Resumption of the session
President
I declare resumed the session of the European Parliament adjourned on Friday, 15 January 1999.

Schifone
Mr President, I appeal to you and the office of President to find some time, if only little, during this part-session of Parliament to commemorate the 30th anniversary of the death of a young European who gave his life for the freedom and dignity of his people and his country. Many people will have understood that I am referring to Jan Palach who committed suicide in January 1969, turning his body into a human torch in protest against the oppression of his people by national and international communism.
Mr President, the Alleanza Nazionale delegation believes a place should be created amongst the many commemorations and prizes this Parliament promotes, possibly even a place of honour, in memory of a young man from Prague who sacrificed everything in the name of liberty, which is also championed by this Parliament.

President
As you will appreciate, Mr Schifone, what you have just said has no connection with the agenda and cannot be included in our order of business at the present time.

García Arias
Mr President, during question time at the December part-session Mr Pérez Royo and I put a question to Mr Van Miert concerning the legality of the aid the Spanish Government intends to award to the electricity industry. Subsequently, at a meeting of the European Energy Foundation held a few days ago, the Commission Director-General responsible for energy went so far as to criticise so-called political exhibitionism and the fact that certain issues had been brought into the public domain when in his view they should have been dealt with discreetly in the European Commission's offices.
If the Director-General was referring to the public debate Members of this House are entitled to during question time, I must ask you to lodge a very strong protest on my behalf with the European Commission. I object to a senior official of the European Commission voicing the opinion that such issues should not be discussed in the public domain - the precise phrase used was 'in the marketplace' - and that they should instead be discussed discreetly in the offices of the European Commission.
I believe public declarations of this nature, made at a European forum such as the European Energy Foundation, must be criticised. As regards the transparency of the debate held in Parliament during the December part-session, I would ask you again, please, to convey a strong protest on my behalf to the President of the European Commission.

President
That will be done.

Ford
Mr President, can I raise a point of order on the declaration of Commissioner's interests. You will recall, as a former distinguished member of the Rules Committee, that pressure was put on the Commission some time ago for a declaration of Commissioners' interests. This was done reluctantly but in the best spirit of Soviet bureaucracy kept secret, available only to the President and the Secretary-General of the Commission. Following last week's events, it has now been published and what we have is twenty virtually blank pieces of paper, three years out of date, indicating, much to even my surprise, that the Commission are so dull and uninteresting that they have no interests.

President
Mr Ford, that is not a question we need look at today. You know perfectly well as a member of the Rules Committee that you have the option of putting questions to the Commission. Then it can explain the matter to your satisfaction or you can call for changes. It is not on the agenda today.

Ways towards a sustainable agriculture
President
The next item is the statement by the Commission on agriculture and the environment - towards sustainable agriculture.
Commissioner Bjerregaard has the floor.

