Resumption of the session
President
I declare resumed the session of the European Parliament adjourned on Friday, 13 June 1997.

Approval of the Minutes
President
The Minutes of the sitting of 13 June 1997 have been distributed.
Are there any comments?

Posselt
Mr President, Friday's Minutes correctly record my protest that the plenary did not discuss financial aid for Bulgaria and Macedonia. The President also told me that according to her information that was the decision of the Committee on External Economic Relations. Let me make it quite clear that the Committee on External Economic Relations unanimously decided the contrary! After all, this was an urgency, which we approved on Tuesday morning. The committee met on Tuesday evening in Strasbourg and decided unanimously that its chairman or a representative would present an oral report; and then suddenly, on Friday morning, we heard that there would not be a debate. I am absolutely in favour of accelerated procedures, but to find that an important political question, involving a lot of money, is not discussed either in committee or in plenary is quite contrary to parliamentary procedure and our Rules of Procedure!

President
Mr Posselt, I shall find out exactly what happened and let you know.

Florio
Mr President, I want to speak on a point of procedure. In February I put a question to the Office of the Presidency on the building work in Strasbourg. Well, four months have gone by and I have received no reply whatsoever. This is no way for Parliament to operate! I demand an urgent reply to my question, and to questions from other Members who are having to wait too long in contempt of the Rules of Procedure.

President
Mr Florio, the draft reply to your question was put before the Bureau this morning. The Bureau considered that a fuller answer was required, so the question is still pending and due for approval on 10 July in order to give you a fuller reply.

Schwaiger
Mr President, following on from what Mr Posselt said, let me point out that the Commission decided on financial aid for Bulgaria as early as mid-May, that the documents were available and that the Commission could have consulted us in the usual way via the Council. That did not happen either. As I pointed out in Strasbourg on Friday: in future different procedures should be introduced, not just at Parliament level but also in relation to the consultation procedure applied by the Commission and the Council vis à vis the Committee on External Economic Relations. Otherwise we will not be able to carry out our important duties.

President
Thank you very much, Mr Schwaiger. As I said to Mr Posselt, I shall find out what has happened and give you an answer.
(The Minutes were approved)

Welcome
President
I should like to inform Honourable Members that a parliamentary delegation from Central America is present in the House and I should like to extend the European Parliament's greetings and welcome to them.
I call upon Mrs Seillier.

Urgent political matters
President
The next item on the agenda is a communication by the Commission on the economic agenda of the Amsterdam European Council and the Denver Summit.
I call upon Mr Commissioner de Silguy.

De Silguy
Mr President, ladies and gentlemen, President Santer has asked me to report to you on the economic results of the European Council in Amsterdam and the G7 meeting held last weekend in Denver, Colorado.
There are three principal messages emerging from these two international meetings. The euro is now an established reality, which is a good thing for Europe and a good thing for the world; the economic climate is developing satisfactorily, and employment has become the first economic priority of the national governments.
First, the euro. The G7 summit ratified the results of the Amsterdam Council. The euro is here to stay. All the evidence I need is the completion of the preparatory work associated with its introduction, and the acknowledgement of its international dimension. The European Council in Amsterdam definitively adopted the legal framework for the euro, which, I should remind you, comprises three essential elements: the resolution on the new form of the European Monetary System; the two Regulations creating the legal status of the euro, in other words the monetary law of Europe for the year 2000; and the two Regulations - one preventive, one deterrent - which together with the Amsterdam resolution make up the Pact for Stability and Growth. This framework, which is necessary for the proper functioning of economic and monetary union, has been devised in close co-operation with this House. It will encourage growth and employment while preventing or correcting excessive public spending deficits.
The European Council in Amsterdam also gave a specific mandate to the Commission, the Council and the European Monetary Institute on the work needed to place the international role of the euro on a clear and solid basis. Furthermore, in Denver, the coming of the euro was internationally recognized. The G7, in its communiqué, emphasized for the first time that economic and monetary union, based on sound economic policies and structural reforms, would make a valuable contribution to the stability of the international monetary system.
Secondly, the economic situation. As well as a favourable economic climate, the need for structural adjustments was confirmed in both Amsterdam and Denver. Regarding the economic climate, the Denver summit offered an opportunity to compare the situation in Europe with that in the United States, in particular. Over and above the traditional contrast between the American and European models, a very largely artificial contrast in my view, it became clearly apparent that the major difference between the two continents was the confidence the Americans felt in the power of their economy - a confidence which, sadly, is still lacking in Europe.
And yet the European economy today is undergoing a genuine recovery, sustained by the efforts of the Member States to meet the convergence criteria as they prepare for economic and monetary union. The growth of the Community GDP - which was 1.6 % in 1996 - should reach 2.4 % in 1997 and 2.8 % in 1998. This return to a higher rate of growth should allow a net increase of two million in the number of jobs in Europe over the two years 1997 and 1998.
Apart from the return of growth, a substantial reduction in European unemployment from its present intolerable, demoralizing level will be achieved through structural reforms - especially those affecting the employment market, education and research - and through improving the competitiveness of business. To be effective, however, those reforms are going to have to be universal, ambitious, socially sustainable and politically presentable.
Incidentally, an interesting new fact that emerged in Denver was the link that exists between demographics, social systems and budget deficits because of the irreversible problem of the ageing population, especially in Europe. This ageing is significant. A single figure proves the point: the ratio of the non-working to the working population is expected to increase from 25 % to 51 % between 1995 and 2040. In the absence of any change in policy, this trend will result in a long-term deterioration of public finances, and pension costs could increase from 3 to 4 % of GDP between now and 2030.
So there is no escaping the need to continue the policy of budgetary adjustment. The budgetary framework introduced by economic and monetary union, designed to re-establish the balance of public spending in the medium term, will release room for manoeuvre. And that can be utilized to finance welfare and pension systems. Over and above that, however, the need for progressive structural reforms was emphasized by the G7, especially as regards the reform of the pension systems and the role delegated to the pension funds. That, in essence, is one of the strong messages sent out both by the European Council in Amsterdam and by the G7 meeting in Denver.
Thirdly, we come to employment and the co-ordination of economic policies. At the initiative of President Santer, the European Council in Amsterdam adopted a resolution on growth and employment, whereby the Member States, the Commission and the Council have given a firm commitment to make employment a top priority concern of the Union and a priority aim of their economic policies. In this context, the European Council recalls that sound macroeconomic and budgetary policies go hand-in-hand with strong, sustainable growth in terms of output and employment.
Very symbolically, the European Council put both the resolution on the implementation of the Pact for Stability and Growth and the resolution on growth and employment under a single political umbrella: ' Stability, growth and employment' . The European Council adopted two guiding principles to strengthen the place of employment at the heart of economic policy.
The first was the development of the economic pillar of economic and monetary union. According to Articles 102a and 103 of the Treaty, the broad guidelines will be extended to cover competitiveness, the employment market, technological innovation, education, training and taxation, with a view to harnessing all economic policy in the interests of employment. In practice, the Council, acting on a proposal by the Commission, will be able to issue specific recommendations on these matters to the Member States. This is a significant advance along the lines of better co-ordination of economic policies such as this House regularly demands.
The second guiding principle is the early implementation of the 'employment' chapter of the Amsterdam Treaty, without even waiting for it to be ratified. In this way, the Council will be able to make recommendations on employment policy. Finally, it will have a legal basis for making practical decisions to promote employment. The Commission will of course take full account of these two guiding principles in preparing the broad guidelines of economic policy for 1998.
However, in order to be able to implement these European Council recommendations without delay, the Commission means to give concrete form to this new stimulus to employment, beginning with the extraordinary meeting of the European Council in Luxembourg devoted to this subject. This Council will decide on the concrete form to be taken by the new initiatives for employment adopted in Amsterdam. A particular priority here will be extending the role and activities of the EIB. Another will be the ECSC, where it has been suggested that a reserve fund should be set up to use the proceeds of the income available from 2002 to speed up research in sectors linked to the coal and steel industry.
The Commission and Council have been invited to prepare, jointly with the EIB, a report on all these matters - and on many others, too, especially the SMEs - for this special European Council. Parliament will, of course, be involved in our work. This new stimulus to employment that has been decided on here in Europe will go hand-inhand with similar initiatives on a global scale - that decision was taken in Denver. For example, we have the forthcoming meeting at Kobé in November 1997, followed by the 'employment' G7 early in 1998 at the initiative of the British Prime Minister.
In conclusion, may I emphasize the fact that both the Amsterdam Council and the G7 summit in Denver have sent out a message of optimism to Europe, a message that will help restore its self-confidence. The European Union faced a more difficult initial situation than its American counterpart, but Europe today is pushing ahead on the path to economic progress and structural reform. The first encouraging results are already apparent. The prospects for growth in Europe have not been so favourable for some years, and their effects should soon be felt in terms of competitiveness and employment. Finally, I should add that the impending introduction of the euro, in accordance with the conditions and timetable laid down in the Treaty, will provide a further boost to the recovery of economic activity in Europe.

Seillier
Commissioner, you have referred to the irreversible problem of an ageing population in Europe, and you have also referred very frequently to the need for essential reforms.
So let me ask you a few questions: do you not think that one very important reform, intellectually, would be to review the excessively narrow concept of economic criteria that are accepted at these conferences, and that it might be high time to take account of a suggestion made by the World Summit on Social Development held in Copenhagen in 1995 which called for the child-rearing tasks performed within the family to be included in economic calculations?
Do you not think that, since family policies in all European countries are recording a reduction in family purchasing power, that the time has surely come to reform our economic programmes and take account, at long last, of the wishes of those European couples, those European women, who would like to have children but are unable to do so because of economic constraints?
Might not the best way to revitalize the economy in Europe be a process of demographic revitalization, which is a matter of political will and intellectual reform?

de Silguy
For my part, I see no incompatibility between demographic revitalization, an intellectual reform and a straightforward recognition of economic realities. Like it or not, Mrs Seillier, we are currently in a situation where the 'baby boom' generation still forms part of the active population, but from 2010 onwards we shall have an extremely serious demographic shortfall in Europe.
The question that faces governments today is whether they may not already be able to address the problem, in political terms, to prevent today's working generations from facing retirement with pensions that are not sufficient to enable them to live. The issue today, Mrs Seillier, is to pursue our endeavours in the field of economic policy that are specifically designed to bring back to our national economies sufficient budgetary room to manoeuvre to enable them to bear the increasingly heavy burden of social spending in future years.
Of course, that is no obstacle at all to efforts to develop and strengthen the role of the family, in the context of child-rearing and family policy, though as far as that is concerned, I believe that personal considerations are often more important than purely economic ones.

Boogerd-Quaak
Mr President, I was appointed on behalf of this House as rapporteur on the demographic situation in Europe. It is not so long ago that this report was adopted by Parliament, on which occasion much attention was rightly paid to the ability to pay pensions. If I may, I should like to differ from the Commissioner in regard to the fact of it being impossible to fund pensions in the future. It is much more a question of making a start at the appropriate time and of applying the correct system. In the past I asked for this question of pensions, including supplementary pensions, private pensions and government pensions, to be placed on the agenda of the European Commission. Subsidiarity had previously applied in this area. My specific question to the Commission is therefore: With a view to the employment summit can this become a matter for both the Commission and the national governments?

de Silguy
I entirely agree with Mrs Boogerd-Quaak: we need to act before it is too late and take precautions to deal with this matter, though I must add that the problem is made worse by the fact that an ageing population means increasing expenditure on health. After all, it is clear that more and more elderly people are often in need of care which is proving more and more costly. In financial terms, then, the problem is complicated by the existence of a link between an ageing population and increasing expenditure on pensions and health care.
The Commission is of course taking a close interest in this matter, which is why, in my oral presentation, I made a point of stressing this problem of ageing. At the discussions that took place in Denver, the Commission's contribution on this subject was particularly extensive and much appreciated. I can also tell Mrs Boogerd-Quaak that this question is primarily of concern to the Member States because, in view of the principle of subsidiarity and as the Treaty stands, we cannot act for the Member States. But this problem does indisputably have a Community dimension - a European dimension.
For this reason, and especially as we prepare for the extraordinary meeting of the European Council in Luxembourg before the end of this year, the proposals and recommendations that the Commission will make will take careful account of your suggestion. The Commission will take steps to ensure that these questions are perceived by the Member States in a co-ordinated way, and in particular that they exchange information on the measures implemented by each of them. I would add that very special attention will be paid to the problem of pension funds.

Katiforis
Mr President, I have two short questions for the Commissioner:
The first is: at the Summit Conference in Luxembourg will the Commission contribute to discussions concerning certain additional financial items to support employment policy? Because from Essen we know that employment policy cannot be made effective, or at least, jobs cannot be created, by words alone.
The second question is: I heard a Minister for Economics - one of those who took part in Amsterdam - saying at a public meeting that it is conceivable that the Euro's beginning might be postponed for a year. I know you will deny this, but I would like to hear you repeat it emphatically.

de Silguy
I can answer your second question immediately. I was there, from start to finish: I was at the Council of Finance Ministers in Luxembourg early this month, I was at the European Council and I was at the Denver summit, and I never heard anyone mention the possibility of postponing the euro. Indeed, on each occasion I found that all the participants -European and non-European, including the Americans - were firmly committed to complying with the timetable. And that determination was reflected in the communiqués, decisions and official comments that were issued.
Secondly, and dealing more specifically with that European Council, I should perhaps add to what I said earlier: among the initiatives adopted in Amsterdam there is one that relates specifically to extending the role of the EIB, in three ways. Firstly, by establishing a special facility to finance projects by high-technology SMEs; secondly by broadening the scope of the bank's interventions to education, health, the urban environment and environmental protection; and lastly by easing the repayment period for loans to the trans-European networks.
I also said just now that funds would be released from the ECSC reserves, especially with a view to creating a research fund for research in sectors linked to the coal and steel industry. I can also tell you that the Council will study initiatives to look into the possibilities of creating jobs for SMEs on the basis of a new report by the Advisory Committee on Competitiveness. Finally, the Council will also study good practice in each Member State in employment policy.
On all these matters, I believe that the mandate is sufficiently detailed and sufficiently substantial to enable to Commission to present specific proposals to the European Council - proposals capable of bringing at least a partial answer to the present problems of unemployment.

Rübig
Mr President, thank you for taking up the question of small and medium-sized enterprises. We have seen over recent decades that most jobs have come from small firms, that new enterprises can create a great many jobs and that the SLIM initiatives in particular are designed to relieve the burden on these firms and can therefore also produce greater competitiveness.
What do you think the chances are in Luxembourg of making use of the training programmes, by increasing the appropriations for this area? For I believe that training is the only means of really efficient job-creation.

de Silguy
There are two different answers to your question. First, training is a critical requirement of SMEs. That is undeniable, it is clear, and we are working on it. But training is also one of the essential aspects to be implemented in the context of the ambitious Europe-wide structural policies which we must pursue in order to remedy the structural causes of unemployment.
Secondly, bearing in mind the importance of the contribution made by the SMEs in terms of employment, the emphasis placed on these enterprises goes well beyond the aspect of training alone. In particular, the new approach being asked of the EIB - that it should release resources to enable SMEs, especially those working in leading-edge sectors which, by definition, are the ones that create jobs - should enable more resources to be made available to the SMEs.
I would add, on this point, that the Commission has already tabled a number of proposals and made a number of recommendations which are, or have been, under consideration by Parliament. They are now in the hands of the Council, but some of them have been blocked at that level, and I deplore that. Even so, it will not prevent us, as we prepare for the special European Council in Luxembourg, from attaching particular importance to the SMEs and to their role in the campaign against the structural causes of unemployment; and, of course, within that framework, very special attention will be paid to questions of training.

Arroni
Mr Commissioner, today you have mentioned that the economic environment is favourable to improving the economic position of the Member States. The Italian papers have certainly emphasized the points you made about Italy from the statements you made yesterday. And we all remember the snapshot of Italy you gave us in this Chamber a couple of months ago.
I now want to ask you two questions. Taking advantage of your presence here today, I would like to hear from your own lips your view of the situation in Italy and your opinion of Italy's chances of meeting the criteria. And secondly, what is the main reason for this change in the Italian position?

de Silguy
In reply to your second question, Mr Arroni, I would say that the political intent is certainly that of the Italian Government. What I said about Italy yesterday was the result of an analysis, a finding that shows that Italy is currently achieving highly impressive advances when it comes to economic convergence. And if Italy achieves the ambitions that its government has adopted, it will this year have achieved the greatest reduction in public indebtedness achieved by any European country in the last 15 years.
Otherwise, as the government has not yet officially disclosed its convergence programme, I could not offer any precise assessment of it in public. Having said that, and bearing in mind the facts known to me, I did say that the objectives put forward, especially in the Italian 'Economic and financial planning document' , are sound. Moreover, the areas singled out by the government for budgetary reform are appropriate: pensions, social security, the civil service and the broadening of the tax base.
I also added, and this may have received less coverage in the press, that the moment of truth would come in September when the government presents specific measures designed to give concrete form to these objectives, measures which, I believe, will be included in the 1998 budget. So it is out of the question at this stage to launch a premature examination, to make the Member States undergo a qualification test. The examination will take place in March 1998, based on the real results for 1997. What I can say today is that there is no doubt that the situation in Italy is developing along the right lines. That is encouraging, and it suggests to me that, if countries have the necessary political will comply with the timetables and conditions set out in the Maastricht Treaty for joining the single currency, they will succeed in doing so.

Randzio-Plath
Mr President, measures to get Europe back to work, that was the Commissioner's message to us today from Amsterdam. And we listened to it and certainly see it as a positive step. But I would like the Commission to tell me what action it is now taking to define the basic economic policy measures the Community and the Member States should take. If you, the Commission, and if the European Council took the recommendations by this House seriously and incorporated them in your own proposals, we might have different economic and employment policy results from those we have seen in the past following from your recommendations. Please tell us how this can be changed, for what the EU ministers of finance proposed in the past was not enough to really get Europe back to work.
My second question, Commissioner, is as follows: I fully appreciate that you are also concerned with the international role of the euro. But I would like to know one thing: are you also thinking of the consumer, of consumer protection? When will we finally have a regulation to ensure that EU consumers do not bear the costs of conversion? When will we finally have a regulation that also ensures that no dual pricing system will be introduced?

de Silguy
First, Mrs Randzio-Plath, if you carefully study the conclusions of the European Council in Amsterdam - something I am not going to do here, though I am willing to go through them with you in person - you will find that the concerns of the European Parliament, especially those expressed in its resolutions on the Pact for Stability and Growth, have been extensively taken into consideration. Not only that, but I personally have taken the trouble, during recent discussions, to try to persuade the Council to adopt as many as possible of the ideas put forward by Parliament.
Secondly, you ask what initiative we are going to take. In my speech just now I spoke in general terms about the approaches that have been selected, both in terms of co-ordination of economic policy and in terms of employment policy, and what we were going to do to follow them through. Confining myself to essentials, I think the first thing to do is to ensure that the content of Articles 102a and 103 is more oriented towards employment. That is why the broad guidelines of economic policy are going to be widened - as you will see when we present them next year - to take more account of competitiveness, the employment market, technological innovation, education, training and taxation.
That may not be the end of it, because we shall, if appropriate, pursuant to Article 103(4) of the Treaty, propose to the Council that it makes recommendations on these matters to the Member States. In other words, there is a parallel between the powers of recommendation we have exercised so far in budgetary matters and those that we can extend into the economic field.
Secondly, as far as employment is concerned, I think I answered your question earlier when I said that we were going to take maximum advantage of the fact that the 'employment' chapter of the Amsterdam Treaty will be implemented even before that Treaty has been ratified, thus providing a legal basis for more specific action. All these points are currently the subject of in-depth examination and analysis. I look forward to reporting back to you very soon, once the Commission's services have made progress with this work, and I can assure you that I shall keep you closely informed of the way our ideas are developing on this matter.
Regarding the consumer aspect, we organized a round table discussion on 15 May which enabled us to identify a number of specific, practical problems including dual pricing or labelling, the date of issue of the banknotes, how long dual circulation should continue, etc. Following that round table, we organized and are now holding a number of workshops with consumers, banks and businesses, subject by subject. My objective would be to arrange two general meetings on these issues - one in autumn and the other in March - to see what solutions we can find to these problems, bearing in mind that it would be preferable to avoid resorting to regulation if possible.
Our European Union already suffers from paralysis brought about by excessive regulation, and I would prefer it to err on the side of dynamism and consensus. At this stage, then, our work is geared to a quest for consensus, the objective being of course to enable us, when we make public the decision on the list of countries joining the euro in late April or early May 1998, at the same time to give specific answers to consumers on the specific questions they ask. What I can promise you now is that these practical matters are one of the essential areas on which the Commission is currently working.

Hautala
Mr President, the European Parliament has called for the whole economic cycle of a Member State's economy to be considered when determining whether it has an excessive deficit. This is wise, so as to ensure that a Member State which finds itself in difficulties is not driven ever deeper into the economic mire. However, the conclusions of the Amsterdam summit concerning the Agreement on Stability and Growth contain a direct reference to the Council declaration, which in turn stresses adherence to very strict, automatic procedures for assessing excessive deficits. They are to lead quite directly to fines. Is this not extremely unwise? How is this to be reconciled with your efforts to promote employment, or was the declaration on employment needed purely to enable the French to return home in safety?

de Silguy
My first answer to that is that the Stability Pact is absolutely and completely consistent with the Maastricht Treaty. I would refer you to Article 104c of the Treaty, which states that the Council may resolve upon sanctions if certain conditions are present. In the present case, the Pact for Stability and Growth preserves the autonomy of the Commission intact in terms of its power of initiative, and preserves the autonomy of the Council intact in terms of its normal powers of decision granted to it by the Treaty. The Pact for Stability and Growth is a code of conduct, a guide to behaviour, which is intended to specify the conditions and timetable for the necessary action to restore budgetary equilibrium.
I can tell you, Mrs Hautala, that as far as I know public deficits do not create jobs. I see this equally in the United States and the European Union - I am not talking about France, have no fear - and in the other European countries. In recent years, those countries which have done most to reduce their public deficits have also seen the strongest growth and created the most jobs. I am looking here especially at the Dutch presidency. This is no obstacle to undertaking structural reforms, but, both in Denver and in Amsterdam, the Heads of State and Government of every country did indeed stress the fact that there is a link of compatibility, I would even call it a synergistic effect, between the pursuit of a sound economic policy, the reduction of the public deficit, the stimulation of growth and the creation of jobs.

Provan
I wonder if you would care to comment on the use of the Euro by international companies in the European Union. In those countries which have the right to opt out, or which may not be eligible at the start of monetary union, do you foresee large international companies using the Euro in practice and for accountancy needs, thus allowing the Euro to evolve in those countries as a recognized currency? Will the Commission be making sure there is a legal base for that to happen?

de Silguy
Let me reassure Mr Provan. Of course international companies, even if they are not based in a euro country, will be able to use the euro. At present, the regulations adopted on the legal status of the euro are specifically designed to provide sufficient legal guarantees to ensure that the euro can be used by every enterprise in the world that wishes to use it.
Secondly, I can pass on the news that the Commission has been working with, among others, those responsible for the finance markets on extremely technical matters of financial conventions and denominations, with a view to trying to lay down rules, at the request of the financial operators themselves, to ensure that the euro can be used on a harmonious basis.
My third comment is this: clearly, if the euro is a good currency, in other words a stable currency, it will be an alternative to the dollar and it will be in demand among investors wanting to diversify their portfolios. So the euro is bound to grow and its use is bound to become more widespread as a trading currency and a payment currency and, also, a reserve currency.

Féret
Commissioner, I should like to take another brief look at the specific proposals to boost employment which the Commission believes it can implement as a direct outcome of the European Council resolution in Amsterdam.
Does the Commission believe that that resolution, the new chapter on employment and the integration of the social protocol amount to a sufficiently ambitious and explicit political commitment to enable the Union, between now and the implementation of the single currency, effectively to address the crucial and dominant problem of unemployment in Europe, and to respond to the urgent need and sometimes desperate anxiety of the social groups affected by it?
Or is the Commission perhaps inclined to consider, with sadness, that the conclusions of the European Council as summarized in the resolution on growth and employment merely encompass a few generalities suitable for firstyear students of political economy, bearing witness to the timid and often inconsistent vision of a minimalist Europe capitulating in the face of some of the serious difficulties that confront it - the social problem in this case?
To summarize, Commissioner, I doubt whether your apparent optimism is shared by our eighteen million unemployed.

de Silguy
First, let me say that I quite agree that jobs cannot be created with documents and treaties. Nor can we give Europe back the confidence it needs to rediscover its drive and create new jobs if we are constantly going to throw in the towel and adopt the pessimistic view. Today, when Europe has the necessary know-how and is rediscovering the secret of growth, the best way of providing the necessary stimulus and will to succeed is by encouraging the people, not discouraging them.
Secondly, the introduction of the euro will form an integral part of the solution to the problem of unemployment, because the euro will bring Europe greater growth. It will also enable Europe to eliminate the monetary fluctuations - ' competitive devaluations' as they were once known in certain quarters in France - which cost Europe a million and a half additional people unemployed in a two year period, 1995 to 1996. I believe, then, that the contribution made by the euro to growth in Europe will also be a valuable contribution to the struggle against unemployment.
But the majority of unemployment is structural, and so structural reforms must be our primary aim, now more than ever. That means reducing the burden on the low paid, it means giving flexibility to the employment market, it means education, it means learning, training, all those fields of endeavour where perseverance and determination are required.
Once again, on returning from the United States after seeing the Americans and talking to them, I realized that Europe was certainly no weaker than the United States but that we had one flaw - we don't believe in ourselves. And I believe that the role of politicians, of whatever party, today is to give back Europe's citizens that confidence in themselves.

Scarbonchi
Mr President, there is a rather unusual, not to say original, question I should like to put to the European Commissioner.
At the G8 meeting in Denver, which was notable for the lack of any positive decisions as far as Europe was concerned, a notable event was a cowboy evening paying homage to the American world order. The President of the European Commission, Mr Santer, like most of the leading figures present with the exception of Mr Blair, who refused, received a present in the form of a gold watch of very considerable value.
Commissioner, might not this gift be an opportunity for the Commission and Parliament to set up a museum to store and exhibit all the gifts received in the course of their official duties by European Union dignitaries - Parliament, Council and Commission alike?
I feel that this would be the best way to demonstrate to European public opinion, to the citizens of Europe, the keen interest which we all share in the preservation of integrity and transparency.

President
Do you wish to reply, Mr Commissioner?

de Silguy
I have taken careful note of the Honourable Member's suggestion. Personally, I have not received any such gifts. As for museums, let's have museums by all means, but do we want to bury Europe in museums?

Fayot
To get back to employment policy, Commissioner, among the means available you mentioned recourse to broad economic guidelines, the extension of those guidelines and the Council's recommendations on employment. In particular, you also talked about extending the role of the European Investment Bank and making use of ECSC funds.
I wonder if you could tell us what effects these two eminently practical ideas can be expected to have on employment. After all, as the Vice-President of the European Investment Bank, Mr Roth, has said, the Bank already takes account of employment problems in the investment projects it finances. On the other hand, the ECSC funds are not disposable funds - they are funds that come from industry and they cannot simply be appropriated and put to work for a Keynesian project.
I should like to ask the Commissioner what the European Council had in mind when it settled on these two very practical ideas.

de Silguy
Thank you for that question, Mr Fayot. I could spend two hours answering it, because it is technically complex. To keep things as simple as I can, what we are asking of the EIB is first that it should give easier, quicker access to credit, and secondly that it should reduce the cost of that credit to small- and mediumsized enterprises operating in high technology areas. So what we are talking about are specific, targeted schemes that will enable the EIB out of its own resources - out of its reserves, if I can put it that way - to provide easier access to borrowing for enterprises which need loans in order to expand, and this idea holds out promise for the future because the sectors concerned are the developing sectors of so-called high technology.
As for the ECSC, as you know, it holds substantial reserves which it is obliged to retain because it has to cover the loans it has made to industry. The ECSC will cease to exist on 23 July 2002. A number of loans will still remain active, will still have a few years to run. So, as long as those loans need to be covered, the reserves will remain. The interesting point is that the European Council said that since those reserves were set up on the basis of a levy on the coal and steel industries, then when those reserves can be released they must be given to a fund which will enable research to be promoted in the industries connected with that sector.
So, instead of ending up with this money being handed over to some unspecified recipient, we can feel certain that it will be appropriated and used to best effect to facilitate research, because research stimulates employment and because not enough research is being done in Europe.

Mulder
Mr President, now that it is becoming increasingly likely or almost certain that we will have the euro, I should like to ask the Commissioner what will happen to Europe's green currency system? Will there soon be a green euro or when does the Commission envisage making concrete proposals in this area so that Europe will also have a single euro in the field of agriculture?

de Silguy
That is a very good question. We are already giving thought to that. What I can say is that the euro will simplify the situation, at least for the countries in the euro zone. Consequently, in agri-monetary matters, the difficulties that have arisen as a result of changes in exchange rates, and which have had agri-monetary repercussions, will disappear. So that will simplify the situation.
Secondly, there will still be a problem to be sorted out with the non-euro States that are members of the European Union. The technical aspects of these matters are currently under consideration, and I can assure you that all the arrangements will be made to ensure that, as soon as the euro comes into existence, any difficulties that may still persist will be eliminated.

