presented a fine study with a sort of pot pourri of everything he has written since March and all that with the attitude of an official of the French Supreme Audit Office. Well, that is all very well.
The only innovations are not deliberate. It is the first budget of the 21st century, one which will indeed see the dissolution of the European Union following the Seattle Conference where the Community preference will be abandoned. It is the first budget to implement the Financial Perspective for 2000-2006, which Mr Bourlanges is also asking that we review. It is the first budget which is going to verge on the EUR 100 billion mark if we adopt the amendments which Mr Bourlanges is proposing and, speaking of Mr Bourlanges, who I might call the financier from "Uncle Jean Monnet' s Cabin" , this is a first for him, his first report following the general report, after that of Mrs Dührkop Dührkop, Mr Tillich, Mr Lamassoure or others.
Apart from the change in presentation in the form of Mr Bourlanges, 2000 is much like 1999 as far as the budget is concerned. Firstly one finds once again the European Parliament' s ongoing aspiration to make its presence felt. This has been a constant ever since 1979. This is a natural tendency on the part of all parliaments throughout the world. The judgements of the Court of Justice of the European Communities have multiplied. The 1995 budget was even cancelled, and President Hänsch refused to sign, and, every single time, there is this conflict about NCE and CE. Well, Mr Bourlanges is bringing us back to this bellicose atmosphere, even quoting Marshal Foch, which is appropriate, I suppose. In the backwater of the European budget there is not enough room for two crocodiles, the crocodile of the European Council and the crocodile of the European Parliament which, after eating up the Commission by toppling Santer, now wants to eat the Council too.
So Mr Bourlanges proposes to be voluntarist, he wishes to increase Community expenditure by 7%, he is an ultraliberal who has forgotten the budget rationing pact which he wanted to inflict on others, and he is doling out money because Christmas is coming, 135 million for Turkey, 500 million for Kosovo. First we bomb, then we rebuild. And then there is even East Timor. It is said that it is old monarchs who concern themselves with foreign policy. Of course, the farmers are not entitled to the same largesse, unless they move to Turkey. The only problem, obviously, is that if you keep increasing expenditure, one day you will also have to increase revenue and contemplate a Community tax. But in the meantime, well, Italy will pay, and France will pay another EUR 600 million.
I shall conclude, as Mr Bourlanges quoted Saint Matthew, by quoting Jesus, asking Simon Peter. "What thinkest thou, Simon? Of whom do the kings of the earth take custom or tribute? Of their own children, or of strangers? Peter saith unto him, Of strangers. Jesus saith unto him, Then are the children free." But with Mr Bourlanges' tendencies, how long will this freedom last?

Garriga Polledo
Mr President, this budget is fundamental to the development of Europe in the next few years. It is the first budget in accordance with the new Financial Perspective and institutional harmony will depend very much on its efficient execution, and without that harmony - and I would like to underline this - it will be very difficult to implement a genuine European policy.
We must remember that the previous Parliament approved, in May, the Financial Perspective for 2000-2006 and the interinstitutional agreement. Parliament approved them by a simple but, nevertheless, clear majority.
We must also remember that the Berlin Council approved the Financial Perspective by means of an extraordinarily complicated consensus, which began with some extremely divergent standpoints between the Governments and, furthermore, with a European Commission which had resigned and a European Parliament which was at the end of its mandate.
What I mean by this is that it is now of fundamental importance to defend the Financial Perspective. Only in this way for example can we guarantee the financing of the Union' s structural policies.
It is clear however that the interinstitutional agreement itself provides for a review of the Financial Perspective if necessary. If the Council has not found any other way of financing the reconstruction of Kosovo other than an across-the-board cut in the external activities of the Union, it is logical that the European Parliament will want to defend those lines.
In any case, we believe that the notion of defending the validity of the approved Financial Perspective and the notion of needing to finance the reconstruction of Kosovo by means of a limited review of that perspective, are compatible notions. If this is the proposal which Commissioner Schreyer is making, I hope that this Parliament will welcome it.
With regard to the fisheries agreement with Morocco, we should point out that the commitment presented by the rapporteur on the first reading calms the fears of a significant section of the Community fishing industry. We must remember that the fisheries agreement with Morocco affects almost 30,000 citizens of the Union and that regions such as Galicia, the Canary Islands and Andalusia have a large proportion of their fleet fishing in Moroccan waters.
It is normal - and this is the view of the rapporteur and my own group - that, at the beginning of the budgetary process, we should be concerned to see that in the first reading no commitment had been specified for these EUR 125 million.
Nevertheless, and bearing in mind that fishing policy is a Community policy whose funding is separate from the Treaties, a formula has been found between all of us that allows the Council' s amendments not to be rejected in the first reading, including those referring to fishing, but rather defers their approval until such a time as financial agreement is reached with the Council.
We would have preferred to separate the fishing agreement from the rest of the Community' s external activities. In our opinion, this is a confusion of two categories of expenditure and two different kinds of problem. However, it is also clear that the outgoing Commission did not include any indication concerning the renewal of the agreement in its preliminary draft and, for this reason, did not include any appropriation in the reserve. If the outgoing Commission had been willing to take that political step, we would not now have to wait for the second reading.
We repeat however that we will have a political commitment on the part of the European Parliament to prioritise the funding of the said fisheries agreement. This will serve to calm the fears of all those families and economic sectors which urgently need this agreement.
Finally, what we do ask the rapporteur and the representatives of the Council is that an enormous effort be made in terms of negotiation. We do not want to reach the second reading with a proposal to break the interinstitutional agreement and thereby end up with no Financial Perspective.
I repeat: we need a Financial Perspective and we need the interinstitutional agreement. But we also need credible, and therefore well financed, external European activities. We need both things. And we want the Member States to confront these exceptional circumstances, and the reconstruction of Kosovo is an exceptional circumstance, with exceptional solutions which must not be sought by means of a simple across-the-board cut imposed on Parliament in their lines and programmes.
The general rapporteur has said this: we are in a paradoxical position which requires a real solution. The priorities are clear. Now, representatives of the Council, the negotiation must begin.

Wynn
Mr President, it is customary to congratulate and thank the rapporteurs and I will do that as chairman of the committee, and there are three of them - let us not forget that. First of all, Mr Virrankoski who has done a thorough job. He came to this position halfway through the year; his attitude has been exemplary and he really deserves the congratulations of Parliament, not just the committee. Secondly, Mr Pittella who, as a new member, came to the committee and has made quite a significant point about the phasing-in of the ECSC funds. It is quite an innovative approach and he should be congratulated. And while we are giving out congratulations I shall also congratulate the Commissioner on her speech which was politically realistic. Well done Commissioner!
But the main congratulations go to Mr Bourlanges. When Mr Bourlanges began he said it was the first time he had had 15 minutes to speak in Parliament, and my immediate thought was "yes and that will not be long enough" . Sure enough it was not long enough - he exceeded it by almost a minute and still had not said half the things he wanted to say. Mr Bourlanges, I congratulate you on your approach to the budget. It is fair to say there has never been a dull moment. You are pragmatic, innovative and, most importantly, serious. That is shown in your attitude towards the BATs. You may well be known as "BATman Bourlanges" although I cannot quite see you with a cape and mask, wearing underpants outside your pants, but you have done an extremely good job on the BATs!
This first reading is predominantly about the asterisk amendment concerning Kosovo, the Morocco fisheries agreement, East Timor and Turkey, which was mentioned by the rapporteur. I have to stress this point quite clearly to the Council and - to a lesser extent - to the Commission because I think they understand. We take the interinstitutional agreement extremely seriously. There are forces within this Parliament which would quite happily see it scrapped tomorrow but as far as I am concerned my job - and the job of Parliament per se - is to defend the agreement which we made earlier this year. We have shown that we are prepared to do that. If we were against it the Category 3 ceiling would have been exceeded, and on that point, incidentally, all three institutions have a problem with the amount deemed necessary for codecision lines such as Socrates. This is not just a problem for the year 2000, it is an ongoing problem. Can I say to both the presidency and the Commission that this is something we need to find a solution to together and quickly.
The amendment for Category 4 should not be seen as Parliament just flexing its muscles. I hasten to add this is not a threat - though that may sound like a contradiction of something I have to say a little later on. But I do not want the Council to see it as a threat. We do not want the Council thinking that we think we have them "by the Balkans" so to speak; we are not trying to squeeze them too hard, though that may be the wrong phrase to use. It should be seen as an invitation for our two institutions to sit down and agree a solution. That is what we should be aiming to do, President-in-Office.
We look forward to the proposal from the Commission which will come forward next week. In the light of what Mrs Schreyer has said, I look forward with anticipation. I hope the Council can do the same. But I do need to stress to the Council that this is not the Grand Old Duke of York marching his troops up the hill, just to march them down again. This is not just some act by Parliament to mount a show of force, but at the end of the day Member States will put pressure on individual Members whose parties are in government to get us to change our mind. Things do not work like that because of the majorities that now exist within this Parliament. If we do not get an agreement on the revision of the Financial Perspective especially, I am fairly certain that Article 272 will be invoked. There is no doubt about that and Council should be in no doubt about that whatsoever. That it is not a threat, it is a statement of intent.
Let me reiterate the philosophy of two of my predecessors: Mr von der Vring and Mr Samland. I want the Council to take back this message. What we are fighting for is Parliament' s rights, we are not fighting for money. It is about the rights of this Parliament and that is the message they have to understand through and through. Once they understand that message I am quite sure that the discussions we should and will have will be fruitful. I know the political constraints that Member States are working within, we are all serious about - as you put it - the principles of cost efficiency and rigour. We abide by those same principles but in this instance, after what Parliament has fought for over the years, this revision of the interinstitutional agreement, a revision of the Financial Perspective as outlined in the interinstitutional agreement, is extremely important to Parliament. I hope that is understood.

Costa, Paolo
Mr President, I would like to add my voice to those who have already expressed their satisfaction and support for the basic outline in the Bourlanges report. Mr Bourlanges stands before a double paradox - a debate on the budget which deals with expenditure but not income, and then a budget subject to the double conflicting pressure of an increase in the tasks of the European Union and an actual trend towards reduction of the European GDP rate which is reflected in the Union' s budget. The way out of the paradox has been suggested to us and means not accepting tomorrow' s priorities being financed by the sacrifices and priorities of today and yesterday, and consequently, financing new, indispensable priorities of external actions by increasing the Financial Perspective for Category 4.
I hope that the European Parliament will follow the rapporteur' s statement and that the Executive Commission and the Council will accept the consequences of this. However, I do not think that everything can come down to difficult negotiations that seek a possible compromise between new resources and the sacrifice of former priorities. It would be a short-sighted attitude which is largely hypocritical and out of keeping with the irreversible prospect of an extension of the Union' s competences and geographical enlargement of the Union' s strategy. This prospect is dictated by the implementation of the Treaty of Amsterdam, but even more so by the change in global political balances following the war in Kosovo. One of the few and sure guarantees of stability and prosperity in Europe which cannot be ignored is Europe' s active presence on the world stage and its unequivocal, open attitude towards progressive enlargement policies, even towards south-east Europe and the Balkans in the perspective of that parallel virtual enlargement of peace and security which Mr Prodi has given us a glimpse of.
In these circumstances, we need to make a bold choice. We need the hypothesis which is contained in Mr Bourlanges' proposal to be set out for all to see. We have to say that the emperor is naked! Today the European Parliament, the Executive Commission and the Council have to take on the responsibility for opening a broad, thorough debate in full view of the European taxpayers. In short, we need to ask ourselves whether or not the moment has arrived to entrust the European institutions with greater shares of financial resources. This must not lead to any increase in public spending in Europe, but requires individual countries, all the European countries, to be willing to transfer the resources corresponding to the de facto transfer of competences to the Union. The increase in the Community budget will and can correspond to a reduction in national budgets. The task we have before us is a formidable one which can no longer be avoided, for otherwise the all the European institutions will lose credibility. I hope that Parliament will take this path.

Staes
Mr President, firstly I would like to give my reaction to the rather naïve comments made by Mr Martinez about Kosovo. The money that we want to spend in Kosovo, Mr Martinez, will largely be spent on rebuilding the 80,000 homes that were destroyed there. Those homes, Mr Martinez, were destroyed not by NATO but by your friends there, that is to say, by certain Serbian paramilitary organisations. That is the truth of the matter and there is no other.
I am indebted to the rapporteur and the Committee on Budgets for their support for Amendment No 69, which I submitted with the support of Mrs Van Lancker and Mr Beysen, as well as most of the Flemish and French-speaking Belgian Members. It provides for an appropriation of EUR 50 million to be taken up in the financial reserves for financing the activities to be undertaken by those producers or Member States wishing to set up an integrated quality control system for the whole food chain. That will make it possible for us to restore the consumer' s faith in his or her food. And so I will take the opportunity at this plenary sitting to say that it is my express wish that the Council should lend its support to this amendment.
Secondly, I would like to affirm my support for paragraphs 13, 17 and 57 of the Bourlanges report. Paragraph 57 relates to the allocation of additional posts to OLAF and the Veterinary Office in Dublin. I endorse what Mrs Morgan, Mr Walter and Mr Mulder had to say about this. Paragraphs 13 and 17 concern the future of the TAOs, the Technical Assistance Offices.
As Mr Bourlanges rightly says, the measures produced by the European Commission do not satisfy our demands. I regret that Mrs Siimes' reaction to the proposals made by rapporteur Bourlanges was one of slight disenchantment. The Council maintains that the European Parliament is proposing very far-reaching reforms and that it will not be possible to accommodate these in Budget 2000. Mrs Siimes, the citizens of Europe expect us to exercise robust and financially-transparent administration and it is therefore absolutely essential that we see to it that the Technical Assistance Offices are gradually disbanded. I would refer you to what Mr Elles has just had to say on the matter. And so it is my hope that the overtures we have made to you do not fall on deaf ears.

Cauquil
Mr President, the main proposition of the Bourlanges report involves increasing the budget by EUR 700 million to finance what he calls the four priorities, with, first and foremost, aid for the reconstruction of Kosovo. I am in favour of aid for Kosovo. But financing for the reconstruction of Kosovo, and indeed Serbia, where the fate of the population seems not to be of interest to the European institutions, should be taken out of the military budget of the powers responsible for the destruction. The humanitarian arguments which we have heard serve mainly to hide the fact that EUR 500 million of public money, supposedly earmarked for Kosovo, only serve to make profits for big business in the private sector, especially building firms and public works contractors. The Members of Lutte ouvrière and the Ligue communiste révolutionnaire have no intention of sanctioning the European budget either directly or indirectly. This budget reflects the fundamental orientation of the European institutions, responsible for facilitating the activities of the large capitalist groups, including in the areas which are most damaging to society, such as the redundancy plans which are responsible for the gravity of the unemployment situation and the spread of poverty. On the subject of internal policies, since the Bourlanges report establishes priorities, the first priority should be to prevent all the redundancy plans announced by Renault-Nissan, Alsthom, Rhône-Poulenc, Hoechst-Marion-Roussel and many others. This is the only way to oppose the rise in unemployment effectively without it taking a single penny from the budget.

Gallagher
Mr President, there is one financial matter of importance to Ireland which I would like to focus on during this wide-ranging debate on the budget. This relates to the continuation of the European Peace and Reconciliation Fund for the period 2000 to 2006. As a Member of Parliament for the constituency of Connaught/Ulster I certainly welcome the decision of EU leaders taken in Cologne this year to ensure the continuation of this programme.
Peace and Reconciliation has been successful. I believe it was a wise and sensible decision to continue this programme. For the border county region which I represent it will be worth something in the region of IEP 80 million. But my primary concern relates to the transitional period between the ending of the existing programme and the commencement of the next programme. It is important that transitional financial arrangements are put in place so as to guarantee that those organisations who oversee the fund can smoothly make the changeover from the existing programme to the new programme.
In conclusion, I believe a roll-over will ensure the retention of the excellent staff on both sides of the border who have played no small part in ensuring the success of the programme.

Ferber
Mr President, Commissioner, in undertaking our first reading of Budget 2000 today, we are discussing the first budget under the guidance of the new Commissioner, under your guidance Mrs Schreyer. And it is the first budget to be treated in accordance with the Berlin decisions on Agenda 2000 from March of this year. I think that both these points are worth mentioning. Firstly, because I had expected more involvement by the Commissioner in the budgetary procedure; there was actually little to be seen and heard. Secondly, because in the first year of implementation of the decisions on Agenda 2000 there is already a need to discuss revision of the Financial Perspective. This also I consider to be fully worthy of note because the wish list of the foreign ministers, which has grown in recent years, means that today we can no longer cope financially. The buck has been passed to us to bring about a solution in this and to find a way to handle matters from a budgetary point of view.
To be perfectly honest, I find this unacceptable. First of all, the foreign ministers should be at one with their own finance ministers and then we can also sensibly implement this in the budget.
However, I would also like to say a few words on the so-called "small budgets" . Firstly: I do not consider it credible that, as the European Parliament, we should, on the one hand, require the most stringent tests from all other institutions, in particular the Commission, that we should expect the staffing structure to be adapted to new challenges and that we should want to accomplish this through the European budget, when, on the other hand, we are not prepared, here in our own domain, in the parliamentary budget and in the parliamentary administration, to take the necessary action. For this reason, as the Group of the European Peoples' Party, we have commissioned a study which, for our own administration, will bring about opportunities for staff development and task allocation within our departments. We have - and I would like to state this quite clearly - started an initiative to find a neat solution to the budget funds which we must manage ourselves as a Parliament - I am referring here, in particular, to travel costs. In this regard, in the very near future I am expecting specific proposals from our parliamentary administration which can then be treated accordingly by our Bureau. It must not be the case that the initiative which we as the Group of the European Peoples' Party have started leads in the end to savings being made where it makes least sense, i.e. in the very place where real work is done, Strasbourg.
In the European Court of Justice, there has been an urgent need to increase the number of interpreters. It must not be the case that Court processes are delayed for two or three years due solely to problems with interpreters. Here we as a Parliament have seen the need and assume our responsibility. The Committee on Regional Policy has now found a solution for solving its staffing problems internally. It is not a matter for the budgetary authority, but something they can do, and indeed are doing, by their own efforts. I would like to thank the rapporteurs for their loyal cooperation and hope that in the second reading also we can adopt a sound budget.

Colom i Naval
Mr President, naturally enough the rapporteur and some of the previous speakers have already alluded obviously to what for me is one of the crucial political elements - if not the crucial element - of this draft budget. But, as rapporteur for the interinstitutional agreement and the Financial Perspective, I feel compelled to emphasise it.
Few people interpreted Berlin as a success: the European Council confused austerity with miserliness. I will not repeat my criticisms: I refer you to the Minutes of the plenary sittings.
Between 25 March and 6 May, we held the last round of negotiations between Parliament and the Council. During that long and intense month of bargaining, Parliament made an effort to persuade the Council that there was more to the Union than the EAGGF and the Structural Funds, that the remaining 20% of the budget was also used to serve the Union' s objectives and that, often, it affects issues which were politically very sensitive. The Ministers implicitly recognised the obstinacy of their leaders, but did not want to find fault with them barely five weeks later. For this reason they only accepted the slightest and most miserly alterations to Category 3 (Internal Policies) and Category 5 (Administrative Expenditure).
The insuperable stumbling block was Category 4 (External Action) and not even the war in the Balkans persuaded them to accept the higher figure. One of the Ministers who negotiated and who is now a Commissioner came to recognise that it was possible that the Financial Perspective would have to be revised before it entered into force, but that we would have to wait until the Commission provided an estimate of costs. Once again, the Council confused the multiannual budgetary framework, that is to say the Financial Perspective, with the budget itself: a self-interested short-sightedness which hindered suitable and appropriate political decision-making and which led to a bungled handling of the budget.
What is the situation? We are beginning to see the cost of the needs of Kosovo, there has been an earthquake in Turkey and a political disaster in East Timor, not to mention the need to pay for the fisheries agreement with Morocco, which the government of the principal country involved must have forgotten in the negotiations in Berlin.
The Council intends to resolve the matter by cutting a good proportion of the aid to Russia and the Mediterranean area with the rest coming from proportionate reductions in the other external programmes. Very cunning. The Financial Perspective has also failed to take into account the question of the accession of Cyprus and Malta. I believe that we should bear in mind that the interinstitutional agreement includes a mechanism for revision of the Financial Perspective for these cases, and that it is there to be used when necessary.
There are those who keep an empty bottle in the fridge in case their visitors do not wish to drink anything. If the Commission now presents a proposal for revision of the Financial Perspective, think of that bottle, Madam Minister.