Bjerregaard
Mr President, Commissioner Fischler and I have today presented a communication to the Commission on the link between agriculture and environmental policy. The communication comes after long and fruitful cooperation between our departments, and I would like to take this opportunity to express my thanks to Mr Fischler. The political response to the demand for a better environment is currently reforming the way in which the EU makes policy. Integration is the watchword of the process that was set in motion by the Amsterdam Treaty, with the help of the conclusions of the Cardiff and Vienna summits, and integration is a process of which this Parliament has also been a keen supporter.
Integration can take us further in areas where we are making no progress with traditional environmental policy. The relationship between nature and agriculture is a good example of the fact that it has been difficult to achieve the right balance with the traditional instruments. For too many years now, agricultural policy and environmental policy have each gone their separate ways. In some places, the consequences have been dramatic. Pollution of the groundwater with nitrates and pesticides and erosion and impoverishment in some of Europe's regions are partly the consequence of intensive farming. Other areas are suffering from the marginalisation of agricultural land and depopulation - a development which also has serious consequences for nature and the countryside.
Alongside these trends in agriculture, Europe has adopted some ambitious environmental legislation which reflects its citizens' wish to have a cleaner, healthier and more attractive future. However, it has also become clear that the developments in agriculture have in fact made it difficult to ensure compliance with the environmental legislation. Parliament's recent report on the implementation of the nitrates directive was a very good demonstration of this problem. There is therefore every reason to integrate the environment into agricultural policy, and that is precisely the intention of the Commission's proposal for agricultural reform as part of the Agenda 2000 package. That was the one which we presented in March last year, as you know.
It is as one of the components of this integration project that the Agriculture Commissioner, Mr Fischler, and I have today presented a communication on agriculture and the environment to the Commission. The communication aims to demonstrate and stand up for the need to maintain the environmental elements which are included in the Commission's proposal. Anything else would make the governments' calls for integration sound hollow. Before I deal with some of the key elements in Agenda 2000, let me stress that a good deal of Community legislation - including some outside traditional agricultural policy - has a bearing on agricultural production. As I have said, the nitrates directive is a good and well-known example, but there is also EU legislation on pesticides, genetically modified organisms and consumer protection. Legislation in these three areas is helping to limit the environmental impact of agriculture.
But when we turn to purely agricultural policy and the environment, the Agenda 2000 proposal is a key element. In brief, a reform is planned which is so green that agricultural policy and environmental policy will increasingly complement one another. I should like to describe some of the main features.
Firstly, the guaranteed prices for beef and veal, cereals and milk are being reduced. This price reduction is necessary to create a better balance in the market, but lower product prices are also good for the environment. This part of the proposal gets to grips with the artificially high prices which for years have been partly to blame for the over-use of sprays, artificial fertiliser and energy.
Secondly, the Commission is proposing that Member States should make the payment of all income support conditional on farmers observing the rules that are required to protect the environment. This will provide a much greater incentive to implement what are ambitious but necessary EU rules in practice, and in this context I would once again mention the nitrates directive, as well as the environmental protection legislation and legislation on pesticides.
Thirdly, support for particularly environmentally friendly farming methods is being increased as part of the so-called accompanying measures. This is support for farmers who are willing to make a positive environmental contribution beyond the minimum legal requirements. This may be organic farming, extensification or reforestation. In this respect, the proposal is a consolidation of the pioneering schemes introduced at the beginning of the 1990s by what is known as the MacSharry reform.
Fourthly, so-called 'national envelopes' are being established for the livestock sector. This expression covers a sum of money which the Member States are free to distribute within the sector as they please. A more environmentally correct distribution might be based on the amount of pasture land a farmer has, rather than providing support in proportion to the number of animals, as is now the case. If used correctly, these 'envelopes' could help further promote environmentally correct forms of cultivation and reduce the cultivation pressure on sensitive land. I would stress the fact that it will be up to the Member States, and not the Commission alone, to ensure that this takes place.
Fifthly, it will now be possible for farmers in Natura 2000 areas who have had extra burdens placed on them to share in the aid distributed to less-favoured areas. This should make it possible to increase the benefits provided by what is a cornerstone in the protection of Europe's environment.
Let me also remind you that last spring I presented and secured the adoption of a strategy for biodiversity in Europe. This means that by the end of 1999 an action plan will be drawn up on how European agriculture will contribute to safeguarding biodiversity. Agricultural reform is, of course, a precondition for this measure.
All these building-blocks of a new agricultural policy go a long way towards what a number of environmental NGOs and a large section of the European Parliament have been campaigning for. It is clear that the Agenda 2000 reform proposal is an unambiguous signal that, from now on, aid will be redirected towards more neutral support for production and more support for the environment. In future, the common agricultural policy will increasingly reward environmental values and responsible farming. Farmers who take up the environmental challenge will have a financial advantage compared with the current system.
Agriculture itself, as Mr Fischler has often stressed, has a long-term interest in a redirection of aid. I expect the outcome of the forthcoming negotiating round of the World Trade Organisation to point in the same direction. It is a positive development in which there is the great challenge of ensuring that environmental aid does not just become a kind of window-dressing, protecting traditional monetary flows.
But there are also other long-term perspectives in the reform. My message is that, if it is adopted, the proposal will lead to greater local influence on policy than is the case today. To a greater extent, agricultural policy will become a matter for our citizens and farmers. Individual countries, regions and districts will be involved in deciding the requirements that will apply in their areas. There will of course be conditions to ensure that existing European and national legislation is respected, but with an opportunity for people to take more account of local circumstances than is possible with very centralised solutions. In fact, this is the principle of subsidiarity in practice. Environmental organisations, local authorities, water companies and other interested groups will be able to sit down together with farmers and discuss how agriculture and the environment should work together to contribute to sustainable development. Brussels will continue to draw the outlines, but the citizens will fill them in.
This will of course make considerable demands on both citizens and farmers. A dialogue will be created covering everyone's interests. This will give our citizens a great opportunity to influence developments, but they will naturally need to become involved and be willing to accept the responsibility which this brings. It is important that all the EU countries take up this challenge.
The Commission's proposal, which was put forward in March 1998, has since been discussed in the Agriculture Council together with Mr Fischler. It is far from being adopted, and it would be wrong to say that all the European agriculture ministers were enthusiastic about the prospect of a greener policy. As you know, however, at the June summit in Cardiff, the Heads of State and Government called for agriculture to be one of the policy areas which should lead the way and demonstrate how integration should be carried out in practice. This challenge was renewed and built upon in Vienna, with a request for a report for Helsinki. That report will contain a timetable for gearing agricultural policy further to the environment and will deal with the question of what indicators can be used to measure the state of the environment. This is an important question, because it is difficult to pursue environmental goals if the relationship between agricultural production and the state of the environment cannot be assessed in a way on which there is general agreement.
It is of course a precondition for making progress that the agriculture ministers should reach agreement on the reform package. However, it is not enough to cross our fingers and wait for the outcome. The environment could easily be forgotten in the final dash for cash. I see it as a great personal challenge to ensure that that does not happen, which is why Mr Fischler and I have today presented the communication, which states, amongst other things, that intensive agriculture conflicts with the EU's ambitions for the environment and that a further effort must be made if drinking water and biodiversity are to be safeguarded. The communication also highlights the important role played by organic farming, because it can make a positive contribution to solving these problems.
The agriculture ministers will be held to the instructions given by the Heads of Government in Vienna and at previous summits. Above all, it will be made clear that a reform without environmental progress is not sustainable, either for the environment or in political terms, for that matter. Europe's taxpayers deserve and demand an environmental return on the cheque for EUR 40 billion which they donate to the agricultural sector every year.
Like Mr Fischler, I hope that the European Parliament will welcome this initiative and use it to reopen the public debate on agricultural reform and the environment, which is so essential. The long-term success and acceptance of the reform depend at least as much on a sound environmental profile as on the price of cereals and meat.