President
Thank you very much, Mr Commissioner.
The debate is closed.

Takeover bids
President
The next item on the agenda is the report, drawn up by Mrs Fontaine on behalf of the Committee on Legal Affairs and Citizens' Rights, on the proposal for a thirteenth European Parliament and Council Directive on company law concerning takeover bids (COM(95)0655 - C4-0107/96-95/0341(COD)) (A4-0204/97).
I have received a request from the UPE group pursuant to Rule 129 of the Rules of Procedure for the report to be referred back to committee.
I call upon Mr Florio to move this request.

Florio
Mr President, we have made this request because we believe the issue needs to be examined more deeply. We would point out that this proposal from the Commission began life as a proposal for a recommendation and then made enormous strides, turning into a proposal for a directive. The consultations were geared to the proposal for a recommendation and not to the proposal for a directive it has transformed itself into on its travels. Now in the light of these considerations, the determination and the conviction has grown in my group that it is right to go further into the matter in committee and also, perhaps, to deal in parallel with the imminent - or almost imminent - discussion of the directive on the European limited company. So, on behalf of my group, I support the request for reference back to committee.

Medina Ortega
Mr President, on behalf of the Group of the European Socialists I should like to tell the House that the matter was debated at length in the Committee for Legal Affairs and Citizens' Rights, taking account of all considerations and all aspects. It seems to me that there is no point in referring it back to committee now. I therefore suggest that we keep it on the agenda.

President
I put the request to refer the report back to committee to the vote.
(Parliament rejected the request) I call upon the rapporteur, Mrs Fontaine.

Fontaine
Mr President, the report on takeover bids which I have the honour of presenting to this House on behalf of the Committee on Legal Affairs and Citizens' Rights cannot be considered outside its historical context, and I hope you will allow me to say a few words on that subjects.
It was in 1989 that the Commission, noting the proliferation of takeover bids, both friendly and hostile, in the European private sector, took the initiative of proposing the adoption at Community level of a number of joint provisions governing these practices. In actual fact, the Commission's proposal was nothing less than a harmonization directive. This House added a few amendments, but approved the proposal as a whole, in a report adopted back in January 1990. Since then, however, the truth is that the matter has been continuously blocked by the Council.
Today, therefore, the Commission is suggesting a new approach. That approach takes the form of a framework directive establishing general principles applicable to takeover bids, without making any attempt to achieve detailed harmonization of the rules in force in the various Member States. It should be noted, incidentally, that since 1989 the Member States, one after the other, have made certain arrangements to regulate this matter.
The new approach by the Commission is consistent with the undertaking given at Edinburgh in 1992 to respect the principle of subsidiarity and leave the Member States free to implement the principles set out in the directive, making due allowance for their national traditions and practices. Also, in the present case, this new approach is designed as an escape from the dead end created by the Council. It is common knowledge that the fiercest opposition has come from those Member States which felt that the harmonization initially suggested went beyond what was desirable or desired.
In this context, you rapporteur felt strongly - and I hope Mr Florio is listening - that the Legal Affairs Committee should first give very careful consideration to the appropriateness of this new line proposed to us by the Commission. That was, as it were, a preliminary question which I put to the Legal Affairs Committee before any consideration of the merits of the instrument. Was legislation necessary or not? And if so, was a directive the right way to go about it? Should it be approached in the limited way proposed by the Commission?
The Legal Affairs Committee once again, after very careful study, answered both these questions in the affirmative. It instructed your rapporteur to continue her work along those lines - the lines of a directive of minimal harmonization, as the Legal Affairs Committee considers that the extreme diversity of national legislation means that takeover operations cannot be effected with the necessary degree of legal certainty to protect both minority shareholders and the employees of the companies targeted. It considers that an attempt at harmonization - even with limited objectives, even, let us be frank, a somewhat timid attempt - would nevertheless make it possible to establish a degree of fairness between the various stock market players, acting as a deterrent to purely speculative raids by the strongest of those players.
I should add, ladies and gentlemen, that the argument along the lines of 'hold on, don't let's do anything until the fifth directive on worker participation, the tenth directive on cross-border mergers and the draft plan for the European company have been unfrozen' is too reminiscent of the 'web of Penelope' , which of course was never finished at all. These various projects -unfortunately blocked by the Council for years - have no sufficiently direct links with the subject before us today to justify a universal freeze. Indeed, the signal we are going to send could mark the start of a long-awaited thaw in this area of Community company law.
With regard to the substance, therefore, our guiding principle was not to try to make the text more restrictive, knowing that the same causes would once again produce the same effects and the text would again be rejected by the Council. Adopting a pragmatic and efficient approach, we tried to make it clearer, more precise, but also more dynamic in view of its intended subsequent application by the Member States. That was the thinking that prompted our amendments defining the offeror, protecting minority shareholders and specifying the functions of the supervisory authority. Finally, and as we did earlier in 1990, we stressed the need for clear information for the employees. Some of our amendments, adopted from the excellent report by Mr Hughes on behalf of the Committee on Social Affairs and Employment, are particularly designed to enable employee information to be improved.
Mr President, ladies and gentlemen, following on from the Amsterdam summit, which recorded a few timid steps forward towards giving the European Union that social dimension which it so grievously lacks, I hope this House will show that in such areas we will not accept paralysis or prevarication. I hope with all my heart that this House will approve the views expressed by its Legal Affairs Committee and its Social Affairs Committee in favour of this directive and the amendments we propose to give concrete form to our desire for transparency, equity and social equilibrium in the European single market.

Verde i Aldea
Mr President, first of all and not merely out of politeness or custom - I must congratulate Mrs Fontaine on the work she has done on a text which has an extraordinarily light touch. Mrs Fontaine is to be congratulated because she has attempted to make the content of that text a little clearer although within the limitations which she has pointed out.
In fact, as she herself has said here and indicated in her report, Mrs Fontaine did doubt whether it was worth continuing to consider this directive and spending much time on it.
She decided that it was and I congratulate her on the work she has done. Moreover, an attempt was made to put some flesh on the bones of this directive by the Committee on Legal Affairs and Citizens' Rights and by means of some amendments. In fact the present proposal for a directive is an exercise which seems to me to have fairly limited results. That is because the principle of subsidiarity is applied to overcome the hurdle of opposition within the Council in giving its agreement to previous proposals.
This is one of the cases in which the principle of subsidiarity has been used in a rather forced manner, because if this matter falls within the jurisdiction of the Member States, then all company law, or the greater part of company law, will fall within the jurisdiction of the States. And company law is not the same in Britain for example as on the continent.
The British have very much put the brakes on this draft directive - I would mention that it was the government of the day - and it might in fact be said that there are many aspects of company law which are specific to AngloSaxon law and do not necessarily contain a Community dimension. However, the rapporteur points out - and I think this is important - that when we are aiming for a global approach, as we are now - it is clear that the European Union is not responding in this field of company law as might be expected when, strange to say, all aspects of trade are taking on a more international and global character and becoming ever more alike. I remember that when, many years ago, I was studying comparative law it was pointed out to me that it was not possible to harmonize everything and the example of family law and divorce law was quoted. This appears however to be practically harmonized throughout almost all the Union and, in contrast, we have company law which is not. I hope at least this text will be approved. We shall vote in favour with some amendments because something is better than nothing.

Mosiek-Urbahn
Mr President, ladies and gentlemen, the Commission proposal takes account of the principle of subsidiarity, on the basis of the experience gained with the aforementioned 1989 proposal, which failed. So the proposal simply sets out an objective, a framework, and by and large leaves its practical implementation to the Member States. However, this only minimally attains the objective of ensuring that the shareholders of listed companies will enjoy equal protection in the single market in the event of a takeover.
In view of the very divergent rules on takeover bids in the various Member States, the Committee on Legal Affairs and Citizens' Rights and my group rightly asked whether a recommendation might not have been more appropriate than a directive. I personally would have preferred a recommendation, although there were good reasons for the decision to opt for a framework directive. If we are to avoid distortions of competition and make the stock markets more transparent and give minority shareholders at least minimum protection, we need a minimum of legal certainty. Given the wide differences between national provisions on takeover bids, this legal certainty can only be achieved by fixing a legal framework of action, however minimal. The main way to ensure that the individual participants in the stock market act along the same lines is through harmonization and not through voluntary codes of conduct.
In terms of content, the Legal Affairs Committee has made it even clearer that the Commission proposal is a framework directive by nature. Thus the report contains some amendments that give the Member States even more margin for reverting to their national systems.
The directive goes into some basic points either too briefly or not at all. They include, for instance, the definition of minority shareholders, the inclusion of concerted action in the scope of the directive and the definition of cases in which the Member States can authorize their supervisory authorities to grant exceptions to the provisions of the directive. Taking account of the difficulties I have mentioned, I believe the Commission proposal nevertheless deserves our full approval, in the version proposed by the rapporteur.

Florio
Mr President, first of all I would like to dispel any possible doubts. I have the greatest respect and esteem for the outstanding work the rapporteur has done and my request, on behalf of my group, to refer the report back to committee was not intended and is not intended in any way to sound like a criticism of the work carried out by Mrs Fontaine.
As has already been said, the proposal for a framework directive on takeover bids is the result of an earlier initiative. In 1989 the European Commission had already proposed a classic harmonization directive, but it was not agreed by the Council. Then, when the single market came into force, the Commission at first proposed a recommendation, which I mentioned just now, and then a framework directive containing certain general principles, with the purpose of creating similar conditions in all the Member States, leaving them a wide margin of manoeuvre. So the Commission feels the current extreme diversity of national legislation does not permit takeover bid operations to be carried out in a context where rights are satisfactorily protected, and a mild harmonization - even if the Commission would have initially preferred a genuine directive which would be more binding - would at least allow some fairness to be introduced between the various players in the stock markets.
The directive contains a number of points like this, which I shall not go through, but the Member States are left very wide opportunities to legislate in different ways. In a field like this, linked to the free movement of capital, we think it would have been more appropriate to identify a larger number of precise common rules. This has not been done. So with some regret, we find that when serious and important decisions have to be taken, the European Union does not succeed in taking them in common.

Thors
Mr President, on behalf of the Liberal group I would like to say that we have serious doubts about this phase of the work. We are of the opinion that currently there are more important matters of company law requiring our efforts. By this, I mean the enormous problems which companies experience with genuine cross border operations. Vigorous action is needed, based on the report by the Davignon group; standardised taxation for companies operating in more than one Member State and we need to look into how we can handle the deficit. This is where we should be concentrating our efforts now and I hope that the Commission will commence work seriously on this.
It is well known that the situation regarding take-overs varies in different Member States. The previous speaker has already mentioned this. Some countries have precise legal systems while others have voluntary systems in place. I hope that these will still be secure under the Directive even after the Commission's scrutiny of it.
Even if we are talking about a framework Directive, there are issues in a framework Directive which ought to be specified. The proposal on applicable law, for example. I do not think the Commission's proposal or the proposal which resulted from the discussion in committee are satisfactory; Article 3.2 in particular. This is why we have made an amendment proposal for this particular point. I also think that it is important that we give real protection to minority share holders when we adopt such a Directive. This is not the case in Article 10. This is why we have made our amendment proposal.
Ladies and gentlemen, I also think that the legal committee has made several proposals which are out of place in the modern world. For example, the proposed obligation that a report be published annually for five years after the take-over showing how employment has progressed. This gives employment but not real competitive jobs.

Falconer
Mr President, I should also like to join in the congratulations to Mrs Fontaine. She must feel as if she is receiving a bouquet of flowers. She dealt with this matter in committee very well. She united the committee at the end of the final vote, with the exception of two abstentions and Mr Cassidy voting against the overall committee decision. I think it would need a miracle by the Archangel Gabriel to persuade Mr Cassidy to come round to our position.
The 1989 original directive has already been very well explained in this House. This directive is very much reduced. It is very temperate in its tone because it has taken into consideration what happened in the Council in 1989 and 1990. The United Kingdom has the highest rate of takeovers and takeover battles throughout the European Union. There were something like 1, 500 in the years 1995/96. It also has the excellent reputation because of the takeover panel of having knowledge of these particular matters. We accept that and the proposal goes a long way to accepting that. In Article 6 it says that the supervisory authority can be a non-regulatory body. The takeover panel in Britain has been catered for with that amendment.
Hostile takeovers are now being seen across Europe. Krupp/Thyssen will be seen as just an interlude when we see the massive hostile takeovers of the future. Therefore, the Socialist Group takes the view that it is in the interest of competition policy in this field that we have some form of regulatory law in these matters.
Concerning the Commission's hostility to Amendment No 11, in 1995-96 in my country alone 12, 500 job losses were due to takeovers and mergers. Amendment No 12 calls for those people who have funds or shares in the companies involved through their occupational pension funds - a growing number of people throughout Europe - to be involved in any final decision on these matters. I understand the Commission is concerned about this. If it wants to come back with different legislation, for example the pensions directive which is before the Council now, we could take this into consideration.
In conclusion, the challenge to this House is Anglo-American law and whether Anglo-American law will supersede the European model. I hope and trust this House will reject that proposition. Anglo-American law has caused us grievous problems in the United Kingdom and I do not want to see it here. I am sure when it comes to the conciliation procedure with the Council, Mrs Fontaine will fight strongly on behalf of Parliament for our amendments.

Palacio Vallelersundi
Mr President, I shall retain only one point from the speech I had prepared and that is to congratulate the rapporteur on her competent work. She did indeed manage to steer the ship of the European Parliament report with a masterly hand and I am sure she will manage to bring it safe to harbour.
Having said that, I wish to make a broader analysis centred upon the debate between those wanting to regulate company law by means of a recommendation - which is why a request has been made for this report to be referred back to committee - and those who advocate that it should be regulated by means of a directive or at least a framework directive. After Amsterdam, Mr President, our next challenge is the third phase of Monetary Union and if that is to have any chance of success - and Europe needs this third phase of Monetary Union to be a success - we need to complete the internal market. When we arrive at that point we realise that there is one sector where there has been no progress as regards the internal market for the past twenty years and that is the companies sector. But that is paradoxical because the companies sector was the pioneer in European integration - the sector which gave the first spur to the internal market.
This sector has made no progress for twenty years and now we are told that we should not issue a directive - which has had a most complicated ten-year history - but rather a recommendation. That is strange because I have also heard from the lips of the very people advocating the recommendation, that this directive does not go far enough and needs to aim at greater integration; they also argue, on a matter which is unconnected with this point, that we should be in a better position to lay down suitable rules if we waited until the Davignon report was finished and then issued a directive on the European limited liability company. I wonder, Mr President, what this constitutes. In Spain this is known as institutional filibustering and is tantamount to hoping to arrest the progress of the vessel of the European Union and there are two words behind this - one is subsidiarity and, paradoxically, the other is globalization. And between Scylla and Charybdis a realistic policy must be put into practice as my colleague from the Socialist group, Mr Verdi i Aldea, so rightly said. This directive is, in my opinion, insufficient but it is a first and absolutely essential step which we hope will be followed by other steps which are also absolutely essential in the field of company law.

Cassidy
Mr President, naturally I join in the chorus of praise for the efforts of the rapporteur. However, I would warn her with the Latin phrase 'Timeo Danaos et dona ferentis' which means: Fear the Greeks even when they bring gifts. May I suggest to the rapporteur that she should look very carefully at compliments coming from the direction of Mr Falconer because they come from a suspect source.
I have no criticisms at all of the work of the rapporteur. Within limits she has done a competent and workmanlike job. My criticism is aimed at the Commission. This proposal is the wrong proposal. The comment has already been made by Mrs Palacio and Mrs Mosiek-Urbahn that they would have preferred a recommendation rather than a directive. That is a perfectly legitimate point and I know the rapporteur raised it in committee. But this draft directive does not deal with the fundamental problem, namely that cross-border takeovers in Europe are extremely difficult to bring about and every country, or most countries, have barriers to takeovers.
The great argument is that we must look after jobs and so on. But jobs will be much more in peril unless we succeed through cross-border takeovers in creating world size companies which will enable us to compete with the Americans, Japanese and others. The proposal in Amendment No 23 by Mr Falconer and others that investment fund managers who manage portfolio fund investments should be excluded from the takeover proceedings is simply out of touch with reality since most of those institutions represent pension funds which represent the savings of workers all over Europe.
This proposal is the wrong proposal. I voted against it in committee and I shall vote against it tomorrow in plenary. I urge many others who have doubts about it to do the same.

Monti
Mr President, ladies and gentlemen, on behalf of the Commission, I congratulate Vice-President Fontaine, on her fine report on this important measure in the area of company law. I think we can all agree on one point: the situation in the Community as regards takeover bids and the protection of minority shareholders where control of a company quoted on the stock exchange changes hands, is currently characterized by a mass of different rules which are fragmenting the market. In the light of the progressive integration of European financial markets, the Commission regards this as a real obstacle to the operation of the single market.
As you know - and this has been mentioned - the previous attempt to remedy this situation was not very successful. The proposal for a directive drafted at the end of the '80s, and amended in 1990 to take account of the opinion of Parliament, met with strong resistance from some Member States. The discussions made it clear that it would be difficult to reconcile certain fundamental differences through a directive geared to detailed harmonization of takeover bids, all the more so as the detailed harmonization approach has to some extent had its day, not just in this specific case but in general. That is why this proposal is inspired by the spirit of subsidiarity, as Mrs Fontaine has mentioned.
So some people seemed to want a recommendation, and others seemed to want a more meaningful, more detailed directive. We have opted for a framework directive, which sets some minimum principles and conditions while leaving it to Member States to apply it in the way that corresponds best to their own traditions and structures, and that includes self-regulation codes. The Commission's basic objectives are to ensure that, throughout the single market, shareholders of a company quoted on the stock exchange enjoy the same guarantees if control changes hands, and that there are minimum rules governing the progress and transparency of takeover operations. It is crucial to ensure that when a takeover bid is launched, it takes place in a context of legal security where all the interested parties are aware of the conditions they need to operate under.
The Commission can accept the majority of the amendments tabled by the Committee on Legal Affairs and Citizens' Rights, with slight changes to the wording of Amendments Nos. 1, 4 and 6. But at this stage it cannot accept Amendment No 17, on the acceptance period for the offer because, in the light of the general economy of the text and its purposes, the reasons for it do not seem sufficiently clear. The Commission reserves the right to reconsider its position on this point at a later stage of the parliamentary process.
Mr President, as regards the social aspects - and here I also want to thank the Committee on Social Affairs, Employment and Working Conditions and Mr Hughes - the Commission is in favour of the inclusion of the general principle of protection of jobs, contained in Amendment No 11. However it cannot accept two related amendments - Amendment No 13, information on employed personnel and Amendment No 21, consultation of employees by the management of the company affected by the takeover bid. We find it difficult to reconcile these two amendments with the concept of a framework directive and with the principle of subsidiarity.
We accept Amendment No 14, but with a less rigid wording, and Amendment No 16 only partially. We cannot accept Amendment No 12 because it is not clear to us how people who are shareholders as a result of choices made by the managers of institutional investment funds can be involved in the procedure for carrying out a takeover bid. We tend to think this matter, which relates to the management of pension funds, should instead be regulated at the national level. Amendments Nos 23, 25, 26, 28 and, in part, No 27, presented during today's sitting, cannot be accepted by the Commission. However we can accept Amendment No 24, and the part of Amendment No 27 which provides for information of employees within a reasonable time after publication of the offer.
I hope the European Parliament will continue to support our initiative and I agree with what has been said about the fact that there are other important initiatives on the ground: cross-border operations, the European company statute, the need for coordination of taxation systems. But, like the rapporteur, Mrs Fontaine, I do not see how sending back this proposal can help solve the other problems. Prompt and positive consideration of this proposal can make an important contribution to breaking the deadlock on all these matters.
Finally, Mr President, we have in drafting the proposal taken particular account of the concerns expressed by British MEPs and in Britain generally. The directive, as drafted, is intended to keep the UK take-over system as intact as possible. Litigation in the form of judicial review in the UK is already a possibility, although it is not a common tactic due to the reluctance of the English courts to intervene during a bid, as is the right of an injured party to sue for damages. The directive itself explicity encourages voluntary control to be exercised by the supervisory authority in order to avoid recourse to administrative or judicial action. I want to reassure those Members of Parliament concerned that we are as concerned as they are about these aspects and we tried to devise a mechanism that, while providing a framework directive, causes the least disturbance possible to a wellestablished and well-functioning system like the British one.

President
Thank you very much, Mr Commissioner Monti.
The debate is closed.
The vote will take place at noon tomorrow.

Dangerous preparations
President
The next item on the agenda is the report, drawn up by Mrs Baldi on behalf of the Committee on the Environment, Public Health and Consumer Protection, on the proposal for a European Parliament and Council Directive concerning the approximation of the laws, regulations and administrative provisions of the Member States relating to the classification, packaging and labelling of dangerous preparations (COM(96)0347 - C4-0426/96-96/0200(COD)) (A4-0186/97).

Baldi
Mr President, ladies and gentlemen, dangerous preparations are currently governed by Directive No 88/379, which regulates their classification, packaging and labelling. The Commission's proposal, which we are now examining at first reading, is designed to update the directive in question, bringing together Community legislation on dangerous preparations in a single act. This proposed directive introduces changes to the 1988 directive geared to extending the scope of the directive on dangerous preparations to five new sectors, viz: 1) environmental classification and labelling; the original directive only covered the criterion of classification and labelling, with the wording 'dangerous to health' ; 2) pesticides and biocides, as the directive on classification, packaging and labelling of the parasiticides will be repealed; 3) safety data sheets, which the manufacturers must provide for preparations not classified as dangerous; 4) explosives, for which professional users must provide a safety data sheet; 5) labelling of certain sensitisers, by which products containing sensitisers, even below the normal limit for classification, must be labelled.
The great majority of changes introduced are important because they are linked to the assessment of preparations as a function of the dangers they represent for the environment, harmonizing with the seventh updating, in line with technical progress, of Directive No 67/548 on dangerous substances which is closely linked to the directive we are now discussing in this Chamber.
The aim has been to follow a process of harmonization of existing legislation on chemical substances and, while the proposal may not be easy for those not involved in the work to understand, it is also necessary to remember that the role of Parliament is to give political direction. Nevertheless I would remind you that assessment of the dangers of a preparation is based on determination of the following indicators of the danger of a substance: physical and chemical properties, properties with effects on health, environmental properties.
What needs to be underlined once again is the importance of harmonizing the existing legislation, because different legislation currently in force in the various Member States on classification, packaging and labelling of dangerous preparations, constitutes, as the Commission has rightly shown, an obstacle to intra-Community trade, sustaining unequal competitive conditions and having a negative effect on the functioning of the internal market.
So a directive geared to regulate this sector is welcome, as long as consumer protection is always given priority. It is precisely to protect the health and safety of European citizens that we want the directive to introduce high safety standards in all the Member States: hence the requirement for safety data sheets, labelling of certain sensitisers and so on.
Citizens have the right to see their health protected and this can be done through clear and transparent information, and legible and easily recognizable labelling. We have acted to ensure this by including, amongst other provisions, warnings recognizable by touch to protect blind people.
However, in cases of non-dangerous preparations containing a substance with a health risk, where information on certain properties is not relevant to the protection of consumer health, simplified safety data sheets need to be introduced for preparations not classified as dangerous, because drawing up and updating full data sheets involve major cost, time and difficulty for small and medium-sized firms which often do not have the necessary human and technical resources.
Finally, I would like to stress the fact that this European directive embraces and respects the wishes of the great majority of the Member States, as has emerged from the contacts I was at pains to make with the European national authorities, because the aim was to generate balanced legislation which takes account of Member States' different legislation, by improving it and trying to harmonize it. The amendments I have tabled in committee and in this House recognize the need to harmonize the legislation on chemical preparations. This proposal is intended to be a real step forward in this direction and it is the result of mediation across the various existing national legislations. Now the directive must be made feasible and operational.

Hulthén
Mr President, I would like to begin by thanking Mrs Baldi for the amount of work she has put into this very complicated and important issue.
The handling of chemicals is one of the most important issues which comes under the scope of the environmental sector. Every day we see the number of allergies increasing along with other negative effects on people and the environment. This is why I welcome the Commission's proposal which means we will be making a real effort at European level to deal with these problems.
The Directive itself is difficult and technical, but adopting a political stance will be simpler when we see the effects. What we are doing now is deciding on legislation which will determine how hazardous goods should be classified, packaged and labelled. This is particularly important for the thousands of European workers who come into daily contact with these chemical products. They depend on detailed and correct information on how these preparations should be handled to avoid putting their own health at risk. It is Article 16 of the Directive which concentrates primarily on the working environment. One of the proposals in this Article is to make obligatory safety data sheets, which will have to contain information on handling. So it seems absurd that Parliament should intervene and try and reduce the standard for this type of safety data sheet. This would also mean that the three newest Member States, at least, would be forced to reduce the level of their current legislation in this area. We are talking about safety at work here. This is not bedtime reading which has to be made simple to make it easier for certain Members of Parliament to read; we are talking about important issues concerning people's health.
But it is not just the working environment which will be affected by this Directive but the environment generally and our daily lives as consumers. Many of the products we buy in the shops have labels warning us of particular health risks or potential allergies. Against this background it seems somewhat unrealistic to say that it is consumer interest groups who want the impact of this Directive lessened. It is other interested parties who wish to see the standards in the Directive reduced and I sincerely hope that this House will reject such Directives and proposals which would mean that the type of safety data sheet which we already have in Sweden, Finland and Austria, for example, can no longer continue to be used in the future. This issue forms part of the agreements which were concluded during our membership negotiations. So I do hope that this House can see the benefit in starting at a high level when it comes to safety, for us as employees, as consumers and as members of society in Europe.

Schleicher
Mr President, ladies and gentlemen, let me say on behalf of the EPP Group that this proposal for a directive concerning the approximation of the laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous preparations is another good example of sensible European legislation. The question of dangerous preparations has been regulated on a Community-wide basis since 1988. But that regulation has been supplemented and amended on several occasions.
The present Commission proposal not only revises and brings together various legislative measures but also closes a legislative loophole by covering the environmental effects of dangerous preparations. The reason this question is so complex is that it does not only involve a great many - several thousand - substances, but also an even greater number of preparations containing these substances. It is a matter of several hundreds of thousands of them.
Things become even more complicated because preparations are not just sold to the end user but many of them are only used within the industry. Many small and medium-sized enterprises produce these preparations. They are also expected to produce all the necessary data. That means they must of course ensure that man and the environment are protected. In the case of any further data, however, we must achieve a reasonable balance between cost and added benefit. In this respect, I believe that the Commission proposal formed a very good basis. Even in the case of most preparations not regarded as dangerous, the producer must provide a safety data sheet if the users so wish.
Labelling, of course, presents particular problems. On the one hand it has to be comprehensible to the end user, on the other hand it must include a lot of information that may be important to the processor but is of no interest whatsoever to the general public. I think it is important for the labelling to indicate really serious risks. There may be three, five or seven of them. But it cannot list another 20 potential or conceivable risks. That would involve too much labelling and would confuse rather than inform the consumer.
The same applies to listing the chemical formulas, which the normal consumer cannot understand and where giving the more general name - for instance formaldehyde - would be more sensible. That is precisely why some of the amendments give rise to problems. Nor would such an abundance of information offer more protection; in fact it is more likely to do the opposite because it is confusing. Even if people might think that lists can clarify a generic term, in practice they do the opposite, for lists are limiting and disregard other possible aspects implicit in the generic term. These are the main reasons why my group will reject some of the committee's amendments.
To finish let me draw your attention to one more point, Commissioner, namely the poor translation. The German version at least contains a number of mistakes. For there is a difference between 'patentierung ' (patenting) and 'potenzierung ' (potentiation). There are several things like this in the text. I mentioned this in committee too, but unfortunately the mistakes were not corrected. I cordially request the Commission to look into this again.

President
I am in any case informed, Mrs Schleicher, that the relevant department have put that right.

Eisma
Mr President, we are very pleased with the proposal for a directive which somewhat widens the field of application of the original directives, as this is a directive which incorporates in a single document the existing legislation which has long existed in the field of dangerous preparations. In particular, we believe the European Commission has submitted a good proposal because dangers to the environment are included in addition to dangers to health as mentioned in the existing text. This is progress.
We also find it a useful improvement that preparations which can cause an allergic reaction are now also to be labelled. We, the Group of European Liberals, are strong defenders of a high level of protection for the environment and clear labelling for the consumer. I repeat, the Commission proposal seems to be a very reasonable proposal, although I would have liked to see further improvements on a number of points. In our view, the report by Mrs Baldi scarcely constitutes an improvement on the original Commission proposal and, unfortunately, some of her amendments in fact serve to weaken the original. This is why my group is unable to support the amendments which Mrs Baldi has once again submitted after they failed to be adopted by the Committee on the Environment, Public Health and Consumer Protection. We do, however, very much support the amendments approved by the Committee on the Environment which we believe usefully improve on the Commission text. These amendments concern matters such as the labelling of dangerous preparations which attain a dangerous concentration, if not individually, then when combined.
If we accept these amendments, then together with the Commission proposal we believe it will make a good directive. I hope that Mr Bangemann is of the same opinion.