Schröder, Ilka
Commissioner, Mr President, the current climate conference in Bonn is crying out for more funds for renewable energies; to wit funds from the EU, both for research and for demonstration projects. The recent nuclear accidents in Japan and South Korea again show how overdue a new energy policy is. Regarding the EURATOM credits, we in the Committee on Industry, External Trade, Research and Energy are asking that Parliament be consulted immediately. It is incomprehensible to us that our colleagues in the Committee on Budgets cannot support this as parliamentarians.
The sole purpose of the budget lines in the area of trade is, professedly, to promote exports and create free market access. Yet this so-called "free market" only exists for multinational concerns because, for example, the SME cannot access either the information on money allocation nor the programmes themselves. In the last two decades exports from Latin America have increased by 300% whilst the gross domestic product in those countries has only increased by 3.3%. Since the beginning of the worldwide policy of a liberalised world economic area, there has been a massive redistribution from the rich to the poor, both within societies and between States. I advocate the opposite political trend. The result is that the financial assistance from the EU is indirect subsidisation. It is precisely this which contradicts the declared concept of free trade. Ultimately, what we are seeing here is another of the many inherent contradictions in WTO policy.

Markov
Mr President, any budget reflects the financial implementation of the intended policy. Consequently, the decision to accept or reject the budget can, of course, only be bound up with how the focal points of the policy match up to one' s own ideas and whether the available financial funds are sufficient. What then, in my opinion, are the main criteria for this budget?
Firstly, a drastic minimisation of the unemployment which dominates in the Member States of the European Union. Secondly, a reduction in the economic and social divergences in the Member States. Thirdly, the enlargement of the European Union and, fourthly, a peaceful, democratic and social development of all regions in the world. If, and this I am assuming, you share these starting points, albeit there will certainly be differences of opinions as to the ways in which we reach these goals, it must be clear that the budget, as it stands, cannot be affirmed.
Mrs Schreyer, I am, of course, in favour of reorganising and redistributing. I would immediately switch the focus from large enterprise to small and medium-sized economic policy which safeguards jobs. I would immediately move from an offer-oriented economic policy to a demand-oriented economic policy in order to boost consumption.
But it is absurd to find ever more responsibilities for the European Union without providing it with the necessary financial funds. It cannot be the duty of Parliament to accept that the Council wants to finance important new political needs by renouncing traditional needs. Similarly, it cannot be the duty of this Parliament to accept that the Member States want to reorganise their budgets to the detriment of the European Union budget. Consequently, I consider that the most urgent task, given that we have a new Parliament and a new Commission, is to give consideration to the fact that the Financial Perspective really must be amended and that the interinstitutional agreement must also be modified.

Camre
Mr President, Budget 2000 contains some technical improvements while an attempt has been made to do away with the usual over-budgeting for structural arrangements. Over-budgeting is an unsound budgeting practice, and it is important that it should disappear completely from the EU' s budget. I have noted the Council' s savings in regard to both structural arrangements and the agricultural sphere. These I support, even though they only constitute a small beginning when it comes to the required changes to the EU' s financial arrangements. In a changing world, we must be in a position to make adjustments to the budget far more quickly so that, without increasing the overall budget, we might meet any new needs including, first and foremost, the development needs of the new Member States in Eastern Europe but also the need for emergency aid and reconstruction in the Balkans, which ought not to be financed through cutbacks in support to the Third World.
Overall, the EU has no need for more money but, rather, a need to use the existing money more sensibly. I want to emphasise that a more professional and accountable administration of the EU' s financial resources will provide rich opportunities to get more out of the same amount of money. Everywhere, there is a need for activity-based budgeting. More cost-conscious administration must be implemented and the wastefulness of which we have again and again seen examples and which the Court of Auditors' reports have revealed for a number of years must be eliminated if the EU' s citizens are at all going to be able to regard the EU' s institutions as serious partners in the development of Europe.

Daul
Mr President, I would like to draw Parliament' s attention to the fact that the draft budget for 2000 did not envisage any allocation of funds to line B1-3800 concerning the promotion of agricultural products, an amount used solely to discharge the past, and I would of course like to thank the rapporteur, Jean-Louis Bourlanges, for his understanding, and Mr Böge and Mr Görlach for their support.
As a result, all the efforts made in favour of quality beef, fruit, vegetables and dairy products would be in danger of being wiped out, even though this action is part of the Community action which could be entered in the green box at the WTO. The pretext of setting up an evaluation study does not justify the suspension of appropriations whose continuation is the guarantee of success. The professionals in the Member States who participate widely in this action are in agreement in favour of a study. Such a study could in particular result in the harmonisation of the Community contribution which currently varies between 40 and 100%, according to the products. For the same period, there are plans to finance a communication action for third countries, but in the absence of an implementing regulation, it will probably not be possible to use the provision in the year 2000. Finally, provision is also made for the promotion of the labelling. The Commission, however, is actually proposing to defer the implementation of labelling for one year, making the promotion of this non-existent product completely useless.
It is therefore possible to continue to promote quality products without requiring additional expenditure, and I therefore ask the Commission not to stop promoting quality products, for these products are the external face of difficult regions, local products and the earnings of family farms in Europe.

Casaca
Mr President, supporting the economic reconstruction and the political renewal of a free, democratic and independent East Timor is not only nor is it fundamentally a question of humanitarian aid. What it represents above all is the confirmation that the Europe that we are building is ruled by universal values which are equally resonant across the world. It also means that military invasion is not an acceptable method of extending borders, whoever perpetrates such an act and whatever geopolitical factors and interests may be involved. It means above all, that liberty, democracy and respect for human rights are the fundamental principles according to which we would like to see our world develop.
By deciding that the budget for the year 2000 is to make Europe' s financial contribution to Timor one of the four great European priorities, the European Parliament will be giving an unmistakable political signal to Europeans and to the world. I am pleased to note here the determined way in which the Commission and most particularly the Commissioner directly responsible for this matter, Chris Patten, is committed to supporting East Timor. In spite of the huge budgetary constrictions within which we work, the Commission managed to find the means to respond to the most pressing needs even in 1999.
The assessment reports on the reconstruction costs for East Timor, as well as for the attendant international financial aid plan, have still not been completed which means that it is not yet possible to have an accurate estimate of the European contribution to the costs of reconstruction. The political message that we shall be giving when we vote next Thursday in favour of Mr Bourlanges' draft legislative resolution is nevertheless unmistakable.
Europe' s support for East Timor is an absolute priority for Parliament in terms of the budget for the year 2000. It gives an accurate reflection of the feelings of many Socialist MEPs and of those from other benches who came here to give their evidence in the debate that we held on the situation in East Timor in the September part-session.
(The sitting was suspended at and resumed at 3.00 p.m.)

Rod
Mr President, we approach the draft budget 2000 with considerable concern, particularly regarding the lines on development and cooperation but also those concerning human rights, as other Members have already said.
Indeed, we have the impression that this budget is restricting all those things which are dearest to us. At a time when the requirement is for women to take greater part in the decision-making process, the corresponding budget lines are being restricted. At a time when the wish is for the environment, particularly the protection of tropical forests, to be integrated into the development process, the appropriations allocated to this are being reduced. At a time when developing countries are being asked to respect the principle of good government, with respect for human rights, our own budget on this crucial issue is being drastically reduced. Finally, at the very time when Lusaka is reminding us of the human and economic ravages due to AIDS in Africa, we are reducing the funds dedicated to it, contrary to the Commissioner Nielson' s assertions, while mixing them in with the policy on health and reproduction.
Furthermore, we can only regret the re-orientation which involves favouring aid to States rather than to NGOs, especially the organisations of the South which are, however, known to be more effective and which make it possible to really target society.
In short, we cannot be satisfied with this new distribution of appropriations which destabilises the priorities of the European Union in developing countries.

Seppänen
Mr President, I would like to express my support for Mr Bourlanges' s position regarding the amendment of the Financial Perspective. At the same time, I wonder how Finland, as the country to hold the Presidency, has clung to the untenable position of the Council, according to which world events do not influence the EU budgetary framework and the final sums fixed in the budget itself. In the same connection, I would also like to draw attention to the calls there have been to adopt financial support for European political parties. Our group, the Confederal group of the European United Left/Nordic Green Left, has another stand in this matter. We do not want Europe' s taxpayers' money to be spent on support for political parties. We would also like to see a revision of the pay and benefits enjoyed by MEPs by adopting a common rule, whereby MEPs do not receive unjustifiable expense compensations and everyone is paid a fair salary and remuneration.

Hyland
Mr President, in the time available I want to refer to just one particular line in the budget which is the school milk scheme where the Commission has proposals to reduce the allocation from EUR 96 million to EUR 53 million. In 1997 Ireland for example received over IEP 1.4 million from the European Union for the administration of the school milk programme. As a member of the Committee on Agriculture and Rural Development I fully support the scheme, both now and in the future. However, I am disappointed that reductions are being made in the overall budgetary allocation but I hope that the European Council, when it comes to reviewing the second reading of the EU budget for the year 2000, will take on board the recommendation of this Parliament that it should increase the funding for the programme to EUR 67 million or IEP 53 million in next year' s allocation.

Färm
Mr President, it feels good to be able to say, in my first speech in the European Parliament, that the EU' s budget for the year 2000 has its sights set on a number of important processes. I am thinking of the importance of increased democratic support for the EU' s activities and of the importance of concentrating on crucial issues, for example the fight against unemployment and the enlargement of the European Union to include the new applicant countries. These tasks go hand in hand. The European Union must win the fight against unemployment so as to break down ordinary workers' and employees' mistrust of the European Union. In order to succeed, the enlargement of the European Union must quickly give rise to social and economic improvements for the citizens of the applicant countries. That is why we now want to increase the resources for developing dialogue between the two sides of industry. It is a question, among other things, of giving employees a say in the development of the Employment Pact and coordinated economic policy. It is equally important that the applicant countries should now be able to participate in the dialogue with a view to constructive cooperation on the labour market in these countries too.
The procedure leading towards membership for Eastern and Central European countries, among others, is a difficult one. It is not enough to design well-balanced accession agreements. For EU membership to be a palpable and advantageous change in the eyes of ordinary citizens, the current state of affairs needs to change, and companies and employees need to be able to create a labour market which is not only dynamic but also grants rights to employees. Enlargement of the European Union must not mean that companies exploit a situation where there are low wages and poorer social security or that taxes and environmental demands are evaded. Employees in the new Member States have the same legitimate claims upon social entitlements and influence as we do. In this budget, we want, both for their and for our own sakes, to support dialogue between employers and employees and the establishment of union rights in the applicant countries too. In the same way, we would point out how important it is for the EU' s Committee of the Regions to have resources to develop contacts with regions and municipalities in the applicant countries. We also support the proposal for a special initiative to promote local and regional cooperation around the Baltic and the Barents Sea.

Pronk
Mr President, I would like to start by saying how indebted I am to the rapporteur, who has done some sterling work in this area. He has developed a strategy that everyone can support. My colleague Mr Wynn may have feared that we would end up with a "Duke of York" -type scenario, but I feel that the whole affair is more akin to a scene from Asterix and Obelix, where Asterix has a special part to play in this case and we then have to vie with the Council, which plays the part of Julius Caesar. That is my first point.
I must say that we can be satisfied with regard to Category 3, which is of particular interest to me. The rapporteur has struck the right balance here. But I would like to temper this comment with a caution to the Commissioner. I would ask that she does not start making changes to the categories when she puts her package together. We have decided most emphatically to restrict ourselves to Category 4 and if she starts on Category 3 then I think we might run into difficulties.
I am very curious as to the contents of this package. I believe that the Council and in fact the Commission itself are responsible to a certain extent for the problems now facing us. The Commission because it misjudged the fisheries agreement, thereby actually reducing our margin, and of course the Council because it allowed Africa to foot the bill for the remainder.
I have one more small point to make about Kosovo. It relates to a particular concern of mine besides that of the total amount to be spent on Kosovo. Of course we can consider the situation in terms of existing needs. I am completely in agreement with taking this approach. But we must also look at how much Kosovo' s economy can bear. If we were to provide assistance amounting to approximately 50% of Kosovo' s GNP - and there is a possibility of this happening if very high estimates are made - then I fear that the inflationary and other consequences for the economy would outweigh the benefits afforded by the assistance. I would ask the Commissioner to look not just at existing needs but also at the macroeconomic consequences. It is very clear that this is what happened at the time of the Marshall Plan. That is when it all started. We should also look very closely at this matter in the case of Kosovo, and we must learn from our experiences in Bosnia as far as that is concerned.

Gröner
Mr President, I would like to start by saying that it is very difficult for me to get on with my work here in Strasbourg owing to the fact that for the second time now, my case of documents has failed to reach my office.
I would like to thank all those involved in the budgetary procedure for their work, which had to be executed with very little room for manoeuvre and was intended to send out a message to all the citizens of Europe. We are able to do this as far as Category 3 is concerned, which relates to internal policies. The youth programme, the SOCRATES programme, the cultural programme and issues relating to women and equality all provide us with the opportunity to make clear to the citizens what we want to achieve. A mistake was made in the case of Category 3, that is to say, when the vote took place in the Committee on Budgets an amendment was adopted by a very slim majority which could cause considerable damage if it is not corrected. The Committee on Women' s Rights and Equal Opportunities submitted a remark and a budget for the European Women' s Lobby in line A-3037, as it did the previous year, but the remark now states that this line is to be opened to all non-governmental organisations. May I remind you that we as a parliament have supported this umbrella organisation for European women' s organisations and have entrusted it with the task of implementing the plan of action agreed in Peking at non-governmental organisation level, and I think it would be disastrous if just any women' s organisation could have a share in this budget. That is why I would ask you all to correct the amendment again and to vote against Amendment No 443 and in favour of the amendment tabled by the Committee on Women' s Rights and Equal Opportunities. We weighed the situation up very carefully and exercised great restraint as regards the amendments relating to gender mainstreaming and the question of firmly establishing equal opportunities in all European policies. I would particularly ask the rapporteur to take this into account and to support the position of the Committee on Women' s Rights and Equal Opportunities.

Stenmarck
Mr President, all budget work is about setting priorities. There are grounds for asking the question now and again, "What should the EU' s tasks really be?" It is in fact the answer to this question which ought to guide work on the budget, too.
Within a short period, we shall be facing what will probably be the biggest round of enlargement of the EU ever. It is a prerequisite of enlargement that there should be extensive changes to the budget and that we should begin to make these changes right now. This ought to involve making cuts right now in Category 1. We can begin this work by reducing the tobacco subsidy, among other things, and in such a way that it can be abolished completely within a ten-year period.
A number of so-called unforeseen expenses have arisen in the course of the year' s work on the budget, and this means large demands for increased expenditure in Category 4. Humanitarian efforts to help refugees or victims of war in Kosovo, people injured in the earthquake in Turkey or innocent people hit by events in East Timor have obviously led to demands being made upon the European Union. As I see it, it must be an obvious objective successfully to deal with these matters too within the frameworks which we ourselves have been involved in setting up. That is where the important issue of prioritising comes into the picture.
We have budget frameworks in the form of an interinstitutional agreement, signed less than six months ago. In my view, it would be extraordinarily unfortunate if this should need to be cancelled. I am in fact proceeding on the assumption that it will be possible for this issue to be solved jointly by the European Parliament and the Council of Ministers before the second round of discussions.

Gill
Mr President, this is my first budget. I should like to begin by thanking Mr Wynn and Mr Bourlanges and the other two rapporteurs for simplifying a very complex process for me.
I believe that the European Union is changing. The institutions are having to become more representative. In that spirit, we should be trying to bring the European budget closer to the electorate. It is crucial for the citizens of the EU to know what their stake in the EU' s policies and operations really is, what they are paying and what they are paying for. Increased transparency will be the key to the future success of all EU institutions. That means assessing every budget line to see how it benefits the citizens of Europe.
Given the commitment in the Treaty of Amsterdam to incorporating the interests of consumers into all other policy areas of the EU and the derisory level of the consumer budget, which stands at a quarter of one percent of total EU spending, there is a need to begin by making sure that valuable programmes such as the school milk scheme are safeguarded. This is not the case in the draft budget as my colleague, Mr Hyland, said earlier. The draft budget for the school milk programme throughout Europe has been reduced by 50%. This cut is a drastic measure for a programme that has benefits for both consumer and producer alike.
The reason I feel strongly about this budget line is that it has an impact on the long- and short-term health of people, it addresses social deprivation issues and it impacts on the economy and jobs in my region. I do not have any difficulty with the reform of the CAP if it means cheaper and safer products for the consumer. I know that people are concerned about paying for subsidies that increase prices for them as consumers.
The response I had from the Commission in the Budgets Committee was initially quite disappointing. They said that social issues are not within the original remit of the programme. But it now emerges from the Trialogue meeting last week that the Commission will be proposing an increase of EUR 31 million. I welcome this. I must say that I am disappointed that the Council is not here because I would like to know if they will support this. People out there are not concerned about the finer points or headings of the subsidy. What matters to them is the impact and the positive benefit of policies, such as this one.
I accept totally the need to streamline and introduce efficiencies in the management of this scheme and others and to improve value for money, but a more effective way in terms of amending the budget would be to outline improvements and provide an implementation plan for the future.
The Commission, in estimating spending, should look at funding in its totality. I call on Members to support this endorsement and amendment in Thursday' s vote.

Costa Neves
Mr President, in this debate, the European Parliament has the opportunity consistently to underline its resolve concerning the future of the European Union. In this context, I must emphasise the fact that the Council' s draft budget represents less than 1.10% of the Community' s GDP, an amount which is already quite low in itself and what is more, is considerably lower than the ceiling of 1.27% set in Edinburgh and confirmed in Berlin. This should be cause for serious reflection for those who want Europe to do more and to do it better.
Having said this, I agree completely with the rapporteur Jean-Louis Bourlanges, whom I congratulate for the quality of his work, concerning the obligation to meet, in the budget for the year 2000, major needs which have recently arisen in the area of Category 4 on external action without calling into question other needs which have been previously defined, as the Council is trying to do. Taking away from some in order to meet others is not acceptable! Across-the-board cuts are an aberration! I am also against any reduction in the level of Category 1 on agriculture and Category 2 on structural operations.
Amongst the new priorities, I would single out that of the reconstruction of East Timor, a region which has been a permanent target of the attention of the European Parliament which in September, once more adopted a firm resolution. In terms of the political commitment it represents, I think that the proposal to dedicate a specific budgetary heading to East Timor is of great significance. It is a shame that the Commission' s estimates - EUR 30 million - are not in line with reality. Once we have consistent forecasts, we will have to make the necessary adjustments.
Two final observations: the first is the difficulty in understanding and then in explaining why there is a legal basis, and rightly so, for assisting victims of natural disasters anywhere in the world, as we are very rightly going to do for Turkey, but there is no such basis for doing the same at home. Today let me remind you, it is Greece. Tomorrow, God knows. Secondly, there is the expectation, that I insist be noted, of the specific measures and the resulting funds which the Commission is obliged to propose for the outermost regions of the Community which have been recognised, identified and defined since Amsterdam in the Treaty on European Union.