Cunha
Mr President, this Commission initiative must be welcomed. In the last few years I believe that significant progress has been made in reinforcing the environmental dimension of the Common Agricultural Policy. I also believe that the 1992 reform was a very important point given its establishment of agri-environmental and agri-forestry measures. This Commission communication is heading in the same direction and will reinforce this aspect.
However, there is one issue which I feel is rather contradictory. If we analyse these proposals for reforming the Common Agricultural Policy, now being discussed within Agenda 2000, we find that there is only an increase of 5 % in the amounts intended for agri-environmental measures. In other words, this is only a very small increase to reinforce the environmental dimension of the CAP, which to a certain extent is in contradiction with the Commission's current political aim which I support.
I would ask the Commissioner to explain why there is only a 5 % increase in the amounts for agri-environmental measures.

Fischler
Mr President, ladies and gentlemen, may I point out that Mr Cunha did not put a direct question, but since I do not agree with his last statement I would like to make the following clear. It may be true that expenditure on those environmental measures that are currently summarised under Regulation 20/78 is only rising by a certain amount, but it is also true that this results in a whole range of other, additional expenditure, for instance an extra incentive for extensive beef production. Finally, it must be emphasised that in future all direct agricultural aid payments will be subject to the observance of good agricultural practice, which de facto also means higher environmental requirements and for which absolutely no provision is made under our existing rules.

