Announcement by the President
President
 At the Conference of Presidents' meeting on 31 January 2002 it was decided to alter the duration of the adjournment of the session. I should like to inform you that pursuant to Rule 10(4) a plenary sitting will be held in Brussels on Wednesday, 20 March 2002. The purpose of that sitting will be to hear the outcome of the Barcelona Summit meeting. It will be addressed by the President-in-Office of the Council, Mr Aznar.

EIB Annual Report for 2000
President
 The next item is the report (A5-0392/2001) by Olle Schmidt, on behalf of the Committee on Economic and Monetary Affairs, on the EIB Annual Report for 2000 (C5-0541/2001 - 2001/2218(COS)).

Schmidt, Olle
Mr President, Mr Maystadt, I should like to thank you, Mr Maystadt, very much for the kindness and readiness to help which you and your colleagues have shown to me and the committee. It made the work considerably easier. I also wish to thank my colleagues.
The role of the EIB has been of topical interest in the debate in recent years, and criticisms have been made. These have mainly been targeted at deficiencies when it comes to environmental issues, openness and transparency. The EIB has understood the criticism, and significant changes have taken place. For this, you, Mr Maystadt, and your colleagues deserve our recognition.
The analysis for the year is in many respects a follow-up to the sterling work carried out a year ago by Mr Lipietz. A number of the views put forward at that time are being repeated now. As is well known, the most important issue for the EU is enlargement. This involves a fundamental change constituting a major challenge both for the candidate countries and the current Member States.
Today, most EIB loans go to different types of regional development project within the EU. That is certainly fully compatible with Statutes of the EIB, but future enlargement makes it necessary to reconsider this distribution of resources. There must be an increase in the future Member States' share of the total loans.
Solidarity on the part of the EU must also, of course, extend to include third countries that until now have been recipients of EIB loans. Among these are the Balkan countries, the Mediterranean countries and the ACP countries. Now it is also Russia' s turn. There is also a need for discussion concerning which less developed countries the EIB is mandated by the Council to support and concerning whether, for example, the 49 least developed countries are not in fact in greater need than the ACP countries traditionally supported by the EU.
In the information society, economic growth and an improved standard of living are not only the results of constructing new roads and factories, but also of education, innovation, new technology, e-commerce and the development of other knowledge-intensive sectors. In my view, this has to be reflected to a greater extent in the EIB' s activities.
It is important that the EIB should continue to strengthen its support for small and medium-sized enterprises. There are clear opportunities for growth in this area. The EIB needs to become more active in making SMEs more aware of the possibilities that already exist for granting such loans.
From having been a rather closed institution, the EIB has begun to change its attitude to information and transparency. Contact with democratically elected representatives at local and regional levels is important. There is a knowledge of the projects at local level. Contact with non-governmental organisations has improved, and the bank' s web site has also improved. The EIB has published a list of projects at the assessment stage. In my opinion, it would be good if all the public documents from the internal evaluation unit were published on the Net.
As matters stand, the EIB is supervised by its Board of Governors, that is to say by the 15 Finance Ministers, but it lacks prudential supervision by a competent authority. The committee has discussed the possibility of letting the European Central Bank, or ECB, exercise supervision over the EIB because the EC Treaty provides for the Council to give the ECB specific tasks of prudential supervision. If the Council does not want to give the ECB this remit, the issue should be clarified at the next Intergovernmental Conference, with the objective of establishing proper prudential supervision of the EIB' s activities.
In order to improve the way in which the Bank fulfils its obligation to render accounts, the committee proposes that the external Auditors' Committee forward its findings to the European Parliament, as well as to the EIB' s Board of Governors. Mention might be made of the fact that the EIB has already shown a willingness to cooperate more closely with OLAF.
The environment is the issue which the NGOs are most interested in. These issues received much attention in the Lipietz report last year. I believe that the EIB has become more aware of environmental issues and that the Bank' s support for environmental projects has increased considerably.
Another key factor is the EIB' s environmental assessment capacity. At present, the EIB has only one person responsible for coordinating environmental issues, while the project teams are composed of engineers and economists who have received additional environmental training. In my opinion, more staff are required in this area. More trained environmental experts should be appointed or contracted to review the environmental impact assessments correctly.
There are, therefore, many demands upon the European Investment Bank. If all of these needs are to be met, it is necessary to increase the capital of the Bank. In line with what applies to commercial banks able to handle greater risks, the Member States should, for example, consider reviewing the ratio of capital borrowed by the Bank to capital of its own, with the purpose of including the EIB' s reserves.
Mr President, I should like to welcome the Commissioner to the House.
Finally, I want to comment on the amendments that have come in. I am able to support Amendments Nos 1, 3, 4 and 6 from Mr Lipietz etc. They do not change the content of the report but highlight the environmental issues and the issues concerning openness and transparency. I cannot, however, support Amendment No 2, which I find unnecessarily far-reaching. I am only able to support Amendment No 5 as a supplement to Paragraph 30.

Grönfeldt Bergman
Mr President, I want to begin by thanking the rapporteur, my Swedish colleague Olle Schmidt, for a very good report. It sheds light upon the important areas of Europe' s future development, which the EIB has a major responsibility for promoting within the framework of its powers. The report also addresses the demands Parliament should make upon the EIB as Europe' s financing institution. I therefore want to confine myself to highlighting a few more of those aspects I consider to be most significant. I am thinking of the candidate countries, the way in which projects are prioritised, small and medium-sized enterprises and supervision of the EIB.
Where the candidate countries are concerned, it is extremely important that there should be a significant increase in their share of the total loans of EUR 36 billion. In 2000, they had access to EUR 2.9 billion. In view of the forthcoming enlargement of the European family, there must be an increase if it is to be possible to achieve the objective set at the Lisbon Summit.
When it comes to prioritising projects, it is important to safeguard Europe' s competitiveness and therefore prioritise infrastructure in the broad sense of the word. That applies, then, to communication not only in the traditional sense of roads, connecting links and the availability of energy-efficient transport systems for goods and people, but also in the sense of telecommunications, IT, e-commerce, education, increased knowledge and support for new technology.
Small and medium-sized enterprises at present account for more than 60 per cent of EU jobs. In an enlarged EU, they will probably account for a significantly higher percentage. Of the 18 million companies in the EU, 99% are small and medium-sized enterprises employing 66% of the workforce. More than 90% of these companies have fewer than ten employees. If, like many new companies, the existing small and medium-sized enterprises are to be given the opportunity to grow and become larger, or simply become large companies, more must be done in terms of supplying information, contributing to projects and providing access to venture capital.
The rapporteur has proposed that the Commission be called upon to give the ECB powers to exercise supervision over the EIB. I agree with that. The Bank has no national connection and cannot therefore be compared with a private commercial bank. The ECB is therefore a suitable supervisory body until such time as a possible European finance inspectorate is established.
In view of the objective set by the Lisbon Summit, priority must be given to those projects which lead to economic growth, development and increased employment in an enlarged Europe and which attach major importance to small and medium-sized enterprises' opportunities for growth. Competitiveness and staying power should be the guiding principles here.
Greater demands must be made upon the EIB in terms of providing information and evaluating projects and the importance of proper professional supervision and auditing must be emphasised.

Van den Burg
Mr President, first of all, I should like to extend a warm welcome to the President of the European Investment Bank, Mr Maystadt. In February last year, I expressed the hope of turning the discussion of the annual report in this Parliament into an annual tradition, and this is what we are honouring now. It has taken a while before the report could be included on the agenda - indeed, it was already completed in November - but it is good to uphold this tradition.
Moreover, I understand that, this coming Thursday, you also intend to present the plans for the future and the 2001 annual report to the press and the Council. Last year, we met immediately after this presentation, whereas this year, our meeting immediately precedes it, and I hope that you will be able to lift the veil and give us some information about these plans for the future.
Before I deal with the content, I should also like to thank Mr Schmidt for his report and for the sound cooperation during the handling of the amendments tabled by us and other groups. In my opinion, it has been a productive group effort.
I should now like to turn to a number of points which were also raised in our annual report last year, and note with satisfaction that you have indeed devoted attention to these in your further plans, and that Parliament' s areas of concern indeed recur in the Corporate Operational Plan which you presented this year. I should like to comment on a few of these areas of concern. I will skim over other points, because these have already been dealt with by others. I trust that the environment will be dealt with adequately by the Greens and others. Needless to say, we support this, as well as the tabled amendments, although, like Mr Schmidt, we are loathe to replace Paragraph 30 which concerns the balance between the environment and other objectives. In other words, we do want to maintain this balance and only accept the amendment in question as a supplement. Transparency and evaluations have also already been commented on, and the subject of SMEs has already been raised by Mrs Grönfeldt.
I should, however, like to touch upon the matter of supervision. Last year, this was the subject of an extensive debate here, and you noticed that we made it very clear this year in the report that it is desirable for the European Central Bank to play a role in this supervision. You have probably seen the Financial Times of 29 January and ascertained that this is now also very much being considered in ECB circles. This was evidently raised during a lunch meeting with the Chairman of the FSA, the British financial authority, and I remember that we, too, raised the point during a lunchtime meeting with Mr Duisenberg and his colleagues in the past. It is my impression that, although the Bank is amenable to the idea, it is quite reticent because it is not equipped for this at the moment. I would call for a somewhat broader discussion to be held about this financial supervision in this Parliament, but also in the Council and in the Commission, for I have the impression that this topic is being dealt with in different reports in a very fragmented manner. It is important to sketch the broad outlines in this matter too. Perhaps we could do this in a more coherent discussion some time in the future.
As far as the EIB is concerned, it is not so much about supervision of the latter' s conduct. A number of arrangements have been made on this score and this supervision is also being exercised in a number of areas. It is mainly about the economic supervision of companies. The advantage of that could be that, by means of the financial resources available within the Bank, and also with the available reserves, more could be done and more risk-bearing action could be taken than is currently the case, provided that sound supervision is in place.
I would now like to turn to another topic which, with a view to the future, will become an important point of discussion, namely that of increasing the Bank' s capital. I assume that the supervisors, the Ministers for Economic and Financial Affairs, will be talking about this during the forthcoming meeting in June. You have seen that, in Paragraph 33, we declare our support for such a capital increase. This matter should be brought to a conclusion from 2003, and should particularly play a role in enlargement. The point of departure in this is - this is actually a comment I should like to make - that it should add value to EIB loans. The EIB should not do what is also possible within the market, and I believe that it is important that it act in a transparent manner. Unfortunately, I am unable to make any of my other comments, but I shall do so in due course.

Gasòliba i Böhm
Mr President, ladies and gentlemen, Mr Maystadt, President of the European Investment Bank.
My colleague, Olle Schmidt, the rapporteur, has already expressed the opinion of the Committee on Economic Affairs on the annual report of the EIB and has presented proposals which, according to our committee, would improve its operation and also meet the need to provide it with greater resources to fulfil its commitments.
I would like to draw your attention to a very specific and topical point. In Laeken it was agreed that the EIB would carry out a study to create a financial instrument or institution which would guarantee that, in terms of the cooperation between the European Union and the third countries of the Mediterranean, the level of use of resources responds to the effectiveness and possibilities for development cooperation that the situation demands.
We know that in the Mediterranean, in the medium term, very serious conflicts may arise with the European Union itself, and that in order to ensure our own peace and stability in the future it is necessary to strengthen this cooperation and ensure better application of resources which, according to the experience of the first MEDA programme, has only been 30%. Therefore, this initiative agreed at Laeken, of presenting a proposal or alternatives to increase the level of application, seems to us absolutely essential and urgent.
Also, if this could be consolidated at the next meeting of the Special Council of Barcelona, we believe that it would be even more appropriate, because the whole issue of development cooperation with the Mediterranean was born in 1995 in Barcelona, under the Spanish Presidency. The current Presidency of the Council has also considered the issue of cooperation with the Mediterranean to be an urgent priority and we decisively support this initiative.

Schörling
Mr President, as Mr Schmidt also pointed out, the initiative leading to Parliament' s resolution on the European Investment Bank' s annual report was taken by the Group of the Greens/European Free Alliance, with Mr Lipietz as the original rapporteur. I think it necessary for the European Parliament to express an opinion about the EIB' s activities because the EIB is not only a Bank but also an EU institution that finances large projects and uses Community funds to steer development.
The EIB has been criticised for neglecting environmental issues, as well as the issues of openness and transparency. Mr Schmidt also mentioned that positive changes to the EIB' s policy have taken place recently in response to the criticism. I hope that the EIB will continue in the same spirit.
I want to congratulate the rapporteur on an excellent report that addresses important issues. It proposes, for example, that loans to the candidate countries should be increased and that evaluations should be made more easily accessible to the general public. A further proposal is that dialogue between the two sides of industry, politicians and non-governmental organisations etc. should be strengthened as aspects of openness and transparency.
The report could, however, have been more vigorous when it comes to environmental issues. The Group of the Greens/European Free Alliance has tabled six amendments that specifically address environmental issues and matters of transparency. A prerequisite for expressing our support for an increase in the EIB' s capital should be that the projects lead to sustainable development. Performance indicators must also be established so that the EIB' s activities can be measured and evaluated properly.
I am delighted that the rapporteur expressed his support for most of our amendments. In accordance with Mr Schmidt' s wishes, I also accept Amendment No 5 as a supplement to Paragraph 30.
It would, however, be unfortunate if Amendment No 2 were not to be adopted. If civil society is to be able to keep track of an issue, the documents must obviously be available in the national language. I call upon MEPs to vote in favour of this amendment.

Sjöstedt
Mr President, the European Investment Bank may be said to be one of the European Union' s unknown powers that be. With loans amounting to EUR 36 billion granted in the year 2000 and total capital of EUR 100 billion, it exercises significant influence through its policy.
In spite of its influence, there has been very little discussion of the Bank. This is the second year that we are discussing the annual report in Parliament. What is perhaps most remarkable of all, however, is how little all this is discussed by the Bank' s owners, in the Member States and in the parliaments of the various Member States which, I believe, are in many cases quite unaware of the Bank' s activities.
This situation may be compared with that in relation to the World Bank, which has been exposed to extensive examination and debate, or with that regarding the European Development Bank which has also been examined in a different way to the European Investment Bank.
A good deal of criticism has been directed against the EIB' s activities and in two areas in particular. First of all, the EIB has been criticised for having supported a series of projects that have increased environmental problems, as well as for shortcomings in terms of environmental impact assessments. Secondly, the EIB has been criticised for a lack of openness and of willingness to engage in dialogue with, for example, environmental movements in different countries.
I think that this criticism has been justified. Comparisons show, for example, that the World Bank is in actual fact significantly better than the European Investment Bank at providing environmental impact assessments and at publicising these. It is rare for the Left to have occasion to praise the World Bank, but it does in this case.
For some years now, the European Investment Bank has shown a new attitude to greater openness, which is very welcome. What is important, however, is that this new positive attitude also be followed up by practical measures.
Mr Schmidt' s report addresses certain demands for measures with which I agree, referring, for example, to the need for more resources, including more staff working on environmental issues and the question of greater openness. There is a need to go further, however. I believe, for example, that it is reasonable to demand that, if environmental impact assessments are carried out, they should always be published before decisions are taken. The EU' s demand for environmental impact assessments must also be fulfilled when loans are granted to projects outside the European Union, and these assessments must be available in translation in the national languages of the countries to which the loans are granted.
The European Investment Bank should also comply with the Århus Convention, entailing an obligation of great openness towards the environmental movement. This should mean a big improvement.
The EIB should also have a more evolved policy when it comes to development issues, for example, development in the Developing World as the Bank' s activities there increase.
The Gothenburg Summit gave the EIB the task of supporting sustainable development and concentrating on climate issues. This should have far-reaching consequences for the type of transport and energy projects that can be supported. It should imply, hopefully in practice too, a change of focus for the Bank.
I believe that increasing the Bank' s capital must be conditional upon reforms being carried out. Only if the Bank is obliged to implement such reforms should it be agreed to increase the capital.
I am opposed to the idea of allowing the European Central Bank to act as a supervisory authority. The European Central Bank is a genuinely undemocratic institution which should not be given tasks of this kind.

Ilgenfritz
Mr President, it is right and proper that we should keep on highlighting the significance of SMEs for the European economy. SMEs ensure growth and employment in Europe. It is therefore right, and indeed important in terms of Europe's development, that the EIB should step up its support for SMEs or carry on with it. Half of the total lent, about EUR 5.7 billion, was used for that purpose in 2000. This amount should be increased or its continued availability ensured. We must not stop the support measures. It is also important that more risk capital should be made available to these enterprises, and this is something which I personally strongly support.
It goes without saying that the points of criticism made in the report must be taken seriously. It is not acceptable for the EIB's own home page to list its activities in only two or three languages. By so doing, the EIB is limiting its own significance.

Randzio-Plath
Mr President, Mr Maystadt, the Lisbon Process cannot be imagined without the European Investment Bank. Support for SMEs and for entrepreneurship as sources of employment is becoming more important, as external finance other than through banks is becoming more expensive and bank finance for small and medium-sized enterprises is becoming more and more problematic. When we consider what the European Investment Bank has achieved since 1968, in terms both of funds and of initial support for projects, I consider the outcome to be an impressive one.
I must say that the integration of the EIF and the EIB under one roof, which was pushed through by the Lisbon Process, has resulted in an optimisation of the European Investment Bank's activities right across the board. I would therefore ask those who now want to push for the founding of another bank, to rely on, and make use of, the competence and qualified expert staff that the European Investment Bank has at its disposal. It is for that reason that I oppose the founding of another bank. It would surely also be in the interests of the Central and Eastern European States for the work of the European Bank for Reconstruction and Development and that of the European Investment Bank to be more efficiently harmonised and coordinated with each other. I am therefore sure that both the European Investment Bank's quality and its financial activity will be improved still further, or advanced, at the European Summit in Madrid, due, among other things, to the European Commission's consolidated report.
As has been pointed out by my fellow Members and also in Mr Schmidt's report, one must surely see to it that the best possible use is made of funds for small and medium-sized enterprises. It will, without doubt, be a matter for our concern that there may be a decreasing number of small and medium-sized banks and financial institutions available with which the European Investment Bank can manage the flow of its funds. So it is, of course, very encouraging that the European Investment Bank has a network of 130 active intermediaries and that activity in Italy has now resumed to an encouraging extent. We should bear in mind, though, that what matters, above all, is that small and medium-sized enterprises should really be enabled to get access to working capital and also risk-capital financing at their local level.
It is therefore important, Mr Maystadt, that an assessment should be submitted of what influence this activity by the European Investment Bank has actually had on growth and employment at local and regional level. Regional development is, after all, one of its main fields of activity. We know that the whole European Union benefits if economic and social cohesion can be realised at regional level. So this assessment must be carried out, as should in future be done, before the Spring Summits, so that even better use may be made of the European Investment Bank's instruments.
One final plea, Mr President. All the institutions are committed to the need for gender mainstreaming. I have noted that progress has been made in appointments to the European Investment Bank. There is so far, unfortunately, only one woman on its board, and so the Member States are urged to give women, too, the facilities and opportunities to play their part in the Investment Bank's work. I also note that, at its highest level of management, only one of the twelve officials is a woman. There must be changes here.

Solbes
Mr President, I will make a few quick comments which have occurred to me during the debate. Firstly, I would like to thank Parliament for taking the initiative of holding a debate on the annual activities of the European Investment Bank. You know, and some of you have highlighted, the important role the Bank plays in the channelling of savings towards investment in key sectors of the European Union as well as sectors outside it.
You have highlighted the Bank' s fundamental objective of contributing to our aims in close cooperation with the Commission. The Bank has already implemented the Lisbon initiatives. Initiative 2000 is fully operational and continues to increase its actions in the funding of small and medium-sized businesses. President Maystadt will make some subsequent comments, but I would like to congratulate the Bank on the good work it is doing in this particular sector and, above all, on the transformation which has taken place as a result of paying greater attention to risk capital. In this respect, the European Investment Fund is turning risk capital into an important Community institution as a complement to the market forces which govern supply and demand.
Some of you have suggested that the Bank should pay greater attention to environmental factors. I believe that we must be aware that each institution has its own function and the function of the Bank is basically financial. Environmental issues are fundamental, of course, but each institution must play its corresponding role.
I would like to make two further comments. The first relates to the extension of the Bank to other areas. I believe that this issue is mentioned in the seventh point of the report. Nevertheless, we must not forget the extension of the Bank' s actions over recent years. We only need to remember that, in 2000, Croatia was included in the CCEE contribution and the special option for the Customs Union with Turkey, and that in November 2001 the Federal Republic of Yugoslavia was included.
Some of you have expressed your concern with regard to the careful monitoring of the Bank' s activities. It is true that the statutes of the European Central Bank open up this possibility, but it is also true that it has no authority whatsoever. Even if it had it, we would have to raise the question of whether the idea of monitoring the European Investment Bank is consistent.
The European Investment Bank is not a commercial bank. It is a multilateral bank which belongs to the Member States and has been established as a Community institution by the Treaty. Therefore, in my opinion, it is doubtful whether it is correct to have additional monitoring of one Community institution by another Community institution. Above all, bearing in mind that we now have a clear system for controlling the Bank by means of the auditing that is being carried out, which directly informs the Council and the government and is attended by external auditors. Furthermore, you also know that the Court of Auditors already carries out inspections of its activities when they involve European Union funding. Therefore, I believe that this issue warrants more profound analysis. We do not believe that we should create other monitoring posts or institutions.
Finally, with regard to the issue of Barcelona and the possibility of funding cooperation with the Mediterranean, raised by Mr Gasòliba, President Maystadt will comment on the actions of the European Investment Bank. I will simply say that the Commission is working on the Laeken mandate in order to have a report as soon as possible. We would all have liked it to have been finished for Barcelona, but, naturally, we will have to follow the normal procedures.

Maystadt
Mr President, ladies and gentlemen, first of all, I would like to say what an honour it is for me to have another opportunity to answer the questions raised by the House, as Mrs van den Burg wished; this could become an annual tradition. Although the European Investment Bank has no formal obligation to report to the European Parliament, I think that it is natural, in a democracy, for all public institutions, including the financial institutions, to have to respond to questions and to take into account the priorities expressed by the representatives elected by the citizens. It is therefore a great pleasure for me to attempt to answer the questions that have been raised, bearing in mind that five minutes does not, of course, give me enough time to provide a detailed answer. We will, however, have the opportunity to continue the dialogue, particularly within the Committee on Economic and Monetary Affairs, under the dynamic chairmanship of Mrs Randzio-Plath and on the basis of the excellent report by Mr Olle Schmidt.
Today, I would simply like to give some details in response to the four categories of questions raised. The first category contains questions on the activities of the EIB; the second relates to questions on supervision; the third category regards questions on the policy regarding information and transparency and, as for the fourth and final category, I will speak briefly about equal opportunities, an area that is particularly close to Mrs Randzio-Plath' s heart. First of all, as far as the EIB' s activities are concerned, Mrs Randzio-Plath quite rightly pointed out that regional development was still the main task of the European Investment Bank. In conjunction with Commissioner Barnier' s services, we developed a set of indicators and we are attempting to assess, in a more systematic manner, the impact of projects that we finance on regional development. The growing importance of the EIB' s activities in the candidate countries has also been mentioned and Mr Schmidt quite rightly emphasised this point. Enlargement is a huge challenge for us all, for those who are already in the European Union and for those who are about to join it. Clearly, the European Investment Bank must step up its work in these countries to assist them in fulfilling the conditions of membership as quickly as possible. Currently, the EIB already has a portfolio in excess of EUR 16 billion, so far mainly for infrastructures - such as transport, communication and energy infrastructures - but also for the environment and these funds are increasingly being granted directly to promoting the private sector.
The environment is another area on which the rapporteur and other speakers have focused in particular, and I think that it must be approached from two angles. The first angle is that of the number of environmental projects that we finance; these are projects which play a direct part in protecting or improving the environment. I can now give you - before anyone else hears them - the figures that I will be publishing next Thursday. Last year, we granted EUR 6 billion to environmental projects in the form of individual loans and EUR 2 billion through what we call global loans, in other words, loans to intermediaries, which themselves provide loans to local authorities. This therefore amounted to EUR 6 billion for environmental projects in the European Union and EUR 0.5 billion in candidate countries, which means that, currently, approximately one fifth of our loans go directly towards improving the environment. We hope to gradually bring this figure up to a quarter of the total volume of our loans.
This is the first angle, but there is obviously a second angle - and your Committee has quite rightly paid this a great deal of attention - which is that the other projects, those that are not directly aimed at improving the environment, must also take into account the impact they have on the environment. We must therefore put in place the resources to enable us to assess more systematically the environmental impact of these projects. This is the reason why, following a suggestion made in last year' s report by Mr Lipietz, we carried out internal restructuring and set up an environmental group within the project department, whose specific task is to ensure that proper account is taken of environmental aspects when assessing such projects. And we, of course, intend to further improve our resources dedicated to this task.
To continue on the subject of the EIB' s activities, we must mention the Mediterranean. Without going into too much detail, I would simply like to say that we have taken note of the objectives announced by the Spanish Presidency and that the EIB is at the Council and Commission' s disposal, if it is felt, given the extent of our activities in the Mediterranean, that the EIB can help to achieve these objectives.
Lastly, I note the concern expressed by several of you, particularly Mr Schmidt and Mrs Randzio-Plath, regarding the support given to small- and medium-sized businesses. We are continuing to provide this support, not only through global loans but also through the European Investment Fund, which last year gave risk capital of EUR 800 million to small- and medium-sized businesses.
With regard to supervision, we should bear in mind, as Commissioner Solbes stressed, that the EIB is already supervised in various ways. I would simply say that we are working to apply the prudential banking rules. If it were considered advantageous to organise additional supervision by a body that is specialised in banking supervision, the EIB would, of course, have no objection. We would welcome an external authority specialised in banking supervision checking that we are correctly applying the prudential rules.
As for the policy regarding information and transparency; first, we now publish all our strategy documents; second, we publish an overview of our assessment methods; third, we publish, with a few exceptions, the list of all the projects currently being examined so that the public can respond and submit its comments; last, we now publish all the full assessment reports carried out by the independent ex-post evaluation department, which was set up a few years ago.
I should like to end by briefly touching upon the subject of equal opportunities. Mrs Randzio-Plath has, on several occasions, drawn our attention to an undeniable imbalance within the Bank' s higher management. There is still only one woman on the Management Committee. I regret this, but it depends on Member States. As far as the management itself is concerned, we decided last year to appoint four women to senior management level, which will therefore begin to correct this imbalance.
To sum up, Mr President, we are determined to ensure that the EIB remains an institution that serves the European Union, something which requires, by necessity, greater cooperation with the Commission and strengthening dialogue with Parliament.

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

Financial services legislation
President
The next item is the report (A5-0011/2002) by Karl von Wogau, on behalf of the Committee on Constitutional Affairs, on the implementation of financial services legislation (2001/2247(INI)).

Prodi
Mr President, ladies and gentlemen, I am very pleased to be responding on behalf of the European Commission to Mr von Wogau' s report on the implementation of financial services legislation, in the context of the Lamfalussy report.
I would like to start by congratulating Mr von Wogau and thanking him for all his impressive efforts to build consensus on this important matter in this House. Let me also congratulate Mrs Randzio-Plath, who chairs the Committee on Economic and Monetary Affairs and who has helped to stimulate the Commission' s thinking on these matters.
Implementing the proposals contained in the Lamfalussy report in a fair and balanced way is of major importance to the European Union. It lays down essential stages for delivering the entire Financial Services Action Plan by 2005, as requested by the Lisbon European Council, and the measures relating to the securities markets by 2003, as requested by the Stockholm European Council.
The aim is, of course, to build a strong, stable, pan-European capital market, a market which will benefit its citizens and businesses by improving future employment and growth prospects throughout Europe.
We have reached a fair and honourable compromise. Let us, together, seize the moment. I am confident that our debate today will yield a positive result and send out a strong signal of the renewed and effective cooperation between Commission, Council and Parliament.
Before making a formal statement on behalf of the Commission, I should first like to dispel any possible doubts by stating that the Commission will act both on this statement and on the Stockholm European Council resolution and what is set out in the letter of 2 October 2001 from Commissioner Bolkestein to Mrs Randzio-Plath, Chairman of the Committee on Economic and Monetary Affairs.
I should also like to draw your attention to three vitally important points. Firstly, the Commission will naturally respect Parliament' s powers of codecision and the rights to information and transparency which underpin our democratic process. The Commission will do business with Parliament and the Council on a joint basis, fully respecting the current interinstitutional balance. Secondly, the Commission will, without exception, take full account of the European Parliament' s position, as is provided for in the Stockholm European Council resolution. It will do everything in its power to find appropriate solutions in keeping with the current interinstitutional balance. Thirdly, with a view to the longer term and the revision of the Treaties, the Commission wishes to see Article 202 amended and both its own future executive duties and the joint role of the two co-legislators clarified.
This concludes my preliminary remarks. I shall now make a formal statement on behalf of the European Commission:
"As was recalled at the Lisbon and Stockholm European Councils, the integration of financial services markets is fundamental to strengthening the European economy.
The delivery of the Financial Services Action Plan by the deadlines set by the European Council conclusions - 2005 for the entire Action Plan and 2003 for the measures relating to securities markets - is crucial to achieving this objective.
Ahead of the Barcelona European Council, which will take stock of the European Union' s economic reform process as mapped out in Lisbon, the Commission welcomes the close cooperation between the Community institutions and expresses confidence in its harmonious development when it comes to implementing the Commission' s proposals, in line with the recommendations of the Committee of Wise Men chaired by Baron Lamfalussy.
The Commission stated in its White Paper on European Governance that, in general, its executive responsibilities need to be more clearly defined and that the Council and the European Parliament should have an equal role in controlling the way in which the Commission carries out its executive role. In the White Paper, it also announced its intention of launching a debate on this issue in the context of the forthcoming Intergovernmental Conference and indicated that it favours an amendment to Article 202 of the EC Treaty.
In the meantime, before the next revision of the Treaty and without setting a precedent, flexible regulatory mechanisms in the field of financial services are needed that fully respect the institutional balance. In this regard, a letter was sent on 2 October 2001 by the responsible Commissioner to the chair of Parliament' s Committee on Economic and Monetary Affairs. In this context, the Commission is now in a position:
to take note of Parliament' s intention to limit the duration of the delegation of executive powers to the Commission to four years from the entry into force of each particular directive, subject to an extension being proposed by the Commission and accepted by Parliament and the Council. The Commission could accept amendments adopted by Parliament to this end;
to ensure that Parliament is given a period of three months from the first transmission of draft implementing measures in which to examine them and to give its opinion. However, in urgent cases that are duly substantiated, this period may be shortened;
to ensure full transparency vis-à-vis Parliament throughout the entire procedure for the adoption of implementing measures. The Commission will also ensure that there is wide public consultation before draft implementing measures are drawn up;
to support Parliament' s wish to see the establishment of a market participants group attached to the Committee of European Securities Regulators, and it strongly encourages its establishment in as short a time as possible;
to recall its political willingness to endeavour to ensure that Parliament benefits from equivalent treatment and, in order to secure effective cooperation between the institutions, reaffirms its commitment to take the utmost account of Parliament' s position and any resolutions that it might adopt with regard to implementing measures exceeding the implementing powers provided for in the basic instrument and the Commission' s aim of reaching a balanced solution in such cases." Mr President, ladies and gentlemen, I hope you will firmly support the approach that I have outlined. It is the fruit of a lengthy debate and very close cooperation between Commission and Parliament.
Indeed, with this approach, we can now take another major step forward towards European financial integration, which is the next crucial step after the introduction of the euro.
Today' s positive result makes it even more essential for work to start in the interinstitutional working party to which Prime Minister Aznar, no less, pledged his authoritative support before this House during the January part-session.

von Wogau
Mr President, Mr President of the Commission, ladies and gentlemen, it is an extraordinarily important debate that we are taking part in today. It is important to banks, insurance companies and investment funds, because this debate will make it clear that we are pressing onward - and that without delay - on the road that leads to a common European market in financial services.
The debate is though, also important to the European Union's citizens, as we are removing obstacles from the path of cross-border competition in the field of financial services, in the granting of credits and the negotiation of insurance policies. Competition of this sort will put the citizen in a stronger position and enhance Europe's competitiveness.
What, then, is this debate about? Alexandre Lamfalussy and his Committee of Wise Men have made proposals as to how we can speed up the great legislative package needed to make this common market in financial services a reality. In doing so, he made the wise suggestion that the legislator, that is Parliament and the Council, should focus on setting the essential objectives, whilst leaving to the Commission, working together with experts, the small print of the implementation provisions.
That proposal is a very good one. Where, then, is the problem? The problem is that we have always found, in our experience as parliamentarians, that it is to us that the public and firms come with complaints about the European Union's bureaucracy, and that they are not complaining about the law, be it a directive or a regulation, that we have helped to enact, but about the provisions made for its implementation. That is why Parliament has insisted on being able, jointly with the Council, to carry out a kind of final check on whether the implementation provisions that are enacted actually correspond to what the legislator intended.
What have our negotiations with the Commission and the Council now achieved? At this point, let me warmly thank President Prodi for his statement, but also Commissioner Bolkestein, Mr John Mogg and many others, as well as the secretariat of the Constitutional Committee. I have to tell you that the discussions lawyers had in this area occasionally reminded me of disputations in ancient Byzantium on the sex of angels. I wish to thank very warmly all those who helped me find my way judiciously through this labyrinth.
What have we achieved? Transparency first of all. That is important, as we are informed about everything that goes on in the Commission. We also get to see preliminary drafts. Secondly, we have achieved the reduction of the mandate to four years, after which period it must be renewed by Parliament and the Council.
We have, furthermore, gained the right to monitor outcomes, which is where President Prodi's statement was extraordinarily important. Like the Council, we have three months in which to do this, in which respect we are given equivalence with them. President Prodi, indeed, spoke of parity and equivalence, which adds up to an additional safeguard.
Thirdly, we must be clear in our own minds about the actual relations between the powers. We are faced with a large number of legislative acts, which have to be adopted. Each time, Parliament and the Council together must give the Commission a mandate, and if the Commission were to fail to take Parliament's justified interests and objections into account in this respect, it would have cause to fear that it would not be granted that mandate when it came to the next legislative act. What this means is that, today in any case, we as a Parliament are in a very strong position in this context. To that extent I take the view that, in this context, or on the basis of President Prodi's statement, the equivalence we demanded has been granted.
Something that strikes me as also especially important is the committee of market participants, which we decided on. This represents a first step towards the European Union's lawmaking becoming more modern. We must reach the situation in which legislation generally makes a clear distinction, as Alexandre Lamfalussy proposed, between the Parliament and the Council's intentions as joint legislators and the small print of the technical details. Here, for example, the supervisory authorities and the experts should be involved, but at the same time the market participants, too, should be included in the structures as purely practical issues are under discussion. In that sense I also believe that what we are deciding on today can also be a model for the Convention, the Intergovernmental Conference, and the improvement of the European Union's legislative procedure, and so I wish to ask you to adopt my report.

Berès
Thank you, Mr Prodi, for your statement, but also, and perhaps more importantly, for your introductory comments.
This statement is peppered with 'constructive' ambiguities, and I hope that, on this basis, we will manage to complete the fruitful discussion that we started in this House, following the resolutions that Parliament adopted on 13 March and 5 April 2001, and the publication of the Lamfalussy report.
I have two comments to make on the important nature of the discussion that we are holding today. My first comment is that, as the rapporteur pointed out, following the introduction of the euro, it is crucially important that we put in place an action plan on financial services, especially if we want to reach the objectives that we set collectively at Lisbon, namely to make the European Union the most competitive economic area in the world.
However, the institutional issues are also important and provide the evidence of democracy. From this perspective, the discussion that we are holding today is of major importance when you take a look at the timetable before us: the Convention and the IGC, the Commission' s White Paper on Governance, the essential reform of Article 202 of the Treaty and the redrafting of the interinstitutional agreement on comitology, which patently does not take account of the evolving powers and role of the European Parliament as a legislator, in particular, in the economic and monetary Union.
I think that, from the Commission' s point of view, the fact that the two pillars of economic and monetary Union are working well means that the European Parliament is a full partner and this demonstrates the importance of the discussion that we have been holding with you for almost a year now.
We will all appreciate the outcome of this discussion, from our own perspective, both in economic and institutional terms. Personally speaking, I would like to underline two points, the first on the issues that you brought up in your statement and the second on what will certainly be the subject of future discussions that we will hold, particularly within the framework of the Convention.
Regarding the first point, I think you mentioned the notorious 'constructive' ambiguity of doing business on an equivalent basis. We do not believe that equal treatment is a matter of discussing complex subtleties: it is in the hands of the Council. You are aware of this, Mr Prodi. In any case, this is how we are interpreting your statement and comments.
Behind this, however, there is the idea that this request, in addition to the formal statement that you have just made, must be used as a reference each time that we have to issue an opinion on a document within the framework of the financial services action plan.
Then, also, there is the issue that you have not tackled today and that we will continue to bring up in the forthcoming meetings that we shall have with you, namely, how can we avoid a possible disagreement between the European Parliament and Commission? On this point, we believe that the idea of an informal trilogue enabling us to reach a balanced and mutually acceptable agreement, as proposed by the Committee on Constitutional Affairs, is the correct negotiating basis for the future.

Hautala
Mr President, more and more often in present-day society we are seeing situations where legislators are expected to enact laws very quickly and effectively. It would seem that these demands being made with regard to financial services are quite justified. This means we really have to evolve a modern legislative process, as Mr von Wogau mentioned. Unfortunately, a modern legislative process often seems to mean that it is the European Parliament that is expected to give up some of the legislative powers it enjoys by virtue of the Treaty. The problem with the Lamfalussy package is that the European Parliament cannot be completely certain it would not, in fact, be surrendering the legislative power it has on behalf of the citizens of the EU to the Council, on the one hand, and the Commission, on the other. In this regard, the European Parliament must ensure that these parliamentary supervisory powers are brought into closer focus.
As President of this institution, you will surely seize on the proposal that the Committee on Legal Affairs and the Internal Market has put forward: whenever the European Parliament suspects that the Commission is using more than its fair share of powers of implementation, you could negotiate an ad hoc scrutiny mechanism to prevent Parliament' s legislative powers from being watered down. We all know that Parliament' s legislative power is not an end in itself: we really try to ensure, on behalf of the public, that decisions are taken openly and democratically, and that all views worthy of attention are taken into consideration during the process.
It is also perfectly clear that the EC Treaty is no longer relevant to modern times in this respect. The Commission' s commitment to amending Article 202 of the Treaty in the very near future, which would restore Parliament' s legislative and supervisory powers, is to be welcomed with open arms. It should also be emphasised that the European Union needs a hierarchy of legal acts, with legislative powers and powers of implementation being defined very clearly. At present we are in a grey area with this Lamfalussy package, the direct result of level 2 decision-making.

Méndez de Vigo
Mr President, not many Members of this Parliament are attending the debate today in this House. And this debate is probably not going to be treated as a priority interest by the media. Nevertheless, and I am addressing the public who are in the galleries, this is a very important debate for European citizens.
I hope that today, after many months of work, negotiation and seeking a consensus, this Parliament will take a decision on the report which has been admirably well drawn up by Karl von Wogau, and which represents one more step forward in the process of constructing an economic and monetary Europe, and furthermore, is an important step within the framework of the process started at the Lisbon European Council aimed at achieving greater flexibility, competitiveness and growth and creating jobs. I also hope that this process will include other important decisions at the next European Council in Barcelona.
At a point when the euro and its implementation have been a great success, this Parliament, the Commission and the Council must demonstrate that they are fulfilling the obligations laid down for them in the Treaties. Mr President of the Commission, you have done this recently - and I thank you for being here today - by adopting the appropriate measures and reproaching those countries which are on the point of exceeding the criteria established in Maastricht in the field of deficit.
This is a good decision, and I am therefore deeply disappointed that the German Commissioner has shown a lack of solidarity in certain comments made in Bild am Sonntag. I do not approve of this, because what we want is to maintain the internal cohesion of the European institutions and the balance between all of them.
In this respect, this exercise is politically positive, because Parliament has had to fight hard to gain its competences, like all parliaments. Therefore, having gained them, we want to keep them, since that is what the people demand. Baron Lamfalussy' proposals, which we all agree are needed, also mean, in the long run, putting our trust in the European Commission.
On behalf of my group, I would like to tell you that we have always defended the European Commission, because it is at the heart of the Community institutions and is the most obvious motor for integration. However, as Mrs Berès and Mrs Hautala have quite rightly said, we must take precautions. We neither can nor want to give anybody a blank cheque. That is why this negotiation has gone on so long and has involved so many people. And I would like to acknowledge, not only the rapporteur, whose work we have all praised, but also Mrs Randzio-Plath, Mr Napolitano, the coordinators of the Committee on Constitutional Affairs, Mr Bolkestein and his team, as well as Mr Rato.
Mr President, we have finally achieved a text, whose declaration you have read today and which, in the judgment of the Group of the European People' s Party (Christian Democrats) and European Democrats, fully satisfies - and I say this emphatically - our expectations: we are going to be treated on an equal basis with the Council, our rights of codecision and the transparency requirements we demanded are going to be guaranteed and there is a formal commitment from the European Commission that, in the next reform of the Treaties, which the Convention is going to analyse, there should be a modification of Article 202.
Today is therefore a good day for European integration: we are sending messages to the markets that we are prepared to make even more progress in realising all the aspects of economic union. It is also good news for the citizens, who, thanks to our choosing this method, are going to see the disappearance of much rigidity, which will give us hope for greater growth and employment in the future.
Congratulations, Mr Prodi and Mr von Wogau. Congratulations to all of you.

Corbett
Mr President, what we are debating is the proposal that Parliament and the Council should delegate substantial implementing powers to the Commission. Parliament is happy to go along with that, provided there are substantial guarantees as regards the oversight of such delegated powers. Those who sometimes worry that in seeking such guarantees Parliament is trying to modify the interinstitutional equilibrium should remember that this substantial delegation of powers is itself a modification of the interinstitutional equilibrium as it exists and that in those circumstances it is quite legitimate for Parliament to seek to obtain certain guarantees.
After many months of discussion, talks and negotiations with the Commission, the result has now been put forward to us in the form of the statement just made by Mr Prodi. I must say that it contains a number of significant steps forward. First, the Commission recognises that Article 202 of the Treaty should be changed at the next revision of the Treaty - it supports Parliament's position on that. But, in the meantime, the Commission recognises that Parliament has the right to examine and take a position on the implementing measures that it puts forward to the specialist committees that will be set up to work with the Commission.
Parliament will have three months instead of just one month, as it has under existing procedures, to examine and take a position on such implementing measures. The text of the Commission does not limit Parliament's right to examining whether the Commission has gone beyond what has been delegated to it, something which we could anyway solve by means of a legal case, if ever it came to a conflict. It gives us the right to object, if need be, on the substance. That is also very important.
But what happens if Parliament objects and then the Commission does not accept its objection to an implementing measure? There the text is a little ambiguous: it speaks of equivalence without saying equivalence with whom. Mrs Berès has already made the point: equivalence with the Economic and Social Committee, equivalence with the press? No, it is obvious for us insiders that it means equivalence with the Council. That is what we have been talking about for months, and Mr Prodi's introductory remarks made it clear that the Commission too accepts that it means equivalence with the Council. That is how we interpret it and I think there can be no other interpretation.
We have a third step forward and that is a guarantee in case all this does not work. We have the sunset clause: after four years the delegated powers will revert to Parliament and the Council, unless we agree to renew them. That is a guarantee to us and it will concentrate the minds of the Commission in between times, making it aware that it must exercise these implementing powers in a way that Parliament finds satisfactory if it wishes to have any hope of their renewal.
Fourthly, we have some important guarantees as regards openness and transparency, and we have acceptance of Parliament's idea that a market participants' committee should be set up alongside the other committees.
So, all in all, we can be satisfied with the progress that has been made, even if the drafting on the points I made earlier could have been a little better. Nonetheless, I would ask whether the full text of the Commission's statement and Mr Prodi's statement today could be incorporated not just in the Verbatim Report of Proceedings but also in the Minutes, because it was a very significant statement and should be recorded in our Minutes, so that we have a proper record of what the Commission has undertaken to do.

President
Mr Corbett, your request has been anticipated. This will appear in the Minutes as a document of record of some substance.

Huhne
Mr President, for more than a year we in Parliament's negotiating teams, together with the Commission and the Council of Ministers, have been struggling with a puzzle. We have all agreed with Baron Lamfalussy and his wise men that effective regulation of financial markets and the creation of a single financial market require us to delegate powers to the Commission and to a more nimble official committee. But there has been a key problem. Although this House was given the power of codecision vis-à-vis such legislation by the Maastricht Treaty in 1992, it was not given the power to oversee effectively the role of any committee. What we have seen of such committees in the past, we have not liked; they have been secretive, bureaucratic, Kafkaesque. One condition on which my group insisted was that this culture of secrecy must change fundamentally, opening up decision-making not only to us in Parliament, but to the world outside. We needed guarantees of transparency, openness and consultation. Here they are in the President's statement and in the letter that Commissioner Bolkestein addressed to the chairperson of the Committee on Economic and Monetary Affairs.
But how were we to ensure that those promises of a changed culture, so often honoured in the breach, were finally respected? It became clear that no lasting change could happen before the convention and the intergovernmental conference of 2004 had been concluded. Only an IGC could change Article 202, which basically gives sole rights of oversight of committees to the Council of Ministers, ignoring the new role of Parliament. We needed a promise that our concerns, ignored in successive treaty revisions, would be taken on board. We needed an interim solution that meant that Europe's savers and investors did not have to wait still longer before the completion of the single market in financial services, which was first launched in 1973. The health of the European economy depends on this legislation. A vital and dynamic economy depends on an efficient financial system for collecting savings and funnelling them at low cost to the most productive uses.
It was long clear to the Liberal Group that the only interim solution would be to put a time limit on the delegated powers. For the first time in EU legislation, we will have a sunset clause that will remove the powers of the Commission and the committee after four years unless they are used wisely and well. Thankfully, the initial opposition of the Socialist Group and the European People's Party, together with concerns about legal uncertainty, were overcome. Any regulations passed by the committee will remain on the statute book even if its powers are suspended, but Parliament can bite if it needs to.
This is an important moment for liberalisation of the European economy. The deal will underpin the euro - for what is a single currency if the markets on which it is traded are still divided by national barriers? It will give confidence that, whatever the challenges ahead for economic and monetary union, the European Union can surmount them, and it shows that Parliament is a serious and responsible legislature and partner in economic reform. The Lisbon reform process is back on track. I wholeheartedly congratulate Mr von Wogau, our rapporteur, and commend this report to the House.

Titford
Mr President, what is interesting about this report is the expressed concern for Parliament's rights. This is matched by the claim that the committee wants to enhance democratic control over this fast-moving area. What I do not see is any concern expressed for those in financial services or for the customers they serve. Without dwelling on any particular aspect of the financial services legislation to which this report refers, I have to fulfil my own democratic responsibility and point out that the aggregation of Community legislation is slowly, but inexorably, strangling the financial community and making it almost impossible to trade.
In this context I am constantly reminded by my constituents that those most affected are the small and independent financial advisers, the net effect being that business is becoming steadily concentrated in the hands of larger and larger firms. On the other hand, I see no slackening in the number of financial scandals which break into the headlines. In fact, the very reverse seems to be the case. Coming as I do from a tradition where parliament is the guarantor of safeguards and freedoms of individuals, I therefore find this report yet another exercise in increasing the power of the Community institutions, with no thought for what the legislation is trying to achieve. The committee is counting the angels dancing on the end of a pin while the industry gradually collapses. This to me typifies what the Community is about.

Della Vedova
Mr President, President Prodi, Commissioner Bolkestein, once again, we are faced with the inadequacy of the European legislative procedure, as Mr Huhne pointed out a short while ago too.
In this context, Parliament has two distinct aims, which could have been conflicting: on the one hand, the need to secure a more significant, effective role for Parliament in these matters, to secure, that is, greater democratic legitimisation of the rules we are debating; on the other hand, however, there is the urgent need to conclude the Financial Services Action Plan with all speed in order to implement the common market in this sector.
We are seriously behind schedule, and the persistence of this hotchpotch of regulations is creating barriers which are costing the European citizens dearly. One example is the case of pension funds, which have long been constrained by protectionist rules in the different Member States. The average size of European pension funds is one sixth of that of pension funds in the United States and the yield in Europe is 60% of the American figure. This represents a severe handicap for pensioners, for savers in general and for the efficiency of the economy.
The time factor is crucial. We are lagging behind severely and we must therefore be responsible in our attitude and not neglect the need to give a vigorous boost to the construction of the internal market in our pursuit of the goal of securing a proper role for our institution.
To sum up, Mr President, my view is that the rapporteur, Mr von Wogau, Mrs Berès, the Committee on Economic and Monetary Affairs and the Committee on Constitutional Affairs have succeeded in achieving a balance between these requirements, providing us with a good short-term solution and pointing the way for the future. The Italian radicals will therefore vote for the measure.