Sjöstedt
Mr President, in its current form the Balti report is a good one. My group will be voting in favour of it. The report was not quite as good before the vote in the environment committee because, in its original form, some of the proposals it contained would have reduced the standard of regulations governing data sheets. Consequently, we will also be voting against all those proposals which have been raised again here aimed at reducing the standard of data sheets.
On the whole, the report in its current form and the Commission's proposal are very good and they will lead to significant tightening up in many areas. Many more types of substances hazardous to health are now included which will be of benefit particularly to those with allergies. Pesticides are included as well. It is very important that the new Members are not forced to reduce the standard of their legislation by adopting regulations which are too weak.
We will be voting for the report in its current format, and we will be voting against the UPE's amendment proposals.

Bowe
Mr President, I would like to welcome the Commission proposal. It is a much-needed and longoverdue review of this area of legislation. It is important not just for the safety of the environment but in particular for human health and safety.
There are three things in the Commission proposal which I welcome. There is the general extension of information to preparations and substances dangerous to the environment, a new recognition of their importance; the extension of this proposal to biocides and pesticides, something which is much-needed and long-overdue; and an extension of the need to provide information on substances which are not necessarily dangerous by chemical characterization but when in use might pose some risks.
The Commission proposal, like everything else in this world, is not perfect. Therefore I would commend to the Commission the majority of my colleagues' amendments which extend, clarify and develop the proposals of the Commission in a direction which is worthwhile and, in particular, the amendments which extend the provision of information through safety data sheets. This is a positive proposal which is in operation in some Member States already, including the United Kingdom and Sweden. It is important for suppliers to be obliged positively to provide safety data sheets to users. This really is essential.
In addition, I would stress the need for good design of these sheets to ensure they are comprehensible to all users throughout the Union, which is not easy when dealing with technical material like this in many different languages. I hope that the Commission will examine this area carefully.
I have some reservations with regard to proposals to allow the use of common or generic names without, in addition, the full names or details of the substance. I would hope that in these circumstances we would accept the safeguards proposed by the Commission as it is an effort worth taking and will pay off in time.
Finally, I should like to thank the rapporteur. The gracious and enthusiastic way she has produced this report has made it very interesting. Her personal endeavour and commitment has made it a very enjoyable report to work on.

Trakatellis
Mr President, the proposal for a directive we are debating today aims to concentrate all the European Union's legislative acts that determine the classification, packaging and labelling of dangerous preparations that circulate or are used in the market. This replaces and extends the scope of the existing Directive 88/379.
The directive we are to vote on, by extending the field of implementation of the initial directive, will cover the following:
a. the classification and labelling of preparations that pose a threat to the environment, with specification of the wording 'hazard to the environment' ;
b. the classification, packaging and labelling of phytochemicals and biocides;
c. the requirement for a safety data sheet from the manufacturers of most unclassified preparations;
d. the requirement by professional users of explosive preparations, for these too to supply safety data sheets, and finally,
e. the classification and labelling of preparations containing certain sensitizing substances that induce allergies, even if their quantity is below the usual classification limit.
The European Parliament's Committee on the Environment would also want the data obtained from centres of information on poisoning to be used effectively. As for the issue of labelling, the Committee stresses that this should be done in a clear way, because only then will the consumer be protected. Finally, Mr President, it is important to make effective use not only of the experience gained by implementing the directive, but also the experience that will emerge from labelling, advertising and education. For that reason, it is appropriate for the Commission to put a report before the European Parliament in two years, based on information gathered from the Member States and from professional users, so that any necessary technical amendments or indicated proposals can be set in hand.
In concluding, Mr President, I would like to applaud the Commission's initiative in proposing this review of the directive, to thank Mrs Baldi, who really worked hard on a difficult and complex subject, and to say that the Directive, as amended by the Environment Committee, has been greatly improved from what it was initially and I think we should vote for it.

Graenitz
Mr President, the directive on the approximation of the laws, regulations and administrative provisions of the Member States relating to the classification, packaging and labelling of dangerous preparations is certainly an important step towards genuinely completing the single market, because it is particularly necessary, in the field of chemicals, for us to have uniform labelling, uniform indications of risks and uniform methods of handling these dangerous materials. Certainly it is also important to approximate the Member States' different legislative systems. But, Mr Bangemann, it would have been a good idea also to incorporate the legislation on this matter that already exists in the three new Member States, Finland, Sweden and Austria, and not to wait for Parliament to point out, in the relevant amendments, that some Member States already have more stringent legislation, which is of course very sensible.
My colleagues have pointed out on several occasions that in the case of dangerous preparations it is not just a question of the risks of individual substances but that it is often the combination of the various substances that presents a considerably greater danger. This needs to be pointed out, both to the processing firms and to those who buy the end products. I hope this amendment by the Committee on the Environment, Public Health and Consumer Protection will obtain the necessary majority here and that the Commission and the Council will approve it, because this is a most important point.
I would like to add to another point my colleagues have already mentioned: for the sake of the consumer, we must ensure that these dangerous preparations are not advertised as ecologically safe and environment-friendly, or can be sold with these attributes, for that leads the consumer astray.
Finally, let me turn briefly to the safety data sheets, which I believe are particularly necessary for small and medium-sized enterprises, even if they add extra costs, because the owners themselves are far more involved in working with their people than in large firms and they do not have the same chance to obtain information as large firms, which may have whole departments dealing only with chemicals.

Flemming
Mr President, Austria has had very strict and very progressive legislation on chemicals since 1985. During the accession negotiations Austria was specifically assured that it could keep this legislation for a transitional period, with the promise of very careful consideration as to whether the other EU states could not also adopt these high standards, so that Austria would not have to lower its own ones. We were given that assurance.
So we were all the more surprised, Commissioner, at what the Commission then proposed! Surely it would have been only natural for the Commission to submit a document containing all the stricter Austrian provisions. What Parliament or even the Council then did to it would have been another matter. Yet the Commission did not even consider it necessary to incorporate them in its draft!
Even stranger was the explanation in committee as to why it did not do so. The Commission told us: ' We asked the other Member States whether they might not be prepared to adopt the Austrian standards.' So who did the Commission speak to? To a minister, to an official, or to some secretary? And in what form did it speak to them? Did it write to them, or just make a few phone calls? At any rate I consider this behaviour quite out of order!
I could now say as an Austrian that I don't care, that after Amsterdam we certainly do not have to suspend our legislation. But I shall not do so, for I am now an MEP and I am concerned about how that would look in Europe! After all, we keep hearing from Amsterdam how important environmental protection is - top priority is given to sustainability in the economic sector too! Very important, Commissioner! We certainly hear that message, only we are gradually not believing it any more. For whenever it comes to practicalities, when it comes to implementing things, the Commission at least recoils.
I very much hope the European Parliament will not recoil and that tomorrow we will approve the content of those amendments, which have in part already been law in Austria for the last ten years.

Myller
Mr President, this Directive is important to all Member States of the European Union, but clearly, since agreement was reached on certain matters with the three new Member States during the accession negotiations, it is to be hoped that sufficient account will be taken of these points. Otherwise there is a danger that these countries will be left empty-handed at the beginning of 1999.
The Directive, which was originally presented as an amending proposal by the Commission, has gradually acquired genuine substance of its own. The new Directive will unquestionably improve the existing situation, inter alia by collating and unifying EU legislation on dangerous preparations. It is also an improvement on the earlier Directive that the new proposal takes into account environmentally hazardous compounds and requires them to be classified and labelled.
However, the job has been left unfinished. In the Directive it is proposed that, in the case of preparations which are not classified as hazardous substances but large batches of which contain small active quantities of hazardous substances, safety information for users should be provided to professional users only where required. However, this information would concern only substances hazardous to health, and not those hazardous to the environment. Yet decisions as to which compounds are to be used in practice are mostly taken at the work-place. It is there that it is decided how to use and store substances and how to dispose of waste. Many workers, as well as the trade unions, are aware of issues relating to health, safety at work and the environment. It would therefore make more sense to label these compounds in all cases with information about constituents hazardous to health or the environment. This is the purpose of Amendment 40. Certain sensitizing and possibly allergenic substances should be marked even if they can only provoke a reaction in sensitized people.

Blak
Mr President, the directive we are discussing today does not just deal with labels on cans and drums and requirements to provide safety data sheets. It is a directive that will determine whether Danish painters are protected in the future against organic solvents. Many people in Denmark have a view on this. Unfortunately they remember it as one of the areas in which the EU is scrapping high Danish standards. In Denmark we consider that, while it cannot be demonstrated with certainty that painters suffer brain damage through being exposed to organic solvents, the mere suspicion constitutes sufficient grounds for taking action. Clearly therefore, painters need to know exactly what it is they are using. We now have some new friends in this circle: the three new Member States, who also support better labelling. In all three countries there has been concern that EU membership will lead to a lowering of standards on the environment and the working environment. The revision of the old directive, which also covers unwholesome things like pesticides, biocides and medicines, is viewed in these countries as a decisive test of whether membership can be reconciled with high Danish environmental standards.
The European Parliament thus has a vital role to play here. It is up to us to put maximum pressure on the Commission and the Council of Ministers to ensure that we do not end up with inferior standards for consumers and workers. We are the only EU institution elected by direct suffrage in the fifteen Member States; we therefore have a duty to argue the case of the common man.

Bangemann
Mr President, I do not want to discuss all the objectives we are aiming at in our proposal, because I believe it has become quite clear during the debate that the Commission, like Parliament, is endeavouring to improve the existing provisions. By and large all the Members who spoke in the debate have confirmed that. But in particular I want to thank the rapporteur and the Committee on the Environment, Public Health and Consumer Protection, because we find most of the amendments they have tabled acceptable and think they improve the proposal which, I believe, was fairly good in the first place, taken as a whole - as Mrs Schleicher rightly pointed out.
I want to concentrate mainly on the amendments now. We can accept 29 of the 39 amendments supported by the Committee on the Environment, Public Health and Consumer Protection either unreservedly or in principle: Amendments Nos 1, 2, 3, 5, 7, 10, 13, 14, 15, 18, 19, 21, 22, 25, 27, 31, 32, 33, 34, 35, 36, 37, 38 and 39 unreservedly and Nos 6, 17, 24, 29 and 30 in principle. Since Amendment No 35 was adopted, Article 12 of the proposal has to be deleted, which of course means that the amendments tabled to that article lapse.
Let me turn now to the amendments we do not want to accept. In our view Amendment No 4 would lead to unnecessary tests on animals because it would suspend the use of the conventional method. That is why we do not want to accept that amendment. Amendments Nos 8, 9, 11 and 12, to which Members from Sweden, Finland and Austria mainly referred, seek to introduce into the report a specific situation that exists particularly in Austria.
It is not true that, as some of the ladies who spoke to these amendments believe, when we drew up the proposal we paid no regard whatsoever to the treaties we have concluded with the new Member States. For instance we also introduced classification and labelling provisions for pesticides, i.e. we incorporated legislative provisions that exist in, for instance, Austria. The same applies to substances that may pose a risk to the environment; we included this feature of Austrian law too. It is absolutely not the case, i.e. it is incorrect to say that we paid no regard at all to that.
What we did not do is to incorporate a provision requiring that the chemical name of all dangerous substances contained in a preparation must be mentioned on the label. We rejected that idea because we believe - and this is not an affront to Austria, Sweden or Finland - that this would in fact be of no benefit at all to the consumer. On the contrary, if we listed all the substances that may be contained, even below the threshold level, we would have a mile-long list which no longer had any real meaning. I think it was Mrs Schleicher who rightly pointed that out.
We did not do this just by the by; I want to tell you this because of the criticism that we just made a few phone calls. Of course we prepare our proposals carefully and we do so by discussing them with experts from all the Member States who can then put their own points of view in working parties. During these preparations we and the experts from the other Member States asked Austria to produce material or arguments to justify the special situation in Austria. It did not do so, which is why all the other Member States accepted the Commission's position.
So you really cannot say that we proceeded in an arbitrary fashion without regard for these interests. I regard that almost as a personal attack, because I love Austria, and of course Finland and Sweden too!
All love affairs are dangerous, Mrs Flemming, that is why they are so wonderful!
So we did this for carefully considered reasons and I hope we will obtain Parliament's assent. On the question of translation, let me say I regret what happened. There are indeed a number of mistakes in the German version. We cannot correct that now, Mrs Schleicher. The document is in the Council's hands and the Council already has a proposal before it from the German delegation on how these mistakes can be corrected. So I assume all this can be sorted out.

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

1998 estimate for EP and Ombudsman
President
The next item on the agenda is the report, drawn up by Mr Tomlinson on behalf of the Committee on Budgets on the estimates of revenue and expenditure of the European Parliament and the estimates of revenue and expenditure of the Ombudsman for the 1998 financial year (A4-0178/97).
I call upon the rapporteur, Mr Tomlinson.

Tomlinson
Mr President, I should like to commend to the House the report that stands in my name on behalf of the Committee on Budgets. First, I want to say to the House that the one thing it should understand is that today's debate is the beginning of our budget procedure and not the end. I say that in the light of comments I shall subsequently make in relation to some of the amendments. This is not the conclusion but merely the start and, as you rightly pointed out, Mr President, when you read the subject for debate today, it is a report on the estimates of revenue and expenditure for the European Parliament and the Ombudsman. That is what we are establishing today.
Therefore, at the outset, I want to emphasize, over and above the report itself, Amendment No 17 tabled by Mr Wynn which I urged him and my group to submit. Obviously I could not table it myself because it had not been dealt with in committee. The importance of Amendment No 17 is that in establishing the draft estimates we have gone over the 20 % ceiling of Category 5 appropriations which would normally be the maximum that Parliament spent in accordance with our normal practice. Therefore, Amendment No 17 contains a firm commitment to remain below the 20 % ceiling of administrative appropriations.
I had a long discussion yesterday evening with the President of Parliament and with the Vice-President responsible for budgets. We are clearly agreed about the mechanisms which need to take place. There will be a rectifying letter sent by the Bureau of Parliament to the Committee on Budgets. That will need to be sent by the middle of September in order to effect the necessary changes. It means that over and above the suggestions that already exist in the draft report on the estimates, the Bureau has to face up to the need to find a further ECU 4m of cuts in the draft estimates and submit that proposal for ECU 4m of cuts to the Committee on Budgets.
However, the letter of rectification will have to deal with other things beside that. It will need to see if there are any consequences, for example, of the outcome of the IGC in relation to places of work. That is going to be somewhat more complicated than people imagined at first sight. I do not want to produce a rather pejorative note into our discussion today but there will clearly be implications from the outcome of the IGC for the budget of Parliament and these will also need to be covered in the rectifying letter from the Bureau to the Committee on Budgets.
The third area that such a rectifying letter will clearly need to cover - and I say this very clearly to the House - is the question about the outcome of the Bureau working group in relation to the transparency and control that was called for by Parliament in its resolution of December last year concerning Members' allowances. I and the Committee on Budgets will be resisting in the vote this week a number of amendments in relation to those allowances. That is not a value judgment on those amendments. It is intended as a proper respect for the competence of the Bureau to fulfil the mandate it has been given. It was asked to produce a report to Parliament by April. It has not been able to do so. Parliament and the Committee on Budgets are being extremely tolerant in accepting that it might take until September. But it cannot take beyond September. If we do not have the proposals from the Bureau for the transparency and control of Members' allowances in that rectifying letter in September, then it will be right and proper for the House to make its own decisions on the recommendation of the Committee on Budgets in the vote at first reading. I say that with as much clarity as I can because I do not want anybody to misinterpret votes that are made against some of the amendments. They are made not as a value judgment but out of respect for the Bureau competence, and include a promise that we will return to these questions at the reading of the budget in October if we do not consider that they have been adequately covered by that time.
I now turn to the report itself. We work on the basis of the estimates that have been established by the Bureau on the basis of a report from the Secretary-General. The Committee on Budgets has mainly formulated proposals in six areas to work on the basis of the report that had been given to us and, we believe, to improve it somewhat. The first of those six areas is changing the updating of remarks and nomenclature, in particular in the statement of revenue. That is rather technical but, nevertheless, important to the clarity and transparency of our budget.
The second area, which I have already partly referred to, is in relation to Members' travelling allowances. Concerning travel expenses, we have now reached an agreement with the Bureau that there will be no increase in the travel allowance, not even the increase for inflation for the year 1998. We have clearly incorporated that. It does not depend on future votes. It is in this draft report.
The third area where we have concentrated our endeavours relates to the freezing of the establishment plan of the secretariat but, at the same time, within that overall context of freezing the establishment plan, there has been the granting of a certain number of upgradings on the basis of parameters set for career developments.
There are a number of other areas that we will be looking at in some detail on the basis of reports we ask for in the course of the budgetary procedure. For example, there are a number of requests that we ask for further information concerning mission expenses and canteen expenses. I have to say that I do not feel any sense of grievance at the somewhat perjorative way I have been represented by the Staff Committee who advertise what they claim to be the price of Tomlinson. I had suggested that we put the appropriations for subsidies to the canteens into reserve until we could examine more fully how they were currently used and how they could be justified in future, if at all.
I suspect, however, on reflection that the staff did not agree with its Staff Committee either because at the Staff Committee elections where this figured as one of the most prominent aspects of their election campaign, the Staff Committee found that it was 350 votes short of a quorum. That indicates the need for it to get its act together and fight on the real issues of concern and not on phoney issues such as whether they deserve a subvention to their canteens.
The next major item on which we will be focusing relates to the whole question of building policy. One of the problems we have had in the 1998 budget is that although we move out of the Belliard building in order to occupy the new building, our lease on the Belliard building continues well into the next millennium. So there had been no provision made for the rent of the Belliard building. That might have satisfied everybody in theory, but it did not satisfy the landlord. The landlord needed to be paid. Therefore, we have had to enter over ECU 7m into the budget for the rent for the Belliard building until we have managed to dispose of that lease. An extremely important part of our building policy, therefore, is not just concentrating on moving into new buildings but making sure that we dispose properly of leases on existing buildings such as Van Maerlant and the Belliard building.
Finally, there was the assessment and updating of strategy in the data-processing sector where the Committee on Budgets are collaborating very well with Vice-President Haarder who has responsibility in this area. A substantial amount of money is being put into the reserve until the data-processing strategy is somewhat clearer.
There are many other things in the Committee on Budgets' deliberations which I could focus on. For example, we have looked at the whole question of telecoms in a liberalized telecommunications market. We find it somewhat surprising that as the telecommunications market has liberalized we have not gone to competitive tender for the provision of telecom services. So, the Committee on Budgets has called on the administration to produce an appropriate report with appropriate savings.
Therefore, on the basis of what I have said, I will be opposing all amendments to the Committee on Budgets' report and urge people who have amendments to realize that frequently the best place for their amendment is not in the estimates but when we come to the reading of the budget in October.
I can deal with the other part of the report in the remaining 20 seconds. It is in relation to the estimates of the Ombudsman. It shows the general state of satisfaction with the modesty of his requests and demands that it has received no amendment at all. I commend the report to the House.

Fabra Vallés
Mr President, first I should like to thank Mr Tomlinson for his report on the 1998 estimates for the European Parliament and the Ombudsman. This report clearly shows the need to continue the budgetary austerity line begun last year, so that the 2.7 increase in Section I as compared with last year is the correct and the most suitable figure which could be applied.
But austerity should be backed up by sound financial management which would necessarily require greater interinstitutional cooperation and better use of technological resources, since data processing, as Mr Tomlinson has just mentioned, would make the work more efficient. I fully agree that we could obtain much more for the money which is to be spent. However, it must be noted that there is still a lack of transparency as regards the implementation of various parts of Section I, so information is rather scant: Epicentre, security, cleaning and maintenance.
I also regret that the situation on the future of the Belliard I and II Buildings has not been clarified nor the transfer of the Maerlantd Building. Is the Maerlantd Building to be occupied by the Economic and Social Committee or the Committee of the Regions? I am aware that none of these decisions is without its difficulties since, although we have buildings enough an to spare now, we might be short of them following enlargement. It is still essential to make sure that the removal from the Maerlantd building is coordinated in order to avoid leaving the building unoccupied which would entail further expense. I am confident that the competent administration will do everything possible to clarify the future situation on the accommodation front.
As regards the last point which Mr Tomlinson mentioned on budgetary heading 1840 - the restaurant subsidy - I think that subsidy constitutes compensation to a firm which is providing a continuous and correct service to people who are not present for the whole week and many of whom are for one week in every month in Strasbourg. I therefore think that the subsidy provides some compensation for diminished use. If it is discontinued that will be reflected in an increase in prices and, finally, like the whiting biting its own tail, in even less use so that it will then be necessary to go out to eat, which would increase the time spent away from the offices.

Haarder
Mr President, I should like to thank Mr Tomlinson for the spirit of thrift that ran through his speech to Parliament, and I want to thank the Committee on Budgets and the Bureau, on which I myself sit, for unanimously deciding to keep Members' expenses for travel and the like at the same level as last year or, more accurately, to keep expenditure for next year at the same level as this year. I should like to thank Mr Tomlinson for his clear insistence that the release of money to refund travel expenses in the future should of course be subject to the production of documentation showing that a journey has actually been made. That is the least that can be expected. The Liberal Group has a very clear position on this matter. No firm would cover travel expenses for its employees without proof that they have actually travelled. Our Parliament should not give politicians terms any different to those governing the conduct of our citizens. It is not a question of mistrust, it is about order, propriety and openness, so that everyone can see that things are being done correctly.
We in the Liberal Group take an equally clear stance on Parliament's sittings in Strasbourg. We accept - albeit under protest - the ordinance that Parliament should meet every month in Strasbourg. But every month means 11 and not 12 part-sessions. We think that the Council of Ministers shows contempt for Parliament by not taking account of this, because it causes expenditure to increase quite unreasonably.
It is important that Parliament get used to saving in all areas and that we do our work more efficiently. If we get used to saving, we shall also have money to spend on necessary projects, for example in the field of information technology. We must transform Parliament from the bogey it is in some Member States into a model, an example of a unique, effective and modern international Parliament working in close cooperation with the national parliaments and with ordinary citizens. That must be the goal of our activity.

Svensson
Mr President, there is increasing public concern that parliamentarians receive extra tax free income because of their high allowances. Such privileges are damaging to democracy and create a gulf between us and our people. In the interests of democracy such privileges should be abolished. Those responsible ought to take note of this before September.
The Tomlinson report also proposes that funds be set aside for political parties at European level. This is a very strange proposal. Parties are created by the people. Their legitimacy arises from this popular base. To create 'super parties' by allocating money from above is democratically unnatural. It is contrary to national constitutions that foreign based parties should be able to intervene and be active in national politics, in competition with national independent parties. The creation of such 'super parties' which stand above society and above the people is alien to all democratic tradition. Democracy is not constructed from above. Nor is Parliament - and nor can they be bought with money. The whole of this absurd idea should be rejected.

Müller
Mr President, ladies and gentlemen, I believe that building policy is a very heavy burden on Parliament, which is why I also presume that retaining the 20 % limit is the most delicate question we will have to resolve at the first reading.
Regardless of that, I believe we can no longer escape the necessary pressure for reform and the call for transparency in this House. In this context I would like to openly praise the rapporteur and thank him for including in his report a demand which my group has been making in this House for a long time. Let me refer you to paragraph 36. We too would like to see an ecological audit of Parliament's buildings. We cannot call on EU enterprises to observe the eco-audit directive while we ourselves sidestep it in the case of our own buildings and our own approach to paper and the environment.
The second remark I would like to make concerns the public procurement system in this House. We have tabled a supplementary amendment on this and I would be very grateful if it could still be considered. In my view, this House is far too sloppy in its approach to public procurement. The Committee on Budgetary Control is currently examining the cases that have arisen in the course of last year and the year before and I believe a warning about the need to observe these public rules would be a good idea for us and especially of course for the administration and the Bureau.
My third remark concerns the urgent need for transparency in relation to allowances for us, the Members of this House. We have now found that the working party set up to this end has not yet reached any conclusion and perhaps we should not just call for the appropriate reform proposals with a warning that we will come to our own decision at first reading in September but should say openly that in future Parliament itself will decide on Members' allowances, and not the Bureau.
In this context, I certainly support the rapporteur. All the requests we, and in particular my group, have put forward on transparency in relation to travel allowances, checks on attendance by means of roll-call votes, auditing secretariat costs and the transferral of the general estimate of these allowances directly to the pension fund, all these requests which I and my group regard as minimum standards for transparency in relation to allowances, will be put before this House for a roll-call vote in September. Then we will see how serious the House is about transparency!

Vanhecke
Mr President, with just two minutes in which to speak I must of course limit myself to a couple of fundamental comments.
First of all, I once again regret that no serious attempt is being made to set an example as Members of Parliament. It is a fact that in all Member States - and partly as a result of the Maastricht criteria - our electors are being asked to make huge material sacrifices, with the imposition of new taxes and levies. But we ourselves are not touching our princely - even by parliamentary standards - expenditure allowances of various kinds. I know that I can now be accused of being a hypocrite. I understand such comments. I must certainly acknowledge that the leading proposer of amendments on this subject is a member of the Flemish Socialist Party, the party which is notorious for the bribes and other scandals of which not one penny has yet been returned to the taxpayer. But nevertheless, if tomorrow we support all the amendments which correct the anomalies of our allowances, nobody needs be a hypocrite any longer.
Secondly, as a Fleming I want to categorically state that under no circumstances must savings be made on the back of translation costs. I note that members of the European Commission among others are increasingly trampling on the right to information in your own language. I experienced this once again in Strasbourg this month, for example, during a speech by Commissioner Cresson. Anybody who takes even a cursory glance at this Parliament's budget can immediately find tens of millions of ecus in possible savings. It is no exaggeration to say that in 'Europe' money is being thrown out of the window. In these circumstances, in my opinion anyone who wants to save on translation costs is motivated by other than budgetary considerations.

Elles
Mr President, I should like to begin by congratulating our rapporteur. It is the typical style we have come to expect from him - combative and taking no hostages when he is fighting particular causes. However, I should like to echo the point that we are dealing with estimates of revenue and expenditure. We will come to our first reading later this year and that will be the time when substantive decisions will be taken.
On behalf of my group, in contributing to this debate and in setting Parliament's budget for the 1998 financial year, I want to underline the following points. Firstly, we would like to make sure that the overall approach we take is one which respects a general rigour in monitoring the expenditure of the budget. So we find ourselves, as in 1997, in sympathy with Member States who are having to cut back on expenditure to meet the Maastricht criteria for the single currency. In doing so, we wish to retain the 20 % limit and quite clearly a decision will have to be taken as to how to do that.
Secondly, looking at particular items, the Group of the European People's Party will be putting forward amendments, in particular on information policy, to make sure that we are going to get the right economies in both the Commission and Parliament budgets. We have done that in the past and will continue to do so. For example, we will aim at the objective of having common European houses in our Member States by the year 2000.
Equally, we back the position of the rapporteur in the treatment of the Epicentre. We have to be extremely cautious about setting up a new system of information without coordinating it effectively with other means of distributing information to parliamentarians. In terms of building policy, now that the Council has decided that Parliament should have its seat in Strasbourg, we will be voting for the cheapest way in which we can purchase our buildings. The ten-year solution, however inconvenient, is the one we must stick by.
Lastly, when it comes to the first reading we will be looking for the report which Parliament asked of the Bureau on the question of a statute for Members' allowances. That is the point in time when we must take a decision and not now, as one or two Members seem to think, in order to gain some short-term political capital. In the Amsterdam Treaty under Article 138(4) Parliament is asked to come up with proposals on how a common statute will operate. We will be looking to bring all these elements together and take some sensible decisions as to how our finances should be expended.

Florio
Mr President, ladies and gentlemen, I too want to express my congratulations to the rapporteur on the work he has done and, obviously, given the limited time available, I will restrict myself to certain general points on the European Parliament's budget.
When we talk about the European Parliament's budget, it is impossible not to highlight the fact that the most glaring example of lack of transparency and excessive cost inside this Parliament is represented by the buildings policy in both Brussels and Strasbourg, and it is one of the subjects - this needs to be stressed - on which the Presidency maintains an attitude of extreme reticence every time it is asked.
In practice we are now largely forced to restrict certain functions that are important for Parliament - I am thinking, for example, of the whole interpretation service - to pay for the excessive cost of misconceived operations, operations full of irregularities, operations which are largely superfluous. That needs to be said very clearly!
I am not clear whether the 1998 budget includes the amount arising from the penalties CERS will have to pay for the delay in delivering the new building in Strasbourg in Parliament's income. I would like some clarification on that point.
If we want to save money, I think there are some suggestions to be made. I think we ought to begin by abolishing the right of political groups to meet outside the institutional buildings, which wastes a great deal of money. We could save on the buildings in the individual Member States, which cost such a lot and produce very little return, and we could certainly save on the costs of the canteens, as the rapporteur has suggested. Finally, we must be careful not to create a new bureaucratic structure just to check Members' expenses receipts. Transparency is essential, but we must take care that we do not end up spending just as much and at the same time increasing the bureaucracy to do the checking.