Colino Salamanca
Mr President, I must first recognise that progress has been made towards reconciling the needs of the environment with those of agriculture. Nevertheless, I feel the Commission has shown a certain lack of judgment, in that a distinction should be made between measures designed to encourage good practice and simply meeting minimum standards. The arrangements now in place mean that failure to meet minimum standards could lead to farmers not receiving aid.
The Commission needs to codify these minimum standards clearly. At present, they are scattered throughout Community legislation. However, measures designed to create an incentive are better codified, and in future we are likely to see them in the rural development programmes and then in certain sectoral COMs. For instance, the Commissioner has just mentioned how those who wish to benefit from the ECU 100 extensification premium know they will have to maintain a specific intensity of cattle. These measures are designed as an incentive to improve the quality of the environment.
I would like the Commission to codify all the standards which will have to be met in order for farmers to qualify for aid. Member States should not have the latitude to act as they see fit. It seems from the Commission's proposal that it is delegating all its responsibility to the Member States, whereas I feel it is incumbent on the Commission to codify the minimum standards required across the length and breadth of the Community.

Fischler
Mr President, ladies and gentlemen, I am very grateful to Mr Colino Salamanca for the statements he has made. But let me clarify the Commission's point of view again. Firstly, we have to distinguish in the proposals between measures that are obligatory and those that are voluntary, meaning first of all those that are obligatory or voluntary on the part of the farmer. So the point is that the farmer is guaranteed the same level of direct payments, which correspond to compensatory payments, but that these will be subject to the general requirement of what is called gross compliance, which the Member States are indeed required to impose.
It will no doubt prove possible under the implementing provisions also to coordinate the level of these requirements in such a way as to avoid any bias. The second aspect is the voluntary payments, which must go beyond normal practice. That is one of the conditions of eligibility for such payments in the first place. But here too it is clear that they are a component of the second pillar, namely rural development policy. After all our proposal is that we must have a rural development policy of this kind for every rural region. But the proposals also specify that a programme will only be accepted if it definitely incorporates an 'agri-environmental measures' heading. Seen from that aspect, I believe our proposals to a very large extent satisfy your requirements.

Graefe zu Baringdorf
Mr President, Mr Fischler, would you admit that environment-friendly agriculture is still the exception, that intensive farming is still the rule, that price reductions within the intervention system trigger more intensive production? Secondly, I find it very sensible for you to say that the second pillar should contain an environment-based programme, but the funding is very low. How do you propose to help the rural areas with this kind of structural programme? Thirdly, when you, or Mrs Bjerregaard, refer to subsidiarity I wonder how this is to be achieved if we do not have any framework conditions at European level. That is not subsidiarity, it is giving free rein. Two small examples: in set-aside land you allow chemical industrial raw materials to be used in farming but you do not allow vegetables to be grown for animal feed. My other example ...
The President cut the speaker off

Fischler
Mr President, to simplify matters let me reply to the first part of the question and, as Mr Graefe zu Baringdorf wanted, Mrs Bjerregaard will reply to the second part. On the first part: Mr Graefe zu Baringdorf, I often agree with you but on this point I do not agree that price reductions, in fact the reduction of guarantee prices, automatically triggers more intensive farming. We had the opposite experience with the 1992 reform. If you look at the trend in expenditure on fertilisers, pesticides and so forth between 1992 and 1998 you will find that it fell rather than rose. So your hypothesis is not correct.

Bjerregaard
Let me add here that in my comments on subsidiarity there was no suggestion of any kind that people did not need to comply with environmental legislation. On the contrary, I emphasised very clearly in my speech that one condition for discussing these things at all was compliance with environmental legislation. As is emphasised in the communication, the positive message - which is also contained in the Agenda 2000 proposals - is that there should be cooperation at local level between people who are close to these problems. So I think we all agree that environmental legislation should be respected, but also that the people who are close to the problems should sit down together more often and find some sensible solutions.

Olsson
Mr President, in principle, I am all in favour of decentralisation. Nevertheless, I was somewhat surprised, to say the least, to hear Commissioner Bjerregaard sing the praises of decentralising environmental policy. Where the decision-making process in relation to the environment is decentralised, different conditions will naturally obtain in the different countries. This would distort competition by giving countries with lax environmental policies a competitive advantage. That is not the right approach for the Union.