Bolkestein
Mr President, as various Members have said, the Commission has been engaged in frequent discussions with those closely involved in this issue in Parliament, and the importance which the Commission gives to this important matter is also reflected in the presence of the Commission President here this morning.
Various Members have referred to angels this morning - either to the sex of angels or to how many could dance on the head of a pin. May I say that it is often in the detail that one encounters the devil. Let us hope that the devil and angels will compensate for one another and that we can achieve a balanced compromise this morning. According to some Members who have spoken this morning, Mr Méndez de Vigo for example, that is indeed the case. He said that this is a good day for integration and offered congratulations to the rapporteur - congratulations which I should like to echo on behalf of the Commission. I should like to thank Mr von Wogau and the Committee on Constitutional Affairs very much for having crafted this compromise. It is only right that the Commission should give expression to those feelings.
Mr von Wogau started by referring to the ambition of the European Union as expressed by the European Council in Lisbon, which is, as is well known, that the European Union should become the most competitive place in the world. The Lamfalussy report should be seen in that context. Mrs Berès also referred to the ambitions expressed in Lisbon. Indeed they form a whole, and I do not need to emphasise our wish to give as much impetus and stimulus as possible to our moves towards greater competitiveness. Once again, this debate and the result which I hope it produces are of importance to the economic well being of the Union.
I do not have to explain what the report of the committee headed by Baron Lamfalussy is about and the way it refers to the comitology procedure for implementing measures or executive proposals. The report by Mr von Wogau enumerated what has been achieved. Mr Corbett has also done so. He referred to the fact that, in the Commission's opinion, Article 202 of the Treaty should be changed in the context of the next intergovernmental conference - and this is the heart of the matter. Parliament has often impressed upon myself and others the need to achieve equality with the Council in the oversight granted to both Parliament and the Council in considering executive proposals. The Commission agrees and also sees the need for equal standing for Parliament vis-à-vis the Council in the whole comitology procedure.
Unfortunately, from the point of view of Parliament - and the Commission recognises its feelings and opinions - this is not possible at the moment. Article 202 is clear: the comitology procedure arrived at in June 1999 is also clear and, as much as the Commission sees the point of view of Parliament and has said so in its own White Paper on governance, it is at present unable to grant Parliament's wishes. The Commission's view as laid down in the White Paper on governance is that Article 202 ought to be changed. However, the Commission itself cannot do that; any such change has to take place in connection with the next intergovernmental conference.
Mr Corbett mentioned that Parliament now has three months to consider the executive measures put forward by the Commission. There is full equality with the Council here, and that is a good thing. He went on to say that Parliament now has the possibility to object in substance. Yes, indeed, the substance concerns us all and Parliament has the inherent right to put forward its positions and its arguments. The Commission has said that it will take the fullest possible account of Parliament's position. That is also what Parliament would want the Commission to do.
Mr Corbett spoke about equivalence - a fine word - but equivalence with whom? Obviously, equivalence with the Council. That is what the whole debate is about and it would not do to deny what is clear to every one. Parliament wants that equivalence with the Council; the Commission is willing to grant it, takes the same view, and has said so in its declaration and in discussions.
Mr Corbett mentioned a sunset clause, which is another example of a weapon available to Parliament to ensure that the Commission takes the utmost account of Parliament's wishes. The sunset clause means that the delegation of executive measures to the Commission lasts for no longer than four years. It may be prolonged on the initiative of the Commission, but it certainly keeps the Commission's nose to the grindstone and is a powerful weapon available to Parliament.
The same applies to another factor, mentioned by Mr von Wogau. In his introductory statement Mr von Wogau said that if the Commission does not carry out its promises - as set out in the declaration made by Mr Prodi - then the next time a directive comes around Parliament knows that it can keep a tight rein on the Commission. The Commission is well aware of that. That is another way in which Parliament can put forward its opinion forcefully and with conviction. The Commission would therefore be well advised to listen carefully and take the utmost account of that opinion.
Mr Corbett's last remark - apart from the desire to have the declaration put into the Minutes - was on openness and transparency. The Commission has stated this morning and in the letter I sent on 2 October to Mrs Randzio-Plath, chairperson of the Committee on Economic and Monetary Affairs, that it is most willing to practise that openness and transparency.
Mr Titford said that the industry would collapse. Methinks this is a poetic exaggeration. I am not under the impression that the industry is about to collapse. Yes, scandals emerge - perhaps less so in the European Union than in other parts of the world - but that is a fact of life. I do not think the proposals made by Mr Prodi this morning will fuel more scandals. They will, in fact, go a long way towards avoiding them, and therefore I cannot agree with the sentiments expressed by Mr Titford.
Finally, I come back to Mr Méndez de Vigo who said that it was a good day for integration. He congratulated Mr von Wogau, and I join him in that. I wish to congratulate Mr von Wogau personally on the fact that at 11 o'clock this morning he will receive a high French decoration, the Légion d'Honneur. The Commission congratulates him.

I will have the opportunity to reply to further questions later in the debate, so I rest the Commission's case here.

Goebbels
Mr President, I would like to ask you to record Mr Bolkestein' s comments in the Minutes of our meeting, because, if I am not mistaken, Mr Bolkestein is correcting Mr Prodi on a crucial point. He is saying that the word 'equivalence' does indeed mean equivalence between Parliament and the Council.

Bolkestein
Mr President, may I briefly reply to Mr Goebbels? There is no contradiction between what the President said and what I said. The equivalence is with the Council and nobody has ever thought differently.

President
Colleagues, if you read the text of Mr Prodi's preliminary remarks, you will see they carry the sentiment in substance. Those remarks will be Minuted. They cover the issue that has been referred to.

Villiers
Mr President, on behalf of the British Conservatives and the rest of the PPE-DE Group I would like to say that we strongly support the compromise set out in the von Wogau report and reiterated by Mr Prodi this morning. Parliament has secured significant concessions on transparency, on consultation and on oversight. Parliament's rapporteur is to be congratulated for securing those. Parliament should also express its appreciation to Mr Bolkestein and his staff, and to the Commission, for responding to the concerns that we raised about these matters. Mr von Wogau deserves much praise for drawing to a conclusion the lengthy negotiations that we have had on this important issue.
We in Parliament have taken a pragmatic approach. This is a workable interim solution pending final resolution of the whole matter of delegated legislation in 2004, when Parliament could and should ask for a legally binding call-back mechanism, which is desirable but, sadly, not permissible within the terms of the current Treaty and arrangements. It is of vital importance that Parliament backs this compromise when it votes at 12 noon today, because without it we will not be in a position to deliver an integrated financial market - whether in 2004, 2005 or indeed ever. That financial market is not just of interest to bankers; it could also lead to cheaper prices and a wider choice of financial products for consumers and businesses, cheaper borrowing, higher returns for savers and investors, as well as doing a great deal to start defusing the pensions time bomb. All these are highly significant benefits to the ordinary people who elected us to serve on their behalf.
Accepting this compromise will bring us considerably closer to achieving our goal of an integrated financial market and delivering those benefits to ordinary people right across the European Union.

Randzio-Plath
. Chairman of the Committee on Economic and Monetary Affairs. (DE) Mr President, Mr President of the Commission, Commissioner, I want to vigorously emphasise that nobody in this House underestimates the significance of the financial markets. We all know how important it is that we catch up on the United States' integrated market in terms of the productivity of capital. On the other hand, we are also aware that the European financial market has significance not only for enterprises but also for those who rely on proper provision for old age, in other words who are, as consumers, dependent on it in view of their small pensions. Parliament therefore bears a heavy responsibility for coming to the right decisions in the co-decision procedure.
In today's proceedings, with our debate on the von Wogau report, we have an extremely sensitive topic to deal with. The rapporteur has attempted to find cautious formulations in order to give a chance to all the parties who are particularly sensitive to the effects of this legislative process.
I wish to underline again that Parliament, which demands more and more rights of co-decision, will not refrain from doing so in the parliamentary legislative procedure and that today's compromise in the von Wogau report is without prejudice to the possibility of Parliament giving up this legal position.
If we come to a transitional arrangement for secondary legislation today, that will only mean that we as a Parliament had previously been unable to push through the cementing of secondary legislation in the Treaty. That had previously been a matter for the Commission. In my capacity as Chairman of the Committee on Economic and Monetary Affairs, I wish to express my thanks to Mr Bolkestein for the fact that our negotiations on governance, laborious and difficult though they were, nonetheless succeeded in getting this formulation incorporated into the White Paper as a Commission proposal. That is a success in which we all share. Now we also have to achieve a successful conclusion to the next Intergovernmental Conference and the next amendment of the Treaties. That is, without a doubt, very important.
One question, though, has not been answered - that of to what extent we can actually attribute real significance to the Lamfalussy procedure in all this legislation, because all of what has been described as technical, today, is very often political. Parliament cannot be satisfied with a role legislating only in outline; we must rather still hold on to our authority to define, item by item, detail by detail, paragraph by paragraph, and article by article. We shall pay attention to that. I think it should also be clear, Mr Prodi, following your statement and also Mr Bolkestein's, that we will also take care to ensure that Mr Bolkestein's letter of 2 October to the committee will also, as an interpretation, be part of this protocol. The third thing that is clear is that, by its two statements, the Commission is committing itself, today, in the implementation of the Lamfalussy procedure, not, under any circumstances, to follow the recommendations of the Securities Committee against a qualified majority. This was, fortunately, clear today. So I think we can be full of optimism and constructive spirit in approaching this form of cooperation on the basis of parity and equivalence.

Riis-Jørgensen
Mr President, I should like to say thank you to Mr von Wogau who has expertly prepared a very well-considered report on this difficult issue. It is an issue which has been waiting to be solved for a very long time, and I wish to be the first to welcome a solution. Our debate today shows the general dilemma we face between, on the one hand, wishing to be effective and, on the other hand, wishing to secure democratic control by means of the legislation we adopt, and it is this issue of, on the one hand, effectiveness, and, on the other hand, democratic control which is to be discussed in detail during the forthcoming Convention.
Those of us who want to see clear ground rules for the European institutions are often criticised for being nit picking and preoccupied with power. I disagree very strongly with that view. In my country, Denmark, we had a constitutional struggle that lasted from 1866 right up to 1901, in which parliamentarianism was finally adopted as the central democratic principle. It is the same process we are now in the throes of at European level. I am therefore also very pleased that, in the midst of this struggle, we in the EU are able to deliver a result, namely this practical agreement. To refer again to the situation in Denmark 130 years ago, the whole political system was just about paralysed during the Danish constitutional struggle. I am therefore very pleased about the President of the Commission' s, Mr Prodi' s, statement that the Commission approves the content of this report, which ought to receive considerable support from the European Parliament. However, it is extremely important that the Council not merely accept the content, but also the basic message, of this report. Quite a few Members of the Council basically believe that this whole matter is futile and is merely a case of Parliament' s making a nuisance of itself. That is not so. It is, in short, about exercising democratic control by means of our common European legislation.

García-Margallo y Marfil
Mr President, I will comment briefly on five points.
Firstly, at this point in the debate the facts have been well established. The history of the tempestuous relations between Parliament, the Council and the Commission have been well described and if, as Lenin said, only fools discuss the facts, I do not want to fall into that temptation and I will say no more on this point.
Secondly, if you will allow me to speak autobiographically, I belong to the generation of Spaniards who well recognise the importance of parliament in a democracy. What is more, I was part of the Spanish Parliament that created the Constitution. I therefore have great sympathy for Mrs Randzio-Plath' s defence of the rights of Parliament.
Thirdly, to continue in an autobiographical vein, I am also a committed European and I am absolutely sure that, just as the euro was essential yesterday, today structural reforms are absolutely necessary and, amongst them, we must place special emphasis on the reform of financial services if we want the European economy to be competitive.
My fourth point is the reconciliation of these two objectives: doing things well and doing them quickly, speeding up the process and respecting the rights of Parliament, must be carried out, as Mr Huhne said, within strict limits, the limits laid down in Article 202, which are badly worded and whose reform we advocate.
Finally, the solution to this dilemma has been discovered by the new Knight of the Order of the Legion of Honour, Karl von Wogau, and supported by this Parliament. I hope that the Commission appreciates this vote of confidence from Parliament in the Commission and the Council, and that it will never fall into the temptation - since Mr Bolkestein likes Latin - to alter the par conditio, because the reaction of a spurned lover is unpredictable. Parliament has the powers to try to go into the maximum detail within level 1, which would delay the process. Parliament could, like a spurned lover, delay discussing the proposals and that would mean doing the opposite to what we should be doing.
I believe that today is a great day for all of us. I congratulate Karl von Wogau, the Commission and the Council and I hope that in Barcelona we will be able to reap the harvest which we have begun to sow today.

Swoboda
Mr President, Mr President of the Commission, ladies and gentlemen, today is indeed a most decisive day as far as the role of Parliament is concerned. President Prodi's statement - which I see as an undertaking by the Commission - has made clear in an unprecedented way that the Commission will put its weight behind the idea that the two components of the legislature should have real equality of rights in what they do. I believe that what Commissioner Bolkestein had to say was also of particular value. It was, in particular, thanks to Mrs Randzio-Plath's initiative and endeavours that we were able to convince Commissioner Bolkestein as well, something that was not so easy, nor was it clear from the outset that we would be able to do it. I do not believe that Commissioner Bolkestein has now been transformed from a devil into an angel, for we did not see him as a devil and he is not an angel now, but a good piece of work has been done. Commissioner Bolkestein, I would also like to express my respect for the way you today clarified and enlarged on what President Prodi said.
Firstly, I see this as a clear commitment by the Commission to bring about the parity, as President Prodi stated, of the two components of the legislature, to give equal weight and value to the roles of the two legislative bodies, the Council and Parliament, and finally, to do so by means of the amendment to Article 202. The statement is clear and unequivocal, and it is as such that we will always, to some extent, keep it in mind.
There are, secondly, definite statements on how this equal treatment will affect financial services. I assume that other areas are also affected by the intention - even subject to the legal position as depicted by Mr Bolkestein - to do everything legally permissible to achieve de facto equal treatment for the two components of the legislature. I must acknowledge that what you say, Mr Bolkestein, is indeed how the law stands. What I can read between the lines, though, is that the legal position will not be used to keep the unequal treatment in place until Article 202 is amended, but that everything possible is to be done in the meantime to achieve de facto equal treatment of the two legislative bodies in all essential matters.
For my third point, Mr President, I will address you, for it has to do with the setting up of an interinstitutional working party to make appropriate preparations, something which President Prodi has repeatedly urged, most recently persuading Mr Aznar, the President-in-Office of the Council, to give a positive response to the effect that this working party is now actually going to be convened. I would think it right and proper, Mr President, if joint discussions in the Conference of Presidents were to prompt you also to take the initiative in order to achieve what, as I have said, President Prodi was the first to propose, namely this interinstitutional working party. Today is an important day in the sense that it is now a matter of record that we recognise the knowledge and insight possessed by the experts, but at the same time that democratic control means that it is parliaments that, at the end of the day, decide on political objectives.

Gasòliba i Böhm
Mr President, ladies and gentlemen, Mr President of the Commission, Commissioner, I would like firstly to congratulate Mr von Wogau on the wonderful work he has done on this report. This report and the statements made about it by both the President of the Commission, Mr Prodi, and Commissioner Bolkestein, free up a process which has really prevented the speed that we would have liked in the negotiation of projects and the proposals for the creation of an internal market in the financial sector.
In the little time remaining for me, I would like to focus on two aspects. Firstly, once we have freed up the process by means of the agreement that today' s debate represents, what we have to do is get to work. That is to say, we have to make the 42 directives envisaged a reality, by 2003 in the case of the capital market and by 2005 in the case of financial services.
Secondly, I would like to point out that the European Parliament has never created obstacles when it has been asked for speed, urgency and cooperation in the implementation of projects and issues of such importance as the implementation of the euro or the European internal market itself, which are two very important successes of European construction. The Commission has not normally created obstacles, nor has Parliament, and if we have ever been faced with obstacles, it has been in the Council. In other words, everybody must fulfil their responsibilities.

Karas
Mr President, Mr President of the Commission, ladies and gentlemen, I wish to take up a position on this issue and propose to do so in seven stages. Firstly, I wish to congratulate the rapporteur and thank him for this report and for his gesture of commitment to various committees and institutions, in order to resume progress towards realisation of a common objective. This instance has provided an answer to the question as to what sex an angel is; here the parliamentary angel was a male one in the person of Karl von Wogau.
Secondly, I would like to thank him, again, today for the excellent work he has done for the Community on the Committee for Economic and Monetary Affairs, which he has left after many decades and to which - as to all the other committees he sits on, as this report shows - he has brought massive experience and economic knowledge. Thank you, Karl.
My second point - and this is probably beyond doubt - is that we must speed up the Lisbon process, and - not only for that reason, but certainly for that reason - we must create an internal market for securities as rapidly as possible.
My third point is that whoever wants to do that must take all necessary steps to enhance the efficiency of the decision-making procedure and accelerate the legislative process. That, after all, is the reason for this report and for the Lamfalussy report too.
There is just one contradiction I wish to clear up. There is no contradiction between speeding up the procedure and Parliament having greater efficiency and more codecision. There is a contradiction between Article 202 and Parliament's codecision procedure; that is why it needs to be amended. So I do not only expect codecision, information and transparency to be adhered to, as this is so formulated in most of the translations of the Commission's reports; rather, I expect us to make every effort to help bring to fruition something that is a fundamental Parliamentary right and a precondition for transparency and information. This report is an important step towards making this possible.
In this connection, I would like to direct your attention to item 5 of the report - I do not need to explain it at the moment - and to two events that show why we are so sceptical. I recall that the Commission presented a report in October 2000 on occupational pension schemes, which Parliament adopted in July by 460 votes, yet the Council has not, to date, adopted a Common Position on it. I recall the European Company, on which we are in agreement on matters of content but not at all as regards form, because we act on the basis of Article 95 and, in Nice, the Council pulled the legal basis for codecision from under our feet. That is why we are so sceptical.
Now for my last point. Mr President of the Commission, I wish to refer in this context to the sentence in your statement in which you said that it is the introduction of the euro that makes this report so important, and that, by this report, we are contributing to a strong and solid capital market. I therefore do not at all understand how a member of your Commission can, in a German newspaper, criticise your decision to send a notice of poor performance to the Federal Republic of Germany and actually dissociate himself from the thinking behind it. I would like a statement on that as well, as the Stability Pact and adherence to it are issues affecting the credibility of the euro and a precondition for public confidence in it. I consider the letter necessary because we must not differentiate between States, but must do our utmost to ensure that the Stability Pact is applied to everyone equally and with its full weight. Anyone who dissociates himself from that is endangering the credibility of the Stability Pact and, thereby, confidence in the euro.

Goebbels
Mr President, Mr von Wogau has submitted an excellent report. Nevertheless, Mr Prodi' s answer is not totally satisfactory, because Mr Prodi was still vague on the crucial point, namely that of equal rights between the Council and Parliament.
Mr Prodi tells us that the Commission is declaring its political will to work towards a situation where Parliament enjoys equal treatment. Equal with whom and equal to what? Commissioner Bolkestein told us that we must not discuss the sex of angels, but that 'equivalence' obviously means equivalence between Parliament and the Council. At the same time, however, Mr Bolkestein is warning us that the Commission cannot guarantee us this equivalence. Why did Mr Prodi not use these simple words, namely 'equal treatment with the Council' ?
Mr President, I am the European Parliament' s rapporteur on the market abuse directive. I must now table an amendment, therefore, laying down in substance that the Commission will be permitted to make technical amendments to this directive and that Parliament will have three months in which to respond. If, within this time, Parliament has not adopted a resolution stating that the proposed technical amendments go beyond the executing powers specified in the directive, the Commission will stop its measures. So far, so good! If this does not happen, I will have to write 'the Commission will work towards a situation where Parliament enjoys equal treatment' .
Mr President, who are you trying to fool? Can you really propose this sort of text to Parliament? I think that the Commission must make a commitment to show respect for the resolutions adopted by Parliament. That, Mr President, is democracy - pure and simple.

Martin, Hans-Peter
Mr President, even though I have only two minutes in which to speak, I have to begin by saying this: Esteemed Commissioners, we MEPs are now committed to working on the assumption that the Commission's statement is made in accordance with the thinking behind the codecision procedure and on the basis of the role played by Parliament and the Council in the Lamfalussy procedure being one of equivalence and parity. And what are we doing today? This is a very important stage in the new European Union's coming into being, and I think we have managed to specify what paper and pencils are to be used, where the entrances will be, which architects to appoint and what they can do and when they can do it on the road towards standardised financial services. What we should not forget in all this, though, is what the edifice will look like, because it will be one of the most important high-rise blocks in the European Union. Following this trial of strength between Parliament, Commission and Council, the issue is now what we want this building to be like. That is the next step and also what we in Parliament expect.
Our expectation is that the standardisation of financial services will not result in the problem of consumers having this sort of excess of information, that, in other words, once equal entitlement to them is offered without regard to national frontiers, that it does not come pouring in like a flood of videoclips inundating the consumers, who will then be 'overnewsed and underinformed' . We, of course, expect to prevent the big businesses' desire for excessive market concentration, resulting in a mere two or three players ending up defining the market. The insurers Allianz have said that they will only go into markets where they will be among the top three, and that, on an international level, will become a self-fulfilling prophecy.
The third problem is the insecurity of investors. We are implementing this at a time when only 65% of Germans who invest in stocks and shares state that they want to carry on doing so. We live at a time when we have to deal with the collapse of important pension facilities in the USA, and 'ruinitis' is going round. This must not be allowed to happen in Europe. There you have a demand for what your legislation should contain. If we end up with USA-style unequal distribution, then we in Europe will have failed.

Prodi
Mr President, I would like to thank the rapporteur and all the speakers for this excellent debate on an extremely important subject, which has focused both on the matter at hand and, more importantly, on its symbolic value and on the joint commitments we must make for the future.
We all know, we all realise that we need to respect the current sensitive and possibly inadequate balance between institutional matters and policy, but we also know that we will have ample opportunity to go back over these issues during the debate launched within the Convention. Today, the Commission has committed itself according to the terms of the statement I have read - and it could do no more - but soon it will undertake to work with Parliament to ensure that its institutional rights are fully recognised.

Bolkestein
Mr President, Mrs Randzio-Plath has drawn to our attention the importance of financial markets and the Commission wholeheartedly subscribes to her words in that respect. She said so in order to stress the importance of the report by Mr von Wogau and there again the Commission agrees with Mrs Randzio-Plath.
Mrs Villiers very succinctly put her finger on the sore spot by saying that a compromise is necessary and that is what we are discussing this morning because the call-back option is not permitted under the Treaty and the comitology procedure. That is perfectly correct. Mrs Villiers then went on to say that we are talking here about benefits for ordinary people. There again the Commission wholeheartedly agrees. Fortunately we are living in the European Union where more and more ordinary people own shares and all we are doing this morning is providing a legislative framework which safeguards the interests of ordinary people. I am very pleased to say that we are making good progress in this work.
If I have understood Mrs Randzio-Plath correctly, her interpretation implies that the Commission would not go against a simple majority in Parliament. Without saying so she refers to the "aerosol declaration" which the Commission appended to the comitology decision of June 1999. If that is what she meant - this is not the first time that Mrs Randzio-Plath and I have discussed this matter - then that is not a possibility for the Commission because, as Mrs Villiers and other Members of Parliament know, it does not agree with the comitology decision or with Article 202.
I should like to address Mr Goebbels' comments. He said that the Commission should show respect for Parliament's resolutions. The Commission does show respect for Parliament's resolutions. More to the point, the Commission has said that it will take the fullest account of Parliament's position. What more can Mr Goebbels want? I should like to add that the Commission has respect for Parliament's resolutions, but it has more respect for the Treaty. It has more respect for the agreed comitology procedure. The Commission shows respect all around but is bound by the formalities of the Treaty and wishes its words to be interpreted in that way.
Mr Goebbels also made reference to the word "equivalence". The Commission has very clearly indicated its sympathy with Parliament's position with respect to Article 202. It has laid that down in black and white in the White Paper on comitology. The Commission will continue to work on that basis - as stated by the Commission President, Mr Prodi, when he said that the Commission would continue to do that and, fully respecting the existing institutional balance, the Commission would treat Parliament and the Council on an equal footing. In the end we are striving for what we can achieve only at the next IGC, which hopefully will start in the year 2004.
Since this is close to the hearts of Members of Parliament, may I end by summarising in seven points the safeguards which this Parliament has. Firstly, the extent of delegated powers will be defined through codecision. Secondly, there will be a fully open and transparent process including a market participants' group attached to the European Securities Regulators' Committee. Thirdly, there will be a sunset clause - and this is in response to a specific request from Mr Huhne in this Parliament - limiting the duration of the delegated powers to four years after adoption of each legislative act. Fourthly, the Commission, as I have mentioned a few times this morning, will take the utmost account of Parliament's position and of any resolution - Mr Goebbels - stating that the Commission has exceeded its delegated powers. Fifthly, the Commission will support a change to Article 202 at the next IGC. Sixthly, there will be a full and open review in 2004 and we hope an interinstitutional monitoring group to ensure everyone carries out their commitments connected with the Lamfalussy process. Seventhly and lastly, if the Commission fails to respect its engagements Parliament will not grant any further delegated powers in future. In effect, Parliament can make its voice heard in no uncertain fashion and the Commission is bound to listen to that.
I should like to thank the rapporteur and Members of Parliament for their constructive attitude. Mrs Randzio-Plath was kind enough to say a few kind words in my direction. May I reciprocate and say that I have always found the discussions with the chairperson of the Committee on Economic and Monetary Affairs very fruitful, friendly and, in the end I hope, constructive.

Goebbels
Mr President, may I briefly put a question to Commissioner Bolkestein? On the basis of which article of the Treaty did the Commission agree, at Stockholm, to declare that it would not go against a majority opinion of the Council?

Bolkestein
Mr President, both Mr Goebbels and Mrs Randzio-Plath are well aware of the answer. They know that when the comitology procedure was decided on in mid-1999, the Commission issued a unilateral declaration, which has become known as the "aerosol" declaration, which was given in exchange for something called the contre-filet, another procedural device. The Commission and Council accepted that the contre-filet procedure would disappear, and in its place came this unilateral declaration, which referred to a much earlier case in connection with veterinary matters. That is why in the unilateral Commission declaration mention was made of particularly sensitive cases, because the veterinary situation back in the early 1980s concerned human health. The declaration stated - again by way of replacement of the contre-filet procedure - that the Commission would not go against a majority opinion of the Council, thereby basically maintaining the status quo, while bringing things into sharper focus.
Therefore the Stockholm resolution adds nothing beyond what was already in place under the comitology procedure, because the same words - the ipsissima verba - that appeared in the declaration by the Commission in June 1991 reappear in the resolution of the European Council. So matters have basically remained the same.
If Mr Goebbels is asking on which article this is based, then the reply is on Articles 202 and 211.

Randzio-Plath
Mr President, there has been a qualitative change in the form of the entry into force of the Treaty of Amsterdam. This shows me, though, how necessary it actually is to have secondary legislation on a basis that accords with the Treaties. I just want to ask whether the Commission is now, at last, declaring itself willing to grant the competent committee in Parliament, the Committee for Economic and Monetary Affairs, observer status on the Securities Committee and invite it to the meetings on a regular basis.

Bolkestein
Mr President, much as the Commission would like to come to a final and positive agreement with Parliament, I regret that on this specific point the Commission cannot agree with Mrs Randzio-Plath since the presence of a parliamentary observer in the Securities Committee would not be in accordance with normal constitutional principles. As Mrs Randzio-Plath says, it would amount to a mixing of executive and legislative powers, and for that reason the Commission cannot see its way to agreeing with the chairperson of the Committee on Economic and Monetary Affairs.

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

Structure and rates of excise duty applied on manufactured tobacco
President
 The next item is the debate on the second report (Á5-0016/2002) by Mr Katiforis, on behalf of the Committee on Economic and Monetary Affairs on the structure and rates of excise duty applied on manufactured tobacco products.

Katiforis
Commissioner, Mr President-in-Office of the Council, ladies and gentlemen, Article 93 of the Treaty states that efforts must be made to harmonise excise, that Parliament must be consulted in this procedure and that the aim of the Treaty is to harmonise taxation to the extent that harmonisation is necessary to ensure the establishment and the functioning of the internal market within the time-limit laid down in Article 14. Of course, Article 14 expired a long time ago, back in December 1992; however, as the internal market has not quite been completed, the purpose of the Commission's first proposal was to serve the objectives of Article 93, with which we have no choice but to agree, given that they derive directly from the Treaty.
Because Parliament has a consultative role in the matter, the Council is pushing for a fast response from us. The Commission too has put pressure on Parliament, brandishing the fact that the Council is in unanimous political agreement on the matter, so all that is left is for us to endorse the Council's and the Commission's faits accomplis. This was, in my view, an unfortunate way of dealing with Parliament, especially on the part of the Commission, because it is tantamount to asking Parliament merely to endorse a fait accompli without making any contribution of its own whatsoever. Our purpose in life is not to sign blank cheques, Commissioner. And, may I say to the Council that I trust that its haste in requesting an urgent procedure does not mean that it is merely going through the motions and that it will give serious attention to Parliament's opinion, into which, I can assure you, we have put a great deal of thought.
Parliament has already rejected the previous Commission proposal by a large majority. The main tenet of that proposal was to impose a minimum fixed tax of EUR 70 per 1000 cigarettes, alongside the minimum 57% tax charged on the most popular market brand. I do not want to go into the technicalities of how this tax is calculated at this point.
Parliament rejected the proposal because it accepted the following arguments: first, imposing a minimum fixed tax would put small and medium-sized tobacco companies at a distinct disadvantage. Assuming that the only way a small tobacco company manages to get its most popular brand on to the market is by reducing the price, it immediately faces a heavy fixed tax which bears no relation to its production costs, putting it at a disadvantage in relation to large tobacco companies. Secondly, the immediate effect of the Commission proposal was to increase prices in southern countries, where per capita income is lower than in the northern countries in the main zone of the Union. Insofar as taxes were harmonised, they were harmonised upwards, by increasing prices. Parliament had, in fact, called for this sort of harmonisation in the past, but it was clear from the last vote that the new Parliament voted in took a different view and in 1996 and 1999, Commissioner, the rapporteurs voted against the Commission proposal.
I believe that Parliament is now convinced that constantly increasing the price of cigarettes does not achieve the objective, which I support, of reducing smoking; all it does is to reduce legal sales of cigarettes and encourage cigarette smuggling which, in some countries, has reached worrying proportions. In addition, the Commission proposal would result in astronomical price increases in candidate countries of 200% to 400%. Consequently, the Commission's old proposal, which in essence forms the basis for the Council's political agreement, does not serve the purpose of Article 93 because it tends to destabilise rather than consolidate the internal market.
However, as the Commission and the Council are determined to stand by their initial position, although they have no reason to do so, the Committee on Economic and Monetary Affairs has asked me to table a compromise proposal. This proposal is as follows: the Council can adopt the Commission's initial ideas and Parliament will withdraw its opposition to them. However, it will call for an alternative method of harmonising taxes. This alternative will be based on a combination of minimum excise duty of 57% plus a minimum value added tax of 15% which, once the relevant mathematical formula has been applied, gives a harmonised tax of around 71%. So what we propose is to introduce two methods of taxation and to allow the Member State in question to choose between them.
The pros of this solution are as follows: first, it will not push up prices and put the industry in certain Member States in the south at a disadvantage. This is, of course, vital to the candidate countries, as I have already said. Secondly, it will help to harmonise prices, in that we already had price convergence with the minimum 57% tax and it was the value-added tax which was causing the fluctuations. Consequently, our new proposal does more for harmonisation than the Commission proposal. Thirdly, it allows Member States to protect their small and medium-sized enterprises from distortions of competition caused by imposing a fixed tax. And by shifting the focus away from price increases on cigarettes, these measures will discourage smuggling.
I think the Council should show courage and imagination, accept the two different versions and leave the final decision to the Member States. I am positive that the new proposal, which I am confident my fellow Members will support, has so many advantages that the Member States will opt for it and we shall soon have just one system of harmonised taxation.
Allow me to finish, Commissioner and members of the Council, by saying that I, too, want to see smoking reduced. But I do not think that we can do so by constantly hiking up prices. Cigarettes are already extremely expensive in Europe and smoking shows no signs of abating. Which is why I am against the amendments tabled by Members trying to support the anti-smoking campaign by raising prices. I do not think the price mechanism can be used to achieve everything. There is much that it can be used to achieve, but not everything, which is why I am against these proposals. This is my compromise proposal to Parliament and I call on the Commission and the Council to take it seriously and not to look on it as a mere formality, because that would be insulting to Parliament.

Honeyball
Mr President, it is with some regret that I must disagree slightly with my colleague, Mr Katiforis. I am speaking particularly on behalf of the UK PSE delegation in order to say that we will not be supporting this report for many of the reasons that Mr Katiforis has already outlined. We do not accept the argument that price makes no difference to the amount of cigarettes consumed. In fact, I have figures here from the UK, which show that a 10% increase in the price of cigarettes leads to a 4% decrease in consumption. So there is a link between the cost of smoking and the amount that is actually smoked. That is the case that the UK PSE delegation is making, particularly with regard to Amendments Nos 2 and 3 on reducing the excise duty below that set out in the original report.
It is important for Parliament to vote against this report, because very recently we adopted the tobacco directive, which, as we all know, took various public health measures to reduce smoking. It therefore seems very inconsistent to adopt this report, which seeks to pass measures and form opinions which will, to some extent, go against the measures we have already taken on public health grounds. That is not to say that we do not understand the issues raised about the applicant countries and about small and medium-sized tobacco producers. If voting against this report has an effect on them, that is unfortunate and is not something that we would wish to see. But when we are discussing tobacco we are talking about a product which is harmful to health wherever you happen to live, and that is the main argument. This is a health measure rather than anything to do with production or with harmonising duty, though that we accept the latter as a principle. I felt that I needed to explain our position and say why the UK PSE will be voting against this report later today.

Maaten
Mr President, it is obvious to us, too, that increased prices lead to a drop in the consumption of tobacco products, particularly cigarettes and hand-rolling tobacco. The situation in the United States and Sweden, where excise is very high and consumption relatively low, illustrate this trend, as well as a study conducted by the World Bank. In two previous resolutions from 1996 and 1997, the European Parliament left no doubt as to the fact that it is seeking an upward harmonisation of tobacco prices by means of increased excise duty. As the Commission proposes in the explanatory note, the new minimum excise amount in euros for cigarettes is based on the average excise yield in the Member States, namely EUR 90 per 1 000 cigarettes and subsequently reduced to EUR 70 per 1 000 cigarettes in order to prevent the majority of the Member States from having to increase their excise duties. It is, in this connection, once again worth mentioning that the excise yield in nine Member States is even more than EUR 70 per 1 000 cigarettes. This is why my group is opposed to a further reduction.
In our view, Commissioner Bolkestein' s proposal is a big improvement on the current situation. He already mentioned health aspects during previous discussions a few months ago. We would like to further reinforce this aspect. We have tabled a number of amendments, in conjunction also with Mr Blokland. Firstly, there is the VAT issue in respect of which the rapporteur has submitted proposals which we support. Secondly, we believe that this matter should be firmly placed in the context of existing negotiations in the World Health Organisation. We are of the opinion that more should be done to combat differences in smuggling prices, since they form one of the reasons for fraud and smuggling, although they are not the only reason. In our view, a system should be considered during the four-yearly review by means of which the use of more harmful products can be discouraged. In the final analysis, and I am taking this opportunity to repeat what I have said before, it remains an unacceptable anomaly, on the one hand, to increase the excise duty on tobacco products, although partly for health reasons and, on the other hand, to continue to heavily subsidise tobacco growing in the European Union.

Korakas
Mr President, there is no doubt that cigarettes seriously damage your health. However, it is hypocrisy on the part of the Commission to maintain that it is helping to protect public health by introducing more taxes on tobacco products, which are a widely consumed product, when it leaves consumers at the mercy of very dangerous products in the food chain, imported tobacco products of dubious quality, and is pushing for health to be completely privatised.
One thing is for sure: increasing taxes - and hence the price to the consumer - will not reduce smoking. Otherwise it would surely have happened by now. What will happen if taxes are increased is that consumers on lower incomes will be forced to buy cheaper contraband cigarettes from third countries which are possibly even more damaging to their health. In other words, smuggling will increase, not decrease, as the Commission maintains. The proposed measures will increase the cost of living at a time when consumers' wages are constantly being eroded by the policy of the European Union.
The campaign against smoking and the campaign against tobacco cultivation in the European Union have become one and the same and we are against that. The campaign against smoking benefits consumers' health, while the campaign against tobacco cultivation benefits large-scale producers and industry, mainly in the USA, to the detriment of tobacco farmers and processors in southern Europe. That is precisely why we are against abolishing or even reducing tobacco-farming subsidies, as many would have us do. That would wipe out tobacco farming in the European Union, which would then be wholly dependent on imported cigarettes.
These are just some of the reasons why we are against any form of additional excise because, as I have already said, it does nothing to protect public health; in fact, it may well have the opposite effect. Finally, we suggest that revenue from tobacco taxes should be used to fund education, preventive measures and centres where smokers can kick the habit and obtain treatment.

Blokland
Thank you, Mr President, we all seek clarity, including clarity in the policy on tobacco products and the excise duty that applies to them, excise yields which are largely used to combat the negative effects tobacco consumption has on health. Unfortunately, Mr Katiforis' s report lacks this required clarity. However, the report has made it clear that the rapporteur wants to protect the interests of the tobacco industry, and particularly in those countries where products are also available at low prices. The rapporteur' s approach serves the interests of the cigarette industry and not the interests of the citizen.
It is therefore very disappointing to note that the rapporteur confines himself to amending the Commission proposal where the level of excise duty is concerned without giving a reasoned consideration. This consideration is something which the European Commission itself does give with regard to increasing excise duty, namely in terms of promoting a well functioning internal market and discouraging smoking by pursuing a consistent and convincing policy. This is underlined in the amendments I have tabled together with Mr Maaten. In the past, Parliament has in two resolutions clearly called for an upward fiscal harmonisation of excise on tobacco. The claim that the increase in excise would encourage smuggling is not proven. Quite the reverse, in fact, smuggling practices occur precisely in those areas where tobacco products are cheap. However, research has shown that the increase in tobacco prices encourages people to quit smoking and deters non-smoking young people from taking up the habit. It will be to the credit of Parliament if the amendments that I have tabled together with Mr Maaten are adopted.
Finally, I should like to note once again that, sadly, one billion euros' worth of tobacco subsidies still go up in carcinogenic smoke.

Della Vedova
Mr President, Commissioner, in the United States - a country which has achieved the most striking results in curbing cigarette consumption - the incidence of taxation in relation to price is much lower than in all the European countries, even those with the lowest excise duty levels. I feel that this is a benchmark we must not disregard.
There is another factor that we must not lose sight of. The British Member said that increasing prices leads to a reduction in cigarette consumption, and this is evidence to prove it. However, what happened in Italy is that an increase in cigarette prices brought about by an increase in taxation did indeed reduce the consumption of cigarettes sold on official markets but only because it greatly increased the consumption of contraband cigarettes. This is especially true in that cigarette smuggling takes place not between European countries with differing excise duty levels - and we would point out that excise duties in the United States vary from State to State - but from outside Europe to inside Europe: cigarettes are smuggled from Montenegro across the Adriatic and by this route to the whole of Europe. Moreover, we will be in danger of exacerbating this phenomenon of criminal, mafia smuggling if we continue to pursue this policy of increasing excise duties. The positive results obtained in terms of public health in the United States - I want the Members to understand this - were pursued and achieved by applying lower rates of excise duty than in Europe.

García-Margallo y Marfil
Mr President, I will make a few brief and concise observations.
I fully agree with what the rapporteur said about the legislative procedure, the role of Parliament and the need for loyal cooperation between the institutions. I also agree with the rapporteur on his modifications to the Commission' s basic proposals. The Commission proposes a special tax, an abscissa of 50% with a threshold of 70%. Mr Katiforis proposes, firstly, to reduce this threshold to EUR 60 - a proposal which my group agrees with - and secondly, to offer the States which this directive is aimed at an alternative option: to apply the rate of 71%, including within this rate both special taxes and valued-added tax.
I believe this is an innovative and important approach which respects the principle of price proportionality, which to a certain extent puts an end to the minimum threshold, and introduces a degree of clarity into indirect taxation. The accumulation of indirect taxes and value-added tax have been repeatedly condemned by this Parliament and this option - to establish a combined minimum level for the two taxes - seems to me to be a good solution.
I also agree with the rapporteur that price plays a part in dissuading people from smoking, but it is not the only method, and we therefore expect the Commission to send us supplementary proposals soon, aimed at putting an end to this habit.
I also agree that the price increase in coastal and border countries may lead to an increase in fraud. I would ask the Commission to strengthen the cooperation procedures in order to eradicate fraud, which is one of the elements that erodes indirect taxation, especially here, but we will talk about that later with Mr Bolkestein, in relation to the Kauppi report.
Congratulations, Mr Katiforis. On this occasion you can count on the support of my group.

Sbarbati
Mr President, we feel that the Katiforis report on the proposal for a directive on the structure and rates of excise duty applied on manufactured tobacco products is a good compromise on the Commission and Council' s proposal. Indeed, adopting the Commission' s proposal, we would ultimately have made the legislation too inflexible and created great difficulties, particularly for the manufacturing sector, with the result that the cost of national production - especially in southern Europe - would have increased and its quality decreased. There would also be an increase in smuggling, as has already been pointed out. In particular, we feel that the idea of a fixed amount minimum excise tax on cigarettes, as proposed, would not have protected - or rather, would have compromised - equality in the field of competition between very large and small and medium-sized tobacco companies, thus leading to distortion of the principle of competition.
In our opinion, Mr Katiforis' report focuses on three goals. Firstly, the goal of tax harmonisation - it proposes a rate of 71% - in that VAT rates are made subject to a common rule for we are imposing a total tax for the first time: excise duties plus VAT; by taking this line, we will achieve greater convergence and avoid indiscriminate price increases and penalising the manufacturing industries of the Member States of southern Europe. Secondly, the goal of combating fraud and smuggling. Thirdly, it also achieves the aim of greater prevention of health risks, which is not obtained through continually increasing taxation but, we feel, especially through specific investment in research too.
Lastly, we feel that the position on cigars and cigarettes as presented in the Katiforis report is more convincing in that it also avoids potential employment slumps, thus safeguarding the principles laid down in Article 127 of the Treaty.
Therefore, Mr Katiforis, the Italian members of the Group of the European Liberal, Democrat and Reform Party, European republicans, democrats, Italy of Values members and liberal socialists will support your report.

Paisley
Mr President, 22% of all cigarettes purchased in Great Britain and Northern Ireland are smuggled into the country. In the year 2000 smuggling of tobacco caused losses of GBP 3.8 million to the British Exchequer. Her Majesty's Customs and Excise have been able to cut the cross-Channel bootlegging of tobacco by an impressive 76% since March 2000. The bootleggers are up in arms at this, but now, with the Commissioner announcing his intention to take action against the United Kingdom for creating barriers to the free movement of goods, the door could be opened even wider to give smuggling an even greater field day.
The cheap smuggled tobacco has produced new smokers among the young people in the United Kingdom. That is a tragedy. It has also threatened the few remaining jobs in the British tobacco industry. The British tobacco industry should have an even playing field with the tobacco manufacturers in the rest of the European Union and should not be penalised.

Villiers
Mr President, I and my delegation of British Conservatives welcome the rejection of the Commission's proposal in the previous vote in Parliament, and we regret the current proposal to accept the Commission's proposal, which is flawed. We will be supporting a number of Mr Katiforis' amendments because they make a bad proposal rather better.
However, overall, we cannot give our support to this proposal because we do not believe in the upwards harmonisation of tobacco taxes. Tax is a matter for nation-states, for domestic governments, and should remain the preserve of domestic governments, which are democratically elected and democratically accountable, tax being one of the most fundamental aspects of nationhood and statehood.
In addition, we are by no means convinced by the health arguments on smoking and tax. We are increasingly concerned that ever-spiralling levels of tax on cigarettes may lead to increased smuggling. Such illegal smuggling of cigarettes from outside the European Union is now causing a great deal of concern and may lead to an increase in smoking, certainly in my constituency and much of the United Kingdom.
So the health issues in favour of high tobacco taxes are not clear cut but, even more importantly, we do not believe in the upward harmonisation of excise duties or, in particular, the upward harmonisation of tobacco taxes. Hence, we will be opposing the Commission's proposal.

Schmidt, Olle
Mr President, Commissioner, smoking is dangerous both for people who smoke and for those in their vicinity. Even those who are not even born are harmed by the fact that their mothers or fathers smoke. Smoking is therefore very much a public health issue. We must therefore do everything to prevent people from starting smoking. I know what I am talking about, Mr Katiforis, for I, myself, have been a smoker.
The words 'public health' do not even appear in the report. Mr Katiforis is a very intelligent and agreeable fellow MEP, but even intelligent MEPs are occasionally wrong. This time, Mr Katiforis is wrong. There is a lot of evidence to show that higher cigarette prices reduce the level of smoking. Less tobacco is consumed, and fewer young people begin smoking.
In my country, the Public Health Institute has calculated that the one-off effect of the increase in cigarette prices in 1997 was to save 12 500 people from premature death, thanks to the fact that 100 000 people gave up smoking when cigarettes became more expensive. We are talking here simply about my own country, Sweden, which has only 9 million inhabitants. As is well known, taxes in Sweden are, moreover, significantly higher than in the EU generally.
The arguments are therefore in favour of our being obliged to accept the Commission' s proposals. However, I do not believe it is sensible for the EU to support tobacco cultivation at the same time as great efforts are being made to prevent smoking and reduce the spread of cancer. We must be a little more consistent and not engage too much in double standards. I therefore hope that Parliament will support Mr Maaten' s amendment and, through it, the Commission' s proposal too, albeit in a somewhat stricter form.

Lulling
Mr President, I belong to the majority in this House that rejected the Commission's proposal in November, and I would actually have been quite happy to have left it at that, but now we are confronted by a second report that we have to vote on. Unfortunately, the Commission is sticking to its plan to raise the minimum rates of excise duties. Today's are on tobacco; according to my information, the Commission wants to introduce a proposal to increase excise duties and to abolish the zero rate on wine, even though it is a proven fact that wine drinkers are more intelligent and less prone to weakness of mind in old age. What else the Commission plans to cook up the day after tomorrow, I do not know.
This proposal will not achieve the objective set for it, that is, the progressive convergence of excise duties in the internal market, and puts an unnecessary question mark against the balanced compromise achieved in 1992 under Luxembourg's Presidency between supporters of proportional and specific taxation. If this hapless proposal from the Commission were to be implemented, there would also be a massively greater risk of smuggling, especially in the countries of the South and in post-enlargement Central Europe, because the price of cigarettes there would increase by between 200% and 500%.
As far as the campaign against tobacco consumption is concerned, which has to be pressed into service in justification of the Commission's exorbitant proposal, I can only reiterate that there is no proof whatever that cigarette prices slow down tobacco consumption. Far from it, smoking then even becomes a status symbol.
In view of these considerations, I reject the Commission's proposal. The amendments introduced by our rapporteur, leaving it to Member States to choose between excise duty at EUR 60 per thousand cigarettes and excise duty plus VAT of 71% of the price, represent the lesser evil, and, politics being the art of the possible, I will, of course, follow the rest of my group in voting for Mr Katiforis' report with full conviction.