Iivari
Mr President, adopting the budget for the cultural sector is more difficult than usual this time. The Socrates II programme is presently the object of conciliation, and the recommendations for a second reading on the Youth for Europe action programme and the Culture 2000 programme will be discussed in the plenary sitting on Wednesday, which is tomorrow. Thus the final effort to have these multiannual programmes approved still remains to be made.
The greatest differences of opinion between Parliament and the Council relate to the financing of the programmes, which is still open. At the same time, the Committee on Budgets has had to present the allocations for the implementation of the programmes next year. It has to be clearly pointed out that the figures presented by the Committee on Budgets do not constitute a stand on the result of conciliations. A schematic mathematical method is not suited to multiannual programmes. The financing of the programmes has caused worry to the members of the Committee on Culture, Youth, Education, the Media and Sport, and it might not be just a one-off problem.
We have to alter parliamentary procedures with regard to the budgetary procedure for multiannual programmes that are the object of the codecision procedure. The opinion of the Committee on Budgets relates to the report on the first reading, but there is no official collaboration between the special committee and the Committee on Budgets in connection with the second reading and conciliation. That can easily lead to breaks in the flow of information and misunderstandings between the special committee and the Committee on Budgets. The worst that can happen, however, is that Parliament' s position on financing for the programmes remains unclear; that can be used against Parliament. As multiannual programmes must in any case adapt to the general Financial Perspective of the relevant budget heading as well as the budget as a whole, it is necessary, in my opinion, for Parliament to enhance the effectiveness of its internal coordination when discussing multiannual programmes and the budget. Communication between the special committee and the Committee on Budgets should not be broken at Parliament' s first reading, after which some time might pass until the matter is finally resolved. The Treaty of Amsterdam emphasises Parliament' s position as a responsible and effective decision-maker. That is why we need Parliament to have a common and sustainable view of the matter under discussion in budgetary negotiations and conciliations.

Costa, Raffaele
Mr President, we are dealing with a consolidated budget, which is showing the effects of choices perpetuated over the years and which has not yet been dynamic enough. The major items have undergone some changes, but they are not yet at the level of a structure free of conditioning, which may vary in nature: there is national conditioning which, however, is acceptable in part, conditioning by sector, not to mention by corporation, which is less acceptable, and by lobbies, categories, individuals and structures. Budgetary language is not dry because it is made up of numbers but because it pays little heed to changes in society and its needs, expectations and hopes. The Union performs its major function not only through political and legislative acts, but also through investments, management and expenditure, which are becoming a means not so much to satisfy as to stifle high expectations. The wait for funding is becoming the strongest bond for many communities, not just local ones - funding which binds people together more than any other types of ideals or principles.
While we do not agree at all with some of the programming choices, we will, however, accept them on one condition - that expenditure is subjectively and overall, individually and collectively useful. But because of inveterate habit, it does not always appear to be like this. Just because there is unjustified management does not necessarily mean there is unlawful management. Taxpayers' money can be badly spent in a perfectly orthodox manner. The Community' s expenditure is huge and there could be many benefits and beneficiaries. If this is not the case, it is often because Brussels seems distant from Europe and does not always know what is happening there, while those in charge of controls sometimes seem distant and uncoordinated or disorganised. Let us give them more means, as is repeatedly requested, and the results will certainly be significant. There is a great deal of confidence, but the choice of what is to happen is just as important.
Finally, I would like to recommend a reduction in the Community' s bureaucratic impetus, reducing the number of officials who are inspectors in name only, committees, commissions, temporary transfers, obligations and regulations. We need more passion and transparency. As a new Member - and this is just one example - I approached the European Investment Bank, and I felt as if I were approaching a sanctuary for privileged, all-powerful fat cats who had been released from the rules of democracy and therefore from their obligation to citizens.

Fabra Vallés
Mr President, this year, once again, we rapporteurs and speakers are using the word rigour in relation to the budget. And if it is clear that rigour is required in the implementation of the budget, I would also claim that we require rigour in the drawing up of the budget. And it is difficult to be rigorous in the drawing up of the budget if one does not have rigorous information.
And here today, how many of us have had to insist on the question of the fishing agreement, a clear case of a lack of rigorous information. The previous Commission should have foreseen that the said agreement was going to be discussed again, that it was going to be renewed and that therefore it would have to be reflected in the budget.
With regard to the other institutions, when we speak, for example, of interinstitutional cooperation, how much rigour was there in the information on the day when our colleagues previously agreed that a Common Organisational Structure had to be set up and what is the reality today when we decide that we have to dissolve that common structure? I believe that we lack rigorous information.
When we speak of building policy, who has the genuine information about the continuous changes between the Economic and Social Committee and the Committee of the Regions who say "now I am going to that building" , "now I am not interested" , "now I am going to the other" ? When we speak of the rigour necessary for interinstitutional cooperation with regard to the buildings in Luxembourg, has Parliament decided what the effective minimums and maximums are which Parliament requires in Luxembourg?
When we talk about expecting enlargements as from 2002, are we taking account, in our building policy, of the enlargements to come, in 2002, 2003 and 2004?
Rigour also has to be demanded of the members of other committees: the Committee on Budgets must not always be seen as the baddy, the one who always makes all the cuts. The other committees must take responsibility in the knowledge that new policies mean new expenditure, that for every increase there must be a cut.
And with regard to MEPs allowances, I believe that the current regulation is less unjust than any situation which the absence of a regulation would cause. In any event, it can only be reformed by means of the Members' Statute.

Rübig
Mr President, Commissioner Schreyer, we have just had a very interesting discussion. The Members have endeavoured to get to the heart of the issues. At the same time, we should not forget the goals of the European Union, the most important of which is to make our budget lines as effective as possible in terms of creating employment. Which budget lines can we use to create fresh employment opportunities in Europe? Another interesting question of course is which budget lines we can use to secure fresh taxation revenue. Revenue is a very important area and we should examine these issues in detail.
On the other hand, we must take a look at which of the products currently on offer in the EU superstore we could take off the shelves. Which products could be returned to the national level? It would be interesting to set up a research programme into which activities are currently being performed at European level that could in fact be dealt with much more easily, more efficiently and better at national level. This would free up our time and give us the opportunity to concern ourselves with the new projects, new goals and all the aspirations that we have expressed here today.
There are two budget lines that are particularly dear to my heart. One is B5-512, financial support for small and medium-sized enterprises, support for family businesses. The SMEs account for 66% of jobs. In excess of 55% of turnover in the European Community is generated by these enterprises. We must concentrate our energies on specific programmes, start-up support, transfer of business know-how, and on the Euro-infocentres, for it is these that will give rise to fresh employment opportunities and fresh sources of taxation revenue.
The second budget line B5-234 concerns financial support for the European digital capacity for global networks. Commissioner Liikanen advised this House that there will be approximately 1.2 million additional jobs by the year 2002, but we will not be in a position to guarantee the necessary quality of staff. We must train people and ensure that this labour market of 1.2 million jobs can be exploited in future, and that we develop programmes that will enable us to get people into work. This will put us on the right footing in terms of the Internet, e-commerce and the many sectors which will bring brand new opportunities to Europe, and there is no question but that we should work on this.
In addition, programmes such as BEST are of crucial importance to us. When it comes to enterprises of this kind - there are 18 million SMEs in Europe, 50% of which have no employees - we must make the legal requirements pertaining to them a great deal simpler so that they can concentrate on their main tasks of satisfying customer requirements and offering the right products and services. That is what creates jobs and new opportunities. That is why we should also look to encourage innovation in schools and to reinforce initiative and innovation in schools - from primary school to university level - so as to give this sector completely new impetus and also enable new opportunities to develop there. We must reach agreement with the supply sector. How can we foster links between small and large companies so that the former can learn from the latter, so that we can help them with the introduction of the euro, so that we can promote transfer of business know-how, and so that we can tackle any year 2000-related problems?
To close, I would like to mention the enormous challenge we have before us, that of enlargement. I believe that enlargement also represents a huge opportunity for small companies. But we should not shrink from providing them with the support they need. There are only a few more years to go. Many are already involved over there, many are interested, and I believe that the work being done at grass roots level is interesting and affords new opportunities. We in the European Parliament recognise the challenge to give our commitment and invest our energies here, and I would like to take the opportunity today to thank you for your support in this, Commissioner.

President
Many thanks, Mr Rübig. Also many thanks for coming to work on what is a national holiday in your country.

Schreyer
Mr President, ladies and gentlemen, Many thanks for your interesting and highly varied contributions to the debate, and above all, thank you very much for making the atmosphere in which this debate has taken place an extremely constructive one. I would like to limit myself to a few points in my speech, points which I would like to come back to since, in my view, Parliament and Commission proposals must be reconciled. I wish to refer, firstly, to market measures in the agricultural sector. The Commission agrees that it is of course, necessary for the budget appropriations for the year 2000 to correspond to actual requirements as far as possible, and that no artificial reductions should be made here. That was our position in the preliminary draft budget and it will be maintained in the letter of amendment.
Turning now to the measures in the rural development sector, I had pointed out that I also considered this second pillar of agricultural policy to be an absolutely essential addition. Accordingly, the Commission will propose a limited increase for agricultural development measures so that the Member States are also given the incentive to step up their efforts as far as environmental protection in the agricultural sector is concerned and as regards establishing structures to ensure safety in the food chain.
I would like to mention the issue of research. It is being proposed here to divide up those budget lines in the budget plan which relate to the research sector. I believe that there is a pre-condition to consensual solutions. The Commission will always inform the European Parliament before there is a need to amend the appropriations for key actions and before these amendments are actually carried out, and it will of course substantiate these in full. I hope that on this basis we will be able to reach a consensual solution as to how matters are to be represented in the budget plan.
I will now turn to the question of the TAOs, which Mr Bourlanges, Mr Wynn and Mr Elles went into very deeply again. The new Commission will undertake and examine the award of contracts to the technical assistance offices according to the various criteria, which, again, you have discussed, in order to reach a clear decision here as to what has to be undertaken by public administration and what can be undertaken by the assistance offices. This issue will also be a main theme of the blueprint paper on administrative reform and institutional reforms. It will then also be possible, against the background of this blueprint - as is desired by the European Parliament - to estimate the overall staffing requirement.
Finally, I would just like to address the question of financing the important measures associated with reconstruction in Kosovo. Mr Bourlanges rightly pointed out that it is not a task which lasts only one year. On the other hand though, we are in a situation where we do not yet have a definite basis to be able to estimate the overall requirement. That is why the Commission is proposing that we should first review the Financial Perspective for the year 2000 and only then, once definite figures are available, should we talk about how the necessary funds for the ensuing years are to be made available.
There have also been a few critical comments made on the question of what our approach will need to be in the year 2000. The question of how the sum of EUR 500 million stands in relation to Kosovo' s estimated GDP is indeed worthy of mention. On the other hand, though, I think that we should continue to stand by the figure that the EU has in fact quoted in the political sphere - it has said that it will make EUR 500 million available for the year 2000 - so as to avoid giving the impression that the EU is backing out of its political responsibilities. I have gained the impression from this debate that the Commission' s proposal, which I myself put forward, could form a sound basis for compromise.
I would like to come back again to Mr Böge' s and Mrs Buitenweg' s contributions to the debate. The Commission proposes a limited revision, as you yourselves mentioned, and it also very important that we should make a point of providing for and taking account of ECHO measures for Kosovo. The Commission will therefore propose that all three instruments should be used i.e. reallocation of funds, use of the flexibility instrument and review of the Financial Perspective. In the Institutional Agreement we all have an excellent legacy on which to base our handling of Budget 2000 and fruitful cooperation, and as far as that goes, I am very confident, having had this debate, that it will be possible to reach a consensual solution and make the budget for the year 2000 one in which we can have faith.

Bourlanges
, rapporteur. (FR) Mr President, I would like to thank Mrs Schreyer for the remarks she has just made. We will appreciate her proposal, once she has drawn it up, which will help us to understand.
For the moment, I shall limit myself to one small comment, which Mrs Schreyer will understand perfectly, on the subject of research appropriations. I appreciated the terms of the commitments which were publicly undertaken by the Commissioner regarding the management of the lines for research. Like everyone, I believe, on the Committee on Budgets, I attach particular importance to seeing these commitments being made in writing further to the highly interesting letter which Mrs Schreyer sent us and to which our chairman, Mr Wynn, responded requesting, I believe, further details.
I shall therefore ask you, Commissioner, together with your colleagues, please, to formalise the commitments that you have just undertaken in the terms you deem appropriate, so that we can be familiar with the facts and we can proceed to the vote on Thursday on the basis of clear commitments which do not allow for any misunderstanding between us.

President
I see that the Commissioner is nodding in agreement, which means that there is no need to continue the debate.
The debate is closed.
The vote on the budget will take place on Thursday at 10.00 a.m.
(The sitting was suspended at 3.45 p.m. and resumed at 4.30 p.m.)

President
Ladies and gentlemen, the best laid plans in life are wont to go wrong. Mr Duisenberg should in fact be here by now but he is stuck in a traffic jam. I shall, therefore, open the sitting and suspend it again straightaway for another fifteen minutes in the hope that he will have arrived by then. If not, then I am afraid that we will have to repeat the same formal procedure once again. I am not the one to blame; presumably it is the motorways. Thank you for bearing with me.
(The sitting was suspended at 4.30 p.m. and resumed at 5.20 p.m.)

President
Ladies and gentlemen, please take your places, as Mr Duisenberg has just joined us.
Mr Duisenberg, we have been waiting for you, if I may say, with some impatience, and we are delighted that you have at last been able to join us.

ECB annual report
President
The next item is the report (A5-0035/1999) by Mr Huhne, on behalf of the Committee on Economic and Monetary Affairs, on the 1998 annual report of the European Central Bank (C4-0211/1999).
I shall give the floor immediately to Mr Duisenberg.

Duisenberg
. I have great pleasure in presenting the first annual report of the European Central Bank to the European Parliament at today' s plenary sitting. Almost ten months have passed since the euro was successfully introduced and the European Central Bank took over full operational responsibility for the single monetary policy. Many of us feel that, with the launch of the single currency, the process of European integration has gained a new quality. Indeed, the transfer of a core competency of the modern state, namely monetary policy, to a truly European and independent organisation such as the ECB must be regarded as a historic event which marks an unprecedented degree of economic and political integration within the European Union.
The smooth transition to this new era of European integration and the successful operational start of the ECB was the outcome of several years of intense and thorough preparation. The Annual Report of the ECB gives a detailed account both of the final preparatory work conducted by the Eurosystem in the run-up to the introduction of the single currency and of the main economic and monetary developments within the European Union in 1998 and in the first few weeks of 1999.
Since the information contained in the annual report is of a self-explanatory nature, it might be more useful if I concentrate my remarks here and now on some of the issues addressed by the draft resolution prepared by your Committee on Economic and Monetary Affairs. After that I shall be happy to answer any questions you might have.
I should like to start by commenting on the discharge of the ECB' s accountability vis-à-vis the European Parliament. The Treaty establishing the European Community contains various provisions to ensure the democratic accountability of the ECB, one of the cornerstones of which is certainly the presentation of the Annual Report to the European Parliament and the Council of the European Union. However, apart from this annual exercise, the ECB and the European Parliament have established several other contacts.
First and possibly most importantly, I should like to mention the regular hearings held by the European Parliament' s Committee on Economic and Monetary Affairs. Within the scope of these hearings, which - in line with the European Parliament' s Rules of Procedure - take place on a quarterly basis, I provide detailed explanations regarding both our assessment of current economic and monetary developments and the decisions taken by the ECB. Transcripts of these hearings are published on the websites of both the European Parliament and the ECB. Moreover, the European Parliament has invited members of the Executive Board of the ECB and of the staff to participate in additional hearings on a number of specific issues, including the external representation of the Eurosystem, the preparation of euro banknotes and statistical matters.
Furthermore, the ECB also had the opportunity to welcome delegations of members of the European Parliament' s Committee on Economic and Monetary Affairs to its premises in Frankfurt. We attach great importance to these visits and will be pleased to continue to host such events. However, since these visits to the ECB are of a more informal nature, it goes without saying that they have to be considered as an additional tool for communication between the two institutions and cannot be seen as a substitute for regular public hearings at the European Parliament.
In setting up its communication policy, the Central Bank decided to go beyond the transparency requirements of the Treaty. Thus, while the Treaty requires the ECB to publish a quarterly report on its activities, the ECB has decided to publish such a report on a monthly basis, the Monthly Bulletin, which gives a detailed presentation of economic and monetary developments.
In addition, there are a number of other communication tools that the ECB regularly uses. First, let me mention the extended press conferences that the Vice-President and I hold immediately after the first meeting of the Governing Council every month, transcripts of which - including transcripts of the questions and answer session are also accessible via the ECB' s website. You, of course, are aware of the broad range of publications that the ECB has issued on specific subjects related to its fields of responsibility. Our communication policy gives clear priority to maintaining and enhancing the credibility of the Eurosystem and confidence in the euro, both of which - credibility and confidence - are crucial elements in the successful conduct of monetary policy. In this context, one should always bear in mind the fact that the Governing Council acts as a collegial body, and that all decisions have to be communicated to the public in a clear and consistent way. Speaking a common language is particularly important for a central bank operating in a monetary union comprising several countries. Contradictory indications about the decisions taken by the ECB and the underlying reasons might trigger unwarranted market expectations and increase uncertainty, thereby running counter to the very objective of being transparent with regard to the conduct of monetary policy. I should like to stress that the information provided at the press conferences held after the meetings of the Governing Council, together with the analysis contained both in the ECB Monthly Bulletin and in the other channels of communication comes very close, in substance, to the publication of "summary minutes" . In view of the broad variety of publicly available information issued by the ECB, it is my firm belief and conviction that the ECB can stand comparison with other central banks in the field of transparency.
In this context, I should also like to comment briefly on the request to publish the ECB' s internal forecasts. First, it would, at this moment, clearly be premature to consider such a step since the Eurosystem - that is, the ECB and the eleven national central banks - has yet to gain experience with its forecasts. More time will be needed before we can assume that all the technical issues have been addressed properly, and the publication of forecasts can be considered without endangering the ECB' s credibility. I am confident, however, that we can achieve this in the course of next year. Let me also emphasise that the role of the ECB' s internal forecasts in the decision-making process should not be overestimated. Such forecasts constitute one piece of information made available to the Governing Council, but certainly not the only one. The role of our internal forecasts within the monetary policy strategy of the Eurosystem therefore differs from the role of inflation forecasts in a strategy of direct inflation targeting. Finally, I should like to recall that the Monthly Bulletin - especially in its extended quarterly version - provides a forward-looking analysis, including reviews of the outlook for price developments.
The ECB has also been asked to publish reports featuring national data relating to countries participating in the euro area. The publication of such data, however, would, in our view, be misleading since the single monetary policy cannot be directed at country-specific situations. On the contrary, the Eurosystem must take a euro area-wide perspective in its assessment of the economic situation in general and the outlook for price stability in particular. Publication by the ECB of detailed reports for each country participating in the euro area would run counter to the necessary creation of an area-wide perspective in the conduct, discussion and thinking of monetary policy. However, it should be recognised that the national central banks of the Eurosystem continue to produce their own regular reports that address national economic and financial developments in some detail.
I should now like briefly to expand upon another issue which I know is of fundamental concern to the European Parliament, namely the contribution of monetary policy to the general economic policies in the Community. The Treaty provides for a fundamentally sound allocation of objectives and policy instruments between the monetary and governmental authorities in Europe. The Eurosystem is responsible for maintaining price stability. To this end, the Eurosystem has adopted a monetary policy strategy that is forward-looking and acts promptly to address threats to price stability. The Treaty also states that, without prejudice to its primary objective of price stability, the Eurosystem shall support the general economic policies in the Community.
By maintaining price stability, it is our firm belief monetary policy makes the best contribution it can to achieving a high level of output and employment in the medium-term. Price stability has beneficial effects on general economic performance - including growth and employment prospects - through many channels, of which I should like to mention the following.
First, in an environment of price stability, the market mechanism will allocate resources more efficiently to their most productive uses. Markets function most effectively when relative price signals are not distorted by fluctuations in the general price level.
Second, a climate of price stability reduces the inflation risk premia in interest rates, particularly in longer-term rates, and thereby improves the conditions for financing investment.
Third, lasting price stability serves the interests of social justice and helps to protect the weakest members of our society, such as pensioners and the unemployed, who depend on fixed incomes and who cannot protect themselves against the costs of inflation with other assets, such as property or shares.
Broad agreement exists that there is no long-term trade-off between price stability and economic growth. Attempting to use monetary policy to raise real economic activity above its sustainable level will, in the long run, simply lead to ever higher inflation, but not to faster economic growth. Such an attempt would simply forfeit the benefits of stable prices, which I have just outlined, and would therefore prejudice growth and employment prospects over the medium term.
While the contribution it makes through maintaining price stability must not be overlooked, monetary policy clearly cannot solve the serious structural unemployment problem in the euro area. Other policy areas have the instruments needed and are thus responsible for solving the structural problems. Decisive action in this field is certainly required to improve growth and employment prospects.
Safeguarding sound government finances is a means of strengthening the conditions for price stability and achieving strong sustainable growth which is conducive to employment creation. In this context, the Stability and Growth Pact sets the right incentives for the conduct of sound and disciplined fiscal policies across all participating Member States. In addition, structural reforms in labour and goods markets, as well as a moderate development of wage costs, can best address the root causes of currently high unemployment in Europe.
The clear division of policy responsibilities I have just described enhances the credibility of monetary and economic policies in Europe, increases transparency and facilitates accountability. It provides the proper incentives for the policy-makers in individual policy areas. If all parties concerned respect the fundamental allocation of these responsibilities and act accordingly, the achievement of the objectives of all policy areas will be the natural outcome of their individual policy choices.
In this regard the Eurosystem supports the idea of a dialogue between monetary policy and other policy areas in the form of an open exchange of information. However, such a dialogue should be clearly distinguished from any attempts to coordinate policies ex ante, so as to achieve a certain "policy mix" , which would blur the fundamental responsibilities I described. Such coordination would tend to decrease accountability, reduce the transparency of the policy framework for the public and increase uncertainty about policy actions, potentially threatening to destabilise the economy. Finally, the debate on a "balanced and appropriate policy mix" should not be used to deflect attention from the structural reforms that are so urgently needed to address the euro area' s serious structural unemployment problem.
One other matter, which is addressed by your committee is the ECB' s contribution to financial stability, and in particular the question of the provision of emergency liquidity to financial institutions in distress. Allow me to explain some of our main considerations in this regard. The main guiding principle within the Eurosystem with reference to the provision of emergency liquidity to individual financial institutions is that the competent national central bank would be responsible for providing such assistance to those institutions operating within its jurisdiction. The ECB does, however, have to be informed of this in a timely manner. In addition, in operations of relevance to the single monetary policy, the decision-making bodies of the Eurosystem will be involved in assessing the compatibility of the envisaged operations with the pursuit of monetary stability. In the case of a general liquidity crisis resulting from a gridlock in the payment system, for instance, the direct involvement of the Eurosystem could be expected.
For the markets it would be sufficient to know that there is a clearly articulated capability and willingness to act if really necessary. It is not common practice amongst central banks to disclose the conditions and practicalities of emergency liquidity assistance arrangements. In particular, there are typically no official documents describing the conditions under which emergency liquidity would be extended or what procedures would be followed. Indeed, ex ante commitments would be counter-productive in this field, since they would restrict the ability of the central bank to act to contain systemic disturbances with unforeseen features. Moreover, this policy of "constructive ambiguity" can limit the associated problem of moral hazard.
Finally, I should like to turn to a different issue which has also been raised by the European Parliament on several occasions, namely the question of cross-border retail payment services in the euro area. The ECB is aware of the criticism that has been expressed with reference to the low level of efficiency and high costs involved in the processing of such payments and it fully shares the concerns expressed by the European Parliament in this regard. The current situation is particularly unsatisfactory in the area of cross-border credit transfers, whereas the situation in the area of cross-border card-based payments raises fewer concerns.
As you will be aware, one of the basic tasks conferred upon the Eurosystem by the Treaty is the promotion of the smooth functioning of payment systems. However, the involvement of central banks in retail payment systems is, in general, less pronounced than in large-value payment systems, mainly because retail payment systems entail significantly lower systemic risks. Nevertheless, the Eurosystem is concerned with efficiency issues related to cross-border retail payments.
At present, the performance of cross-border retail payment systems is clearly lagging behind the policy objectives of Economic and Monetary Union and, indeed, behind the expectations of many European citizens and small enterprises. After the introduction of the euro banknotes and coins on 1 January 2002, these differences in service levels for national and cross-border payments within the single currency area will become even more apparent.
Against this background, the ECB strongly advocates the creation of a single payment area in order fully to reap the benefits of the single currency. In order to give a clear signal to the banking industry and the public, the ECB published a number of objectives in September which it expects the industry to fulfil and which should contribute towards substantial improvements. The current inadequacies are linked, in part, to the still predominant recourse to correspondent banking and the lack of adequate interbank infrastructures. More efficient funds transfer arrangements have been set up in recent years, but they are too fragmented and economies of scale are very limited. One pre-condition, therefore, for achieving a substantial enhancement in the processing of cross-border retail payments is undoubtedly the fact that the banking industry must implement common technical features in the processing of funds between banks.
However, this is unlikely to be sufficient. The banking industry must also improve substantially its internal procedures for processing cross-border payments, as well as its communication with the customer. This, in turn, requires a more extensive use of automation and standardisation. In this respect, I should like to draw attention to the standards agreed within the framework of the European Committee for Banking Standards, which I consider to be of particular importance. The ECB is organising meetings with all parties involved in order to bring the implementation of the standards forward.
Once the conditions related to interbank processing and internal procedures have been met, it should be possible for the banking industry to decrease substantially the price of cross-border credit transfers and to reduce the execution time to that needed for domestic payments plus one day.
The ECB expects the banks in the euro area to achieve substantial improvements by 1 January 2002 at the latest. The ECB will act as a catalyst for change and will, together with the national central banks of the Eurosystem, discuss these issues with the euro area banking industry in order to play a supportive and coordinating role in this regard. At present, an operational involvement of the ECB does not appear to be justified since there are already some indications that the general appreciation of the problem by the private sector is now increasing. The ECB will, however, closely monitor further developments in this area and will inform the European Parliament and the general public about the progress achieved.