Virrankoski
Mr President, the estimate of the European Parliament's next year's expenditure has been drawn up most professionally. My thanks to Mr Tomlinson.
Parliament's budget ought not to exceed 20 % of Category 5 appropriations. This document exceeds that ceiling by ECU 4 million. This is a blemish which ought to be expunged. I therefore support Amendment 17.
Among the other main points, I should like to stress point 6(f) of Part B, concerning data processing. The European Parliament's systems are years behind those at the Member States' parliaments - at any rate Finland's. The rapporteur's stress on this point is accordingly justified.
In my view it is also right that the rapporteur has cut expenditure on canteens. Originally, running costs amounted to two and a half million ECU, or approximately 100 Belgian francs per customer per day, assuming that every employee and every Member eats every working day. I do not see any need for subsidies. If the employer wishes to subsidize employees' meals, this should be done in a different way - openly, for example by issuing luncheon vouchers. Canteens and a possible Parliament shop ought to be organized by means of open competitions - the approach which has in fact already been adopted in many Member States. 3-079

Hautala
Mr President, I welcome Mr Tomlinson's decisiveness with regard to Members' privileges and expenses allowances. He has decided to put these matters in order if the working party set up by the Bureau does not achieve anything. But as a member of the Bureau's working party, I have to say that Mr Tomlinson is far too polite. I would advise you not to expect too much of the working party. Its chairman, who is leaving Parliament to take up other duties, has just postponed the final meeting, at which proposals were supposed to have been made. It has been quite impossible for us to obtain definite information as to how the various amendments tabled affect Parliament's budget.
But Parliament undoubtedly needs to reach a quick decision about this, as we know that the Court of Auditors is also taking an interest in the curious problem that expenses are paid here for journeys which have not been made. It is also known that citizens have complained to the Ombudsman about this administrative defect. Proposals therefore need to be made without delay. As Edith Müller has said, the Green Group believes that travelling expenses should be paid only if documentary evidence is produced. This is the only way of overcoming the existing problems, which undermine the very legitimacy of Parliament. Roll-calls should also be held at plenary sittings to ensure that Members do not draw their daily allowances unless they participate in the electronic voting.
I should also like to draw attention to the secretarial assistance allowance. This totals around 7 % of Parliament's entire budget. I believe there is a good deal of negligence here. A proper audit is called for.

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

The information society
President
The next item on the agenda is the joint debate on the following reports:
A4-0163/97 by Mr Hendrick, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the proposal for a Council Decision adopting a multiannual Community programme to stimulate the establishment of the information society in Europe (COM(96)0596 - C4-0030/97-96/0283(CNS)); -A4-0208/97 by Mrs Boogerd-Quaak, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communications from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on: -' The Information Society: from Corfu to Dublin, The New Priorities' , and 'The Implications of the Information Society for European Union Policies' (COM(96)0395) - (C4 0521/96) and-' Europe at the Forefront of the Global Information Society: Rolling Action Plan' (COM(96)0607 - C40648/96); -A4-0209/97 by Mr Rübig, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communication from the Commission to the Council and the European Parliament on 'Standardization and the global information society: the European approach' (COM(96)0359 - C4-0523/96); -A4-0200/97 by Mrs Ahlqvist, on behalf of the Committee on Culture, Youth, Education and the Media, on the communication from the Commission to the Council, European Parliament, Economic and Social Committee and Committee of the Regions: ' Learning in the Information Society: Action Plan for a European Education Initiative' (COM(96)0471 - C4-0528/96).
Hendrick
Mr President, my report is concerned with the awareness, raising and dissemination of information about the information society. As we all know, information in itself is power. And our job, as elected representatives of the people, is to disseminate that power to the people. We do that by creating an information society where information is plentiful and widely distributed and through reliable infrastructure.
Information empowers people and we as Socialists cannot accept an information society of haves and have-nots. That is why the Commission with the support of this Parliament continues to support the multiannual programme to stimulate the establishment of the information society in Europe. The setting up of the information society project office is a tremendous step forward. The worldwide web and the Internet has developed into a phenomenal medium. The use of this medium will revolutionize society as we know it. The nineteenth century was the age of agriculture and the twentieth century the age of manufacturing industry. With computers and mechanization, most of our food, consumer goods and services will be provided by automated systems. Early into the next century, only approximately 8 % of our population will be employed in agriculture or manufacturing goods and services. The vast majority of human activity will revolve around the use of information and the twenty-first century will be the age of information.
Information will be the raw material. Economic performance and prosperity will be determined by the ability to process raw information into knowledge, by the ability to transport that knowledge throughout information infrastructures, through fibre-optic cables and via satellite to destinations where it can be utilized to create wealth for our citizens. Teleworking, teleshopping, teleconferences are all activities which will utilize the new technologies and the new infrastructure.
What we also need are people with the skills to do that. The multiannual programme will contribute significantly to making people aware of these new technologies and encouraging them to take up the new technologies and learn the skills required in order to utilize them so that they may find fortune in the future with work and prosperity which will keep Europe ahead of the game in terms of economic performance.
In addition, we should not just set up a programme to stimulate such use without monitoring the effectiveness of that programme. Therefore, in my report I suggest that we monitor the performance of the programme using specific parameters which will say how effective that programme has been and ensure that the Community funds are being well-spent and used effectively.
It is also important that we involve other players apart from the Commission, Parliament and national regulatory authorities in this process. I have therefore suggested that we set up a committee made up of industrialists and academics, experts in their own particular field, who could provide an input to the Commission, Parliament and the regulatory authorities so that this multiannual programme can take into account the views of people in the Community as a whole. It is for this reason that we hope to see an information society that will benefit all our citizens in the future and one which will give them the jobs and the prosperity they so desperately need at this moment in time.

Boogerd-Quaak
Mr President, ladies and gentlemen, Commissioner, the White Paper 'Growth, Competitiveness and Employment' already contains a notable overall view of what needs to be done to allow Europe to enter the 21st century as a major player in the information society. After the White Paper came the Corfu, Esssen and Dublin Summits. On each occasion the Council and Commission took the necessary measures. They were then either not implemented at all or implemented too slowly. Now the Amsterdam Summit has once again called for more employment and has decided to hold a special employment summit in Luxembourg.
On paper everything is in place. The Commission proposals which we have before us today, studies by the high level group, the Club of Brussels, the information society forum, ... and just too many to name. What we must now do is make a final choice and then promptly act upon it. This is why I call upon the Council and the Commission to place all the proposed measures concerning the employment aspects of the information society high on the agenda at the employment summit. The ministerial conference in Bonn can provide the necessary first steps in doing this. The information and communication technologies are an example of a new activity by means of which new jobs can be created without too many extra European resources, provided the right conditions are created. In the telecommunications sector alone 150, 000 jobs have been created. The indirect effect of ICT on the European economy as a whole could lead to the creation of between 0.5 and almost 1.5 billion new jobs.
Secondly, Europe must create a competitive environment for industry. An internal market which, unfortunately, remains inadequate, is resulting in an inadequate European competitiveness. This is why it is important to strictly respect the deadlines linked to the action plans. There is a need for improvement in areas such as combating government assistance to national companies and ensuring fair competition. In this connection, I support Commissioner Monti's proposals for the completion of the internal market. It is the Member States which are the biggest problem in this area. They are often too lax in implementing European regulations.
Mr President, Commissioner, in the information society it is new small businesses which play an innovative role by developing new products and which are therefore important to boosting Europe's competitiveness. At the present time just 4 % of Europe's small and medium-sized enterprises have Internet access. It must be the EU's task to stimulate the activities of these small firms. The European Investment Bank can grant loans to new and fast-growing businesses, as was decided at last week's European summit.
I also believe that a substantial part of the resources under the Fifth Framework Programme must be allocated to activities relating to the information society. At present just 2 % of the regional funds are used for this. The same applies to the European Social Fund. It is possible to do more and better things with the same money.
The information society is not only a question of technology, it is also a question of the impact on society. I am pleased to see that the focus of the Rolling Action Plan is shifting to the social aspects of the information society. Hopefully this aspect will not be neglected at the ministerial conference in Bonn.
Special attention must be paid to lifelong learning and adult education. Attention must also be paid - and this is probably the most difficult part of the European Commission's work - to creating a more flexible market and reformulating the rights and obligations of employees and employers. The Member States must always remember that a European population given the constant possibility to undertake further training under working conditions which take into account the new forms of work is a formidable weapon in the war of competition with the United States and Japan.
The four policy lines on which I comment in my report are good policy lines. I am pleased with the documents as presented but, as I have said, at the end of the day ICT must be for people and not the other way round. My greatest concern is therefore the implementation of the correct regulations. This is why I call upon the Commission, upon us as a Parliament and upon the Council to produce fewer memos and take more action.

Rübig
Mr President, I want to congratulate the negotiators in Amsterdam on not downgrading employment to a question purely of convergence but on deciding that this issue will be discussed in depth at a summit in Luxembourg. I believe that a competitive European economy is the main point of departure for creating new jobs. That means we must work even harder to complete the internal market, which is where the information society has a central role to play.
Mr Hendrick has highlighted this very well. This is where we must start. This is where we must make more progress. Of course standards form part of it and standardization can do much to make the European economy more competitive. For standards are not just a technical or legal matter; they are the precondition for creating competitiveness. In the field of information and communications technology, the development of standards is - and in my view must be - market driven. I believe that is crucial to the drawing up of standards.
Four basic questions arise here. Firstly: official standards and the concept of publicly available specifications. I think we have to consider the technical and legal aspects of this. The second major question is the changing role of standards and of the European standardization organizations. I believe in future we will have to work more closely together both with the national and with the international standardization organizations, avoid duplication and twin-track situations and in particular speed up this process.
The third question is the legal status of publicly available specifications, also known as PAS, in Community law. I believe that in relation to this legal status we must also consider to what extent this involves the software, hardware and manware areas. Mrs Ahlqvist will be going into that later. In the information society, learning is of fundamental importance and we need learning standards too so that we can see whether certain standards have been achieved and what standards are needed. The fourth question is the importance of strategic proposals for developing competitiveness through the standards policy.
That brings me to standardization itself. It offers substantial benefits, namely legal and technical certainty for the users, for the firms, for the consumers and for the suppliers, and I believe that this is a most important basis and a fundamental consideration. But in the end we are also talking about a legal basis for the world-wide extension of these standards and taking direct account of essential requirements such as security - for security is always a central issue - network interconnection, application interoperability and data protection. Standards also offer the advantage of being published, which means they are easily accessible worldwide, without time loss. That means we can easily obtain carefully checked, written documents and opinions, on the basis of which we can then also improve our standards.
At present these processes take too long: a period of 6 to 8 years is no longer compatible with the life cycle of products of these technologies. We also find, for example, that certain standards have never even been developed. A simple example is the electric plug; there are many different, incompatible systems in the European Community.
We also have standards that were not developed quickly enough, where the European industry did not decide quickly enough, for example Video 2000, which never established itself. On the other hand we have standards that have achieved international recognition, such as GSM. GSM is becoming established worldwide and it is quite easy to telephone Slovakia or Russia today thanks to GSM.
Now, with the introduction of the euro, for instance, new opportunities have opened up for standardization, and especially for the PAS. With the prospect of the introduction of banking codes we can already consider how Europe is to meet this challenge internationally and thereby become more competitive. I believe the report makes it very clear that both de facto and de jure standards should be applied and that new systems must also be developed. As in the case of proprietary rights - patents, trade marks, copyright, protection of patterns and designs - a complete system should be developed for standards, in which small and medium-sized enterprises and consumer organizations should be very closely involved.

Ahlqvist
Mr President, this discussion today of the first report that I have had the pleasure of writing on behalf of the culture committee evokes special feelings for me. I am pleased to have been given this task, particularly because my homeland, Sweden, can in many ways be held up as an illustration of information technology and its use.
The Commission has given the Swedish Department of Education the task of developing a school computer network which will be used throughout Europe. We have started work and I hope to be able to present the results to the culture committee at the end of the year. At the same time, I cannot refrain from mentioning the slightly bizarre fact that the position adopted by Parliament concerns a plan of action which was launched in December last year. I am not one of those who wish to increase the power of the European Parliament to interfere in everything but I really do think that when we do something we should do it seriously. It is true that I have had regular contact with the Commission and I assume that some of my opinions will be evident in the future handling of the action plan. But I really would like to emphasise that positions adopted by Parliament which are not legally binding must also be treated seriously. How will our people have faith in the slogan 'Citizens first' if the opinions of elected members are treated as pure formalities?
As far as the actual action plan is concerned I support the Commission's proposals for the most part. The initiative has three goals: to hasten the entry of schools into the information society, to promote increased use of multimedia technology in teaching and to strengthen the European dimension in education with the help of the tools of the information society, and to put emphasis on cultural and linguistic diversity. In order to achieve these three goals the initiative will concentrate on four courses of action which will support local and national initiatives. T his will be based on promoting the interlinking of school networks to each other and encouraging the development and spread of the programme. In addition, teachers will receive training and support and all those involved will be given information on the pedagogical opportunities offered by multi-media technology.
Both research and pilot projects demonstrate that information technology makes the acquisition of new knowledge easier and stimulates personal development provided that it is adapted according to need and that the educational content is sufficient.
Based on my experience as head teacher at Hertsön's high school in Luleå I think that teacher training and information for parents are prerequisites for the success of the project. It is important that teachers have time to familiarise themselves with new methods of teaching and that they fully understand the possibilities. At the same time I know that parents have an important role to play in reinforcing school work at home. Both of these points are also underlined by the Commission.
But the original action plan does not address an issue which I consider to be extremely important in this respect and that is the situation of the disabled. As a result of information technology, opportunities for disabled people are greatly increased both in education and at work. There is a need to develop software and information and to undergo training in order to take advantage of this. The wonderful thing about most software packages is that there is practically no extra cost involved in adapting them for the disabled provided this is done at an early stage in the development process. I think that this must be a political priority. The Commission have shown themselves to be in favour of my proposal which I hope will now be developed in more detail.
The same applies to the aspect of equality. It is also extremely important that we redress the unfavourable balance between the sexes which even now can still be seen on the computer front. This is why I have proposed that a pilot project be created within the action plan aimed particularly at young girls.
Regardless of the risks associated with the information society we must acknowledge that there really is no alternative. This is why it is important that we politicians enter the debate at an early stage and that we are aware of the opportunities available through new information technology. It is in primary schools and secondary schools that the new technology must be taught.

Berger
Mr President, as draftsman of the opinion of the Committee on Legal Affairs and Citizens' Rights let me warmly congratulate Mrs Boogerd-Quaak on her report and thank her for fully incorporating in her report the unanimously adopted conclusions of the Committee on Legal Affairs and Citizens' Rights. All the reports we are jointly debating today show that the European Parliament is fully committed to the Commission's policy on the information society. But they also show that we have to point to the dangers of unilateral development. Unilateral developments are becoming increasingly evident and the Commission must do more to counter them in its policy.
While applications in the commercial and entertainment fields, for instance, are becoming increasingly varied and numerous, the field of public administrations is lagging behind at both national and EU level. We do not see comparable progress in improved citizens' access to public information, access to the law, or accelerated legal and administrative procedures. The same applies to non-commercial applications in the field of schools, education and culture.
These useful applications would also make it more attractive to a larger number of women to use the techniques of the information society. Another possible field of application is rarely if at all mentioned in the action plan, namely the potential of the information society to strengthen the citizens' democratic rights. We could do with a more imaginative approach here at all policy levels. If we want to bring the project of Europe closer to the citizen, and after Amsterdam that will be more necessary than ever, we will have to embark on large-scale experiments in tele-democracy.

Mann, Thomas
Mr President, you are just ten years old and already surfing the Internet. You can put information on Voicemail and exchange data and news through your E-mail. You use CD-Rom not just for games and also make discoveries in virtual reality. Europe's young people are using the new information and communication technologies, which are still a mystery to many adults.
Yet while a number of schoolchildren are teaching themselves, but also their parents, how to use these new technologies, others have no access to them: disabled pupils, pupils with learning difficulties and those who do not have the money to buy the basic equipment. The gap between those who know and those who do not know must be narrowed. They must be given equal access to these technologies at an early stage. They should be taught and learn how to use them responsibly. One aim of the European Commission's action plan, which we support in the Committee on Employment and Social Affairs, is to promote their use in primary and secondary schools. Regardless of the type of school, regardless of the level of qualification, minimum knowledge must be transmitted in order to equip young people for their future working and social life. These technologies are bringing Europe closer together.
Children at school can contact each other across frontiers, learn to know other cultures and languages and develop common interests which can be built on through visits to the host families. At present the costs of equipping schools with data banks are still far too high and the multimedia applications are totally inadequate. Mrs Ahlqvist, the rapporteur, showed that very clearly.
So we need to implement more pilot projects, such as our German 'schools on the network' initiative. That could link up ten thousand schools to national and international networks and multimedia services in the space of three years. At European level, the further training of teachers in the use of these future technologies is being supported through the Socrates programme. Let me draw your attention in particular to the need to support women teachers, for we must not allow them to continue to be disadvantaged in a technical world often dominated by men.
There is also a shortage of pedagogical material at schools. To this end high-grade databases must be developed and used. To ensure that many people do not rely solely on computers, teaching must also aim to motivate pupils to develop a team spirit and work creatively in groups. It should also help ensure that information is not just swallowed but also interpreted and that pupils checks its veracity. In this way the new information and communication technologies can help pupils make judgments and decisions, which are essential elements of true democracy.

Holm
Mr President, I am the rapporteur of the opinion of the Committee for Research, Technical Development and Energy on Mrs Ahlqvist's report on Learning in the Information Society. The committee unanimously accepted my proposal for the opinion. Mrs Ahlqvist has included most of the points raised by the energy committee. So I will just briefly describe three areas which I would particularly like to highlight.
The first is that there is a big difference in terms of IT and Internet capability in the various schools in the European Union. Fewer than 5 percent of European schools had access to electronic networks in the middle of last year. This figure varies enormously between Member States. In Sweden and Finland for example two thirds of schools have access to the Internet while the figure is fewer than 2 percent of schools in Germany. This is something which we must bear in mind when we are discussing these issues.
The other point on which we have spent much time is the attitude of teachers to the technology. Personally, I do not think that it is the young people and students who have the most difficulty in adapting to new IT information. The difficulties have more to do with the teacher's attitude and expertise. In many places it is now teachers who have the most difficulty in adapting to this type of information while young people view it more naturally.
We must also be cautious in placing too much faith in multi-media technology. It is by no means certain that the use of multi-media technology will mean better teaching in schools. Multi-media technology should complement normal teaching methods. Schools also need funds for non-material resources, in other words, for teachers. This is linked with my third point which is that we must look seriously at EMU in this respect as EMU requires the fulfilment of certain convergence criteria which, for example in Sweden, has meant that the public sector, which includes schools, has had to make savings. I do not think it is right to make savings in such an important area as schools. Young people are the future of the EU. We should not therefore be making savings in schools as we are doing at the moment.

Haarder
Mr President, if we develop the immense potential inherent in information technology, we can improve the economy, we can make life easier, not least for the disadvantaged in society, and we can increase public information and democracy. There is no end to the possibilities; applications are emerging all over the place. But, if the EU is to take full advantage of and have its full share in this new market and in these new possibilities, we urgently need to bring about a single, homogeneous internal European market. There is a lack of legal security and legal predictability. That is weakening European enterprises with respect to their American counterparts. A large number of directives are in hand and awaiting implementation. The present rules of competition are inadequate. There is plenty to do.
There is one bright spot - and we should be grateful to the Commission for it - namely that agreement was reached at the Amsterdam Conference to call upon the European Investment Bank to set up a new loan facility for advanced technology projects in small and medium-sized enterprises. That is a very important step. The Commission must be asked to step up its efforts to secure and improve the operation of the internal market in the field of information and technology. The Member State governments must take steps to ensure that the liberalization of the telecommunications sector is implemented in good time and on a fully unified basis by 1998.
And we must not forget the part we ourselves have to play. The European institutions must also think of their own information technology policy. The Commission must do that, and so must we in Parliament. And indeed so must the European Schools, which are regrettably lagging somewhat behind with regard to these possibilities. There are problems in large parts of the education sector as regards the use of the new possibilities. As a former education minister, I would gladly speak at greater length on this, but I will instead merely echo the points very eloquently made just now by Mr Thomas Mann.

Hautala
Mr President, I have been asked, on behalf of Mr Ripa di Meana, to outline the views of the Committee on Culture concerning the Commission's two documents on the information society. It is clear that the Commission has a duty to take cultural aspects into account in this field, as Article 128(4) of the EU Treaty stipulates. However, the Committee on Culture is concerned that the Commission's plans for the information society do not take this duty seriously enough. The Committee on Culture has particularly drawn attention to the fact that practical ways of promoting cultural diversity are now needed. There is no shortage of fine-sounding words on the subject, but the specific proposals are not particularly impressive.
One significant element in cultural diversity is multilingualism. There is a serious risk that the information society may become a monolingual society. This is not a development to be welcomed. The Commission ought therefore constantly to be making practical proposals concerning ways of promoting a multilingual information society.
It is also important to point out that what is at issue is not merely equipment and technology. To a very large extent, we are also concerned with the type of social and broader societal impact information technology will have, and one cannot stress too much that these social and societal effects have not by any means been investigated as fully as their seriousness warrants. We are witnesses to a development which is nothing short of revolutionary: national tax systems will already be seriously threatened as people start to do their shopping through the Internet.

Glante
Mr President, ladies and gentlemen, I would like to concentrate on three parts of Mrs Boogerd-Quaak's report. I believe that the move to an information society signifies a radical change in our society. In my view, the information society is based on two pillars, technological development on the one hand and social and societal development on the other. Until now technological development has stood in the forefront, and it does indeed remain crucial to European industry. This area is marked by rapid technological change.
Buzzwords such as broad-band networks, ISDN, Internet, Intranet, telematics in communications, etc., are commonplace now. The Commission's many efforts in this field are laudable. The rapporteur, Mrs Boogerd-Quaak, is supported in her call for the various activities to be integrated. We need more transparency in this area. The Commission must try harder to integrate the many individual information systems and regulations in a coherent and transparent whole.
The second pillar of the information society is society and its societal aspects. Initially, not enough attention was paid to these aspects, but they are increasingly being given their due place. So I warmly welcome the fact that the Commission has made this clear in its green paper on 'Living and Working in the Information Society: People First' . Here the key words are: lifelong learning, knowledge as the central qualification, etc., but also fear of technology, the disintegration of society into those who can handle the new media and technologies and another those who have no technical or psychological access to it. The rapporteur is right to recognize a deficit in relation to social and societal aspects. I can only share her view.
We do not want an information society that is concerned only with how the few can boost their profits. The European concept of an information society must carry the citizens with it along the road to the future. Social change must also open up opportunities for the individual on a broad front. By that I mean giving the individual a greater say, more access to information, more chances of education and more opportunities for low-cost communication. And looking to the future, the EU must prepare itself for the next round of enlargement even at this stage.
It is most important to involve the applicants for accession in the regulatory process if we want to have a homogeneous market in Europe. Once again we must also stress the importance of a European regulatory authority in the telecommunications field. I think that is the only way to ensure competition in this area and to reduce disputes between European operators and governments.
Seven amendments have been tabled to the report as such, which our group supports except for Nos 3 and 4. They make it clear that the development of an information society must not call workers' rights in question. We reject any idea of a protection-free zone. We could accept Amendment No 2 if the words 'public service' were replaced by 'universal service' . But this is probably just a question of terminology.

Malerba
Mr President, Mr Commissioner, ladies and gentlemen, during the last session we debated an own initiative report from the Committee on Research on the information society. Last week at the Le Bourget Salon we had the opportunity to hear about the commitment of the space agencies and European industry in the field of satellite transmission. In May, in Cairo, in the presence of Commissioner Bangemann, we sought to put on the agenda the initial elements of a plan for application of the information society via satellite with a view to a cooperation which goes beyond the confines of today's Union. The initiatives are really multiplying and we must give the Commission credit for that.
It seems to me that the work on the rules of the open market is reaching completion, so a major obstacle for citizens in the information society is slowly being removed. I am pleased the Commission's plan of action that we are discussing today finally prioritizes the effort on education, perhaps the highest barrier for citizens and firms to scale. Linking schools to the Internet, introducing a wide band multimedia network for teaching and for the new applications, expanding the 'Citizens of Europe' initiative with additional programmes - these are all excellent ideas which the United States has already implemented, in its own way.
What still concerns me and what I am still not clear about, is how the Commission intends to proceed on cooperation with the Member States and local government, on forms of incentive and financing, on the respective levels of economic commitment, on how to introduce the new techniques of keyboard and mouse into a system - basic education - which tends to have rigid programmes and rules, pretty limited resources and strong resistance to change. And I believe it is in these issues of flexibility in our society that the information society may encounter its greatest difficulties.

Ryynänen
Mr President, discussion of the information society has been dominated by technical aspects, at the expense of content. It is high time to consider the development of the information society from the point of view of people's needs and as a broad social trend.
A time will come when an ability to use information and communications technology is an absolute precondition for full participation both in working life and in other areas of the life of society. The necessary skills must therefore be imparted to all, in order to try to prevent a fresh class division and a new kind of marginalization. Only an information society based on equality can strengthen competitiveness and employment.
Mrs Ahlqvist's excellent report stresses that familiarization with information technology should begin at kindergarten and primary school to ensure that as many children as possible start out on an even playing field. Equally important is to give aging people an opportunity to learn how to use new technologies and information flows. This is one of the main challenges of lifelong learning, and appropriate materials and methods are needed to meet it.
The availability of and access to information and communications technology are of particular importance from the point of view of regional equality. Distance learning must be developed, and peripheral areas must not be left behind in economic and social development. The extent to which schools are equipped with network connections varies very widely from country to country, as has been observed here. In Finland, more than two thirds of schools are networked, whereas the corresponding figure for the Union as a whole is less than 5 %. In this connection it is important to stress the significance not only of educational establishments but also of libraries, and their considerable potential to operate as regional learning centres open to all. Professional staff with up-to-date training in the library and information field can also help to find knowledge and afford access to experiences which exist in new forms.
The position of information and communications technology in teacher training and in-service training should be enhanced. I believe that quality educational software and teaching materials urgently need to be developed. The Commission should also continue its efforts to develop a European multimedia industry so that it genuinely promotes Europe's linguistic and cultural diversity.

Pailler
 (without microphone) ... emphasizes the dangers of exacerbating social inequalities in the course of realization of the information society, thus recognizing that the new technologies represent an opportunity for society, a step forward, provided they are made accessible to all through teaching and through the universal service, whose responsibilities include that of supplying the necessary equipment to the various public establishments.
Well, although the Commission acknowledges the evolutionary and dynamic nature of the universal service, it is still refusing to extend it to include the supply of advanced telecommunication services to educational establishments. We agree with the Ahlqvist report when it deplores the total absence of any new resources to achieve these objectives. We agree with the analysis that attributes this total lack of resources to the budgetary austerity connected with the convergence criteria for the single currency, resulting in public spending cuts that have a particular impact on education, closing classes, abolishing jobs and providing no real training for the teachers in the new technologies.
We regret that none of these reports offers any criticism of the dominant conception of education that emerges from the Commission's various communications. We cannot accept that, in the name of progress, the very foundation of education is being called into question by the theory that apprenticeship should be given priority over education and training as a way of meeting the needs of industry.
Let us think back to paragraph 62 of the Herman report which cautions us against the illusion of regarding information technology as the solution to all teaching problems. We are still opposed to, and very concerned about, everything to do with excessively tight private or public partnerships, and especially everything to do with privately financed education.

Scarbonchi
Mr President, ladies and gentlemen, the Commission, far from concerning itself with a global, co-ordinated Union policy on the new technologies, prefers to dole out its thoughts and communications and papers of various colours little by little, depending on the highly objective criterion of the subjects handled by each parliamentary committee. And the parliamentary committees, basically, have had no option but to attend to their own individual helpings.
Ladies and gentlemen, this procedural farce must end. If it is true, as they say, that the brave new world is coming, the world of the information society replacing the industrial society, should it not be our priority to hold, at long last, a sensible and rational debate in this House about the future of the new technologies and their far-reaching consequences for the 21st century?
So I can only welcome today's joint debate. The four reports before us do in fact touch on several areas of the information society: finance, standardization, education and training, the change in the value of 'work' , and the quest for dominance by the information technology multinationals. At the end of the day, ladies and gentlemen, is not the essential question this: information highways to where?
For the creation of infrastructures alone, Jacques Delors's White Paper puts the total finance needed to link up the entire European Union at 150 billion euros. Well, the Community's five-year programme has a budget of 45 million euros. That is devisory, it is not enough, and it will achieve nothing. Because, ladies and gentlemen, if we want to go out and play with the big boys we have to start by making sure we have the resources.
Confronted with economic issues like these, I acknowledge with Mr Bangemann that prudence is the mother of safety. But, pace Mr Bangemann, there is every prospect that the European model of the information society will bear an uncanny resemblance to Microsoftland. And don't be surprised, ladies and gentlemen, if the European consumer continues to prefer the American original to the pale European imitation. And yet it is still not too late to take action to bring about a genuinely European model of the information society.
Four months ago, the European Parliament adopted Mrs Morgan's discerning report on the information society, culture and education, advocating a European model guided by democratic, social, cultural and educational concerns. Taking due account of the human dimension is a priority for all of us. Because the supertechnological information society will be capable of manufacturing greater and greater wealth with a smaller and smaller workforce. And so we shall see - more than we see it today, more than we may believe - the generalization of parttime working and the partial wages it brings.
That is why politicians have a duty to rethink the status of 'work' as the only vector of social cohesion in today's society. And that is why, too, things are going to change in schools. Children are going to have to learn by using the new technologies, not just learn to use them. And as for the politicians, where will they be, confronted by the IT multinationals? Driven by the profit motive alone, the giants of information technology, telecommunications, optical fibres and the media are embarking on what they see as a great adventure - world domination. Well, if a nation no longer has control over the production of its own images or the power to supervise new technologies, is it still a sovereign nation?
That is the real issue behind this unstoppable revolution. In our Western democracies, Mr President, we refer to the media, or at any rate the press, as 'the fourth estate' . Isn't it going to become, quite simply, the first estate - the only estate? That is the question we have to ask ourselves in the course of our future work.