Bolkestein
Mr President, the new report brings the positions of the Commission and Parliament closer to each other and I welcome the efforts made by Mr Katiforis in that respect. His report now proposes to approve the Commission proposal subject to two amendments.
The first amendment concerns the taxation of cigarettes and offers Member States a choice between two taxation systems. The Commission is, however, of the opinion that this will lead to less rather than more harmonisation of tobacco taxation. The option proposed would not oblige any Member State to change its level of taxation and would even make it possible for a number of Member States, including Member States applying relatively low tax levels, to lower their rates. This would be in clear contradiction to health policy objectives, as has been pointed out by Mrs Honeyball this morning.
For this reason, the Commission cannot accept this first amendment. Moreover, it feels that one of the reasons why it is proposed - in particular the need to conserve the balance between specific and percentage taxation - is already taken into account in its proposal. As I explained previously, Member States affected by the introduction of the fixed amount in euro retain the flexibility they enjoy at present to determine the proportion of the specific and ad valorem components of cigarette taxation.
To justify the amendment, the report also points to the situation of candidate countries, for which the minimum duty level should be an achievable objective. But offering them a choice between two taxation systems after accession would leave us with a wide gap between their tax and price levels and the tax and price levels of the present Member States, resulting in substantial revenue loss for present Member States. The Commission is aware that achieving the amounts in euro will require a significant effort from most candidate countries and has therefore proposed to the Council that limited transitional periods should be granted to candidate countries to reach the minimum rate of taxation.
The second amendment rejects the change in the definition of cigars and cigarillos. However, the Commission remains of the view that products having the characteristics of cigarettes should also be taxed as cigarettes. That change was requested by a number of Member States and has the unanimous support of all the others. It has also received substantial support from the cigars and cigarillo industry.
I would also like to comment upon the two other amendments adopted in the Committee on Economic and Monetary Affairs. The first one suggests adding a new recital, calling upon the Commission to submit proposals to eliminate fraud and smuggling. The Commission shares the view that rate harmonisation in itself will not eliminate fraud and also that other measures are required to combat fraud and smuggling. However, this does not need to be re-emphasised. A number of initiatives to combat fraud in the sector of excise products, have already been launched following the 1996 report of a High Level Group on fraud in the alcohol and tobacco sector. The most recent example is the Commission proposal of 19 October 2001 for a decision of the European Parliament and the Council on computerising the movement and surveillance of excise products. It will be more appropriate to discuss the issue of fraud, which is a general issue relevant to all excise products, within the context of this proposal.
The second amendment concerns the upper limit of the euro amount proposed by the Commission and suggests lowering the amount from EUR 100 to EUR 85. The motivation of the amendment is that EUR 85 is easier to achieve than EUR 100 for the applicant countries, which today apply excise duty levels between EUR 6 and EUR 24. I would point out that this upper limit is not relevant to applicant countries. It is only relevant for Member States already applying a very high amount of duty but which, in spite of this, do not meet the 57% minimum.
In conclusion, I can say that the Commission sees this report as a step forward in comparison with the first report, as it endorses the need for enhanced approximation of rates of excise duty.

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

Corrie
Mr President, once again it was quite impossible to hear the Commissioner's winding-up speech. It is totally unfair to our Commissioners who come here to address us after they have listened to our speeches.
I wonder whether, at the start of this two-and-a-half years of your presidency, you might consider a five-minute break between the end of business and Members coming into this Chamber, because we cannot continue in this way, showing this discourtesy to our Commissioners.

President
Mr Corrie, your point is well made. Your suggestion is one possibility. We also need to ask the huissiers to ensure that when Members enter the Chamber they are not engaged in conversation. Conversations are for outdoors.

Vote
President
 The next item is the vote.
Recommendation for second reading on behalf of the Committee on Legal Affairs and the Internal Market on the common position adopted by the Council with a view to adopting a European Parliament and Council directive relating to the type-approval of two or three-wheel motor vehicles and repealing Council Directive 92/61/EEC (8402/1/2001 - C5-0472/2001 - 1999/0117(COD))
(The President declared the common position adopted)
Simplified procedure:
Proposal, on behalf of the Committee on Agriculture and Rural Development, for a Council regulation amending Regulation (EEC) No 2019/93 introducing specific measures for the smaller Aegean islands concerning certain agricultural products (COM(2001) 638 - C5-0590/2001 - 2001/0260(CNS))
(Parliament approved the Commission proposal)
- Proposal, on behalf of the Committee on Regional Policy, Transport and Tourism, for a Council decision on the arrangements concerning the AIEM tax applicable in the Canary Islands (COM(2001) 732 - C5-0691/2001 - 2001/0284(CNS))
(Parliament referred the proposal back to the committee)
- Proposal, on behalf of the Committee on Regional Policy, Transport and Tourism, for a Council regulation temporarily suspending autonomous common customs tariff duties on imports of certain industrial products and opening and providing for the administration of autonomous Community tariff quotas on imports of certain fishery products into the Canary Islands (COM(2001) 731 - C5-0692/2001 - 2001/0289(CNS))
(Parliament approved the Commission proposal)
- Proposal, on behalf of the Committee on Fisheries, for a Council regulation establishing measures to be applicable in 2002 for the recovery of the stock of cod in the Irish Sea (ICES Division VIIa) (COM(2001) 699 - C5-0690/2001 - 2001/0279(CNS))
(Parliament approved the Commission proposal)
Report (A5-0015/2002) by Nisticò, on behalf of the Committee on the Environment, Public Health and Consumer Policy, on the proposal for a European Parliament and Council directive amending for the twenty third time Council Directive 76/769/EEC relating to restrictions on the marketing and use of certain dangerous substances and preparations (substances classified as carcinogens, mutagens or substances toxic to reproduction) (COM(2001) 256 - C5-0196/2001 - 2001/0110(COD))
(Parliament adopted the legislative resolution)
Report (A5-0468/2001) by Palacio Vallelersundi, on behalf of the Committee on Legal Affairs and the Internal Market, on the proposal for a Council regulation amending Regulation (EEC, Euratom, ECSC) No 259/68 laying down the Staff Regulations of officials and the conditions of employment of other servants of the European Communities (COM(2001) 253 - C5-0249/2001 - 2001/0104(CNS))
(Parliament adopted the legislative resolution)
Report (A5-0013/2002) by Hughes, on behalf of the European Parliament delegation to the Conciliation Committee, on the joint text approved by the Conciliation Committee for a European Parliament and Council directive on the organisation of the working time of persons whose occupation is the performance of mobile road-transport activities (PE-CONS 3676/2001 - C5-0688/2001 - 1998/0319(COD))
(Parliament adopted the joint text)
Report (A5-0026/2002) by Ghilardotti, on behalf of the European Parliament delegation to the Conciliation Committee, on the joint text approved by the Conciliation Committee for a European Parliament and Council directive establishing a general framework for improving information and consultation rights of employees in the European Community (PE-CONS 3677/2001 - C5-0687/2001 - 1998/0315(COD))
(Parliament adopted the joint text)
Report (A5-0460/2002) by Oostlander, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the Commission proposal with a view to the adoption of a Council framework decision laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of illicit drug trafficking (COM(2001) 259 - C5-0359/2001 - 2001/0114(CNS))
( After the vote on the Commission proposal)

Bolkestein
Mr President, I wish to express the Commission's disappointment that the vote has gone against its wishes. The only thing that remains for me to do is to bring the result of this vote to the attention of the Commission, which will take due account of it and inform Parliament accordingly.

Terrón i Cusí
Mr President, I have asked for the floor, when you have given it to the Commission, to say that what we have just rejected in this House is Mr Oostlander' s report, not the Commission' s proposal.
We do not have the power to vote on the Commission' s proposal. We have rejected the report by Mr Oostlander, together with his opinion of the Commission' s proposal.

President
 You are quite correct. That is what I declared - that the report, as amended, was not adopted.
The procedure that now takes place, if the Commission does not withdraw the proposal, is that we refer it back to the committee responsible without voting on the draft legislative resolution.
Report (A5-0436/2001) by Ludford, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a Council Directive concerning the status of third-country nationals who are long-term residents (COM(2001) 127 - C5-0250/2001 - 2001/0074(CNS))
(Parliament adopted the legislative resolution)
Report (A5-0455/2001) by Kessler, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a Council regulation on the conditions in which third-country nationals shall have the freedom to travel in the territory of the Member States for periods not exceeding three months, introducing a specific travel authorisation and determining the conditions of entry and movement for periods not exceeding six months (COM(2001) 388 - C5-0350/2001 - 2001/0155(CNS))
(Parliament adopted the legislative resolution)
Report (A5-0016/2002) by Katiforis, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive amending Directive 92/79/EEC, Directive 92/80/EEC and Directive 95/59/EC as regards the structure and rates of excise duty applied on manufactured tobacco products (COM(2001) 133 - C5-0139/2001 - 2001/0063(CNS))
(Parliament adopted the legislative resolution)
Report (A5-0464/2001) by van den Berg, on behalf of the Committee on Development and Cooperation, on the Commission communication to the Council and the European Parliament on Linking relief, rehabilitation and development - an assessment (COM(2001) 153 - C5-0395/2001 - 2001/2153(COS))
(Parliament adopted the resolution)
Report (A5-0392/2001) by Schmidt, on behalf of the Committee on Economic and Monetary Affairs, on the EIB Annual Report for 2000 (C5-0541/2001 - 2001/2218(COS))
(Parliament adopted the resolution)
Report (A5-0011/2002) by von Wogau, on behalf of the Committee on Constitutional Affairs, on the implementation of financial services legislation (2001/2247(INI))
Before the vote on Paragraph 13:

von Wogau
Mr President, the debate we had this morning and President Prodi's statement, mean that we need to adjust the text of the resolution to conform with them. I have an oral proposition, which I have here in French:
'takes note of the speech made in plenary on 5 February 2002 by Mr Prodi, President of
the Commission, which included the statement detailing the Commission' s undertakings
to Parliament' .
(The President noted that there was no objection to the oral amendment)
(Parliament adopted the resolution)

Report Hughes (A5-0013/2002)

Fatuzzo
Firstly, I would like to congratulate the new President of Parliament personally. I hope that he will have the patience to listen to me as the previous President used to.
I have to tell you that I took part in the work of the Conciliation Committee establishing the working hours of mobile workers performing road transport activities. I discussed the matter with my friend, Mr Ugo Gustinetti from Alzano Lombardo in the province of Bergamo, who has worked as a driver all his life, and he said to me: 'What is much more important than rules is that there should be genuine monitoring of driving time' . Therefore, I propose that the Galileo satellite system should be used to monitor all the vehicles moving in the European Union from the sky.

Raschhofer
Mr President, I wish to make an oral statement on the vote on the directive on working time in the road transport sector. My delegation welcomes the adoption of the directive. The improvement of road safety in general and greater protection for crew are both matters for concern across the whole of Europe and must therefore be regulated on an EU-wide basis. The latest events in connection with the hauliers' scandal in Luxembourg and in my homeland, Austria, have shown that there is much wrong in the transport sector. The plenary's adoption in January of the proposed regulation introducing an attestation for drivers was a proper indication of the desire to get the better of the illegal employment of third-country nationals. The directive that the plenary has adopted today represents another important step.
The requirement to adhere to rest breaks and the laying down of maximum and night work times are making their contribution to safety on Europe's roads. It is for that reason that we voted for the adoption of the directive. It is, however, regrettable and disturbing that self-employed lorry drivers have not, for the time being, been included in the scope of the directive. That is a problem. It will probably give rise to new forms of pseudo self-employment.

Bastos
- (PT) The result achieved by the Conciliation Delegation is very positive and represents a very significant achievement for the European Parliament. By adopting this directive on the organisation of the working time of persons whose occupation is the performance of mobile road-transport activities, we will eliminate distortions to competition within the sector and at the same time promote road safety. I welcome, in particular, the agreement achieved on the central issue of this directive: the inclusion of self-employed workers. Including these workers within the scope of the directive seven years after its entry into force and the possibility of the Commission undertaking a study of the consequences of the exclusion of self-employed drivers, to be carried out two years before the end of that seven-year period, have proven to be a useful and balanced formula for overcoming the resistance of some Member States and thereby obtaining the agreement that is crucial to the adoption of this new directive, which is of vital importance to the common transport policy.
The definition of a self-employed driver put forward in the directive also makes a valuable contribution to preventing the creation of new forms of false self-employment during the period of temporary exclusion of self-employed drivers.
With regard to the hours of night work, guarantees are provided for the competitiveness of the outermost countries, whose drivers have to travel long distances in order to reach the main centres of production and distribution, travelling at night when traffic is less heavy. The outcome of the agreement between Parliament and the Council, therefore, represents an appropriate balance between the economic aspects and road safety and the health of workers.

Hudghton
. I am a supporter of the general principles involved in regulating working time, for the benefit of workers in terms of health and safety considerations and, in the case of road transport, for the road safety/accident prevention benefits that will be achieved.
I do believe that regulations of this nature must balance the acknowledged benefits against the practical realities faced by transport operators, especially in rural and island areas where no viable alternative to road transportation exists.
The concession on limitation to night working is important to Scotland, where long road distances are unavoidable and where transport operators already suffer such disincentives as high fuel taxation and relatively poor road networks in many areas.
Rapport Ghilardotti (A5-0026/2002)

Fatuzzo
Mr President, Mrs Ghilardotti has documented the debate on the directive on consulting and informing workers in an excellent report, which I support. Moreover, I was sure she would do a good job, for Mrs Ghilardotti was Chairman of the regional council of Lombardy, the largest region in Italy, when I was a regional councillor, and this document will certainly help workers to take part in the life of the undertaking they depend on for a living. However, I would like to ask Mrs Ghilardotti, who, I regret, does not appear to be in the Chamber at the moment but who, I am sure, will read my explanation of vote, whether we cannot manage to achieve a directive which would require workers always to be informed of their pension rights as well.

Evans, Jillian
. This directive will give valuable protection to many employees whose livelihoods are at risk, in particular due to the increasing ease with which companies relocate. It will not, of course, stop job losses but it will prevent situations from arising where employees read that they are being made redundant in the newspaper. It will also enable preparations for large-scale job losses to be made if they are inevitable. It does not adversely affect the 97% of companies with fewer than 50 workers that fall outside the terms of the directive.
This final agreement is certainly not as strong as the Green/EFA Group wanted. Nevertheless, we will support the agreement because it is a major step forward in some states like the UK, which currently has no such protection for workers. We saw this in my constituency, Wales, when Corus made 3,000 steelworkers redundant, with disastrous effects on many communities and no prior consultation with the workforce. The six-year exemption unfortunately shows that the UK Government has learned nothing from that experience and workers in Wales will continue to be amongst the most vulnerable in Europe to job losses.
I hope it will not take six years before all workers in Europe enjoy the same rights.

Hudghton
. A stark example of the need for improvement and the establishment of a common European framework for informing and consulting employees is occurring in my home area at this moment.
A long established multi-national company - Levi-Strauss - recently gave advance notice of redundancy in relation to workers at two factories in Scotland, at Bellshill and Dundee. The news media were informed first, and the announcement was accompanied by a statement explaining that the company had unilaterally considered and rejected any possible alternative to closure.
This type of action is deplorable, not helped by the fact that the UK is seen as having the weakest legislation in this area. I therefore welcome and support moves towards a reasonable EU-wide standard for proper consultation with workers.
Rapport Oostlander (A5-0460/2001)

Fatuzzo
Mr President, I too voted against Mr Oostlander' s report, but this does not mean that I am against combating drug traffickers. We all agree that it is right to fight to eradicate the scourge of drugs from the face of the earth - not just from European territory - but if we do not restore our young people' s faith in values, including the values of politics, we will never succeed. Therefore, when will we decide, for example, to remove from bookshops a book by a certain Italian journalist named Mario Giordano, entitled 'L' unione fa la truffa' [The Union is a fraudster]? It is unacceptable to sell books entitled 'L' unione fa la truffa' in European bookshops. I call upon the Presidency to take the necessary measures.

Crowley
. I have been on record many times before and I would reiterate this call today that soft and synthetic drugs should not be legalised in Europe. I do not support the legalisation of ecstasy, cannabis or other synthetic drugs such as LSD or amphetamines. The UN Convention against the Illicit Traffic in Narcotic Drugs prohibits the use, manufacture and distribution of ecstasy, LSD and amphetamines and this policy position must be fully upheld.
I would like to say for the record that I did not register my vote today because there was a wholescale misuse of language put forward in various amendments which sought to fully confuse the key elements of the debate today.
It is undeniably the fact that the use of these drugs causes damage to the user' s health. They can hardly be perceived as providing a positive function. I believe that the World Health Organisation has taken the correct approach on this issue. We cannot and must not support the creation of a drugs culture in our society by legally permitting the use of soft and synthetic drugs.
For example, some people have put forward the proposition that ecstasy use should be deemed quite normal in society. I abhor this particular line of argument particularly in light of the fact that there has been a number of tragic deaths in Ireland and across Europe from the use of ecstasy. The long-term effects of the use of ecstasy are still very much unknown, other than we know that ecstasy is still a drug that can cause depression and memory impairment.
While the European economy is performing strongly, we must also ensure that key social problems such as drug abuse are combated in a society. European initiatives to reduce the level of drug abuse in Europe must be supported at every opportunity. I do believe that the European Social Fund has played a key role in this regard in the past and must continue to do so.

Meijer
 - (NL) Those who organise international trafficking in hard drugs are only concerned with making money on the back of the suffering of others. Proposals not only to lock these criminals up but also to strip them of their profits receive my support. Without these profits, they have no motive for continuing their harmful trade. Unfortunately, Mr Oostlander argues that, within his group, he is not one for splitting hairs in order to fight the thirteen amendments from the Left. Those amendments focus on organised cross-border crime, national competences and the consideration of therapeutic and personal use. In addition, he makes no secret of the fact that, in his view, the proposals are minimal, and he hopes that they will be further tightened up in future. Some see his proposals as a way of opening the door to ruthlessly combating the production, transport and use of soft drugs. This would lead to the criminalisation of the users, who would then need to make their purchases from criminals who trade in hard drugs. With regard to those amendments, I consider whether they contribute to the discouragement of soft drugs in a way similar to that employed in connection with other harmful, but legal, stimulants, such as alcohol and tobacco. The rejection of the improvements by the Left necessitates my rejecting the entire package, unfortunately including a few sound proposals made by the rapporteur.

Titley
. I wholeheartedly applaud the efforts to standardise the meaning of and define the penalties for drug trafficking. Essentially, this report represents a balanced, far-reaching, sensible and tough approach to a perennial problem which besets all Member States of the EU. For too long, the terms and conditions of what constitutes a drug trafficking offence have been too woolly, thereby creating serious pockets of crime in some parts of the world and within the EU.
An additional welcome measure is the standardisation of penalties, with prison sentences with a maximum term of no less than five years. Once this law becomes enforceable, it should act as a real deterrent. Fines should only be used as an additional measure to prison sentences since otherwise they could lead to the belief that you can somehow pay your way out of a criminal offence.
Lastly, I welcome the nuanced approach that the report takes vis-à-vis mitigating circumstances. For example, minors and those who have committed offences under physical duress, should clearly not be subject to the same penalties as all offenders.
Report Ludford (A5-0436/2001)

Boumediene-Thiery
Mr President, ladies and gentlemen, we naturally welcome the proposal for a Council directive which is totally in line with the Treaty of Amsterdam and the Tampere conclusions, which stressed the need to finally put in place a policy for integrating third-country nationals. Having said that, we could not support the report. We regret that the proposal does nothing more than set out the conditions governing the residence of third-country nationals and that it does not, in any shape or form, establish a genuine European status for third-country nationals comparable to that of EU citizens.
By the same token, family members must enjoy the same rights as the person they are joining. Yet, the way in which it is presented in the report, the right to live a normal family life, which is internationally recognised, does not take into account certain fundamental laws.
Although the right to vote was, in principle, adopted in part, the conditions of application are not mentioned. Political rights are, however, an integral part of any integration policy. Fundamental rights are universal and if the universality of rights must be applied without exception, it should also apply to everyone, whether or not they are EU citizens. As for the criteria regarding resources and evaluating the stability of resources, would it not be better to offer all residents access to the labour market, rather than to confine some of them to exclusion?
Furthermore, there is no reason why students or persons that have been granted residence with subsidiary protection should be excluded from the scope of the proposal.
Firstly, however, the concepts of public order and security, which are reasons for excluding persons from permanent status, require a common definition. Yet these concepts are now left to the discretion of the States or the competent authorities, which gives rise to serious discrimination, particularly towards third-country nationals.
Lastly, with regard to procedures, the examination process takes six months, which is far too long. If the application is refused, a redress period, which does not exist, should be provided and this must have a suspensory effect, enabling any attempt at the expulsion of the person to be blocked, in the name of the right to self-defence.
My final point is that the directive does not cover the millions of third-country nationals who are residing illegally, but who urgently need a political solution from Europe. The Union must therefore shoulder its responsibilities.
To sum up, this report does not promote equality between citizens of the Union and citizens of third countries. The European status of a long-term resident does not exist. We must not therefore sanction this type of political approach.

Fatuzzo
Mr President, Baroness Ludford' s report calls upon us to facilitate the movement within Europe of citizens who wish to stay here for at least three months of a six month period. The Pensioners' Party is for this and is pleased to see citizens of any other State travelling within Europe. In this regard, however, I feel we should distinguish between citizens who come to visit Europe with honest, noble intentions - Baroness Ludford belongs to the nobility so she, better than anyone, can understand that nobility must be valued - and the honest citizen is noble, and citizens with ignoble intentions. In other words, an open doorway for the new nobility of honest citizens but doors closed to the delinquents who, I am sad to say, are to be found everywhere, just like black sheep. The nobility, however, the new nobility of people with noble intentions, must be allowed to enter Europe.

Andreasen, Busk, Jensen, Riis-Jørgensen and Ole Sørensen
 - (DA) The Group of the European Liberal, Democrat and Reform Party in the European Parliament has abstained from voting in favour of the overall report because we are unable to support Article 5(1) of the Commission' s proposal.

Bastos
- (PT) This proposal for a directive has my vote because it represents a major step forwards and makes a valuable contribution to the creation of a more coherent Community policy in the field of immigration. It is an attempt to define the status of long-term resident, because we all recognise the need for the European Union to reach a compromise on harmonising the situation of citizens of third countries residing legally and permanently in a Member State, in which they must be guaranteed legal, economic and social rights on a par with those enjoyed by the Union' s own citizens.
This status will be obtainable after five continuous years of legal residence, at the request of the interested party, who must have financial resources and sickness insurance, so that he or she does not become a burden on the Member State, and as long as the applicant' s behaviour poses no threat to public order or to domestic security.
On the other hand, once this status has been granted, the individual will be guaranteed a set of rights, such as the right to work, to education, social security, healthcare and access to goods and services, etc., thereby making this a real instrument for integration into the society in which the individual lives.
It is worth emphasising once again the importance of creating a more energetic policy for integration, which is crucial to promoting greater economic and social cohesion and to preventing discrimination and racism. Nevertheless, we must also stress the fact that genuine integration requires efforts on both sides.
Furthermore, I welcome the series of procedural guarantees established in this proposal for immigrants who are anxious to be granted this status and which will enable us to prevent potential abusive behaviour by the competent authorities of the Member States.

Berthu
We voted against the Ludford report, which supports the Commission' s proposal to establish a single status for third-country nationals, who have been legally residing in one of the EU countries for more than five years. In our view, this idea is fundamentally flawed, as it will make the existing status uniform and more rigid, and deprive each Member State of any margin for manoeuvre in an area - namely, the presence of long-term foreign residents on its territory - which must, first and foremost, remain a matter for the national sovereignties.
Secondly, we cannot give this proposal a legal basis without distorting the meaning of Article 63(3) and (4) of the Treaty establishing the European Community, which only provides for 'measures' regarding residence and not a 'status' in the full meaning of the word. It is true, however, that if the Treaty of Amsterdam had not been ratified, the weaknesses that the Commission is now exploiting would not exist.
Lastly, we are seeing once again that, in practice, the Commission is using the concept of status as a lever to grant long-term resident third-country nationals (including refugees as well, for good measure) rights that are virtually equal to those of national citizens. Article 12 of the proposal for a directive lists the areas where equal treatment would be de rigueur, in other words, almost all of them, except the right to vote.
This systematic equality is unjustified; although foreigners clearly have a right to receive benefits in return for having paid social security contributions, each nation must have the freedom of choice to decide whether to grant benefits that are funded from tax contributions. We wonder whether this desperate attempt to achieve equal treatment for all is one of the profound causes of the disaffection towards citizenship that is currently evident in our countries.

Bordes and Cauquil
We are in favour of full equal rights, including political rights, for everyone living and working in the European Union, whether citizens of a Member State or third-country nationals.
The proposal for a Council directive sets itself a different objective altogether; amongst others, that of increasing the mobility and flexibility of the immigrant workforce within the European Union. Nonetheless, the proposal makes several improvements - which we have voted for - to the status of persons who originate from third countries and who are residing in the European Union. That said, the proposal aims to limit even these few improvements to long-term residents only, which we cannot adopt. It is even more difficult for us to adopt most of Parliament' s amendments, which further restrict the original text and have no other aim than to pander to nationalist, sovereign or xenophobic prejudices.
We shall not vote against this text, because, in many ways, it improves the situation of certain third-country nationals who live and work in the European Union. But we refuse to give our backing to the numerous restrictions that it contains. We therefore abstained on the whole text, rejecting the particular amendments - that is, most of them - that would make the original text worse.

Lang
It is a pleasure and a joy to see our fellow Member Baroness Ludford back at work. Since she was appointed a senior human rights specialist at the European Parliament, we can only remember the emblematic report that we voted on last March, which was dedicated to the fight against racism and xenophobia. She threw all her belief and all her effort into the task so that she would succeed in impressing upon us her passionate belief in 'anti-racism' . Today, thanks to her impressive resilience, she has not disappointed; the active integration of third-country nationals will be achieved more quickly and to a greater extent and will be a useful weapon in the fight against racism and xenophobia. Baroness Ludford has reassured us and put our minds at rest.
Her report is therefore presented as a list of duties. Duties that are, of course, reserved exclusively for the people of Europe.
Therefore, third-country nationals who have been residing in an EU country for more than five years shall automatically acquire the status of long-term resident. The administration has mandatory powers to issue the resident permit which is valid for ten years and is automatically renewable (Articles 8 and 9 of the directive).
Once the status has been granted, Member States can only withdraw it under very restricted and specific circumstances. The legal certainty of the holder must be as high as possible. The holder can therefore be absent for a period of more than two years without having his long-term resident status withdrawn.
The host Member State is obliged to grant to third-country nationals and their families, under the right to family reunion, the same rights as those granted to nationals, whether this is in terms of education, professional training, social protection, social assistance or tax. They can also enjoy additional welfare benefits, such as economic or cultural benefits, in order to enable them to integrate completely.
To complete the picture, obtaining this status must constitute the first step towards being granted the nationality of the Member State in which they reside. This objective will fulfil the desire that Parliament has voiced on numerous occasions to see a multiracial, multicultural society flourish within the Community, where there could be no discrimination on grounds of race, gender, ethnic origin, religion etc.
We are greatly looking forward to seeing Baroness Ludford welcome with open arms the several thousand refugees from Sangatte who are hoping to settle in England. Home, sweet home!

Meijer
 - (NL) If the measures for residents and visitors from outside had not been prepared before 11 September 2001, they would probably have been subject to a long delay due to the new fear of terrorism and lack of security. It is high time we tore down the last vestiges of statutory discrimination against a large proportion of our population. This discrimination affects people who, mainly in the 1960s, were attracted as 'guest workers' from Turkey or Morocco to come and fill the most unpleasant and worst paid jobs. Initially, their permanent residence was not taken into consideration by the six Member States of the then European Communities. After 40 years, many of these people from the first generation of migrants still do not have the nationality of their country of residence. For these people, there was no European unity for years. Unlike people with the nationality of a Member State, they were required to continue to comply with visa obligations in each separate Member State which they crossed in order to spend a holiday in their country of origin. The fact that they are now afforded more equal rights is unfortunately not so much the effect of indignation about the discrimination against them as it is a way of building one large European super state and of demonstrating that the old national borders have largely become defunct.

Thorning-Schmidt
 - (DA) I have abstained from voting in the final vote on this report. I have done so because Denmark has a reservation in this area and not because I disagree with the intention behind the report or the directive.
I would emphasise that I am in favour of giving rights to third-country nationals when they accept work in another EU country.
Rapport Kessler (A5-0455/2001)

Fatuzzo
Mr President, this directive is not unlike the previous, noble directive of Baroness Ludford. As I see it, it discusses the possibility of movement, particularly for unemployed people who come to Europe to seek work - which is good - but also for pensioners and elderly people who wish to see the beautiful sights of our Europe. As representative of the Pensioners' Party, I would like to take this opportunity to call upon Parliament, in addition to allowing the movement of people who wish to visit our beautiful European countries, to do everything possible to make it easier for those elderly people who have worked for a lifetime and now, at last, have the time to dedicate to healthy, intelligent, educational, cultural travel round the beautiful sights there are to see in Europe.

Berthu
The Commission' s proposal on the movement of third-country nationals within EU countries for stays of less than three months is not restricted to harmonising conditions; it also aims to reduce certain controls in the name of 'freedom' . This is the case, for example, with the 'reporting of presence' by foreigners under the Schengen Convention which I mentioned in yesterday' s debate. Even if this obligation to declare oneself was poorly applied, I was of the opinion that it was a matter of urgency to strengthen this obligation, rather than to weaken it.
In another area, the Commission is also pursuing its former approach by proposing to introduce a 'specific travel authorisation' issued by a Member State which will apply in all the others, in order to facilitate the movement of third-country nationals for a period of less than six months. This reform is a good illustration of the subversive technique whereby a series of small steps can finally bring about the grand plan.
As things stand, stays of more than three months are subject to national visas which fall within the sovereignty of each State. The 'travel authorisation' proposed by the Commission would erode this mechanism. In order to justify this derogation, on page 9 of the Explanatory Memorandum, the Commission mentions the case of certain foreigners who would need to move around the EU over a six-month period in their capacity as 'recipients of services' , such as 'tourists' or 'persons taking health cures' or even 'musicians' , as Commissioner Vitorino mentioned during the debate. This pretext is rather weak; hardly any tourists stay for six consecutive months in the EU and there is no justification for developing a directive specifically for them. The advantage for the Commission is elsewhere, namely the destruction of the coherence of a system based on national sovereignties in order to introduce a different kind of system, one that has supranational objectives.
This dogmatic exercise will not bring any other benefits for our current area of priority, which is controlling migration flows and security. On the contrary, there is a danger that it will harm it, by encouraging weaknesses and inconsistencies to appear.
Rapport Katiforis (A5-0016/2002)

Fatuzzo
Mr President, before I left for Strasbourg, I met my great friend and colleague, Mr Giuseppe Italia - that really is his name, the same as my country, Italy - and Giuseppe Italia, who lives in Cremona, said to me: 'I know that you are going to vote on this report. That is good, I am in favour of that. I am a chain-smoker and I am prepared to go out of my house to have a cigarette if there is someone indoors who does not like smoke. However, I am sixty-two years old: I don' t drink, I don' t have sex any more because ...' - he did not expand on this point - 'but, at least, leave me the pleasure of smoking cigarettes for I do not disturb anyone and I have no other pleasure left in life.' Therefore, I voted for the motion: I am in favour of smoking in appropriate places and I am against increasing taxation on cigarettes.

Andria
Mr President, after Mr Fatuzzo' s diverting speech, I would like to add my comments on the Katiforis report. I come from the south of Italy and I am sad to say that we continue, as always, to be badly served by airlines. I should have been in the Chamber for one of my reports - I am a shadow rapporteur - but I did not get here in time. In any case, I would like to point out here that this connection between smoking and health which we are continuing to make in resolutions on excise duties and State tobacco subsidies is inappropriate. There is clearly a connection between health and smoking but this is not the way to solve the problem. In southern Italy, particularly in Naples, contraband cigarettes are sold door-to-door and on the street: therefore, if we really want to boost the smuggling activity, the way to do it is to continue to wage war on this product. I would also point out that in some very poor areas with a high level of delinquency, such as the province of Caserta, tobacco succeeds in literally keeping3 000 workers off the breadline, and these jobs would be placed in extreme jeopardy. Congratulations, Mr Katiforis, on your two-fold resolution which the House has endorsed almost unanimously.

Maes
Mr President, I should like to make a comment on the Katiforis report. I share the concern about the less privileged regions. I have the feeling that some States - and I am thinking of France, but do not rule out that there may be others - use the whole tobacco excise issue to put themselves in a good light abroad by adopting a progressive policy, that is to say a policy that promotes health and is against tobacco, while they actually devote too little attention to compensatory measures for their regions that rely on tobacco for a living. I also heard in Corsica a complaint similar to the one expressed by our fellow MEP. I therefore believe that those in Paris care little about the suffering in the regions in their concern to make us more healthy. Not by cutting down on sex, but by cutting down on smoking, Mr Fatuzzo.
Rapport Van den Berg (A5-0464/2001)

Maes
Mr President, yesterday, I followed with great interest the debate on the reform of development cooperation policy and the debate with the Commission on the grey zone between relief and development cooperation. I fully concur with the report by Mr Van den Berg. I should like to stress that, wherever I go, I hear complaints from women in situ about the lack of involvement and the lack of participation in the practical implementation of reconstruction. In Somalia, for example, the women are on the spot but the men take the decisions in Kenya, far removed from reality. I therefore believe that the verbal concern about gender aspects is not sufficient. We must insist on women being actively involved in the field; they are sufficiently responsible to consider, and help assess, the way in which reconstruction should take place in practice.

Fatuzzo
Relief, rehabilitation and development: pensioners and the Pensioners' Party are in favour. Indeed, they are so much in favour of this that I too, Mr Andria, was delayed in my plane journey to Strasbourg. Why is that? Because I had to stall hundreds of pensioners - doctors, lawyers, architects and engineers - who, having learned of this report, wanted to leave immediately for developing countries to offer their services to help them, free of charge, with no remuneration, in the hope that this document would support, encourage and assist those elderly people and pensioners who so wish to continue to be useful after their retirement in the many developing countries. It was very difficult to dissuade them and I hope that, next time, they will have reason to applaud the European Parliament because it accepts their help.

Bordes and Cauquil
We voted in favour of this report for the sole reason that, if the European Parliament rejects the text, this should not serve as a pretext for making further cuts to emergency interventions that are granted to cope with natural disasters in poor countries, interventions which are already disgracefully low.
By condemning the coordination problems alone, the report is, however, concealing the dreadful lack of resources.
What is more, the report makes no mention of the fact that, despite the fact that natural disasters have equally disastrous consequences in poor countries, and that these countries are completely incapable of coming to terms with even the slightest of their consequences, this is because they do not have the material and human resources, such as hospitals, doctors and transport, and that they are so poverty-stricken from being plundered, both in the past and present, by the capitalist companies of the world' s most powerful countries.
To speak of 'gaps' in 'international assistance' is utterly scandalous when referring to the most powerful countries, which restrict themselves to making purely symbolic gestures when they have to assist a poor country in coping with a natural disaster, but which, in fact, spend astronomical amounts on dropping bombs on a poor country such as Afghanistan (and many others before it).
Rapport Olle Schmidt (A5-0392/2001)

Blak, Frahm, Herman Schmid, Seppänen and Sjöstedt
We have voted in favour of the report in view of the importance it attaches to transparency and environmental considerations. We would nonetheless make it clear that we are opposed to Paragraph 22, designed to make the ECB the EIB' s supervisory authority.
Report Von Wogau (A5-0011/2002)

Fatuzzo
Mr President, Mr von Wogau could not fail to win the vote of Mr Fatuzzo and the Pensioners' Party on this major document on European finances, public finance and the financial market. Pensioners and the elderly like to keep abreast of money matters, of course, because they know the value of money after a whole lifetime of dealing with it. I would like to take this opportunity to express the great joy with which elderly people throughout Europe welcomed the introduction of euro notes and coins, the new currency; they feel as if they are in a fairy tale country, in a land of dreams where there is more money than before. I am sure that this European finance policy will bring pensioners and the elderly greater pensions, more money and greater well being. Europe is drawing closer to them.

Andria
Before I explain why I voted for the report in question, I would like to draw your attention to Mr von Wogau' s major contribution to Parliament' s work as a member of the Committee on Economic and Monetary Affairs. I know he will be just as valuable as a member of the Committee on Constitutional Affairs. My heartiest congratulations!
The process of integrating the financial markets involves reshaping all the structures which supplement financial services. In this context, it becomes even more important to take note of experience gained in markets outside as well as within Europe in terms of organisation, operating procedures and the functioning of control measures. In particular, to this end, we need to introduce new telematic technologies to increase the efficiency of the securities markets.
In fact, the use of these new instruments, which both allows the level of competitiveness between securities operators to grow and makes it possible to manage large volumes of transactions according to time frames and procedures which, until a few years ago, were unhoped for, has helped to raise the 'quality' of prices on these markets and to reduce brokerage costs.
The implementation and integration of the securities markets must, however, be based on a more effective decision-making process - I refer here to the Lamfalussy report - which safeguards the interinstitutional balance while fully respecting all the levels of democratic control established and in operation.
That said, the first thing we need to do is speed up and streamline the legislative process, adopting legislative acts at first reading where possible. Secondly, there must be an increase in transparency and provision of information, for these are an essential basis for the development of an integrated European securities market. The third improvement needed is consistency and clarity of procedures for both consumers and investors.
We therefore need an information system to facilitate transactions, from the placing of orders through to payment.
Lastly, it is vital to regulate the role of securities brokers. This should take the form of regulation of brokers and regulation of activities, in addition to establishing a new balance of supervisory powers in which Parliament' s powers are equal to those of the Commission.

Berthu
The report by Mr von Wogau on 'comitology' within financial services - namely, on the Commission' s introduction of implementing measures for legislation in this area - raises a number of very interesting questions, but, in our view, does not always provide the right answer.
The starting point of the discussion is the current wording of Article 202 of the Treaty establishing the European Community, which grants to the Council, and to the Council alone, the responsibility of delegating implementing powers to the Commission, which is contested by the European Parliament. It believes that, given the recent extension in its co-decision power, Parliament should now jointly decide the rules, as well as the implementing measures.
The European Parliament is putting forward some excellent ideas in the von Wogau report, such as the automatic inclusion of a sunset clause in legislative acts, under which any delegation of powers to the Commission with a view to taking implementing measures would be suspended at the end of four years so that its appropriateness can be re-examined. On the other hand, Parliament is departing from its true role in wanting to verify all the implementing measures, and even 'to attend meetings of the Securities Committee as an observer' . The Council traditionally enjoys two types of powers, executive and legislative. Due to its executive powers, Article 202 grants it a specific role in drawing up implementing measures. The same does not apply to the European Parliament, which has only a legislative role in applying the Treaties, and must not therefore be involved in everything.
Nevertheless, the Commission clearly has a problem when it comes to supervising the drafting of the implementing measures. The European Parliament' s reaction may not be fully appropriate, but it has been triggered by a genuine reason. The next Intergovernmental Conference should respond to this by strengthening the role of the Council in the execution committees, and by strengthening the democratic scrutiny exerted over these committees: the scrutiny of the European Parliament over the Commission' s representatives, possibly, but also the scrutiny of sectoral assemblies made up of national parliaments, which would be exerted over the Council' s representatives.

President
 That concludes the explanations of vote.
(The sitting was suspended at 1.08 p.m. and resumed at 3 p.m.)

Situation in the Middle East
Solana
Mr President, ladies and gentlemen, it is not only my obligation, but also my desire, to begin by warmly congratulating you on your election last month to this extremely important post, which is a fundamental pillar of the European Union' s institutions.
Mr President, I have said this in private, but please allow me to repeat it publicly. It is going to be a great pleasure for me to work with you, with the Presidency, and with Parliament, and rest assured, ladies and gentlemen, that whenever our complicated agendas allow it, I will be very happy to attend Parliament to explain the important actions the European Union is taking in the field of security and foreign policy.
Ladies and gentlemen, I have been asked to attend today to speak essentially about the Middle East and that is what I will focus on, but I would also like to take this opportunity to exchange a few words with you on the situation in Afghanistan and the Balkans, where - we must not forget - we have very serious commitments.
Ladies and gentlemen, the first term I am going to use when talking about the situation in the Middle East is frustration. For those of us, like myself, who have spent years trying to find a formula for resolving the problems of the Middle East, the situation we are in can only be described, both from a personal point of view and from that of the parties involved, as highly frustrating. I first became involved in the problems in the Middle East at the Madrid Conference, which was the driving force that demonstrated that we needed a formula essentially based on the idea of 'peace for territory, territory for peace' and which subsequently gave rise to the Oslo process, which brought results, but not all the results we wanted, and which suffered from the enormously tragic assassination of Prime Minister Rabin.
Today, unfortunately, ladies and gentlemen, we cannot talk of a peace process, since there is neither a process nor any peace. My first comment, ladies and gentlemen, is therefore to say how much I, as a person involved, regret the consequences of this lack of a peace process, as do the people who are suffering on both sides. Should we be pessimistic then? I would say not, and despite all the frustration, despite everything that is happening, we must retain a certain degree of optimism and a sense of future possibilities. I believe that the European Union is performing its task correctly by not throwing in the towel. We must stick vehemently to our principles and our commitment to this process.
Ladies and gentlemen, we must not just defend and help the Middle East peace process because of the principles and values which inspire the European Union, but also because, in this globalised world, the Middle East, the Mediterranean, is our home territory. We cannot conceive of a stable Europe, a progressive Europe, without a Mediterranean and a Middle East which are also progressing. It will be very difficult to achieve a stable and peaceful Europe, which is worthy of the status of a great world actor, if we are not also capable of having a Mediterranean which is peaceful, tranquil and prosperous.
Please allow me to say that, since I had the opportunity and the privilege to work on the drawing up of the Mitchell report, almost a year ago now, there have been many, too many, missed opportunities. Too many moments when something could have been done and it was not. Too many occasions when progress could have been made and it was not.
The European citizens and we in Parliament, their legitimate representatives, must collectively commit ourselves to never again allowing an opportunity to be missed. At this point there are certain opportunities which I would like to mention to you. But please allow me to go a little, not into the broader story, since we have had the opportunity to discuss that on several occasions in this House, but into more recent history. Please allow me to return to December of last year.
On 10 December, I was in the Middle East. I was able to be there and talk to all the political leaders. I also met with General Zinni, the representative of the United States there. There was a tough stage, as you will remember, but later there was also a moment of hope. And we must recognise that, thanks to the effort of Miguel Ángel Moratinos, the representative of the European Union in situ, we achieved, from around 10 December, the most significant moment of peace for many, many months, which lasted until the middle of January. There was opportunity during that period, the most significant demonstration of which was the speech by President Arafat on 16 December.
You will remember perfectly that on 16 December President Arafat made a speech in his own language, broadcast by television stations, as requested by the Members of the European Union, in which he called for a cease-fire, for peace and for the terrorist groups to stop their violent acts on behalf of the Palestinian Authority. As I have said, there were a few days of peace, of hope, which were related to the Christmas celebrations. Even when President Arafat himself was not authorised to go to Bethlehem to celebrate Christmas.
Unfortunately, ladies and gentlemen, since 10 January we have a situation similar to the previous one. First of all violence broke out amongst Palestinians in one of the settlements, later Israeli forces murdered an important member of one of the Al Fatah groups and later there was the incident involving the vessel, the Karim A. I would like to talk about both things very briefly.
It was a terrible tragedy that violence should have broken out again in January. Because we had passed that crucial period of seven days of total calm and the opportunity was not taken to make a qualitative jump forward. I remember, and I will never forget, how, in Tel Aviv airport, on 6 December, late at night, together with the United States' representative, General Zinni, we were thinking about the plan to implement the Tenet plan and the implementation of the Mitchell plan. We had agreed on a trilateral meeting between the Palestinian, Israeli and United States security services and subsequently a bilateral meeting between the Palestinians and the Israeli forces. Terrorism and violence from both sides destroyed the opportunity we had over those days. And it was complicated - as I said previously - by the famous episode of the Karim A. Please allow me to stop a moment and explain to you what the famous Karim A has meant.
As you know, the ship, which contained arms of a higher calibre than those normally used by the Palestinians, also had a strategic value for the Israeli leaders and for the United States, since it was the beginning of the relationship, not yet finally proved, but very possible, between 'somebody' in the Palestinian Authority and Iran. Ladies and gentlemen, the relationship between the Palestinian Authority and Iran has been practically non-existent for many years. If that relationship comes to be proven, it would significantly change what we might call the Middle Eastern landscape. There is no firm proof which I have been able to see physically, but there is no doubt that something of that nature has taken place.
As you can imagine, ladies and gentlemen, all of this has led to an increase in the already significant distrust between the two parties. If Camp David represented a break in the trust between the two parties, the situation of the early days of January this year have lead to huge further increase in that distrust.
What can we do from now on? How can we try to resolve the situation?
Remember the famous European Union declaration in Laeken, in the final days of December. It assigned clear responsibilities to the two parties and I believe it is one of the best declarations made by the European Union. We must continue in this direction, which was the one taken by the last General Affairs Council.
That Council, as well as making that declaration, sent me to the United States to try to find a common position between the European Union and the United States, above all in relation to the situation of the Palestinian Authority. As you will remember, President Arafat is practically a prisoner in Ramallah and the Israeli authorities are still claiming that the Palestinian Authority has become unnecessary and irrelevant.
You know that that is not the European Union' s position and that we believe we should maintain the Palestinian Authority and its President, for various reasons: firstly, because it has been elected by the Palestinian people and, secondly, because we firmly believe that there will be no military solution to this conflict and that therefore the only possible solution is dialogue, and that dialogue requires negotiators, and the negotiator elected by the Palestinians are the members of the Palestinian Authority, headed by President Arafat.