Huhne
It is an honour to be chosen as the rapporteur for this important report. This is the first occasion on which the European Parliament has given its views on the progress of the European Central Bank and in this context it is my pleasant duty to congratulate the ECB and Mr Duisenberg, as President, on its success so far.
The launch of the euro itself is a truly historic moment in the life of an extraordinary undertaking. It represents a substantial technical achievement and the many officials involved deserve our thanks and our appreciation.
Clearly it is still early days in terms of judgement on the results of the ECB' s mandate but here, too, we can already point to many positive signs, not least that investors are prepared to lend euro area governments their money at very low rates of interest. This is a real vote of confidence that the ECB will continue to deliver price stability and will not allow an inflationary erosion of people' s savings.
It is very much in this context of overwhelming support for the objectives of the ECB and of praise for its achievements so far that my remaining remarks should be seen. Only if the ECB is open about the way it reaches its decisions will it be able to retain support in bad times as well as in good. It may achieve its objective of price stability but without openness it will not be clear whether that objective has been attained by design and can therefore be repeated in future or by lucky accident which may therefore require some improvement in its methods of working.
The committee was also struck by the fact that other central banks have moved more rapidly in recent years towards greater openness. The US Federal Reserve, the Bank of Japan, Sweden' s Riksbank, the Bank of England all publish the individual votes of the committee that decides interest rates. They all publish forecasts, they all give information about the nature of the debate within their governing councils. In all of these respects - objective measures of transparency - the ECB lags behind normal international practice.
The committee therefore proposes, firstly that the ECB should publish a summary minute giving both sides of the argument, for and against monetary actions. Secondly, the ECB should publish a six-monthly forecast of economic developments in the euro area. Mr Duisenberg' s remarks to us today are particularly welcome in that respect because he has promised that he that will do just that within the next year. Thirdly, the ECB should discuss on a regular basis developments in each of the Member States of the euro area in order to have a positive influence on price and wage developments which must, as Mr Duisenberg rightly pointed out, differ from Member State to Member State. Finally, the committee may request that the President appears following each significant monetary action. These measures would do much to foster a culture of transparency.
The committee was unable to support a call now for the publication of votes as is in the Liberal group amendment today. It was felt that a young institution should have time to find its feet. Most members felt that publication might intensify the public pressures on governing council members to vote in line with their national interest. Similarly, the committee did not support the Liberal position that it would be useful to publish the ECB' s econometric models of the euro area, partly for fear that they may be abused.
The committee also rejected the Greens' view as expressed in their amendment today, that the price stability mandate should be altered to take account of the difficulties faced by manufacturers alone if their prices fall. The amendment from the EPP, however, clarifies the paragraph and should, in our view, be supported.
Mr President, I would like to highlight briefly some other points that we make. The first is to thank Mr Duisenberg again for his assurance to this House that the process of cooperation between the ECB and the national central banks is now adequate, even in the case of a serious crisis in which a euro area financial institution may need to be supported. I would also like to stress the committee' s view that the ECB should bring pressure to bear on those Member States which rely excessively on short-term debt, as this can present dangers, particularly during a financial crisis.
Thirdly, we encourage the ECB to fulfil its role on the international stage as one of the three main pillars of the international monetary system.
Finally, I very much welcome, too, Mr Duisenberg' s taking up of a point in the report about the need to reduce the costs of cross-border payments, particularly for smaller payments which affect individual members.
Mr President, if the euro is as great a success as I hope and expect, it will play its part in revolutionising the European economy. By completing the single European market it will give Europe' s consumers more choice of goods and services, of higher quality and at lower prices and will, therefore, spur greater increases in living standards. It will provide jobs in expanding industries which is the only sure guarantee of future prosperity. Although I have no doubt that the ECB will face many difficult challenges in the years ahead, I am pleased to report that so far it has risen to the challenges it has faced with considerable élan. We can look forward to a future which builds on its recent success.

Karas
Mr President, President Duisenberg, rapporteur, I would like to outline five thoughts briefly.
Firstly, we have heard that this is the first report of the ECB and first position that we have been called upon to express on it. It can be discerned immediately that the report describes the status quo of a year that has now passed and does not definitively clarify the work of the ECB and our relationship to the ECB. Cooperation between the European Parliament and the ECB, as well as the operating methods of the European Central Bank, are in a process of evolution. Much of our criticism or our requirements today will seem self-evident in a while. I would, however, like to say on behalf of our group that we consider the fundamental conditions to be sacrosanct. The Group of the European People' s Party/European Democrats sees itself as the political group which says yes to the independence of the ECB, to reinforcement of the stability policy, regarding both price stability and currency stability, and which also says yes to further reduction of the public debt, to new growth and employment and to the credibility of monetary policy.
These fundamental positions of ours, in addition to the tension between autonomy, confidence, a transparent public record and the essential intensification of monetary dialogue with the European Parliament, are crucial for us to be able to assess the work of the ECB, but also for the preparation of our own report and the operating methods of Parliament.
We have already heard briefly today that the main theme of the report is the year 1998, a year in which it was announced which countries had met the convergence criteria - eleven of them, the location of the ECB was decided, the EMI was taken on, the third phase of economic and monetary union was introduced and the ECB Governing Council decided on the stability strategy, based on the two recognised pillars.
It has to be said, a lot happened in the course of this year. In spite of some currency turbulence on other continents, the euro has already demonstrated that it can earn confidence, and the conversion of existing currencies to the new currency on 1 January 1999 was achieved smoothly.
At this point, therefore, I would like above all to offer congratulations and thanks. Congratulations and thanks to the European Monetary Institute, the national banks, the European Central Bank, represented here today by President Duisenberg, but also to all the Member States who, by means of many politically necessary reforms, drove forward further structural and institutional reforms and fulfilled the convergence criteria, and not forgetting the citizens who support this necessary step towards European integration with increasing approval.
Permit me to say in conclusion that fulfilment of the convergence criteria has led to price stability, exchange rate stability and to improved public finances. These three successes are the prerequisite for economic growth, on the one hand, essential investment in the future, on the other hand, and creating jobs and making them secure. Considering that the report contains all our fundamental conditions, my hope is that it will meet with wide approval.

Randzio-Plath
Mr President, our primary objective is to establish the euro, after a successful start at the beginning of this year, as a stable currency in the long term, to make it an international reserve currency and to ensure that it is accepted by the citizens. I am particularly pleased that the President stressed again today that the European Central Bank also regards consumer protection as an important task within monetary union.
The independence of the European Central Bank is important for the objectives I mentioned, but its credibility and the degree to which the public can have confidence in it are important too. In a democratic legal system, the institutional and political independence of an institution is only possible if democratic legitimisation is guaranteed at the same time, and that includes transparency of decisions and indeed the possibility of understanding these decisions.
In this respect, a central role falls to the European Parliament, and I think that the dialogue on monetary policy, in the form established between this Parliament and the European Central Bank, is a good start for future years in the euro area.
I know how difficult it was, and this is shown in the annual report, to set up the European Central Bank, and indeed the whole system, and to get Monetary Union underway without problems. I also consider it very positive that the European Central Bank has improved its information policy. I do think, on the other hand, that it is not sufficient to allocate only an ancillary role in this communication policy to the European Parliament, as the open forum for European policy. It is important to see the special role of the European Parliament here too and I also think therefore that ECB information services and transparency could be significantly improved with regard to the European Parliament. By that I do not mean that we necessarily need to have verbatim reports of meetings published now, but it would be useful to have outline minutes of meetings giving the arguments for and against, making it possible to understand the way in which the European Central Bank actually makes its evaluation in the assessment of the risk of inflation or of deflation.
It has not been clear to us to date how an assessment can be made or is made in this area regarding the development of prices over and above goods and services, with reference, for example, also to property markets or share markets. There is therefore some uncertainty in this area as to the basis for decision making and the intelligibility of decisions, just as there still is with reference to the forecasts and models. The European Central Bank must be allowed some time. It is only 10 months since the child came of age and became responsible in the monetary arena, but it must continue in this direction.
I am convinced of the fact that trusting collaboration between the ECB and Parliament will also contribute towards achieving greater certainty and confidence among the public. At the moment there is great speculation on the subject of the ECB' s decisions in matters of interest rate policy. In this context within the euro area, I expressly welcome the ECB decision last Thursday to leave interest rates unchanged. This shows that the ECB is taking its responsibility in supporting other national economic objectives, particularly employment, seriously, and we know that the economic "spring" in the European Union, in spite of the varied developments within the euro area of the 11, certainly needs even further support. I think that the drop in oil prices, together with the fall in consumer prices which has already been experienced and which is expected to continue in the telecommunications, electricity and financial service sectors as a result of competition and the liberalisation of the market also certainly played a part in the decisions of last Thursday. This should continue to be the case.
I am filled with consternation regarding the ECB' s attack upon the Employment Pact. I would ask the ECB to make a constructive contribution towards achieving the Growth and Employment Pact and to say very clearly what part it intends to play in the macroeconomic dialogue in order to contribute to a balanced policy mix. It is no longer possible for monetary policy just to be responsible for price stability. It is no longer possible for budgetary policy just to be responsible for state finance, and social partners for moderate wage policy. There must be real liaison here in the interests of the further development of European Economic and Monetary Union, and also a shared position in this area in the interests of increasing employment.

Gasòliba i Böhm
Mr President, on behalf of the Liberal Group, I am pleased to express our support and favourable position with regard to the report presented by Mr Huhne, concerning the 1998 annual report of the European Central Bank.
First of all, we must congratulate ourselves on the process of introducing the euro. It is now a complete reality which is operating with total normality on all the economic levels envisaged - in the Member States, in the European Union, on an international level. The good leadership and management of the European Central Bank has undoubtedly contributed to this normality and we should congratulate it and its President since, during the early months of the establishment of the euro, when the initial approaches were adopted, they had to overcome - and they did it skilfully - certain adverse circumstances at moments which were clearly delicate at an internal as well as an international level. At that time - and I must insist on this - the European Central Bank displayed skill, good leadership and management and the ability to maintain the principles of independence.
This very solidity, which has been demonstrated in so few months, should allow us to be braver, more decisive in some areas which have already been mentioned, which are in Mr Huhne' s report and which I would like to insist on. One of them is clearly the issue of transparency in some areas that the President of the Central Bank himself has already mentioned. The publication of the forecasts, the possibility of having access to the minutes of meetings and a global report on the economic progress of the Member States are elements which will contribute - as the Committee on Economic and Monetary Affairs, by means of the intervention of its President, Mrs Randzio-Plath, has demonstrated, and as mentioned in Mr Huhne' s report - to the consolidation of the level of internal and international acceptance and, of course, transparency, not only with regard to public opinion but also with regard to the experts in monetary affairs.
Let me end by insisting on the specific position of the Liberal Group which calls for, after the transitional period of two years, the publication of votes, the various positions taken in the meetings of the Executive Board and the macroeconomic models, which I believe would allow more convincing and accurate forecasts to be made by those whose operations relate to the European Central Bank.

Lipietz
Mr President, this is the first time that the new Parliament is fulfilling its mission of supervising the European Central Bank.
The Group of the Greens/European Free Alliance heartily supports the Huhne report, not only for its professional quality but also for its general attitude of mind. It is effectively a response to the fundamental problem which faces us today, that of accountability in managing monetary policy.
What is the nature of this problem? The Central Bank is not a fourth estate. It is not, for example, in a position to challenge the social rights gained by Europeans. These rights are enshrined either in the Universal Declaration of Human Rights, in national bodies of legislation and in conventions between management and unions.
The Central Bank, on the other hand, has been assigned a specific function by Europeans, that of ensuring price stability. The Maastricht Treaty is not very specific on the manner in which it must actually be accountable for the fulfilment of its mission with regard to national representatives. All central or international banks of major countries are bound, in one form or another, by this democratic accountability with regard to the socio-economic community - in the Anglo-Saxon countries through Parliament and in Germany through the federate banks of the Länder.
Today we have to invent the forms of democratic responsibility of the European Central Bank. The Huhne report already provides many possible routes. We support the two amendments tabled by the rapporteur himself, for publication of votes in the Council of the European Central Bank and the econometric models on which these votes are based. Only the most complete transparency of the relationship between the objectives set by the Treaty and the actions of the members of the Council will make it possible for Europeans to actually measure whether the members of the Council are fulfilling their mission properly, not that we doubt it.
From this point of view, the Huhne report is justifiably very pleased with the reduction in interest rates which occurred in April. Apart from the positive effect of this decision on employment, it is in line with the objective of ecological sustainability, which is to say the rejection of a policy of excessively favouring immediate prospects at the expense of long- term future prospects.
This is why our group is concerned about the rumours of a forthcoming increase in interest rates. Such a decision would compromise both the upturn in employment in Europe and ecological investment, especially that related to saving energy and combating the greenhouse effect.
Such a decision could only be taken in the event that price stability was threatened. Well, price stability applies in both directions. For many months, the consumer price index has been increasing at a rate of 1%, while the industrial price index on the other hand has been decreasing, at a rate of 1%. This deflation in industrial prices prompts giving preference to short-term prospects. It would become dangerous if real interest rates were to increase.
In order to prevent such situations arising, our Group is proposing an amendment drawing the attention of the European Central Bank to its mandate to ensure price stability in both directions.

Kaufmann
President Duisenberg, I would like to mention three matters critical to this first annual report of the European Central Bank: accountability, transparency and employment. Firstly, in my view, the content and the drafting of the report do not make it sufficiently clear that the European Central Bank is willing to subject itself to democratic control by the European Parliament. This is demonstrated by the fact that dialogue on monetary matters between Parliament and the ECB is assessed on page 95/96 on just the same terms as cooperation with other institutions. In my opinion, this is in contradiction to Article 113 of the Treaty on European Union, which makes it mandatory for the ECB to present an annual report of its activities and its monetary policy to Parliament. This is precisely what you get as a result of the fact that the European Central Bank' s accountability towards Parliament is described in such vague terms in this Article. I therefore support the request made in the report of the Committee on Economic and Monetary Affairs, to wit, that the ECB should take immediate action in order in future to at least take into account fully the special relationship with the European Parliament established by the Treaty on European Union.
This brings me to my second comment. It is not acceptable that the European Central Bank should give no details of the background and reasons for its decisions on monetary policy. Indeed, this Parliament is the forum where the ECB must present its monetary decisions, justify them and, if necessary, let them be criticised. If this does not take place, then Parliament cannot fulfil its own task of supervising the activity of the Bank. Monetary policy is, as is known, a highly political matter, and it is precisely for that reason that the Bank must demand a high degree of transparency with regard to decision-making.
Thirdly, what for me is a central question, there is clear dissent in this House, President Duisenberg, as to the views you have just expressed. I am of the opinion that the European Central Bank must make a contribution to economic growth and employment by means of its monetary policy. It is not right for full employment to be de facto abandoned as a political objective and for everything, literally everything, to be subordinated to monetary stability. I still consider this to be the crucial foundation for establishing...
(The President cut the speaker off.)