Bjerregaard
No, Mr Olsson, that is definitely not right. European environmental legislation must be complied with. That is also why I said in my introduction that I was pleased with Parliament's report on the nitrates directive, and that we have taken specific measures against countries which are failing to comply with the directive. In my introduction just now, I said that 'agricultural policy will become a matter for our citizens and farmers. Individual countries, regions and districts will be involved in deciding the requirements that will apply in their areas. There will of course be conditions to ensure that existing European and national legislation is respected, but with an opportunity for people to take more account of local circumstances than is possible with very centralised solutions.' I therefore do not believe that there is a great difference between Mr Olsson's views and my own in this area.

Barthet-Mayer
Mr President, Commissioners, organic farming is a very good example of sustainable agriculture.
The joint resolution from the European Parliament on organic livestock production questions the Commission and the Council on the technical progress needed to fulfil the Commission's proposal that is currently being examined. As regards the fundamental issue of animal nutrition, the derogation in this proposal that allows 10 % conventional feed to be used is quite sufficient. With the 25 % recommended by the Council could production really still be called organic, particularly as organic farming must remain a byword for the strictest and most stringent quality standards? You agree with this, I know for a fact.
Does the Commission believe that an animal fed with 25 % conventional feed can still be described as an 'organic product'? What is more, the nature of this conventional feed is not specified in any way. It could include intensively farmed products, whereas the least we could do would be to specify products from regions covered by the agri-environmental measures, from integrated farming or even farming converting to organic methods.
What does ...
The President cut the speaker off

Fischler
Mr President, ladies and gentlemen, the question Mrs Barthet-Mayer has put in fact goes in two directions. We must draw a very careful distinction here: what is conventional production, what is integrated production and what is organic farming? They are three different categories. As you know - and, Mrs Barthet-Mayer, we recently discussed this in Parliament - the Commission proposed Community-wide guidelines that would also protect animal products, so as to establish a common, Europe-wide standard for the definition of organic products. This proposal has now been on the table for some years and the Council of Agriculture Ministers is currently discussing it in detail - the most recent discussions were at the December Council - but to date it has not managed to reach a unanimous view. There are a few sensitive aspects involved which, in my view, need further discussion, without accepting any watering down of the core question, namely the definition of what is actually meant by organic products; one specific aspect you addressed in this connection is the use of conventional feed and of feed containing GMOs.
That is a question that is currently being discussed at another level, in connection with the revision of Regulation 220/90, and I believe we must endeavour to take a more balanced look at any measures that can lead to clearer consumer information.

Hardstaff
Mr President, could I have an assurance that both Commissioners are united in opposition to the import of beef produced with hormones and also milk produced with BST.

Fischler
Mr President, Mrs Hardstaff, this is not in fact directly connected with today's subject but I would like to tell you one thing quite clearly: what we will and must do is, as stated in the panels' findings, to adjust our risk assessment to the WTO provisions. In all the Commission has commissioned eight scientific studies. We are now awaiting the findings of these studies and I hope we can then adhere to our position, as we have always intended.

Goepel
Mr President, Mr Fischler, am I right in assuming that in fact you drew up Agenda 2000 in order to make farmers more competitive on the world market and not in order to reduce the consumption of fertilisers and other means of production that farmers urgently need? That is my first question. Mrs Bjerregaard's explanation was about the last reason that could be given for why we have to implement the Agenda at all!
Second question: can you tell me what percentage of the aid under Regulation 20/78 the Member States are taking up? In my region it is 100 %, so it is worth raising this matter. I would also like you to tell me what you mean in real terms by agricultural practice. Please do not confuse the concepts of intensive farming and farming appropriate to the location!

Bjerregaard
Mr President, I believe there is a good deal of similarity between what I have said to Parliament today and the proposal presented by the Commission in Agenda 2000. The new communications on which Mr Fischler and I have reached agreement, and which it is important to have distributed, point out that there should be an interaction between environmental and agricultural considerations. Neither of us accept non-compliance with environmental legislation. We are framing the policy in such a way that it is feasible. We are both of the confirmed opinion that it is feasible, and that it is possible for us to secure some sensible decisions in the Member States. It may be that some help will be required before we achieve a constructive outcome, and we also naturally hope that Parliament will enter into this debate, so that we can achieve a result which ensures both sensible agriculture and a sensible environmental policy.