Therefore, ladies and gentlemen, we are maintaining that position. And I have had the opportunity over recent days - I have spent the whole week in New York talking to the Secretary-General, Kofi Annan, and in Washington with Vice-President Cheney, Secretary of State Powell and the President' s adviser, Condoleezza Rice - to try to discover whether we are able to give further joint impetus in the face of this terrible situation in the Middle East.
I believe that these visits have some consequences. I do not want to talk about the influence of any one party, or the influence the European Union, but I will restrict myself to describing the facts.
Last Wednesday night when I was in the United States, Prime Minister Sharon, for the first time since saying that he would never again hold contacts with the Palestinian Authority, received three very important Palestinian leaders in his private residence: the President of the Parliament of the Palestinian Authority, Abu Ala; the person who is considered to be the number two in the Palestinian Authority, Mr Abu Mazen; and Mohamed Rachid, who is considered to be one of the most important people in the financial world within the Palestinian Authority. For the first time, Prime Minister Sharon received these people in his house. I can also tell you that yesterday and today Secretary of State Powell has received Abu Ala, President of the Palestinian Parliament, in Washington.
In other words, we are at a point where we can once again say that there is a tiny glimmer of light at the end of the tunnel. The aim of all this effort is to try to recover a political perspective. We can and must continue to fight against violence. We must continue to condemn terrorist attacks, but we must also be capable of giving the conflict a political perspective. That was the spirit of the Mitchell report. That was the spirit in which I participated as a representative of the European Union, and that is the spirit which must inspire all of us.
That is where we stand, ladies and gentlemen. I cannot tell you at this point that I have great hope. I have a little bit of hope. I began by saying that I was very frustrated, but I can also see that there is some possibility that we may inch forward a little. Any movement in the right direction is worth trying, however small it may be. Because, ladies and gentlemen, I do not know how many of you have been there recently, but the situation, from the citizens' point of view, is truly horrendous. It usually took me twenty minutes to get from Jericho to Ramallah. At the moment it may take me three hours to make the same trip, owing to military and police controls.
Ladies and gentlemen, I believe that the European Union is doing all it can to try to bring a little hope to this process. I believe that the European Union must continue to work in conjunction with our friends in the United States, as well as the King of Jordan and President Mubarak.
A few hours ago I was with the King of Jordan, I also spoke a few hours ago with President Mubarak on the telephone and I have spoken to President Arafat this morning, and there is, as I have said, a little hope. I cannot say that there is a lot. We still have the rest of the week to carry on working. At the weekend, as you know, the Foreign Affairs Ministers will meet at Gymnich to deal almost exclusively with the issue of the Middle East.
What political initiatives can we bring to the table? Ladies and gentlemen, I would like you to participate in what I believe should now be our course of action: to help, to contribute to the successful outcome of the process of dialogue which has begun between the President of the Parliament of the Palestinian Authority and the Foreign Affairs Minister, Simon Peres. As you know, the negotiation mechanism which has now begun is as follows: to try, as soon as possible, to have the Palestinian State recognised, before the definitive borders are recognised. The idea is that the bases of the negotiation should be the 1967 borders, with exchange of territories if necessary, in order to compensate for some of the possible difficulties. To try not to enter at this point into a discussion of the more difficult issues: Jerusalem and the return of the refugees; and to begin to work with the mutual trust of two States which already recognise each other, although the second is not complete.
This is the idea we are working on. I cannot guarantee success. I must also tell you, very frankly, that Prime Minister Sharon told me that for him that was not the perfect solution but that he was going to let the Foreign Affairs Minister continue with the negotiation. That is to say that we cannot be sure that in the end the government of Prime Minister Sharon is going to accept it. But I believe we must continue working in that direction.
If there is no change, even the slightest change, in the current situation, the violence will continue to dominate the centre of the debate. And we must be able to prevent violence being at the centre of the debate, since politics must be there. I insist once again: this problem can only be resolved politically, by means of dialogue, and, therefore, sooner or later - let us hope that it is as soon as possible - arms and violence must disappear so that politics can prevail. There is no other solution.
Ladies and gentlemen, just a few days ago, Simon Peres spoke in a restricted sitting of the General Affairs Council to the fifteen ministers and told them something which meant a lot to me, due to the way he expressed himself and the emotion with which he said it. He said more or less as follows: "I will never be in a government which does not have the objective of two States: Palestine and Israel. For a dreamer such as I, Simon Peres, who is very old and has always worked to achieve peace, it is impossible to imagine a situation in which there are not two States. If there are not two States, two negative things will happen, which I could not accept: one, Israel would not be a democratic State because we would be imposing ourselves on the Palestinians, or, on the other hand, Palestinian demography would win out and the State would not be a Jewish State ".
For all of these fundamental and profound reasons, which he expressed with great emotion, we must carry on fighting for two States, quickly, on the basis of the agreements of the United Nations Security Council, the two resolutions, and on the basis of those approaches which I referred to earlier.
Will we have success immediately? There is no guarantee of that. Is there the will to make every effort to do so? Yes. I can assure you that there is. However, ladies and gentlemen, neither the European Union nor anybody has a miraculous solution. To carry on working with the United Nations, with the United States, with Egypt, with Jordan, is - I believe - the best way to try to make progress in that direction.
Therefore, ladies and gentlemen, this is what we are doing. You can rest assured that both Miguel Ángel Moratinos and I will be working 24 hours a day, whenever necessary, to try to resolve this conflict, which is of profound concern to the Europeans. We are not talking about a distant problem, but a problem which is physically, geographically, close and which we feel in our hearts and in our heads. It is therefore our obligation to continue doing it.
Ladies and gentlemen, Mr President, please allow me very briefly to mention two issues which I had been asked to mention. The first is Afghanistan. Commissioner Patten will have more information to offer you, because it is he who has represented the European Union at the Tokyo meeting in a most dignified manner. I just wanted to say that we have a personal representative of mine in Kabul, and I am also rather proud to say something that we are not always able to acknowledge: the military forces defending Kabul at the moment, supporting the government which was approved at the Bonn Conference - also a European city - are mostly European forces.
Thirteen European Union countries have forces deployed there. I believe we have to say this very clearly: we must be proud that the people who are carrying out the peace and stabilisation process in Kabul are basically citizens of our countries.
Secondly, I will tell you that we have to work, and that we will do so in very difficult political circumstances during the remaining time between now and June, when, as you know, the Assembly will once again have to name the Grand Assembly which will have to meet to elect another government, which will not be easy. The present government has a certain degree of balance. To change those balances will not be easy, but it will certainly have to be done. Therefore, between now and June we will have to work very intensively with the representatives of Afghanistan and also the other three fundamental countries.
Firstly, Pakistan. Yesterday, both Chris Patten and I were with the Pakistani Foreign Affairs Minister. I believe that they are doing a fantastic job and we should congratulate them on it.
Secondly, Iran, the other key country for the stability of the region. We must recognise that, regardless of what is said or what can be said about Iran, its representatives behaved constructively in both the meeting in Bonn and the meeting in Tokyo. I believe that we must work with them.
And thirdly, Russia. These three countries are crucial to the external stability of Afghanistan. We are doing so and we are going to continue to do so, in order to try to ensure that this process, which will begin in June, and which was launched at the Bonn meeting, yields results.
The other issue I wanted to mention, very briefly, Mr President, is that of the Balkans. I would like to focus on three points, which in my judgment are the hottest, or potentially the hottest issues. The first relates to the FYROM, Macedonia and Skopje. I believe that, after the agreements signed in Ohrid, we are in an ideal situation, from a political point of view. The whole Constitution was changed and a few days ago the Law on Local Governments was approved, which was a fundamental element in terms of being able to implement the return and entry of police into areas they had been expelled from some months ago. We are therefore moving in the right direction. The situation is still not perfect, but I believe we will be able to spend the Spring in peace and calm.
At this moment, NATO military forces, led by Germany, are still there. The government has accepted an extension for another three months, which may become six. The European Union is considering the possibility of treating them as an actual European Union responsibility in the future. No decision has been taken, but it is being considered and therefore, in relation to Skopje, although this is not a time for great celebrations, I believe that things are moving in the right direction. The Conference of Donors, which Chris Patten will refer to, may work and may be a considerable help from an economic point of view.
Secondly, in Kosovo, as you know, there were elections which we should all be satisfied with. The elections took place very calmly, with no violence, and the Serbian minority also participated in them. They are now the second largest force in the Assembly.
What is happening now, at the beginning of February, is that they have not yet been able to reach agreement, and remember that the elections took place in November. They have not yet agreed either on electing the President, which really should be President Rugova, or on forming the government.
It also happens that the representative of a European MIC, which will continue to be European, had to leave for personal reasons and we have had a few weeks of vacuum. I was there trying to give a little impetus to the negotiations, which are absolutely essential, so that Rugova, who does not have the majority to govern, can do so with the others. Let us hope that over the next few days we will have an Assembly with a government in place, with the Presidency elected which has the ability to confront the real problems that that government will have to deal with.
The last point I would like to make relates to the Federal Republic of Yugoslavia. As you know, the talks between Podgorica (Montenegro) and Belgrade broke down on 24 October. I was called by Kostunica and by Yukanovic, to see whether we were able to keep those talks alive. We have managed it and we are continuing to work, to negotiate and to facilitate those talks as the European Union. I am going there as often as I can to talk to each of them. We will meet again on Sunday, when we will have another meeting to see whether it is possible, by means of constitutional reform, to prevent the referendum and the separation of Montenegro from Belgrade. We are working very intensely on that: there is total consensus between the Member States of the European Union that we should make every effort to achieve that objective.
There were certain doubts over whether the United States would take the same approach or not. After spending this week dealing with their leaders, I can tell you that they are taking the same approach and they are prepared to help us to achieve this reform of the Federation' s Constitution.
Ladies and gentlemen, I would like to end - and I believe, Mr President, that I have almost exceeded my speaking time, since I was told 30 minutes and this is my twenty-seventh minute - by referring once again to my first point: the Middle East. There is no doubt that it is, and must continue to be, our main concern. The European Union has great responsibilities and we must continue to work in that direction. It will not be easy, but we must not throw in the towel and we must continue to be resolute and determined. We will win this battle.
(Applause)

Patten
Mr President, this is the first time I have spoken in a debate with you presiding. It is not just the half of me that is Irish which welcomes your presence in the Chair - all of me welcomes your presence in the Chair. I wish you well for a very successful presidency. I am sure we can count on it being not only successful but also remarkably eloquent.
I have one potential confession: If I have to slip away for a couple of minutes during the course of the debate, it will be just to do my democratic duty in another place, where one of the Union's great institutions is meeting and discussing important matters relating to competition policy and other things. I will only do that if I have to and will return straight away to the debate.
The whole Parliament knows how tirelessly my friend and colleague, Mr Solana, has worked to restore some semblance of hope in the bloody shambles of the Middle East peace process, and to sustain the progress that the Union has undoubtedly made in bringing stability and hope to south-east Europe, and to the western Balkans in particular.
I have an admirable speech, which goes over all the issues which the High Representative covered so extraordinarily well. In order not to offend the intelligence of Parliament and to ensure that as many Members can take part in the debate as possible, I will not simply cover the issues which Mr Solana has covered with such knowledge and passion. I will just underline the strength of my agreement with everything the High Representative has said. He has pointed out the missed opportunities - one after another - which have brought so much savagery and violence to the region, beginning with the failure to implement the Mitchell report, and going on to the failure to respond with adequate generosity of spirit to the speech made by Mr Arafat on 16 September. He has touched on some of the appalling errors which have disfigured the history of the region, including the Karine shipment. What we have seen is a descent into violence: killings provoking more killings, violence, repression, senseless destruction. As the High Representative said, we do not have a Middle East peace process any more but - to use a phrase from a New York magazine a few weeks ago - a bloody feud. We have to remain engaged in order to try to restore some hope, and the High Representative set out some of the things the European Union is doing to press the case for peace and for a political settlement.
There is one thing on which I should like to focus - which the European Union has been doing and which is sometimes decried. We have been supporting the Palestinian Authority, and our support for the Palestinian Authority has first of all made certain that there is still a viable negotiating partner for the Israeli government. Secondly, it has made sure that there has not been a descent into anarchy in the Palestinian territories - because let us be clear that the alternative to a Palestinian authority is Palestinian anarchy.
What is the alternative to the substantial commitment we have made? In the last two years, we have spent about EUR 400m from the Community budget in the Palestinian territories, and that money has been carefully vetted month by month, in particular the contributions we make to the Palestinian Authority, to ensure that it is not spent on purposes of which this Parliament would not approve. It must be said that if the accountants of Enron had been one-hundredth as diligent as the IMF is, month by month, in looking at how our money is spent in the Palestinian territories, a lot more people would still have jobs and pensions to look forward to.

When one looks at that commitment and sees the extent to which projects we have started and others in which we have invested money have been destroyed, wilfully and purposefully, it is enough to make one literally weep. We have seen the destruction of projects worth about EUR 17m in which the European Union has invested - that is, just over a tenth of the total destruction of infrastructure which has been identified by the World Bank. And the World Bank argues, though this must be a very rule-of-thumb figure, that the Palestinian national income has been reduced by about USD 2.4bn as a result of what has happened over the last months.
I ask myself, and I ask Parliament: where is the evidence that any of that increases security?
(Applause)
Where is the evidence that going back twice to destroy the forensic laboratory that we had been asked to provide for the Palestinian security services increases security in the Territories? Where is the evidence that destruction of a sewage pump increases the security of Israel and Israeli citizens - something which I wholly understand they are passionately concerned about? Where is the evidence that taking bulldozers to the runway in Gaza airport is a contribution to the security of Israel?
We all know that sort of destruction of infrastructure, health and education services, people's livelihood and jobs destroys hope and any prospect of political stability and security.
The High Representative referred to what we are doing in Afghanistan and the former Yugoslav Republic of Macedonia. Why is Europe spending EUR 600m this year in Afghanistan - EUR 200m from the Community budget? We are doing that not just out of humanitarian motives, but also to try to ensure a more stable and secure future for the people of Afghanistan. We know that economic development and social progress help contribute to political stability and to greater security. That is why we are making that investment in Afghanistan and why, so far, the European Union, the Member States and the Commission have pledged about 45% of what the World Bank and the UNDP say is going to be needed in Afghanistan over the next five years. I hope some others - the United States, Japan, Saudi Arabia - will be as generous as we have been in the next few years.
Why are we spending what we spent in the Balkans, in FYROM, for example? In the last few months, with the reconstruction agency starting to do as good a job in FYROM as elsewhere in the region, we have already repaired 400 houses, there will be 300 more repaired by April; electricity has been restored in Aracinovo; water and electricity are restored in Kumanovo. We have made a considerable contribution to restoring normality to Macedonia and will keep on doing that. Again, why? Not only because of a humanitarian impulse but also because we know from our experience in Europe that there is a relationship between economic stability and political stability and security. I do not labour this point as a sort of demented chartered accountant. I make these arguments because they are so obviously true. We know they are true from our experience. If you make people unemployed, if you destroy any infrastructure for people's social well being, then what you are doing is not only making their lives miserable but also, almost certainly, making sure that everyone's lives become more violent.
I hope that even now in the Palestinian Territories and in Israel more people will be prepared to listen to the moderates, to those who made their views about the future so bravely known at Kalandria checkpoint before Christmas. I hope that the Voice of Peace movement will be listened to because the people who argue in that brave way for peace are the only ones who really chart a way forward for the Middle East, for the Palestinian State in the future, and for Israel. Anybody who does not believe that should ask Members of this Parliament; should ask somebody like Mr Hume what helped to produce peace in Northern Ireland. It was moderates being prepared to stand up for their beliefs, it was moderates having the courage and decency to go out there and argue for what we all know is the only way in which you turn off the violence and turn on the peace and security.
Look at what has happened in South Africa, which the Voice of Peace Movement from the Middle East has recently been visiting - exactly the same process occurred there.
So in endorsing everything which the High Representative has said, I just wanted to ask this question: how many more people have to die before the voices of the moderates who are left in the Palestinian Territories and Israel are actually listened to by the citizens of those communities?
(Applause)

Poettering
Mr President, High Representative, Commissioner, ladies and gentlemen, the events of 11 September and subsequent action taken in Afghanistan and the current situation in the Middle East, have pushed into the background a matter that both Mr Solana and Mr Patten have mentioned, namely a peaceful settlement in Macedonia. I wish to say a word of thanks to Mr Solana, the High Representative and also to Commissioner Patten, but also to all the others who have played their part there in making Macedonia peaceful today. This is a gigantic success for the European Union, for which our Group of the European People's Party (Christian Democrats) and European Democrats thanks you.

In these days and weeks, we are looking eastwards. We expect there to be new countries in the European Union in the next few years. I will, though, say quite emphatically and underline what the High Representative said, that it is important to our security in Europe that we achieve peace in the Middle East and that we, as Europeans, cooperate peacefully and well with all the countries of the Mediterranean region.
We will also state that, when these problems are under discussion, we must first just put people on centre stage. We state quite clearly that the life and human dignity of a Christian and a non-Christian in Europe, the life of a Jew, an Israeli in Jerusalem or Tel Aviv and the life of a Palestinian, of a Muslim in Ramallah or the Gaza Strip are of the same value, and no distinction must be made between human rights in Europe, in the Islamic world or anywhere else on this earth.
(Applause)
We wholeheartedly agree with both Mr Solana and also Mr Patten in declaring our need of dialogue and of partnership. These involve us telling the truth and not going along with irresponsible language. When, for example, the Israeli Prime Minister Ariel Sharon says, in Thursday's issue of 'Maariv' - and I am quoting him verbatim: 'In Lebanon' - that is, in 1982 - 'it was agreed that Arafat was not to be eliminated. To tell the truth, I regret that we did not eliminate him.' - that is irresponsible language. That is the sort of language that leads to war; it is not the sort of language that brings about reconciliation.
(Applause) I find it difficult, even in view of my nationality - and I was born after the war - to say this here. I find it cynical of the Israeli Prime Minister to respond to our criticism of his attitude by speaking of a resurgence of anti-Semitism in Europe. No, we are not anti-Semitic. We want Israel to live in peace within secure borders. In that, we stand alongside all Israelis. This has absolutely nothing to do with anti-Semitism. We reject that appellation with all the decisiveness we have.
(Applause)
We have, of course, demands to make of Yasser Arafat. He wrote a remarkable article in the 'New York Times' a few days ago. In it he says that he intends to redouble his efforts against terrorism from the Palestinian side, thus expressing the possibility that he might not have previously done all that was necessary. So we also call on Yasser Arafat to do more in this respect in the places where he has influence, knowing as we do that he does not have all the Palestinian groupings under his control.
Mr Solana also mentioned the weapons shipments on the Karine-A. We too want to have information on who they were intended for. We urge Arafat to provide information on this.
I believe that we Europeans have, along with the Americans, a great task ahead of us. The Americans, though, must also understand that they have to give Israel and Palestine equal treatment, and that both sides have the same dignity. Secretary of State Powell, in an interview a few days ago, spoke of Palestine's right to exist, its right to be a state. All this we welcome. I think that we, Europeans and Americans together, now have a common task, to contribute to peace in that region.
Yasser Arafat is, of course, the elected President of Palestine. If we do not accept him as a partner in dialogue, then there can be no peace and no dialogue. We therefore call on Ariel Sharon and Yasser Arafat to make a start on peace by talking to each other so that people in the region, in the Middle East, can have a future worthy of human beings. All those who promote that, such as Javier Solana, Chris Patten and others, have the full support of our group.
(Applause)

Sakellariou
Mr President, High Representative, I too want to welcome the Commissioner, who will shortly be returning to the Chamber. I wish to start by joining with Mr Poettering in what he said on behalf of his group, and also, on behalf of our group, express our thanks for the success of the policy on the Macedonian issue which the High Representative and the Commissioner conducted last summer. The press is, unfortunately, always full of the things that are not going well in Europe, but when a policy is successful, it is virtually ignored.
I want to focus my remarks on the Middle East. I am dismayed by the figures the Commission has published on the destruction recently meted out to projects funded by the European Union. The point here is not the fact that something is being destroyed, but rather the reason why it is being destroyed. The Israeli government is attempting to wreck whatever might become the infrastructure of a future Palestinian state, and that is something we cannot accept.
You were saying today, Mr Solana, that what is going on there is not a peace process. I agree with you wholeheartedly. I have been saying in this House for a year and a half that we should no longer use the word 'peace process' . It is a low-intensity war, but a war all the same, and our task is to put a stop to it and attempt to restart what will become a peace process. We are, though, still a long way from doing that.
Mr Solana, I fully support your statement that the EU must carry on, for we have no alternative. As has repeatedly been said, though, Israel does not want us as mediators. Perhaps you will again be accepted and welcomed there, with an opportunity we are rarely given to present our policies and our proposals. Are we then to finance projects only to see the Israeli government's tanks destroy them? I also consider the recognition of a Palestinian state to be very important, indeed, as Mr Poettering has said, the only possibility. A President has been elected for this Palestinian state, and that is something Mr Sharon cannot ignore any more than we can. He is the only person we can negotiate with. I do not believe there are many other potential partners in dialogue on the Palestinian side.
I regret, Mr Solana, my inability to share even in your modest optimism. For one and a half years, we have been looking on while two utterly unequal opponents wage war on each other. We look on while Israeli tanks destroy Palestinian homes and kill Palestinian civilians and we also watch as Palestinians kill themselves and take equally innocent Israeli citizens with them. It goes without saying that we condemn all violence and every terrorist act without 'ifs' and 'buts' . Where, though, does it get us? We achieve no progress by it, and so, Mr Solana, we and the Commission as well, have to think in terms of using the powers we have by reason of the association agreement with Israel, even to the extent of suspending it.

Watson
High Representative, Commissioner, you have the dubious fortune to live in interesting times, as the Chinese might say. You may be the architects of the Union's awakening in foreign policy. I welcome the meetings that Mr Sharon had last week with Palestinian leaders. I regret that it is the first time since he came to power that he has directly engaged with the Palestinians and I hope it is not mere coincidence that the talks come just before his trip to Washington DC. But it will not be enough to talk about a cease-fire. We need to be talking about an Israeli pullback and an end to the destruction of EUR 17 million worth of EU-funded Palestinian infrastructure.
I recommend, High Representative, that if we want peace we do not define any starting date. Nonetheless, the news that some Israeli reservists are reportedly refusing to serve outside the 1967 frontiers is a welcome development.
After all it was similar pressure from reservists that led to Israel's withdrawal from Lebanon and, taken together with Arafat's expression of willingness of the Palestinians to end the conflict and the need to find creative solutions, these green shoots of optimism need to be nurtured and encouraged to grow.
High Representative, you spoke of the Mitchell report and light at the end of the tunnel. I hope this is not the headlamp of an oncoming train. Sometimes America's friends - or so-called friends - in the Middle East have been about as helpful to the peace process as the so-called loyalists in Northern Ireland have proven loyal to the UK Government. The Union has a serious dilemma if it believes that US policy on the Middle East is damaging the entirety of Western interests. I wish you wisdom and courage in your discussions with our friends on the other side of the Atlantic.
High Representative, you spoke also about Afghanistan. My group is concerned about reports of interfactional fighting in Northern and Eastern Afghanistan, leading to thousands of Pashtuns fleeing villages, reports of 50 or more people being killed in Gardez. Such reports are an ominous sign and strengthen the case for an international stabilisation force to prevent any possibility of a slide to civil war. Our priority would be to complete the elimination of terrorist networks but in this regard we believe that whatever questions there are over the status of combatants held by the US in Afghanistan and in Guantanamo Bay, they should be treated consistently with the 1949 Geneva Convention.
(Applause)
That Convention was the fourth such to establish principles for the treatment of enemy soldiers and civilians in wartime. I hope that you will support my call for a United Nations committee to review it, to determine whether further changes are needed concerning armed insurgents and terrorists who do not fall within the traditional definitions and, if not, at least call on the Americans to sign the 1977 amendments to extend protection to guerrillas and combatants, amendments which the US has refused thus far to sign.
In his state of the union address, President Bush displayed a shocking belligerence. Just as his environmental policies lead to global warming, so his diplomatic and military policies are pushing the world towards a new cold war. In this century every shot the US fires will indeed, in the words of the poet Emerson, "ring round the world" and unless you can appeal to, and nurture, a wider concept of American self-interest, then we risk the menace of a new military millennium.
(Applause)

Cohn-Bendit
Mr President, High Representative, we are being haunted by the chronicle of long-expected and mindless acts of violence in the Middle East. You said that politicians feel a sense of frustration, not to mention cynicism. This translates as melancholy, sadness, distress, fear, anxiety and despair for the people.
We could continue by saying that the Israelis certainly have not done what was necessary. Mr Sharon' s strategy consists of destroying Palestinian infrastructures, because he does not believe in the Palestinian State, he does not want a Palestinian State. He has spent his whole life fighting a Palestinian State. We must therefore make him understand that he will only achieve peace and security in his country if there is a Palestinian State. And, to do this, we must enter into a dialogue of political interference in Israel. It is the Israeli people that must be made to understand that they can only have security if there is the Palestinian State. The only possibility of security for Israel is if there is a Palestinian State.
As far back as 1972, I defended this thesis and I was almost beaten up during an important meeting at the University of Jerusalem. I know what fighting for this issue means in Israel, but there is no other solution. Similarly, there is no other solution than saying that, in the Palestinian territories, there will be no return of all Palestinians to the State of Israel. The numbers of those returning will be limited, we must have the courage to say this, but a State of Israel is a State of Israel, a Palestinian State is a Palestinian State and the two must remain separate.
The price of this is that there will be a European intervention force between the Palestinians, maintaining security in Jerusalem, Tel Aviv and Jaffa, but which also maintains security in Ramallah, Gaza and in other Palestinian towns. You will say to me 'But who are we to do this?' Mr Sakellariou will say 'Europe means nothing. No one listens to us.' First of all, we must want to be heard, we must want to speak out, we must want to say 'No, it is not up to the Americans to run global politics!'
We, the European Union, know that the Middle East conflict is a result of a fundamental European crisis. It is our responsibility, the responsibility of Germany, the responsibility of others who created the situation that we now have in the Middle East. This is why we must not give up. This means that today, we must break down the barriers that are isolating President Arafat. This does not mean that I believe President Arafat is absolved of all responsibility. He is as hypocritical as Mr Sharon. They are two old gentlemen who have been fighting for decades in this region and we know that hypocrisy is one of their common weapons. They know one another very well, they do the same thing. That is not the problem. It is not a question of moral standards. As one speaker said today, there is an elected president - Mr Arafat. There is a second - Mr Sharon. I can do nothing, even though, in any case, I would not have voted for Mr Arafat or for Mr Sharon. Democracy is not what I decide, it is what the majority decides. Nothing can be done. We have to put up with the situation.
I shall therefore come back to the point that we must break down the barriers that are isolating Mr Arafat. This is why our group is asking the European Parliament to invite Mr Arafat and Mr Perez to have a discussion with us. They both hold the Nobel Peace Prize, therefore they know what is meant by peace. Well, let us invite two holders of the Nobel Peace Prize to discuss the subject of peace with us here in Strasbourg. And let us put pressure on Mr Perez to allow Mr Arafat to leave. It is scandalous that it is Mr Sharon who decides whether Mr Arafat has the right to take part in a meeting in Brussels or in Strasbourg or wherever. It is up to us to intervene politically to break down the barriers isolating Mr Arafat.
We must fund, organise and support all the NGOs that are fighting at civil society level for new relations to be forged and so that everything between the Israelis and Palestinians will not collapse, as there are some wonderful things being done in this region. Those who have often visited Palestine and Israel know this. This is why we have a fundamental responsibility to contradict the key phrase that you hear in Israel, which is 'there is no other solution' .
This is not true; there is always another solution. I know that today, as Mr Patten said, those who speak of peace are not listened to, but if we manage to show that the other side can hear the initiatives we are proposing, then there will be many more initiatives, like those by the soldiers who are saying that they want to defend the security of Israel, but do not want to occupy Palestinian territories and the Palestinians.
This is why I hope that Parliament will have the courage to make a determined effort in its attempt to influence the Israeli and Palestinian civil societies and make a strong gesture by inviting Mr Arafat and Mr Peres to Strasbourg, in order to break down the barriers isolating Yasser Arafat.

Wurtz
Mr President, High Representative, I welcome many of the positions that you have clearly outlined, Mr Solana, particularly regarding the Palestinian Authority and its president. I also know that you are working in a creative and worthwhile manner with your many counterparts in order to encourage the prospect of a breakthrough in the situation.
I also thank Mr Patten for his fair and forceful words on the subject of the destruction of infrastructures which symbolise the heart of the Palestinian State. I think, however, that the general attitude of the Fifteen is still greatly out of touch with the extreme seriousness of the situation in the Middle East.
In my view, there is a great danger of seeing the majority of Palestinians lose their last hope for peace out of dignity. A nation that is submitted to this sort of daily humiliation by the occupying forces must never feel that the whole world does not care. We must therefore make ourselves heard.
As Mr Poettering rightly pointed out, it is not normal for the head of a government to express regret that a man, recognised by the whole international community as the leader of a people and a nation, was not killed 20 years ago.
What do we think of this? And how has Europe reacted to the dangerous green light given by President Bush to Mr Sharon' s policy under which he makes things worse in order to further his own ends? The rapport between them is as threatening as a violent storm cloud.
Conversely, how are we interpreting the signs, a growing number of which is evident amongst the Israeli population, of a deep-rooted opposition to Mr Sharon' s policy on the basis of the fundamental requirement that the military occupation of the Palestinian territories must be brought to an end?
I am thinking of the courageous statements made by Mr Avraham Burg, Speaker of the Knesset, who believes that a nation of occupants will end up being disfigured by the crimes of occupation. I am thinking of the 300 men and women who travelled from Israel to Ramallah this weekend to deliver a message of peace to Mr Arafat. I am thinking of the appeal launched by 52 Israeli officers and soldiers to no longer agree to fight in order to occupy, deport, destroy, blockade, kill, starve and humiliate a whole nation of people.
The latest opinion polls reveal a profound distrust of Mr Sharon' s security policy and almost an absolute majority in favour of peace with the Palestinians.
Do such facts not give us more room to manoeuvre than those that we use to significantly heighten the tone when faced with the irresponsible attitude of the current head of the Israeli government? What are you intending to do, Mr Solana, in this area, to support the forces of peace in Israel?
Lastly, practical measures are as important as fair words in diplomacy and these measures are now expected from Europe. One of the very significant initiatives, such as the one I proposed to you in an open letter that I sent last week, and the essence of which Mr Cohn-Bendit has just partly taken up, could be to invite President Arafat, and possibly Shimon Peres, to the European Council and to the European Parliament and, if Mr Sharon dared to defy the European Union by using force to prevent our guest from travelling, to organise a joint visit by the 15 Foreign Affairs Ministers to Ramallah and to clearly express an opinion on the conditions that, in Europe' s view, would secure a return to peace.
I believe that it is of utmost urgency to give, in one way or another, those who support dialogue and peace on both sides the prospect of a breakthrough, which they vitally need. Simply by doing this, you will present - and I know that this is your desire - Europe with a task that rivals its greatest ambitions.

Welcome
President
 I have the pleasure of informing Parliament that Mr Rodrigo Samayo Rivas, President of the Central American Parliament, and Mr Manuel Gamero Durón, Vice-President, have taken their seats in the gallery of official visitors. I extend a very warm welcome to them on our debate on the Middle East.

Situation in the Middle East (continued)
Collins
Mr President, like previous speakers I, too, am gravely concerned that since last December the situation in the Middle East has deteriorated to a new low. There has been an appalling loss of life, the conflict in the region between the Israeli and the Palestinian people has deepened and the hopes of restarting the peace process regrettably have receded. Between 15 January and 25 January last, over 45 people were injured from bomb attacks alone, while ten people were killed during the same period. This is a staggering level of violence and hatred by any standards. Hundreds of Palestinians have been left homeless as a result of the demolition of nearly 100 houses by the Israeli forces at the refugee camp in the Gaza Strip. I very much welcome the fact that the Spanish Presidency has written to the Israeli Foreign Minister expressing our deepest concern at the damage that has been done to projects funded by the European Union as a direct result of Israeli attacks against the Palestinian institutions.
Mr President, violence has brought neither greater freedom to the Palestinian people, nor greater security for the Israeli people. In both cases the result of violence over the last few months has achieved the opposite to what was originally intended. Violence has only resulted in an intensification of hatred and recriminations between the Israeli and the Palestinian peoples. The Israelis and Palestinians must resume the search for peace and the two sides must act together and they must act in tandem. The Mitchell principles have clearly laid down the broad parameters for an overall peace agreement. Any future agreement must both recognise Israel's right to live in peace and security and ensure that the legitimate rights of the Palestinian people are protected and promoted. This means the establishment of a viable and democratic Palestinian state and an end to the occupation of the Palestinian territories.
Israeli and Palestinian authorities are going to have to move to renew some level of security cooperation with the aim of ending this awful present cycle of violence. Persons involved in perpetrating any of these awful terrorist attacks which have taken place must be arrested and must be brought to justice, including terrorists operating in the Hamas and Islamic Jihad organisations.
Recent discussions between representatives of the Palestinian authority and Prime Minister Sharon must be seen as a somewhat positive move, but negotiations must surely be meaningful and cannot be seen as a cosmetic exercise under any circumstances. We must all remember that Yasser Arafat is the democratically elected leader of the Palestinian people and he has the political authority and the political mandate to represent the concerns and the needs of the Palestinian people at this time. Yasser Arafat is a viable peace partner for Israel and he commands the support not only of his people, but of the broader international community. I welcome the recent article written by him in the New York Times in which he stated that the Palestinians were ready to end the conflict with Israel. This call for reconciliation and coexistence must be welcomed by all interested parties.
I strongly believe that the EU must continue to play as active a role as possible in brokering a peace between both sides. President Bush and Prime Minister Sharon are meeting this week and I hope that this will signal a more willing involvement on the part of the United States to re-intensify its efforts to reach a political agreement in the region. I strongly believe that the European Union and the American government have mutually important roles to play in ending the violence in the region and restarting meaningful peace talks.
Finally, the Israelis and the Palestinians must also calm the situation and de-escalate the conflict. Sustained attacks by Israel on the Palestinian Authority and its security forces and facilities are wholly misguided. Incursions by the Israeli military forces into Palestinian territories must be halted immediately and there must also be a lifting of restrictions that are imposed on the Palestinian people. Let us all remember, as was said by previous speakers, that the alternative to the Palestinian Authority is Palestinian anarchy.

Belder
Thank you, Mr President, there is, once again, a glimmer of hope in the Middle East. There are two indications of this. First of all, there was the discussion between Prime Minister Sharon and prominent representatives of the Palestinian Authority that was held in the middle of last week. Furthermore, a regular follow-up every couple of weeks has been announced. In addition, there is the public assurance by Mr Arafat in the American press that he wants to call an end to the terrorist attacks on Israeli citizens. I sincerely hope that the meeting between President Bush and Prime Minister Sharon next Thursday will help these developments move towards a de-escalation of the extremely bloody Palestinian-Israeli conflict. Just consider the extent of the killings and destruction on both sides. And suffering, certainly personal suffering, cannot be captured in cold statistics or weighed up on a merely rational level.
Meanwhile, a consistent rejection of, and fight against, terrorism do remain the conditions par excellence for creating any political compromise between the State of Israel and its neighbours. This is of direct interest to various countries in the region, for they fan the Palestinian and Lebanese flames of terrorism willingly and knowingly. This is why the clear warning by President Bush addressed to them in last Wednesday' s State of the Union speech deserves full support from the EU Member States.
However, this political realism is lacking on our Continent, precisely at a time when European shortcomings have come to light in NATO in such a poignant way. The EU Member States support efforts to bring peace to the Middle East, especially by making a credible and effective contribution to the current fight against terrorist networks in that region. This will benefit the Israelis and Palestinians alike. I would therefore call on the Member States in the person of their High Representative, Mr Solana, to make this contribution.
Last week, a young person from my town, Apeldoorn, sent a touching e-mail about peace in the Middle East. His appeal was not for a spiral of violence but a spiral of prayer. Along with the psalmist, I would say indeed: pray for the peace of Jerusalem.

Dupuis
Mr President, Commissioner, I think that Mr Patten' s comments - and I am sorry that he is not here at the moment - are absolutely unacceptable. In my view, to speak of the senseless destruction - and this is a point on which we obviously agree with him - of the Palestinian infrastructure and to speak of the selective killings of Palestinians without mentioning the Israeli victims is absolutely intolerable. But this is also symptomatic of the policy that Commissioner Patten has, for many months, been conducting towards Israel.
I am pleased that the High Representative, Mr Solana, is here with us, because at least he can raise the quality of our debate slightly above the level we are used to in this House. Having said that, I do not think, Mr Cohn-Bendit, that we can resolve the conflict between Israel and Palestine by simply asking both sides to make a little effort, or even asking both to make a great effort. Mr Barak made some proposals with which we are all familiar and these proposals were not accepted. The Palestinian Authority existed and the Palestinian Authority has sanctioned the suicide attacks that were and still are carried out every day against Israel. That is the reality today.
I think that the European Union has an opportunity to show true generosity, but not by means of the tourist trips that Mr Wurtz is suggesting. The European Union could show its true generosity by saying to the public, to the people of Europe, that they must have the courage to fully integrate Israel into the European Union, that this is the only way to guarantee security in Israel, to finally give five million Israelis the feeling that they can live in peace alongside the Palestinians, but within the European Union. This proposal has been put forward. Ladies and gentlemen, we must urgently begin to reflect on this in slightly more depth.

Galeote Quecedo
Mr President, I have the feeling that, recently, in each debate in this Parliament on the Middle East, we basically go over the same ground. The only thing that changes is the state of the crisis, which, unfortunately, is increasingly worse in that region.
Since the last resolution we approved in the European Parliament, with the majority support of the parliamentary groups, there have evidently been more terrorist attacks against Israeli civilians. I think there have been five in the last ten days.
We have also, however, seen the siege by the Israeli army increasingly close in on the Palestinian population and its institutions. There has been very considerable material and personal damage which I consider to be completely unjustifiable.
Within the landscape of violence, which is very controversial both inside and outside the region and also here in the European Parliament, we should be able to agree on certain things. The first is that nothing can justify acts of terrorism, which reduce the chances of peace and produce nothing but pain and indignation. The second is that it seems clear that the Palestinian National Authority does not have the capacity to restrain this wave of violence. The third is that not everything is permissible in the fight against terrorism: when we have the Rule of Law, we must always act within the parameters of the law and with scrupulous respect for human rights. The fourth is that the parties in conflict must understand that no act of violence is going to improve their position. And the fifth is that we cannot stand on the sidelines; on the contrary, the European Union must maintain its political pressure and its permanent presence in the region.
I am happy to see the efforts the Council and the Commission are making, but I am even happier to hear that there is a glimmer of light on the horizon. I agree with the Council declaration, which says that our first priority must be to put an end to the suffering of both peoples. And it seems to me completely pointless for us to try to find somebody to blame. On the contrary, I believe that we must seek solutions and, for example, the European Parliament should promote and sponsor an international conference for peace in the Middle East, a second instalment of the one held in Madrid ten years ago, from which Mr Solana could no doubt recount many experiences.
Let us hope that amongst all of us we can contribute to peace, because I believe that that is the only truly important thing at the moment.

Napoletano
Mr President, High Representative, today' s debate seems to me to be a proper debate. I appreciate the Presidency' s flexibility as regards time: if the President wants to make this a genuine political debating chamber once again, it may be no bad thing that he is showing some flexibility towards us. I would like to say that we are caught up in an appalling, absurd situation: when the Israelis elected Ariel Sharon to power they thought he would bring them more security, but they are now in a terrible situation. When President Bush was giving his assessment of the tragic situation after the attacks on the Twin Towers, he gave the impression of intending to eradicate the sources of hatred and to genuinely do something about this tragic affair. However, if the United States now backs Ariel Sharon, there is a danger that it will no longer be able to play the mediating role it had even under Bill Clinton. At present, it would appear that Yasser Arafat is not in control of the situation, for the terrorism of Hamas is still gathering momentum, but if Mr Arafat were to lose all support, the consequences for Palestine would not bear thinking about.
Therefore, it is up to us, to Europe to do something. I do not want to shock anybody, but I believe that the only way to give Israel security - as many Members have said - is to establish a Palestinian State. Therefore, we must start to declare right now that we are prepared to recognise such a State and also that we need to have a special relationship with both the Israeli State and the Palestinian State. I will not go so far as to mention accession to the Union, as Mr Dupuis did, for fear of causing offence, but if Europe wants to genuinely lay the history of the twentieth century to rest, it cannot confine itself to enlargement and refuse to assume full responsibility for the consequences of European history.

De Clercq
Mr President, the recent Palestinian suicide attacks, Israel' s tough reaction to them and, to some extent, the statements by Prime Minister Sharon about Mr Arafat, have once again brought the Israeli-Palestinian conflict to a head. This spiral of violence must now be broken as a matter of urgency. The international community must urge both parties to reach a permanent settlement and cease the terror. One glimmer of hope is at any rate the consultation between Prime Minister Sharon and some Palestinian official representatives that was held last weekend.
As far as the European Union is concerned, a tougher stance would be welcome. We must strengthen our position in the peace talks, given the exceptional interests - and first and foremost the humanitarian interests - that are at stake. European leaders can no longer afford to look on from the sidelines, at the risk of a much greater and more extensive conflict emerging in the Middle East. The peace process will be a lengthy and tiresome process, but I remain convinced that with the necessary trust, the indispensable political will and the necessary perseverance, we can attain our common goal, namely a peaceful and prosperous Middle East.

Morgantini
I too nurture some small hope. In actual fact, there seems to be greater awareness within Parliament of the tragedy taking place and also of where responsibility lies for this situation, not least our own responsibility.
As Mr Solana has said on a number of occasions: we have wasted many opportunities. I fear we will waste others too, but I do feel it is important that we have gained this awareness.
I find Mr Bush' s support of Ariel Sharon' s policy truly irresponsible, opportunist and inhumane, for it is not that the two sides lack confidence in each other: this is a specific policy, a specific decision - Ariel Sharon has made this explicitly clear in his speeches in the Knesset - not to allow a Palestinian State to exist, apart from 'Bantustan' territories, and not to give back the Occupied Territories. I do not understand why we do not realise that this is his policy and take appropriate action. At the same time, some responsibility certainly lies with Yasser Arafat, and it is an appalling tragedy for both Palestinians and Israelis that terrorist acts are taking place.
However, my hope lies in Commissioner Patten' s words, in Mr Solana' s words, in actions and signs, and I would like to tell you of the great hope that I have in Israeli society. On Saturday, together with 300 Israelis - young people, coloured people, young lads who have refused to serve in the Occupied Territories, women, university professors - we crossed the Kalandia checkpoint, running serious risks for the Israelis who crossed it were told they were not allowed to enter the Occupied Territories. Three hundred of us crossed the Kalandia checkpoint to go to meet Yasser Arafat. The young Israelis said: 'We want peace. We are the other Israel' . And Mr Arafat embraced them. However, the most important part was in the afternoon when we met the Palestinians and Palestinian organisations, and they too displayed their desire for peace. I therefore feel that it is imperative that we believe in these organisations and act to support them.
I too, like Mr Cohn-Bendit, want to issue a challenge. If Mr Arafat leaves the territories, there is a danger that we will not be able to get him back in again. It is important that we work to support this operation, to bring Abu Ala and Avraham Burg here. International protection is vital for the Palestinian people; moreover - and here I agree with Mr Sakellariou - it is vital that we take practical action, even suspending the association agreement, for Israel must respect human rights.

Gollnisch
Mr President, ladies and gentlemen, the tragic situation of Palestine illustrates two political truths, which are only bitter for utopians. First of all, each nation necessarily aspires to sovereignty, in other words, to have the full reign of a territory that is its own and which it can organise as it wishes. Secondly, it is not, therefore, borders which create conflicts, but the lack of safe and recognised borders. It is not the division of nations which engenders war, it is when the nations are thrown together. Throughout the world, multi-ethnic and multi-cultural societies have failed, causing bloodshed, and yet there are many utopians even in this House who would like to conduct such experiments on our European societies. I greatly admire Mr Cohn-Bendit' s realistic attitude towards the Middle East, an attitude that totally contradicts the hare-brained ideas of his friends and his own colleagues, regarding the situation in France for example.
That said, the tragic but fragmented events - bloody attacks, arms trafficking, the mutual accusations of murder, terrorism, the repeated failures at maintaining a truce, the unacceptable destruction - are sad consequences, which must not, however, be confused with the profound causes of the situation. The fundamental problem is that there will only be peace if the Israelis and the Palestinians each have a territory that is marked by recognised borders and, within this territory, they have the opportunity to govern their country freely, without threats or interference. The State of Israel now possesses three quarters of Palestine' s former territory under the British mandate. The Palestinians must be permitted to live freely, in peace, in the other quarter.
As sensitive as some places are for the Jewish people and for other believers, places which have great religious significance, we must bring an end to the colonisation of the occupied territories which stems from 1967. We must observe the United Nations Security Council resolutions and we must also bring an end to a military occupation that has lasted for almost 35 years now and which is an outright record in history. Of course, Israel has a right to secure serious guarantees in exchange for its withdrawal. These guarantees can be granted within the framework of the United Nations Organisation, and, in particular, by the United States of America. They must be more serious than those that failed to prevent the 1967 conflict. However, this is no longer 1967. Israel must thus have the courage to appreciate its victories, to withdraw from the occupied territories. Only then can peace return to the Middle East.

Brok
Mr President, Commissioner, Mr Solana, one victim of the recent bombings in the Middle East, in which Israeli civilians were targeted, has been the willingness of moderates to form coalitions. I think one has to distinguish between murdering civilians willy-nilly, pursuing possible terrorists or, on the other hand, setting a 7-day deadline and positively inviting the radicals to promptly wreck the possibilities for dialogue.
Israeli settlement policy, which is to be continued, provides us with examples of this sort of thing, as does the hopeless existence which drives Arab Palestinian refugees to turn themselves into weapons, and the consideration of the idea that they should return to their original homes and thereby put a question mark against the State of Israel's long-term viability. We also see it in the destruction of infrastructure on Palestinian territory, and that in areas that have nothing to do with counter-terrorism, but - as Commissioner Patten rightly said - destroy prospects for development.
It is for these reasons that we have to make it clear that we, the European Union, have to make a fresh start, and it is perhaps not right that you, Mr Solana, are going there to play for high stakes in a week's time, followed by the American representative the week after. So we shuttle hither and thither and get nowhere. Why do you not, for once, go there together in the same week in order to make clear that this is a joint European and American initiative to hammer the point home that we will no longer allow things to go on the way they are. Both of you must go there together and take funds with you in order simultaneously to give hope and guarantees of security.
We must find a new point of departure, and we will not do it in the ways we have used so far, nor - and this remark I address to Mr Sakellariou and others - by adopting resolutions apportioning guilt in a one-sided way, because then we are destroying the opportunity to be intermediaries.

Swoboda
Mr President, Mr Solana, Commissioner, the reports you have presented today may not have been positive or optimistic, but they sketched a realistic picture.
I am very glad that, after a short, perhaps terrifying moment, the European Union has clearly demonstrated that it is not willing to sit back and let the Palestinian structures, supported moreover by funds raised by the European Union, be destroyed. This is not about denying Israel the right to defend itself against terrorism, but about our strongest condemnation and rejection of excessive courses of action that really have nothing to do with counter-terrorism. I am very pleased that this is what both representatives have done, clearly and unmistakably, and that they have made their position clear without falling prey to emotionalism.
That is important because the pro-peace groupings that are present both in Israel and in Palestine are waiting for Europe's voice to be heard. I support all the efforts at joint action with the USA, but where this is not possible, we must be an identifiable, and indeed, readily recognisable, European voice.
My second observation, on the Balkans, may well be taken as underlining all of what has been said here. I would only ask that particular additional attention be given to the situation in Albania, where things are not at present developing very well. I wish to make it very clear that I cannot see us going down the road towards an association agreement with Albania if Albania does not concern itself with the country's stabilisation. What has happened in the past weeks is, alas, no contribution to stability. We want stability in the Balkans, we have done much, and with great effort, to achieve it, and let no power in the Balkans cause this stability to collapse again. I would therefore ask you both to follow events in Albania, in particular, very closely, and represent our positions there with a great deal of clarity.

Van der Laan
Thank you, Mr President. After months of heartrending and meaningless violence in the Middle East, we must now nurse and foster each and every glimmer of hope. President Arafat has indicated that he is prepared to negotiate with any Israeli party and to help search for a creative solution for the return of the refugees. These are two courageous steps forward which deserve our support and should be immediately responded to by an equally generous offer by Prime Minister Sharon. In addition, we have noticed that, in Israel, a shift has emerged in public opinion with regard to one of the key issues of the conflict, namely the illegal occupation of the Palestinian regions. There are now 110 reservists of the Israeli army who have signed a petition in which they refuse to take part in the occupation any longer. These brave soldiers deserve the open and emphatic support of the European Union because they are choosing international law and human rights, rather than choosing to obey their orders and to follow the path of least resistance. They are, in fact, choosing the road of peace, away from occupation, away from terror and state terror, and towards the negotiating table and, hopefully, peace eventually. I would be interested to hear from Messrs Solana and Patten whether they are prepared to express this support.

Morillon
It is with considerable sadness, and with full sympathy for your frustration, High Representative Solana, that we have seen the ongoing deterioration of the situation in the Middle East over the past few months, especially when we were convinced, after 11 September, of the urgent need to find a political solution to the problem.
I should simply like to recall the closing statement of the special session of the Mediterranean Forum, held in Brussels in November, before the vote on 13 December on our recommendations preceding the formal declaration by the Laeken Council. I would remind you that this statement called for the immediate and unconditional implementation of the Tenet plan and of the recommendations of the Mitchell committee, and reiterated our conviction, Mr Cohn-Bendit, that establishing an impartial monitoring mechanism would serve the interests of both parties.
It has to be said that all of this has come to nothing and that, in fact, recent events seem to have closed the door on any serious attempt to restart negotiations. Although, like William of Orange, I believe that it is neither necessary to have hope in order to embark on a course of action nor is it necessary to succeed in order to persevere, I feel that we must welcome the fact, Mr Solana, that you are ceaseless, as you have just demonstrated, in making every possible effort to give renewed hope, which is so badly needed in that part of the world, to the Israeli and Palestinian peoples.
We can only encourage you to pursue all initiatives for cooperation between the United Nations, the United States and the most directly involved Arab States, in order to put forward proposals, in conjunction with them, on actions that are crucial to restoring mutual trust and respect, without which the current downward spiral of violence can never be halted.
This is why I am not in favour of our Parliament today playing the role of excommunicator. As Commissioner Patten said in his last speech to this House, 'What is past, is past' . What we are interested in is the future and the immediate future. I also feel that I am summing up the opinion of the majority of Members when I repeat that we in Parliament are ready and willing to fulfil our mandate to take the initiative by issuing another invitation - why not President Cox? - to the representatives of the two States at the highest level, perhaps even Mr Arafat himself, to come and explain their intentions to us, as the speakers of the Palestinian Legislative Council and the Knesset did in September 2000.
By the same token, we would like to encourage you to give positive consideration, in conjunction with the Presidency-in-Office of the Council, to the possibility of holding an ambitious peace conference along the lines of the conference held in Madrid, in which, Mr Solana, you played such an important part, as you reminded us. In our own interests and for the sake of coherence with the spirit of our unreserved commitment to the fight against terrorism, we must play as active a role as possible in saving the peace process, while respecting the legitimate rights of the region' s peoples.