Abitbol
Mr President, today our Parliament has the President of the European Central Bank as its guest, that is to say the president of the first institution to which the nations of Europe, by who knows what perturbation, have decided, eleven of them at least, to confer to give sovereign power.
Thus, Mr Duisenberg, even though today' s poor attendance does not seem to back up my statement, you are nonetheless the successor to the emperors and popes who, since the time of Charlemagne, have dreamt of unifying our continent by faith or by force. No doubt you will even have more power or influence, in the final analysis, than they ever did, even if it is to be a less flamboyant form of power, since at the end of this millennium which seems to set money up as the ultimate universal value, you are poised to hold both temporal power and spiritual power within the European Union.
Confronted with this - I do not know how to describe it exactly - this "Bank State" or this "Holy Bank" , the Vice-President of which, Mr Noyer, recently explained to us ingratiatingly, but in English, how responsible it felt for the long term whilst governments, on the other hand, gave in to short term whims because they were subject to the vagaries of universal suffrage. Confronted, then, with the omnipotence of this Bank, the excellent report by our fellow Member, Mr Huhne, calls for greater transparency, without however daring to go as far as demanding of you what might pass for exhibitionism, that is to say, ceasing to maintain anonymity regarding decisions.
We can only approve these excellent resolutions, while being aware that there is even more talk of transparency when democracy is being relinquished or sidelined. Let us recall, for that matter, that transparency comes from the Russian glasnost. That is why, Mr Duisenberg, I believe that today' s meeting, and particularly the ridiculous opposition force which Parliament is attempting to exert in relation to the considerable power which has been entrusted to you, can only worry anyone who attaches importance to national sovereignty, which is just one way for nations to keep control of their own fate. I only hope that, aware of the power which has been granted you, you will be able to exercise this power with all the wisdom one could hope for.

Blokland
Mr President, the ECB' s first annual report looks back over 1998, a year dominated by the build-up to the launch of the single currency on 1 January 1999. The transition to the third stage of EMU proceeded fairly uneventfully. We can justifiably be pleased about that. But it has since become apparent that bringing about the monetary union of eleven Member States also has its drawbacks. These negative effects could, in the main, have been foreseen, but this Parliament never gave them serious attention during the run-up to EMU.
One issue that is now receiving people' s undivided attention is that of the divergent rate of inflation in the euro countries. Currency depreciation is significantly higher in Ireland, Spain and the Netherlands in particular. There will be no change here in the foreseeable future. According to the estimates published by the IMF yesterday, the Netherlands can expect inflation to be at 2.3% next year. The constant rise in consumer spending is prompting the Dutch Government to make concerned and admonishing comments, but it is doing the wrong things in policy terms: tax reductions instead of debt reduction.
Following an inquiry into the situation, the ECB concluded that the differing rates of inflation ought not to be a major cause for concern. Regional differences in the rate of inflation are in fact greater still in the United States. However, federal states in the US benefit from automatic stabilisers coming into play via the federal budget. The mobility of labour is also much greater in the United States. I tend to feel that the ECB wants to play fast and loose and I would like its President to clarify his position.
I also want to ask him if the banking supervision system needs to be adapted. As things stand it is decentralised and that is fine, but is the supervisory process not rendered more difficult by transnational mergers with banks outside the euro area? I would be pleased to hear what you intend to do about this.

Della Vedova
Mr President of the Central Bank, I am speaking on behalf of the Italian Radical Members. Certainly, this first report by the European Central Bank is compensating for the launch of the euro and you and the Governing Council of the bank are taking on a great responsibility. The Huhne report certainly contains positive elements, especially as regards the request to the European Central Bank for more information regarding the grounds for the decisions it adopted through the publication of concise Minutes including dissenting opinions as well. However, there is a point in the report which, Mr President, in my opinion is completely unacceptable. I am referring to point 11, which states that Parliament regards 'the reduction of 50 basis points in interest rates on 8 April 1999 as appropriate, and welcomes in particular the reasons given for it' , which tells us that the cut in rates supported the general economic policies in the Community.
Regarding the method, I wonder why on earth Parliament, in discussing the 1998 report of the European Central Bank, feels the need to include its approbation of a specific measure which the European Central Bank will give an account of in its next report - the 1999 report. Moreover, how can we consider judging the effects of the manoeuvre on taxes after only a few weeks? And what sense is there in Parliament giving an opinion of one single act of the Central Bank?
Considering this matter further, I find this approbation totally out of place. Yesterday, both the head economist of the Central Bank, Mr Issing, and Vice-President Noyer implied that a fresh increase in taxation is imminent. Does this not maybe prove that the decision taken in April was wrong, given that in the meantime there has been no unexpected shock? And was the long-term tax increase not due to the loss of credibility owing to that very cut? We have the suspicion, actually more than a suspicion, that that decision was made following political pressure - for example, Oscar Lafontaine - and that Parliament, with today' s approval, wishes to confirm the move towards a Central Bank which is subordinate to political requirements or even electoral interests. I believe that the Central Bank' s strategy must focus exclusively on currency and prices. It would be suicide, as today others have repeatedly advocated, to think that European leaders can put pressure on the Central Bank so that it will make up for their inability to relaunch the economy through structural reforms, liberalisation of the markets - the job market first and foremost - and tight budgetary policy which must be coupled with a reduction of the tax burden on people and firms.

von Wogau
Mr President, President Duisenberg, I too would like to express my delight at being able to welcome President Duisenberg here today. Why is the debate we are having today so important? The European Central Bank is autonomous, and my group is surely the one which always stressed this most. But, at the same time, the European Central Bank must make decisions which concern every individual citizen of Europe. It is therefore particularly important that the bank should not exist in an ivory tower but that it should continue to justify itself to the public. There are a variety of ways in which it can achieve this.
I would also like to point out that the European Parliament has a particularly privileged role here. The European Parliament is explicitly mentioned in the Treaties as the partner of the European Central Bank in dialogue, and this is not the case in the same way with other institutions. The European Parliament is a forum where all of Europe can in fact take part in the debate; though I would have liked to see a rather larger participation in this debate today, for I am of the opinion that this debate is of great significance.
The European Central Bank is autonomous. It is committed in the first instance to ensuring price stability. At this point, I would like to remind Mrs Randzio-Plath that the Treaty plainly stipulates that the prime objective of the European Central Bank is to ensure price stability and that any other objectives may be pursued only if they can be achieved without any risk to price stability, and that price stability itself, as the President has already stated, can have positive social and economic effects.
On behalf of my group, I should like to say that the European Central Bank has achieved some outstanding work in the course of this last year, since it was founded. It has taken some very important decisions, for example, its decision on the definition of price stability. That is of very great significance for the long-term development of our debate on this question. Even in its decision regarding the minimum reserves, which were rather controversial, the European Central Bank, i.e. the Governing Council of the European Central Bank, has demonstrated great perceptiveness. It has, at least, passed its period of probation as far as that goes. I would however like to specify that throughout this probationary period the Bank experienced fair weather, economically speaking. Perhaps occasionally things were rather hazy, but, on the whole, we are going through a period of positive economic development.
It will be much more difficult for the European Central Bank to take uncomfortable decisions, such as, for example, raising interest rates rather than lowering them, if the economic situation becomes more difficult and if actual risks to price stability arise. In the first months of its existence, the European Central Bank has earned our confidence, but if it is to be able in the future to withstand such situations, then this confidence must be systematically consolidated in the years to come and, Mr President, in that endeavour you may count on the support of my group.
We are called upon to vote on a draft amendment which demands that the votes of the individual members of the Governing Council of the European Central Bank should be made public. I would like to make it perfectly clear that my own group will never agree to such an amendment. Why not? Individuals sit on the Governing Council of the Bank, who are personally responsible for monetary stability and who make decisions as individuals within this Governing Council. There is not, therefore, any weighting of votes, such as there is in the Council of Ministers, since it has been determined that these are people who have to vote here as individuals. Publishing the votes could lead to a situation where there would then be national debates on the behaviour of individual members. That would be extraordinarily negative both for the European Central Bank and also for all of us. The European Central Bank has achieved some excellent work, it has earned the confidence of the citizens by dint of its work in the last few months, and this is what we are going to reflect in this resolution.

Goebbels
Mr President, this first annual report of the Central Bank gives me the opportunity to make an on the whole positive assessment of the work accomplished to date by the European Central Bank and the operation of the euro area. The Central Bank has managed to fulfil its primary mission of maintaining price stability. The general economic policies of the Union have been accompanied by an opportune reduction in key interest rates. The countries participating in the euro area have been in a position to continue their structural improvement. Growth has returned in the majority of European countries. Following the doubling of petroleum prices, a slight upsurge has been observed in inflation. The ECB has a duty to remain vigilant, but as the mean rate of inflation of the euro-11 is still well under the 2% mark, I dare to hope that the Governing Council will give growth and, consequently, further reduction in unemployment, a chance. According to ECB estimates, some four fifths of unemployment is structural in nature. More recent studies show that in fact less than one fifth of unemployment is structural. This type of unemployment linked to the current economic climate could be absorbed only by more vigorous growth.
While emphasising the need to continue the policy of stability, I would like to ask President Duisenberg the following question: can Europe' s only ambition be to pursue a macroeconomic policy focused on stability alone? In my view, the fight against inflation must go hand in hand with the improved coordination of budgetary policies and the establishment of a macroeconomic framework favourable to growth and to employment. When assessing the work of the ECB and the positive effect of the euro area, one must consider the internationalisation of financial markets. One is bound to observe that Europe has come to terms with the crises in Asia, Russia and Brazil rather well. Without the euro, some more vulnerable Member States would probably have experienced monetary difficulties along with, who knows, some cases of competitive devaluation. The euro is also a victory of Community regulation over the disordered interaction of individual financial markets. People will bring up the objection that, since its successful launch, the value of the euro has depreciated in comparison with the dollar. This is to forget that, within a floating exchange rate system, the main currencies are always going to evolve in relation to each other. In the last twenty years, the yearly slide in the volatile Mark/Dollar exchange rate has, on several occasions, exceeded 10%.
The only criticism I have of the ECB is that it should be a bit less reticent about international exposure in all the various for a. The ECB is one of the most important central banks in the world. It is its duty to take a particularly close interest in the vulnerability of the international banking system and the fragility of the financial sector throughout the world. The crisis in Asia was not triggered by traditional macroeconomic imbalances, but by the financial excesses of the private sector. The irrational exuberance which characterises some stock exchanges, the excessive indebtedness of American households and of some economic sectors in important countries cause a definite threat to hang over worldwide economic stability. The ECB should make a firm commitment in all the appropriate fora to create a new regulatory framework for the structure of international finance. The essential complement ...
(The President cut the speaker off)

Schmidt, Olle
Mr President, Mr Duisenberg, we in Sweden are relatively new to the EU, and I am new to this House. It is my understanding that we Swedes still have a lot to learn within the field of European cooperation. At the same time, it is my conviction that there is also a great deal for the EU to learn from how we handle some things in Sweden, for example the issues of openness and public access to official records.
When it comes to the report on the European Central Bank, there is every reason to wonder whether we should not be able to do more to increase openness within the European Central Bank and public control of its affairs, to strengthen the Bank' s legitimacy and to increase democratic support for it. We Liberals believe that this is needed, and without, moreover, encroaching upon the Bank' s independence or reducing its efficiency.
The Bank of Sweden now reports, with two weeks' delay, upon the minutes of the meetings of the Board of Directors. Monetary considerations, together with the positions adopted by the various Board Members, are reported on at this time. Last week, Swedes learned that the Deputy Chief Executive of the Bank of Sweden, together with a further Member of the Board, did not back the Bank' s latest report on inflation. They advocated a rise in interest rates but were voted down.
Similar openness would be to the advantage of the European Central Bank too. Why? Well, openness leads to clarity, which reduces uneasiness in the market and makes for stability. However, Mr Duisenberg and I are clearly not properly in agreement about this argument. Openness would increase our citizens' support for the Bank and make it easier for everyone to understand the goal of monetary policy: that price stability, just as Mr Duisenberg said, should lead to growth and employment. In my opinion, being open about strategies and prognoses, internal discussions and methods of voting will also actually increase Board Members' accountability, not reduce it. It is actually a good thing to be open to public scrutiny.
I want to say too that we have today been able to see that support for EMU in Sweden has increased, which I am glad about. I should like to tell Mr Duisenberg that support for EMU and the likelihood of taking Sweden into EMU will increase if he and the European Central Bank display greater openness.

Knörr Borràs
Mr President, Mr Duisenberg, it is probably not necessary to say it, but please allow me to emphasise, as a humble MEP from a small country - the Basque Country - that you have a lot of power but it is a democratic power. And contrary to what somebody said a little while ago, we do know who granted that power.
In the current phase of European construction we are seeing significant economic and monetary integration processes, which have been speeded up since the adoption of the single currency. In the real economy we are witnessing great mergers and concentrations which must be carried out in accordance with good practice and respect for consumer rights.
At an institutional level the Central Bank plays a key role and we would also like this role to be counterbalanced with the transparency demanded of those institutions which result from the votes of the citizens.
Somebody said that one should not grow fond of banks because they will never grow fond of you. We do not intend to present you with a rosy picture or a wonderful idyll, but we do not believe that it is too much to ask that at least they are transparent with the citizens of Europe who are affected by their policies and measures.
In general terms we agree with the Huhne report, which emphasises the quality of the annual report of the ECB and the progress made in the communication of the Bank' s policy.
We also agree with the measures proposed with regard to the increase in transparency and the need to clarify what the European Central Bank understands monetary policy to be, beyond price stability - which is evidently its main function - because this will undoubtedly contribute to an appropriate and balanced policy mix which is aimed at promoting sustainable development and lasting employment.
I must insist once again on transparency: do not apply a bandage until you are injured. Mr Solbes said in an appearance before this Parliament that he would try to cooperate with the Members without prejudice to the quality of his work. Transparency does not have to be incompatible with the protection of aims of monetary policy.
We are not asking for miracles nor that a great song and dance be made about what is going to be done, but simply that its management model be more transparent. If you take note of what other Central Banks have done and if you trust in this Parliament, have no doubt that we will make progress with transparency without endangering the objectives of the European Central Bank.

Theonas
Mr President, the European Central Bank is still very much an institution which makes crucial decisions for the millions of citizens of the European Union without being subject to any democratic or political control. From this point of view, when Parliament considers that progress is being made because regular press conferences are held following any Governing Council meetings and because, in addition to annual reports, the ECB also publishes monthly reports, this invokes a false sense of true democracy among the peoples of Europe. This 'progress' has, in fact, been run-of-the-mill practice at the central banks since the 1930s!
Mr President, European citizens are, first and foremost, interested in and, at the same time, concerned by the content of the policies of the European Central Bank, the European Union and the Member States - policies which give absolute priority to so-called monetary stability and the interests of major credit capital, at the cost of dramatic job losses and the total disintegration of the so-called European social model. Workers are concerned by the fact that the European Central Bank considers a growth rate of over 2.5% to be dangerous for the notorious monetary stability, thereby deferring indefinitely efforts to address the issue of unemployment. The average inflation rate of the 11 countries within the euro area is below 1%. Some countries have already entered an anti-inflationary phase, but there are growing signs of a rise in interest rates in order to maintain monetary stability.
Mr President, with growth rates below 2%, with a new rise in interest rates, with deflation and the rigorous implementation of the Stability Pact, growing pressure is being brought to bear on the security and social rights of workers, and this will indirectly bring about a dramatic deterioration in their living standards and working conditions.

Turchi
Mr President, first of all, we must analyse the first period of the ECB' s activities which, as we know, began a year ago in the hope of becoming, in time, the main institution for intervention in the economies of the Member States of the Union. On the one hand, we have all noticed the greater role played recently by this institution - and indirectly, at the same time, the whole Union - in terms of economic policy and, especially, employment policy. On the other hand, this was not sufficient to ensure that the euro was not affected by speculation or weakened in the face of our competitors - which, of course, we must definitely not ignore - which are the United States and NAFTA. In fact the euro, which started with a strong position in the money markets, after a few months was exposed to attacks which were, to say the least, speculative. We must take note of this signal and always ensure that the focus behind major political, budgetary and monetary strategies is not the new single currency but a long-term view taking into account the need to give the euro and the Member States stability, and above all, to relaunch the Union' s economy and the employment situation which concerns each of us in this Parliament so greatly.
Therefore, we must continue along the path which President Duisenberg is establishing within his role and the institution itself. However, at the same time, we must monitor price stability so that we can control the greater evil with which we are all familiar - inflation - and at the same time keep interest rates low to stimulate investments and relaunch the European industrial sector, making it more competitive with regard to the other States. In doing this, we would bring prestige to a new institution like the ECB and we would gain political credibility internationally.

Krarup
In a debate like this about this important institution known as the European Central Bank, two starting points might be taken. One can talk about what is apparent, that is to say the surface details; or one can talk about what is real. The European Central Bank' s mode of functioning is to stay on the surface. It is a question of regulations and rules of procedure. We are conducting a rather shadowy debate here, and it is also interesting what the rapporteur has written in the explanatory statement, namely that the European Parliament "is responsible both for receiving and debating the annual report of the ECB and for monitoring the ECB" . There is no basis for this. Neither Article 113 of the Treaty nor Article 15 of the Statute give Parliament any powers other than the power to talk. So we can talk, then, and come up with comments about openness, as my excellent Swedish colleague has done, and I concur fully with the criticism of the culture of secrecy. But the reality is the European Central Bank as a political tool, and this House believes that the question of the euro and its establishment as an important institution is a matter which is over and done with. It is not! It is a success, writes the rapporteur at the start of the report. Success according to what criteria? Is it a criterion of success that the exchange rate has fallen since the euro was established? And, if one considers social criteria such as unemployment, it hits you right in the eye that the three North European countries which are outside the single currency (namely Denmark, Sweden and Great Britain) have significantly lower unemployment than certain areas in the EU, where it is catastrophically high. Is this success?
The next step consists of referenda in the Scandinavian countries, and these will perhaps introduce a different agenda.

Tannock
Mr President, nine months after the euro' s launch and with enthusiasm for its future role as the major international reserve currency dimmed as the result of exchange rate weakness, it cannot be heralded as an unqualified success. It remains to be seen if the "one-size-fits-all" model of interest rates will work in countries like Ireland, without causing large tax rises and damaging the popularity of the Euro-project.
Nevertheless I applaud the aims and coherence of the Huhne report as a basis for defining accountability of the Central Bank, on which I should like to say a few words, particularly on the issue of transparency and accountability.
Some may question why I, as a British Member, should like to speak on this issue. I would like to point out that Britain and the British Conservative Party - to which I belong - have never been hostile to the euro as a currency for those Member States which genuinely wish to join, as we are all bound together through our membership of the single market so that a collapse in confidence for the euro would affect us all, whether we are in or outside the EMU. For this reason it is vital that the Central Bank enjoys the confidence of the financial markets. We live in an era of massive capital flows and foreign exchange markets. Some £300 billion is traded every day in the City of London. A collapse in the credibility of or belief that the Bank would not be prepared to pursue an anti-inflationary policy at all costs could have severe repercussions economically throughout the whole Union.
I believe that only the Central Bank, for instance, should pronounce when necessary on foreign exchange target zones for the euro, to avoid conflicting messages being given to the financial markets. It is also vital, in my opinion, that the Bank be encouraged to follow the example of other leading central banks, such as the Federal Reserve in America, and make transparency a central feature of all its activities. I regret, therefore, that attempts to require the Bank to publish the names of those present, the voting on monetary actions, after a grace period of some two years and the publication of the ECB' s econometric models were defeated at committee stage and have not been put before this House today.
It was also confusing yesterday to hear that Mr Issing, the ECB' s chief economist, reportedly stated in London that the Bank would not publish economic forecasts for Euro-land, perpetuating a culture of secrecy. I welcome Mr Duisenberg' s clarification on this issue today. I believe that any confident central bank would welcome the opportunity for its members to be challenged on the fundamental assumptions underlying their decisions. But particularly in the ECB' s case, as it does not have the track record of the mighty Bundesbank and could quickly lose the confidence of the financial markets if it is reluctant to protect itself through greater transparency.
Openness to criticism is not a weakness but a strength. As a doctor I know that advances in medicine are often achieved only after rigorous scrutiny and challenge in peer review journals. The Bank has to learn to operate within the same spirit. I also believe that the financial markets and the people of Europe will expect no less of this new Central Bank and that this Parliament should be relentless in the pursuit of an open and accountable European Central Bank for the near future.