Lukas
Mr President, the reports we are debating should be endorsed. Yet I have a sneaking suspicion that once again a lot of money is to be spent mainly on producing paper. I have nothing against detailed research and studies, but we have to consider whether it would not be more sensible to use the ECU 45 million available for the multiannual information programme to stimulate the establishment of the information society in order to implement projects of practical use.
Let me give you a concrete example: if the European tourist industry is to remain competitive in the next millennium we will have to create comprehensive electronic information and reservation systems. The technical requirements for these kind of tourism marketing systems already exist; but because of its small-scale structures and fragmentation, the industry currently has neither the organizational ability nor the motivation to produce comprehensive, reliable and up-to-date information and reservation systems.
For the many small and medium-sized firms that, after all, represent the backbone of European tourism, the key to the success of tourism will be not just the supply of information but accurate and rapid information. The tourists, i.e. the consumers of tourist products, book their holidays increasingly late and are becoming increasingly fussy. The consumers naturally expect detailed information at the press of a button and last-minute booking facilities from their suppliers.
So we must encourage the development of networking between suppliers among themselves and in particular between suppliers and markets, especially travel agencies, but also directly with the consumer, for instance via the Internet, on a Europe-wide basis. The European tourist industry must set up information and booking systems that can be accessed world-wide even in the most remote regions, which will also help protect and create jobs.
In the framework of the action plan, considerable progress could be made in this respect in the area of school education, motivation and the transfer of know-how, which would help make an industry that is constantly losing world-market shares become more competitive.

Paasilinna
Mr President, colleagues, one of the claims most frequently made on behalf of the information society is that it eliminates distances and thus makes it possible to use countries' land areas more effectively. Services can be used, businesses managed and jobs created without it being necessary to move to major population centres.
However, this optimistic appraisal does not take account of two significant problems. They must be resolved to ensure that developments do not proceed in quite the opposite direction. Even if it were to be assumed that information technology and data communications improve employment, the added value they bring does not by any means in its entirety accrue to the benefit of society through traditional work: to a large extent, job opportunities and purchasing power pass to well educated town-dwellers, while in peripheral regions purchasing power does not grow.
Another essential aspect of the information society is that of democracy. Democratic control and democratic opportunities should guarantee that even so-called marginalized groups have a chance to take part in electronic dialogue. Mrs Boogerd-Quaak's report is praiseworthy. I secured an amendment to it warning against the accumulation and globalization of information networks, the marginalization of the less educated and abuse of power. I also asked the Commission to investigate the information society's impact on employment and to stress that, despite information technology, there is still no substitute for a skilled teacher.
The opportunities for both users and producers to use services in the information society depend on the existence of state-of-the-art hardware and public infrastructure. The required expensive, and in virtually every case private, investments are readily made in densely populated areas, and become concentrated there. This adds to the marginalization of areas where communications facilities are already inadequate. It seems rather alarming if 'general telecommunications services' are taken to mean providing basic services for certain groups of poor customers who are lagging behind, rather than adopting ambitious development objectives for society as a whole. The fact is that, in less developed areas, modern information technology equipment, and particularly access to the Internet, cannot be based on privately purchased machines. Accessible work stations are needed in public places, for example at schools, libraries and hospitals.
Finally I should like to draw the Commission's attention to the fact that satellite communications and state-of-theart data communications ought to be possible throughout the territory of the Union, particularly in areas where the conventional telecommunications infrastructure is inadequate or outdated. A broad-band European intelligent network is a project of urgency.

Herman
Mr President, ladies and gentlemen, as often happens here we seem to be overlooking the main issue and focusing on considerations which - while certainly quite legitimate democratic and moral priorities - are secondary in any consideration of ways and means. Because the main issue is that Europe has now fallen far behind the United States, far behind Japan, and the rate of growth of the big American companies and producers, in every field, is five times as high as that of their European counterparts. As Mr Scarbonchi rightly put it, Europe is going to become 'Microsoftland' . That is the main issue.
Why? Because we all have our different priorities: for some of us it's the public service, for others the public sector; a third group is mainly interested in universal access, and a fourth wants to avoid inequality. All well and good. But in the meantime, what happens? While we hold forth about everything we think the information society should be doing, others are creating it. And we, ultimately, will be mere users of what others have produced.
I am in agreement with the content of most of the reports. I am not so happy about the measures proposed by the amendments, which incidentally are the same for every report. The amendments tell us that the workforce, the consumer, the representatives of this, the representatives of that, must be involved in the work of standardization, etc. The effect of all these conditions will be to make it impossible for any decisions to be taken at all. However much I may agree with the idea of consulting everyone, because there must be no limit to consultation, I am equally convinced that the making of decisions must not be shared out, because if it is there will be no decisions at all. That is Europe's problem, and that, sadly, is what many of us fail to see.
When I read all the amendments that have been tabled, on Mr Rübig's report or Mrs Boogerd-Quaak's report or Mr Hendrick's report, they all say the same thing: everybody has to be involved in the decision. Everybody has to participate. For heaven's sake, if you want nothing to be done, no participation at all, then the way to ensure it is to call for universal participation. We've seen something of the kind in Belgium: the idea was that virtually all the interests concerned should be involved in town and country planning policy. As a result, it is no longer possible to reach any decision at all. So the decisions are imposed by market forces, and horrible decisions they are for everyone. That is the end product.
So let me make a solemn appeal to Honourable Members: don't sink your own ship, don't suffocate the European information society just when it needs all the air it can get.

Plooij-Van Goorsel
Mr President, I could not agree more with the previous speaker, Mr Herman. There are many occasions when I do not agree with him, but today I fully agree with him.
Naturally, I should first like to congratulate Mrs Boogerd-Quaak on her report. I think that the problem, Mr Herman, does not only lie here with fellow Members of this House, but also with the European Commission. Because what does the Commission do? It sends us a constant stream of documents about the information society. Each one bigger than the one before. There is a great deal of overlap between all these communications. Today we again have four documents with a great deal of duplication. We do not expect this. The Commission itself must better coordinate its different services in order to eliminate this duplication.
A good example is that my report on the ICT industry was adopted at the last part-session. The Commission now comes out with its own communication on the subject. Thus we are rehashing the whole thing again. None of this brings Europe's citizens one step closer to the information society. So I also call on the Commission to better coordinate its activities in this area.

Ribeiro
Mr President, ladies and gentlemen, basically what is known as the information society is the result of an objective process in the technology revolution which is unfolding, chiefly at the level of information and communication techniques. It is the result of the introduction of new technologies, services and innovations at an almost mind-blowing rate. It is undoubtedly the result of human achievement.
Nevertheless, these achievements, having been pushed on by selfish interests and by the engine of commerce, have been appropriated by those doing the pushing and their use is very far from intended to benefit all humanity. Quite the reverse! We are very concerned at the role which this process might play in accentuating - even exacerbating - yawning social chasms which are already so marked and so serious.
In fact, it seems clear to us, that with the way it is being built, the information society is exacerbating and accentuating these chasms by creating a divide between those with access and those who are far from having access or who are excluded. The amendments we support to the Boogerd-Quaak report are designed to reflect that concern and, if they are adopted, we shall vote in favour of the report as we shall for the Hendrick, Rübig and Ahlqvist reports and we congratulate all the rapporteurs on the work they have done.
Finally, I cannot, nor do I wish to remain silent about the threat that we shall have to contend with different types of illiteracy under the umbrella of the information society as it is being built:
the illiteracy of those who do not learn to either read, write or count and who are thus forced to live as though in the last century or even several centuries ago and who will constitute a significant part within the large and growing number of social strata cut off from the new technologies; -the illiteracy of those who rapidly forget how to read, write and count because all they can do is click an electronic mouse, brilliantly of course, and who will live in a world of the future which I want, although I fight against it in that form, since it will create an ever-broader social spread with infra-humans on the one extreme and information supermen on the other who have no idea about Rimbaud and who are indifferent to the horrors of economics.
Wibe
Mr President, I would like to thank the three rapporteurs for their reports which are all excellent in my view. I have just a few simple comments to make in particular with regard to Mrs Boogerd-Quaak's report.
In contrast to the views put forward by many of the speakers here, I do not think that we should be concerned about the USA's technological leadership in this area. This is in fact the same argument, namely that European technology is trailing helplessly behind the USA, which was used by Mr Servan-Schreiber thirty five years ago when he wrote about the American challenge. The fact is that the growth per capita during those thirty five years has not been any greater in the USA than in Europe and I am quite convinced that this will continue to be the case in the future as well.
The reason that we do not need to be concerned is that trade is based on relative advantages. Europe has trade advantages in other areas instead, so it will not be a disaster if Europe does not become a world leader in every sector of Information Technology. I also think that if we really want Europe to take the lead in specialist technologies, we must base our thinking on the simple fact that eight out of ten Nobel prize winners for science come from the USA. So we must concentrate our efforts on basic research if we wish to lead the field in the technology of the future.
But it is the question of equality in the information society which concerns me most of all. It is currently young, well educated and highly paid men who clearly predominate in the field of information technology. The problem, as I see it, is how can we spread this knowledge to the general public. I think that Mrs Boogerd-Quaak is absolutely right when she points to the role of schools. We have a clear responsibility here and we must ensure that information technology does not create a class-based society for future generations.
Even now, we see well-off families, who are able to afford it, linking their home PCs to the Internet and in so doing giving their children knowledge of this technology right from infancy. Unfortunately, not all children have parents who are interested in computers or who can afford to buy a computer. We must tackle this problem in some way, I think, to ensure that we do not create different levels within the information society.
Finally, Mr President, I would also like to point out the great opportunities which the information society gives us to decentralise employment. The fact that people located right up in the North can work together with people in the South on the same project gives us an opportunity to develop rural areas and to reduce the population concentration in the cities.

Günther
Mr President, first I want to congratulate Mrs Ahlqvist, whose report I shall be discussing, on her work. The Commission Communication on which her excellent report is based is entitled 'Learning in the Information Society' and is intended as a European education initiative. Let me say as a matter of principle that perhaps we are not entirely doing justice to our education systems in suggesting that they are only just entering the EDP age. Information technology is already being taught and computer rooms already exist in schools all over Europe.
Yet this initiative aims to emphasize that the use of EDP and the media represents a constant challenge which everyone involved in education has to face up to on a continuous basis. But we must not forget that education and training are a field where the primary responsibility lies with the Member States. So I am glad that paragraph 3 specifically refers to the Member States' jurisdiction over cultural and educational matters and that in other passages too the report resists the temptation to prescribe rules to the Member States, offering them suggestions instead.
I must admit that I still have some reservations about paragraphs 13, 14 and 15. I am getting fed up with girls and women still being presented as technical dunces!
If you just look at the offices round here you will see that women are perfectly capable of using the new technologies. To say that there is a shortfall here would also mean that 40 years of coeducation was just a waste of time! Nor should we be too didactic. The reference to encouraging play with these technologies as an educational tip may be harmless but it is superfluous! I quite agree with the rapporteur that the changes proposed in the Communication must be accompanied by a reform of teaching. I think that is overdue. But teacher training is not really a Community task and I have reservations about supporting this from the structural funds. That is why my group will call for a separate vote on paragraph 27 and only vote for the first part.
There are two other aspects I welcome. The first is the reference to the disabled, which I consider mot important, and the second is the proposal to examine whether the research and education programmes can be used for the networking of schools. But here we must decide clearly where the priorities lie and where we can then cut back. Despite these reservations, I wish the report success.

Thors
Mr President, there have been many obvious points raised today but one sector which neither the Commission nor the majority of members have paid serious enough attention to is the need for Europe to create standards and an infrastructure for digital geographic information. By this we mean information bound to a certain place.
There is one point in the action plan which mentions G12000, but there has been no action, although the French, German, Spanish and Dutch Ministers asked for action in this area in a letter to the Commission in 1994. We can make substantial savings in follow up work. Something must be done in the fifth framework programme for research. There is nothing in the 1998 budget for geographic information. If it is not included, the EU will be unable to do what is required of us, or what we promised at the G7 information conference a few years ago. We also need better co-ordination of the data bases created by the Commission itself.

Quisthoudt-Rowohl
Mr President, ladies and gentlemen, today we are discussing four reports on telecommunications and we are discussing them jointly. That is indeed sensible. For there are so many aspects to the information society that we can only consider them together. But what is the real situation in the European Union? At present we as producers are losing market shares, and on an annual basis. We only have two large firms, accounting for just 10 % of the market, that are European. We are fuelling a broad social debate on the potential hazards of the information society, on those who might lose out.
We do not have harmonized markets. We are cutting back on resources for research and development in the field of information technologies too. So we find the Americans asking us - as they actually did at a meeting last week in Bonn - why are you actually so against E-mail and the Internet? Incidentally, when we discuss the Internet we spend more time on the risks and on child pornography than on communication between remote parts of the world. So what do we need? First we need more R&D resources. And we need broad consensus on that. We cannot just finance things we want to keep. We must also finance things that will secure our future.
This research has to be coordinated and to be applied research. That in turn also means we have to agree to pay far more attention to applications, going so far as really to offer assistance to the industry where that is necessary. We also need broadly based research on standards. Only if we can develop our own standards will we be able to conquer the markets of the future. And it is precisely in this context of the information society that we need a far greater and far better transfer of technology than we did in the past. Why is it beneath us to finance applications, why do we only stick to the basics? There is nothing wrong with satellites that bring in money, with satellite applications. We do not have to confine ourselves to sending out research satellites.
But above all, we will only create an information society and create networks if the people accept them, if there is a demand for them. In other words - and even if I do not think much of this in other contexts - in this case we need a broadly based information campaign, but also a positive information campaign that begins by listing the potential and opportunities of the information society rather than its possible risks. For the rest, we need a largescale offensive to promote teleworking. If we have a lot of teleworking that will also contribute to rural development and will encourage women to work by making it easier for them to combine family and a job. If we create a large number of teleworking jobs, we will have to introduce accompanying social measures. But if we reject this from the start and take a negative attitude from the start we will never make headway here.
I sometimes fear that we will miss out on an opportunity for the future. In the field of the information society it is particularly important that we act centrally, and we must do so now. That is why these four reports and the four Commission proposals are so welcome at this particular point in time.

Bangemann
Mr President, reading the reports and then comparing them with the debate this afternoon one finds quite a considerable difference. The reports all deal with what the Commission has done together with Parliament to date and then examine the new aspects being proposed here, i.e., the action programme, the special possibilities we have identified for schools, for education in general, and many other aspects.
Sadly, many Members of this House have used this debate, as so often in past discussions on information technology, as a kind of Wailing Wall to lament the injustice of the world and the dreadful fact that there are rich people and poor people, and so forth. Of course that subject is relevant to the information society too. But the problem that always arises is that when the Commission tries to answer these criticisms, the ladies and gentlemen who have made them have already left.
I am not saying this out of hurt vanity; I do not think that is so important. However there are a few faithfuls, who include Mrs Pailler. I am always pleased to find that she really does want to discuss the issues and does so, even if we sometimes have different views.
Let me try once again to put the discussion in context, as some speakers have failed to do. From the outset we did not regard information technology and its development as a technical or economic issue, which is apparent if only from the choice of the term information society; instead we tried from the start, since our first proposal, known as the Bangemann report on the Corfu summit, to point out that the main questions are a matter of social policy and that the prerequisite for using these new technologies is to prepare society for them and make it receptive to them.
However, we also said - at the end - that of course we can only discuss whether we are using these technologies in a socially sensible manner if we have them ourselves, if we develop them ourselves, rather than merely being other people's customers. That is why we also tried from the outset to remove any existing obstacles; let me remind you that our proposal to abolish the public monopolies in the telecommunications field was not contested in Parliament.
We are standing on the threshold. On 1 January next year there will be competition in this field. The idea of competition as an element of this new technology and its economic use was not disputed either. Competition has already halved the difference between our costs of transmitting information and those of the USA. When we began, our costs were ten times as high as in the USA. Today they are five times as high, which is still five times too high. So we must reach the same level; but the abolition of monopolies, the introduction of competition, of market relations, has already brought considerable relief to those who used to be excluded from information technology because of the fees they had to pay.
That is the social effect we are achieving by making use of the instruments the market economy makes available to us. I am not glorifying anything. I do not believe that competition is an end in itself. I do not dispute that we will have to make further efforts, which we are indeed doing; but I do say that there is no better means of helping the disadvantaged than by reducing the costs that have to be paid to obtain information.
Some of what has been said here is simply not true. For instance it was repeated again that we are totally backward and that our market share is falling. That is not correct. I have already pointed out on earlier occasions that if you take the three basic elements of this technology or this economic organization, namely the infrastructure, the hardware and the software, we are certainly not backward in terms of infrastructure. There is good reason why the Americans called their own efforts information highways, because it is they who have infrastructure problems, not us.
We are internationally competitive in hardware, not just thanks to the large firms people keep referring to, such as Siemens, Alcatel and Philips, but also thanks to small firms from smaller Member States. Ericsson in Sweden and Nokia in Finland are internationally competitive firms. Nor is it true that we attached no value to standardization. A speaker from the ELDR Group criticized us, saying that we should be more concerned with standardization. The lady in question evidently did not notice that we are also discussing Mr Rübig's report, which deals solely with standardization! How on earth are we supposed to discuss things properly in this situation?
With the GSM standard we have created a mobile telephoning standard that has been recognized worldwide. I am entirely in favour of people expressing their displeasure at the poor state of the world from time to time, but they should not overlook the facts. For instance, over the past three years our market share has changed very little in comparison with that of the USA, Japan and what are called the four tigers. In 1995 we had a share of 30.3 %, in 1996 29.7 % and in 1997 29.3 %. The USA had 34.5 %, 34.6 % and 34.7 %; Japan 15.1 %, 14.9 % and 14.6 % - their share has fallen considerably - and the four tigers had 3.9 %, 4 % and 4 %. So you can see that the situation has scarcely changed for these four main competitors, and very often their loss was the developing countries' gain.
I want to draw your attention to this again because speakers keep talking about the widening gulf between developing and industrialized countries. It is precisely in the field of the information society that the developing countries have considerable advantages in competition, especially in software where we are certainly still weaker than a number of others, but where we are also catching up now. India, for example, is one of the best and most competitive software producers in the world and although we may have believed in the past that we could create competitive industries in developing countries by giving them money we now know that this did not achieve much. But to let them and their knowledge into our markets, to accept them as competitors, that is genuine development aid; yet if we do that we immediately find that once again some people decide that this would be bad for Europe and start talking about relocation, the trap of globalization and suchlike.
Those same people who were always calling for development aid and for more money discover, now that we are beginning to allow the competitive advantages of developing countries into the system of competition, that we have fallen into a trap! I think that is the most hypocritical statement I have ever heard on the subject.
It was also said, again I think by an ELDR Member - I will have to visit the ELDR Group again one day, Mr President, it is obvious I have not done so recently - that we are only producing paper. Just taking the information society projects we have aided and assisted in the past three or four years since we began, there are 3000 practical projects. We have reached an arrangement with the cities of Europe, which has since been extended to all the cities of the world, to set up joint projects with them that will benefit their citizens, i.e., not just information on what the cities have to offer but also better medical care. In the area of tele-medicine we now have a whole range of excellent projects. We have also embarked on other projects with these cities and done other practical work.
We have also created the information society forum. We told Parliament we would like to involve EP representatives in it. We initially made provision for two Members; then there was a storm of indignation and we were told that obviously that was not enough. In principle we had wanted to talk to those who do not normally get a say, i.e., with social groups. So we increased the number of MEPs to five. Alas I must tell you that both we and the forum are disappointed by the participation of MEPs. It would be a good idea for Parliament to find out what work is being done in this forum. It is quite excellent! I also think it would be quite a good idea for us to have discussions from time to time with those whom you want to address, so that we can take a look at all that is already being done.
But let me now say a few words on the individual reports, for it really would be unfair of me just to discuss the debate and say nothing about the reports. I thank Mr Hendrick, for he has accurately highlighted what we want to do and, incidentally, answered many of the questions. Primarily the multiannual programme is designed to make the transition to the information society easier for those social groups that cannot do so with their own resources. One speaker here said we should pay more attention to the disadvantaged and to remote regions. He cannot have read the Hendrick report, for that is precisely what it says.
I also thank Mrs Günther for her contribution. Like Mr Herman she spoke to me from her heart. If I was a woman, I would protest vehemently at always being mentioned in the same breath as groups that really do deserve special attention, for otherwise it would look as though women were not as good at using information technology as men. The opposite is true! Now Mrs Roth-Behrendt is leaving because for once I have praised her!
If you just take a look at working women today you will see that they have no difficulties at all using these modern information systems...
(Heckling) ...OK, I give up!
Let us just look at these firms together. For the problem is that people obviously have different ideas about what the reality is. As I said right at the beginning: I believe teleworking is an excellent solution to a situation that has faced many women with insoluble conflicts. For in the past it was virtually impossible for a woman to perform her family duties as mother and as the focus of a household and to have a paid job at the same time. This conflict still faces many women today and part-time teleworking would allow them to combine the two activities. When I said that, a few Members of this House once again jumped on me and said: that will lead to the isolation of women. They will no longer be able to have coffee breaks with their colleagues, and so on.
I think we can imagine an ideal world. But we will never attain it. But if we can make some improvements to the world as it stands I do think it is worth doing so, instead of waiting for the ideal world of our imagination. What we are doing under this programme is precisely what has been said in this debate. We must thank Mrs BoogerdQuaak for pointing out in her report what we have been doing from the outset. Of course we have new tasks to tackle. That is why we presented the Rolling Action Programme, which is to say that what we are now doing in the field of electronic commerce, the modernization of our training and further training systems, the improvement of regional and social cohesion and protection of the citizens against illegal and harmful content represents a new programme of work. We did not do this from the outset, but these are problems we encountered as the systems developed.
In a fortnight's time, for instance, a conference is being held in Bonn involving many players not just from the EU but from outside too, on the question of how we really can protect the user from illegal or other content that he does not want. For that is a difficult problem and one that cannot be resolved by discriminating against the Internet because pornography or other illegal matter may appear on the Internet; it can only be resolved by discussing the technical methods of organizing this protection. That is what we intend to do and will do.
I also thank Mr Rübig. He rightly pointed out that we are also faced with a whole range of requirements in the field of standards, for instance how to rapidly develop practical and viable standards. But here too the situation does not look too gloomy. He will remember that when I suggested we should not regulate everything at once ourselves but try to achieve practical results together with the industry, Parliament strongly criticized me because many Members believed in their superior knowledge that things could not be done that way.
We have had good experiences here. We have a continuous chain of standards for the transmission of digital signals - and we are the only ones to have that on a worldwide basis - which we have developed together with the industry. They apply to the transmission, compression, decompression and reception of signals. So we are definitely not behind, on the contrary. In this area we are even ahead of many others and we can see that this has produced good industrial results too.
Mrs Ahlqvist brought up an aspect on which we have been very active from the start. One of the task forces we set up for research and development looked into educational and vocational training and further training software. That was years ago! We invited the Member States to discuss with us in greater depth how best to link schools up to the network. I admit we are not directly competent here, which is partly the problem, but all the Member States looked into this question - some are a little behind, other more ahead. But everyone knows that is one of the main problems.
I would ask Mrs Pailler not to be so critical about the participation of private firms. These firms are naturally interested in finding new clients now or in future through the use of computers, the Internet and other facilities, but for the time being they are also willing to make available, at little cost and sometimes for free, equipment which the schools simply do not have and which the state does not fund either.
Here too there is a gap between the ideal world we might imagine and the real world. Of course one could imagine a situation in which every Member State had enough money to finance all this from its budget. But that ideal world does not exist, not even under communism, Mrs Pailler. I have visited the accession countries, which all used to be communist. Hardly any schools there are linked to the Internet. Sometimes there are hardly any schools anyway. So we should not regard this as the fault of capitalism. But we want to make use of these possibilities.
There are four parts to this action plan and we hope that we can implement them without additional public funds. At any rate we will try not to be stopped short by budgetary difficulties but to do something practical. I am sorry, Mr President, if that sounded a little pointed, but I get the impression that our debate will have to evolve a little further if we are really to tackle the practical problems currently facing the citizens of the Union.

Plooij-van Gorsel
Mr Bangemann, I would like to repeat something you did not understand correctly. So I will now say it in German. You were very defensive today. You need not be, for I did not say that all you send us is papers. I merely said that the various departments within the Commission keep sending us information and communications at different times. That is the reason for our reaction. We would like them to be integrated. I asked whether you could not coordinate the Commission's activities better. I never said that you do no work! Perhaps you are aware that I too sometimes visit projects and give talks at conferences about telecities and suchlike. I am quite aware of all you do in this area and I am glad you do it.
You then said that we are not losing any market shares. Perhaps you should have another look at my last week's report on the matter. In 1990 we had a 35 % market share and now we only have 29 %, which is a 6 % decline. But I will be glad to see you at the ELDR Group again...
(The President cut off the speaker)

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

Imports of hormone-treated meat
President
The next item is the debate on the statement by the Commission on imports into the European Union of hormone-treated meat (WTO).

Bangemann
Mr President, first let me apologize for the absence of Mr Fischler, who would have liked to make this statement in person but cannot do so and has therefore asked me to read out the statement on behalf of himself and the Commission.
The WTO hormones panel forwarded the parties concerned two virtually identical preliminary reports, one for the USA and one for Canada, on 8 March 1997. The panel of expert's preliminary conclusion, and I stress preliminary, was that the EC ban on imports of hormone-treated meat was incompatible with a range of the WTO agreement's rules on health and plant health measures. Of course the Commission is disappointed. At the request of the European Union, an interim meeting was held with the panel of experts on 4 June 1997, at which the Commission made a number of comments on the panel's use of scientific data.
The final report is expected at the end of the month, which is why the Commission does not want to adopt a position before the panel has completed its work. For even if there does not seem much prospect of a different conclusion being reached, that would certainly be a procedural error. The Commission will, however, do its utmost within the WTO context to ensure full recognition of the fact that European Community legislation can decide what level of protection it considers appropriate for its citizens.

Roth-Behrendt
Mr President, Mr Bangemann, the Commission is not always able to adopt such welcome positions as this one. I gather from what you said and from a letter from Mr Fischler, which he sent to the chairman of the Committee on the Environment, Public Health and Consumer Protection a few weeks ago, that the Commission, like the European Parliament, is adhering to its many decisions and resolutions to continue banning the use of natural or artificial growth-promoters, i.e., hormones, in the European Union.
Their use is prohibited in the European Union for good reason. No long-term studies exist on the effects on humans. Scientists have produced very different assessments of the uses and risks of hormones in animal feed. Nobody knows the effects of the hormone cocktails that are so often used, not just on the animals but in particular on humans. When we consider all that, it becomes quite clear to myself and my group - and, I am sure, to the majority in the European Parliament - that we must adhere to our ban.
Let me say a few words on the situation in the European Union and what we expect the consumer to accept. The loss of confidence we have suffered recently in the European Union in relation to food production, but also as a result of the BSE scandal, is quite incalculable. It can probably be calculated for farmers and can also be calculated for some distributing and marketing organizations, but we cannot calculate what it means for the people. If the WTO now forced us to authorize hormones, imported from the United States or wherever, labelled or not, we would face a further enormous loss of public confidence, and quite rightly so.
That is why I am convinced that our strategy in reorganizing the market in beef and veal and milk must ensure that we continue to prohibit any use whatsoever of hormones. Moreover, we must evolve a strategy on how to deal with our partners in the framework of the WTO. Mr Bangemann, I ask you to take the appropriate measures in the Commission to enable us in the European Union not just to present the scientific evidence offered by the WTO but also to look into it. For once again, the supposed evidence of harmlessness that was produced has not been checked at all and we all know the old saying about ten scientists and ten different opinions. The same applies to lawyers. Looking at the evidence the WTO has submitted, I think we are just as capable of finding different evidence. If we want to be sure of ever building up any kind of consumer confidence again in the European Union, any kind of certainty or conviction that we are ensuring that our meat and food is harmless, we will have to adhere to our ban on hormones.