Poos
Mr President, the European reaction, which has been somewhat more coherent than usual, has come at the right time.
It has now become quite clear that Mr Sharon' s policy is leading nowhere. When there are no political prospects on the horizon, the Old Testament prescription of 'an eye for an eye, a tooth for a tooth' leads directly to horror and to chaos. Bloodshed leads to further bloodshed. This is a return to the Middle Ages, even to prehistoric times.
It is therefore high time that the Council of the European Union, the Commission and all our governments spoke up, loudly and clearly, whatever the President of the United States might think. It is Mr Sharon, and not Mr Arafat, who has the power to end the conflict. How can he do this? Simply by complying with international law, by ending the repressive occupation of Palestine and by withdrawing behind Israel' s internationally recognised borders.
The best way to protect both Israeli and Palestinian citizens is to re-establish a proper border between the two peoples. The way out of the deadlock of hatred does not lie in the humiliation and the destabilisation of Mr Arafat. It lies in land distribution and in acknowledging Palestinian nationhood, not in the medium term, but immediately.
Mr Solana, Mr Patten, you must state this quite clearly. This is the urgent message that all of Europe' s representatives should be conveying.

Nicholson of Winterbourne
Mr President, I too congratulate the High Representative, Mr Solana, and Commissioner Patten for their untiring work. We share your frustration at the lack of outcomes.
Has the time come now for us to move on from dialogue and move into shared partnerships, overcoming perceived religious differences to tackle common human evils of poverty, ill health and illiteracy? Surely the place today for dialogue is within Islam, between Muslim and Muslim, to work out ways of discarding false jihads, rejecting distorted interpretations of the Koran that lead inevitably to misguided martyrdoms and terrorist assaults. Islam is a faith that promotes peace, equality and a secure life.
Meanwhile we should tackle the lack of democracy in the oil-rich states. Here we can assist through building civil society and use means such as our association agreement with Egypt to exert undoubted influence.
High Representative Solana mentioned the Islamic Republic of Iran. My view is his as well. I believe we should open a Commission office in Tehran as soon as possible. This is an Islamic state, and yet a democracy; it has Sharia law, and yet a parliament. Surely Iran is part of the solution rather than part of the problem - a peaceful society in a violent region. I thank our Commissioner and our High Representative and their staff for all their work.

Cushnahan
Mr President, Israeli Premier Ariel Sharon's recent remark that he regrets not having killed Yasser Arafat in Lebanon in 1982 is unforgivable. But I suppose we should not be surprised: Mr Sharon's own terrorist behaviour in Lebanon, when he permitted the massacres in the Sabra and Shatila refugee camps, was subsequently condemned by Israel's Kahane Commission of Inquiry. Given this fact, it is regrettable that he was subsequently elected as Prime Minster of Israel, this being the root of many of the current problems.
Current Israeli policy is ludicrous and counterproductive. How can they make demands on Arafat to behave as if he was the leader of a normal state, while at one and the same time they make him a virtual prisoner in his own home, destroy his airport and his broadcasting station and humiliate him? Who do they want to replace him with? In the post-11 September situation, the European Union has been oversensitive in its approach to the Middle East. We are indeed an honest broker and we should be vigorous in that approach. The fact that the Americans are indebted to us for the solidarity and the support that we provided when they needed it should mean that we are entitled to a reciprocal response from them. And instead of being the puppet of Israel, they should join with us in an even-handed policy approach to the tragedy in the Middle East. If that is not forthcoming, then we should act on our own. It is frustrating that the United States through its present stance is becoming much more part of the problem than part of the solution.

Menéndez del Valle
Mr President, I thank Mr Solana and Mr Patten for continuing, in spite of everything, with their already excessively longstanding efforts to achieve peace in the Middle East.
We are clearly facing a frustrating, cruel and, if I may say so, surreal, situation. It is surreal because we are facing a situation in which the Prime Minister of Israel does not support the constructive conclusions of his Foreign Affairs Minister. It is also surreal because Mr Sharon - who regrets not having destroyed Mr Arafat, who he describes as irrelevant, in Beirut in 1982, and who calls the Palestinian Authority a terrorist organisation - is meeting with three notable members of this so-called terrorist organisation. It is surreal because Mr Arafat is under great pressure to combat terrorism but, at the same time, Israel - and we are allowing it - is bombing and thereby destroying the resources available to the Palestinian Authority for combating that terrorism.
This surrealism, however, is welcome if it can bring us closer to peace and development in the region, not only for Palestine. I would like to say however - and I hope I am wrong - that I hope these talks by Mr Sharon with these supposed terrorists from a supposed terrorist organisation, are not simply another attempt to gain time before his meeting with President Bush in Washington tomorrow.
I would like to ask the High Representative, Mr Solana, a question relating to the famous seized vessel, the Karim-A: it appears that the people who are trying to ascertain whether the evidence of Iran' s involvement is reliable are working on the basis of stronger evidence than the appearance of arms which are 'made in Iran' , because we all know that the fact that arms are manufactured in a particular country does not necessarily mean that they are supplied by the government of that country.
Mr President, I say this - and I will end here - because, in this era of trilateral evil, and the demonisation of the situation and the desire to spread suspicions all over the place, it could be a fatal error to encourage suspicions of this type in relation to those invisible enemies which Mr Bush is currently dealing with.

Van Orden
Mr President, this debate has focused largely on the situation in the Middle East. I am not sure that the largely one-sided tone of this Chamber is at all helpful. I endorse Mr Brok's call for a more balanced approach but as requested I also want to take the opportunity briefly to touch on another area of crisis which is of increasing concern at the moment and where the European Union has the capacity to exert some influence.
I am referring to Zimbabwe. Even if electoral observers are allowed in, we must maintain the pressure on Mr Mugabe to deliver free and fair elections. We do not want to be in a position of merely recording that the election was fixed and standing back and wringing our hands afterwards. We want the presence of observers to deter violence and electoral fraud so that the Zimbabwean people can make a genuinely free choice. Many of us continue to be alarmed by reports from inside Zimbabwe about the situation on the ground. I am referring to the fact that five MDC supporters have been killed in the past week, that MDC demonstrations and rallies have been disrupted by the police, that the independent press is restricted, the Independent correspondent, Basildon Peta, was earlier today arrested under the Public Order and Security Act and the Australian journalist Sally Sara has been refused admission. Taken together one might think that these matters already constitute a breach of EU conditions.
I have some questions for Mr Solana. What representations are being made to the Government of South Africa to apply greater regional pressure on the Mugabe government? Are the measures for the implementation of smart sanctions now in place? What level of deterioration in the situation will trigger these sanctions? Is the European Union's response being fully coordinated with that of the United States?

Wiersma
Thank you, Mr President, talking about the conflict in the Middle East means being faced with the substantial dilemma of striking a balance between Israel' s right to safe borders and a viable Palestinian state. We are further from this goal than ever before, or so it seems. Nobody feels safe anymore, either in Israel or in the Palestinian state. Nobody appears to be able to play an objective role in getting the peace process back on track. The extremists set the agenda, and the Americans seem to tolerate the tough stance adopted by Prime Minister Sharon. Whichever way one defines the position of President Arafat, it seems to me that, without him, chaos would descend on the Palestinian Regions.
What can the European Union do? In my view, we should mainly keep the channels of communication open. I back those fellow MEPs who say that we must continue talks with both parties and exert pressure on Israel to accept the Palestinian Authority as the only significant interlocutor, and so find the way back to consultation. However, we must also continue to ask Mr Arafat to tackle the terrorists on his own home turf.
The European Union should be prepared to postpone a certain form of cooperation with Israel in this context, but not to rule such postponement out in respect of the Palestinian Authority either, should it transpire that the fight against terrorism is not being taken seriously.
This brings me to yet another point which I should like to put to Mr Solana. The conflict in the Middle East is also tied in with the relationship between the EU and the United States, and this issue is also important in the fight against terrorism. In addition, I should like to find out his reaction to the statements by President Bush who talks about the axis of evil and the three countries he refers to by this. What is the EU' s reaction to this? Is he driving a new wedge between the European Union and the United States? I would particularly like to know what implications these statements by President Bush have for the policy of the European Union, particularly with regard to Iran. I am interested to know how the Council assesses Iran, but also the other countries which are being accused by the Americans of state support for terrorism. In my opinion, this will be an important issue in the time to come, also in connection with the fresh debate on the military superiority of the United States and the military weakness of the European Union.

Souladakis
Mr President, as the last Member to speak in today's debate, it appears to me that there has been an unusual degree of unanimity, accompanied both by concern and a determination to bring about some sort of happy ending. Are we really in the worst stage of the Palestinian crisis or has the tragedy risen to its climax, to be followed by catharsis and a way out?
Without wishing to judge, we must admit that Sharon's policy has even made victims of the Israelis: he has painted himself into a corner with a no-win policy. Perhaps Sharon dreams of a final solution to the Palestine problem, to complete the circle of one of the darkest periods in the history of Europe. But America must take its share of the blame for failing to understand that supporting no-win policies basically undermines its own policy and role.
Are we Europeans merely bystanders here? No, we are not. I believe that the proposals made by both Commissioner Pattern and the High Representative, Mr Solana, and everything else said during the debate, are very serious proposals with the potential to become practical policy. Nor do I think that we, the European Union, are mere bystanders doomed, like Sisyphus, to roll the boulder to the top of the mountain and then watch others toss it back over the edge.
We must, however, also turn our attention to other matters because now we have a crisis in the Middle East and tension on the borders of the European Union. And then we have another crisis within Europe. The Balkan crisis. In this sense, Mr Solana was right to comment on the state of flux around Albania, around Kosovo, around Montenegro and the area in general, where there is not so much a fragile equilibrium as an unstable equilibrium, which is far worse. The success of any endeavour which, in the Balkans in particular, has been undertaken mainly by the European Union, must be based on - and we must insist on - a fundamentally political solution, because that is where, in the final analysis, we shall be judged on our ability to manage crises peaceably and bring about political results.

President
 I should just like to place on record our gratitude to the Spanish President-in-Office of the Council, Mr Ramón de Miguel, for being here for the entire afternoon to listen to this debate. Frequently that is not the case in these debates.

Solana
Mr President, I will try to be brief and to start by thanking you all - those who are here, those who have left - very much for your support for our efforts to bring peace to an area which, as I said at the very beginning, is geographically close to us and also very close to our hearts, minds and values.
I would stress once again that the difficulty of the problem is not the absence of a mechanism to provide a solution to the crisis. We already have the Mitchell report, which contains the steps to be followed, and it has been accepted by both sides. The problem is not that we do not have rails on which the train should be travelling but that we have not been able to get the train out of the station. The train cannot leave the station until the requirement of a seven-day period of complete calm has been fulfilled. But what happens? When you set seven days of complete calm as a precondition, you can always find somebody who is not for the peace process and who, at the last minute, can engineer a catastrophe. Therefore, you are back to square one. That has happened on a couple of occasions. This manner of doing things hands the initiative to the most radical people and takes it away from the moderates. That is the problem we have at this point in time.
Let us hope that the modest beginnings of conversations - I would not call them negotiations between the two sides - held right now, yesterday, tomorrow, maybe the day after tomorrow, maybe at the beginning of the week, will produce at least a change in the way they handle the crisis, by not placing the solution in the hands of those who do not want the process to move forward.
I have not received many questions. Therefore I am not going to respond to the very interesting remarks you have made. At least 90% of your statements have been supportive.
Two questions have been put very clearly and I would like to answer them before I make my final remarks.
On the question by Mr Menéndez del Valle regarding Karine-A, I do not have the intelligence on which several countries have based their statements. Several countries - some are members of the European Union - state that their intelligence has established a link. Whether it is a state-to-state or state-group-to-state-group link is an open question. But there is no doubt that some kind of link exists between the Iranian people and some Palestinians.
The second question I would like to answer is from Mr Brok, although he is not here. This joint effort is being carried out every day on the ground by representatives of the European Union, of the United States, of the Secretary-General of the UN and of the Russian Federation. They work together every day. I would remind you also that we - that is, I, Mr Powell, Mr Ivanov, Mr Koffi Annan - meet regularly to deal with this issue collectively.
We need to be tenacious and persevering. We also need a change in both societies, and not only in the authorities that lead the countries. Those societies have indeed changed very profoundly in the last few years. Israel has changed. The strong, broad-based peace camp there has not disappeared, but it has been reduced.
The same thing has happened on the other side. Frustration has created a sentiment that the peace camp cannot bring about peace in a reasonable period of time. That lack of trust and of confidence between both sides was not present before. I remember very well the relative friendship in Oslo between Arafat and Peres and between Rabin and Arafat. That has disappeared. We have to do something to reconstruct society vis-à-vis society and we, as Europeans, have a tremendous amount of work to do there, to bring these societies together, because they will have to live together. Whatever we can do through this Parliament, through the institutions, through the NGOs, we must do.
I would like to tell you two little anecdotes, one from a very good friend of mine who was in the peace camp in Jerusalem. The other day he told me that he would not dare send his daughter and his son to school in the same bus. That is a dramatic and profound change in the heart and in the mind of somebody who would otherwise be a fighter for peace. On the other side, on the Palestinian side, you go to a hospital, you talk to a paediatrician and he tells you how a little boy has been killed. This is a terrible blow to trust and confidence among people. Therefore we have to work also with societies. We have to engage societies, universities, schools, doctors, etc. to impress upon them that they have to live together and that Europe will be behind that sentiment of reconciliation. That is something we have to do.
I will conclude by recalling a beautiful phrase from Yitzhak Rabin who, without any doubt, was the architect of the Oslo process, together with Shimon Peres. He used to say something that is still valid. We have to fight against terrorism, as if there were no negotiations, and we have to negotiate as if there were no terrorism. That is the approach we have to rally around today. It is necessary to continue the negotiations, to continue talking, to continue moving the political scene - the centre of gravity has to be politics. Until they put politics at the centre of gravity, it will be very difficult to move the process forwards.
We can be proud of what we as Europeans are doing. We do not have the capacity to solve the problem, but we can move in the right direction as soon as possible and aim for peace. This is not a question only of values. It is part of our history, no doubt about that, but it is also part of our future, the future of this European Union, of the countries in an enlarged European Union and of the countries of the Mediterranean and the Middle East, which are part of our family.

President
Pursuant to Rule 37(2) I have received seven motions for resolution to wind up the debate.
The debate is closed.
The vote will take place on Thursday.
Several colleagues - Mr Cohn-Bendit, General Morillon and some others - made a number of suggestions as to initiatives Parliament might take. I am very open to working with the Conference of Presidents and colleagues on those. Last week I had a very productive private meeting with Ambassador Moratinos to seek his advice as to how best to move some of these ideas forward. We will talk about that in the appropriate forum.

Vertical agreements and concerted practices in the automobile industry
President
 The next item is the Commission communication on vertical agreements and concerted practices in the automobile industry.

Monti
Mr President, it is my pleasure to make this - albeit brief - presentation of the draft motor vehicle Block Exemption Regulation, which the Commission adopted this morning. Parliament is aware of the relatively severe practical limitations of the current Block Exemption Regulation, which is due to expire next September. It is not sufficiently beneficial for consumers, particularly where they wish to exercise their right to a single market. Moreover, the rules currently in force hinder the development of new methods, including Internet distribution; lastly, access to technical information for independent repairers needs to be improved too. We have therefore put together this Block Exemption Regulation, which the Commission has adopted today, and I would like briefly to outline its main points.
The basic line underpinning the regulation is that the new system must be more stringent than the existing regulations and must allow greater competition on the sales and after-sales markets. What are the main characteristics? Firstly, as regards the sale of new vehicles, flexibility and freedom to choose are the draft' s key points. When they select their distributors, vehicle manufacturers can choose between a selective distribution system and a distribution based on territorial exclusivity, but they can no longer combine the two systems. Both systems allow a vehicle manufacturer to guarantee that the members of its distribution network are qualified and that its distribution network covers all the areas of Europe, thus ensuring total coverage of the territory.
In both cases, the rights linked to the single market will be much, much better safeguarded than at present. In an exclusive distribution system, distributors will be assigned to a specific geographical area such as a city, within which no other distributor will be permitted to open a showroom or carry out sales activities. An exclusive dealership may, however, sell to any potential buyer that approaches its showroom. This also applies to independent resellers, to those known as grey resellers. These resellers could be supermarkets, for example, and they would exploit the price differentials to buy vehicles in countries where the prices are lower and then sell them in Member States where prices are higher, thus helping to create a genuine single market.
If, on the other hand, manufacturers opt for selective distribution, the distributors can advertise and send out customised mail shots and e-mails to consumers throughout Europe, even visiting them in person. Consumers could, however, still encounter difficulties in dealing with a dealership from another Member State, particularly as regards simple, direct contact with the foreign dealership, payment of invoices and agreements regarding the delivery of the vehicle. We therefore deemed it necessary to adopt a more radical approach in order to bring about greater integration of the markets, making it genuinely possible for consumers to buy vehicles abroad.
A vehicle distributor must be able to open sales or delivery outlets closer to consumers' places of residence, including in other Member States. On a practical level, this means, for example, that an Amsterdam Volkswagen dealer could open a showroom in the United Kingdom and sell Volkswagen Golfs there at the Dutch retail price, which is 23% lower than the British price. This, of course, would create the necessary market conditions for reducing the currently considerable price differentials of motor vehicles in the European Union.
Then consumers are demanding multi-brand dealerships. The draft regulation makes multi-brand selling much more simple. The only permissible constraint is that the different brand models are displayed in different areas of a showroom so as to avoid confusion between brands. This display method is already used in car showrooms and has proved universally satisfactory.
Moreover, the draft regulation seeks to reorganise the existing relationship between sales and after-sales services, allowing specialisation. Distributors will be able to opt to provide after-sales services themselves, as dealerships currently do, or they will be able to subcontract to one or more authorised repairers. These repairers must observe all the quality requirements set by the vehicle manufacturers.
In addition, block exemption makes intermediaries' work much easier: one example is that of Virgin Cars, which buys vehicles on behalf of consumers and will now be able to find the best deal for consumers more easily.
All these factors give distributors more room for manoeuvre to organise their activities on the basis of market conditions, exploiting new sales opportunities and thus consolidating their independence from manufacturers.
Another way to reduce dealers' dependence on manufacturers is by laying down the obligation for manufacturers to give sufficient grounds for deciding to cancel distribution contracts. If the distributor does not agree with the grounds given, it can have recourse to a mediator or a court. Moreover, the Commission has decreed, through this draft regulation, that a reasonable period of notice must be given before the cancellation of a contract, in most cases two years.
All these measures ensure that distributors can make full use of the new opportunities offered to them by this draft regulation.
I would now like to say a few words on after-sales services, which are also extremely important. The new draft regulation seeks to ensure that consumers have a genuine choice and that they can have recourse to both authorised repairers and independent operators. In the interests of the safety and reliability of all vehicles - we have placed great emphasis on this objective - we have to ensure that all operators can compete with each other in all sectors without this affecting the quality of the service provided, which must continue to be of the highest level.
The new regulation allows all vehicle manufacturers to set quality requirements which must be respected by all repairers who wish to be authorised repairers. Manufacturers can therefore guarantee that the members of their network comply with high quality standards. This avoids foreclosure of these markets as new operators could now be designated authorised repairers, provided, of course, that they are prepared to observe the requirements set by the vehicle manufacturers.
The proposal also lays down the benefit for dealerships whose contract has come to an end of being able to continue to operate as official dealerships of their brand for as long as they satisfy the quality requirements. The general level of technical skill on the market is thus increased and a substantial Europe-wide network of official repairers is maintained. This will help to bring higher quality of service and greater road safety. Moreover, we can expect the proposal to have a positive impact on employment and small and medium-sized businesses.
The proposal seeks to make it easier for independent operators on the after-sales market to compete. In view of the increasing complexity of motor vehicles, it is important for independent repairers to have better access to all the necessary technical information, including diagnosis devices, equipment and training. Any discrimination between official repairers which are part of the network and independent repairers is therefore unacceptable. The proposed changes also encourage the use of spare parts which are cheaper but of equivalent quality, making repair work less costly.
I would like to end, Mr President, ladies and gentlemen, by focusing on the procedure. The next stage in the procedure is consultation with the European Parliament and the Member States and the publication of the draft regulation in the Official Journal. This will allow the Commission to receive comments from all the interested parties before adopting the final regulation. The whole process should be concluded before next summer.
I am especially looking forward to giving a more detailed presentation of the draft regulation to the Parliamentary Committee on Economic and Monetary Affairs on 19 February and to continuing the fruitful dialogue already underway between the Commission and Members of Parliament, particularly Mr Konrad, who is your rapporteur for the subject, and the Chairman, Mrs Randzio-Plath.
Mr President, we have addressed a complex subject: a subject which is also extremely important, practical in nature and has wider significance. If we want the European citizens genuinely to identify with European integration, we cannot afford to let such a key element of the single market as that in motor vehicles to continue not to be a single market, for it would be unfair to the consumer.

Konrad
Mr President, Commissioner Monti, ladies and gentlemen, many thanks to you first of all, Mr Monti, for setting this proposal before Parliament. We very much welcome the fact that this proposal's first outing has brought you to Strasbourg, and this is much appreciated.
As became clear during discussions in the Committee on Economic and Monetary Affairs, I welcome many points of this proposal, including those on the sale of more than one make of car, original spare parts, access to technical information, and liberalisation as regards the separation of service and sales, but I have a query about how freedom of establishment within the internal market is to be regulated. We in Germany have a regulation entitled the Group Exemption Regulation, which states that a regulatory framework should continue to exist, subject to a time limit. That is something I welcome. The content, though, amounts to liberalisation if all it says is that individual dealers may be restricted at national level but entitled to set up as many subsidiaries as they like within the EU internal market. This modifies these rules and makes a nonsense of them. It will create problems for us and we must discuss this. Such is my first important question in this context.

Whitehead
Mr President, there is much to be welcomed in the Commissioner's statement, in particular its acknowledgement of the role of the grey market in bringing prices down, the use of the Internet, car supermarkets in the proper trade in spare parts and servicing.
There is one question I have to ask. It looks as if in different national markets exclusivity can be maintained in a position which could be anti-competitive. How wide, in a given national market, could these exclusive deals with the dealer networks remain?

Harbour
Mr President, I should also like to thank Mr Monti for coming to Parliament today and making a very clear statement on a very complex issue. It would have been very helpful if we could have had the text in advance, but I understand and hope it will be available very quickly.
I should like to raise two points with him. What concerns British consumers - and much of it is addressed in his proposal - is clearly the question of price. Does the Commissioner see a role for putting price bans and price guarantees in the regulation so it is reviewed after a certain period to ensure that prices are converging? That would give a clear signal about the direction he wants to go.
The second issue concerns freedom of dealers and their ability to invest. He has moved substantially in the right direction but I am concerned, in the example he gave, about the ability of a dealer to Holland to go and invest and set up a dealership in the UK. How is that going to protect dealers who already have a substantial investment? Would it not be much better for them to be able to go and buy cars in Holland and sell them to consumers there, rather than have what could be a random solution which would actually dissipate the impact of the dealers' independence that he wants to give them?

Monti
I hope there will be further occasions, in the Committee on Economic and Monetary Affairs, for example, to go more into the detail. What seems to me links the first two speeches is a concern that indeed would be there if a location clause could exist. One distinctive feature of today's Commission decision on the draft regulation is that the location clause is not there at any percentage level. This should go a long way towards alleviating those concerns.
As regards making sure that prices converge, this is one of the objectives of the overall proposal. As you know, we keep regular track of the convergence or non-convergence of prices. We produce a report twice a year on the price of different models in the different Member States. That will be a powerful means of gauging the consequences, among other things, of this new regulation.
We have resisted the temptation to become price regulators and to link specific competition arrangements for distribution to the size of the price differentials. It is not for us to say that this price differential is acceptable, but that this plus one is not. We are working on the roots of the phenomena, so that price convergence should develop.
As for the Anglo-Dutch example, my answer briefly is that both modalities would be allowed, namely the setting up of dealers' outlets in the other countries and unrestricted trade without changing the location of the dealers.

De Rossa
Mr President, on a point of order: before you ask the first speaker to make a contribution, I indicated that I wished to be added to the list.

Riis-Jørgensen
Mr President, I have a short question for the Commissioner. I was the rapporteur seven and a half years ago when we first discussed this project. I am pleased to see that the Commission has moved so far, but I still have a question. Maybe I am too cynical and too liberal, but why do we need to have rules? Why cannot we just use the Treaty as it is? Why do we need to have special rules for car dealers and for car sales? So far as I am concerned we could use the normal competition rules.

Cushnahan
Mr President, I support Commissioner Monti's initiative and I am pleased that his Commission colleagues are also supporting him. Certainly the current rules benefit car manufacturers and dealers and disadvantage consumers. I see this particular proposal as upholding the principles of the single market, and I am convinced that it will lead to cheaper cars for EU citizens.
I have one major concern and that concerns my own country. Is the Commissioner aware that the vehicle registration tax in Ireland will add anything between 50% and 100% to the price of cars? So an initiative like this will be virtually meaningless unless the Commission is able to persuade the Irish authorities to reduce the vehicle registration tax. I know tax is a national competence, but we are moving towards harmonisation of tax and I would therefore humbly request that the Commissioner approach the Irish authorities to seek a reduction in the vehicle registration tax, so that Irish citizens can enjoy the same benefit as their continental counterparts.

McCarthy
I should like to congratulate the Commissioner on steering this package, which was not entirely unanimous, through the Commission so skilfully. The same problems exist in the UK: 52 models examined in the UK are still more expensive. My question is the same as Mrs Riis-Jørgensen's. If we have the partial reforms that the Commissioner is proposing here today, and we carry those out in opening up the market to grey trade supermarkets, in particular Internet sales, is it not the case that the block exemption becomes obsolete, and when will the day be when we actually get rid of these rules?
Finally, Commissioner, in 1999 I asked you a question in response to which you told me that cars in Britain would be cheaper if Britain joined the euro. Is that still your position, and what difference do you think that would make in terms of price differentials?

Monti
I realise, not without relief, that I am not the Commissioner responsible either for taxation or for monetary union, but merely the Commissioner for humble competition policy which, nevertheless, has a role to play and tries to play it vigorously - with the support of Parliament, which is apparent once again today.
On competition proper, why not be even more liberal and refrain from applying sector-specific rules? Well, we have looked into this and a detailed analysis has brought us to the following conclusion. If we did not have specific rules for this industry competition-wise, the industry would fall under the application of the block-exemption regulation on vertical restrictions. That would have two main drawbacks. It would allow the industry to use very similar distribution agreements to those permitted at present, on which our evaluation report was pretty negative. Also applying the general regime would not be a satisfactory means of improving competition on the after-sales market. Independent repairers could be foreclosed from the market as a result. This is clearly something which could not be accepted.
Furthermore, all motor vehicles would most likely continue to be distributed through the same type of selective and exclusive distribution systems if no new regulatory regime was introduced.
Last, but not least, the general regime does not offer provisions which are crucial in the car sector to ensure benefits for the consumer. This is the case with the so-called availability clause, which allows, for instance, a British consumer to buy a right-hand-drive car in a left-hand-drive country.
So, although we are in principle against sector-specific rules, as you have seen with the telecom package with my colleague, Mr Liikanen, we have moved some way towards the adoption of general competition rules. But here the particular nature of the situation has led us to firmly believe that a sector-specific rule would be more appropriate.
As for supermarkets, for example, I can only say that, during the lengthy consultation process undertaken by the Commission, no supermarket or association speaking on its behalf directly expressed a desire to sell cars on a regular basis.
On the other hand, it would not be true to suggest that the draft regulation adopted today gives no business opportunities to supermarkets. A supermarket could become a mono- or multi-brand sales dealer if it satisfied the criteria laid down by the manufacturer. Similarly, it may act as an intermediary for consumers.
Finally, on the two issues which do not relate to competition but have a bearing on prices, tax and the euro, I will not go beyond the answer I gave on the issue of the UK, cars and the euro. As for taxation, the honourable Member underlined that this is a national responsibility and it is tempting, but perhaps not entirely consistent, to argue that this is to be jealously guarded as a national prerogative and yet ask the Commissioner to lobby actively for harmonisation. I will, however, pass this message on to my colleague, Mr Bolkestein.

Caullery
Mr President, Commissioner, everyone knows today that cars are complex and highly sophisticated products.
If you now allow dealers to subcontract maintenance and repairs, an entire continuous chain of responsibility will be broken. This should cause us to be concerned for the consumer. How, in your opinion, Commissioner, will car manufacturers be able to honour their guarantees, ensure compliance with quality standards and, if necessary, recall vehicles if they now have only an indirect link with subcontractors?

Naranjo Escobar
Mr President, Commissioner, I believe that the debate does not concern either the Commission' s final objectives or its principles in relation to this proposal, but rather the possible unwanted consequences which may result from the application of the future regulation of the sector.
Therefore, given the removal of the localisation clause, I would ask you, Commissioner, whether you think there should be a transitional period for small distribution companies, bearing in mind the investments made or under way in this sector, which have a great influence on the level of employment.

Berenguer Fuster
Commissioner, I congratulate you on the presentation of this document which is the last of the raft of rules relating to vertical restrictions.
I would like to make some comments. You have given the example of the distributor in Amsterdam who could open a branch in London. Let us bear in mind that distributors are dependent - as always, but even more in this case, given the quantity of the investments to be made - on manufacturers, and that contracts do not extend for very long periods. It is true that, in the event of a resolution, they could go to tribunals, but I believe that, in the majority of EU countries - at least, Commissioner, in yours and in mine - the indefinite extension of cases would lead to the bankruptcy of distributors.
Therefore, given that selective distribution is allowed, I would ask you whether, in order to achieve equality of prices between the different countries, it would not be more sensible, for example, to restrict this prohibition of the selective vendor selling exclusively to the final consumer or to other members of the network. That would favour parallel importers who would contribute to lowering prices.

Monti
Motor vehicles are indeed, as Mrs Caullery says, complex and sophisticated. That is one of the reasons why we decided to introduce sector specific rules rather than fall back on the general regulatory framework for vertical restrictions.
I would stress the following, however.
The proposal in our view improves and does not undermine the safe and reliable servicing of cars. It does not make it more difficult for car manufacturers to fulfil their obligations. The repairer to whom a dealer may subcontract the service if he or she so wishes must be entrusted by the manufacturer with the task of providing the services which dealers provide today. To put it bluntly, the only difference between an official dealer who provides after-sales services today and an official repairer in the proposed regime tomorrow is that the latter may not have a showroom from which to sell cars. Technical expertise, training, tooling, and service standards will remain those decided by the manufacturer and applied throughout its network. In these circumstances manufacturers are indeed in a position to comply with their obligations.
Mr Naranjo Escobar asked whether there will be undesired consequences and whether it would not be advisable to have a transitional period while keeping the location clause for the time being. The time frame is already sufficiently structured because, after consultation, the final Commission regulation will be adopted before the summer of this year. It will probably contain a clause saying that it will be fully effective from October 2003 and we have taken into account also the situation of the existing dealers by introducing in the draft regulation an explicit notice for the termination of the contract. At any rate it is clear that what we have adopted today is a very deeply thought through and structured draft regulation but there is still to be further consultation and if we see important and persuasive arguments coming up in the consultation of course we will take them very seriously into account.
In reply to Mr Berenguer Fuster, the Commission allows selective systems for many products in line with the policy it applies: the draft regulation neither imposes a particular distribution format nor prescribes in detail how agreements should be drafted. It recognises that other vertical restraints agreed between the parties may trigger economic efficiencies which lead to optimal investment levels by manufacturers, official networks and independent repairers.
If I can conclude with a slightly more general point, with this proposal we do two things. On the one hand we bring the forces of competition more vigorously into play. There is an injection of additional competition. On the other hand we free up the choice of modalities by means of fewer rigidities and more flexibility.

Manders
I should like to thank the Commissioner for the clear account, and I am of the opinion that what is being proposed can optimise and improve the internal market principles. To that extent, I am in support of the proposals.
The Anglo-Dutch example which the Commissioner quoted is related, inter alia, to the additional taxes which are being levied in each Member State. I know that taxes fall within the national competences, but I believe that the Commission is entitled to intervene if competition and internal market regulation are hindered. You state that you yourself are not responsible for taxation, but it is always the Commission that does the talking. If I therefore address the Commissioner, I assume that, formally, I am addressing the Commission and not specifically the Commissioner. I thus assume that you can take this message with you, as my Irish fellow MEP pointed out.
In addition, I should like to ask why it is not possible to take a registered car from another Member State to the country where you live. In this way, far better use could, in fact, be made of the internal market.

Garriga Polledo
Commissioner, you have already heard many Members who believe that the approximation of prices must also be achieved by means of fiscal harmonisation, possibly more than by means of this regulation.
The current regulation affects 100% of the distribution contracts. Nevertheless, you are establishing very tough limitation clauses in relation to the definition of a retailer.
Do you not believe, Commissioner, that this new regulation could create legal uncertainty amongst dealers, which may also endanger the continuity of the investments they are making and, also, to a certain degree, the employment of these dealers throughout the European Union, who number more than one million people? Are you not rather afraid that, with this policy of opening up competition, the large-scale distributors may benefit to the detriment of the small dealerships?

De Rossa
I will be brief. I want to welcome the announcement by the Commissioner. We will have to wait and see how it actually works in practice. The companies we are dealing with here are quite powerful.
Does the Commissioner have an understanding with Member States that they will not top up their vehicle taxation as a means of recovering income lost as a result of lower prices, thereby wiping out the economic benefit to consumers?
In addition, would it be possible to make displaying or advertising pre-tax prices along with post-tax prices obligatory? Generally we have post-tax prices advertised.
Finally, what impact, if any, would this have on guaranteeing on a Europe-wide basis the car which may be bought in another state?

Rübig
Mr President, the Committee on Industry, External Trade, Research and Energy considers it an important question as to what effects this will have on technical legislation, specifically with regard to on-board-diagnostics or the various interfaces. How, too, are we to ensure actual adherence to working standards and norms? Is it envisaged that there will be some sort of third-party certification, with neutral third parties checking that the standards have actually been kept to?

Monti
In this area some action concerning taxation is important. The Commission has a role to play in this. I would remind you that the Commission's position for the Nice IGC was that there should be a shift to qualified-majority voting in those areas of taxation which are crucial for the functioning of the single market. I would not expect Member States to top up with higher taxes. They would face constraints in doing so.
Will the new system bring about legal uncertainty for dealers? I believe not - on the contrary. We are also confident of avoiding the sometimes-feared economic consequences for dealers and employment. The draft regulation offers former dealers the opportunity to become official repayers within the manufacturers' network and to locate where they wish. At any rate we already know that, this draft regulation aside, several manufacturers are planning to restructure and reduce the number of official network dealers in their systems.
As to the European warranty, it remains in the proposal. Networks have to provide warranty, irrespective of where a car is bought.

President
 Thank you very much for your dedication and brevity, Mr Monti.
The debate is closed.

Question Time (Commission)
President
 The next item is Questions to the Commission (B5-0002/2002).
We are going to change the order of the first two questions in accordance with the Members and the Commissioners.
Part I

President


Antonios Trakatellis
Question No 39 by (H-0030/02):
Subject: Nuclear safety: Bulgaria's failure to comply with EU partnership agreement and agreements to decommission reactors at Kozloduy With regard to the decommissioning of units 1 and 2 of the nuclear plant at Kozloduy by the end of 2002, Mr Kovachev, the Bulgarian Energy Minister said on 8 January 2002 that his country will not be honouring its commitments to close down and dismantle the dangerous, old-style reactors, as provided by the revised partnership agreement between the European Union (EU) and Bulgaria, and the Sofia Memorandum, which Bulgaria signed with the Commission in 1999.
How will the Commission ensure that the commitments contained in the partnership agreement to decommission units 3 and 4 will be honoured, and what stage has been reached in the decommissioning of units 1 and 2, given that all four units are unsafe and cannot be upgraded at reasonable cost? Can Bulgaria ask for the opening of negotiations on the energy chapter under the pre-accession process when it refuses to honour its commitments to the EU on nuclear safety and has not drawn up a new energy strategy to bring it into line with free market rules (production and pricing) and the opening of the market to competition?

Verheugen
Mr President, ladies and gentlemen, the Commission is unable to confirm the information according to which the Bulgarian government has announced its intention not to abide by the agreements entered into in respect of the decommissioning of the Kozloduy nuclear power station, nor can we attribute such a statement to the Bulgarian Energy Minister, Mr Kovatchiev. Differing opinions have in fact been expressed in political circles in Bulgaria during the current public debate on the closure of the Kozloduy nuclear power station - specifically of its units 1 to 4.
Information available to the Commission indicates that, in a statement on 10 January 2002 on the early decommissioning of the four reactor blocks at Kozloduy, the Bulgarian Energy Minister mentioned 2008 or 2010 as possible dates for the closure of Blocks 3 and 4. The Bulgarian Energy Minister's statement did not refer to Blocks 1 and 2.
The situation is that, in the agreement I reached with the Bulgarian government in 1999, we agreed on the decommissioning of Blocks 1 and 2 by 2002, that is this year, and that we would have discussions with the Bulgarian government on the decommissioning of Blocks 3 and 4 in connection with the revision of that country's energy strategy and that a decision on this would be reached before the date originally envisaged. The Commission made it clear that it understood this to mean that 3 and 4 would be decommissioned by 2006 at the latest. I must, though, say quite clearly that Bulgaria has not yet come to a formal decision on this matter. This means that we cannot, of course, complete the energy chapter of negotiations with Bulgaria as long as we do not have a definite decommissioning date set down for Blocks 3 and 4.
The agreement I reached with the Bulgarian government at that time constitutes part of the European Union's common negotiating position in the energy chapter with regard to Kozloduy. It is clear, therefore, that this chapter cannot be completed without compliance with the content of this agreement. The matter is clear to that extent, and, on the Commission's behalf, I now repeat that the decommissioning of Blocks 1 to 4 of the nuclear power station at Kozloduy in accordance with the agreement entered into is an absolutely indispensable requirement for the conclusion of accession negotiations with the Republic of Bulgaria.
Work has begun on the decommissioning of Blocks 1 and 2 and the right administrative and technical conditions are in place. As an international fund stands ready to finance these operations, I am working on the assumption that everything will go according to plan. I do not share the concern expressed by some that the decommissioning of reactor Blocks 1 to 4 will result in major economic difficulties, particularly as regards competitiveness. The Commission has calculated that Bulgaria has considerable over-capacity in energy production, and, as a new nuclear power station of modern design is being built, any loss to Bulgaria will be compensated for, and any problems are, in our view, perfectly capable of being surmounted.
To sum up, we have not the least indication that Bulgaria will pull out of the commitment it has made. I would also like to expressly underline that the Bulgarian Prime Minister, at my most recent meeting with him, quite expressly confirmed to me that his government stands by the undertaking given by its predecessor.

Ôrakatellis
Commissioner, thank you for your reply confirming that reactors 1 and 2 will be shut down this year, in 2002, that work has in fact already started, and that reactors 3 and 4 will be shut down by 2006 at the latest, as originally agreed, as the President of the Commission, Mr Prodi, has assured me in writing and as you have stressed repeatedly.
I should like to ask you to keep up the pressure here because there will always be uncertainty about the security of supply. I should like to know exactly what the Commission has done about the single, interconnected operating system which could be used to exchange energy so that we do not have countries wondering what will happen now that reactors 1 to 4 at Kozloduy are to be shut down and whether or not they will be short of energy?
My second question concerns the loan granted to Bulgaria to bring reactors 5 and 6 up to Western safety standards. What has been done about reactors 5 and 6?

Verheugen
In order to avoid misunderstandings, I have to again tell you, Mr Trakatellis, in the clearest terms that there is as yet no binding promise by the Bulgarian government that Blocks 3 and 4 will be decommissioned by 2006; there is, rather, an agreement that the decision on decommissioning these blocks will be taken earlier than the Bulgarian government originally planned. The Commission stated in this communiqué that it understands that closure will take place by no later than 2006. Formal notification by the Bulgarian government is still required, but it is certain that that is on its way. Moreover, Mr Trakatellis, I have to tell you that energy provision in Bulgaria is a matter for the Bulgarian government.
Nor is the issue of energy efficiency in the Balkans and Bulgaria's position in the energy market a matter within the immediate remit of the Commission. I can only reiterate our estimation that the decommissioning of Blocks 1 to 4 will not result in an energy shortage in Bulgaria, where there is, on the contrary, substantial overcapacity.
I entirely agree with you that it is a matter of absolute necessity to inform the Bulgarian public in precise terms of the need for decommissioning and the measures that are to accompany this, as in fact - as you are no doubt well aware - the people of Bulgaria do not, as a whole, understand this requirement by the international community. We always behave as if these things were self-evident, and so I am grateful to you for addressing this point. The overwhelming majority of Bulgaria's population does not see it as at all self-evident that the country's largest and most important power station should be decommissioned under pressure from the international community.

Rübig
Mr President, Commissioner, I would be interested to know to which technical norms and standards the Commission actually refers when deciding which blocks are dangerous and have to be closed down.

Verheugen
Mr Rübig, the Commission did nothing of the sort, and indeed it cannot. This was a political condition for the opening of negotiations with Bulgaria, one that was laid upon us by the Member States. This political condition was formulated by the Member States in consequence of an assessment carried out by the industrialised States as early as the beginning of the 1990s, in the course of which the safety of nuclear power stations in Eastern Europe was subjected to examination. This determined which of the nuclear power stations were seen by the Western industrialised States as incapable of being retrofitted at reasonable cost. I am, at the moment, unaware of what standards the States applied at the time. If you are interested, though, I would be happy to initiate the relevant research on your behalf. The Commission did not set any enquiries in motion, but performed its political function of achieving a result with the Bulgarian government as regards compliance with a political condition for the beginning of negotiations.

Flemming
I congratulate you, Commissioner, on always being allowed to make statements on such scintillating subjects, first Temelin and now Kozloduy. You must be a very happy man. May I ask how much a decommissioning of this sort costs? What happens to the contaminated materials? Who pays for it all? How long does such decommissioning take? What actually happens if there is some sort of mishap before 2006? Who pays then? Who bears the costs?
Following on from your answer to Mr Rübig's question, do you not also believe that we are yet again seeing how urgently necessary it is that we should have common European standards rather than always arriving at decommissioning dates by a process of rough estimation? Blocks 3 and 4 in 2006 - that is what we have said now. Should we perhaps not make that 2004 or 2003? What happens then if something goes wrong in 2005?

Verheugen
Madam, much as I regret it, the Commission bears no responsibility for the safety standards at nuclear power stations anywhere in the world, not even in Bulgaria. Even if I were able to answer your technical question, I would not be permitted to. Responsibility for the operation of the Kozloduy nuclear power station, for any safety problems connected with it and also for any accidents that might occur, is borne exclusively by the operator, that is, in this instance, the Republic of Bulgaria.
I must also make it clear that the Commission is not in a position to take on any responsibility as we are not in a position either to have any influence on how this nuclear power station is operated. I have no personal view on how safe or dangerous this nuclear power station is. I am quite happy to give you detailed information on the technical processes involved as soon as such information is available to me. We have to work on the assumption that the time required to complete a project like the decommissioning of a nuclear power station, is to be reckoned in decades rather than years. That means that we are dealing here with a very long-term operation, which may, under certain circumstances, also involve long-term commitments or burdens on the Community budget.

President
Thank you very much, Commissioner.
As the author is not present, Question No 38 lapses.
We invite Mr Liikanen to take a seat in the front row.
Part II Questions to Commissioner Liikanen

President


Concepció Ferrer
Question No 41 by (H-0054/02):
Subject: Improving the regulatory environment for SMEs The internal market is an ideal environment in which European undertakings can conduct business. However, some important obstacles to the free circulation of goods and services continue to hamper their operations.
Given the need highlighted at the Lisbon Summit and in the European Charter for Small Enterprises for an improvement in the regulatory environment, further action in this regard is required. What steps is the Commission taking to that end?

Liikanen
Mr President, the internal market has been of huge benefit to companies, but still more can be done. Progress in this area is being watched within the framework of the Commission' s Internal Market Strategy for Services, approved in November 1999. The Commission examines the Internal Market Strategy each year to evaluate the results achieved and suggest improvements. The evaluation was last carried out in April. One of the aims is to improve the operational environment for companies and special attention is paid to helping small enterprises in much of the action that is taken in association with this aim.
The Commission also monitors developments in the business climate for small enterprises with reference to the yearly report on the European Charter for Small Enterprises. The report for 2002 will be coming out in the next few days and will assess the action to help small businesses that the Member States and the Commission have said they are taking. The Conference of European Ministers responsible for SME policies to be held on 23 February in Aranjuez, in Spain, will be reporting on the conclusions of the report for 2002, and they will be submitted to the European Council when it convenes in Barcelona.
At this stage I might say that there has been progress. Progress has been made, for example, in such areas as access to finance and the exchange of good practice. In addition, in December, an SME envoy was appointed whose task it will be to step up exchanges with small and medium-sized enterprises and their representative bodies. He will work in the Enterprise Directorate-General and his job will be to act as liaison officer on issues such as opportunities for SMEs to acquire funding and exploit innovation as well as matters to do with competitiveness, better regulation, implementation of the internal market process, participation in EU programmes and how best to enhance consultation procedures.
Last year the Commission launched an initiative called 'Helping SMEs to go digital' . The aim is to make SMEs aware of the opportunities offered by information networks. Six events have been planned for this year in different Member States and there is to be a large-scale conference in Brussels.
The Commission' s work to improve regulation is also making headway. There have been a number of proposals to improve the situation, both in a White Paper on Governance in the European Union and in the Laeken communication on improving and simplifying the regulatory environment. The proposals relate to the whole lifecycle of Community acts. Under discussion are, for example, the need for more effective consultation with interest groups and civil society, an evaluation of Community action and costs, and a simplification of current laws. By no later than June the Commission will have put forward a proposal for a straightforward action plan to simplify and improve the regulatory environment, after the Community' s institutions and other interest groups have been heard. The Enterprise Directorate-General will be actively involved in drawing up this plan and drawing on the experience gained from the business impact assessment system and the test project connected with it. The conclusions drawn, as a result of this project, will be ready this month.

Ferrer
Commissioner, you have given me such a complete answer that I have few remaining doubts to ask you about. Nevertheless, I would like to insist that the measures he says are going to be adopted, above all in relation to the simplification of the regulations, be genuinely implemented and applied as quickly as possible.
Great declarations, great words and great policies are all very well for existing undertakings, but it is essential that those who - inspired by the entrepreneurial spirit which we are so keen to promote - decide to create a new undertaking, are not faced with obstacles and difficulties which prevent them from going ahead.
Furthermore, and in order that this policy may be truly effective, information on actions implemented by the Commission must reach the smaller entrepreneurs, a sector which very much needs it.

Liikanen
Mr President, I agree with the honourable Member that words are words and only actions are important. When our report appears this week on the SME Charter it will present a picture of what has been done in Member States. It is very important for the Commission that we are able to present this year a thorough impact analysis of all new legislative proposals and that we know what the genuine costs to companies are, and that we always consider what the most simple solution might be. I am prepared to go back over this matter with the honourable Member in minute detail. But I agree: deeds are what is most important, whereas words are only good for a very short while.

Harbour
I would like to pick up on the Commissioner's last reply and I am delighted that he is talking about thorough impact assessment. I would like to put it to him that at the moment impact assessments that we receive attached to Commission proposals in many cases are not thoroughly done, they are not looking at the full implications, they are not necessarily independent.
Would he agree with me that it is vital to have an interinstitutional arrangement for independent impact assessment so that when proposals come through this House and colleagues add burdens on business they are properly costed? Also, when the Council adds provisions to Commission proposals in common position, they should be properly costed too? Would he not share my view that this is the sort of bold proposal we want to see? I have to say that the proposals we have seen so far from the Commission on regulatory assessment are far too timid.

Liikanen
I share Mr Harbour's view that there is a lot to improve in the impact assessment. For that reason, when I took office I launched a project to create more solid methodologies for business impact assessment. The results of this work are ready now in February.
Alongside this, the Commission proposed at the Göteborg Summit the need for sustainable impact assessments, which means impact assessments that include economic, social and environmental factors. This work is now proceeding inside the Commission and is led by the Secretary-General.
I fully agree that we must have predictable accepted methodologies so that anybody can assess how we have come to these conclusions. The Commission is ready to open the debate on these issues and to appear before the respective committees, for instance, to discuss what we have learned in our business impact assessments. The Commission appreciates the importance of both business and sustainable impact assessments and the need to achieve them quickly.
Secondly, of course it does not mean that measures will not be taken if costs are incurred but we should at least try to assess the costs honestly and then an informed decision can be taken.

President
Mr Crowley arrived immediately before I gave him the floor. If you wish to ask your question, the Commissioner will reply.
Question No 40 by Brian Crowley (H-0025/02):
Subject: Improving the business environment in 2002 and creating an inclusive eSociety
Will the Commission outline its proposals for 2002 aimed at improving the business environment, including for small and very small businesses, and will it indicate its time-scale for bringing forward the promised new initiatives aimed at consolidating the move towards an inclusive 'eSociety' ?