Berès
Mr President, Mr President of the Central Bank, Commissioner, I believe that our sitting, today, is a founding act.
This is the first time that you have presented your annual report to this House as President of the Central Bank. Indeed, if I am interpreting the Treaty on European Union correctly, this is an essential element in the balance designed by the people who set up Economic and Monetary Union, with the success we have seen, taking into account the conditions of the transition to the euro on 1 January this year. This balance, in fact, involves both the independence of your institution and the annual report which you must present to our own institution. This is the meeting we are witnessing today.
Unlike some of my fellow citizens, I believe that today we are here reaching the very core of your democratic responsibility. As you know, this institution has clearly shown its will to exercise fully the competences accorded under the Treaty. Parliament set the condition of having a hearing with each of the members of your Executive Board; it meets you on a regular basis, and considers today' s meeting to be the high point of this approach.
It is only to be expected that our debate today should be more concerned with the methods rather than the basis of the monetary policy. You are still just about in your initial running-in period, as are we. We must take advantage of this period to strengthen the resources that we, the European Parliament, have. But for your part, you too, Mr President, must perhaps take advantage of it to review again your idea of the relationship between your institution and ours.
So, as regards transparency - many people before me have said it, but let me repeat it once again - if we want to be able to really act as an intermediary in monetary policy, which you implement and which we discuss, then we need you to present the decisions you are taking, and give your reasons and justifications for them.
As regards monetary policy itself, you said, Mr President, that it cannot solve the structural problems of the labour market. Very well. But it can make a contribution, and this is what the Treaty invites you to do, and what we invite you to do. Sustained growth in Europe is essential if we wish to solve the problem of employment. There will be no structural reform without growth. Certainly, positive signs are appearing. We know that more gradual growth today is already enabling the creation of jobs in some of our countries. But if we want sustainable growth for a high level of employment, we need monetary policy to accompany this movement. This is what the treaty invites you to do, and this is the matter on which we expect positive signs from you. In this sense, the policy which you are pursuing in the area of interest rate policy is clearly essential, and we are awaiting very clear commitments from you in this respect.

Maaten
Mr President, this is an important debate for it is the first time we have come to discuss the European Central Bank' s report. The fact that President Duisenberg is present serves to underline the special relationship that the ECB has with our Parliament. The Liberals are satisfied with the ECB' s report and with the four proposals put forward by the Committee on Economic and Monetary Affairs for there to be more transparency in the bank' s dealings. But we are disappointed that the Committee on Economic and Monetary Affairs has shown itself unwilling to take one step more towards achieving still greater openness, hence my group has submitted a number of amendments to this end. I refer in particular to the publication of votes and the voting behaviour of each individual member of the Governing Council. We believe that this could only strengthen, not weaken the independence of the members. After all, the ex officio attendance of the Council of Ministers and the European Commission means that the national governments too are now in a position to know how the members vote and are able to bring pressure to bear at will, but then this is done completely unverifiably and behind closed doors.
We do not doubt the integrity of the members of the Governing Council and openness is, we think, the best way in which to guarantee greater integrity. We have no time for the argument that members could not then change their minds. Of course they can if, for example, circumstances changed or new arguments were put forward. It may well be that their voting behaviour would initiate debate, but we are sufficiently reassured that the members of the Council have the fortitude to deal with this.
Greater openness is a sign of strength and inspires confidence. We consider this to weigh more heavily than any possible risks. What is more, publication would bring the Bank more into line with the Federal Reserve Bank in the United States and the Bank of Japan. Why should we Europeans act as if we have something to hide? Surely that is only going to weaken confidence in the euro?
Mr President, as liberals we are very much in favour of the ECB' s being independent and we value the part the President has to play in upholding this. But we believe that greater openness would reinforce the independence and authority of the ECB and request that Parliament supports moves to this end.

Schmid, Herman
Mr President, I want to thank Mr Huhne for an interesting report containing a number of important clarifications. Among other things, he points out that the European Central Bank is altogether too secretive, that the meetings are held in camera and also that the current President, Mr Duisenberg is against the minutes from the Bank' s discussions being published. There are a lot of people who have taken up this point, so that Parliament is expressing a strong opinion on the matter.
Mr Huhne complains in his report that the European Central Bank does not display the same openness as the central banks in the USA, Japan and England. Olle Schmidt talks about the Bank of Sweden' s publishing the minutes as soon as two weeks after the meetings concerned. Why should not the European Central Bank be able to do the same?
There are various arguments in favour of this culture of secrecy. One of these which has been put forward is quite startling, I think. This is an argument to the effect that the Bank' s leading personnel will be better able to withstand pressure from lobbyists and individual governments if they have a duty of confidentiality imposed upon them. I think that, in this way, an amazing lack of confidence in these people' s strength of character, integrity and independence is being expressed. They are mistrusted, which shows that it is not only ourselves, who are among those critical of the EU, who are mistrustful. Instead, I would maintain that distrust of the Bank' s leading personnel is written into the Bank' s own statute.
Finally, I also want to associate myself with Mr Huhne' s understanding of the goal and significance of monetary policy. I want to go a step further and say that the ideology concerning stability is just that: an ideology. If we look at what has happened in Europe in recent years, it appears, rather, that the policy of stabilisation merely stabilises unemployment.

García-Margallo y Marfil
Ortega y Gasset said that wasted effort leads to melancholy, and I, in order not to become a victim of melancholy, am not going to repeat any of the ideas which have been expressed here. I will simply highlight some of the points with which I agree or disagree.
The vice-chairman of my committee said, referring to the history of the euro, that we would have to go back as far as Charlemagne and probably Diocletian, who is the grandfather of the euro. And as a Spaniard I must mention Charles I, who wanted to unify the European currencies on the basis of the Cologne mark.
And this leads me to the speech made by an English Conservative Member, who explained what the single currency required in order for the financial markets to have faith in it. What they probably need most is for the United Kingdom to join the single currency.
Having said this and to get to the point, the Treaty of Maastricht enshrined the principle of price stability and put in place a fully independent European Central Bank to uphold this principle. But the Treaty of Maastricht did not deal with the institutional consequences of this decision, and for this reason we are talking today about the independence of the Central Bank, the relationship between the Central Bank and other institutions and the unresolved problems.
In Amsterdam, the decision was taken not to amend the Treaty of Maastricht in any way, and therefore the problems which were pending are still pending. We are now on the eve of an Intergovernmental Conference which has to deal with the consequences of the decisions which we have taken before.
Much has been said here about independence and it is true that, with the Treaty of Maastricht, those of us who believed that price stability was an essential condition for sustained development and that a Central Bank was necessary to control inflation have been vindicated, while those who believed that it was possible to implement any economic or monetary policy provided it produced short-term artificial growth, have been proved wrong. The spokesman of my group has expressed this very well and I will not repeat it.
But because we believe in this model, we also believe that we should adopt decisions so that this model does not fall apart. Firstly, we have the problem of transparency, a topic the rapporteur handled with humour and skill. We believe in the independence of the Central Bank, but this Central Bank is much more independent than the Bundesbank or the United States Federal Reserve, because it was not created by an act of Parliament and cannot be modified by one, because it does not exist side by side with a government that has its own economic policy. And this has led some people to talk of a type of platonic aristocracy composed of a series of independent experts to whom decisions regarding monetary policy are entrusted in the belief - probably correct - that money is too serious an issue for politicians to deal with.
For this reason, if we do not want this model to fall apart, it is necessary to prioritise transparency measures, and I whole-heartedly subscribe to each and every one of the measures which the rapporteur has mentioned.
Secondly, we have the problem of the relationship of the Central Bank with the other European institutions. It has been said here that the priority objective is dealing with inflation, but it is not the only one: we have to think in terms of, amongst other things, an economic focus, responsibility, the international representation of the euro and the monitoring of the banking institutions at a time of significant mergers amongst the financial institutions.

Pérez Royo
Mr President, Mr President of the European Central Bank, this debate is taking place with the euro having been in place for nine months, in conditions which enables us to affirm that its introduction has been successful, even if only in the limited sense that the transition to the third phase of the Economic and Monetary Union has taken place with no great upsets. Given that much of this success is undoubtedly due to the Central Bank, we must communicate our congratulations to its President, and we hereby do so.
Having said this, we must stress two or three points: firstly - and this has been mentioned this afternoon and Mr Duisenberg knows perfectly well that it is a concern of this Parliament - we have the question of transparency. Given that this has been discussed here this afternoon, I will not pursue this argument, particularly as I know that Mr Duisenberg is perfectly aware of the Socialist Group' s position in this regard.
The second issue I want to address, which for me is more important, is that of growth and employment, specifically the relationship between monetary policy and growth and employment. We agree with you, Mr President of the ECB, when you say that price stability is necessary for growth, and that growth and the creation of employment cannot happen without guaranteed price stability. Likewise we agree with you when you say that monetary policy alone cannot resolve the problem of unemployment. But we must also warn - and you understand this perfectly - that bad decisions regarding monetary policy may harm growth and prevent the economic recuperation which has started. There is no lack of historical examples in this respect and the warning is worthwhile at a time when economic recuperation in Europe is far from being confirmed and when, at the same time, there is speculation about the imminence of a stricter monetary policy.
Lastly, I would like to take this opportunity, given that the Commission is present in this debate, to remind you of something which has also been repeated many times by this Parliament and which, in any case, is very important to our group: economic policy does not end with currency and does not end with monetary policy. The third phase of Economic and Monetary Union raises the issue, even more than in the past, of the need for a more robust and articulate coordination of economic policies. In this case, it is the responsibility - I would say the main responsibility in this area - of the Commission. You know this, Mr Solbes, and we call on you to face this responsibility, and in this you will surely be able to rely on the support of this Parliament.

Bordes
Mr President, obviously I do not share with the rapporteur in offering congratulations to the ECB. As for presenting the purely formal actions of the managers of the European Central Bank to involve the European Parliament as if it were the expression of democratic control, that is just a feeble joke.
Having said that, I feel bound to object in particular to the virtual declaration of war against the workers and the unemployed of the European Union in the form of the objective declared by Mr Noyer, the Vice-President of the ECB, when he speaks, and I quote, of the need to "reduce rigidities in labour markets" or even for "a break with often deeply rooted habits and allegedly acquired rights" . Well, we know that the rights he is talking about are simply the rights to a job and to a wage which affords a person a decent living.
These gentlemen of the Central Bank act like the spokesmen for the employers who are effectively in the process of reducing "rigidities in labour markets" by axing thousands of jobs, such as Michelin, Renault-Nissan, Alsthom, Rhône-Poulenc, and Hoest Marion Roussel and many others even now, or by propagating the precariousness of jobs by means of wages which cast an increasing proportion of the population into ever greater poverty while the fortunes of major shareholders continue to grow.
Gentlemen, beware, their attitude will ultimately trigger the reactions they deserve among workers and the unemployed. I hope that in all the countries of the European Union these reactions will unite the victims of the policy of employers.

Villiers
Mr President, Mr Duisenberg, we MEPs, as we have stated a number of times this evening, have a unique role to play in relation to the single currency because this Chamber here is the only place in which the people of Europe can have any democratic input into how their new currency is run. We must not shy away from addressing the difficult issues which surround Europe' s single currency, because if we do so we will be letting down those people who elected us to this Chamber so recently.
Mr Duisenberg, in my view, you have a more or less impossible task because you have to set a rate that is suitable not only for the booming economies of Ireland and Spain but will also suit the faltering economy of Germany. Still less would it be possible to fix a rate which would also suit the persistently divergent economy of the UK. But none of us here doubt the importance of your role because a domestic Euroland government faced with reviving a faltering economy has very few weapons at its disposal. It has no power to set interest rates, no power over exchange rates, little power over government spending restricted by the Stability Pact and, if many people in this Parliament had their way, it would have no power over its own tax rates.
The governments have very few cards left to play with and not for nothing has it been said that the euro could lead to a recipe for stagnation. But we should not be surprised at the limitations on the powers that are left to the domestic governments in Euroland because it has never been a secret of those founding fathers of the single currency that what they had in mind was the creation of political union and a united states of Europe. I welcome your frankness, Mr Duisenberg, in making clear the very big political leap which has been made by those countries which have already entered Euroland.
But anyone who denies the existence of this political agenda - which subsumes the single currency - in my view is either deluded or dishonest, because it is a very real agenda. We saw that very recently, articulately presented to us by President Prodi when he said that we now face the best opportunity to unite Europe since the fall of the Roman Empire. Clearly, Mr Prodi had in mind the replacement of an ancient hegemony with a new economic one. But political union may not just be the idle dream of a few federalists. When you share a joint bank account with your neighbour you are affected by the actions and the spending decisions of your neighbour. You legitimately need some control over their actions. There is a very strong argument for saying that the single currency cannot function properly unless there is increased political integration and political union. That is one of the many reasons why the British Conservatives are campaigning vigorously to persuade the UK to keep its own currency and to keep the pound and to stay out of the single currency.

Katiforis
Mr President, I shall start in English because I must address my congratulations to my British Conservative colleagues for their steadfastness in fighting the euro to the last penny of Japanese investment in their economy or any other investment in their economy. I shall continue in Greek.
Our meeting today is certainly a landmark. We have had so little to rejoice about as regards the building of Europe, so the fact that we are coming to the end of a successful year as regards the euro is something we should applaud. I believe that both Mr Duisenberg and Mr Lamfalussy and their colleagues deserve all our gratitude for everything they have achieved in this matter. Of course, in all democratically-held debates such as this, we are bound to hear at least some critical remarks - but that does not, in any way, suggest that we do not acknowledge the tremendous contribution the European Central Bank has made to European affairs.

Mr President, since we are discussing the annual report, it would be a good idea to focus our attention on a number of long-term issues. The first is the ECB' s insistence on the two-pillar strategy for ensuring monetary stability. While using a "broad-based assessment of the outlook for price developments" , as the Bank calls it, which is basically an "inflation forecast" , seems perfectly logical, using the M3 money supply has neither practical nor theoretical support. From what I have seen, I believe Mr Titmeier has also criticised this. It is an important issue since there may be some disparity between the two criteria and it would be tragic to curb the development of Europe for the sake of an indicator of somewhat dubious quality. Even if monetary policy is as advantageous as you say it is, Mr Duisenberg, and we have no proof of this yet, monetary 'over-stability' could prove to be extremely detrimental.
The second point concerns the independence of the Central Bank, which the political leaders of Europe have given their assurances of - and rightly so. However, independence from the political leadership is not enough; the European Central Bank must convince us that it can guarantee its independence from the capital markets. The central banks are often tempted to keep up with the markets; to wit, they are often tempted to adhere to the interest rates which the markets fix indirectly when they set the prices of securities. But the markets have short-term horizons, the markets have a mass mentality and are exceptionally prone to speculative bubbles which can be particularly disastrous at times. The European Central Bank has not yet said anything to us about that. We only hear a deafening silence from your report. And so, you will have to make a concerted effort to convince us that, in additional to political independence, you have also gained independence from the capital markets so that we can support you in absolute confidence.

Kauppi
Mr President, Mr Duisenberg, the annual report from the European Central Bank shows that the bank has got off to a brisk start, and the steps taken so far have been on the right track. The transition to the third stage of EMU has taken place without problems. During its first months of operation, the bank has been able to adapt its working methods to the demands of the present day. Nevertheless, much has still to be done to raise the European Central Bank to the position to which it is entitled, though not automatically so. In the future we wish to see a strong and independent European Central Bank and not just one alongside our global competitors, Federal Reserve and the Bank of Japan, but, preferably, edging ahead of them. Building up its status and obtaining the confidence of markets will, however, take time, and we here in the European Parliament cannot presume that everything will happen in an instant.
In discussing the annual report in the Committee on Economic and Monetary Affairs, we had lively discussions on inter alia the issue of transparency and how it can be gradually increased. Although transparency has undeniably increased and, for example, press conferences with the President, held after board meetings, have meant a clear improvement in the bank' s approach, the aim must be to increase transparency further, once the work of the bank becomes established and the teething problems disappear. The European Parliament must, as the representative of the European people, have the right to demand that in future, the ECB, like other central banks, should also publicise the arguments both in favour of, and against, its monetary policy decisions. Furthermore, the publication of abstracts of board meetings is justifiable, and the justifications for decisions taken must be clearly evident from these abstracts, so that market players can make their own decisions.
For my own part, I seriously considered my position regarding whether the individual opinions of the members of the board and possible decisions taken by a vote should be made public in the future. However, I ended by adopting the majority position of our group, justifying my decision by reflecting how this sort of approach might reduce rather than increase market confidence in the work of the bank in the early stages. It could also be just too big a step to take so early on. In the long term, however, I hope that transparency is fully realised at every stage, in this regard also. Information is power, and the dissemination of information in an open market economy is democracy. Market viability can be enhanced through the spread of information. The more evenly information is disseminated in a society, the more effectively individual choices steer the economy' s development and guide the invisible hand of the market.
Finally, I would like to say that I thoroughly support the publication of the reports on the economic situation of the countries in the euro area and the various indicators that go with it. The ECB may also comment on this information, but their analysis must, however, be left to national decision-makers. We have to remember that, although the euro area has just one monetary policy, we still have eleven different economic policies, for whose coordination the Member States are responsible, within the frameworks determined in the Growth and Stability Pact.

Van den Burg
Mr President, it is a shame that this debate is soon to finish. I would very much like to hear Mr Duisenberg answer a number of questions that have been raised. I hope there will still be enough time for this. I wanted to remind him of his role in the Dutch consultation system in a former life. In particular I also want to raise the question that other speakers have raised too, as to what he would think to developing a consultation system of this kind on the European scene. I hope that he will take a little time to address this issue before we close.
As far as his former life in the Netherlands is concerned; the Central Bank of the Netherlands, of which he was President for many years, was at the centre of the field of influence in society in which socio-economic policy was developed, and I believe that we should take our example from this and involve the European Central Bank in a European macroeconomic dialogue. As you know, there are plans afoot for dialogue of this kind to take place and there is also due to be a meeting on 8 November.
It is also established practice in the Netherlands for there to be structured ways in which the Dutch Central Bank participates in the consultation system, for example there is a banking council in which advice is given to the bank and in which both sides of industry also take part. This participation in the consultation system economy is also afforded by the Dutch Central Bank having a seat on the socio-economic council, which is the most important advisory body in the socio-economic field. I hope that the macroeconomic consultation between both sides of industry that is soon to take place will be given a far more prominent role. The comments that Mr Duisenberg made in his introduction, to the effect that this dialogue ought only to confine itself to the exchange of information, fell rather short of the mark in this respect to my mind. I think that in view of his experiences in the Netherlands he ought not to be so wary of taking such responsibilities, and also feel that coordinating and harmonising policy could be of great benefit to further developments.
I would like to close with a quote that he himself used when he recently attended the opening of new banking premises in the Netherlands. The quote was as follows: " I believe that the future is also the past, only it comes in through a different door" . He might like to relate this quote to his own circumstances.