Provan
Mr President, I agree entirely with Mrs Roth-Behrendt's final remarks. We are talking about consumer confidence and that is the most important thing. Our objective tonight as a Parliament is to reinforce the position we have adopted over several years and to make sure that the Commission keeps its resolve to maintain the current position of the European Community.
I was intrigued to hear the Commissioner say that it would wrong for it to pre-empt any decision that might be taken following the final result that comes from the WTO panel. We must be careful because we are in a very strong position. A decision was taken by the Commission, by Parliament and all the way along the decision-making process in the Community. And just because there are certain influential companies in the United States which have great influence on the Hill, the decision-making process in the United States, it does not mean to say that we should weaken our resolve on this issue.
It is not a question that what is good for the United States is good for the rest of us. Surely we in the Community must be allowed to take our own decisions on these sort of issues. We are going to run into many decisions and many difficulties in the World Trade Organization unless we have some mutual respect and mutual recognition of what others in the world believe. The WTO panel is going to come to a decision. I hope that the Commissioner is aware of the strength of feeling in this Parliament on the issue and that if the decision is maintained which is not satisfactory as far as we are concerned, the Commission will stand up for what we believe in, what the Union believes in and make certain that we do not allow meat to come into the Community that is not acceptable under our own legislation.

Rosado Fernandes
Mr President, Mr Commissioner, I take great heart from the words of my colleague, Mr Provan; I am always heartened to see a representative of the United Kingdom supporting a measure against the United States and against the tyranny which they now represent. The United Kingdom is Portugal's oldest ally and I therefore for the first time feel that there is in fact an old Luso-British alliance in operation.
As regards the question of hormones, we all know that they are used also in Europe and the Americans know that too. They know that there has not been sufficient control in Europe. In Portugal, unfortunately, hormones are used and they are at the moment fetching more than cocaine - and that is the truth! That is because they are banned! I am, moreover, concerned about the philosophy of using hormones. Why should we use hormones? Why should we want animals to grow more quickly when we have meat surpluses? To be competitive? It was the principle of competitiveness in the milk sector which led us to BSE...
It is true that, from the scientific point of view, it will not be long before research results show that hormones cause cancer. However, from the philosophical point of view, I always told the Americans that I did not agree with the fact that they had used a false concept of progress to produce more of what they were producing too much of. As regards health, we are all aware that the question of hormones as a cause of cancer raises major doubts. As regards control, we are all aware too that it is not sufficient in Europe.
In any case I am even more shocked to see what the World Trade Organization panel is doing. How are the judges chosen? We already had the case of the bananas in which the three judges were from Hong Kong, Australia and Switzerland. No-one knew anything about bananas. It appeared too that the panel judging the hormone question was made up of lawyers who knew nothing about hormones! The intention is clearly to instal judges who are slightly impartial who naturally take a completely wrong view of the concept of justice. I hope that the Commission has the courage to tackle this problem and to rout the illegal designs of the United States.

Mulder
Mr President, once again this House is discussing the hormone question in connection with the United States. I can inform the Commission that the Liberal Group supports the Commission's resolve. We oppose the use of artificial hormones in meat production. The main reason for this - as other groups have already said - is that there still remains too many doubts among scientists about the effects of their use and as long as there is the slightest doubt we must not permit them. I therefore believe that we must support the European Commission in continuing to argue our case for as long as is procedurally possible.
However, and this is also the view of the Liberal Group, I would not go as far as to say that we should condemn the WTO panel as such. It will be difficult to dismiss the arbiter in the event of a wrong judgement. We must therefore simply follow the procedures which are designed for such cases. But on one point I believe the Commission must prepare itself. In Europe we have another view of food than in the United States for example or other continents. We have another view of animal foods and the conditions under which animals are kept and transported. In this case I believe we must respect the consumers' wishes as much as possible. We are seeing this already in a number of Member States. We are seeing a multiplicity of quality marks, the one more environment-conscious than the next. I believe it is up to the European Commission to give leadership in developing something in this direction so that it is easier for the European consumer to recognize what is safe to eat and what is not. The customer is still king. He must be able to choose, he must have the choice and we must give European leadership on this. I am totally in agreement with what Mr Provan says: we must state what we want and we must promote mutual respect within the WTO.

Querbès
Mr President, Commissioner, you are waiting for the panel to complete its work, and I realize that, but you must admit that the World Trade Organization is producing one verdict after another, and all the verdicts are similar.
Following the decision on banana imports, the WTO panel concluded that the European Union's ban on imports of hormone-containing meat was contrary to the rules of international trade. The refusal of Europeans to eat hormone-treated meat was considered no more admissible than the argument in favour of supporting the economies of the French overseas departments and the ACP States in the case of bananas. Once again, the WTO is giving precedence to commercial interests and the free trade principle over any other human consideration - health, social, cultural or environmental.
Let us recall that when the European Union decided to ban imports of hormone-containing meat from 1 January 1988, the reason was not an artificial, protectionist attempt to prevent trade but an attempt to protect consumers against the harmful effects of hormones, whether natural or artificial - effects acknowledged by many scientific experts and by the European Veterinary Committee.
In actual fact the United States Government, making light of the situation facing European farmers and even the health of their own consumers (several thousand people die of food poisoning every year in the United States, 4000 in 1996), have only one objective: commercial. Having been an importer, the United States has now become a net exporter of more than two million tonnes. They want to continue this trend.
This commercial aspect is all the more important for them in that the question of growth hormones for meat conceals another: the question of the dairy production hormone BST, the authorization of which in Europe would open up an enormous market for American companies. This verdict by the WTO panel is unacceptable, as is the use of the Codex Alimentarius as a reference criterion on health and quality issues.
We must refuse, therefore, to compromise on human health and food safety, which must take precedence over any other consideration. That is why our group calls upon the Commission and the Council not to give way to the WTO's orders, and calls upon this House to adopt the resolution.

Graefe zu Baringdorf
Mr President, my group is totally against the use of hormones and against imports of meat from the USA that has been treated with hormones. We do not want the stuff! We do not need it! We are supported in this by the majority of European farmers and the majority of European consumers. We have nothing against commercial interests in principle, but we are against commercial interests being defended to the detriment of the financial and commercial interests of the farmers of Europe! And we are also against this being done to the detriment of consumer health.
I believe the Commission must take a hard line. It may be unable to say anything more at this stage for procedural and strategic reasons; here we in Parliament are in a better position. We can and we will table a strongly worded resolution tomorrow and I am convinced that Parliament will adopt it with hardly any votes against. The Americans, or perhaps I should say the American chemical and agricultural multinationals, are adopting an arrogant, nationalistic and insolent stance. They are trying to impose their ideas about agricultural production and food on us. We have to resist that. There is no culture without agriculture! If there is some other culture in America, then let them live with it, we do not want it! We assert our right to develop and continue developing our own food culture, and it does not include hormones.
Mr Bangemann, I am calling on the Commission to evolve a strategy directed not just at the panel but also at the forthcoming WTO negotiations. These considerations must be given their due place in the new agreements; for consumer and health reasons we must be able to reject certain things. The various states and organizations must also have the right to take their own decisions and should not be forced by others to follow a line they do not agree with. I do not think it necessary that our children should reach puberty earlier than they used to because of the use of sex hormones. Mrs Roth-Behrendt rightly pointed out that no long-term studies exist on the subject. That is why we must strongly resist this and not allow it in the long term either!

Vandemeulebroucke
Mr President, ladies and gentlemen, I welcome Mr Bangemann's reply. He says that every possible means will be employed to continue the battle and to justify our position before the World Trade Organisation. I welcome this and I hope that the Commission will continue to argue its case.
The report by the panel of experts remains a provisional report. It simply fails to take any account of the opinions of the nine scientists appointed by the European Union. Our scientists came from Germany, Norway, Hungary, Puerto Rico and also the United States. I myself invited three of them to a conference in Brussels last month. They were Professor Metzler from Karlsruhe, Professor Liehr from Texas and Professor Epstein from Illinois. They stated outright that the so-called American hormones are never administered separately, but always in combination. And that it is precisely this combined formula which can have such harmful long-term effects on the human DNA. These can apparently take the form of gene toxic and carcinogenic effects.
The scientific conference convened by the European Commission itself stated in its conclusions that more research was needed into the use of hormones in combined form and this is essential. Research into long-term damage is particularly important. Our nine experts also told the World Trade Organisation panel that the scientific data on which the United States based and is continuing to base its findings are hopelessly out of date. Everything is based on the so-called JEFCA report which dates from 1987. And more than a half of the 80 references were out of date in 1987. The United States is thus continuing to base itself on scientific data which are now more than 20 years old. We all know that scientific research is, fortunately, constantly progressing. What was considered harmless 20 years ago can today indeed be shown to be harmful.
The whole history surrounding the DES hormone - which was originally seen as totally harmless - speaks volumes. It was only 20 years later that DES was shown to be carcinogenic. Clearly the argument that hormone treatment could be harmful should in itself be sufficient for the World Trade Organisation to accept a hormone ban. The principle of being safe rather than sorry correctly applies in the area of international decision-making.
This is why we fully support the European Commission which in Geneva had already submitted objections or replies to that provisional report and we also support the Commission in what I hope will be its further efforts if things go against us and it appeals. An appeal if the World Trade Organisation maintains its original position.
We also want the European Commission to already make preparations for a new scientific forum, a forum of independent scientists and not scientists who are in the service of industry. Scientists who are not only competent in veterinary science, but above all scientists from the field of human medicine and also scientists who are known and renowned for cancer research. Finally, scientists who first and foremost investigate the risks linked to the combined use of hormones. In this way we can further reinforce our risk analysis and at the end of the day we must certainly be found to be in the right. The principle of prevention must take precedence over all other considerations. Of course the general hormone ban must be upheld along with the ban on imports of hormonetreated meat. I naturally want to support the Commission in the position which it is now adopting and I hope that our resolution will receive unanimous support.

des Places
Mr President, Commissioner, the use within the Community of anabolic substances in animal production has been the source of major controversy ever since the 1970s, involving politicians, consumers, scientific experts and the entire international community in a virtually continuous debate. So there is nothing new about the matter, and I will spare you the historical details.
However, on 7 May this year the joint special group delivered its interim report to the parties - a report which, incidentally, should have been kept confidential as required by the memorandum on the settlement of disputes. The conclusions of that report are clear and unambiguous. The panel is quite clearly giving precedence to strictly commercial considerations over any legitimate concern for public health, and rejecting the principle of caution which consumers are entitled to expect.
In its motion for a resolution, our group has called upon the Commission to organize as soon as possible a conference to determine consumer reactions regarding the health aspects of hormone-treated meat. In this connection, we must state our opposition to the panel's recommendation that voluntary labelling, stating that the beef or veal in question contains no hormones, might be one possible way of responding to consumer concerns about information. Quite the reverse: as in the case of genetically modified organisms, what is needed is obligatory labelling specifying that the meat has been treated with hormones.
Be that as it may, the measures prohibiting the use of hormones in meat production are fundamental and cannot be called into question. Consumers would not understand it if those measures were to be lifted when the safety of these hormones has not been proved, or even tested. Furthermore, the production constraints imposed on European farmers must not be swept aside by imported products that are not covered by the same health and quality guarantees.
What we ask, therefore, is that the dispute procedure should be carried forward to its conclusion, to the appeal stage in other words, and the whole of our group is ready to support the Commission.

President
On that issue I have received seven motions for resolutions pursuant to Rule 37(2) of the Rules of Procedure.
The vote will be taken tomorrow at 12 noon.

Happart
Mr President, Commission, there is no reason, is there, why meat should escape the new religion, the worship of the golden calf, which seems to be the one guiding principle of the public and of leaders in our so-called rich and civilized societies? Why hormones, when - as was said earlier - we already have too much meat and too much milk? Why? The answer is simple: profit. If the Americans want to make us eat meat with hormones in it, their motive is not just the pleasure of selling us meat - the main motive is to make us accept the hormone principle, because of course the real profit comes from the production and marketing of the hormones. I understood that more than ten years ago, when I wrote the first report on somatotropin.
The intention of selling bad meat, selling poor quality products, means that the consumer is being robbed twice over: first his trust is stolen, then his food values are undermined. Corticoids and other hormones, used singly or in combination, cause meat to swell. That means incorporating more liquid, which means the consumer is buying water at the price of meat. The interests of human beings, of the citizen, are non-existent, because the citizen is just an uneducated consumer and therefore submissive.
Hormones are dangerous. No one, at least, is going to claim that they are vitamins. We fought against DES. We must fight against the others as well. Human health is at risk, clearly, but so too is animal health. It is already a proven fact, today, that the use of hormones causes bone deficiency in the mothers and, in the medium term, sterility in the offspring. It will obviously be necessary, even more necessary than it was with BSE, to insist on labelling, traceability and transparency.
We in Europe are entitled to be culturally different in our diet. That is a right which you, Commissioner, can defend on behalf of the citizen and on behalf of human society. If Mr Bill Clinton sees fit to adopt a moralizing tone towards Europeans and accuse them of mismanagement or failure to understand modern society, as he did at the G8 summit, that's his problem.
What I, personally, will not accept is that anyone should tell Europe's citizens that they have to eat poisoned meat because the Americans need the money. And that, Commissioner, is why I call upon you urgently to continue the struggle to ban this meat, and hormones in general, in Europe.

Gillis
Mr President, I should like to thank the Commissioner for his statement. The hormone issue was decided by the European Union some years ago not on the basis of science but rather on emotion. I would remind the House that all food contains hormones. I give the examples of wheatgerm and green vegetables, etc. which contain many times the levels one would find in meat. But they are naturally occurring substances and not dangerous, synthetic cocktails.
The US and the WTO will continue to insist that science, not sentiment, and scientific measurement, in particular, be the yardstick which determines food quality and food safety. Having put the ban in place, I see no option but to hold the line and to continue even if we have to buy our way out. A huge amount of damage has already been done to consumer trust and consumer confidence in the recent past. We cannot afford further risk to the industry.
I would reiterate the appeal by a previous speaker for the setting up of a competent, independent, scientific body to act as a watchdog and to communicate with the public at an early stage, especially through consumer associations. It should be given the specific tasks of ensuring that the public is adequately protected on the one hand and, on the other, that new developments in food production be carefully explained at an early stage. Only in this way can fact rather than fiction govern our decisions on food law and food safety in the future.

Mann, Erika
Mr President, ladies and gentlemen, Commissioner, I believe we are in a difficult situation, and we are very well aware of it. We know more or less what the panel's decision will be. It will not look good for us. We can more or less anticipate that, meaning that we should prepare ourselves for a strategy, as many colleagues have pointed out.
The second difficulty we see is that we are dealing not just with the USA and Canada but with other meatproducing countries too, such as Argentina, South Africa and Australia; there are others too. That means that in future we will have to consider a much further-reaching strategy, which will have to encompass an entirely new agricultural policy, an entirely new trade policy and an entirely new consumer protection policy.
In fact we missed the opportunity to start a debate on this subject at the last WTO round. Let me remind Members that we opened up a new area by introducing trade and environmental questions into the conference in Singapore; similarly we should of course have tried to open a debate on trade and health and on trade and consumer protection at the last WTO round. It is essential that we do so if there is a next round. We do not know whether there will be one, but we will have to act promptly to introduce these ideas into the WTO discussions.
We will have to go even further than this. We will have to consider crucial questions. Mrs Roth-Behrendt rightly pointed out that we need to hold discussions with our partners and that we will have to discuss how on the one hand we can ensure free trade, which of course we do not want to disturb and which also protects our own producers, while on the other hand we can maintain very divergent cultural perceptions of different levels of protection.
How can that be reconciled in future, and when will we have these kinds of rules? I know these are fairly difficult questions, but I believe we must tackle them promptly. I am assuming that in any case the Commission will go to the court of appeal. Then we will definitely have a chance to underpin this strategy by the findings of new scientific research.

President
The debate is closed.
(The sitting was suspended at 8.10 p.m. and resumed at 9.00 p.m.)

Cohesion Fund - Structural Funds
President
The next item is the joint debate on the following reports:
A4-0167/97 by Mr Novo, on behalf of the Committee on Regional Policy, on the Commission's annual report on the Cohesion Fund 1995 (COM(96)0388 - C4-0509/96); -A4-0210/97 by Mr Belenguer, on behalf of the Committee on Regional Policy, on the Commission's Seventh Annual report on the Structural Funds - 1995 (COM(96)0502 - C4-0020/97).
Novo
Madam President, Madam Commissioner, ladies and gentlemen, as you know, the Treaty on European Union set up a Cohesion Fund intended to help to finance projects to be carried out within the field of the environment and transport infrastructures within the sphere of the trans-European networks.
It is therefore a fund basically intended to realise the principle of economic and social cohesion and, as such, is aimed only at the four Member States with a per capita gross domestic product of less than 90 % of the Community average - Spain, Greece, Ireland and Portugal - although the actual aid has been given in a rather contradictory manner, generally made conditional upon the acceptation and fulfilment of a convergence programme tailored to meet the nominal convergence criteria set for Economic and Monetary Union.
Since this is a report on the implementation of the Cohesion Fund during the year 1995, attention should be drawn to some of the most important aspects noted in that period. This Parliament, however, has a political obligation not merely to note points, but, having analysed the facts, it has a duty to find new avenues of work, new solutions and adjustments and to make political proposals for the future. That is what this report sets out to do. I should like to draw attention to the points mentioned below.
First the high level of implementation - 99.9 %of the commitment appropriations and 97.1 % of the payment appropriations were taken up. This fact is all the more significant because it is certain that, because of the nature of the fund in which each individual project is analysed in meticulous detail before there is any commitment or payment, these rates represent the real level of implementation for projects in the field.
Whilst implementation rates are high, there is still no misappropriation noted of the financial resources. This confirms that the Cohesion Fund is, as already noted in previous years, still being implemented in a totally regular manner, as there has never been any shadow of any problems concerning slight administrative or procedural irregularities.
These facts show that, contrary to what some people would like to lead us to believe, these funds made available to the four cohesion countries are highly suited to being taken up in a regular and transparent manner and that the projects submitted for funding are well presented. That confirms the need which those countries have and will continue to have in the future for environmental and transport structures, since there are still great imbalances within this field within the European Union.
Secondly, I should like to mention the progress noted in obtaining a global balance in the financing of projects between environmental projects and projects for the trans-European transport networks, even though there are some national imbalances which will need to be corrected - problems in the transport sector in Greece and in the environment sector in Portugal.
It is appropriate here to mention the balanced distribution between these sectors of investment, although in the report it is stressed that such a balance should be seen as an overall guideline rather than as a rigid and inflexible end in itself for the present period of application of the Fund which is until 1999.
Moreover, and in order to improve the presentation of projects and to make it possible to diversify implementation in the less-favoured regions of the beneficiary Member States, it is considered necessary to step up investment in rail and air infrastructures and waste management; it is also regarded as acceptable for applications to be made with a value of less than ECU 10 million and in new areas such as projects for fighting erosion, for afforestation, nature conservation and the protection of habitats.
Thirdly the report points out that there are standards set by the Commission for the practical application of the conditionality clause which are still highly controversial, since that clause should in fact be adjusted as a function of the initial objective of the fund - to promote cohesion - and on the other hand such standards are still not, contrary to what is said, communicated to and debated in the European Parliament.
On the other hand, bearing in mind that the Cohesion Fund was not set up for the specific purpose of creating employment, the report recommends that an assessment should be made of the socio-economic impact of the Fund with the intention of publishing commissioned studies to show the direct benefit accrued by the Cohesion Countries, but also, and above all, the benefits which derive from the global approach of the Member States.
Fourthly and finally, the report tackles the central and essential issue of the future of the Cohesion Fund. From this point of view, it expresses a clear position. Points 16 and 17 reaffirm that the Cohesion Fund is a financial instrument for implementation at national level which should therefore not be confused or diluted with the Structural Funds. On the other hand, it is proposed that measures be taken to extend the Cohesion Fund beyond 1999 on the basis of the relevant criteria followed for its inception - that is keeping it as a financial instrument to promote economic and social cohesion in countries whose per capita GDP is still less than 90 % of the Community average and, furthermore, it could help these countries in their efforts to meet the nominal convergence criteria which they are or will be obliged to meet. That will obviously be the case following the recent confirmation of the stability pact. Finally I should like to thank my colleagues for their help with this report and, of course, the staff of the secretariat of the Committee for Regional Policy.

Novo Belenguer
Madam President, the report which we are presenting and debating today studies the seventh annual report presented by the Commission on the Structural Funds for the year 1995, a report incorporating amendments approved in the Committee on Regional Policy, which will certainly help to define and give form to the ideas which we are presenting in the current report.
The year 1995 is of vital importance bearing in mind that it is the first full financial year of the 1994-1999 period of funding for which Austria, Finland and Sweden were finally included. It must be pointed out that there were over 400 Community initiative programmes presented by the Member States which led the Commission to acknowledge that certain problems were arising because of the complexity that entailed. The present report is therefore divided into five major sections dealing with implementation, complementarity, additionality, evaluation and follow up and, finally, the principle of coordination.
As regards implementation, it is appropriate to say that there is an alarming degree of under-implementation of the budget varying according to the various funds, objectives and States. However, the improvement noted in the Objective 1 regions of the four Cohesion States - Greece, Ireland, Portugal and Spain - must be stressed. In my report I therefore request the Commission to analyse in the next report the causes of the delays in this implementation, the situation in the various Member States and the consequences for the global package for the 1994-1999 period.
Similarly, we ask the Commission to provide us with information on the evolution of outstanding appropriations.
Secondly, as regards complementarity with other Community policies, we welcome the Funds' concern to improve the environment. We also underline the Commission's concern to make it compatible with and complementary to other Community policies, since it must be borne in mind that the Structural Funds are the most important financial amount available to the European Union and that the Treaty itself makes cohesion a horizontal policy, which must be complementary to other Community policies.
We therefore place special emphasis on the fact that the basic objective of the Structural Funds is to pursue economic and social cohesion in order to overcome the local and social disparities apparent in intra-Community solidarity, whilst pointing out that there are still regional disparities.
Thirdly, as regards additionality, we are concerned to note that even the Commission itself cannot guarantee the principle of additionality, which worries us because one of the characteristic features of the Structural Funds is the additional nature as a back-up to state and regional efforts thus making sure that it is promoting cohesion. The Commission is still powerless to test this principle in seven Member States. I shall not mention which those States are, but for four of them the Commission says that it has no data and only incomplete data for the other three. In order to avoid this problem, we ask the Commission to look into the possibility of including clauses for the suspension of aid where the principle of additionality is not respected, including the requirement for each Member State to submit figures.
Fourthly, as regards assessment and monitoring, we unfortunately have to point out that no complete and detailed study has yet been carried out on the first Structural Funds Programme. In that connection we welcome the Commission proposal to involve independent experts, still not appointed, as well as the attempts made in the field of montoring, we welcome the drawing up of the monitoring guide. However, the criteria and procedures bound up with the Structural Funds are still very complex, which is why I advocate simplifying the rules which would be helpful to these monitoring measures.
Fifthly, as regards coordination, we note that coordination with the regional authorities has improved substantially, although it is still inadequate as regards the local authorities. However, the latter has improved as regards information. We underscore the good working relationship with the Committee of the Regions and the need to strengthen the principle of coordination so that both the local and regional bodies carry out the real policy of moving closer to the citizen.
Finally, we reaffirm our confidence in decentralization as a method of managing the Funds, although it is appropriate to point out that the current system has an inherent contradiction, since, whilst the management of the Funds falls in almost all the States upon the State, the responsibility for that management falls almost exclusively upon the Commission. Finally, Madam President, my thanks to all the members of the Committee on Regional Policy for all the series of amendments presented and debated in committee to be debated a tomorrow's sitting and also to the secretariat and, of course, to all those who have cooperated in the drafting of the report.

Eisma
Mr President, the Committee on the Environment, Public Health and Consumer Protection has been looking at the annual report on the Cohesion Fund by Novo Belenguer. We noted that the Cohesion Fund often understands the environment in too wide a sense. We can well imagine that water supply and waste disposal are genuine environmental projects. But when it comes to a dam which is clearly damaging to the environment - and this can also be read in the report - then the Committee on the Environment believes that it is very difficult to understand why such a dam should be seen as an environmental project. This is why it is a good thing that the Committee on the Environment is also involved with regional policy, which we call the integration of the environment and other sectors. This is why I am so pleased that a large number of our amendments have been adopted by the rapporteur and his committee.
Our interpretation of the word environment is too wide. I would therefore argue for more purely environmental projects in the future: the combating of soil erosion, reforestation, nature conservation, the protection of habitats. These are matters to which cohesion policy must also pay much more attention. We submitted an amendment, Amendment No 4, on this subject, and I hope that the Commission also finds this amendment by our group acceptable.
I support Mrs Shroedter in submitting a number of amendments in which she says that too much attention is paid to roads and too little to environment-friendly infrastructures such as railways. Finally, I should like to stress - and this opinion is also on behalf of our committee and is included in your report - that environmental impact reports should be drawn up by researchers who are not involved in the planning or implementation of projects. This must be the practice, it must be objective. This principle must not only apply to the Cohesion Fund but to regional policy as a whole. I am very curious as to how the Commissioner will react to this in order to achieve a more objective environmental impact reporting.
I repeat, Mr President, I am very pleased that we have found the rapporteur and his committee so ready to accept our amendments out of this concern to integrate the environment into regional policy.

Vallvé
Madam President, Madam Commissioner, I should like to begin my speech by mentioning that there are very few people present in the House when we are in fact discussing 34 % of the Community budget, which is intended for the Structural Funds and the Cohesion Fund and in this case we are dealing with the 1995 financial year.
I think this debate should serve to point the way to what the Structural Funds should be, both as regards what they should be for 1999, when the current period of funding from the Structural Funds ends, and as regards the way the regulations need to be amended in order to make the implementation of those funds more effective to promote greater economic and social cohesion and greater local cohesion between the various localities which go to make up the European Union of today.
Neither must we forget the new planned enlargement - taking us perhaps to 2004 - of the European Union. None of these points must be forgotten in the analysis of what the Structural Funds have represented. On this matter I should like to congratulate Mr Novo Belenguer on his report and to draw attention to some points which give cause for concern, such as the under-implementation of the Funds. That means that budgetary surpluses remain for allocation - and these might be very considerable - and we shall therefore have to decide how to use these amounts for the benefit at least of those States which have been the most assiduous in implementing the Structural Funds.
The matter of additionality is highly disturbing, as Mr Novo Belenguer pointed out too, because there is insufficient information available to the Commission on the application by the Member States of the additionality criterion required for implementation of the Funds. The subject of coordination seems especially important to me, above all with the regional and local authorities, especially on those aspects on which the regional authorities have significant jurisdiction as regards the Funds.
As regards the rural areas, the Structural Funds are a very important support for farming and rural incomes and in that connection it should be pointed out, as was agreed at the Cork Conference, that the decentralization of the administration of the Structural Funds should serve to avoid the danger which any future re-nationalization of the Common Agricultural Policy would entail. To this end, more information needs to be given on the possibilities for harnessing and disseminating the Structural Funds throughout the rural world.
I think the European Observatory for Innovation and Rural Development which has been set up also deserves a mention and needs to be given the necessary powers. I therefore, for all the above reasons consider that this report is a positive one, but we must keep a watchful eye on the implementation of the Structural Funds in the future.

McCartin
Madam President, this Seventh Annual Report has 341 pages. It is very difficult for the ordinary Member of the European Parliament or the member of a national or regional parliament to read and digest this major volume. I would like to see a brief summary such as the Court of Auditors includes with its reports, so that the average Member of Parliament could quickly get some idea of what is contained in the report.
The rapporteur for the Committee on Regional Policy, Mr Novo, expressed concern at the bureaucratic workload both at Member State and Commission level involved in the programming exercise. He blames this for the low level of utilization of the funds. We should note this point seriously and should also note that the four different funds, the seven objectives and the thirteen initiatives make for far too much administrative work. They also make an evaluation of what has been done more difficult.
The Committee on Budgets is concerned about the low level of utilization which Mr Novo Berlenguer drew our attention to and recognizes that some states have had difficulty with the complexity of the regulations involved. The overall outturn for 1995 was 82 % of available funds. If we had had a simpler regulation we could have done much more and done it at a lower administrative cost. However, we welcome the fact that it was the poorer Member States which achieved the highest utilization and at least that gives us the satisfaction that the objective of social and economic cohesion is being achieved.
In my opinion I recommended that whatever monies - and it appears definite that money will be pushed forward - are not utilized in the last year should be redistributed for the purpose for which they were intended amongst those states that succeeded in utilizing the funds available to them.

Lindqvist
Rapporteur of the Opinion of the Committee on Social Affairs and Employment. (SV) Madam President, the Structural Funds must undergo basic reforms. Almost 100 of the 250 billion kronor which were allocated for the funds during 1995 have not been used. These are going completely to waste because administration and bureaucracy cannot keep up with processing the applications and allocating the money. It really is an utter scandal, this is a large sum of money which is not being used effectively. It is a matter of poor housekeeping with tax payers' money. There are also serious shortcomings in programme planning, supervision and evaluation.
The most radical solution would be to allow each country to be responsible for their own regional policy, with certain objectives laid down by the EU regarding how the funds are to be used. We will not achieve this today, and must instead reform the funds one step at a time.
I have several proposals from our committee which I would like to highlight: Bureaucracy, both in the EU and in the Member States, must be greatly reduced with fewer funds, fewer objectives and fewer Community initiatives. Programme planning, decision making and supervision must also be improved. More decisions must be taken at a local or regional level. It is our opinion that all regional political initiatives must be directed primarily at resolving the EU's serious problems; unemployment first of all, followed by improvements to the environment and better border region co-operation.
The Novo Belenguer proposal also takes this view, and the view, we think, of the employment committee's proposal on greater decentralisation of decision making, more local decisions and better co-ordination between the Member States' regional policies and the EU's labour market policies.
But, I am extremely dubious about the value of penalising Member States through the actions suggested in the report if they do not fulfil the principle of additionality, i.e. the addition of their own funds. I think that this is the wrong way to change and improve the function of the Structural Funds. But, on the whole I agree with the Novo Belenguer report.