Liikanen
The European Commission will publish within a week the annual report on the European Charter for Small Enterprises.
Through the annual report we monitor progress on the environment for small businesses.
The 2002 report evaluates actions reported by the Member States and the Commission in favour of small businesses. The conclusions of the report will be presented to the Conference of European Ministers responsible for SME policies on 23 February and submitted to the European Council.
As I have already said, the report shows signs of increasing political commitment and major progress has been made in the field of access to finance. Progress has also been made in exchanges of good practice such as cutting red tape in company creation.
As regards the efforts of SMEs to adapt their business practices to the global knowledge-based economy, the Commission launched last year the GoDigital initiative for SMEs as part of the eEurope Action Plan. In some countries this report has received a very positive welcome. We are organising campaigns throughout the European countries at the moment.
Before the end of 2002 a portal to provide SMEs with legal information, guidance and advice will be set up.
The Commission has also just today adopted a Communication on eEurope Benchmarking, where you can follow how SMEs are being connected and how broadly they use eCommerce.
This Commission communication highlights new challenges in relation to Internet usage: broadband is needed to stimulate new services; schools are connected but the Internet is not yet sufficiently part of the pedagogical process; governments online have to move towards full electronic transactions. The indicators include amongst others Internet penetration in business and the percentage of companies selling online.
While good progress has been made, the take-up of eCommerce is not as fast as expected. This confirms the relevance of actions such as GoDigital, but also indicates the urgent need to identify obstacles to eCommerce amongst especially small companies as well as consumers. eEurope should be continued beyond 2002 and shift its focus towards effective usage and availability of the Internet for all citizens and businesses.
The communication on the impact of the e-Economy on European enterprises contains proposals to deepen cooperation between all relevant stakeholders to develop a policy agenda for maximising the benefits of the e-Economy for European enterprises, taking into account the needs of SMEs. The Industry Council endorsed this proposal in December 2001 and invited the Commission and the Member States to intensify the debate on the e-Economy.
The Spanish Presidency has decided to launch a policy debate with Member States to agree future priorities for the promotion of the e-Economy in Europe and to address this topic at the Industry Council meeting in early June.
To this end it will be necessary to identify policy changes at national and European level to adapt to the needs of the e-Economy. These activities will be developed in close cooperation with the reflections and the preparatory work relating to the future of the eEurope Action Plan.

Paasilinna
Mr President, Commissioner, this electronic Europe project met with enormous difficulties when spectrum auctions started to be held. It resulted in bankruptcies, which are still continuing, and unemployment. What do you intend to do to prevent this from happening in the future, with certain Member States collecting charges against the general intentions of the e-Europe project - at the same time leading the sector into a wild downward spiral - and others not?

Liikanen
Mr President, last December - thanks to the European Parliament' s swift action - new legislation was passed on all electronic communication. For the first time it also contains a legal basis for spectra. It allows for the creation of what are now new bodies: a committee, to discuss long-term questions, and a working party, to consider the current administration. Now that we have a common legal basis and joint bodies, it will be possible to discuss common aims beforehand and coordinate action. This is obviously no guarantee that everyone in the end will choose the same approach, but I hope that we can at least agree together policies in an open and transparent way and that before the first State starts dividing up the spectra the rules will be known to all. The market will be able to act more wisely when it is known at least how things are moving in different regions of Europe. I believe that the sort of bedlam we experienced last time will not repeat itself, but it cannot always be guaranteed that common sense will prevail at all times.

President
 As the author is not present, Question No 42 lapses.

Malcolm Harbour
Question No 43 by (H-0042/02):
Subject: eEurope 2002 initiative The Spanish Presidency, in its published work programme, notes that the 'eEurope 2002 initiative will have to be relaunched with new objectives'. Can the Commission explain why a strategy launched only two years ago is now in need of a 'relaunch', indicate the reasons for the failure of the original strategy and outline the objectives that the new strategy seeks to achieve?

Liikanen
I should first of all like to thank Mr Harbour for keeping e-Europe high on the European agenda.
When we look back at the year 2000 we can see that the e-Europe action plan really rewrote the European political agenda. The idea was to set clear targets for the EU and Member States, clear deadlines and follow it up. Has this idea worked? I think it has. To give you a few examples: the telecoms package and unbundling the local loop. We would never have been able to imagine these rapid procedures without high priority being given to information society.
Internet penetration has increased. It was 18% in March 2000 and 38% in December 2001 - more than double. Nearly 90% of schools are now connected to the Internet. Today 90% of European enterprises have Internet access. We now have the fastest research network in the world. The start of progress in getting government on-line is well under way. A comprehensive overview is now available. It was accepted today in the Commission. I am happy to pass it on to Members of Parliament.
What are the new challenges? First of all, Internet penetration has risen sharply but is still very unevenly distributed across Europe. Schools are massively connected but still the number of pupils per on-line PC varies enormously. We must have more PCs at school per student.
Even though businesses are more and more connected the reorganisation of business procedures is only starting. Business consumer e-commerce is still rather small.
Governments have started enthusiastically to go on-line. Normally there is a question about presenting activities on their website. Real interactivity is still rare. All the interactivities give better services to citizens and increase the productivity of the public sector.
The Commission has not come to the end of its actions because technology moves quickly. Broadband Internet is now a real option. Broadband is the essential physical infrastructure of the knowledge society. Without broadband we will not deliver fully Lisbon.
Other nations have already made their choices for broadband. The Commission's report to the Barcelona Summit said: "Broadband Internet access will be a key factor for improving the performance of the economy. Broadband networks will form the backbone of an increasingly interconnected and integrated society. E-Europe should be continued beyond 2002 and shift its focus more towards effective usage and availability of the Internet."
The Commission is particularly happy that the Spanish Presidency shares this analysis and has put the launch of e-Europe 2005 action plan on its agenda. The first discussion on a possible new action plan will take place at the informal telecoms council in Vitoria in Spain on 22 and 23 February 2002. The Commission is ready to go into pro-dialogue also with the relevant committees in the European Parliament.

Harbour
I should like to thank the Commissioner for a wide-ranging reply and I note that two of the central achievements are those which Parliament has pushed through very strongly. However, my concern is not the work that he has done - for which I commend him very much - but rather, for example, the delays and problems that Member States are experiencing in transposing the electronic commerce directive, passed by this House with great speed. Similarly, I see that as regards copyright in the Information Society - another fundamental plank in the legislation that he does not mention - discussion is continuing on ideas for new levies on computer disks and other issues that will fundamentally hold back the development of the e-society.
Does he share my considerable concern that Member States do not appear to be taking anything like seriously enough the fundamental principles that he has enunciated and would he give us some indication that he will give positive vent to them at the forthcoming meetings? Will the Commission publish evaluation reports on both of these issues so that we in this House can put some political pressure on Member States to get on with it?

Liikanen
The two directives on electronic commerce and copyright are extremely important. It is the Commission's duty to ensure that Member States transpose them into their law. They are both within the remit of my colleague, Mr Bolkestein, but we are cooperating here and I am ready to contact him after Question Time.
On the matter of copyright, the Commission is organising a workshop in the next few weeks on digital rights management technologies. When content is sold on line it is very important to guarantee a system where the copyright holder can receive proper royalties for his production. New technologies like digital rights management are helpful there.
My personal wish is that this technology could result in more targeted methods to get proper revenue for copyright holders so that Member States would not need to go for these very broad untargeted solutions such as copyright levy.
Finally, on the follow-up of the Member States, there is often a problem that progress is piecemeal and there is not sufficiently strong coordination in Member States to guarantee that progress will take place in all areas. That will be one of the issues we will raise at the next informal Council and we will pass this challenge to European Council in Barcelona.

Paasilinna
Mr President, Commissioner, what does the Commission intend to do about the threat that the digital divide will increase, because it affects people who are also financially badly off? Secondly, the usage rate of Internet connections amongst us in Europe is low. What does the Commission intend to do about this? Thirdly, the development of content here in Europe is also slow. It is nevertheless the key to greater action in the spirit of e-Europe. How do you intend to tackle this?

Liikanen
All these issues are extremely important. I have just a few remarks.
Schools are well placed to bridge the digital divide. Through them we can guarantee education for all. In Europe comprehensive school systems still work. We can guarantee skills for everybody. When the Internet comes to homes via children we can avoid the divide from the start. But we must also look to the older age groups. Here, the combined efforts of the public sector in training, public access points which can be run by local communities, post offices and the private sector provide extremely important backup. Here I hope all Member States will take active measures.
As regards usage, we are now discussing flat rates in general. In America, higher usage is often explained by the fact that there are more flat-rate offers on the market, not only for broadband but also for narrow bands. We have not reached a final conclusion on this, but this question is being raised now, as we have seen a tail-off in demand for broadband in the form of ADSL and cable. Should that be a solution? I will reply to that after we have done some more internal work.
As for content, if the Internet is not in your own mother tongue it will be not the Internet for all. The Commission is now implementing its programme, eContent, which concentrates on multilingual and multicultural platforms in the content area. It brings together different operators from different Member States. There has been huge interest and it is doing fine.
The Information Society Technologies Programme is shifting attention towards applications. In the future the user will be at the centre. We have often put technology at the centre, but we must now put the user at the centre instead. Users are not looking for technology, but rather for content, services and applications. For that reason the attention of research is moving in that direction. The Commission supports these efforts.

Rübig
Mr President, the UMTS licences were auctioned for very large sums. What effect will that have on digital television licences? I believe that new jobs have been created precisely by these initiatives, which also involve very substantial investments. What view do you take of the development of risk capital in this field?

Liikanen
To be honest, Mr Rübig, last year was not an easy one for the risk capital market. The venture capital market developed very rapidly in 2000, then we saw the difficulties and it went down. At EU level, the European Investment Funds invested in venture capital funds in various Member States. These investments were well-timed because of the lack of venture financing. We have also been using Community budget funds, with part of the multiannual programme credits transferred into the investment funds.
Through these efforts the public sector has been playing its role. At the same time it is very important to complete the legislation on a genuine internal market for financial services and risk capital. In this regard we hope that the solutions resulting from the Lamfalussy report will be very useful.
Today on the Internet I saw some good news: some new venture rounds for wireless applications have been completed. Perhaps the worst is over, but the market is still very tight compared to the situation in the past. So all such measures, an active financial market and public support measures, if there is market failure, will be needed.

President
 Thank you very much for your cooperation, Commissioner.
Questions to Commissioner Diamantopoulou

Alexandros Alavanos
Question No 44 by (H-0951/01):
Subject: Commission recommendations on Greek employment policy The Commission's recommendations to Greece concerning the implementation of employment policies have remained almost unchanged since 1998. Greece is criticised for low employment rates, high youth and female unemployment, and the Commission's recommendations continue along the same lines for 2002 (COM(2001)0512/final). In addition, the Greek Minister for Labour recently stated that Greece cannot attain the Lisbon and Stockholm employment targets.
Can the Commission say whether the Lisbon and Stockholm targets are binding on the Member States, and whether the targets Greece has set for funding from the 2nd Community Support Framework for measures to combat unemployment have been met and, if not, why not?

Diamantopoulou
Mr Alavanos's question concerns the Lisbon targets and whether or not Greece will be able to attain them. First, the target of full employment set in Lisbon was a political commitment by leaders of the Member States, not a binding legal commitment. Except that the political commitment was also highly significant and all the national action plans for employment have been drawn up and submitted on the basis of that commitment.
In Greece, the second Community Support Framework applied over the last five years was completed in December 2001, so it is difficult to make an overall evaluation of it. Naturally, the job market was reformed and training and proactive employment policy structures and mechanisms were created during the course of the second Community Support Framework. The problem lies with the employment services which Greece started to reform at the end of the second Community Support Framework.
As far as the third Community Support Framework is concerned, Greece is one of the few Member States which has set quantitative national targets under its national action plan, having announced a target of 61.5% for 2005. The third Community Support Framework includes a hefty 2.9 trillion drachmas to fund pro-active employment policies and reforms. The implementation of the third Community Support Framework is a huge challenge if Greece is to introduce the mechanisms needed for employment policy, such as an individualised approach, because the Greek national employment agencies need to be completely overhauled and training mechanisms need to work more efficiently and be geared to regional development objectives.
The Commission is working closely with all the Member States and, as you know, it repeats the guidelines every year so that the Member States can take account of European agreements on the application of employment policies.

Alavanos
Commissioner, I know you are a supporter of English as our official language, so I shall put my question in English. By chance, I have before me Eurostat's statistics on the economy labour market. Total unemployment in the European Union in 1990 was 7.7%; in 2000 it was 8.4%. In 1990 unemployment in Greece stood at 6.3%, less than in the Community. In 2000 it was 11.1%, the second highest rate after Spain. In Ireland, unemployment in 1990 was 13.1%; in 2000 it was 4.4%. Ireland and Greece are both cohesion countries. How do you explain that, and what critical view would you take of the Greek Government's actions during the second Community support framework?

Diamantopoulou
First, may I thank you for your support. I knew that a progressive person of your experience would agree that English - and our mastering it in Greece - are very important. As far as the statistics which you quoted are concerned, we need to analyse the structure of unemployment in Greece. The rate of employment for men is exactly the same as the European average, but there is a huge difference in the rate of employment for women, which is 40% in Greece, compared with a Community average of 56%.
Similarly, there is a very serious youth unemployment problem. Here too, in comparison with other countries, unemployment is very high among the young in Greece, 29%, mainly because the various types of part-time employment found in numerous countries, including the country you referred to, are counted as full-time jobs.
According to the Commission's recommendations, what the Greek government needs to do is to focus more on policies for women and young people and on policies for older workers, because here again very few older workers are actually in employment.
These are the three main employment policy problems and, according to the national action plan which it has submitted, this is where the Greek government has focused its efforts. Of course, the Commission will continue to make recommendations where policies have not progressed as the Greek government promised, as it did in September this year and will again next September.

President


Mihail Papayannakis
Question No 45 by (H-0008/02):
Subject: Employment in Greece According to the Recommendation for a Council Recommendation on the Implementation of Member States' Employment Policies (COM(2001)0512/final), Greece continues to have one of the lowest employment rates in the European Union, and unemployment in Greece has stabilised at 11%, which is considerably above the EU average. These data show that the labour market suffers from structural problems, a finding borne out by the Commission Communication on structural indicators. According to this Communication, Greek indicators concerning entrepreneurial expenditure on R&D, access to the internet, lifelong learning and public spending on education are the lowest of all the Member States.
Will the Commission say whether, following the Council Recommendation and the Commission Communication, Greece has taken any specific additional measures or initiatives concerning the above sectors with a view to promoting employability and improving its position?

Diamantopoulou
I should like to start, Mr President, with the tables of indicators announced by the Commission in its most recent communication, which will be sent to Barcelona. It is true, as the honourable Member says in his question, that Greece's indicators on matters such as entrepreneurial expenditure on research and development, access to the Internet, lifelong learning and public spending on education are lower than those of other Member States.
However, I should like to point out that the Commission's philosophy behind these annual indicators is not just to compare the situation between Member States which do not always have the same points of reference; it is to look at the progress made by Member States from one year to the next. If we take the indicator for Internet access, Greece has progressed from 4.5% last year to 11% this year.
These are the main objectives for the operational programmes for 2000 to 2006. In other words, there are operational programmes for education, vocational training, lifelong learning, the information society and the dissemination of the information society in both the public administration and the business sector. This is one of the major challenges of the Greek government's national action plan and the Community Support Framework. Of course, we must not forget that these programmes have substantial Community funds, but that alone is not enough. Very substantial national funds are needed, together with efficient, urgent policies, especially for the information society, if these indicators are to improve significantly by next year.

Papayannakis
Thank you, Commissioner, you are of course quite right. What counts is the progress made from one year to the next and that is precisely why I should like to ask you if any indicators apart from the Internet, which you referred to, have improved? And secondly, as regards the third Community Support Framework, which makes provision for all the major budget items which you mentioned, has Greece actually started spending any money? We are already more or less at the end of the second year. Thirdly, I should like to ask a question which I have been asking repeatedly for several years now, Commissioner, because I have been unable to obtain a reply. Has anyone ever - not last year or the year before, because that would be impossible - but let us say five years ago; has anyone ever actually counted how many jobs have been created over a period of time from funds budgeted for job creation, just to give us a snapshot of exactly how efficient it is.

Diamantopoulou
I referred to this specific indicator because it shows such a huge difference, with growth in the order of 150%. Spending on education and research and technology has risen, while other indicators have remained stable and have not changed.
In reply to your questions on the third Community Support Framework, the first prepayments have been signed, accounting, if I am not mistaken, for approximately 10%, and as for counting jobs for the second Community Support Framework, I do not think we could supply actual figures, because they would probably be fictitious, by which I mean that there are the direct jobs created under the Greek programmes, the stages, and the indirect jobs created by training and the impact of local development funds, either in the public sector or in the private sector following training. These jobs are not counted because the national employment agencies are unable to quantify the results of training but they are some of the important statistics which are required by the third Community Support Framework if we are to be able to monitor progress.

President


Rodi Kratsa-Tsagaropoulou
Question No 46 by (H-0035/02):
Subject: Undeclared work in Greece In 1998, the Commission published a communication aimed at launching a dialogue among the Member States with a view to combating undeclared work which, according to data at the time, accounted for some 15% of the Union's GDP, while in Greece and Italy the figure exceeded 20% of GDP.
Recent investigations by the Greek authorities, together with other available data, reveal that 10.5% of businesses are not registered with the Social Security Institution and that the percentage of non-registered workers fluctuates between 21% and 30%, resulting in a loss of billions of euro from the public purse and, in particular, the social insurance funds.
What commitments did the Member States make as a result of the dialogue launched in 1998? What progress has been made? What are Greece's commitments and what recommendations have been made to that country? What measures will the Commission take to combat undeclared work, in the context of the qualitative employment policy and the open coordination method, to ensure that pension schemes remain viable?

Diamantopoulou
Mr President, may I assure the honourable Member that the European Commission shares her concerns about the impact of undeclared work, the impact of losses on the public purse, the impact on the job market and the impact on the pension system.
The guidelines issued by the Commission in 2001 for 2002 call on the Member States to take measures to combat undeclared work and to encourage registration using a variety of means, such as regulatory measures, incentives, reforms of the tax system, allowances, collaboration with the social partners and special plans for relations between the social partners, between employers and employees.
Greece's response does, I think, bode well for the future. By which I mean that the Greek authorities have introduced a series of measures dealing mainly with work inspectors, controls carried out by inspectors and the auditing agencies of the various insurance funds have been tightened up and, according to our information, a further 120 work inspectors are to be deployed. The commitments made by the Greek government in its national action plan also include a series of other measures dealing with allowances, that is, incentives to register low-paid workers, the results of which will not transpire until a later date, once they have been applied.
On 26 February, the Commission is due to present the study started following the 1998 communication to which you refer. Experts from all the Member States will attend this conference and the presentation of the study to discuss efficient practices for dealing with undeclared work which have brought in significant results in certain countries. As far as the impact on pension schemes is concerned, I should point out that one of the parameters for combating the problem of the viability of pension funds is to increase employment. Not to increase employment generally any old how, but to increase employment which pays statutory tax and insurance contributions. This is the only way of boosting the funds and helping them to stabilise their finances.
The open method of coordination established between the Member States does not, I repeat, involve any legal commitment vis-à-vis the Member States. Political commitments have been made and the Member States are due to submit pension reform plans, together with their economic and social implications, in September 2002.

Kratsa-Ôsagaropoulou
Thank you, Commissioner, for your reply. I do not share your optimism about progress because, as we can see in Greece and Italy - and I refer here to Greece in particular because it is my own country - there has been no progress. Twenty-five percent of unregistered workers alone are foreigners, in which case there is hardly any justification for the mass influx of unskilled foreign workers into Greece.
Do you really believe, with this situation, that the ambitious targets set by the European Commission can be achieved, or should you be calling for means over and above political commitment, the means which countries need to have if they are to make progress? Because undeclared work impacts not just on pension schemes, it also impacts on free competition and, of course, protection for workers, because we are hardly talking high-powered jobs here. I ask you in all honesty, do you feel that the means which you have at your disposal right now are sufficient to stamp out this phenomenon and its many and varied implications?

Diamantopoulou
I must stress, Mr President, that the Commission is not a superstate and it cannot judge policies which are purely national policies and for which each Member State takes the specific measures which it feels it needs to take. What takes place at European level on this particular issue is collaboration between the Member States, through the guidelines, in which undeclared work is a priority and, naturally, steps have also been taken in countries such as Italy which have serious problems. Steps have been taken within an institutional framework to increase incentives to register workers and integrate immigrants.
My evaluation of the measures taken by the Greek government, which is why I was cautious, is that its reaction bodes well in that it has introduced a series of institutional measures which are now under way, such as integrating immigrants and paying companies incentives for low-paid workers and, once they have been implemented, these institutional reforms should bring in positive results. As you know, the measures taken by government are evaluated every year and the guidelines contain the Commission's input.

Papayannakis
As you know, Commissioner, where there is undeclared work there are usually undeclared businesses. So I think we should be discussing not how many people have not been registered with social security agencies but how many businesses have not been registered at all, either with the Ministry of Trade or the police. Nowhere. There are sectors in Greece in which this is the rule rather than the exception. And their economic raison d'être is that no one knows about them.
Of course, the Commission does not interfere in internal affairs in the Member States and rightly so. But I do still wonder if companies in general can get away without registering from the point of view of Community legislation? Is there nothing the Commission can do about this during the course of its duties?

Diamantopoulou
As you said, this is a matter in which it is very difficult for the European Commission to intervene. The registration of companies, which is the top priority for a country as far as its tax system, that is, its revenue is concerned, and as far as its social security system, that is, pensions are concerned, is obviously a priority for the Member States and I do not think that any recommendations are needed along these lines.
I can only hope, from the information at our disposal, that the computerisation of the Social Security Institution, the law on regional companies and certain reforms along these lines will bring in results.

President


Armonia Bordes
Question No 47 by (H-0015/02):
Subject: Transfer of unemployment entitlements Under the provisions of Regulation (EEC) 1408/71, employees who are nationals of EU Member States may acquire unemployment benefit entitlements in any Member State.
Immigrant workers, from non-Community countries, who wish to receive unemployment benefits in an EU Member State other than their country of residence are not entitled to do so under the terms of the Regulation, which does not allow them to transfer their entitlements.
How can you justify the fact that employees from non-EEC countries are not entitled to unemployment benefits if they change their country of residence despite having paid contributions like other employees?
Why are they not allowed to make use of forms E301 and E303 to transfer unemployment entitlements?

Diamantopoulou
Regulation 1408/71 and Regulation 574/72 protect the social security rights of workers by coordinating the different national social security systems of Member States. There are two main rights that workers have through these regulations. Firstly they have the right to unemployment benefit; secondly, to look for employment in another Member State and to continue to receive unemployment benefit for a maximum period of three months.
However, this regulation applies to workers who are Community nationals. In 1997 the Commission presented a proposal to the Council to extend the scope of this regulation to workers who are third-country nationals. The same extension had been included in the larger frame of the Commission proposal of 1998 to modernise and simplify Regulation 1408/71.
There were many discussions over many years. There was a very complicated discussion in the Council of Ministers. There were many disagreements between the Member States. The main obstacles to progress in this regard had been the lack of agreement on the legal base. It is not a legalistic or technical problem, it is a political one. But the difference in the legal base concerned first the Commission's proposal, which was based on the implementation of Articles 42 and 308, and certain Member States which considered that the basis of this proposal could be Article 63. The political difference is that under the last article there are some Member States that have the right to opt out of the regulation.
Under the Belgian Presidency the Council of 3 December 2001 unanimously agreed that the basis which must be used is Article 63. So the Commission will very shortly present a new proposal to extend Regulation 1408/71 to third-country nationals using this new basis of Article 63.
As far as the substance is concerned, I must highlight the Commission's agreement with your concept.

Bordes
I should just like to make one comment: it is the employers, the bosses, who are forcing these workers to move into other national territories. Workers are good for paying taxes, they are good for having profit sweated out of them, but there is no need for them to understand their minimum rights. This is totally unacceptable.

President
 Pursuant to the Rules of Procedure, Questions Nos 48, 49 and 50, by Mr Fitzsimons, Mr Korakas and Mrs Thors respectively, will be replied to in writing.
Questions to Commissioner Patten

President
 As the author is not present, Question No 51 lapses.

María Izquierdo Rojo
Question No 52 by (H-0960/01):
Subject: Reconstruction of Afghanistan and improving the subhuman situation of women What specific action or programmes is the Commission preparing in order to improve the situation of women in Afghanistan? How will it ensure that women actually receive the aid and benefits intended for them?

Patten
The Commission is very much aware of the need to improve the situation of women in post-Taliban Afghanistan. Our initial EUR 57 m commitment to reconstruction in Afghanistan includes specific provision for this. The Commission services are currently finalising contracts with NGOs and UN aid agencies to implement 18 projects worth EUR 25 m and programmes to support internally displaced Afghan people and refugees.
Gender is a cross-cutting issue in all projects funded from the Aid to Uprooted People budget. In 2001 more than 50% of the projects directed at health, education and refugee care had specific and significant gender components. The Commission is currently assessing project proposals for the 2002 budget for uprooted people. The amount envisaged is EUR 24 m.
In the new political situation in Afghanistan the Commission is planning to open an office in Kabul in February or March this year. This office will further enhance the Commission's ability to oversee the performance and delivery of its aid to Afghanistan. ECHO reopened its office at the beginning of last month.
Regarding the humanitarian aid provided by ECHO, women are involved in various types of projects; all medical and nutritional projects funded by ECHO aim to treat malnutrition among children under five years of age, as well as to monitor the health status of women, in particular lactating and pregnant women. NGOs generally organise elementary hygiene education for women. NGOs have access to all beneficiaries, women included, and can employ women as local NGO personnel in medically related programmes. Medical NGOs play a great role in the training of women.

Izquierdo Rojo
Commissioner, I would like to ask a supplementary question which focuses on two aspects.
Firstly, will women manage some of this economic aid?
Secondly, since there are specific risks for women - just today a girl of seven has been sold into marriage by her family in order to deal with hunger and meet their needs - I would like to know whether the Commission intends to create specific funds to prevent this type of violation of women' s rights.
Given the situation I have described, which will no doubt be repeated tomorrow and the next day, I would like a concrete reply from the Commission.
It is also very important to know whether women will manage these funds.
The fact that there are many armed men very much hinders progress in the improvement of the situation of women.

Patten
The simple answer to the very important first question that the honourable Member asked is an unequivocal yes. Not least do we hope that women will be centrally involved in a great deal of our development activity, but there are women in the interim administration. I hope there will be in the transitional administration. Women played a crucial role, let us not forget, in the success of the Bonn talks in December and we will be doing what we can to support the Afghan Ministry of Women's Affairs which will, I hope, be a good example of women managing programmes to help develop society and to help protect the role of women in a society which has abused them for far too long.
The honourable Member asked a question about the specific security of women and young girls. In the light of recent well-publicised events, I wholly understand that. I hope that the overall improvement in the security situation and the increasing grip of the interim authority with our support will help to prevent things like that happening. But after the ferocious talibanisation of Afghan society over the last few years, and given the position of the country where warlordism is still rife, it is going to be some time before we can promote the sort of strong gender policies we would like to see. However, we will do all that we can. I am greatly encouraged by what the honourable Member has said.

President
 As the author is not present, Question No 53 lapses.

Gary Titley
Question No 54 by (H-0965/01):
Subject: Reform of the Stability Pact In light of the joint statement made by Patten and Solana on the reform of the Stability Pact, what is the Commission doing to ensure that the programme becomes more effective in the delivery of its services and in streamlining its personnel?

Patten
The High Representative and I wrote to ministers in November setting out proposals for the future work of the Stability Pact. Our main aim was to take the opportunity, two and a half years into the work of the pact, and with the arrival of a new special coordinator, to build on its achievements by enhancing the complementarity between the work of the Stability Pact and the EU stabilisation and association process, by focusing the pact's activities as tightly as possible and by putting a particular emphasis on encouraging regional cooperation.
The General Affairs Council approved the recommendations in our letter on 19 November and asked the new Special Coordinator, Dr Buseck, who took up the reins on 1 January, to assess the current activities and working methods of the pact and to identify five or six objectives to be achieved by the end of this year. The Council asked him to report back to its meeting on 11 March. The Commission is now working closely with the Special Coordinator in the preparation of this report. Detailed consultations are taking place within the informal consultative committee which was established following the High Representative's and my own recommendations in order to improve coordination between the pact and the stabilisation and association process. Two meetings have already taken place: on 11 and 31 January.
In conclusion, work is well in hand. The Stability Pact and the Commission are working very closely together to deliver the improvements the honourable Member refers to. I have every confidence that the report which Dr Buseck gives to the Council on 11 March will set out a number of practical proposals to that end.

Titley
I thank the Commissioner for his answer. I am slightly perturbed that it seems to be taking so long to get this matter addressed. As we have just heard, it is not going to be until 11 March that we get further developments.
I should like to ask the Commissioner, first, what measures are going to be recommended which will increase ownership by local people on the ground in the Stability Pact. It has been seen as remote and, unless we have proper ownership, quite frankly it will continue to be remote.
Secondly, one of the areas of concern has been the quality of implementation in the Stability Pact. Is he happy that we are moving in the right direction in terms of implementation?
Thirdly, there is a view that there was a chronic lack of information on the ground about the Stability Pact. Is a strategy being put in place to deal with that?

Patten
As regards the first point, Dr Buseck is well aware of the problem to which the honourable Member referred. The proposals he brings forward on 11 March will reflect that awareness of his. The honourable Member will know that he is extremely experienced in dealing with the problems of the region and in particular in mobilising private sector support. I am looking forward very keenly to working with him. He will do an excellent job and he will want to engage with others who are working alongside him in an enthusiastic and transparent way.
On implementation, it is fair to say that overall we have established an impressive record as far as the Commission is concerned in implementing what we have promised to do in the western Balkans and in south-east Europe as a whole. What we have been able to achieve in Serbia, in the former Yugoslav Republic of Macedonia, and in other countries, is impressive. I hope that we will be able to ensure that where there have been any bottlenecks affecting infrastructure projects with the Stability Pact - and sometimes those bottlenecks are the result of problems in the beneficiary countries - we will be able to resolve them. Dr Buseck and I are trying to focus on those problem projects and get them moving as rapidly as possible.
As for information about what is happening on the ground, that is an issue which Dr Buseck is well aware of. We will help him to address it, trying to ensure that the publicity for the achievements of the Stability Pact goes to the pact, rather than to individuals.
It is a pleasure to work with Dr Buseck. I think he will do outstandingly well and he can certainly count on our understanding and support and, I am sure, the understanding and support of Parliament, in the efforts he makes in the future.

President


Richard Howitt
Question No 55 by (H-0002/02):
Subject: Aid to Asia and Latin America Given the European Parliament's amendment to the 2002 budget that 35 per cent of EU external assistance is allocated to social infrastructure, mainly basic education and health; and given Commissioner Patten's letter to the President of the Committee on Development and Cooperation of December 2001, that 'the Commission is willing to implement the budget on this basis. . . understand(ing) that the Parliament's focus is on the overall picture for EC assistance rather than the global performance of all donors'; what precise measures will the Commission take to operationalise this decision in relation to the regional budget lines providing aid to Asia and to Latin America? Can the Commission reply with respect to communication with its delegations, the mechanism for agreement of Country Strategy Papers, the operation of its Quality Support Group, dialogue with partners, as well as in any other respects?

Patten
In the context of the 2002 budget, the Commission has supported a benchmark that 35% of spending in Development Assistance Committee Group 1 countries, including macroeconomic assistance with social sector conditionality, is allocated to social infrastructure, mainly education and health. This recognises that the Community contribution must be seen as part of the overall donor support in a given country and that a degree of flexibility must be the norm. The Commission is committed to work towards meeting this benchmark in assistance to the social sectors in all its programmes, including Asia and Latin America.
With a view to honouring this commitment, a number of initiatives will be undertaken. In particular, these will include, first, improved emphasis on the social sector in all Commission programmes, in line with the priorities in the Community's development strategy. Second, the establishment during 2002 - and I know this is a point on which the honourable Member has himself laid great emphasis - of a solid statistical basis allowing DAC sectoral classification of programmes and projects from 2002.
A reclassification exercise of all 2001 commitments will be undertaken with a view to enabling comparison to be made.
Third, we want to make available to Parliament all approved country strategy papers, including multiannual programmes and associated financial envelopes.
Finally, the continuation during 2002 of work on the definition of internationally agreed performance indicators and implementation of sector-wide programmes in the social sector. The Commission is in contact, as the honourable Member knows, with Parliament's Committee on Development and Cooperation, on the organisation of a seminar in the spring of this year, where the Commission will report on progress made in these areas and, I hope, continue to gain from the experience and enthusiasm and commitment of the members of the Development Committee, including, of course, the honourable Member.

Howitt
The last time I debated with Mr Patten on this subject in committee he accused me of having an overdose of testosterone. I am glad he has not repeated that tonight. Stamina is what we need in dealing with this issue. He is right in saying that there are a number of areas of agreement between the Commission and Parliament, not least in the DAC reporting where progress is such that we very much welcome it. We welcome too their cooperation in relation to the seminar.
I am concerned that the emphasis in his answer was on definitions, about reporting, about statistics - i.e. analysis - rather than the tougher decisions that are equally required to shift resources. It is important that we do not simply talk about the process in terms of information being available - important as that is, and agreed as we are on that issue - but that the Commissioner actually tells us, as those country strategy papers are passed, as the Quality Support Group evaluates new programmes, as delegations (and he did not answer the point about the role of delegations in this) take their decisions, as new staff are recruited, how will he ensure that real resources are allocated in greater number to basic health and basic education? We need to see some shift of resources during the course of this year. Give us some hope that it will happen.

Patten
First of all I am not against testosterone in trying to achieve some progress in this area. We need to show a great deal of energy and commitment.
Secondly, as far as the role of delegations is concerned, as the honourable Member knows, I place particular emphasis, on the deconcentration exercise, which is a particularly ill-starred, euro-gabble way of referring to trying to manage our programmes in the field and as closely as possible to the people whom we want to see benefit from them. The delegations will play a key role in drawing up the country strategy papers, which will have to reflect the priorities of our development philosophy and development strategy.
The honourable Member asks us to give him hope that we will be seeing a real shift. The purpose of providing a better statistical basis for analysing and planning what we are doing is to demonstrate that we are making an effort to achieve the objectives which the honourable Member and I have in common and which are also the objectives of my distinguished colleague, Commissioner Nielsen. So there would be no point for example in the CRIS exercise in which we are engaged if we were not intending it to have an impact on policy. I think the honourable Member accepts that one is looking for steady trends, rather than being too nailed down to specific figures in specific years in specific countries. One wants to see a shift of emphasis and a clear indication that the Commission's programmes are as associated as other peoples' with the objectives of poverty alleviation.
I will make one additional point, which I attempted to make yesterday morning in the parliament of the country I know best. There is still a tendency when people look at what we are doing to compare apples with oranges. It is very often the case that other countries or Member States appear to have a far higher proportion of development assistance committed to poverty alleviation than we do because they look at what we are doing in the Balkans, in Russia, in the NIS, in parts of the Mediterranean, and compare it as though it was exactly the same as our more straightforward development assistance programmes. Because we are carrying the burden in those areas, admittedly with Member States' money, they are not having to do as much there as they would presumably have to do for political reasons, and therefore the figures sometimes flatter them at our expense. That is part of the price we pay for having an external actions budget which has development assistance at its core but has other priorities as well.

Titley
Could the Commissioner tell me if what he said adds up to a guarantee that there will be a better balance between commitments and payments in Asia and Latin America and that we will have better utilisation of the funds voted for in the budget?

Patten
I could also - if I was not as cautious a man as I am - point to progress already in increasing the percentage of payments in relation to commitments. The figure last year in the Mediterranean was 56% to 57%, much higher than any figure we have achieved before but lower than I want to see.
If you look at the achievements of Europe Aid - all of whose staff I addressed yesterday - they are starting to be able to demonstrate an improvement in relation to commitments. They have demonstrated a considerable success in reducing dormant commitments and sleeping commitments so that the reste à liquider has fallen quite substantially. So we are making progress. It will take some time before we achieve the sort of figures that all of us want to see, but we are headed in the right direction. I very much hope that before I make my swan-song in this packed Hemicycle I will be able to point to even greater achievements by the excellent staff in Europe Aid.

President
We are going to put the last question to the Commissioner.
Question No 56 by Olivier Dupuis (H-0007/02):
Subject: International Criminal Court
For several years now the establishment of the International Criminal Court for war crimes, genocide and crimes against humanity has been a priority of EU foreign policy. Only recently, the EU, through the Belgian Presidency, reaffirmed its commitment to working to secure, as rapidly as possible, the 60 ratifications required for the Criminal Court to be brought into operation. To date, 48 countries have already ratified the Rome Statute, including all the EU Member States apart from Portugal (which has, however, already completed the relevant domestic procedures), Greece and Ireland. Three candidate countries - Poland, Hungary and Slovenia - have already ratified the Statute and Estonia has announced that it will shortly deposit its instruments of ratification. Given the fundamental importance which the EU attaches to the speedy introduction of this first stage of an international justice system and in view of the tragic events which have occurred around the world over the last few months and years, would the Commission not agree that the ratification of the Rome Statute should be explicitly established as forming part of the 'acquis communautaire' and as a new 'Copenhagen criterion' to be met by any future candidate for accession to the EU? Does the Commission agree that ratification should serve as a precondition for the signing and ratification of any association or cooperation agreement between the Union and third countries?

Patten
First of all I would like to apologise to the honourable Member for not being present earlier to hear his, I am sure, eloquent - though I am not sure, supportive - speech in the excellent debate on the Middle East. He knows that was not meant as a discourtesy, it was for democratic reasons upstairs. I am sure we will be able to lock horns about some of those extremely important issues on other occasions.
As for his question, the European Union attaches a great deal of importance to the ratification of the Statute of the International Criminal Court. The adoption of the common position of 11 June 2001, which aims to promote early ratification of the Statute and the swift establishment of the ICC, and the ratification of the Statute by 13 Member States underline our commitment to this objective. Ratification preparations by the remaining two Member States are at an advanced stage.
The European Union's commitment to this issue is also reflected in the level of Community funding given to NGOs working for ratification. Since 1995, this has reached almost EUR 7m under the European initiative for democratisation and human rights.
With respect to the enlargement process, the European Union position on support to the ICC is part of the common foreign and security policy acquis, which candidates are asked to subscribe to. In addition, in line with the common position, the European Union regularly raises the question of ratification in the framework of political dialogues with accession countries.
Moreover, the Central and Eastern European countries associated with the European Union and the associated countries Cyprus and Malta aligned themselves with the EU declaration at the Sixth Committee of the UN General Assembly in November 2001, which sought to encourage a swift start to the ICC.
In January 2002, they also declared that they shared the objectives of the EU common position on the International Criminal Court and undertook to ensure that their national policies conform to that common position.
The Council of Europe has also called on all its members to ratify or adhere to the ICC's Statute as soon as possible.

Dupuis
Mr President, I too have no desire to go into the ins and outs of the matter, which was on this afternoon' s agenda. I simply wish to say to Commissioner Patten that I knew he had informed us that he would miss some of the debate. I am, therefore, very sorry, as I said a short while ago in plenary, that he was not able to join us. Having said that, politically, we are at odds on the matter, but I believe we will have the opportunity to discuss this again later.
With regard to his answer to this specific question, I am quite satisfied with the Commission' s position. I would say that making this issue, as Commissioner Patten said, part of the acquis communautaire is a crucial point and this will certainly help the candidate countries to speed up their ratification procedures.

Patten
I certainly do not want to detract from the acquis which the Member concerned and I have discovered together, but I would only add my wish that some of our other partners in international affairs were also committed to establishing the international criminal court. It continues to be an issue that we raise with our transatlantic friends with considerable vigour. We did so with the last administration and we are doing so with this one. It is not a question of the administration having changed its policy. I would have thought that recent events - including those related to Afghanistan - would have bolstered the case for an international criminal court. Maybe it will take a little longer for that message to get home.

President
Pursuant to the Rules of Procedure, Questions Nos 57 to 83 will be replied to in writing.
That concludes Questions to the Commission.
(The sitting was adjourned at 7.30 p.m. and resumed at 9 p.m.)

VAT - Direct and indirect taxation
President
The next item is the report (A5-0466/2001) by Mrs Kauppi, on behalf of the Committee on Economic and Monetary Affairs,
1. on the proposal for a European Parliament and Council regulation on administrative cooperation in the field of value added tax (COM(2001) 294 - C5-0269/2001 - 2001/0133(COD)) and
2. on the proposal for a European Parliament and Council directive amending Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States in the field of direct and indirect taxation (COM(2001) 294 - C5-0270/2001 - 2001/0134(COD))

Kauppi
Madam President, Commissioner, ladies and gentlemen, VAT fraud is a widespread problem in the European Union, which is unfortunately becoming more common all the time. According to reliable estimates, during the first half of 1998, for example, Member States detected 250 cases of so-called Carousel fraud, worth more than 500 million euros in all. To this must of course be added other types of fraud, and all the fraudulent transactions that remained undetected. We can therefore estimate that VAT fraud costs the EU and its Member States hundreds of millions of euros every year.
Generally it is a matter of Carousel Fraud. Carousel Fraud means the acquisition of goods without paying the VAT as required under the rules of the internal market. It is characterised by a chain of invoices, with or without goods, extending across one or more borders. The essential feature of this type of fraud is that one or more links in the chain do not pay invoiced VAT to the tax authority, while other parties in the chain receive VAT refunds based on these very invoices. Carousel Fraud generally concerns small items of value, such as computers and mobile phones.
The most effective way of preventing this type of fraud is through close, administrative cooperation between the Member States. It is generally known, however, that the current legal framework is not up to the task. In order to streamline the current legislative framework, the Commission has now put forward a proposal for a regulation that would considerably enhance and improve current forms of administrative cooperation in the field of VAT. I also support the Commission' s proposal for a directive, in addition to which I propose measures in my report to make direct cooperation between the authorities still more effective and practical.
The main point of the proposal is to allow for direct contact between local and regional authorities responsible for the fight against fraud. At present, all communication must go through central liaison offices, meaning that all requests pass through one country' s administrative machinery from a local office to a national liaison office and down the same path in the other country. This means that requests for assistance often arrive too late at their proper destination. The tax evaders may well have disappeared by the time the local officials in the country that received the request for help look into the matter.
I agree with the Commission that cooperation at local level would improve mutual understanding regarding requests for information, would increase the motivation of tax inspectors, and would avoid wasting the few resources that exist. I therefore wholeheartedly support the Commission proposal, which should be seen as a major step forward in the fight against fraud. All too often, criminals can take immediate advantage of the most up-to-date and advanced means of communication, while the authorities are weighed down by bureaucratic, cumbersome rules, which slows down the work involved in tracking down the criminals and uses up far too many of the administration' s resources.
The Commission, however, could have gone still further to speed up cooperation and increase flexibility. I support the Commission' s proposal for sending communications in electronic form wherever possible. I would also propose that, to speed up the flow of information, electronic communication should be made the rule, and traditional correspondence on paper the exception. For the same reason, to speed up the exchange of information, that is, more room for manoeuvre should be given to the local authorities with regard to language policy. The obligation to translate requests for assistance between authorities must be made more flexible. Why should it be a requirement to translate a request for assistance into the official language of the second country if, for example, a Finn and a Greek come to an understanding that they will deal with one another in French?
There is one point, however, where the Commission proposal goes too far. The Commission is proposing that the Member States would be under an obligation to restrict many of the rights contained in the Data Protection directive if they thought this necessary in order to safeguard important economic or financial interests. It should be noted that there is no such obligation contained in the said directive but that it is simply a possibility that Member States can resort to. This aspect of the matter would therefore be better addressed by an amendment to the Data Protection directive and at this stage it should be left to the Member States to consider whether or not to pursue this line of action.
Finally, something should be said about the legal basis. The Commission bases its proposal on Article 95 of the Treaty, which means the co-decision procedure for Parliament. I agree with the Commission' s view that this proposal should concern administrative cooperation only and must be dealt with according to the procedure laid down in Article 95. The Council has always rejected this view, formerly, and changed the legal basis to Article 93 or 94, which only require Parliament to be consulted. Now, however, the Commission has decided to take the Council to the European Court of Justice over another proposal for a directive concerning the recovery of claims. The legal situation will thus be cleared up soon. I would also like to hear comments from the Commissioner in connection with this choice of legal basis and any new information he might have for Parliament regarding how the case regarding the legal basis for the proposal for a directive on the recovery of claims is proceeding in the Court of Justice of the European Communities.

Karas
Madam President, Commissioner, Mrs Kauppi, ladies and gentlemen, I would like to start by thanking the rapporteur, my colleague Mrs Piia-Noora Kauppi, for this report, which met with very broad support in the competent committee. That means that there was excellent communication between all the parties involved. The report constitutes yet further evidence of the competence for which our young colleague has, in a short time, acquired a reputation in the Committee on Economic and Monetary Affairs, as also for the industriousness shown by the quality of her work. Many thanks for that.
The report is, secondly, evidence of our need, in many instances, for 'more of Europe' . It is only together that we can combat fraud more efficiently and thus more successfully. In this connection, we need, on the one hand, better coordination in order to move towards cooperation and exchange of information, and, on the other hand, an improved and more professional legal framework to facilitate this process of information and coordination more readily.
The Group of the European People's Party (Christian Democrats) and European Democrats says 'yes' to improved cooperation by the authorities against VAT fraud, although we of course emphasise that we are not only opposed to VAT fraud but also every form of fraud. In any case, 250 instances of it were uncovered in the first half of 1998, with losses amounting to over EUR 500 million.
I can do no other than associate myself with the rapporteur in saying that we do not need obligatory translations in cross-border requests for information, but rather more flexibility as regards the data protection directive, deregulation to make things simpler, rationalisation and flexibility to get the work processed more quickly, so that we can get on the fraudsters' trails and so create greater security in Europe.

Pérez Royo
Madam President, I would like to express my total support for the rapporteur, Mrs Kauppi' s suggestion, and, consequently, for the Commission proposal, to which the Kauppi report gives its almost unreserved support. We Socialists also wholeheartedly support this Commission proposal.
The proposal deals with two very important matters. The first is the issue of tax fraud in a specific area, that of VAT in intra Community and triangular operations. The second issue, which is related to the first, as an instrument in combating fraud - is that of cooperation between public authorities to find a solution to, or at least, to reduce, the level of fraud previously mentioned. Mrs Kauppi gave a perfect explanation of the proposals in her speech and I fully share her sentiments.
Having said this, I would like to make two additional comments with regard to the content of this report. The first refers to the validity, today, of the 'provisional VAT system' , a system which was implemented in 1993 on the completion of the single market, of a strictly provisional nature, even with an expiry date, that has been spun out and which has not been respected, as you are all well aware.
I would like to draw your attention to this because the reason we are having to discuss this report and the fraud it deals with today is that, to a large extent, we continue to maintain this provisional VAT system - set up by intra Community operations - which places a burden on a series of operations in the country of destination without having those border controls that were maintained by the system in place before the entry into force of the single market.
Clearly, in a definitive VAT system, which is appropriate to the single market, with taxation at source, we would probably not be discussing this issue, because much of this fraud would be prevented at source. This is the first observation that I would like to make with regard to this report.
My second observation concerns a very important point, which Mrs Kauppi referred to: the legal base chosen by the Commission to present this proposal for a directive. In my opinion, the Commission' s interpretation of the Treaty has to be applauded, for considering that the base applicable in this case was Article 95, that is to say, for deciding that tax matters can be reduced to matters of substantial, substantive tax law, but not to those of adjective law, to those matters - such as those we are dealing with at the moment - that deal with the management of taxes and the exchange of information between public institutions in the management of taxes. In these cases, it is not really a matter of fiscal law or tax law itself, in the strict sense of the word, reserved for national parliaments and, as a consequence, for unanimity, but of an issue that can be dealt with, as is happening now, by the codecision procedure.
I would like to conclude, Madam President, with a piece of advice that stems from my last comment; it would be a good idea if, in the next Convention and reform of the Treaty, the field of tax matters could be defined once and for all and that a precise framework for harmonisation can be established. Naturally, not all tax matters can be harmonised; there are certain areas, such as income tax, that will never be completely harmonised, but there are others - and here I am essentially thinking about the basis for calculating tax on company profits - which should be set up as something that can be harmonised and exempted from the unanimity rule, which would give Parliament the leading role in areas as important as those we are dealing with.