Peijs
Mr President, I never thought of comparing Mr Duisenberg with the Pope but if we are going to do so here in this Parliament then might I request that Mr Duisenberg' s role is a more independent one, if at all possible.
The annual report goes into great detail about the seamless way in which the crucial transition to 1999 was effected, a very important moment. Another such crucial point in time is on its way, that is to say the day on which Europe' s general public will literally have the new coin in hand. I have had several discussions with you, Mr Duisenberg, on how the Member States want to handle the introduction of the euro.
The closer the first of January gets, the more everyone becomes aware of the difficulties that consumers, particularly the elderly, and the retail trade are to face. An ever increasing number of studies state that there are going to be very considerable problems and these are being shouldered by the weakest parties: the consumer and the retail trade. It recently became apparent that the Central Bank will not oppose frontloading the general public with coins. It is true that the Member States are in agreement about the distribution of coins. However, the Central Bank has always maintained to date that regulations and/or laws preclude the frontloading of the general public with banknotes.
Mr Noyer came to Parliament recently and when I asked him what the main objection was to frontloading coins or banknotes he actually gave the vaguest answer I have ever heard. If he ever finds himself penniless then he will have no trouble at all getting into politics.
But I want a clear answer today. I know just how clear you can make yourself. What is the main objection? And do not tell me that it would be difficult to explain to people that they could not spend their euros for the first fortnight. Any citizen assumed to have an understanding of the Treaties of Maastricht and Amsterdam could not possibly have difficulty comprehending that. It is downright insulting to suggest otherwise. The Economic Institute of Small and Medium-sized Enterprises in the Netherlands, which I am sure you are familiar with, carried out a study and concluded that the retail trade needs to have 100% of its daily turnover available in change, as opposed to the 7% available to it now. The situation is so bad because the cash machines, the banknote dispensers will not dispense any of the small five and ten euro notes. I hardly need to tell you what kind of an impact that will have on cash flows, the security of check-out operators and shops, bank charges, etc. Every evening proprietors are going to have to convert their whole day' s takings into change again, doing the same for every shop they own. The banks will have to face up to their responsibility.
Mr Duisenberg, the Central Bank needs to come down from its ivory tower and really get to grips with the difficulties facing those ordinary people who are soon going to have to work with the euro. Have trial runs carried out if you do not believe me or the studies. But consider that the success of the euro will depend on its introduction running smoothly precisely where ordinary people are concerned. The discussion continues to focus on how much it will cost the banks. But the discussion ought in fact to focus on whether there is going to be chaos or whether things will run smoothly. The banks are equipped to deal with large flows of money and security but the corner shop and the local baker are not. You too will be assessed not in terms of greater or lesser increases or reductions in the rate of interest but in terms of how the euro will be brought into circulation.

Solbes Mira
. (ES) Mr President, my intervention will be very brief, and I simply wish to highlight the importance of the presence of Governor Duisenberg in Parliament for the analysis of the first report of the Central Bank. It also seems essential to comment on the success of the euro and to congratulate the Bank on its excellent performance during the last year.
Given that today' s debate is basically between Parliament and the Central Bank and it is not for us to play any other role, I would simply like to point out, in response to the concern of some Members, that we will have the opportunity to debate here the problem of coordinating economic policies, which is within the competence of the Commission.
And with regard to the specific problem of the external representation of the euro, we are satisfied with the role that the European Central Bank is playing. We are not so satisfied with the role of the Commission. As I pointed out in my hearings, we will have time to return to a discussion of this issue.
Once again, my congratulations to the Central Bank.

Duisenberg
Mr President, in my introductory statement I already approached many of the issues which have been again brought forward in Parliament this afternoon. So if you allow me, I will try to formulate my answer by grouping together many of the issues that have been raised in Parliament and produce a comprehensive answer, or at least some remarks.
First of all the issue of transparency. Although I realise and I am grateful that the desire to have the votes or minutes published by the Governing Council does not appear in the motion for a resolution which will be voted on tomorrow by your Parliament, in this discussion a lot of attention, much more than I expected, was paid to the phenomenon of transparency, culminating in publishing the vote. I would like to emphasise that when you talk about and require transparency you have to indicate precisely what that means. What does transparency mean? I would warn against what I might call mixing up transparency with publishing the vote.
As far as transparency is concerned, which I define as giving to the public or Parliament as much information as possible about developments in the economy, about monetary developments, about the outcome of the deliberations of the Governing Council, I believe - and I said so in my introductory statement - that the European Central Bank can look squarely in the eyes of any central bank in the world. For example, there is our publication immediately after the meetings of the Governing Council of the considerations which have played a role in the Governing Council' s ultimate decision whether or not to change interest rates. That is done about one hour after the decision has been taken. We give the arguments for and against certain decisions there. I believe that you will find no central bank in the world which is more transparent than we are.
The only thing we do not do is we do not publish votes. Apart from the fact - and this may be somewhat embarrassing - that we virtually never vote in the Governing Council, so there is nothing to be published, I will not repeat all the arguments against this which I have brought before this Parliament on earlier occasions, but one has to remember that the decisions of the Governing Council of the Eurosystem are made in a collegial way and there is one decision only which emerges.
The arguments for and against it are published in the press conferences and in the Monthly Bulletin after the meetings have taken place but there is one decision. One always has to bear in mind that every word that is spoken by me or any other member of the Governing Council about economic developments and about the decisions which are taken and in what direction sets in motion immediately billions of euros across the world. It is always a signal to the market and it takes effect almost simultaneously with the utterance of the opinion.
On forecasts, Mr President, I do not need to say more than I have already said in my introductory statement. There will come a time when we will publish forecasts, either bi-annually or tri-annually. I do not yet know the precise form. We are actively investigating this question but we simply are not ready yet and we do not have enough data or know the models which ultimately we will use. We have not yet reached a degree of stability which would make it responsible for them to be published now but, as I said in my introduction, I am confident that in the course of next year we will publish forecasts.
To avoid one misunderstanding, it has been asked repeatedly here "why do you not take an example from the Federal Reserve system which publishes forecasts" and I believe it is also a consideration behind the motion for a resolution. That must be a misunderstanding because what the Federal Reserve system publishes twice a year in its Humphrey-Hawkins testimony for the Senate is a range of figures for a few indicators, the range being the range of the individual forecasts of members of the Federal Open Market Committee coming from the regional Federal Reserve banks. That range, the forecast with which they come once every six weeks to Washington, is published. Forecasts are also prepared for the FOMC meeting and in particular for the Board of Governors of the Federal Reserve system, forecasts prepared by the staff of the Board of Governors. They are the forecasts which are used to underpin the decisions that the FOMC takes at any particular moment in time. Those forecasts are not published. And I already made some remarks in my introduction on the relativity of forecasts, even if they are published, for the decision-making process.
Various Members of this Parliament have questioned whether the ECB places too much emphasis on prices and too little on growth and employment. At least that is how I have understood the question; that was the signal that was given to me.
Firstly, the Treaty of the ECB makes it literally mandatory for the ECB to give primary attention to their primary objective, which is to maintain price stability. The Treaty says "without prejudice to price stability" , that is only when price stability, I should say, is guaranteed, should the ECB in its policies support the general economic policies of the Community. There is another small remark I would like to make, Mr President, but it is important in the context of the motion for a resolution. I believe the Treaty language is a little misrepresented. In the resolution it says "providing that this price stability is attained" . The Treaty says, and not without reason, "without prejudice to the objective of price stability" - and that is of great importance in economic terms.
The wording of the resolution may be interpreted as suggesting that when the current rate of inflation is below 2% then the Eurosystem would be under an obligation to support the general economic policies of the Communities. In contrast the wording "without prejudice" clarifies, and it is intended to do so, that the Eurosystem is under no obligation to act in this mechanical fashion if it believes that doing so might jeopardise price stability in the future.
I ask Parliament to take that into account.
Regarding the suggestion that there is too much emphasis on price stability, the formal answer is that it is our mandate. Also, I would like to repeat that we do not overestimate the impact that monetary policy can have - what it can and cannot do. It is my firm belief that monetary policy can and will influence the movement of prices over the medium-term but not in the short-term. That is why we have a forward-looking strategy. The direct impact of monetary policy measures on employment and growth is very limited indeed. That is borne out by research which we did at the institution where, as Mrs van den Berg indicated, I previously worked.
Turning to the current situation, I should like to repeat that the monetary policy strategy of the Eurosystem, which has been made very clear to Parliament, is based on two pillars, both designed to be forward-looking over the medium-term. The two pillars are: the reference value for monetary growth, M3, and a broadly-based assessment of a wide range of indicators and their impact on the primary aim of price stability. That broadly-based assessment is one that encompasses a wide range of indicators, of course including developments in the real economy, movements in employment and unemployment, an assessment of movement of the exchange rate in so far as it has an impact on price levels in the euro area. That is our strategy. It is forward-looking. Of course we look at the current developments in inflation also as one of the indicators of what we think is going to happen in the future, but it is certainly not true that we only look at the current inflation rate, as implied in the draft resolution.
You will understand that I will not join Parliament in the debate on what decisions might be taken in the short-term on interest rates, although that decision has been alluded to by various Members of Parliament. In Parliament it has been said by various Members that if interest rates were to be raised that would choke economic growth and the growth of employment. But please remember that when you are driving a car very fast and you want it to go forward, but maybe a little slower, you can either step on the brakes or you can lift your foot a little bit from the accelerator. There is a difference. Raising interest rates in a certain situation might be more akin or related to lifting your foot from the peddle as opposed to braking the momentum of the economy and in that way going slower. We all want to go forward.
Mrs Peijs wanted a very clear answer on frontloading. I hope to be as clear as I can on banknotes. The Eurosystem, early on, made it clear to the public at large that frontloading over a short period would not be a problem provided it could be ensured that the money frontloaded to banks, for instance, or other organisations is not brought into circulation before 1 January 2000 - into general circulation that is. We formulated that by saying that banknotes may be frontloaded provided there are legal or contractual guarantees at the receiving end which ensure they will not be brought into circulation before 1 January. There would have to be contracts or legal provisions or contracts with retail organisations or banks. Then it would be possible.
On coins - you will be aware I do not have responsibility for coins, this is a matter for the finance ministers - the big difference is that it is virtually impossible to get that same guarantee as far as coins are concerned because coins are generally put into circulation by the retail sector rather than by the banks. To have such a guarantee would be impossible. Another large difference is that it is very easy to try to make a counterfeit banknote with modern photocopying techniques which is the reason why the precise features of the banknotes to come will be widely published but only very briefly in advance of their introduction, so as to reduce the danger of counterfeiting and confusing a public which is not yet familiar with the notes. It is much more difficult to counterfeit coins.
I have touched upon all the major issues that have been raised today on banking supervision. It is well known that the Treaty gives very little responsibility to the European Central Bank in the area of banking supervision. Our task is to promote financial stability and the stability of the financial markets. We monitor banking supervision, but this is not one of the tasks of the Central Bank. We are fully involved in the further development of rules. Mr Goebbels said that the ECB should be: "a bit less reticent about international exposure in all the various fora" . The ECB is now fully involved in all discussions in all international fora on the future of what is now called the "financial architecture" in the world. The ECB is fully involved in all discussions of the G-7, of the G-10, of the OECD. We have a permanent representative who is very actively engaged in discussions at the IMF. In December there will be the first meeting of this new Group of 20 at the initiative of the G-7 countries, consisting of the G-7 countries and a few emerging market representatives. The ECB will be there. We will also participate in that dialogue.
As Mrs van den Berg has asked, we do participate in the macroeconomic dialogue but just as in the Netherlands, the Central Bank participates in the dialogue but does not agree to a compromise on its policy in order to get a concession in another policy area. There will be no ex ante policy coordination but there will be an extensive and, I hope, critical exchange of information of all the partners involved, including the ECB.

President
Thank you very much, Mr Duisenberg.
The debate is closed.
The vote will take place tomorrow at 12.00 p.m.

Assessing the Community' s humanitarian actions and looking to the future
President
The next item is the statement by the Commission on assessing the Community' s humanitarian actions and looking to the future.

Nielson
Mr President, the Commission has today accepted a report to Parliament and the Council, assessing ECHO. The Commission' s assessment is based upon a report by consultants. This report has been prepared by professional people. I think that this is the correct way to go about things. When, in the future, the Commission assesses activities in my own area, this ought to be done on the basis of such modern, professional and open methods. The consultants' overall conclusion was positive, and the Commission shares this positive view of ECHO. However, we are alert to the fact that there are a number of things which can be improved.
First of all, cooperation needs to be improved. We need to improve our cooperation with the multinational organisations, the UN bodies and the Red Cross organisations. The intention is to help the international community respond more effectively and in a better coordinated way in different crises. The fact that ECHO is such a big aid organisation means that we also share a more general responsibility for its effectiveness. At the same time, it means that we should also make larger demands in cooperation with, among others, the various UN organisations. We need to establish a broader and more activity-based approach to individual humanitarian crises. This should be done within the framework of the existing regulations.
Secondly, there is the question of our management strategy. Improvements internal to ECHO should also be made. We should invest more highly in a concerted handling of the whole project cycle, which includes ensuring effective feedback. On this basis, we should to a greater degree be measuring results instead of input. There are also points on which we have disagreed with the consultants' proposals. We do not, for example, wish to abolish ECHO' s logo. European taxpayers are entitled to know where the aid is going to, and there is no reason, either, to conceal from the recipients where the same aid is coming from. But ECHO' s visibility and its logo must not be permitted to hamper cooperation with our partners.
Thirdly, there are the policy considerations. In the longer term, the Commission wants to develop a cohesive strategy for the grey area here, that is to say the area between real humanitarian aid and longer-term, more future-oriented development work. At present, a lively international debate, in which the Commission is also to be an active participant, is taking place about this so-called transition gap. What is more, the Commission' s internal resources are to be mobilised so that they can release the required humanitarian aid in individual situations when the time is ripe. The objective is to give ECHO the opportunity to define a meaningful exit strategy in connection with different crises.
Combining the two portfolios of development and humanitarian aid provides a better opportunity for this, not least on the basis of the fact that both ECHO' s sphere of work and the Commissioner' s responsibility for development policy are global in character. The plan is to present a report on this subject in June 2000. The Commission will also launch a debate about other important policy areas: conflict prevention, preparedness in advance of crises and catastrophes, and humanitarian aid which is based upon upholding human rights, that is to say which focuses to a greater degree upon the victims' rights as human beings. Special groups include women (especially victims of rape), child soldiers, refugees and internally displaced persons. In all these areas, a connection with the Commission' s development policy should naturally be guaranteed. The plan is to report on these areas in July 2001.
And, finally, the conclusions. ECHO is to continue to retain its non-partisan character in all conflicts. This is important for the purpose of securing access to the victims of crises. ECHO' s presence in a wide range of countries, each with its own workers who have been sent out, is an important link in an effective policy of humanitarian aid. ECHO is an organisation with its own power to act and with motivated staff who are ready to implement the proposed improvements. In the midst of all discussion about changes, it is important to state that ECHO' s committed and loyal staff are the most important asset we have to build upon. I am looking forward to seeing the results of the changes. It is my intention to visit East Timor in the very near future. This will be a good opportunity to see some concrete results of ECHO' s work and for me to do what I can to establish fruitful cooperation with all our partners.

Schroedter
Mr President, I have a question for Mr Nielson regarding bridging the gap which he mentioned. He said there would be further discussion of this. Were there any proposals in the expert report as to the form this involvement of development aid would take or even of other development instruments such as PHARE or TACIS, for example, and has it been ascertained whether the problems are in the area of ecological aid and the programme there or in the area of other forms of aid? Could you clarify this?

Nielson
Mr President, there were actually a number of proposals made by the evaluation. One of them had to do with ECHO moving more into the area of development cooperation, in a sense staying longer in a post-conflict situation. I do not think this is how to do it - we will end up over-stretching the resources very rapidly because new conflicts keep coming up. So we need to have a balanced approach, drawing on the resources in our development cooperation in general but making sure that they go in when ECHO goes out.
It sounds easy but it is not that easy. In general it is necessary to combine these things and many are not able to do it. A very big problem is that individual countries although good donors do not have the resources to stay a long time in many conflicts. This is where the European Union has a special capacity and also special responsibility. It is extremely important that we, at a certain point, become very good at managing this transition gap.

Martínez Martínez
Mr President, I am going to ask three questions on behalf of my Socialist colleagues in the Committee on Development and Cooperation, who are here in spirit but physically are in the Committee itself, voting on the amendments relating to the World Trade Organisation.
Firstly: can it be deduced from the Commission' s arguments here today that the funding of ECHO for humanitarian aid will mainly continue to be channelled through the programmes of different NGOs, or is any change envisaged in this regard?
Secondly: does the Commission intend to support the reform of the regulations which govern humanitarian aid? And, if that is the case, in what respect? Would such a reform be carried out in accordance with the codecision principle which is introduced by the Treaty of Amsterdam?
Thirdly: can it be deduced from today' s discussion that ECHO will retain its full role of channelling European Union humanitarian aid in crisis situations, or, rather, that the activity of ECHO and humanitarian aid itself will be progressively diluted within the Union' s general policy of cooperation for development?

Nielson
. First, we are not planning or expecting any change concerning distribution, as between NGOs and UN organisations and other organisations, driven by our management or policy We respond to appeals and crises and use whichever organisation is able to do a good job in the specific circumstances. We do not have a fixed, preconceived idea of who gets what. Concerning the NGOs, we have found very few changes to be necessary. We know that in practice, in daily operations, we will have to streamline procedures as much as possible but, in general, this has not been seen as a major issue in the whole evaluation process.
Moving on to the next question, on reforming or changing the regulation, I already made it clear in my opening remarks that we think it is possible to make many important and necessary changes within the existing regulation. We will come back to that. We are not closing the option of changing the regulation but this will be taken up in a much broader, long-term process - the one I mentioned concerning the policy part of our response. For the time being we will work on the basis of the existing regulation. We think this gives enough scope for the changes that are needed.
Regarding the codecision aspect of this, in responding to the evaluation, I have deliberately avoided saying anything concerning that issue. How codecision will eventually be hammered out in terms of relations between Parliament, the Council and Member States in decision-making on humanitarian activities is something that needs to be discussed further and perhaps negotiated. But I did not want to open up a discussion on that because following up the evaluation is not a problem I have to deal with.
Concerning the identity of the operation, I distinctly mentioned the logo and the discussion. The consultants recommended that we should give up the specific ECHO logo. This is one point on which I feel we should not follow their recommendation. But we have to strike some kind of balance. To put it in a nutshell: visibility is fine, feasibility is better. There is, in some cases, a risk that pushing the logo too much creates friction and reduces the willingness to cooperate smoothly on the ground. Somewhere we have to find a balance. But I did not want to back down as far as visibility is concerned. We owe it to our tax-payers, the European public. Certainly there is no reason why we should hide from the beneficiaries who it is that is actually helping them.

Schori
Mr President, I want first of all to say that I am here as a representative of the Group of the Party of European Socialists, which is meeting now.
I want to say to Commissioner Nielson that his presentation was music to my ears. Three things, in particular, caught my attention. First of all, he promises openness and modernity; openness is incredibly important, since ECHO is among the highest-profile organisations of the European Union. Secondly, he also promises increased cooperation with the United Nations and the Red Cross; this is also important and has been needed for a long time. Thirdly, he anticipates too a more integrated view of humanitarian aid in foreign policy generally, designed to prevent conflict, which I believe is necessary.
My question is this: is the Commissioner prepared, in anticipation of the report also promised for June 2000, continually to consult in one form or another with Parliament and with any non-governmental organisations concerned?

Nielson
My answer to the question will be "yes" . I should very much like to see open debate and open procedure. We can use any good ideas, and what we are trying to do with ECHO is precisely to mobilise Europe' s population, too. The fact that we are involved as active partners in these different conflicts and crisis situations is also a demonstration to our own citizens in Europe that Europe has a role to play in these places. That is why it is also necessary to involve citizens, and that is to say Parliament, and I am therefore very prepared for cooperation with Parliament and with Parliament' s committees when it comes to the next steps we are to take.