Langenhagen
Madam President, the situation of the structural funds in the fisheries sector is as follows. Firstly: for the period 1994-1999 the budget allocation for the Financial Instrument for Fisheries Guidance, i.e. the FIFG, is ECU 2600 m. Secondly, over the same period the allocation for the PESCA Community initiative is ECU 250 m.
In the case of the FIFG, a number of innovative elements were added to structural policy in the sector in 1994/95. Following pressure from the Committee on Fisheries, new measures were introduced to provide, firstly, for early retirement for fishermen and secondly, for individual grants for younger fishermen forced to leave the industry following the withdrawal of fishing vessels from service. By and large, the FIFG commitment and payment rates in Objective 5(a) regions are average compared to those for all structural assistance objectives in the EU. The rate of implementation of FIFG assistance in Objective 1 areas is also satisfactory.
This is not the case with the new PESCA Community initiative, although the general trend is positive. The 98 % programme authorization rate is still above average in relation to all EU Community initiatives. But the payment rate is substantially below average, which gives us cause for concern. The reason for this is that administrative procedures are too expensive, too complex and too slow. There is not enough coordination within the Commission either. Moreover, the Member States must also work more effectively, according to the European Court of Auditors.
According to my information, things did not improve significantly here in 1996 either. The picture for 1997 looks different. Tomorrow the Commission will be holding a PESCA conference in Brussels. We hope it will confirm this. However, let me appeal to all concerned: keep the PESCA initiative alive during the forthcoming structural reform discussions, for every start-up phase is difficult and the fishermen need this initiative.

Karamanou
Madam President, ladies and gentlemen, there is no doubt that the European Commission's annual report on the activities of the Cohesion Fund in 1995 is a very important document, since it provides clear and full information about the Cohesion Fund's operation and effectiveness, records data and trends, and outlines perspectives.
The positive assessment of the Fund's contribution towards achieving the aim of economic and social convergence acquires particular value following the publication, a few weeks ago, of the European Commission's general report on cohesion, which unfortunately makes it clear that the divergences between the European Union's better and less well developed countries have not yet been eliminated, while serious divergences are also to be found within the Member States. The approach to the aim of economic and social cohesion must therefore be recognised as a long-term and painful process, and not as an effort that can be completed within some limited period of time.
Economic and social cohesion is not a fixed point but a constantly moving target. Granted the large developmental distance between the countries in terms of cohesion and other factors, which do not remain static but are changing all the time, it is unreasonable to expect that the aims of economic and social cohesion will be achieved in five or in ten years. In countries in the South of the Community, such as Greece, the main priorities of policy are still to modernize the infrastructure, attract investment, and to educate and train the population so that long-term employment prospects can be secured.
In parallel, the strengthening of cohesion presupposes that policies will be adopted which mitigate the negative consequences of deregulation, unification of the market, and conformity with the prerequisites for participation in EMU. For example, with reference to the trans-European networks for transport, telecommunications and energy, I should like to stress that deregulation of the networks before their basic infrastructure is completed and before a certain minimum level of services is secured for the population as a whole, could lead to further divergence instead of convergence.
We consider that these positions justify the need for transitional periods of adaptation, such as those requested by Greece. Consequently, much greater account should be taken of the dimension of cohesion when planning and implementing the Community's structural policies as a whole.

Costa Neves
Madam President, Madam Commissioner, I fully share the concern of the European Parliament in stressing that in the resolution under discussion on the Cohesion Fund ought, since greater regional internal disparities have been noted within the beneficiary Member States, to include an analysis of the possible impact of implementation of the Cohesion Fund on the said disparities within the field of the Commission's assessment of the socio-economic impact.
The Cohesion Fund, like other funds, is essentially intended to promote economic and social cohesion. This is assessed both by the relative levels of development of the Member States between one another and by the degree of social and local disparities which exist within each Member State. In this context it is not irrelevant to mention the option which exists as regards the investment targeting option made within each of the four beneficiary Member States of the Cohesion Fund submitting projects.
If there were no criteria for the options, the implementation of the Cohesion Fund itself might actually serve to increase the social and local disparities in the beneficiary Member States. For that to happen there need simply be a financing of projects exclusively or predominantly in areas with a higher level of development. There is still time to put right these points which seem to need to be put right. It is illogical and therefore untenable that the cohesion Fund should pay so little attention to the most peripheral regions.
I am therefore very pleased to see the Commission, with the express agreement of the European Parliament, assuming a more flexible position on allowing projects with a value of less than ECU 10 million, since this approach will make it possible to invest more in projects aimed at less-developed regions, which helps to offset the over-concentration on aid to the more prosperous regions.
But although it is essential to ensure that there is a contribution from the Cohesion Fund to realise the principle of economic and social cohesion, it is also essential, since this Fund is exclusively intended for the financing of investment in the transport and environment sectors, that it should follow the policies of the European Union in these fields.
We therefore fully support the strategy announced by the Commission, to step up, by means of the Cohesion Fund, the implementation of Community directives, for example in areas such as water, supply, management and treatment. As regards the Cohesion Fund it seems clear to me that there are many points on which the European Parliament and the Commission agree. That is the result of course of a great deal of work together which we have all put in to this end and I should like to take this opportunity - and I think this is fully justified - to congratulate Mr Honório Novo on his excellent report. We now only have to await the results.

Collins, Gerard
Madam President, first I wish to compliment the rapporteur Mr Novo for his excellent report. This is the first time the Commission has submitted an annual report based on a complete year of operation of the Cohesion Fund and it is the first time this Parliament has had the opportunity of examining how the Cohesion Fund has been implemented in the beneficiary Member States. Without a doubt the Novo report is exceptionally important.
From the Commission report I am pleased to note that, globally, the results are positive. The budgetary implementation of the reference year was almost 100 % for both commitments and appropriations which is a unique and commendable result. However, I find it extraordinary that in at least one Member State, Cohesion Fund investment in one region has caused major problems in another. This has to be of great concern as it flies in the face of the purpose of the fund. I would invite the Commission, in conjunction with the Member State concerned, to find speedy and appropriate solutions to this problem.
It is also heartening to note that no fraud was found in connection with the projects which were financed and this is an example to follow in other areas. Following on from a previous report in 1996 by Mr Hatzidakis on cohesion policy and the environment, it is fitting that the environmental aspects relating to the fund have been given particular emphasis by Mr Novo. It is clear that some improvements have been made in this sector, in particular in a better balance of projects between transport and the environment. I agree that more needs to be done here.
Even though they do not apply to all the beneficiary Member States in the same way and to the same degree, I subscribe to the rapporteur's concerns about other environmental aspects relating to the fund. Mr Novo says that other environmental projects such as combating coastal erosion might be envisaged. On this point, I give my total support to the rapporteur. For a considerable time now, I have been on record that coastal erosion is no longer to be regarded as a local problem. It is not even a national problem. It must be regarded as a European Union problem. For European Union problems there must be European Union solutions and here I would emphasize that coastal erosion is a particularly important problem in Ireland. I can support paragraph 9 of the resolution on the assumption that the rapporteur is referring to regions such as the Azores and Madeira.
In conclusion, the very existence of the Cohesion Fund has been of the utmost importance for Ireland. Through the Cohesion Fund good progress has been made in my country towards the objective of economic and social cohesion and it should continue to do so. Mr Novo's call on the Commission and the Council to guarantee that the Cohesion Fund will continue as of 1999 receives my full and unambiguous support.

Ephremidis
Madam President, the Commission's report is a kind of incomplete account, with many deliberate omissions, of the implementation of Community policy on economic and social cohesion, and of the action and effectiveness of the Structural Funds.
On these issues we have two parallel reports which go together in one way or another, the Novo and the Novo Belenguer reports. They take a positive view of the Commission's report, but put forward a number of noteworthy critical views. In expressing my view of this two-sided picture, the reports by the Commission and those by our colleagues, I should like to say that while on the one hand they highlight the problem, on the other hand they are incomplete. The main problem concerns what the European Union is trying to achieve today with this policy of the Structural Funds, the policy of economic cohesion. It is striving for regional development, approximation, convergence, and the cohesion of countries and regions at some particular level.
The account given shows that this policy has so far been negative, and has consequently failed. It has failed:
first, because the resources available are insufficient and ought to be increased and made more available,
secondly, because the programmes and Community initiatives are numerous and many-sided, but they have no priority or criterion of what they are trying to develop, and
thirdly, Madam President, even after the Amsterdam Conference there is no impulse in that direction. We fear that there will be a series of such deficiencies, that countries and regions will remain in a state of underdevelopment, that expenditure will continue to be squandered for bureaucratic and pointless or inappropriately prioritized, supposedly developmental purposes, and that the desired result will not be achieved.
I can quote Greece as an example. It is very much a country with marked peculiarities, but these are not taken into account. It is as if a bulldozer were trundling across all the regions, all the countries, in the same way. But there are particular features, hyper-regionality, underdevelopment, concentration of the population in some centres and desertion of some other areas, and the various funds, programmes and Community initiatives take no account of these particularities so that the respective needs may be dealt with appropriately. And Greece is said to be always on the scrounge, as we are now hearing here, whereas this is not true. Greece only asks for what it is entitled to. What the Structural Funds provide for the four countries of the Cohesion Fund, in relation to Greece, is distributed unequally and the resources do not match the needs, if proper account is taken of the country's particular features and of those needs.
Unless the problem is dealt with in that way, by a radical approach to Community policy on the issues of economic and social cohesion and the development of countries and regions, we will no doubt come back and debate more reports, but with no result.

Schroedter
Madam President, making money available for infrastructure certainly does not automatically imply progress with cohesion. This is apparent simply from the fact that the development gap between poor and rich regions has still not been closed despite the large sums of money spent. So it is not a question of the amount of money made available but mainly of the quality of the projects.
In the past, large road-building schemes in the cohesion countries have destroyed more than they have really achieved. We can only give a real impetus to sustainable development if we strengthen small-scale infrastructure. That applies even more to environmental infrastructure. Excessively large-scale environmental infrastructure places a burden on the citizens and communities of disadvantaged regions and makes them even poorer. that is why I call on the Commission to give preference to small-scale projects and to support those which will leave the next generation an environment worth living in.
Parliament was putting on the emergency brake when it set upper and lower percentage criteria for the proportion of combined transport - road and rail - in its decisions on the trans-European Networks. There seems to be no other way of really implementing models of sustainable development, as called for in Chapter 10 of the White Paper.
These decisions were parliamentary decisions and it really would be terrible if we bypassed them. Looking to the future, I doubt whether linking the resources for structural intervention to these convergence criteria really has produced any benefit. That is why I call for this link to be dissolved in the next Financial Perspective and for us to aim at making the needs and neediness of regions the main criterion for structural intervention. For it is a question of genuinely doing something for the people of Europe.

Moretti
Mr President, the Commission's reports on the cohesion fund and the other structural funds for the 1995 financial year have arrived punctually. The Commission's judgement is that the budget for the cohesion fund has been implemented satisfactorily and it is cheered by the fact that it has not been notified of any cases of fraud affecting the projects that have been financed. The Commission should pay equal attention to the goal of publicizing the availability of the structural funds and facilitating their use. The working document drawn up in 1996 by DG XIX expressly mentions an alarming underspend of structural funds appropriations, in addition to a great deal of disturbing data and analysis.
The 1997 budget procedure envisages a reduction of the payment appropriations for the structural funds just because of the underspend. If we want targeted and effective projects which have a concrete and substantial impact in needy areas, we should first of all strengthen the initiatives designed to extend the means of disseminating information through modern communications technology. We must also change the complex rules, make them more transparent and easier to apply so as to discourage fraud at its inception, and encourage decentralization of the management of funded projects. Experience shows that in regions with decentralized management greater advantage has been taken of the opportunities offered by Community structural interventions, because the regional authorities are better equipped to assess them directly. For example, Italy, a centralized country, has the disturbingly modest rate of implementation of 28 per cent, whereas Germany, a federal country, has 66 per cent. If these statistics were published in Italy there would be an immediate upsurge in the struggle for independence in Lombardy.

Bösch
Madam President, Commissioner, ladies and gentlemen, 1995 was the first year in which the three new Member States, Austria, Sweden and Finland, played a part in European structural policy. A while ago this House debated and adopted an excellent report by Mr Rack. I believe that these countries have managed to implement the structural policy rather well, partly thanks to the experience they had already gained with their existing national regional policy.
But let me also say in the rather carefree manner of a Member from a new Member State that we found it hard to get to grips with the red tape in the administration of these structural policies. Even though we have managed to implement them fairly well and properly in our countries, I must say - and this is something one has to bring up again and again as a Member - that we sometimes become a little discouraged when we apply to the European Commission or to the regional bodies.
My second point, to which other Members have also referred, is that the amount of appropriations not utilized increased from ECU 15 000 m to ECU 23 400 m between 1993 and 1995, as the report notes. This in itself raises the question of the success of the structural policies. How successful can a structural policy be if it does not prove possible to make the money we budget for in Parliament available for the appropriate measures? I think it is a rather unique situation in the world for money made available not to be used.
To think that a few days ago saw the end of a summit that apparently placed special emphasis on employment, that once again found that we have some 18 million unemployed in the Union while at the same time we do not utilize these kinds of structural funds, I must say that speaks for itself and we Members simply cannot accept it.
I would certainly support it and consider it most important for the Commissioner present here today to make headway in this matter. I believe we need one regional policy in the European Union. We cannot make distinctions on the basis of there being few rural areas here and more urban areas there, etc. I remember certain discussions in which it became clear that everybody in fact agrees on the need to concentrate resources, not just in other countries but in their own too. I think here we must support the proposals of the Commissioner responsible on the future reform of the structural policies. However they need to assume a different form, and Mr McCartin has already indicated on behalf of the Committee on Budgetary Control that we must be in a position to redistribute unutilized resources from one Member State to another, otherwise I think the future of the common structural policy will look rather gloomy, given the moves towards renationalizing the various structural policies.

Hatzidakis
Madam President, earlier, Mr Costa Neves spoke on our behalf, for the European People's Party, about the report on the Cohesion Fund. I myself will therefore refer to the report by Mr Novo Belenguer on the Structural Funds, which I must say, is a very good report which was adopted unanimously by the Committee and for that reason I think Mr Novo Belenguer deserves to be congratulated.
I would like to mention a number of points, mainly in order to draw various conclusions about the future, because the past, what happened in 1994 or 1995 or 1996, is something we should bear in mind when considering the review of Structural Fund regulations.
The first point I want to dwell on concerns the issue of underperformance, i.e. the non-absorption of the resources of the Structural Funds. Here, I should like to point out that this is observed mainly among the wealthier Member States, not so much in the Objective 1 areas, and it applies mainly to the European Social Fund, which is not within the Commissioner's purview, but since the problem has arisen we should address it here in our debate.
I want to say that it is an issue we should certainly all take seriously, both the Commission and the Member States, and besides all the other efforts we will have to make, I think we ought to see what can be done to simplify the regulations without preventing transparency, a thing that as I know, the Commission is already thinking about.
The second point I want to mention is the monitoring and implementation of supplementarity. It seems that the Commission is naturally unable to guarantee its application completely, and there are serious implications that it is not applied sufficiently well, even during the present planning period. This is a very important issue, and the Commission must cooperate closely with the Member States to achieve the requisite improvements, perhaps with the threat contained in the report itself, in other words that funding should be cut if the principle of supplementarity is not ensured.
A further matter that arises is the new assessment system proposed by the Commission, based on the intervention of independent experts. This is certainly a positive step, which will contribute towards the prevention or correction of certain mistakes, but mainly towards the qualitative improvement of the new programmes for the future. In each case, however, it must be ensured that those experts will be chosen on merit and with objective criteria, and provision must also be made to subject them to some form of control. In my view, the monitors will have to be monitored.
Another point is the question of the environment. I know the Commission attributes great importance to that, and as Parliament, that satisfies us. However, I think further steps could be taken as well, especially where studies of environmental consequences are concerned, and those will have to be more substantial and more binding.
Madam President, I conclude with a final comment concerning the participation of local and regional authorities, which contributes to the transparency of the programmes. I know that steps have been taken, but I think there could be many more, and more substantial ones, so that the participation of regional and local authorities can be truly substantial.

Van Bladel
Mr President, any member of this House who commits himself to the spending of Cohesion and Structural Funds is immediately popular with the citizen because the citizen sees an improvement in his own environment which is a good thing and which improves support for Europe. But there is a bomb beneath the support of the Structural Funds. A bomb of money which is not being spent. If this under-spending is not drastically but responsibly corrected than the support of the European citizen may well be lost. In the long term it is not possible to justify to the European citizen that there is a lot of money which is not being spent while the individual Member States are being required to contribute more to Europe. On the eve of enlargement that is a particularly inconvenient and difficult consideration. The shared burdens which we bear have grown into a shared sense of solidarity within Europe. This must remain both before and after enlargement. But before we come to that it must be made very clear what exactly the additional character is which warrants projects being funded out of European funds, as otherwise we are simply moving the money from one pocket to another and in this case also just sitting on it. So this is an appeal to all governments to submit good proposals to spend this money. On the eve of enlargement an unspent bomb of money sends out the wrong signal for the cohesion of European solidarity and certainly to Central and Eastern Europe.

Botz
Madam President, Commissioner, I just want to comment briefly on two points. The first is additionality, where I am speaking more from the point of view of those who are making increasing attempts to obtain structural fund resources at local level. The problem is that we have several principles in the EU. One of the most recent and no doubt most rational principles is the need to reduce further public indebtedness. Since Amsterdam, it has been decided to adhere to this principle on a fairly lasting and strict basis. One effect of this, which is already becoming apparent at local budgetary level, is that small local authorities find it increasingly difficult to raise the complementary resources for EU projects, even if national and regional resources are of course contributed as a matter of course. We must ensure that this does not turn into a disastrous trend for certain regions. I believe we must try to prevent that in time.
Secondly, I would like to make a comment on the principle of partnership. We still have major reservations in many respects about extending this principle. Let me at this point specifically thank the Commission for making serious efforts and also taking serious initiatives in this area. What obstacles still remain relate mainly to partnership between the national governments, the regional administrations and often between the latter and the local authorities. If I may say so, we in Thuringia, for instance, have a large number of regional development plans drawn up in a democratic manner which were not really taken into consideration when the programme planning documents were drawn up.
Let me conclude by making one point in this connection: anyone who wants to deal with the crucial tasks in this area in coming years will have to attach considerably more attention to the principle of partnership, because the main task is in fact to use fewer resources more efficiently.

Rack
Madam President, Commissioner, ladies and gentlemen, this report on the Seventh Annual Report on the Structural Funds for 1995 is the first one to also cover the new Member States of Austria, Sweden and Finland. We recently had an opportunity to say something more specific about some of their experiences, in a separate report on the implementaton of regional policy in those three Member States, and I am taking the opportunity today to draw certain comparisons. They are very interesting at times.
In many respects our report was very similar. We criticized the fact, which is indeed a problem, that in many cases there was and still is far too much bureaucracy both at Community level and in the Member States, too many programmes and, comparatively, too little money in the end. In many ways the picture in the three new Member States was more positive than on average in Europe, and certainly so in relation to some real black spots. In regard to the utilization of resources in particular, despite the fact that we have only been Members for a very short time, the three new Member States certainly managed to utilize a very large proportion of these resources in the start-up phase. I am pointing this out here because it is important to ensure that resources which were not utilized at the time can and must be used up by the end of this year.
On the whole, utilization of resources was very good. This is exceptionally true in the case of SMEs, women's programmes, the information society and in particular LEADER and INTERREG. There were some not so good examples. In particular, the new Member States did not or not entirely manage to make it clear that EU resources were also contributed to the projects in question. We must draw the necessary consequences. We must provide more information and also learn from best practices; we must take the assessment seriously and must continue with careful planning in future too. We are glad to note that the Commission is itself planning to radically simplify and clarify the programmes for the next phase.
We in the European Parliament will be happy to take part in this work, even though we will not yet have the new co-decision powers under the Amsterdam Treaty.

Berend
Madam President, Commissioner, ladies and gentlemen, this Seventh Annual Report is a special one, not just because for the first time it covers three new Member States but far more in fact because the report refers to the beginning of the second planning period, a time when the discussion on reforming the structural funds was already in full swing. There is really no point in looking back to the past, in this case to the year 1995, unless one draws lessons from it for the future.
So I will not evaluate the many positive aspects noted in the Commission's report, in relation also to previous reports, but lay the finger on a few sore points. As with the previous annual reports, once again we note that in practice the beneficiaries face the problem of excessive bureaucracy and more or less inflexible disbursement procedures. That is why talk about the need to simplify the legal provisions and administrative procedures is not just a matter of empty words that keep sounding in our ears but an important factor of the reform, if we are to achieve greater efficiency and transparency.
In my view the Seventh Annual Report also makes it clear that in regions where the administration has been decentralized, more use has been made of the possibilities offered by the structural fund interventions. Decentralized administration can also help resolve an acute problem in some Member States where the regions face long delays before receiving payments from Brussels.
A further finding relates to planning. Here more account must be taken of the direct political responsibility of the regional players in setting the structural objectives and determining the assistance priorities. And if we want to create wider possibilities for structural fund measures in the year 2000 and later, regardless of statistical values, we will have to make provision for a relative number of changes, so that we can react to any unforeseeable structural fluctuations. In short, it must be possible to adjust programmes after they have started and in a flexible manner; that is a requirement we should set out in relation to the reform.

Wulf-Mathies
Madam President, ladies and gentlemen, I want to thank the two rapporteurs, Mr Novo and Mr Novo Belenguer, for their clear and balanced reports and to thank all those who took part in this debate for their valuable contributions, which are indeed most important because we are concerned not just with the year 1995 but, I hope, also with ensuring that together we manage to improve matters as from the year 2000.
Let me begin by briefly addressing a few questions in connection with the report on the 1995 Cohesion Fund. I was pleased to see that real note was taken of the progress we have made towards a more balanced financing of environmental and transport projects. As you know, the Member States concerned are not overly enthusiastic about the Commission's endeavour to split the resources between environmental and transport infrastructure investments for the entire planning period, and I may say that the positive trend you noted in 1995 has stabilized. In 1996 we managed for the first time to split the resources almost exactly by allocating ECU 1200 m for environmental and transport projects respectively.
I believe the suggestion that we link environmental and transport projects more closely is an interesting one, and we will look at it carefully in the context of what is feasible here. For the rest, Member States are also putting more emphasis on the need to build up rail, sea, combined transport and urban transport systems and to give precedence to environment-friendly projects over huge road-building projects. I do think we are making slow and gradual headway here, although I would not say that I am satisfied with this progress as a whole.
We hope that the new directive on environmental impact reports, which the Council adopted in March, will also lead to an improvement in procedures; the Commission will ensure that these procedures are applied correctly and strictly. However, that is all we can do, for we probably all agree that we could imagine even better environmental impact assessments, that responded more closely to your concerns and ours. In connection with our agreements with Parliament on the greening of the budget, we have trained our own officials in the relevant areas in this particular sector, to enable them to see more clearly and become more aware of the problems involved.
In the context of the greening of the budget, the Cohesion Fund will also commission independent experts to evaluate the Cohesion Fund's contribution to environmental protection and sustainable development in general. I am not sure this will earn us nothing but praise, but I do believe it is important and that it will teach us lessons for the future.
As for small projects, especially in the field of environmental protection, let me simply point out that the Commission already takes an extremely flexible approach here, thanks to which it managed to achieve this 50: 50 distribution in the first place, and that we are also being somewhat flexible in relation to the distribution of funds normally intended primarily for large-scale projects. But I do agree with you that a great many local environmental projects need our support. That is why we have often combined a number of small projects, in order to place more emphasis on environmental protection in the cohesion countries.
In your report you again asked for information on the application of the conditionality clause. Let me just point out that the procedure is explained in detail in the Cohesion Fund report for 1996, which responds to your request at the time when we first applied this procedure.
In the report on the Structural Funds - 1995, for which I also offer warm thanks, you rightly criticize the low take-up of budgetary appropriations in the start-up phase 1994/1995, the complex procedures and the high - I think we can say excessive -level of bureaucracy both in the Member States and in the Commission.
But let me point out that the budgetary implementation has been improved considerably in the meantime. In 1996 almost 100 % of budget appropriations were committed. Overall, the three-year rate is also satisfactory; but that does not mean that there are not exceptions in certain areas. In response to the Italian speaker I must say that it is not just the national programmes that are largely to blame for Italy's low rate of implementation, but simply that it is still the case that almost nothing has been done in some regions. Nor is there any universal remedy for this; basically, it means that all three levels, European, national and regional, must act in concert.
But let me state in any case, by way of clarification, that the structural fund programmes are multiannual programmes. Clearly, if you plan an investment over several years, the expenses only tend to increase in later years, which does not necessarily imply poor management. Rather it means that it sometimes takes a while for projects to be clearly defined, funds to be allocated and payments to be made. Nevertheless, I believe that there certainly is a large grey area between the normal running of multiannual programmes and the occasional poor take-up of funds that we are criticizing here. I would be glad if we could make a concerted effort over the next structural fund period to define some kind of criteria for success, in relation not just to the take-up of funds but also to the quality of the programmes and projects, for it is pointless to spend money badly. We must try to combine spending money according to the rules and using it for good and successful projects, which will certainly not be an easy exercize.
For the rest, let me also point out once again that in most of the cases where the slow disbursement of funds in the regions was criticized, the resources were blocked in the Member States' capitals, which means that there is a need for substantial simplifications and for improved procedures in the Member States too.
Mr Belenguer, I am very pleased that in your report you emphasized the importance of the principles of European structural policy, such as economic and social cohesion, additionality and broader and deeper partnership. You also rightly underline the need for coordination with other Community policies and horizontal priorities, such as employment, the environment, equal opportunities and support for SMEs, which we also proposed in recent years as guidelines for the new Objective 2 programmes, but also as means of adjustment of the Objective 1 programmes in the mid-term evaluation, with a view to job-creation and economic revival.
I think it is important to make real use of the mid-term evaluation now. There has been some delay because some things simply took a little longer, in relation also to the monitoring committees, i.e., the level to which we in fact want to assign more responsibility and which we think should have a greater say, until the experts are appointed. Yet I am certain we will have a chance to take a flexible approach to changes in the world and in economic circumstances and to pay more attention to means of actually creating long-term jobs, which is a major aim of the structural funds.
We will also be undertaking evaluations on the subjects of employment, the environment, equal opportunities and support for SMEs in response to your wishes and I hope that the evaluation methods will gradually improve both in the Member States and in the Community. Basically, we finally made progress here for the first time about six months ago, in terms also of convincing the Member States to regard this not just as a bureaucratic exercize but as a chance to improve the implementation of structural policy; I hope that will bring us some way forward.
In your report and during the debate, your proposals regarding the basic principles of the structural fund reform in the Santer package, which relate to the reduction in the number of funds, budgetary structure, decentralization and linking credits and loans more closely, also reflect central concerns of the Commission. The Commission will be adopting this package in Strasbourg on 15 July and submit it to Parliament on 16 July. That is why there are no concrete or official proposals yet at this point.
I discussed some ideas discussed in the Cohesion Forum, in which many MEPs also took part, with members of the Committee on Regional Policy yesterday, so I will simply summarize them in a few words now. For instance, we discussed the need, which I think we all appreciate, for simpler implementing and financing procedures, for more transparency, for a reduction in the number of objectives, for a drastic reduction in the number of Community initiatives, for concentration on cross-frontier cooperation and integrating most of the Community initiatives in the mainstream programmes, and for decentralization, which of course also means a clearer assignment of responsibilities. We cannot have the Member States implementing the programmes while the Commission continues to bear the responsibility. During the reform of the structural funds regulation we will, therefore, also have to establish more definite rules, which will make things easier for all concerned and clarify the areas of responsibility, but also provide for monitoring and evaluation in future too which, I think, is an important aspect and one of interest to Parliament.
I think we also agree on the need for more concrete and binding rules on the partnership principle. As you know, the problem here, in the past too, has been not so much a matter of the Commission's proposals as of the Member States' unwillingness to accept these proposals. Nevertheless I believe our past experience has shown the need to pursue this road and I am sure that the debate on Agenda 2000 and the reform of the structural funds regulations will offer us many opportunities for extensive consultation in the coming months. Thank you for your suggestions and for today's debate!

President
Thank you, Mrs Wulf-Mathies.
The debate is closed.
The vote will take place tomorrow at 12 noon.

Agreement with the Kyrgyz Republic
President
The next item is the report (A4-0032/97) by Mr Chesa, on behalf of the Committee on External Economic Relations, on the proposal for a Council Decision (COM(95)49-11156/95 - C4-0685/96-95/0063(ACC) on the conclusion by the European Union, the European Coal and Steel Committee and the European Atomic Energy Community, of the one part, and the Kyrgyz Republic, of the other part, on trade and trade-related matters.