Ilgenfritz
Madam President, the EU is continuing to be taken for a ride by professional fraudsters, a situation which is, regrettably, a beneficiary of the excessively complex VAT system.
It is through our tax regulations, which are in part difficult to understand, that we are laying ourselves open to fraudsters and indirectly promoting tax fraud. What we need in order to raise the level of taxpayer honesty and increase tax revenue is not only efficient monitoring and effective cooperation by the tax authorities, but also comprehensible and simpler legal texts as a fundamental precondition for this. The taxpayer very often refuses to pay taxes he regards as unfair. Incomprehensible tax laws and the tax burdens arising from them are, though, always or automatically seen by the taxpayer as unfair.
We are therefore in urgent need of a reform of the VAT system, which is far too expensive and complex to the point of being incomprehensible even by experts. It is not acceptable for transactions to be tax-exempt within the business chain between the Member States but taxable at national level. It is advance deduction of tax within the business chain that facilitates this evasion of tax in the first place and that should therefore be abolished.
By taking this step, we would be cutting the ground from under the fraudsters' feet, simplifying the system and avoiding needless controls, with all their vexations, which are a further burden on our small and medium-sized enterprises. We should, therefore, be thinking, first of all, not only in terms of how we get the different authorities to work together better, but also about how we can simplify the system that makes fraud possible in the first place. That would be a step in the right direction, but we will, nonetheless, support Mrs Kauppi's report, as we share her view that it is self-evident that cooperation should be improved and that the effort must be made to make Europe less bureaucratic.

Doyle
Madam President, I have no doubt that the existing arrangements for cooperation in the area of VAT fraud are inadequate in the context of the evolved single market. VAT fraud costs the EU and its Member States several hundred million euro each year. Although measures have been taken over the last few years to come to terms with it, VAT fraud is still a considerable problem today.
I agree that the best way to tackle this ever-increasing fraud is to have close administrative cooperation between Member States. By allowing direct contacts between local offices, the fight against fraud will become less bureaucratic and more effective.
However, let me sound a note of caution in relation to the efforts inherent in this Commission proposal to base this measure on Article 95 of the Treaty. Article 95 specifically states that it may not be used for fiscal provisions. The Commission's view is that this proposal is merely about administrative cooperation and that it does not relate to actual tax collection or tax measures.
With respect, I do not agree - my country does not agree - that by stealth the present position should be eroded. I do not think that SCAC - the existing administrative committee in the tax area - should have more of these functions assigned to it. It is the thin end of the wedge. This proposal relates to fiscal instruments which Member States use and it should certainly be adopted, but it should be adopted with the correct legal basis, which is Article 93, providing for unanimity of voting at Council level. The regulation that this proposal aims to replace is based upon Article 93, and quite simply this proposal should be also.
Mrs Kauppi has referred to the concerns regarding the legal basis in her attached explanatory memorandum. In the past where conflicts have arisen in relation to the legal basis, the Council has always rejected the Commission's view and has changed the legal basis to Article 93 or 94. As pointed out by my colleague, it did this most recently on the proposal for a directive on the mutual assistance for the recovery of claims. The Commission has decided to take the Council to the Court of Justice in this matter and Ireland will be joining the action on the side of the Council.
While I welcome the substance of what this proposal aims to do, for the reasons I have outlined in relation to the legal basis, I and my Irish colleagues will be voting against the report.

García-Margallo y Marfil
Madam President, they say that 'noblesse oblige' and I should, therefore, start my speech by congratulating Commissioner Bolkestein, on the skill with which he was able, this morning, to resolve the conflict that Parliament, the Council and the Commission have been facing for such a long time, preventing us from progressing towards a single market in financial services.
I would also like to congratulate Mrs Kauppi on her report, which has managed, as has already been said, to achieve the support of most of the political groups in this House.
I would like to make just a few specific observations. In a recent appearance to prepare for the monetary dialogue with Wim Duisenberg, the President of the European Central Bank, we were given a report which demonstrated that the introduction of the euro will make price differences between the various countries in Europe more evident, as a result, amongst other things, of differences in taxation. This leads us to call for the harmonisation of VAT and for it to be applied at source, as Mr Pérez Royo suggested, but, until this happens, it is clear that these price differences will encourage fraud.
For this reason, 'more Europe' , or more decentralised cooperation within the European Union, is always welcome. I was a tax inspector and I know how the obligation to refer to higher public authorities can paralyse an idea. We need to eliminate formal requirements. I see no need for a translation: nobody would ask for a translation of information that would permit the arrest of Jack the Ripper and I do not see why things should be different in the field of taxation.
With regard to the legal base, I disagree with the last speaker but I agree with Mr Pérez Royo, given that the difference between substantive law, which characterises the essential elements of the tax system, and formal law, which was set up in order to guarantee that these obligations are met, is well known. Whereas the rules of substantive law have their base in Article 93 and, therefore, unanimity, those concerning formal law, administrative law and application law have their base in Article 95 because, amongst other things, this allows us to avoid unanimity and also paves the way, as we saw this morning in the field of financial services, for what the Spanish Presidency calls 'more Europe' .

Bolkestein
May I begin by saying that it gives me a great deal of pleasure to be able to discuss with Parliament today a proposal for a regulation to strengthen administrative cooperation between Member States in order to enhance VAT control.
I thank Mrs Kauppi very much for her report. It is extremely constructive. I can only echo what was said by Mr Karas who referred to Mrs Kauppi as his "young and effective colleague". She is not my colleague but I should like to echo the appreciative words of Mr Karas.
Mrs Kauppi, along with other Members of Parliament, spoke about the legal basis of this proposal. It is about administrative cooperation. It is not about changing the VAT regime. I wish the Commission could do that. We have wanted to do so for many years but we are not able to do so. But no, it is about administrative cooperation. It is not designed to change in any way the obligations of taxpayers or the rules governing the application of that legislation, but rather to gear administrative cooperation to the challenges of the internal market. That is why the Commission is submitting this proposal under Article 95 of the Treaty. In taking that article as the legal basis the Commission is consistent with its proposal for Regulation No 218/92 as well as with its proposal to modify the recovery directive. The Commission is correct in choosing Article 95 as the basis of this proposal. As Mr García-Margallo y Marfil said quite clearly, it gives Parliament codecision and that is what many Members of this Parliament want. I take this opportunity to thank Mr García-Margallo y Marfil for the kind words he uttered in my direction. I add to that that the Commission is extremely pleased that we have settled the matter of the so-called Lamfalussy proposal and that we can now continue with the work ahead.
More to the point, the Commission is of the opinion that this proposal is an important element of the new VAT strategy to improve the operation of the VAT system within the context of the internal market. It also constitutes a response to the Council calling on the Commission to present proposals for fighting VAT fraud.
The intra-Community market is today seriously affected by organised VAT fraud, where professional fraudsters abuse the exemption mechanism of the VAT system. Tackling that kind of fraud requires rapid and efficient cooperation between the tax administrations of the different Member States. But at present the legal framework is too weak to support really effective cooperation, essentially because it is vague, over-centralised and the exchange of information is not sufficiently intensive. In addition, cooperation is complicated owing to the existence of two legal instruments in this area with different scopes and different rules.
This proposal sets up one single legal framework merging, for VAT purposes, the regulation and the directive, and modifies the current arrangements in three ways: firstly, the proposal lays down clear and binding rules governing administrative cooperation between Member States, for example, for the presence of foreign officials during controls, or for organising multilateral controls; secondly, the proposal devolves cooperation and provides for more direct contacts between tax inspectors of different Member States. This is also a point which Mrs Kauppi drew to our attention. She said that when French and Spanish controllers - for example - in a border area want to communicate, at the moment this communication has to pass via Madrid and Paris. It is obvious that direct communication between inspection staff will make cooperation faster and more effective. Thirdly, the proposal aims to intensify the exchange of information between tax administrations in order to combat fraud more effectively.
I am very pleased that this proposal gets the support of all speakers this evening, except for Mrs Doyle, whom I can no longer convince, since she is no longer here. The Commission is extremely pleased with this support. I would therefore like to particularly welcome the positive contribution of the rapporteur, Mrs. Kauppi.
But given the fact that examination of this proposal is ongoing in the Council, and given the Commission' s strong desire to address this issue in a timely manner, I believe that the most appropriate course of action at this time is for the Commission not to formally accept the amendments put forward by Parliament, but to endeavour to take them on board, as much as possible, during the negotiations in the Council.
However I fear it will not be possible to take some of these amendments fully into account.
In particular, as regards the issue of electronic communication, I would like to stress that much of the information covered by this regulation is not available in electronic format, and therefore, in practice, cannot be exchanged by electronic means.
As regards the translations, I share the argument according to which Member States should strive as far as possible to waive a translation. But the Commission takes the view that the arrangements under which Member States should waive translations should be determined in an implementing regulation, binding for all Member States, and not individually by each Member State.
Finally, as concerns data protection, the Commission takes the view that if Directive 95/46/EC is fully applied, fraudsters would be informed that they are under suspicion, and consequently it is to be expected that they would transfer their fraudulent activity and would dispose of the evidence of fraud. That would seriously hamper the fight against VAT fraud.
I am personally confident that an agreement between the European Parliament, the Council and the Commission will be achieved on these issues. The Council has already started to discuss the proposal in detail. It will do its best to achieve an agreement as soon as possible, and we are making good headway. But your support of the proposal is important to achieve that much desired result. I would therefore recommend this proposal most warmly for Parliament's approval. I thank Parliament for its most constructive intervention.

President
Thank you, Commissioner.
That concludes the debate.
The vote will take place tomorrow at noon.

State aid
President
The next item is the report (A5-0002/2002) by Mr Rapkay, on behalf of the Committee on Economic and Monetary Affairs, on the Commission' s ninth survey on state aid in the European Union (COM(2001) 403 - C5-0632/2001 - 2001/2269(COS)).

Rapkay
Madam President, Commissioner, today the world's eyes - or let us rather say, the eyes of Europe - were again upon you and what you were doing, although you were dealing with matters different from those which we are dealing with here tonight, which do not appear to be that interesting. However, I have just heard that I am permitted to speak for eight minutes, as my group is not especially interested in the subject. I see, though, that Mr Evans and Mrs Riis-Jørgensen are here, and so we can, anyway, give a repeat of our performance in committee, swapping our positions on this issue. But, joking aside ...
We have jointly - and ambitiously - resolved that the European Union is to become the world's most competitive region within the next ten years. If the European Union wants to be the world's most competitive region, that means that its enterprises must be the most competitive enterprises in the world. It also means that we need the European Union's ambience to be both favourable to competition and capable of handling it. Thus far, it is right that our task should be to roll back state aid to enterprises as far as possible, and our task must also be - if we actually have to grant aid at all - to direct it increasingly towards horizontal goals.
To that extent, the perceptible decline in aid between 1997 and 1999 is to be welcomed - and that is the period under consideration, the period covered by the Commission's ninth aid report. We still, of course, call on the Commission to perform its role as a guard against aid that distorts competition.
On the other hand, we should desist from seeing aid policy only through lenses coloured by ideology, and from engaging in it from one ideological standpoint or another. Some of us do that from time to time in this House, and I will give an example of it later. Whether we like it or not, it is a matter of fact that aid is a tool of state policy, because it is used for incentives to facilitate control in line with the market and because it can be used to avoid the need for intervention in the form of instructions or prohibitions. That cannot always be done. It is sometimes more appropriate to achieve something by means of legal regulations, but also sometimes just as practical to do it by means of control in line with the market.
Aid has a vital place among the political instruments, as it can be used to correct failings in the market and reduce differences in standards of living between regions of the European Union. What we are doing with European regional and structural policy is, indeed, also aid, albeit not of the State variety that we want to discuss this evening, and those policies are political instruments in supporting SMEs, environmental protection, research and development.
Let me say, Commissioner, that I welcome the fact that you, or the Commission, now have, in addition to the register of aid systems, which has now come into being, the State Aid Scoreboard. That was something called for by all groups in Parliament. This State Aid Scoreboard, which is in its earliest stages, can, in my view, be developed into an instrument which will make it possible to discern trends and assess aid by reference to qualitative criteria - the qualitative criteria to which I have just referred.
That, then, is something I value. It is not only the quantity of state aid that should be comprehensively assessed; we also need qualitative criteria and objectives that have to be taken equally into account. As I have said, I have named them. Sometimes they justify control measures with time limits, and even existing market distortions can be removed in the medium term by the use of aid.
I believe that the Commission has a far more broad and open mind - with apologies to Mr Evans, and Mrs Riis-Jørgensen - than has the present conservative-liberal majority in this House.
I have noted that, in general debates, there is always full-bodied rejection of aid as if it were quite simply a snare of the devil. The politicians in the field, should one ask them, take quite different views of certain points. In reality, they too want nothing to do with its general disparagement.
Let me now give you the example I mentioned earlier. The Commission has, fortunately, been investigating for some time the extent to which sleights-of-hand in the taxation of businesses are being used to obtain illicit aid. The Commission is doing this on its own initiative and because it is right to do so, but it is also doing it because it was called upon to do it. In committee, I formulated a passage in my draft report which the Commission, remarkably, emphatically supports, and along the lines of which it intends to go forward. When a vote was taken, the majority in committee cut out this passage.
Now, I will be giving you the opportunity to make good this error tomorrow. My group will be reinserting this passage, and a couple of others as well, by means of an amendment. Do please remember that this is common policy on which we have agreed. So, tomorrow, you can make good the committee's error, or, alternatively, make it clear in public that that is not how you see the details of aid policy. You will have to do some thinking about that.
I want to wind up by saying that too much praise for the Commission is not such a good thing. Let us cut back on it a little. So I would like to refer, Commissioner, to something I touched on once or twice in committee. It also has to do with the subject of qualitative criteria, qualitative and quantitative assessment. That is the area, as you will rightly observe, of regional aid granted by the Member States, which makes up a very large part of the aid total, well above half, I think about 56% or more if I remember rightly. You will conclude that that is the area in which a reduction in aid can be best and most rapidly achieved. That is, though, rather a generalised way of looking at things, and I would again recommend that you think a bit about whether it is not perhaps the area of regional aid in which we have very definitely to be guided by qualitative criteria. If we were to have a debate on that next year, that would represent some small progress.

Evans, Jonathan
Madam President, I should like to challenge some of the assertions that have been made by Mr Rapkay. Firstly, there is very much more that unites us on the Committee on Economic and Monetary Affairs than you would think from some of the assertions he has just made. We can see that from the report that we are considering. There are 22 paragraphs in this report. Mr Rapkay had only six areas where his report was significantly amended. We have six amendments to consider tomorrow.
Let us look at the things that unite us. I certainly do not believe that state aid is the work of the devil. In a sense that was excessive rhetoric on the part of Mr Rapkay. We actually both believe in a competitive Europe. We are in favour of making our economy competition-friendly. Mr Rapkay's excellent report - which I will support in its current form tomorrow - is a consistent report building on the one produced by the committee last year. Of course there will be some differences of emphasis between us. We do not all share the same political outlook. But there is a trend in relation to the views that have been forward by the Economic Committee which are at the core of Mr Rapkay's report and for which I congratulate him.
Yes, I certainly believe in the rigorous application of state aid. I congratulate Commissioner Monti for the stance that he has taken in this area. It is something that broadly reflects the position of our Economic Committee. Our committee is committed to taking forward the Lisbon process. Building a competitive Europe must be a part of that, so it is important that we have proper state aid control.
Part of that is through the transparency that comes from the State Aid Scoreboard, of which Mr Rapkay has been a keen exponent. He has raised the issue consistently. We are delighted that Commissioner Monti has made progress in this area. There is more work to be done in developing the scoreboard. I am not absolutely sure that the Competition DG competition is at the front of the queue in terms of the Internet-friendly nature of its particular website. I am absolutely confident that more progress will be made. I went on to the Internet the other day to find out about the Competition Day that is coming up. It was not a particularly friendly site to deal with.
I should like to mention the Steel Aid Code. I have consistently said to Commissioner Monti that the industry is looking for guidance here. We want the current regime to stay in place in some format. I hope that Commissioner Monti will feel after mature reflection that, given the difficulties with the United States of America, that is something he could support.

Riis-Jørgensen
Madam President, as Mr Rapkay said, we can talk to each other as we are used to doing now that we are gathered 'in the bosom of our family' . I would first of all say thank you again to Mr Monti for the great efforts he has made in this area, and I would also thank Mr Rapkay very much. We do not always agree, but I am very pleased with the report, even if there are a number of things we have to discuss regarding how we are to vote tomorrow.
There are also a couple of practical matters I should like to comment on, first of all a matter on which I myself have done some work, namely the Commission' s proposal concerning the shipyards package. We had a debate on this here in Parliament last autumn. I was very much against the proposed aid to shipyards, and I therefore want to ask the Commission how this matter is progressing. I was delighted to note that, at the Council meeting of Trade and Industry Ministers at the beginning of December, it was impossible to obtain the necessary majority for adopting the Commission' s proposal. The Commission was not immediately willing to alter its proposal, which was based upon the results worked out in what is known as the TBR report, drawn up by the Commission every six months. Naturally, I am concerned that the Commission' s next TBR report will conveniently demonstrate that we need aid for more types of ship than those cited in the Commission' s original proposal. I would therefore ask Commissioner Monti to answer the following question: is there a new TBR report on the way from the Commission and, if so, can the Commissioner then inform us as to what conclusions are to be drawn by it?
Tomorrow, we in Parliament will vote on a proposal we did not have time to discuss before the vote. It is most certainly a proposal that does not fall within your area, Mr Monti, for it concerns the fact that, quite extraordinarily, the airlines have been allowed to retain airport arrival and departure times which, under normal rules, they have made too little use of to be permitted to retain. We are, then, preparing special legislation which we are now rushing through and which will, of course, mean that smaller airlines that wish to enter the market with competitive prices will not be allowed to offer this service to us as consumers, who shall instead have to put up with airlines which do not deliver the goods and which - when they do deliver them - only do so at unduly high prices. That is also the reality where state aid is concerned, for it largely favours the old national companies with their monopolies. For me, that is an example of the way in which our fine words about cutting back on state aid are all too infrequently followed up by firm and practical action. I would therefore also permit myself to ask you a question, Mr Monti. How does this proposal fit in with our general desire to cut back on state aid and create a situation in which we can all compete fairly and on an equal basis?

Kauppi
Madam President, Commissioner, I have no hesitation in adding to those words of thanks that have gone to Commissioner Monti and Mr Rapkay, as rapporteur. State aid granted on a large scale, often for shortsighted reasons, has for a long time been a strain on the purse of the European taxpayer and has slowed down the reorganisation of the economic structures of our Member States. Although aid granted by Member States might be justified in particularly exceptional circumstances, large amounts of aid and various tax concessions distort competition and go against the principles of the single market. For that reason, reductions in state aid and effective monitoring strengthen the competitiveness of the European economy and thus boost economic growth and the creation of jobs. At the Stockholm European Council the Member States renewed their commitment to reduce state aid as a proportion of GNP. There was also a promise to redirect state aid to horizontal objectives that benefited the Union as a whole. This commitment must be kept to.
According to the general survey we are now dealing with, a decline in state aid was achieved in the period 1997 - 1999. We cannot, however, be satisfied with the progress made up to the present day. We in Parliament have time and time again called for action that would guarantee greater transparency in this area. The Member States still do not have any monitoring instrument that can be compared to the state agency monitoring that is conducted at Community level. Data on state aid is still provided only in the form of total sums. To make an accurate analysis possible we need more detailed information on the use aid is put to and the sectors and companies that receive aid.
Like many of my colleagues before me, I also take a very positive view of the Commission' s announcement that a state aid register and scoreboard is to be introduced. I also urge the Commission to continue with its earlier policy of reorganising the Union' s economic and production structures, especially with regard to sector- and case-specific state aid. In this respect I agree fully with what my colleague, Mrs Riis-Jørgensen, said about the shipbuilding industry, which is also a major sector from the point of view of Finland, my country. There has been good progress made recently in that area by the Council.
If Europe is to become the world' s most competitive economic area, it will mean giving up the practices of old. It is clear, however, that new and permanent jobs will not be created by trying to maintain dilapidated structures.

Monti
Madam President, I would like to start by thanking the Committee on Economic and Monetary Affairs, particularly Mr Rapkay, who has tabled this excellent motion for a resolution.
I greatly welcome the support pledged by the committee with this report for a rigorous state aid control policy.
Listening to this brief but interesting debate, I believe I can see a wide consensus, as, moreover, has been pointed out, between the different parties represented in Parliament. I believe I can also see a non-ideological approach, and I feel that the more we succeed in producing information tools, the more we will be able to move away from reasoning solely in terms of ideologies and place ourselves in a position to assess the qualitative as well as the quantitative aspects of state aid.
I welcome the fact that the committee calls on Member States to live up to the commitment they entered into at the Stockholm European Council, which Mrs Kauppi has just mentioned, to reduce state aid as a proportion of GDP.
Despite the positive developments of recent years, I too feel that there is still room for further reduction of state aid in the Member States. I essentially agree that a careful reassessment of the relationship between regional policy and competition policy must be carried out for the period after 2006.
I also share the concern expressed in the motion for a resolution regarding returning regional policy to national control, given that some of the economically stronger Member States are arguing that a reduction in Structural Funds expenditure should be offset by greater tolerance with regard to national aid. I see this as an extremely worrying trend.
I am very pleased with the positive reaction of the committee and the Rapkay report to two instruments which might not yet be as user-friendly as we would like. For our part, we will endeavour to constantly improve the State Aid Scoreboard and the state aid register now available on the Internet. There is no longer any need for me to describe these two instruments - you are quite familiar with them - and from now on the scoreboard, in particular, will make it possible to share useful information through Internet connections with the Member States and, with the introduction of the second edition, with the European Parliament as well.
What is more, the state aid register supplements the scoreboard, providing more detailed information in a less aggregate form on each case of aid, specifying the sectors and businesses concerned.
Concerning the steel industry, may I remind Parliament that the Commission has already expressed its intention that strict rules on state aids to this sector be maintained after the expiry of the ECSC Treaty. The European Parliament, Member States, the ECSC Consultative Committee, as well as steel companies and their associations, have also requested strict rules for state aids to the steel industry. The Commission considers that this objective may be attained by focusing on the types of state aid that, from the experience of the past and taking into account the features of the steel industry, have most distortive effects on competition in this sector. This is the case of investment aid and rescue and restructuring aid.
It is the Commission's intention to continue the current prohibition of these types of aid after the expiry of the Treaty on 23 July 2002 and this point is planned for discussion in the Commission very soon.
Mrs Riis-Jørgensen mentioned shipbuilding, and your interest in this does not surprise me entirely. You are well aware what the conclusions or the non-conclusions were in the Industry Council in December. Indeed, a report is being produced concerning the situation of another market segment, for which a procedure has been started. I have nothing new to report on this.
On airlines, I would just like to point out that the Commission has decided, concerning the events of 11 September, that indeed they were of an exceptional nature in the sense of Article 87(2)(b) of the Treaty. This means that state aid to make good damage caused can be accepted - though as you know, this has been applied by the Commission in a very stringent and cautious and restrictive manner - concerning the four days following 11 September, as a result of the closure of US air space, and measures to cover the excess costs of insurance in air transport for one month or if needed to the end of the year.
Finally, let me once again stress how grateful the Commission is for the interest of Parliament in the state aid policy. This encourages us to act more and more effectively in this delicate and important area.

Riis-Jørgensen
Madam President, they could not fly for four days after 11 September and now they want to have a monopoly for more than a year. Everything can be blamed on 11 September. Please give us a free economy.

Monti
I understand Mrs Riis-Jørgensen as saying "they want". So far as I am aware, this is not a Commission position or decision, even though my colleague Mrs de Palacio is the Commissioner responsible in this area.

President
Thank you, Commissioner.
That concludes the debate.
The vote will take place tomorrow at noon.

Monitoring of BSE
President
The next item is the report (A5-0467/2001) by Mr Olsson, on behalf of the Committee on the Environment, Public Health and Consumer Policy, on the follow-up to the BSE crisis with regard to public health and food safety (2000/2321(INI)).

Olsson
Madam President, allow me to begin by thanking everyone who has helped with this report: MEPs from other political groups - especially Mrs Roth-Behrendt, former chairperson of the Temporary Committee of Inquiry on BSE - together with the Commission and the Food and Veterinary Office in Dublin.
Globalisation increases with every day that passes. It is a good sign that we are trading more and more across borders. We need a free flow of goods within the European Union, as well as an ever freer flow of goods in the world. It is, however, important that this should not lead to our seeing a freer flow of viruses. Where mad cow disease is concerned, it feels as though the European Union has gone into the free market back to front. First of all, a free market was created, and then we began to investigate whether the rules were adequate for a free market.
In recent years, a number of gratifying measures have been adopted. For example, we have created the European Food Authority. Moreover, food legislation has been reviewed, and this will lead to sound legislation once all the legal acts have entered into force. Experience so far is alarming, however. A look back shows that many Member States have been poor at complying with the legislation. It is, then, not only the defective legislation but also inadequate compliance with this that have resulted in the present position. It is extremely important that we now remedy this and become better at complying with the legislation.
If we consider the connection between these different diseases, we can see that scrapie, which is the oldest TSE disease, was discovered as long as several hundred years ago, while BSE, which attacks bovines, was not discovered until 1986. We are obviously at a stage where a lot is happening. Life continues, and so does its negative sides. We must therefore be prepared for the possibility of constantly discovering new problems.
During the autumn, there was some anxiety that BSE might also be able to attack sheep. That is presumably the background to Paragraph 11, about the need to monitor sheep, being included in the report. I believe that its inclusion is a mistake and call upon Members not to vote in favour of it, for it appears that the investigation which was to have been carried out on sheep' s brains was most likely carried out on cows' brains. Scientists too, of course, make mistakes from time to time.
The problem with BSE is that it is a disease which crosses the species barrier. This means that there is a risk of people too being infected. We know that Creutzfeldt-Jakob disease is a major worry in this context.
I want to point out some of the measures we propose for the future in the report. First of all, I want to state that, for ethical reasons, ruminants must obviously never be fed with meat meal. They are not carnivores by nature and nor, therefore, must they be forced to eat meat. It is, however, sensible - and we return to this in the second report - for primary produce that is suitable for human consumption also perhaps to be used as feed. The problem is that there is a risk of disease if an animal eats other animals of the same species. What is termed a cannibalism ban ought therefore to be introduced, prohibiting the feeding of animals with feed produced from animals of the same species.
There is a considerable risk of infection, and there has been little in the way of compliance. We must therefore probably observe that it will not be possible within the foreseeable future to remove the ban on feeding omnivores with meat meal and bone meal. In the long term, when there is better compliance, it may perhaps be possible to do so.
Regarding the important issue of sanctions, I want to put a direct question to Commissioner Byrne. If individual Member States do not meet their Treaty obligations, the EU must have powers to intervene by taking measures to guarantee food safety - an issue that we also address in a number of points in the report. We also believe that the Commission must be able to impose sanctions upon Member States that have not done enough to apply this type of legislation. It would be particularly interesting to hear the Commissioner' s view on this.
Finally, I want to repeat what I actually stated at the beginning of my speech. Research is needed within both this and other adjacent areas if we are to be alert to new problems' and diseases' arising. Diseases of this kind are dangerous to both animals and human beings, and it is incredibly important that we in the EU devote adequate resources to maintaining the fight against them at a high level.

Graefe zu Baringdorf
Madam President, Commissioner Byrne, this being the fifteenth year since cases of the disease first appeared, one might think we had done everything necessary and had got a grip on BSE. When we in the Committee on Agriculture and Rural Development were drafting our opinion and yet again pointing out that all Member States should now be carrying out their checks properly, we did think that, well, that has to be re-emphasised. We could not have guessed that it would become such a live issue, yet we are now learning from Germany, mainly from Bavaria and the Rhineland Palatinate, that the tests were done carelessly and the checking handed over to private firms which were ill-suited to it. One can only scratch one's head in bafflement. One can, of course, tell the Commission to better exercise supervisory control, but one can scarcely demand that any more, as the people at the bottom know just as well what it is all about. Let us face it, BSE is a dangerous disease, and it is actually scandalous that tests are done only from the age of thirty months. Most of the animals that end up in the slaughter line have not been tested.
Take Great Britain, where tests are still not being done at all, because animals over 30 months old are not permitted to enter the food chain, even though tests are, of course, necessary in order to establish the incidence of BSE among animals that are not getting into the food chain. When it comes to the scientists who made a laughing-stock of themselves by examining sheep whose brains then turned out to be those of cattle, we cannot of course say, 'OK, then there is no danger to sheep.' There is a danger to sheep, so they too have to be tested.
Turning to the circulation of animal bone meal, there are still evidently thousands of tonnes of infected or potentially infected animal bone meal making their way around the world, so that BSE is still spreading further afield and cropping up in places where we had never expected it. We see here, Commissioner Byrne, that the feed ban is evidently inadequate. It must be stated where the stuff has to go and how it is to be destroyed.
As the Committee on Agriculture and Rural Development has also made clear, the same applies to feeding with swill and food leftovers, which has, over and over again, brought us foot-and-mouth disease and rinderpest when feed contained these in untreated form. This means that, here too, we can do nothing by means of a ban on its own, but must say where the stuff should go. If we had voted on the so-called interim report - 'The Handling of Animal By-products' - all of ten years ago, we would, of course, be under far less pressure from BSE, and if we had had it all along, there would have been no BSE. I would say the same about swill and food leftovers: if we had had proper handling of these food leftovers, there would have been no infection with foot-and-mouth disease and rinderpest.
We must reach the stage where one system prescribes this for all countries. Those who have an economic interest in bringing about the proper handling of animal by-products must be granted licences and punished by their withdrawal if they fail to do what the law prescribes. Whoever breaks this law must lose his livelihood, because human health in our country is at stake here. We must be bold in showing this rigour, or else - even in ten years' time - we will still be discussing the recurrence of lapses.
Mr Byrne, I wish to expressly confirm to you that the Commission bears no responsibility for these latest failures. They are the responsibility of the Member States. The Commission has also done good work on the drafting of the interim report and on its presentation.

Grossetête
Madam President, I shall try to be brief, but I should like to say to the rapporteur, Mr Olsson, that this report comes at a time when we have the impression that we have reached a standstill in the BSE crisis. The Member States have, on several occasions, shown how hard they are finding it to manage this crisis. The European Union must not, therefore, shirk its responsibilities in this matter, particularly with the prospect of the forthcoming enlargement.
It is crucial, today, to better coordinate everyone' s efforts to put an end to this epidemic and to prevent further crises arising in the future. Our objective is food safety. We will only be able to achieve this objective by means of better coordination of the policies implemented in each State, and through greater harmonisation of screening procedures and of the fight against the disease.
My group, however, is divided over the measures to be adopted in this field, although I personally fully support the report by Mr Olsson. On the whole, my colleagues fully support these measures, which must enable us to achieve the objective of food safety. The differences of opinion concern the approaches to be taken. This is something I regret, because this obligation to public health must not allow us to relax the rigour to which we have subscribed under the precautionary principle. The aim is not to pit farmers and environmentalists or farmers and health specialists against one another. Farmers want to produce and to be able to guarantee the quality of their products; environmentalists, like those responsible for public health, want to contribute to a sustainable development, but everyone' s objectives are, in fact, the same.
Therefore, this obligation to public health does not allow any relaxation of rigour in terms of implementing the precautionary principle and the principle of zero tolerance, respecting the ban on feeding animals with animal meal, and the destruction of existing stocks of such meal. I can see that our British colleagues are having a hard time and that they would like to find alternatives to destroying the entire national herd, but none of this should allow us to relax the rigor that we want to see in this monitoring of the BSE crisis.
I should like to conclude, Madam President, by reminding you that, in this field, it is crucial that the Commission is able to put a number of sanctions in place and that it ensures that the necessary inspections are made by the Food and Veterinary Office. Community legislation must be implemented more systematically and must be implemented in all the Member States in the same way. Sanctions must be followed up and we must be able to guarantee consumers the highest level of safety in order to restore the public' s confidence in their farmers and in their political leaders.

Whitehead
Madam President, the Commissioner is in danger of hearing the same speech many times in different languages. This is the English version. I am speaking here on behalf of Mrs Roth-Behrendt, as her father died yesterday and she has had to return home. I am sure the whole House will join me in expressing sympathy to her.
These are the things I want to say. First and foremost, we still do not know enough about BSE and about how it is spread. We certainly do not know enough about its incidence in all the Member States of the Community. We know that we still have it in the UK and although in the coming year it may be that other Member States have more cases than us, that is not a cause for satisfaction for us, but rather for commiseration with those who are still discovering the full horror of what this may mean for them. In the UK we have had over a hundred cases of the human form of CJD. We pray that other Member States will not go through that agony either.
The Commissioner will be entitled to say to us, when we talk about inadequate testing, that the Commission has said time after time that the real truth about BSE was hidden because there was no effective testing. If this debate does one thing at least, as Mr Graefe zu Baringdorf and others have said, it may impress upon us that the Member States need to be able to do this.
I am glad that Mr Olsson accepts that there is an equality of effectiveness between the way the UK takes out animals at 30 months and the slaughter of affected herds and testing of individual animals before they enter the food chain in other European countries. I would not want to see any misunderstandings about that. I believe we need more effective checks for contamination. There are some late, worrying statistics in the UK and elsewhere about animals born after the checks were put into effect, which are still now showing symptoms of BSE. There are obvious suspicions about the hoarding of meat and bonemeal and about where and how the testing is effected.
Mr Olsson wants the FBO to be in effect the monitoring agency. I do not mind that, but I believe that nothing should subtract from the responsibility of the individual Member States to ensure that their testing and external controls are effective and are carried through.
Then there is the question of animal waste to herbivores. We will be debating this when Mrs Paulsen's report comes back for its chequered second reading. I would simply say that I am in that party in this House that believes, with Mr Olsson, that we should outlaw the feeding of animal waste of any form to ruminant animals. It is high time that was done.
Finally, on the issue of sheep, I would just say to Mr Olsson that when we look at that lamentable failure over the testing of what turned out to be cows' brains, all that tells us is that there was incompetence of a grotesque kind. It does not tell us that we have proof positive that BSE has not jumped species once again and got into the sheep population. I would like to hear the Commissioner's views on those things and I apologise for repeating some of the other excellent remarks made in this debate.

Wyn
Madam President, I welcome the report as it raises many important issues as we work towards a comprehensive and a safe food policy in the EU.
Control of infectious diseases goes hand in hand with proper monitoring. Close consideration should be given to how infectious diseases are monitored by European Union institutions. We must likewise question the methods of countries outside the EU and impose stricter import controls like those carried out in Australia and New Zealand.
However, we must remember, if regulations are drawn up, that it is important to impose penalties on Member States which fail to implement EU legislation on feed and foodstuffs, otherwise regulations are not worth the paper they are written on.
I call on Members to let common sense prevail. Of course we need to test animals for BSE, but let us base the tests on sound scientific practices. There is no proof that testing animals at 24 months is foolproof. On the contrary, animals can develop BSE after 24 months. I have had no satisfactory answers as to what this calculation is based upon. The 30-month threshold currently imposed seems to be working. The forecasts are that the UK will be BSE-free by 2005, and this has been achieved using the 30-month threshold. Meat under 30 months can now be exported from the UK and it is true to say that it has proved to be a safe product for the consumer.
Another concern is the compulsory testing of sheep. Again I urge caution and call again on sound scientific evidence. The whole UK flock was nearly wiped out last year because of the discovery of BSE in sheep. However, luckily someone questioned the validity of the findings and it was then discovered that the test was actually carried out on a cow's brain after all. This episode did little to restore farmers' confidence in proper scientific research. We need to develop a comprehensive animal health strategy and ask ourselves what we have learned from BSE. The main thing, without a doubt, is not to tamper with nature on ethical grounds. Herbivores must not be made to eat meat or fishmeal. However, we must now concentrate on the future and work on a policy and strategy to undo the damage to the food chain.
Finally, the farming community has suffered a great blow over the past few years. Let us work together now towards a food safety policy and a reform of the common agricultural policy which moves us away from a so-called consumer-led policy that led to intensification - but let us not move either to a consumer-led policy based on unfounded theories. We must regain consumer confidence by producing a policy that will embrace all aspects.

Fiebiger
Madam President, infringements of the fundamental principles of food standards law provide a great deal of headline material in many, if not all, of the countries of the European Union. Although they involved a lot of distortion and scaremongering, reports played a significant role in preventing such occurrences from being forgotten.
The breaches in the investigation of BSE which have become public knowledge in recent days represent setbacks for all those who have campaigned to introduce a high level of consumer health protection in food production, and I think they had had some of those already.
It is precisely the great public interest in this subject, and the apparent avoidability of the most recent instances of human health being put in danger, that justifies the introduction of strict sanctions as asked for by the report, in order to finally stop new cases of BSE flaring up.
The highest standards in food production should apply in the European Union. Such is the most significant statement in the White Paper on Food Safety. The legal framework this requires must, as I understand things, be allied to a recognised early warning system through the EU countries, so that suspicion that human health has been endangered will result in the products being designated and their manufacturers named in public.
As a rule, public warnings are always desirable, above all when it is suspected that a product has been widely distributed, which is always the likely case in the never-ending cycle of food production.
It makes sense to me that specific food producers should be publicly named and warned where, in future, there is the mere suspicion of danger through unhygienic production practices or basic materials. The widely-honoured principle is this: checks on animal feed are the preliminary stages of foodstuffs inspection.
The report's demands are indeed far-reaching. Practical experience will show whether breach of a specific duty by the withholding of information should have the same consequence as fraud against the financial interest of the European Community. The whole importance of the report lies in the necessity of referring again and again to the need to abide by existing prohibitions and instructions.
I wish to observe in conclusion that Mr Olsson's report is of contemporary relevance and shows close acquaintance with the present situation. I do not believe that it is a plan of campaign for the next BSE crisis.

Bernié
Madam President, BSE crystallises the fears and the doubts of both consumers and producers: a considerable fall in the consumption of beef and a more than 20% fall in the price of produce.
Europe, which is largely responsible for this tragic health crisis, must learn the lessons from it, particularly with regard to the failings that have occurred. Instead of giving the Commission and the Veterinary Office greater powers, it would be better to harmonise the measures that need to be taken and then implement them effectively. How, for example, is it possible that the list of specific risk material varies from one State to another? The European Union, the largest consumer of agricultural produce, must impose its requirements for food safety on extra-Community policy. In other words, it must apply to imports similar rules to those that regulate European production.
With regard to research policy, all means must be harnessed: research into the disease, methods of transmission, means of prevention, the updating of tests on living animals, etc.
With regard to waste treatment, how is animal meal stored? How is it going to be processed?
This crisis also has a major economic and social aspect, with the threat to entire swathes of the farming sector. The fall in the number of farms clearly illustrates the professional crisis affecting young farmers. How, indeed, can they contemplate the future with ease if the high-quality products adapted to the new expectations of consumers are not selling?
Other professions lower down the food chain are also affected. This is true of small butchers and specialist butchers, who refuse to give up their right to remove bones in their shops when they only work with healthy carcasses.
Farmers have already made huge efforts to ensure quality, labelling and traceability, for which they are not always compensated. Large-scale distribution continues, in fact, to favour cheap meat, even if this means importing from third countries.
If, as we are told, society has opted for quality, it must stand shoulder to shoulder with farmers in this process. It has become crucial to launch information campaigns to reopen dialogue and to finally restore confidence between consumers and producers. This step is essential to finding a way out of a crisis that is still unfolding.

Souchet
Ladies and gentlemen, the first thing we must bear in mind at the outset of this evening' s useful and necessary debate on the monitoring of the BSE crisis is the confusion, the distress, the suffering and the fury of farmers, whose possibilities, prices and morale have all been struck by a veritable earthquake that has shaken their world, ruined years of work on breeding and good practices and has caused them to be distrusted by consumers, which they feel is particularly unfair.
We are concerned to see that, in many farming regions, as you know, Madam President, large numbers of still young farmers are leaving the business because, unable to put up with the consequences of a crisis for which they are not responsible any longer, they are forced to stop farming. In some cases, their despair leads them to take violent action, even to commit suicide.
The Commission, which reacted so badly and so slowly to the outbreak of this crisis, first by denying it and then by playing down its severity, appears today, probably to get itself off the hook, to be prolonging the matter by imposing whole ranges of measures which do nothing to allay consumers' concerns; they risk destabilising the markets and increase the costs of making changes to the industry, whilst at the same time proving itself to be more generous in laying down regulations than in providing money. The European testing programme for scrapie enters into force this month. Is this good timing when each test costs as much as a sheep' s carcase and cannot currently distinguish between the prion which causes scrapie, which is harmless to humans, and the prion that causes BSE, which can be transmitted to humans? Furthermore, Argentinian meat imports have started up again. Is this really the right time, when some parts of Argentina remain infected with foot-and-mouth disease? Incidentally, the special purchases programme, set up by the Commission is about to be abolished, on 31 March, and according to Agenda 2000, the intervention mechanism for beef and veal is due to end on 30 June 2002.
I call on the Commission to state unequivocally that these deadlines will be put back, because going ahead with these blows to the beef and veal industry would be like cutting off the oxygen to an injured person who is being resuscitated. Instead, we feel that at a time when the BSE epidemic is at very different stages in the various Member States, it is the vigilance of the States themselves that provides the bests results. In the United Kingdom, where the disease originated and which has had 99% of all clinical cases, the measures, which admittedly took a long time to be adopted and an even longer time to be properly implemented, are now bearing fruit. The number of BSE cases has steadily fallen by 40% per year to reach fewer than 1000 cases last year, whereas in 1992, there were 36 000. In France, where the epidemic is more recent and where systematic screening over the last eighteen months seemed to initially increase the number of cases, there has been a slight decrease since the end of 2000. The other countries affected have a lower rate of prevalence and also appear to be in control of the situation. As you are aware, it is now Japan' s turn to be infected by the epizooty that we have experienced.
In Europe, we must now, therefore, allow the authorities of the Member States to get on with their work so that farmers can regain the total confidence of consumers, whilst, within the Union, resolutely making the necessary efforts to provide real traceability. Consequently, with regard to France' s maintaining its ban on British animals and meats, the European Court in Luxembourg - the judgment should be read in its entirety - has acknowledged that the ban was largely justified due to the still insufficiently reliable traceability within the industry in the United Kingdom. It is also crucial to effectively implement, by means of systematic and rigorous inspections, the same quality and safety requirements, in order to provide consumers with the same guarantees for meats imported from third countries as for Community meats.
Item 25 of the draft resolution that has been presented to us makes a timely insistence on the importance of this issue by emphasising the Commission' s responsibility to "ensure that the same safeguards are applied with regard to imports from third countries as apply to Community products, in particular as regards BSE testing, the temporary ban on feeding meat-and-bone meal and the proper removal of specific risk material." Furthermore, the Commission should also inform us, as well as the Member States, of the results of its inspections. To sum up, Madam President, consumer confidence, which is crucial if our farmers are going to find new hope, will only fully return when they see that in the European Union, public health protection comes before the dogma of free trade.

Ayuso González
Madam President, Commissioner, ladies and gentlemen, I would like to start by congratulating Mr Olsson on his work and also on the willingness he has shown in incorporating the suggestions he received from all Members of Parliament into his report.
The report' s explanatory statement gives a perfect account of the BSE crisis from its origins in the United Kingdom in the 1980s.
The 180 000 infected bovine animals in Great Britain, in addition to the 1 325 in the rest of Europe by the year 2000 and the 101 human cases of new variant CJD have raised serious issues about animal feed and have highlighted the far from harmless effect of this feed on the food chain.
Today, fortunately, we can congratulate ourselves on the scientific advances made in discovering the cause of the disease and on the efforts being made by the Commission and the Member States to eradicate it once and for all. However, there are still some loose ends that need to be tied up in order to complete these investigations and implement the measures that are strictly necessary, because the measures that have been implemented are extremely costly to public and private funds, and for this reason, we must not ask for anything that is unnecessary, even though it costs nothing to ask.
Consequently, I wish to put forward the idea that, until there is scientific evidence to support it, we should neither gratuitously request that the age for obligatory BSE testing be lowered, nor should we ask for the list of risk material to be extended. It would be a different issue altogether were veterinary scientists to recommend this, but, as things stand, they have not done so.
With regard to conclusion No 27, which calls for a reform of the CAP to tackle this problem, I would say that the CAP deals with a great deal more than food safety alone and that this safety is sufficiently complex to be addressed within the reform of the CAP. This is well understood by the Commission and hence the White Paper on Food Safety, the European Food Authority and all the legislation on food safety and animal feed that we are revising in this legislative period.
This is the framework in which the technical and regulatory actions to be taken to guarantee food safety in the whole food production chain and not in the CAP are established, although one side-effect of it could be to impact on some aspects of the CAP.
Finally, as has been said on many occasions, we think that if the crisis was not tackled earlier, it was not due to a lack of research, studies or mandatory regulations. It was due to a failure to implement standards and to a breakdown in the appropriate controls for their implementation. These are areas in which we should have more influence in the future.

Blokland
Thank you, Madam President. It is beyond me why, after putting so many strict measures in place, we are still fighting BSE. Due to the unknown incubation period, the measures that have been taken only take effect in the longer term. It is therefore possible for new cases of the serious Creutzfeldt-Jakob disease to emerge, against which we are still powerless to do anything. We have to be very frank about this.
On the other hand, we can also state that, by the compulsory removal of specific risk material, a guarantee is put in place that the carrier of the disease no longer ends up in the food chain.
Since it is no longer permitted to feed cattle animal and bone meal, I expect that, in time, the number of cattle infected with BSE will be relatively small. At some point, we hope that tests will show that we are at the level we were at prior to the BSE crisis, namely a few cases per annum.
Unfortunately, the testing of cattle for BSE has disastrous side-effects. If one cow appears to be infected, the entire herd is slaughtered. However, this makes no sense. BSE is not the same as foot-and-mouth disease. Infection is caused through the feed and is passed on down the breeding line. That is why the birth and feed group need to be traced and tested, and not the cattle accidentally sharing the same shed. It is irresponsible to sacrifice healthy animals to a false sense of consumer confidence.
We went against God' s creation by turning ruminants into cannibals. We cannot conceal our shortcomings with futile measures. We will once again abuse God' s creation if we slaughter and destroy animals unnecessarily.

Klaß
Madam President, Commissioner, ladies and gentlemen, Parliament is using the Olsson report not only to take up a position on the current BSE situation, but also, in particular, to look into the future. Our objective is to guarantee food safety, and we will not have reached it as long as our knowledge of this disease is incomplete.
That is why I particularly support the demand for the resources needed for continued research into TSE diseases to be made available by the Commission. We need to learn more about these diseases and epidemics, which were previously unknown, in order to be able to combat them more effectively. Society's hysteria, which was particularly marked in Germany, is diminishing. People are going back to eating meat, and are again buying it cheaply.
There is a need for clarity about who, in the European Union, is to bear the costs of additional impositions such as tests and investigations, and conditions for this must be the same from one Member State to another. We must, in the same way, see to it that regulations are transposed in the same way in every Member State. The provisions of the TSE Regulation need to be stringently applied, with tough penalties imposed for disregarding or fraudulently evading them, not only as regards the production and utilisation of animal feeds but also tests, regulations on slaughtering and the disposal of hazardous material.
Animal feed is the target of criticism as much as ever and will continue to be so until we have open declaration and can at last check to ensure that only what is listed on the container is actually in it. We cannot carry on being driven by fear of fraud, improper treatment and erroneous identification to destroy valuable substances and, apart from that, to import materials or feed from overseas, for example, where we have no influence on their production and composition. That is why I put working towards openness, ease of control, and truthfulness right at the top of the list, for only by them will we achieve credibility and trustworthiness. Until that day, the ban on feeding omnivores with meat and bone meal will have to stay in place.
It follows from this, though, that the Commission urgently needs to develop innovative methods of disposal and recycling, such as, for example, the production of biodiesel from tallow or fats. It must at least be made clear that unprocessed offal, waste water, fat and tallow still have to be treated.
We intend that this report should promote greater awareness and urge the Member States to be unstinting in their efforts to beat this disease.