Papayannakis
Commissioner, let us presume that your intentions are good and what you have told us is interesting. Let me remind you that agriculture does not stand alone in the economy. It too operates in the context of a complete environment. How can our farmers farm ecologically when the industries that supply them and those which are their customers impel them towards anti-ecological practices? How can they compete against countries from which we import products which are not ecological, not produced by poor farmers but by the worst and most appallingly intensive exploitation of the soil and animals? And how can they farm ecologically - I know many who do in Greece - when they face enormous problems in marketing their products, marketing which receives no aid under our regulations?
Perhaps, therefore, we should consider these issues in relation to their environment? Perhaps, instead of talking about ecological farming, we should be talking about an ecological economy?

Bjerregaard
Mr President, as Mr Fischler said a moment ago, the reform is about more than just organic farming, which accounts for a very small percentage of European agriculture. Obviously, it is desirable that this percentage should be increased, but we have of course concentrated on many other things. Let me say this loud and clear: I believe that the citizens of Europe want clean water. They are not willing to accept a situation in which the water they drink is not clean. They cannot understand why it should be impossible to formulate a sensible agricultural policy and at the same time to have clean water. We believe it is possible, and that is why we have put forward these proposals and also why we maintain that the environmental legislation must be observed at the same time that we have sensible agriculture in Europe. It may be that we have to talk tough with the Americans on occasion, but if that is the case, then that is what we shall do.

Robles Piquer
I should like to put a question to the Commission. In the context of the search for a natural balance between agricultural production and the needs of the environment, what use does the Commission have in mind for agricultural produce not intended for consumption? In particular, what future does it see for biomass which could be used to produce renewable energy? I believe this would be a logical use for some of the surplus production of European agriculture.

Fischler
Mr President, Mr Robles Piquer, on the second part of your question, whether we are also prepared to encourage biomass farming and the production of alternative energy sources, i.e. renewable raw materials, let me reply as follows. Firstly, our proposals on cereal growing and oilseeds do provide for support for these products. Secondly, under our proposals for rural development, investment in this sector is also eligible for support measures. Thirdly, we have included an expanded forestry chapter in the rural development proposals, and these forestry support measures will also provide for increased support for wood as a renewable raw material.

Myller
Mr President, it is very important that environmental policy is integrated into agricultural policy, and that environmental policy is integrated into all policy in the European Union. Especially important, where agricultural policy is concerned, is the protection of rivers, seas and lakes, as has been mentioned here. There has obviously been progress, in that compliance with environmental standards is being made a direct condition of income support, but, on the other hand, it should be clear as day that aid is to be paid only when the regulations are being observed. But we should be happy to have come this far. Now the question arises as to how Member States will respond to what is, to my mind at least, a step forward: how shall we monitor it? Will we need a long transition period? And how should the matter be treated? Should we have recourse, for example, to an agricultural code of practice, to be used as an instrument of comparison in relation to established policy, and only after that grant direct income support?

Fischler
Mr President, Mrs Myller, first of all there will of course be appropriate controls and here, as always in such matters, we will have a shared responsibility. That means that in situ checks on farms will primarily be the task of the Member States and the Commission departments will be responsible for ensuring and verifying whether the Member States are indeed adequately fulfilling this obligation. Moreover, you must not forget that in regard to carrying out and applying agricultural practice and the financing of direct payments we are looking at Guarantee Fund resources, which simply means that all the expenditure is also subject to EAGGF supervision. That means that if a Member State does not carry out the necessary checks adequately, we can debit that Member State when we carry out the audit.

Bjerregaard
Mr President, the way we have approached the area of the environment is illustrated very well by the nitrates directive. When it was clear that the Member States should have implemented the nitrates directive, we simply carried out a study in all the Member States of how far the implementation had progressed. We published this report, and we instituted legal proceedings against - as far as I recall - 12 Member States which had not implemented the nitrates directive. I believe that such an approach, whereby we examine the situation in all the Member States, increases our chances of persuading the Member States to implement the legislation. One point on which I agree entirely with Mrs Myller is that it is of course vital for the credibility of our policy that it is also implemented by the Member States.