Chesa
Madam President, the reasons that led the REX Committee to approve the interim agreement on Kyrgyzstan are the same reasons that induced it to approve the economic and commercial aspects of the partnership agreement.
That agreement is based on the difficulties and prospects of the Kyrgyz economy: difficulties resulting from the break-up of the USSR, difficulties linked to relations with the other Asian republics, and difficulties linked to the privatization and modernization of the economy, reflected initially by a drop in agricultural and industrial production, and also in food production.
The partnership agreement of 1994, similar to those previously concluded with other States of the former Eastern Bloc, relates particularly to three main points. The first is the trade in goods, based on most-favoured nation treatment as far as customs formalities are concerned, textile products being the subject of a separate agreement. The second point relates to the provisions affecting business and investment, and especially includes conditions affecting employment, the setting up of companies, day-to-day payments, liberalization of transactions and the protection of intellectual property. The third point covers economic co-operation, with a view to assisting the process of reform, economic recovery and sustainable development in the Kyrgyz Republic.
With this in mind, economic co-operation is focused particularly on economic and social development, the development of human resources, support for business, agriculture and food, non-military nuclear energy, transport, tourism, environmental protection, co-operation in general and many other fields. The width of this coverage provided by the partnership and co-operation treaty means that the future of economic and trade relations between the Kyrgyz Republic and the European Union is very promising.
For all these reasons, I ask Honourable Members to vote in favour of the interim agreement between the European Union and Kyrgyzstan, particularly as the Committee on Budgets has given a favourable opinion.

Schwaiger
Madam President, Commissioner, ladies and gentlemen, on behalf of the EPP Group I want to support our rapporteur, Mr Chesa, in his positive evaluation of the interim agreement and also propose that we approve the conclusion of the interim agreement.
This will make it possible rapidly to apply the trade-related provisions of the partnership and cooperation agreement. Following the break-up of the Soviet Union, this Central Asian republic is still struggling not just with enormous political but also with very serious economic difficulties. The entire trade system has broken down and to provide normal supplies of food and energy proved well-nigh impossible for a long time. This resulted in an economic isolation that is still apparent today and blocked its further economic development.
Paradoxically, Kyrgyzstan's difficult situation is exacerbated by the recently implemented customs union with Kazakhstan and Uzbekistan because these two partner states have provided for and are also imposing trade restrictions on third states. At the same time, it is clear that there is much potential for developing economic and trade relations between Kyrgyzstan and the EU. The TACIS programmes were radically reformed for Kyrgyzstan, which may result in greater local interest and more investment partners.
Kyrgyzstan's ambitious privatization programme is the main element of the economic reform that has been initiated. But at present the people do not seem to be very interested in becoming involved in the private economy and setting up small businesses, although there are signs of a gradual fall in inflation. That is why the following areas seem especially appropriate for closer cooperation between the EU and Kyrgyzstan: first, the development and implementation of a new national energy plan; secondly, the transfer of technical and administrative knowhow; thirdly, the establishment of joint ventures in the field of services, tourism and infrastructure.
But what about providing the young people of Kyrgyzstan with business training? How is the Commission organizing this help for self-help so that privatization will finally get under way? Should we not make more use than before of the TACIS programme resources?
At any rate I think it is clear that the interim agreement offers a favourable environment for the development of trade and trade policy between the European Union and Kyrgyzstan and we should support this agreement.

Schroedter
Madam President, let me begin with a few basic comments on the strategy pursued by the Council and the Commission of pushing for purely trade-related cooperation instead of a comprehensive partnership and cooperation agreement. The Greens cannot endorse this strategy and consider it far more important to implement the partnership and cooperation agreement fairly quickly, not to put the EU's interests in the forefront but to pursue an overall strategy to support the process of transformation in these countries.
Otherwise this would have disastrous consequences for Kyrgyzstan. In practice only 20-39 % of the economy is privatized and there is scarcely any real legislation on privatization, only on leasing. Democratization is faltering and far greater support is needed in this area. On the other hand, it is very much in the EU's interest to exploit Kyrgyzstan's valuable resources, such as the gold and uranium mines, which has a destructive effect on this mountain republic's valuable nature reserves. What little still remains will then certainly be destroyed. The agreements are already in existence. Joint ventures are possible even at this stage. That does not primarily require an interim agreement. It would be preferable to follow the overall strategy of the partnership and cooperation agreement.

Wulf-Mathies
Madam President, first I want to thank the rapporteur for his excellent report. The Commission agrees with him that this as an important step in our relations with Kyrgyzstan. The purpose of the interim agreement is to implement the provisions on trade and trade-related questions without waiting for them to be ratified by all the Member States' parliaments, and I believe this first step is also a positive one in regard to economic and democratic developments there.
The interim agreement also contains provisions on observing the principles of democracy and respect for human rights. Its implementation allows for and promotes the expansion of trade relations, which are scarcely developed at this stage. It has been pointed out by several speakers that the weakest bilateral trade between the EU and any of the republics that have emerged from the former USSR is that with Kyrgyzstan. I also think that certainly means TACIS funds should be used for training programmes, with a view to restructuring the economy and also using own resources on the basis of own activities. That is why about one third of the TACIS funds is to be used for training programmes of that kind.
With the entry into force of the interim agreement it will also be possible to put pressure on the Kyrgyz government to observe the provisions on respect for human rights in the event that this proves necessary and that human rights are violated in the very young and unstable democracy of Kyrgyzstan. So we hope that overall this represents a first positive step towards improving relations and improving Kyrgyzstan's potential.

Schroedter
Madam President, I know that Mrs Wulf-Mathies is no expert in this field, but the fact is that we also keep being served up this promise to underpin democracy through the democracy clause by Mr van den Broek too. Yet when it actually comes to applying it, there is always a loud silence. I ask you to call on Mr van den Broek finally to apply a procedure that has been on file since 1995 so as to ensure that these promises really are kept. What we keep being promised should finally be done, i.e., where difficulties arise, the democracy clause must be applied. Hitherto we have had nothing but empty promises!

President
Mrs Schroedter, that was not a question, it was a continuation of the debate.
The debate is closed.
The vote will take place tomorrow at 12 noon.

PHARE programme
President
The next item is the debate on the report (A4-0165/97) by Mr Wiersma, on behalf of the Committee on External Economic Relations, on the Commission's PHARE 1994 and 1995 Annual Reports (COM(95)0366 - C4-0022/96 and COM(96)0360 - C4-0176/97).

Wiersma
Madam President, I am afraid that this is a debate being conducted for the Minutes. My apologies to all my colleagues who are still here this evening. This is a great pity because the PHARE programme is the European Union's most important instrument in granting aid to Central and Eastern Europe and hopefully it will also be the most important instrument in permitting the European Union's enlargement to include these countries. I fear that the way this item has been placed on the agenda will have dissuaded many people from participating in the debate, but it is clearly the aim to use this occasion to speak about the future of the PHARE programme.
In six months' time a number of Central and Eastern European countries will be meeting on a Mediterranean island to begin discussions on enlargement. This is of course a very major investment in the future of a more integrated and secure Europe. It also makes it particularly urgent to undertake a thorough examination of the functioning of the PHARE programme as the most important instrument in this enlargement process. As I said, we have taken the opportunity of the annual reports to undertake a more fundamental appraisal of the PHARE programme, a forward-looking appraisal. The constructive position of Parliament in writing this report and the debate which has since taken place with the Commission on many aspects of it is unfortunately ill-rewarded this evening, with all due respect to the Commissioner present, due to the absence of Commissioner Van den Broek. I very much regret this, perhaps next time we should be somewhat more negative.
I will nevertheless make a number of points, although as I have already said this is more of a debate for the Minutes. These are points which I believe warrant the greatest attention by the Commission in the short term in further developing the reorientation of the PHARE programme. For example, the assessment of the situation of the PHARE programme in Romania revealed an important defect in the programme which I believe applies more generally, namely the poor evaluations, or the lack of evaluations, which have an effect on project implementation. How can this be improved? As a Parliament we have too little understanding of the actual effects of the billions which the European Union is at present investing in Eastern Europe. There is a serious lack of clarity about the objectives of the various PHARE projects in the Central and Eastern European countries. There is also a lack of clarity about how projects contribute to the reform process and will soon be contributing to the enlargement process. Only when we have effective evaluation instruments will we as a Parliament, and also the European Union, be in a position to see how our attempts to provide support also make an active contribution to a successful enlargement process.
Secondly, and this is an important point, there is major under-spending in the PHARE programme. A large part of the funds allocated are either spent too late or not at all. I believe this is a very regrettable situation. It is a subject which has been much debated in this House, but I believe that in future we must focus primarily on ways in which this situation can be ended. It detracts from the value of the PHARE programme, but it is of course primarily damaging to those countries for which this money is intended. I therefore want to see more money going to major projects, especially to promote investments, to improve infrastructures in the candidate Member States and, first and foremost, for improvements in what I describe as the administrative culture in these countries, an administrative culture which still fails to comply with the standards in the European Union. In particular, it is important for governments and administrations in these candidate Member States to be able to apply the regulations and undertakings which apply within the European Union.
Another important point I should like to highlight is the question of priorities. I am afraid that all attention over the next few years will be paid to the successful candidate Member States, if I may describe them in this way. Countries such as Hungary and Poland which everybody says will be included in the first round of new Member States. I can foresee this development and understand that there is a certain logic in it, but that is specifically why I want extra investments and extra attention to be paid to those countries which may well be joining in the second round. I believe that this must be a very important starting point for the Parliament.
I should also like to say something about the management of the PHARE programme. There has been much discussion in this House on subcontracting, or the subcontracting of subcontracted projects, if I may put it like that. The Parliament and the Committee on External Economic Relations find that the Commission itself must assume more responsibility and in particular more political responsibility for matters which fall to policy-making officials who are subject to the authority of the European Union. In concrete terms this includes, for example, more staff for the PHARE programme.
I should also like to draw attention to another important point in connection with the accession strategy. This is the matter of democracy and democratization. I believe more money must be allocated to developing and reinforcing democracy in countries which have applied for European Union membership.
Finally - and I believe this is the last important point - when we look at the future and the investment of European Union resources in the candidate Member States, which is very important in enabling these countries to earn more, much greater attention must be paid to cofinancing, also within the PHARE programme, so that the countries themselves are also encouraged to commit resources to joint projects.
These were just a number of points which I have been able to make in my allocated speaking time. I hope that the Commission will consider these recommendations, but above all that in future the Commission, and also Parliament, as we must also put our own house in order, will take the discussion on enlargement and the resources to be allocated to it somewhat more seriously.

Swoboda
Madam President, Commissioner, ladies and gentlemen, like Mr Wiersma I am sorry that his report, which I think is a very good and important one, was put before such a small number of Members of this House.
Since the main points of principle have already been made, let me perhaps make a few comments on our recent experience with PHARE. Firstly: a pan-European transport conference recently took place in Helsinki. I attended it and noted that one government representative after another from the Eastern European states emphasized the importance of the PHARE programmes for the development of the infrastructure programmes in their countries. If Europe is to grow closer together, which is the objective, it is crucial to expand the infrastructure, especially in public transport but elsewhere too, and that is where PHARE makes its contribution. The general maps in the two annual reports clearly show how much is being done for transport.
I do believe, and this is a point Mrs Wulf-Mathies also addressed, that it will be important in connection with developments over the next few years to coordinate the PHARE programmes in Eastern Europe more closely with the regional and infrastructure programmes in the West so that we can achieve an even greater objective. Given that corridors were recently decided in Helsinki and that a tenth corridor has now been added, it is most important for this coordination to be achieved in practice.
Secondly, I was in Zagreb in Croatia last week with a parliamentary delegation. We noticed how much importance is attached there to PHARE as a means of support and assistance for economic factors but also for integration and democratization. I think we initially had some reservations here. But we should consider entering into further talks, in the context of precisely this objective, as Mr Wiersma also said, namely promoting democratization, promoting the integration of the various ethnic groups, etc. so that we can make even more targeted and efficient use of PHARE in this area.
Albania certainly serves as an example of money being spent and not being used very efficiently. I do not want to criticize anyone specifically, but I do want to point this out and ask the Commission to take greater care when it disburses these funds that they are used efficiently. I know it is difficult to convince a country: you will get money but you must change your administrative structures, change your approach, change your political structure. Yet that is most important, for otherwise the people of Europe will ask why they are handing out money when so much of it is spent badly or simply wasted. So it is important for the countries concerned, but also for the Western European countries, to take more care to ensure that these monies are put to the best use.
On that basis we are happy to approve Mr Wiersma's report. We consider the PHARE programme an important one that will become even more so with the enlargement of the European Union. However, we also believe that the Commission must devote greater attention to ensuring that the resources are used efficiently.

Schwaiger
Madam President, Commissioner, ladies and gentlemen, the PHARE programme is, in my view, a legitimate child of the European Parliament. A few courageous colleagues put the available budgetary resources together at the end of the 1980s to promote the economic modernization of Hungary and Poland, countries which at that time were just trying to extricate themselves from the domination of the Soviet Union.
Of course modernizing the economy means restructuring the economy with a view to a social market economy. We are very keen for the PHARE programme to be successful and to be integrated in the next few years in a longterm pre-accession strategy, which will also be reflected in differentiated form in Agenda 2000. But, and here I agree with the rapporteur Mr Wiersma, we cannot yet tell whether the PHARE resources are now being used more efficiently than they were in the beginning, whether they are being oversubscribed or are inadequate, whether the misdirection of funds mainly towards EU consultants that occurred in the initial phase has now been corrected.
When you look at the well-presented reports you would think they were drawn up by an industrial association, although with the difference that they do not summarize the statistics of success but give statistics on expenditure that shows no prospects of success and no background of success. Of course that makes it difficult for the European Parliament, which attaches very great value to the favourable development of the PHARE programme, to monitor them.
So we also think that there is no point in the long run in drafting reports of this kind but that we must change the monitoring systems, as the Hungarian president proposed a few days ago in the joint parliamentary committee. Mr Horn thought we should provide for a global pre-accession programme that would make the INTERREG funding, the PHARE funding and the European Investment Bank funding transparent while at the same time giving the European Union and the country concerned a chance to use the funds in a manner likely to promise success.
The question is whether that is the right road to follow. We all have our own experiences. Perhaps it would be an idea for the Commission to check what happened with the human resources funding in Romania, as part of the PHARE programme. If you look at the composition of the Romanian parliament and government now, you will find a large number of young politicians who were initially given assistance in their capacity of members of unions or associations and now hold important political offices and also form part of the Romanian political elite. That is an example we can only look at on the basis of own experience.
But we believe there must be other means of making the successes, which PHARE has certainly had, more visible in the long term, both for the Commission, which has to build on them, and for the European Parliament, which must monitor this expenditure more efficiently.

Van Bladel
Mr President, I share the opinion of Mr Wiersma and Mr Swoboda regarding holding a debate on such an important subject at such an hour. It is indeed a pity.
The European leaders at the Amsterdam Summit did not succeed in reconstructing the European house so that it can accommodate more people without us falling through the floor. This makes the PHARE programme all the more important in protecting Europe's stability. Unfortunately, we must now draw the same conclusions as earlier in the evening in connection with the Structural Funds. The money is there, but not enough is being spent. In this case there is the possible excuse that the programme was originally technical in nature and had to quickly deal with a wide range of matters at various levels in society without the criteria being really clear. It is too wide ranging and insufficiently targeted.
The rapporteur, Mr Wiersma, has submitted a good analysis of the situation, together with particularly pertinent recommendations. He first speaks of the need to arrive at a new strategy. To that I can give my support. There are certain priorities, such as promoting democracy, the observance of human rights, nuclear safety and environmental management. Also positive is the encouragement of cross-border cooperation which can promote stability in the region and the status quo.
Regarding project implementation I would, however, like to see a greater increase in staff levels among the people who must implement them here as opposed to increasing the members of NGOs, and preferably more cofinancing with the governments in the respective countries. This would be a genuine bottom-up approach.
In order to allow these countries to switch to our market system, PHARE should promote legislation providing for supervision of the banks and financial system because, Mr President, we all know that money laundering has also become very widespread in Central and Eastern Europe.
Finally, our own house is not ready for the new members. But let us in any event lend the new inhabitants the right assistance to set their house in order, assistance which is better targeted than before. Mr Wiersma's report provides an accurate picture of the present situation and an excellent basis on which to conduct policy. I congratulate him on this and hope that the follow-up to this report can be discussed in Parliament on another occasion when more of Europe's representatives are present.

Plooij-Van Goorsel
Mr President, ladies and gentlemen, I too must congratulate Mr Wiersma on his excellent report. This report could not be more clear. I therefore hope that the Commission - although Mr Van den Broek is not here to represent it - will take note of all the criticisms it contains. For how can we judge whether or not European funds are being efficiently spent if there are no criteria by which they can be tested? I was recently with a delegation in the Czech Republic where I was asked whether the PHARE programme was primarily an employment scheme for Western consultants.
The PHARE programme has slowly changed and grown from a programme for technical assistance into a programme to support the accession of Central and Eastern European countries. What does this mean for PHARE and future priorities? First of all, it must mean improved infrastructure in these countries in the fields of transport, telecommunications, energy, know-how, and also - as Mrs Van Bladel has already said - in the banking sector, which is very important. In fact, investment is not possible without it. A second point is to reinforce the legal and institutional framework and assistance in areas where the Union is placing greater emphasis, such as free competition, the environment, nuclear safety and a favourable climate for small and medium-sized enterprises. This brings other demands for project support, both from the Commission and from the local authorities in Central and Eastern Europe. The Commission must make its procedures simpler and more transparent. But the Eastern European authorities must also be quicker to reform their institutions and reduce bureaucracy so that there is no more under-spending. However, Western governments cannot meet Eastern Europe's major financial needs on their own. There is a also a need for much private financing. The banks are ready for this. There is a proposal for a new Marshall Plan and that must primarily come from the private banking sector. These private investors must be attracted and this requires a stimulating regulatory framework in these countries, combined with stability. The European Union can actively contribute to this through the PHARE programme. Conditions can be imposed on these countries which can also serve to increase financing from the private sector.

Schroedter
Madam President, ladies and gentlemen, I too must thank the rapporteur for drawing up such a good report. I am especially glad that he has included many suggestions by colleagues and has had lengthy consultations with the various committees, which makes this an exceptional report, the like of which we have not seen before in this Parliament in connection with the PHARE programme.
The efforts involved in the process of transformation in these countries need special support in areas where the problems are greatest, and we fully endorse that article. However, the situation is that PHARE alone is not enough to support the integration process of the Central and Eastern European countries prior to accession to the European Union. That is why it is so important to consider new ideas for a support programme worthy of the accession strategy, directed far more to the structural funds than to PHARE, because PHARE does not match up to an accession strategy in terms of funding available, range of support measures or procedures, which is why it cannot fund the aims in question. It is worth considering whether we should not even at this early stage use one or other of the structural funds for the Central and Eastern European countries that want to join the EU.

Van der Waal
Madam President, Mr Wiersma has written a clear analysis of the shortcomings in implementing the PHARE programme, namely under-spending, the major role of expensive consultants and external experts, and an insufficient evaluation of the results achieved through PHARE.
In the meantime, the Commission has already taken on board a large part of these criticisms in the new PHARE guidelines which were drawn up in March. Future projects must be more in keeping with the pre-accession strategy. This means that the Commission will have a louder voice in determining the fund's objectives. More attention will be paid to the development of infrastructure and industry and to bringing the internal legislation of Central and Eastern European countries into line with that of the European Union.
In the framework of the pre-accession strategy, priority must also be awarded to the creation of civil society. A society with efficient and democratic institutions which can count on sufficient popular support. Commissioner Van den Broek is aware of our concerns for the position of religious minorities in various Central and Eastern European countries. Through support for democratization PHARE will also promote the integration of these religious minorities.
Finally, during a recent visit to East Germany by a delegation of the Committee on External Economic Relations, of which I was a member, it became clear just how important it is for the PHARE programme to be also applied to cross-border cooperation. For example, by combining PHARE with the INTERREG programme it is possible to prevent projects stopping at the border and thus being less effective.

Elchlepp
Madam President, Commissioner, ladies and gentlemen, in his excellent report Mr Wiersma has rightly identified the inadequacies of the PHARE programme to date and I agree with him when he calls, among other things, for the backlog to be reduced between commitment and payment appropriations and for more money to be concentrated on those countries that are lagging behind in the economic reform process. Also, I very much regret that evaluation has proved so inadequate up to now. I consider that unacceptable. I also regret the fact that the Commissioner responsible could not attend today.
In future the PHARE programme will acquire a new role with the accession to the EU of the Central and Eastern European countries. So it is urgent to set new emphases and priorities within the programme. I hope that will also enable us to remedy some of the well-known inadequacies.
I believe that with the adjustment of the support measures we should aim at giving the European Commission more say in the selection of programme priorities and projects in future, giving precedence to building up administrative structures and investments. The funds must be concentrated and spent more efficiently.
Let me address one particular point on the basis of personal experience. In my view we should give more precedence to training measures, compared also with what the Commission has proposed in the past. As past experience shows, initial and further vocational training will play a quite central role in the accession process as a means of stimulating structural reform in the first place. So the same value must be attached to training people in these countries as to investment in physical assets. It is simply not good enough just to carry out company reforms under the fashionable heading of management training. The firms themselves must be involved far more in initial and further training at all levels, especially the non-professional level. I would ask you to take note of that.
To achieve this we need to build up a network of committed multipliers for partnerships with Western European players. Investment in this area will create reliable partners for serious projects and have a knock-on effect that may be more important than any investment in physical assets.

Rübig
Madam President, ladies and gentlemen, the Committee on Interparliamentary Relations between the European Parliament and the Slovak Parliament met last week. At that meeting we and the Slovak parliament noted that the Commission had done very good work there.
The Amsterdam summit drew to an end at about the same time and finally decided that Slovakia would probably not be included in the first round of candidates for accession. We felt that excellent concessions were in fact made during our talks with the Slovak parliament, in relation to electoral law and consideration of minority groups, i.e., linguistic minority groups, all of which was to be achieved by the end of November, that means very quickly indeed. I believe that the PHARE programme created the necessary basis for this and that the moves towards accession have been very successful.
The decentralized implementing system has proven itself and the delegations have also done good work, given that they include many experts who have worked together very well with the people in the Member States.
But I also think it is important to involve the SMEs in this process, simply because contacts between people and personal experiences are very important. Let me also ask the Commission to introduce more educational measures in this field, to monitor expenditure and perhaps also to make the award of contracts and the evaluation more transparent.
I also believe that the interparliamentary delegations can support all this very successfully, perhaps also the monitoring, an area where we could perhaps have closer cooperation in future.

Krehl
Madam President, the PHARE programme really is the most important European Union programme for bringing the Central and Eastern European countries closer to the European Union, which it has done with a great deal of real success so far, although there are still some serious shortfalls.
Every year we in the Committee on Budgets discuss the difference between the commitment and payment appropriations in the programme and about its causes and results. Indeed we are in the process of doing so now. Of course there is a wide variety of causes. For one thing it is of course difficult to reach any judgment because of the lack of evaluation criteria; but even if we had them, we could not remove the causes of these shortfalls but only evaluate them better.
In my personal experience, the PHARE programme is still too dependent on the national governments and on their at times very underdeveloped administrations, which means that we keep seeing regional partners drawing up and setting up wonderful projects and programmes, only for the central state then either not to approve them or to drag its feet.
The participant Eastern European states also take very different approaches to the European Union's aid priorities. For instance, it is not very difficult to get an infrastructure project approved and running in Poland. But there is no desire at all there to develop a civil society, which means that hardly any money goes to this sector in Poland.
The question is, of course, whether to leave it to the countries concerned to set the priorities or whether to decentralize the decision-taking more and involve the regions more closely in deciding the programmes. The Committee on Budgets has never wanted to cut the PHARE programme appropriations. But that is no reason for us to go on pushing the ECU 3 000 m along in front of us like a mountain.
One point I would make in the light of the forthcoming negotiations on enlargement is that I believe we should consider how to make the PHARE programme more efficient. Mr Wiersma's report offers a number of suggestions. Some of them are feasible, such as the cross-border cooperation programme. Only, after all these years of talk, we should finally implement it!

Linser
Madam President, basically this is a welcome report because it clearly and plainly shows up the superficial and insubstantial nature of the Commission's reports, or rather of the two reports. In the rapporteur's view, these Commission reports do little more than sum up the projects that have been executed in those two years. I can only agree with him entirely. No concrete targets are set out. General objectives, such as transfers of technology, are of no use to effective evaluations of efficiency.
So we have no results that can be monitored and accordingly no way of evaluating the programmes. Merely to describe the money flows in no way justifies the actual utilization of resources. The Court of Auditors has also noted the poor monitoring and execution of the programmes for some years now. It has referred to the need to rationalize their execution. It has referred to the lack of clarity in the utilization of the resources. It has referred to problems of coordination in applying the system. It has also referred to conflicts of interest between the players involved and, lastly, to the restricted invitations to tender.
These inconsistencies criticized by the Court of Auditors must be remedied at once and in full, before we can discuss a possible increase in resources. Since we all know that only about half of the ECU 6 600 m made available in 1996 was used, there is in any case some doubt about the need to increase the capital injection yet again. What we need immediately is a clear definition of objectives, efficiency, transparency and a new, diversified support strategy. What we also need is more co-financing projects so that the Central and Eastern European countries can identify more closely with the projects concerned.

Wulf-Mathies
Madam President, ladies and gentlemen, first I want to give Mr Wiersma very warm thanks for his comprehensive report. Mr Hans van den Broek is presently at a Council meeting in Luxembourg, so I must apologize for his absence and ask you to accept making do with me instead. However, I can assure you that I will report back to Hans van den Broek on the debate and that I will also try to respond to the suggestions about linking INTERREG and PHARE projects within the framework of my responsibilities.
PHARE is indeed the European Union's main instrument of cooperation with the Central and Eastern European countries while at the same time representing the most comprehensive international support project for these countries. We all agree that the PHARE programme must now be directed at and concentrated on preparing the partner states for accession to the EU. The Commission is aware of the weak points. On 19 March it therefore decided on new PHARE programme pre-accession guidelines. These general guidelines were forwarded to Parliament and the Council and we are pleased that the reactions were on the whole positive.
The Commission agrees with many of the points Mr Wiersma made in his report. Two new priorities are provided for in the new guidelines: assistance for the administrative improvements needed prior to adopting the acquis communautaire , a point which was made by many speakers, and financing the necessary investment. In this sense we are responding to two of the rapporteur's main recommendations. More importance will be attached to investment and we will seek closer coordination and cooperation with the international financial institutions.
In improving the cooperation with public authorities in the partner countries we also want to try to reduce the reliance on consultants. Apart from these priorities, we are also concerned with developing the civil society and strengthening democracy. We will continue to pay great attention to promoting and establishing democracy. The new guidelines also provide for a reform of programme management, including simplified planning and execution reports, together with greater decentralization and the transfer of monitoring tasks to the EU delegations.
The list of measures includes a considerable reduction in the number of programme management bodies, integrating the programme more closely in the activities of the partner country's authorities, a thorough examination of the on-going programmes with a view to speeding up their implementation, reducing the financial backlog and a thorough revision of the handbook on the decentralized execution of the PHARE programme.
Mr Wiersma, in your report you ask whether in future PHARE should concentrate more money on the countries that are lagging behind in the economic reform process. The Commission will look into this question in the context of the Santer package it will be putting to Parliament on 16 July. On the question of evaluation, to which Parliament rightly attaches very great importance, in 1995 the Commission introduced a new monitoring and evaluation system. Moreover, in line with the SEM 2000 principles on economic and efficient budgeting, the Commission has set up an independent evaluation body. This body will go beyond the existing ad hoc evaluations and be able to measure the global effects of the programmes more accurately.
We will shortly complete a detailed interim evaluation of the PHARE programme, which we will forward to Parliament before the end of this month, and I hope that will give you a better basis for assessment because it is based on more than 80 evaluations carried out so far. We hope to see a critical and constructive dialogue with Parliament on the findings of the interim evaluation and will keep Members regularly informed of progress in this area.
Lastly, let me turn to the PHARE programme on cross-border cooperation. As the rapporteur pointed out, priority should be given to supporting projects that aim at reinforcing democracy, respect for human rights and stability, together with social and economic integration.
I welcome Mr Wiersma's suggestions here. When we implement the new guidelines for the PHARE programme we will pay serious attention to the aspect of cross-border cooperation. At the same time I would point out that cross-border cooperation is already being strengthened by the closer links between INTERREG 2a and 2c with PHARE in terms of both content and finance. Let me make it quite plain that this is a question of infrastructural and regional development. Let me also make it clear yet again that the review of PHARE does in fact involve increasing investment funds from 25 % to 70 % and increasing the TEN budget, which means we will be making some headway in this area too, even if it does not mean we can finance all the dream projects or all the necessary projects.
Thank you for the debate and for your ideas. You may take it that we will seriously consider their practical implementation because we are just as keen as you to ensure that the PHARE programme is successful and makes a real contribution to simplifying the pre-accession strategy.

President
Did I understand you correctly, Mrs Wulf-Mathies? Did you say this document would be available by the end of the month, that is to say by Monday?
(Mrs Wulf-Mathies confirmed this.) The debate is closed.
The vote will take place tomorrow at 12 noon.
(The sitting was closed at 11.15 p.m.)