Dybkjær
Mr President, involving the NGOs is something which the machinery both of the United Nations and of Europe is intensely concerned with, and this is doubtless something which is necessary. But when it is a question of constructing democracies in a number of countries, I also think we ought to be looking at how we can involve the members of the parliaments in these countries. We have no tradition at all for doing this through, for example, the UN machinery. We still scarcely have any such tradition through the European machinery. It is, for example, a fact that the NGOs have direct representation in the United Nations whereas members of the parliaments are only appendages of their governments, and it is only as such that they can offer any input. I am very much of the view that we could re-think this machinery and that we ought to be asking ourselves how we can guarantee better parliamentary cooperation with a number of developing countries and also with the Central and East European countries we are supposed to be helping. I am saying this not because the NGOs should not continue to be involved there but because I think it is a rather false picture we are giving of the construction of democracy if we say that it is only NGOs which can be actively involved. In fact, parliamentarians can also be involved and, in reality, were in fact originally involved in our own wealthy part of the world before the NGOs came on the scene.

Nielson
I very much share Mrs Dybkjær' s point of view. The impression has been given that the abbreviation NGOs might almost be read as standing for neogovernmental organisations. But when we consider ECHO' s work, we are talking here about situations following wars and crises in which the societies concerned have fallen apart and in which, in general, it is a question of establishing structures in the societies concerned. I very much agree that members of the various parliaments are naturally important elements but, if we take countries like Somalia, Sudan and other such places, we are forced to take what there is by way of structures in the so-called civil society and try to help these structures become parts of a civilised society. In connection with our efforts as a whole in this area - and not just those involving ECHO and humanitarian aid - a lot of people have asked whether we have not got things the wrong way around in insisting that elections be held quickly. Cambodia was one example, Angola another. Some people think that, in these cases, we insisted too quickly that elections should be held and the formal structures of democracy created. On the other hand, insisting on these things has worked well in many cases, so I agree that we should be pressing for the outward and formal structures of democracy to be established. This is the way in which - as soon as structures of this kind have been established - parliamentarians become the decisive players, in civil society too.
With regard to the part of the question concerned with the role to be played in what we are doing by members of the parliaments concerned - and that is another way of looking at the question - I want to say that the debate itself, the very dialogue between the Commission and Parliament about the policy we are to pursue, is for me the decisive factor, and it is from there that we get the decisive inspiration.

Kinnock, Glenys
Mr President, could I ask the Commissioner whether he considers that this evaluation risks putting structures in place which actually endanger the possibility of us of being able to react in a crisis as quickly and as effectively as he suggests we should? secondly, Commissioner, let us take for instance a case study such as Sierra Leone: You talked about the clear distinction between humanitarian aid and long-term assistance. Could you give me your analysis of what stage one part of your work will take over from the other in the case of Sierra Leone?

Nielson
No, to the first part of the question. I do not see that anything we are suggesting here would actually endanger our capacity for quick action. We are not moving towards creating a rigid system and the special character, the ability to act and the identity of ECHO as such, are all something I find important in order to avoid ECHO, as a humanitarian relief organisation, becoming involved in the very cumbersome decision-making machinery of the Commission in general. We are not heading toward the kind of problems that you ask about here.
Regarding Sierra Leone, it is very difficult to say. The main thing is to what extent it is possible to mobilise enough donors; it is not just what we do ourselves. There must be a critical mass of donors who are willing and able to make a more long-term effort in a given country, so coordination is extremely important here. We have to be able to deliver our share of it and phase out crisis-based ECHO presence, replacing it with the post-conflict presence of a more long-term character of our development resources.
If others do not participate, it will not work, so part of the answer to what we have to do now is to be more active in the discussion from case to case - within groups of friends of Sierra Leone, to take one example - trying to organise a more coordinated response to moving away from the immediate crisis demands.
One case that illustrates where we should be careful not to end up is that the UNHCR is still today funding and managing primary education in Rwanda. Nobody else is ready to pay for it and that is why they are there. They are doing a respectable job but it shows that the international system and who does what becomes distorted if the normal donors do not demonstrate a readiness to play their traditional role. This is where we hope to be able to push the international discussion in a better direction than hitherto.

President
Thank you very much, Commissioner Nielson.
The debate is closed.
(The sitting was suspended at 8.15 p.m.)

Annex - Formal sitting
President
Ladies and gentlemen, it is my very great pleasure today to welcome Mr Andrés Pastrana, President of the Republic of Colombia here today.
(Loud applause)
Mr President, your visit to the European Parliament comes at a time when the whole population of Columbia has demonstrated loud and clear its desire for an end to civil unrest, and for democracy and respect for human rights.
We were very touched by this appeal by eleven million Colombians, including your own wife, who last Sunday marched through the streets of many towns in your country. Please be aware that the desire for peace expressed by your fellow countrymen addresses us and it is our duty to encourage any initiative which may contribute to peace.
This massive demonstration coincided with the opening of peace negotiations between your government and the guerrilla movement in Uribe. I would like, especially, to pay tribute to your perseverance and to your courage which made it possible to initiate this peace process which, I sincerely hope, will progress and be successful. Yes, the European Parliament can stand alongside the Colombians who last Sunday chanted Nunca mas (No more).
Mr President, your continent and your country in particular have paid a high toll to violence and political instability. This is why I would like to pay tribute, in your presence, to all those who were the victims of their own commitment to democracy. There were too many of these female and male politicians, journalists, defenders of human rights and citizens who paid with their lives for their fight for a more just and more humane society.
Please be aware, Mr President, that we shall support every effort intended to suppressing terrorist campaigns, to controlling paramilitary forces, and to affirming the supremacy of civil authority over military might.
The European Union will assist you in your peacemaking enterprise, and shall promote the strengthening of relations between the European Union and Colombia. The cooperation agreement, of the third generation type, has already made it possible to establish solid links between us. I am convinced that these links would be stronger yet if they were to come within the framework of intensified regional cooperation between the Andean Pact countries, a reinforcement which we devoutly wish for because regional stability is achieved primarily, of course, by being on good neighbourly terms.
Mr President, the European Parliament today hopes to encourage you to continue in your move to establish once and for all the rule of law. We thank you for your attendance here, for your visit, and it is now my very great pleasure to give you the floor.
(Loud applause)

Address by Mr Pastrana, President of the Republic of Colombia
Pastrana
Madam President, ladies and gentlemen, it is an honour for me to appear before you, the representatives of a Europe which promotes optimism, which is the most successful example of a genuine political integration this century and which demonstrates that it is indeed possible to return from death to life, from disrespect for human beings to the veneration of their rights, from pessimism to hope: which also demonstrates that peace is possible wherever development, social justice, the defence of the weakest, solidarity and coexistence are established. These are the things that determine culture, give meaning to liberty and open up the path leading to the achievement of shared goals.
At this moment, and from this hemicycle within the new European Parliament complex, my country has the great privilege of addressing Europe, through the elected representatives of the people of the fifteen countries which currently make up the European Union.
Colombia, the country which I govern by democratic consent, is struggling with a difficult quest for peace, employment, development and, above all, social justice. The sovereign population of Colombia, in the highest vote in history, expressed itself clearly and delivered to me an emphatic mandate. A mandate to search for peace in our country.
It is not my custom to block out the sun with my hands nor to cover my eyes with bandages. The international community is discerning and is watching us attentively. We, who are also discerning, also see what is happening in the countries of the world and we know that it is necessary to act now, that there is no time to lose. We know that this is the time for cooperation, not for confrontation nor for intervention.
Many of our neighbours in Latin America, over the course of time, have found solutions to their conflicts. In these processes the European Union has always been present to a significant degree, as a mediator and as a bridge between the various political and social sectors. In the negotiation processes in Guatemala and El Salvador, the role of the European Union was fundamental.
The traditional concern of Europe for peace and human rights, and its marked tradition with regard to negotiation processes provide my country with absolutely essential support: this support is vital. And it is also vital that Europe understands the background to the Colombian conflict.
We cannot allow the discussion of Colombia to be based on words but no action, on the idealisation of conflicts belonging to past decades and even less on press reports which are more concerned with the spectacular nature of the news rather than the reality behind it.
I can tell this from your questions concerning our conflict and the peace process: "Why are there still guerrillas in Colombia when they have disappeared from the rest of the continent?" "Is there a civil war in Colombia?" "What does the "zone of peace mean?" "Who violates human rights in Colombia and what is the commitment of the government to human rights?" "Is the Colombian Plan a military plan?"
I have come here today to explain our real situation to you, without denying the brutality of the violence we suffer. Nobody could be unaware of the reality of my country. Violence has plagued our country for years. Many Colombians have died for their cause and many, through kidnap, have lost their liberty.
The Colombian conflict, under its own steam, has undergone serious changes and, without doubt, the force with which drug-trafficking exploded in Colombia in the Eighties has been the element which has led to the greatest increase in violence. This has not only permeated the guerrilla movement, whose finance increasingly comes from charges imposed on coca leaf, but it has also extended the circle of violence to other armed groups and organised criminal groups.
Faced with this escalation of violence, the Colombian population has said NO MORE. Mass demonstrations have taken to the streets, reminding us of the response of the Spanish people to terrorism, to demand NO MORE VIOLENCE. Today the people of my country, like never before in their history, are united in the demand for a cessation of the violation of human rights, especially kidnap which should cease to be used as a source of finance by the guerrilla movement and other violent groups.
In Colombia, there is no civil war. Less than 4% of Colombians support the guerrillas. During the last two decades, the conflict has changed substantially. While the military capability of the violent groups is increasing, largely thanks to drug money, the civil population is asking to be freed from the conflict, since they have realised that it is they who suffer as a result and it is their fundamental rights which are violated day after day.
Ladies and gentlemen, ours is a unique type of conflict which requires a unique type of solution, and my government is determined and committed to finding this solution.
The guerrilla conflict has concerned our people for 40 years. During this time, several insurgent groups have participated in the conflict. But there are also several who have now understood that the best alternative for our country is to abandon violence through a process of political dialogue. Six armed groups comprising around 8,000 rebels, have, during the last ten years, laid down their arms in favour of the power of argument.
Today we are treading the path of negotiating the armed conflict with the FARC, the oldest of the guerrilla groups. In little more than a year, through dialogue, we have already agreed an agenda for negotiation which consists of twelve points and last Sunday, in a historic moment for our country, we embarked upon a negotiation process which must lead our country along the path to the construction of a lasting and genuine peace.
There has also been a lot of speculation about the so-called "zone of peace" . The truth is that this is an instrument created by Colombian Law to generate security conditions to assist the dialogue. This zone covers only 3% of the national territory and a quarter of 1% of the Colombian population lives there. We have not given up our national integrity there and the State is represented by democratically elected Mayors and Councillors.
We are also moving forward in the search for a solution with the National Liberation Army, the ELN. Last week preliminary contacts were started, aimed at reactivating the discussions and I am optimistic that we will soon see significant advances which will allow us to initiate negotiations with this rebel group as well.
The whole of Colombia and the international community believes in the progress that is possible through a political solution. I know that it will not be an easy path to follow and we will certainly continue to encounter difficulties, but we will always remain steadfast in the effort to overcome them. Peace processes take time and require patience, a lot of patience. Let us remember the cases of El Salvador or Guatemala. Let us observe the peace processes in the Middle East and Ireland. Neither of them happened overnight, but a negotiated political solution will be seen to have obvious benefits.
I would like to repeat that I will do everything possible to achieve this peace which is essential to all of us. But, as I said a few days ago before the United Nations General Assembly, I do not want peace at any price, but rather a peace which genuinely strengthens democracy, which preserves the territory and allows all of the citizens to enjoy full rights and liberties.
I believe that a decent and democratic future is not possible without a culture of respect for fundamental rights. I know that in the course of the protracted internal conflict in Colombia these rights have suffered serious violations, and this must not continue.
I am totally committed to the defence of human rights. My convictions, my background and the mandate of my people testify to this. To this end, I have implemented a broad State policy to combat, within the framework of the law, those armed groups which operate outside that law, to guarantee security, protection, support and freedom of action for the defenders of human rights; to assist people who have been displaced by violence; to adopt legal instruments which protect human rights and strengthen our judicial apparatus. To sum up, a group of specific measures aimed at guaranteeing compliance with international humanitarian law.
The results of the application of this policy are reflected in the notable decrease in the complaints of human rights violations emanating from the public, as recognised in the reports from the intergovernmental bodies and NGOs which operate in this field.
We have worked hard to bring our legislation up to date. Congress is currently debating a law to define and punish enforced abduction, genocide and massacres. Furthermore, my government supported the approval of a new Military Penal Code which includes significant advances with regard to the competence of the civil courts to judge the military with regard to crimes such as genocide, enforced abduction and torture and we have signed up to the Statute of the International Criminal Court.
In addition, a Presidential Decree has been issued to promote respect for non-governmental organisations which operate in the field of human rights. I also hope that those organisations can carry out their noble activities for strictly humanitarian purposes, without any political interference.
Ladies and gentlemen, my government is taking decisive action with regard to the protection of human rights, and in this task we need the support of the international community. If the guerrillas or the autodefensas (vigilantes) violate human rights, this fact must be reported and they must be punished. If any agent of the State does the same, this is also a crime and must not go unpunished. That is to say, any human rights violation must be rejected and the perpetrators punished in accordance with the law. Over the "State motive" or the justifications bandied about by the perpetrators of violence, the "human motive" must always prevail.
It is also important for Colombia that both Europe and the United States understand the correlation between drug trafficking and violence in Colombia.
There is no nation in the world which has offered up as many martyrs as Colombia in the fight against drug trafficking. This disastrous trade has been and continues to be the principal cause of the worst tragedies of our recent history. The economic power of these organisations led to corruption in many areas of our lives. Drug trafficking has been the great creator of violence and has led to assassinations of the highest possible human cost to our country.
Currently, it contributes to the maintenance of the wave of violence which we are suffering by financing the various perpetrators of violence. I have said, and I would like to repeat to you today, that drug-trafficking is the foremost and the worst enemy of peace, and peace will not be achieved totally without the eradication of the organisations which carry out this accursed drug trade or without finding alternatives and solutions which are economically and socially sustainable.
My country, like no other, has carried on its shoulders the burden of the fight against drug trafficking. Therefore, I would like to take this exceptional opportunity to invite all the countries of the world community to fully implement the principle of what has been called "shared responsibility" , in order to combat the global problem of drugs.
This principle requires us to confront together the serious global problem of drugs, at every link in the chain; that is to say, production, distribution, consumption, money laundering, the diversion of chemical ingredients and arms sales. It also requires us to contribute to lasting solutions in accordance with our own individual capacities.
We have significant agreements with the European Union which recognise the shared responsibility in this area. We have made advances in the promotion of cooperation mechanisms between Europe and the Andean countries, as in the case of the tariff concessions of the Andean GSP, the expansion of which is vital to my country.
Whilst on this subject, I must also express my satisfaction with the recent conclusion of the Presidency of the European Council at Tampere with regard to the laundering of capital, which mentions the Council decision to "ensure that specific steps are taken to trace, freeze, seize and confiscate the proceeds of crime" .
We must confiscate the money and property of the drug-traffickers, and their associates, which results from this murderous trade and deny them any possibility of buying chemical ingredients and arms and we must pursue the underworld which launders the money which they obtain.
Together we must continue to make advances towards complete solutions which cover all the links in the chain. And together we will have to give priority to those education and prevention programmes which will bring about a reduction in demand. In this struggle, ladies and gentlemen, we need you as partners and allies.
My country is not asking for much: simply that each member of the world community plays its part in the task, in accordance with the principle of shared responsibility, and that we can all meet the costs of lasting solutions within the bounds of the available possibilities and resources.
It should also be of great concern to all of us that drug trafficking is causing more and more ecological damage. In our country, which is one of the eight richest nations in terms of biodiversity, the illegal cultivation of coca and poppies have destroyed more than a million hectares of jungle, rain forests and mountain areas. The pillage of nature is so out of hand that five hectares of forest are destroyed in order to cultivate one hectare of coca or poppy and every year 200,000 gallons of herbicide, 16,000 tonnes of chemical fertiliser and 100,000 gallons of poisons used on these crops contaminate Colombian waters and soil.
I want to repeat today that there is no doubt that the activities associated with illegal cultivation are spoiling the earth' s natural heritage. It is therefore the duty of all of our countries to stop this destruction in order to defend at all costs the human right of future generations to a habitable planet.
We share Europe' s concerns about global warming, deforestation and the essential conservation of tropical forests. We also understand that we must tackle the problem of polluting emissions. For this reason we want to propose to Europe an Environmental Alliance between the countries of Europe and Colombia so that we may move forward together in this noble purpose.
Faced with Colombia' s real situation it is clear that in order to advance in the arduous task of building peace it is necessary to go beyond dialogue and negotiations with rebels. It is necessary to find fundamental solutions to our problems. We need to construct a new nation where respect for human rights, the application of justice and the reconstruction of our social fabric are the solid foundations which will allow us to build a society in which the factors which create violence are eradicated for good.
It is for this reason that I am here before those of you who share these ideals, to propose that you deepen your commitments with us and that we strengthen this alliance which is useful to all of us. Appropriate cooperation is one of the most effective ways of protecting human rights; cooperation means preventing the preventable; cooperation means opening up the roads to hope.
To this end I have drawn up the Colombia Plan for peace, prosperity and the strengthening of the State. It is not a military plan. It is a comprehensive and unified plan aimed at strengthening such basic issues for our country as the search for peace, the reactivation of our economy and the generation of employment, the protection of human rights, the strengthening of justice and the increase in social participation. The final result will be the strengthening of our State, as the essential requirement for the achievement of peace and progress.
We need your participation on all these fronts but principally we need you, your nations and the whole of Europe to invest in peace for the sake of peace, and to open up your markets so that we can create employment for the sake of peace.
For this reason, Colombia is presenting the international community with an alternative policy for the eradication of illegal crops based on an alternative development which offers the rural population, which is currently involved in illegal cultivation, a permanent escape from their economic and social problems, replacing illegal crops with commercial, mining, agricultural, agro-industrial and service companies, and with the necessary infrastructure so that they may compete adequately in the world' s globalised economy.
Colombia hopes to finance, jointly with those countries which are in some way involved in the drug chain, the infrastructure of the project and also hopes to involve private capital, both national and foreign, in the economically productive companies so that they may incorporate advances in technology and new capital.
Madam President, honourable Members of the European Parliament: I wish you, on behalf of the Colombian people, the greatest success in the enlargement and deepening of European democracy. You represent people who have opted for life, peace and the defence of human rights, you constitute the means of expression of those who believe in democracy, freedom and a healthy environment for future generations. You are largely responsible for leading the rapprochement with those countries which are building hope for themselves and which are eager for the third millennium to bring genuine successes.
I am here before the representatives of European democracy, to tell you unequivocally that I have opted for peace, I have offered the guerrilla movement peace with dignity and security. In order to live in peace we need a national agreement supported by the international community.
As a democrat and before democrats I ask you here today: support peace in Colombia. To do this would be to invest in humanity and in a vision of a future which brings about development, well-being and social justice.
Thank you very much.
(Sustained Applause)

President
Mr President, thank you for the statement you have just made which will remain imprinted in our minds as Europeans, and in our minds as female and male politicians.
You have presented the difficult situation of your country with great candour and great clarity. You emphasised, I noted, the disasters of all sorts caused by drugs trafficking and you appealed to what I shall call our joint responsibility in eradicating this scourge. We have clearly heard your message. As you know, a few days ago in Tampere, an extraordinary Council of the Heads of State and Government of the European Union met and decided upon a number of extremely strong measures in this area.
And then you explained how you intended to progress along the road to peace. You very powerfully expressed your wish to lay down, and I quote, "arms in favour of the power of argument" . I must say that I greatly admired what you had to say on this subject and I also appreciated the wish you expressed to establish a form of peace which strengthens democracy. In this connection, you mentioned a number of very courageous measures which, as you may have observed from the applause of my fellow Members, were greatly appreciated. We have heard, Mr President, your wish, your appeal, I would say, for close cooperation between us and your appeal for our assistance in your very courageous undertaking.
Thank you for choosing the European Parliament as the place to launch this appeal, and may I assure you that this appeal has been heard and understood.
(Loud applause)
(The formal sitting was closed at 1.05 p.m.)