Parish
Madam President, I should like to begin by congratulating the rapporteur, Mr Olsson, on his excellent work in compiling this report. As a farmer myself, and someone who had a beef herd, I can testify to the wholesale damage and destruction that BSE has done - not only to the beef industry in my own country, but also in Member States throughout the Union. So I welcome his efforts in fighting BSE.
This is a scourge that we must defeat across the whole of Europe. I welcome any moves that will strengthen the efforts already made in the UK and by the Commission to stamp out BSE. However, the report also raises some serious questions that are to be addressed if we are to maintain the efforts to improve food safety.
Firstly, I do not believe that the whole-herd slaughter policy has any scientific base for adoption. BSE is not a contagious disease and cannot be spread between cattle. As we have seen with foot-and-mouth, to adopt the scatter-gun approach to disease control policy of mass culling does nothing to instil confidence in the consumer and only serves to spread further concern. In fact, if a farmer has to lose his whole herd for one case of BSE he may be less inclined to declare the animal and may bury it instead. I ask Commissioner Byrne to review the whole slaughter policy for BSE in the EU.
Secondly, there have recently been worrying cases in the UK of beef being illegally imported from Ireland, which breaches the UK's very strict regulations. In the UK at present we have a scheme in place which prohibits beef over 30 months from entering the food chain. In one recent case, beef over 30 months from a plant in Cork was shipped illegally for processing and then resale within the UK. It is a testament to the tough and stringent controls in place in my own country that this particular breach was picked up so quickly and effectively. But I call on the Commission and other Member States to ensure that their own authorities are as vigilant against this dangerous trade.
Finally, there have been far too many cases of meat containing specified risk material being exported into the United Kingdom. The growing number of cases and the fact that they come from so many Member States - Germany, the Netherlands, Belgium, Spain and Ireland, to name but a few - must be a huge concern for us all. I am not seeking to apportion blame in any way, but if we wish to see the farming industry - particularly the beef industry - flourish in Europe, we must all shoulder the responsibility to enforce the rules.
What I am calling for is a mood of resilience and an ardour to implement the EU regulations and the tough controls that we have in place, and for us to work together to improve the inspection regimes in all Member States. I call upon the Commission to take a more robust attitude to the enforcement of this regulation.
We have found in the United Kingdom that the only way to rebuild the beef industry is to rebuild consumer confidence. We will only do that by guaranteeing the public a safe product that they can trust.

Müller, Emilia Franziska
Madam President, Commissioner, ladies and gentlemen, this report focuses principally on public health and food safety. Feeding with infective animal meals or fats is still regarded as the principal trigger for BSE. It is irresponsible, in view of the experience we had of poor adherence to the ban on feeding ruminants with animal meal, to think at present in terms of lifting the general EU-wide ban on it. Moreover, consumers would find it incomprehensible.
All animal meals still kept in stock, as well as feed containing them, must be destroyed without delay in order to prevent future cross-contamination of feedingstuffs. There is a particular and connected danger presented by the animal meals, some of them infective, still stored in other states. The smallest amounts of this material is sufficient to cause infections, and this is yet another reason not to lift the ban on feeding with it.
Guaranteeing the safety of humans and animals most certainly and fundamentally presupposes a working and stringent system of controls in the Member States. I welcome the strict prescription of effective tests for BSE in all the Member States, and also the demand that the age for testing be reduced to 24 months. The Commission must also intervene in favour of the introduction of the open declaration of all feed ingredients in all nation states. Even before the Central and Eastern European states accede to the EU, they need to set up working systems alongside our own to oversee the safety of food and feedingstuffs.
There is an especially urgent need for slaughterhouses to be reorganised so that the immediate removal and disposal of hazardous materials in accordance with European directives may be guaranteed. Imported food must be every bit as safe as that produced in the European Union, and so tests for BSE must now be made obligatory in countries outside the EU. The safety of food, including that which is imported, is a fundamental requirement for consumers who want to eat healthily. We must make it our concern.

Santini
Madam President, in the previous legislature, this issue was dealt with mainly by the Committee on Agriculture and Rural Development, whereas the committee responsible is now the Committee on the Environment, Public Health and Consumer Policy. This is right and proper, for in this tragedy - a tragedy which is equally great for all - there are in effect two victims, also equally affected: the consumer and the farmer.
I remember the long hours of debate, the on-site inspections carried out at the beginning of the committee of inquiry' s work and then during the work of the supervisory committee monitoring the committee of inquiry, set up because Parliament did not have confidence even in the information provided by the Commission; in effect, it proved to be severely lacking in many areas.
Now we know more than we did then, for the world of science has also provided some answers and clarified the main issues somewhat. We now know that the bulk of the blame for this tragic affair lies with the State, with the world of politics. Basically, there are some Member States which have been less diligent in enforcing precautionary rules and, above all, bans, over the past two years. Other States seem, once again, to have adopted, as in the past, the approach of a conspiracy of silence, in what could be described as an irresponsible attempt to hide and minimise the impact of the tragedy or - at least - the problem. Already, in the past, precisely this attitude of lack of transparency has caused the most severe damage for farmers, for they were the butt of suspicion, mistrust and discouragement on the part of the consumer. I therefore feel that the most important part of the Olsson report is precisely its loud call to governments to enforce the rules properly and thereby restore the confidence of the citizens, whether they are consumers or farmers, with an adequate information campaign and, most importantly, with sufficient support not least for those who are the direct victims of the tragedy: the farmers.

Keppelhoff-Wiechert
Madam President, Commissioner, it is, I believe, beyond dispute that public health and food safety are matters of importance to all of us, producers every bit as much as consumers. Preventative consumer protection is on everybody's lips, but my understanding of these things leads me to believe that our role as politicians is not to give additional impetus to the emotional discussions that are still being carried on about the ongoing handling of the BSE crisis.
For my part, I do not want to help discussion of matters concerning BSE to slavishly follow the spirit of the age. In view of current events in Germany, I favour the strictest controls right along the food production chain. We also, of course, need the toughest sanctions when offences are committed. In the meantime, I advocate testing for BSE from 24 months.
Now, when can we actually expect science to come up with definite findings on how individual animals get the disease? I think that when that does come to light, we could say goodbye in no time to the idea of killing off all our livestock. Until then, going down the road of mass slaughter is only one alternative.
The feeding of omnivores with meat and bone meal will no doubt continue to be prohibited, at that for a variety of reasons. We will certainly maintain the current ban on feeding with animal meals for as long as the open declaration of feedingstuffs is not made mandatory and for as long as the processing of offal from healthy animals cannot be carried out with any guarantee of safety. I will mention, though, the formulation used in Mr Olsson's report. He, too, says 'for the foreseeable future' . 'For the foreseeable future' means, for me, that the future may perhaps find us back on a better road ahead.
Let me conclude by saying that it is easy for us to explain to any critically-minded consumer that healthy meat on healthy bone is part of good diet. Processed healthy bone in animal meal is, though, apparently a danger to the omnivore. Just try making sense of that. We could take numerous other examples to illustrate this state of affairs. I take the view that we, bearing as we do political responsibility, have to get back to discussing things in a more matter-of-fact way.

Matikainen-Kallström
Madam President, we still know very little about BSE, a disease that has shaken the whole European agricultural sector. We urgently need new research into what causes it and how it spreads. There is no reliable proof of the quality of the screening process. The call to lower the age of animals to be tested from thirty months to twenty-four months is hardly relevant. In most cases, the disease is still diagnosed in animals when they start to behave strangely.
The possible connection between calf feed and BSE must be studied. There has been no clear explanation for recent individual outbreaks of the disease. It is nevertheless worth supporting the disposal of stocks of bonemeal and tallow. The disease must not be allowed to spread by accident as a result of contaminated feed. There must be unambiguous declaration of ingredients in animal feed, and responsible cattle breeders must be able to make the right choice on the basis of reliable information when purchasing animal feed. The wellbeing and health of animals must be safeguarded.
There can be no transitional periods allowed for new Member States joining the Community with regard to food hygiene and declarations of quality and ingredients, as the new Member States will be joining a real internal market. The applicant countries must be given technical and financial support in the prevention of the BSE risk. We have to ensure that the measures will also continue after the enlargement process is over.
A lot was done last year to bring BSE under control and this brought results: for example, consumer confidence in beef is starting to return. At this stage it is reasonable to remain cool, reinforce the measures that exist, and await the outcome of new studies.

Jeggle
Madam President, Commissioner, ladies and gentlemen, I wish to thank Mr Olsson for his good and critical report, which does a thorough job of highlighting some difficult points. The common concern of us all is, without any ifs and buts, the maximum possible safety of our food, which, though, should also look good and taste good.
To produce this food, we need farmers, we need agriculture and we need agro-food production. That is still the case. It is this fact that prescribes the frame of reference in which we are at present working on this own-initiative report. The report rightly highlights a series of shortcomings, no doubt the most serious of which is the appreciable difference in the ways Community legislation is implemented in the absence of any common level of protection. This is where, in my view, the Commission is meant to be able to intervene and should be in a position to do so. The precautionary principle must be adhered to by any means available.
Current events in Bavaria and the Rhineland Palatinate show how important responsible controls are. We must therefore hold fast to the imposition of strict sanctions when binding regulations are not complied with, but I counsel a more cautious approach where a scientific justification has not, to date, been found. I cannot therefore go along with testing for BSE as early as 24 months, with the ban on feeding with leftover food, even if it has been treated in accordance with contemporary scientific knowledge, and, likewise, the idea of slaughtering the whole stock when a case of BSE occurs, which is something I reject.
There is an urgent need for more research into comprehensive food safety. We need farmers to be well-trained, good managers, motivated and - which is most important - respected by society, and these farmers need a fair price for what they produce.

Schierhuber
Madam President, Commissioner, ladies and gentlemen, I, too, would like to thank Mr Olsson most warmly for taking upon himself the very difficult task of drafting this report. Ever since the first case of BSE occurred, Parliament has always very closely observed and discussed the steps taken at both European and national level to deal with the crisis.
It is important for us, the farmers right across Europe, that all possible steps should be taken to avoid future food crises. The precautionary principle, already mentioned by many of my fellow Members, must be adhered to, and the latest medical findings must be taken into account. One difficulty that has become apparent is that of the marked divergences between Member States in the way they implement EU regulations and the partial absence of details as to how and to what extent Community legislation is being transposed. I am in good company when I say that, above all, though, much firmer measures must be taken in respect of non-compliance, including the removal of hazardous material.
I do not believe that it is sensible to provide for the reduction to 24 months of the age at which tests are carried out. I think this would give rise to unjustifiable costs. Tests should continue to be carried out at 30 months in order to obtain secure results. I therefore also support those amendments that provide for this. As I have already said, the greatest protection is offered by proper slaughtering and removal of hazardous material.
Let me make another observation. I really would like to make the point that the common agricultural policy surely already does justice to the objective of food safety even now. In my opinion, there is no absolute link between the continuing handling of BSE and the treatment of food leftovers. The BSE crisis was, as we know, triggered by the production of animal meal under improper conditions and the equally improper feeding of it to ruminants. The problems of recycling should be dealt with in another report.
A second consideration to which we should give attention is that the subject of animals, which are actually omnivorous, should be dealt with elsewhere, in a report of its own and not in this report, which is actually only on the ongoing handling of BSE in ruminants.

Byrne
Madam President, I am very encouraged by the recommendations in Mr Olsson's report and his support for the Commission's approach in this. I want to thank him for this report. His extensive experience in this area is evident from the detail and the high quality of this report, and I thank him for that.
There is too little time available to speak of the recommendations that the Commission can support. I would like, therefore, to concentrate on those recommendations with which we differ or where there appear to be differences within Parliament itself. The recommendation to reduce the age of testing of bovines to 24 months is an example of this. Almost eight million tests were carried out last year on healthy animals aged over 30 months. The youngest positive case in these animals was aged 41 months. This suggests that there is no immediate urgency to lower the current age limit. However, the situation will remain under review.
Another issue where there is some confusion is in relation to the Commission action in cases of poor implementation of BSE measures by the Member States themselves. I have gone on record repeatedly to the effect that the existing enforcement mechanisms, namely the infringement proceedings, do not have sufficient teeth.
The Commission's intention is to present a proposal to the Council and Parliament shortly on food and feed controls. This proposal will fundamentally review the inspection systems in the Member States. In the process it will also propose much stronger action, including stronger sanctions, which many of you have referred to as having been contained in Mr Olsson's report.
The question of financial penalties in the case of fraud or serious malfunctioning of a national control system is being considered in this context.
The incidence of BSE in the Community gives mixed signals. The total number of cases in 2001, excluding the UK, is likely to be in the region of 1,000 cases. This is more or less double the 482 cases registered in 2000. However, most of this increase was due to the impact of the generalised testing of healthy and at-risk animals with the newly available rapid tests.
In addition, frankly, Member States that previously were not looking very hard for BSE have now learned their lesson and have hugely improved their surveillance efforts. Nonetheless, there is still room for improvement in the area of implementation, as the reports of the FVO consistently highlight.
Another continued difficulty is the problem in the Member States in coping with the huge volume of meat and bonemeal which must be destroyed. The Commission has actively reminded Member States of their obligations to respect Community law in this regard and I would refer to a number of contributions from Members of the House on this matter, and would draw your attention to the fact that there is legislation in place relating to this issue which must be complied with by Member States.
Finally, the continued uncertainty over the possible presence of BSE in sheep is also of concern, and many of you referred to this. A decision was taken only last week to substantially increase the level of testing for TSEs in sheep. This will provide a much better picture of the potential problem facing the Community if the presence of BSE in natural conditions is ever confirmed in sheep.
So, I greatly welcome this opportunity to respond to Parliament's initiative in the report. It is only a little over a year since the most recent crisis peaked. We have made a lot of progress in the meantime. At this stage I should summarise the key measures that have been put in place. First of all, the use of meat and bonemeal in animal feed has been suspended. Testing for BSE has been introduced for all healthy animals aged over 30 months and for at-risk and casualty animals over 24 months. The list of SRMs has been extended, notably to include the vertebral column and the entire intestine of bovines, and mechanically recovered meat from the bones of ruminants has been banned.
There has also been very important progress on the legislative front. Regulation No 999/2001 on TSEs was finally agreed and entered into force on 1 July 2001. Very good progress has also been made on the animal by-products proposal, with the question of how to deal with catering wastes as the main obstacle to final agreement. The agreement also on the open declaration of animal feedingstuffs and on the Food Safety Authority will also greatly strengthen the overall framework in relation to TSEs.
Turning to imports from third countries, there are already a comprehensive series of measures in place under the TSE Regulation and its implementing provisions. The FAO has undertaken a series of inspection missions in the candidate countries in recent weeks and months. Argentina, Brazil and Uruguay will also be visited shortly.
The reports on these missions are now coming on stream. It appears that while there has been some progress, further important efforts are still required to achieve full compliance in these countries. I am very concerned that they should not repeat the mistakes of the Member States in their handling of the BSE problem.
The Commission will be actively calling on the countries concerned to take urgent corrective action. I also intend to raise the matter in the meeting of the Agriculture Council with the candidate countries scheduled for next month.
Let me conclude by thanking Mr Olsson for his report. I want to assure Parliament that the Commission's attention remains firmly fixed on TSEs. I am insistent that there will be no complacency. I know that Parliament will continue to keep a close eye - rightly - on eradicating this disease.
There were a number of points raised by Members that I would like to refer to.
In the UK there is now testing of all bovines born between August 1996 - the date of MBM ban - and the end of 1997. The youngest positive test was found at 41 months. That is in respect of eight million tests of healthy animals.
I should emphasise that there is no question ever of lifting the ban on the feeding of meat and bonemeal to ruminants. That ban is in place and will remain so. There is no debate concerning that issue.

President
Thank you, Commissioner.

Olsson
Madam President, I should first of all like to thank Commissioner Byrne. I am delighted that he replied so clearly to my direct question concerning sanctions and that this is an issue which is being dealt with by the Commission. I am really looking forward to our being able to adopt a position in this House on the Commission' s proposal concerning the way in which the issue is to be handled. I see this as a major step forward when it comes both to this issue and to the control and inspection of foodstuffs generally.
I can also tell the Commissioner that I share his view of the proposal to reduce the age of animals that are to be tested for BSE to 24 months. That was not my proposal. Rather, it came from elsewhere. I shall therefore help vote down this proposal tomorrow, using the same arguments that the Commissioner used.
I want to take the opportunity of thanking you, my fellow MEPs, for all your kind words. It has been a pleasure to work on this report. I would, however, emphasise in conclusion that the danger is not over. As we have seen during 2001, new cases have been discovered in many other countries, not only within the EU but also in the candidate countries, Slovenia and Slovakia, as well as in Japan. BSE is still a problem. I share the view expressed by Mr Whitehead concerning the BSE investigation which proved to have been carried out on cows' brains instead of sheep' s brains. That means that the only thing we know in many of these situations is that we really do not know anything, or that we do not know a sufficient amount. That is why there is a need for research.

President
That concludes the debate.
The vote will take place tomorrow at noon.

Climate change
President
The next item is the report (A5-0025/2002) by Mr Moreira da Silva, on behalf of the Committee on the Environment, Public Health and Consumer Policy, on the proposal for a Council decision concerning the conclusion, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder (COM(2001) 579 - C5-0019/2002 - 2001/0248(CNS)).

Moreira da Silva
Madam President, Commissioner, ladies and gentlemen, we have now been waiting for ten years, since the Rio de Janeiro Conference, for this moment to arrive. It is true that the absence of the United States makes the Kyoto Protocol less universal than we would have liked. It is also true that the Protocol is less ambitious than originally intended. Nevertheless, the alternative to this small step would be incomparably worse: without the political agreement reached in Marrakech, we would have to waste another ten years in negotiations on drawing up a new Protocol.
I am, therefore, pleased that tomorrow we will adopt the Kyoto Protocol and we hope that this can enter into force as early as this year. There is, however, one aspect of the Council decision that concerns me. I am talking about the alleged desire of Denmark to reopen discussions on the burden sharing agreement, which was approved in 1998. Such a renegotiation is unjustifiable, unacceptable and would heap ridicule on the European Union' s international standing. We should remember that, very recently, we censored Russia for attempting to do exactly the same thing.
However, in addition to this environmental message that demands that we act, approving the Kyoto Protocol also sends out other political signals that are worth highlighting. Firstly, it has proved that it is possible to regulate globalisation. Secondly, the European Union has demonstrated its capacity for leadership and, in this particular instance, I wish to congratulate Commissioner Wallström on the admirable way in which she has exercised this leadership. Thirdly, it has created a new economic paradigm, the carbon economy. From now on, the price of a tonne of carbon will be quoted on the markets and carbon dioxide emissions will represent a cost to be reflected in the price of all products. The winners will be those able to produce the same things using cleaner technologies.
Having assessed the situation, let us now talk about the future. Between 1990 and 1999 the European Union already achieved a 4% reduction in its greenhouse gas emissions. Nevertheless, the lack of commitment by the vast majority of the Member States is still a matter of serious concern and the situation is very worrying in some sectors, such as transport, in which it is predicted that emissions will increase by 50% in the next ten years. Given this framework, the community instruments proposed by the Commission are to be praised, specifically the European Climate Change Programme and the directive on emissions trading, on which the European Parliament is due to deliver an opinion within the next six months.
However, although we know what the Community strategy is, what role should the Member States play? In my view, the Member States must not fall into the easy temptation of only implementing reduction measures that entail low costs in both economic and political terms. This would basically be an attempt to resolve the problem by cutting emissions in industry and in the energy sector without tackling the transport or civil construction industries. This option would be environmentally dishonest and economically irrational. By avoiding applying the policy to some sectors, Member States would not only be wasting an opportunity for technological change but would also run up a much higher reduction bill for the future. The strategy must, therefore, involve a reorientation of economic polices, internalising the environmental costs of the 'greenhouse effect' in all economic sectors.
This will only be possible if we introduce certain measures that are considered to be consensual, such as the production of renewable energies, energy efficiency and public transport, in addition to clearly unpopular measures such as ending subsidies to the fossil fuel industry, an energy tax and a tax on carbon dioxide emissions in the transport sector. I shall conclude by thanking the shadow rapporteurs of all the political groups for their cooperation and commitment.

Liese
Madam President, Commissioner, ladies and gentlemen, I would like to start by thanking the rapporteur for the presentation of his report, and also for his commitment to climate protection in recent years. I would also like to thank the Commission, in particular Commissioner Wallström, who has done everything to make it possible for us to now discuss in definite terms the ratification of the Kyoto Protocol, which, we can now, thank God, get to grips with.
Tomorrow we can say only 'Yes' or 'No' to the Kyoto Protocol, but it has taken a great deal of work to give us the chance to say 'Yes' to a comprehensive agreement. I thank all those who have played a part in this. The Kyoto Protocol has come in for heavy criticism and will continue to do so.
Most recently, as the rapporteur has mentioned, it is burden sharing on which criticism has again been focused. I will say here quite openly that burden sharing merits criticism, and that those who say that the burdens are shared unfairly, are right. No one, though, is reducing too much; all the Member States are reducing too little. The experts tell us quite unambiguously that, if we want to put a stop to climate change, we must reduce greenhouse gases by 50% worldwide. The magnitude of the task and the pettiness of the discussions between the Member States about this first step - which is, after all, a very modest one - is shown if we work on the basis that the industrialised countries need to reduce by over 50% in order for the developing countries to have any kind of chance of achieving some sort of prosperity for themselves.
India produces a tonne of CO2 per head of the population, as against the Member States of the European Union with about 10 tonnes on average. Against such a backdrop it is bad enough that some EU Member States are permitted to increase their emissions, and that the Member States that produce a very great deal of pollution, such as the one from which I come, complain about now having to reduce their emissions by a relatively large amount.
The Kyoto Protocol is only an initial step and must be followed by many others. We should not, therefore, be small-mindedly discussing the number of places after the decimal point, but energetically striving for a sustainable economy, being careful with resources and saving energy.

Hulthén
Madam President, I also wish to welcome the Commissioner at this late hour. I cannot help but wonder if it is always the Committee on the Environment, Public Health and Consumer Policy that meets on Tuesday night during the part-session in Strasbourg or whether we are regarded as some kind of suspect fundamentalist sect that is always placed lowest down on the agenda. That would be pretty odd, given that we are responsible for one of the most important issues in Parliament, namely that of the environment. I should like to ask both the President and the Commissioner to look into whether it would be possible to change this, that is to say whether it would be possible at least sometimes to raise the status of environmental issues by debating them in the daytime and not always after nightfall.
I had really intended to begin by parodying a well-known Conservative politician in Sweden who once said that he was not only a Hallander but also a European. I should like to say, today, that I am not only a proud Gothenburger but also a proud European. I am proud to be able to say that Parliament has now concluded its debate on the Kyoto Protocol, and I look forward to the Council' s also being able to ratify it in March.
I am particularly proud, however, of having been able to participate in the little delegation that visited the United States last week. We were given the opportunity of discussing the climate issue with both Congress and the House of Representatives. I have the sense that there is not only a physical ocean separating the continents but also a mental ocean, given the way in which the United States regards the climate issue and believes it should be handled. Certainly, the climate issue has now been recognised as a problem in the United States because their own researchers have stated that it is a problem. However, it is still believed that the solution to this problem is to be found in the United States. It is this view that most divides us. The United States regards a global environmental threat as a domestic problem that only concerns Americans, while the European attitude is that the issue should be dealt with jointly.
I therefore wish to thank the Commissioner for having taken such an active role and also thank the rapporteur of the Committee on the Environment, Public Health and Consumer Policy, Mr Moreira Da Silva, who has kept us together and ensured that we have held a common view and position beyond the frontiers of Europe.
We need, in the future, to stick together not only in theory but also in practice. That cohesion will be put to the test following ratification, as it will also be when, a little later on in the spring, we debate the European Climate Change Programme and emissions trading. It is just unfortunate that certain members of the Council will feel the need to make a fuss about the way in which the burden is distributed. It is pretty pathetic that it is Members from a Scandinavian country who will be doing this. However, there are black sheep everywhere. Whatever the case, I am pleased that we are able to conclude the debate on the Kyoto Protocol today.

de Roo
Thank you, Madam President, the Kyoto Agreement is an historic agreement, the basis of which was laid in Rio in 1992. Bush senior was in two minds whether he would actually go to Rio, but he eventually went and signed the Rio Agreement. The attempt to conclude an agreement with the Clinton/Gore administration in The Hague at the end of 2000 failed. It was disconcerting to witness how Bush subsequently discarded the Kyoto Agreement. Fortunately, the breakthrough came in Bonn in July of last year - a major breakthrough - and it is for my group of great importance that nuclear energy plays no role, either with the CDM or with the Joint Implementation.
Parliament will ratify the Agreement tomorrow. The Committee on the Environment, Public Health and Consumer Policy has already given us a taste of what to expect: 33 votes for, 0 against, 0 abstentions. We will see similar figures tomorrow too. We will be voting unanimously. Hopefully, the Council will do the same, which on 4 March will first need to iron out a minor Danish issue, but I feel confident. Europe has taken the lead, and I, too, should like to thank Commissioner Malmström for her boundless commitment.
As far as the content is concerned: 8% less in Europe and 5% less in the industrialised world, is far from good enough. However, Kyoto is the only international Treaty we have for combating global warming. And like the Ozone Treaty, it will need to be improved many times. But Canada, Japan, Australia and Russia still need to ratify the Treaty first. This will hopefully be done before the Rio Plus 10 Summit meeting in Johannesburg. Like Bush senior, Bush junior is in two minds whether he should go to Johannesburg. Hopefully, like his father, he will decide to attend after all. Last week, we were in Washington with a small delegation, and there are indications that the United States is actually under pressure to change its attitude. The Democrats were embarrassed about the fact that their country was not participating in the Kyoto Protocol, and a number of Republicans too have seen the light. Bush will probably proclaim a national climate policy soon: a modest, partial disengagement from economic growth and energy consumption. Not good enough but far better than what he stated a year ago. We have made it clear that the economic costs of such a policy for America will be greater than the costs of taking part in Kyoto. It is also satisfying that a number of large concerns in the US want America to take part in the Kyoto Protocol. The question is no longer whether, but when, the United States will take part.
Three major questions remain. First of all, there is the implementation. Attaining 8% less is starting to become a serious matter. Then there is the discussion about the objectives following the initial period. One per cent less per annum is a very good start, and I hope that the Commission can confirm this. Finally, the most important and most difficult issue is to persuade the developing countries to come onboard in due course.

González Álvarez
Madam President, Commissioner, as Mr Moreira da Silva reminds us in his report, ten years have passed since the 1992 Rio Earth Summit. I hope that in September we can celebrate the implementation of the Kyoto Protocol. We will have to consider whether or not these last ten years have been wasted.
Whilst on the one hand we recall how reports, financed mainly by Americans, were falsified during this period to show that climate change did not exist, in the same way that any scientist who insisted on the problems that climate change could cause, was discredited, it is also true to say that public awareness has greatly increased over these ten years. In other words, we may have wasted time in implementing measures, but the level of public awareness is higher than ever before.
I think that today we are all aware of the significance of the Kyoto Protocol, the meaning of climate change and its associated effects, such as the submergence of islands, the destruction of coastline, the massive displacement of millions of people and the loss of biodiversity. Therefore, I think that we have made gains on the one hand even if we have suffered losses on the other.
It is also true that, from 1990 to 1999, greenhouse gas emissions were reduced in Europe, but it must be said that this is due, to a large extent, to two countries in particular, for very specific reasons. There are many countries, such as my own, whose greenhouse gas emissions have increased - excessively, to my mind. Spain' s emissions have increased by 23%, although the possibility that at the next Council of Ministers, according to today' s papers, the Spanish government will decide to ratify the Kyoto Protocol is to be welcomed and is good news. This is an example that other countries should follow, to be able to reach, in September, the figure of 55 countries needed to ratify the Protocol, which account for over 55% of all greenhouse gas emissions.
I believe, in agreement with some of my fellow Members, that the final result is not as ambitious as expected some years ago, but, as Mr Moreira da Silva also states, the alternative would be much worse. We have to work to ensure that States ratify the Protocol, but also that they implement specific measures, with the priority of those economic sectors that pollute the most, such as transport. The rapporteur very clearly states that emissions caused by transport could rise by 50% over the next decade. Priority measures should be direct action in key economic sectors.
I also agree with Mr Moreira da Silva that the balance that has been achieved should be left alone, for, as many of my fellow Members have already said, Mrs Wallström and this Parliament have done some great work and, although it may be modest, the step forward is very significant.

Matikainen-Kallström
Madam President, the Kyoto Agreement is very important and we can all be satisfied that at long last it is to be adopted. The EU has shown astonishing powers of leadership in talks on climate change. Without that, the Protocol could not have been saved.
European companies have had to agree to strict measures to try to achieve an 8% reduction by 2012 compared to the 1990 levels. Our competitors in the United States do not have to withstand this burden, President Bush has stated quite coolly that this way he is protecting American industry and production.
The EU cannot bear the responsibility for the entire world alone. The USA, Russia and China must all commit themselves to a common aim. This has been insisted on strongly at WTO talks. It is not merely a matter of commercial policy but the world we share and our future.
The burden has already been shared within the EU. Now there is talk of emissions trading. We cannot let emissions be auctioned off; we have only bad experience of the UMTS and other auctions. I am especially worried about those industrial sectors and companies that have already made massive investments to reduce emissions. These responsible companies cannot now be allowed to pick up the bill again. Surely it is nobody' s intention to force successful and environmentally caring companies out of the market?
The Union' s need for energy is only increasing with economic growth, regardless of the savings made. To achieve the Kyoto targets we have to continue to save energy and adopt the use of renewable energy sources. To ensure the supply of basic levels of energy, however, nuclear energy is the only realistic option.

Linkohr
Madam President, it is quite remarkable how Parliament is united across the boundaries of group and nation on this issue, and the Commission and the Council, too, are of the same opinion, that we want to ratify Kyoto. I hope that tomorrow's vote will see us achieve the greatest possible majority and perhaps even unanimity on this issue.
There is a cultural significance to this, for - if I am right - Europe would be assuming cultural leadership on an important issue for the first time since the Second World War. In the past, we always followed the Americans, trailing them by five to ten years. This time, Europe is indeed ahead. That is something that I welcome.
Only a few, though, are aware of what this ratification signifies. Signing it takes no time, but putting it into practice is extraordinarily difficult. Some have already referred to that. I find it all the more regrettable that, on this issue, we - we, the popularly and directly elected European Parliament - are only being consulted. This is a great economic upheaval - and we are only being consulted. That strikes me as extraordinarily regrettable, although I must say that I would still say 'Yes' to Kyoto if Parliament had the right of codecision, and I assume that my fellow Members would do likewise.
I also call to mind the fact that we are acting on the basis of the precautionary principle, which has, in the meantime, found its way into our lawmaking. Were we not to act, our inaction could, under certain circumstances, lead to us being sued in the European Court of Justice and compelled to ratify Kyoto.
This agreement also has its advantages, for we are putting our industry and ourselves under pressure to develop the most energy-efficient products and processes, and, finally, we are making ourselves competitive, even though I cannot deny that there will also be difficulties for some branches of industry.

Hautala
Madam President, the European Parliament could have insisted that the ratification of the Kyoto Protocol complied with what is called the assent procedure, whereby this legal instrument could not have been brought into force in the Community without the approval of the European Parliament. Against certain legal advice, we are now, however, satisfied that our opinion on this matter is being heard, and this is because we have said how important it is to have the Protocol ratified at long last. Parliament is really doing its utmost now to see that the Kyoto Protocol will be in force when the meeting on sustainable development is held in Johannesburg in September. That is very important.
I would like to add my thanks to those expressed here both to the rapporteur and the Commissioner. It is certainly true that this process, which has now ended with the acceptance of the Kyoto Protocol by the Community, will not be the last indication that the European Union can demonstrate a real capacity for global leadership, and can also show its citizens, as the rapporteur stated, that globalisation can also be controlled if proper rules are applied to it.
There has also been talk of the economy in this debate. It is important to realise that a good number of companies have already become aware of just how much potential there is for business in policies on climate. We must also have confidence in this and include the United States in the process. As my colleague, Mr de Roo said in his speech, a large number of companies in the USA wish the United States would become involved in this process. It may actually be, as my country' s Minister of the Environment has said in this connection, that the USA will become the last open-air museum of the old technology unless it joins in these efforts.
Now we have before us the task of implementing the Kyoto Agreement in practice in the Community. Thanks go to the Commission for the swiftness with which it proposed a directive on emissions trading as well as a large-scale climate programme just before the Marrakesh Conference. This spring the European Parliament can now participate with determination in drafting the rules of this directive on emissions trading. I believe that in this we will be acting with the express purpose of seeing to it that the companies that have already played their part will also receive a reward of some sort, and that all the other companies will also be tempted to join in.

García-Orcoyen Tormo
Madam President, Commissioner, as Mr Moreira da Silva stated, on 4 March the Kyoto Protocol will be submitted for ratification to the Environment Council. I am convinced that the Spanish Presidency is determined to overcome any last-minute difficulties that could arise and that the result will be satisfactory. This will mean that the European Union is taking another step forwards in leading the struggle against climate change.
We have seen once again this evening that the United States is widely criticised for not sharing the level of commitment the Protocol demands. This puts all EU Member States, and this is particularly true if we are able to get the United States to sit around the negotiating table, in a position of urgent need to fulfil each and every one of the provisions laid down in the Protocol, unless we want to suffer total ridicule and have our reputation in international politics tarnished.
Nevertheless, although achieving the Kyoto objectives will not be easy, it is possible. This is demonstrated by the data in Mr Moreira da Silva' s resolution. We must become a society that is poor in carbon and rich in the use of cleaner technologies, taking full advantage of energy efficiency.
We know that the role of the market is crucial to achieving these objectives, but we are still hesitant when it comes to implementing specific measures, above all when we give in to those short-sighted sentiments that still perceive the Kyoto Protocol as an attack on competition and employment when it should be seen, because it can now be seen, that the opposite is the case.
We must act on demand at Community level on aspects such as the internalisation of costs, emissions trading and the exchange of certain policies such as transport, energy or agriculture. With regard to demand, we must focus on training and motivating some European consumers who are still very apathetic and uninformed in this regard.
I believe that the rapporteur has tabled a proposal that is committed to sustainable development, which is clear and precise in stating exactly where we need to act. For this reason it deserves, and I think already has, this Parliament' s gratitude and total support. Thank you, Mr Moreira da Silva.

Wallström
Madam President, ladies and gentlemen, first of all, I wish to say that I welcome the European Parliament' s draft resolution on the proposal for a Council decision concerning the conclusion, on behalf of the European Community, of the Kyoto Protocol. I wish first of all to thank Mr Moreira Da Silva for the report and for the fact that it has been possible to resolve this issue of such political importance by means of a vote in Parliament at an early stage.
I also want to take the opportunity to emphasise how much I value the cooperation with the European Parliament concerning the Kyoto Protocol. Your efforts, including visits to the United States and contacts with parliamentarians in different countries, have been extraordinarily important. The cooperation we have had during the negotiations, especially under Mr Moreira Da Silva' s leadership, has contributed to our having come as far as this on our home ground. I also wish to say that I consider it self-evident and very important that Parliament should be fully involved in the work we are now doing on the European Climate Change Programme and on the proposal concerning emissions trading.
For some years, the EU has of course advocated that the Kyoto Protocol should come into force at the World Summit on Sustainable Development to be held in Johannesburg in September of this year. If it is to be possible to achieve this objective, the EU should set a good example. Mr Liese and Mr Linkohr are right: even though we can quarrel about the distribution of the burden, this is just a first step if we want to take the climate experts seriously. It can only be seen as a first cautious step along the road.
I am particularly pleased about Parliament' s support for the proposal' s being adopted as soon as possible so that we can ratify the whole proposal by no later than 1 June, when the Member States have concluded their own national procedures.
I want to comment briefly on what is termed the Danish problem, which is to be regarded as a technical complication. It is also in terms of a technical problem that we are trying to solve the issue. At the Council meeting in December, the Environment Ministers agreed that we should try to find such a technical solution and that a decision should be taken during the Council meeting on 4 March. I hope that this will be possible. If this decision is adopted at the Environment Council meeting in March, this would be a clear signal that the EU is determined to comply with the Kyoto Protocol, a move that would strengthen the EU' s credibility and leadership role in the matter of combating climate change. It would also increase the pressure on other parties, for example Japan and Russia, to follow our example. The prospects for this are fairly good, given the way things look at present, particularly in Japan. At the same time, we are going to continue the dialogue with the United States and try to convince them to resume the Kyoto negotiations or at least adopt similar measures on a national basis to reduce emissions of greenhouse gases.
If we are to be credible, we must put our own house in order first. In plain language, this means that our first priority must be ratification and effective implementation of the Protocol on the part of the EU. Thank you for your views and for this debate.

President
That concludes the debate.
The vote will take place tomorrow at noon.

Education and training systems
President
The next item is the report (A5-0017/2002) by Mrs Martens, on behalf of the Committee on Culture, Youth, Education, the Media and Sport, on the Commission communication on the draft detailed work programme for the follow-up of the report on the concrete objectives of education and training systems (COM(2001) 501 - C5-0601/2001 - 2001/2251(COS)).

Martens
Madam President, education is an important topic, and I am therefore pleased that the Spanish Presidency has selected it as one of the spearheads of its activities. This report is about developing the objectives which the Commission has formulated in the field of general education and occupational training.
At the Lisbon Summit, it was stated that the European Union was to become the most competitive and dynamic knowledge-based economy in the world, capable of sustaining economic growth with more and better jobs and greater social cohesion. This is an important objective which is also attended by the necessary urgency if we want Europe to be accorded a respectable place on the economic and cultural map of the world. Education is rightly regarded as an important instrument for attaining this objective. It is no less justifiable to apply all existing brainpower and experience. This is why I regret that the European Parliament was not involved in drawing up these objectives, was not consulted and can therefore now only react to the programme which the Commission has in mind for developing the objectives.
Having said that, I do agree with the goals which the Commission is formulating: increasing the quality and effectiveness of education; facilitating access to education; and opening up education and training systems to the world.
The Lisbon Summit thus wanted Europe to do more to promote the knowledge-based economy, sustainable growth and social cohesion. Unfortunately, the Commission report mainly refers only to the first two objectives. The focus is on new technology, expertise in the field of ICT, getting boys and girls interested in education and technology, etc. This is important in occupational training which prepares people for making a professional contribution to society. General education is broader. Not only does it prepare people for working life, it also has a duty to prepare people to function in society as people, as citizens. This dimension is missing from the Commission communication. The Commission is thinking of education too much in terms of the economy and the labour market. In other words, it mainly wants to educate people in their role as economic players.
When we talk about a future Europe, when we talk about a stable Europe, a Europe with social cohesion, then education has a role to play in that field too. This is particularly the case since education, notably general education, has in many countries been given a strongly complementary function in relation to the family.
Education in my own country, the Netherlands, is in crisis, in my view. There are too few teachers. The quality of education is going down, there are complaints about the level of knowledge of students about to embark on a university degree, there are too many regulations, etc. There is also insufficient funding. There are problems in other countries too. That is why I am pleased that consideration is once again being given at European level to the objectives of education and training, and that concrete testing criteria are also being formulated, with due respect for subsidiarity.
In my report, where social cohesion and a stable Europe are concerned, I call for indicators to be formulated and applied which home in on skills that people need to function well in society. Communication and social skills spring to mind, as well as knowledge and understanding of other cultures and a developed sense of citizenship. As already stated, education also offers, of course, a preparation for working life, but must certainly also contribute to educating people into an awareness of democracy and of the notion of the rule of law, as well as helping to educate people into becoming active citizens who not only have their own self-interest at heart, but also the public interest.
Needless to say, the report must be seen in the context of other programmes which touch upon education, such as lifelong learning, mobility and language programmes, etc. Lifelong learning is important when we talk about improving access to education for all, not only for young people, but also older people, not only for healthy people, but also for those with a handicap, and not only for the native population, but also for foreign people.
I should like to conclude with one remark about language education. With a growing, open internal market and with a society which is becoming ever more multicultural, the importance of a knowledge of languages is growing. This is why, in the report, I subscribe to the objective that all pupils should be proficient in two languages in addition to their mother tongues by the end of their compulsory education.

Zrihen
Madam Commissioner, ladies and gentlemen, I should like to emphasise the importance of this report, which underlines the fact that the role of education does not consist merely of preparing young people for employment - even if employment also underpins society and is a means of gauging inclusion and economic and social reproduction. It is generally said that training is about filling in the gaps. The same applies to education. What we really need to do here, therefore, is define what these terms actually mean, which is not happening today. We must, therefore, also discuss the definition of the gaps that we want to fill with our education and training policies. Definitions of this matter are not unanimous; it could even be said that there is a profusion of definitions and that this very profusion reveals our political leanings and the values that we advocate, individually and collectively.
To my mind, the greatest challenge of this decade is that of social cohesion. In a world in which everything is going faster and faster and in which speed of movement has become a factor in the generation of wealth, there are increasing numbers of men and women for whom the doors to work, to culture and to knowledge are closed. I would go so far as to say that exclusion is on the increase and that this trend is harming our various strategies for social cohesion, a concept which we are nevertheless fond of in the European Parliament. Consequently, the gap is continually increasing between a growing number of European citizens and what I would call the world of money. This divide illustrates not only the distance between the individual and the market, but also the confusion, the loss of meaning in a collective system within which there are two groups: those who make the rules and those who merely follow them.
We must, therefore, urgently discuss the issue of the continuous assessment of the European social model and of the price that we are prepared to pay to produce this social cohesion, this citizenship. In this context, we must do everything we can to ensure that the decision of the Lisbon European Council, confirmed by the Stockholm European Council - which, in strategic terms, places economic growth, better employment and greater social cohesion on an equal footing - becomes a reality for all and that finally, everyone, without a single exception, has access both to the social skills required by citizens and the professional skills required by economic producers. I now call on the Commission to take my suggestion fully into consideration and put in place the necessary policies for social cohesion to no longer be the consequence of other strategies and become a fully-fledged, high-priority approach in order to safeguard public welfare, in other words, the harmonious and dignified development of Europe' s citizens.

Vattimo
Madam President, according to Hegel, culture - that is, philosophy - spreads its wings only at the falling of the dusk, but it is getting on for dawn here!
In any case, in my capacity as shadow rapporteur for the Committee on Culture, Youth, Education, the Media and Sport for the Martens report, I would like to start by thanking and congratulating the rapporteur on her work. I am not greatly opposed to any of it and would just like to highlight a few particularly important points.
I feel that it is important - as the draftsman of the opinion of the Committee on Industry, External Trade, Research and Energy has also pointed out - that this report should address the issue of education not just in terms of professional training, of the development of skills which will increase our citizens' chances of finding high quality work, but also in terms of more general education, of which school education is part in a wider sense, directing it towards a humanistic culture which - although it does not directly provide professional skills - certainly achieves that task of social cohesion which is our goal.
The same may be said of the report' s focus on equal opportunities for all citizens and the possibility that European Community action might remove those gaps, those divergences and distances which, in our society, still divide those who have skills, who have access to a computer and information technology, for example, from those who are still excluded from this world. These are the main principles of the Martens report and I feel that Parliament cannot fail to support them. This is the line taken in both the report' s declarations of principle and its practical recommendations: it focuses especially on the need to root and ground these recommendations in the changes currently taking place in the world of communications and in new teaching methods and, above all, to facilitate the climate and conditions necessary for the need for a higher level of quantity and quality of education for all to be met. In this respect, all the measures seeking to actively involve teachers, students and trainers in the implementation of the programme are vital.
The emphasis placed on language learning, on strengthening the ties between the world of work and civil society, on the need to find more attractive images to encourage students and teachers' learning and mobility must not, however, mask the practical root of the problem: the need for financing which respects the choices of the individual.
To this framework we need to add a top priority action plan to assess and intervene with appropriate, effective tools in the tensions which can develop in the worlds of education and work where there are cases of discrimination, with the common desire to fight racism and intolerance.
For all these reasons, the Committee on Culture thanks the rapporteur once again for her work and calls upon Parliament to adopt the Martens report.

Wyn
Madam President, I welcome the report on the Commission communication on the concrete objectives of education and training systems. I would like to thank the rapporteur for her conscientious work. In line with the goals of the Lisbon and Stockholm European Councils, it is vitally important that we enable the generation of young Europeans to choose European research careers and European scientific disciplines.
I also agree that companies have to play a key role in training students and employees. However, before submitting the report we should pay attention to the following points. There seems to be a gap between the proposals in this report and the progress made by the Commission and its expert group so far. My understanding is that the Commission has already started its work on social inclusion and reset its goals on the Leonardo da Vinci programme by, for example, including older people and disabled people within its scope.
This is welcome. We look forward to the European Year of Disability in 2003. In addition to that, one should not neglect the efforts made by the Commission on cooperation with the candidate countries at all levels.
While not wanting to undermine the good work of the Commission, I must say that more can be done. We should also underline the importance of encouraging increased integration of European Union, Member States and regional initiatives in order to make efficient use of the relatively small budget for education and training systems.
In this respect I would suggest better cooperation between the different kinds of funding and an exchange of best practice, together with better dialogue between the supranational, national and regional decision-makers within the Community.
Finally, I would like to see more attention paid to the lack of equal opportunities for all individuals to experience better European integration throughout their professional lives. There are possibilities within the budget to facilitate exchanges of experience of vocational training systems in the different Member States. I encourage this. Europe can offer better education for everybody. Parliament's report should not forget to underline that.

Zorba
Madam President, I should like to congratulate the Commission and Mrs Martens on her report, although I must admit that, like a pupil at night school, all I can think about is going home to bed. This is a detailed and, I think, exemplary programme of work because it systematically links the objectives, the indicators and the timetable, thereby giving us a benchmark. But what we have to ask ourselves is, what sort of benchmark is it if, when it comes to the crunch, we shy away from a real policy of educational convergence at European level. We ignore the main differences, we are not willing or perhaps able to do anything about them or our priorities lie elsewhere and we use the Bologna method to set targets which every Member State has yet to meet. I have my doubts, which I have already voiced to Mrs Reding. Nonetheless, I think that it is a benchmark and we shall see in a few years' time how hard it is for some and how close others have come to it. But I think dialogue is indispensable, and not just at the level of Parliament. We need to find a way of formulating an opinion and a view before we are presented with faits accomplis. We need dialogue at school unit level.
Teachers are strongly resisting indicators, at least in Greece. Most indicators are quantitative, only a few are qualitative, meaning that the picture we get will not always be the most accurate, and we do need the most accurate picture. I also share Mrs Martens' view that we need more indicators on education systems, not just training systems. And here the Commission proposal really is one-sided. I know we are all worried about unemployment, I know that we want to leave school with prospects of getting a job rather than joining the dole queue, but a general education for young children is equally valuable.

Wallström
Madam President, ladies and gentlemen, I want first of all to say a big thank you to the European Parliament, and, above all, to Mrs Martens and the Committee on Culture, Youth, Education, the Media and Sport, for the support, points of view and proposals to which the debate on this report has given rise.
Following Lisbon, and as part of the implementation of the strategy established there, we have given new impetus to European cooperation in the field of education. The result is positive, because the Council and Parliament are agreed on this issue.
We have agreed on the following common objectives: firstly, increasing the quality of our education systems; secondly, facilitating the access of all to education and training systems; and thirdly, opening up education systems to the world.
Despite the fact that this involves some very complicated work, the finishing touches are now being put to a detailed work programme of the kind requested by the European Council in Stockholm. The proposal will be discussed at the Council meeting on 14 February. It specifies the most important points in terms of achieving the objectives laid down and, with the help of the open coordination method, identifies how it will be possible to measure progress. Upon request, the tools used must not only compare the different EU countries with one another but also be used for the purposes of comparison with other high-achieving countries.
The views and proposals put forward by Mrs Martens in her report will, as far as possible, be taken into account in preparing the final document. The Commission is entirely in agreement with Parliament about the two-fold objectives of education, namely to promote personal development through helping people gain the skills which will be of use to them throughout their lives, and to lay the foundations required if young people are to be integrated into society and the labour market. Reporting on the objectives and the detailed work programme will take account of these issues, which are interrelated.
The President of the Commission, Mr Prodi, recently expressed the view that education, training and research are the keys to economic renewal, sustainable development and new jobs. A knowledge-based society cannot be created without knowledge. These different aspects therefore need to complement one another. A prerequisite of being able to achieve such a situation is that we work together. The work in pursuit of common objectives has only just begun. In the future too, we shall have the opportunity to work more with Parliament and other EU institutions, as well as with international organisations such as the OECD and the Council of Europe. Together, we must obviously also ensure that the candidate countries are involved in the cooperation process, and preparations for all this will be made before the next meeting of the European Council in Barcelona. Specifically, we shall have the opportunity of working with all these countries in Bratislava in June at the meeting of the 36 Education Ministers. In conclusion, I want to thank you for this debate and for your attention.

President
Thank you, Commissioner.
That concludes the debate.
The vote will take place tomorrow at noon.
(The sitting was suspended at 12.10 a.m.)