Florenz
Mr President, when I hear Mr Fischler and Mrs Bjerregaard propose a joint strategy here in this Chamber I am always very much on my guard, for in the view of the Committee on the Environment, Public Health and Consumer Protection there has been no harmonisation at all in the environmental field over the past five years; quite the reverse! The legislation of the past five years teems with vague legal concepts, such as the ATO, a high protection level, good agricultural practice, etc. All this has to be transposed into national law and only then, Mr Fischler, when we have a uniform policy line, can you carry out checks.
My question to you, Mrs Bjerregaard, is this: do you intend to define all the vague legal concepts in this area via Ispra or some other instrument?

Bjerregaard
First of all, may I say to Mr Florenz that I am quite happy to leave the question of a definition and a more detailed explanation of good farming practice to my colleague Mr Fischler. However, I would like to say that, in view of the many discussions I have had with the Committee on the Environment, we can only welcome the fact that we now have a joint communication on the environment and agriculture. Had we discussed this issue two or three years ago, I am sure Parliament would not have thought it possible for us to be in a situation where we have a document like Agenda 2000, which contains so much environmental thinking in the area of agricultural policy. Obviously, there may be areas in which we would like to achieve more or where there are special wishes, but like Mrs Myller, I think we have every reason to be pleased that we have come as far as we have today.

Campos
Mr President, I have two questions. In 1950, 35 % of the total European population was involved in agriculture. Today this figure is 5 %. As a result of this reform and due to ageing in the sector, this figure will fall to between 2.5 % and 3 % by 2006. My first question is: can the environment be protected while the countryside is being abandoned, and why therefore is this reform heading in this direction?
My second question is: how can the protection of the environment be promoted by spending 50 % of the budget on this 5 % of the population, which will shortly be 2.5 %? In particular, aid for production just encourages producers to use every intensive production method available. This does not protect jobs, quality, the environment or safety. How can the Commissioner reconcile the policy which he claims to want to implement with the abandonment of the countryside and payments for production? Moreover ...
The President cut the speaker off

Fischler
Mr President, Mr Campos, let me first address the question of expenditure in relation to the percentage of the farming population. To be fair, you would have to compare it with total public expenditure. If you add the national budgets to the Community budget and then deduct the agricultural part, you obtain a percentage of 2 % for 5 % of the population. I do not think that is really excessive.
Secondly, on jobs in agriculture, there is only one thing I can say to you. The more environment-friendly our farming is, the more jobs that will imply and not the reverse. So this proposal to incorporate environmental aspects more firmly in the reform is certainly in the interests of agriculture and of jobs. But there is one thing you must not forget. If we are going to discuss making these additional demands on European agriculture, and in fact considerably higher demands than we make on our overseas competitors, then we must also be prepared to pay for it. And we also have to stop arguing that agricultural reform must not cost anything!

Mulder
Mr President, we have talked about implementation of the nitrates directive on a number of occasions already. In reply to a written question of mine, the Commission said recently that there were no uniform rules for sampling groundwater to check whether the directive was being implemented correctly. That seems to me a very feeble basis for monitoring legislation. When is that going to improve?
My second question is this: nitrate in groundwater can come from sources other than animal manure. It also comes from artificial fertiliser and from factories, sewage treatment plants and so on. How does the Commission intend to differentiate between nitrate in groundwater from these sources and nitrate from animal manures, so that the burden is not placed entirely on agriculture?

Bjerregaard
Mr President, it is of course not the job of the Commission to determine whether nitrates come from one source or another. Our job is to monitor whether the Member States are complying with the nitrates directive, which simply means that checks are carried out as to how much nitrate there is in the groundwater. That is what we are doing. That is what we are investigating, and we have found that the areas where there have been particular problems in connection with the nitrates directive are also areas with a high concentration of livestock production, whether it be cattle or pigs, although pigs in particular have caused a great many problems. That is why some countries have had particular difficulties in implementing the nitrates directive. As I said, however, it is not our job to check whether it comes from one source or another, but we must ensure that the directive is complied with.

Sturdy
Mr President, my question is to both the Commissioners. Tomorrow we take a vote on a pretty important piece of legislation, Mr Kindermann's report on animal welfare. I would like to know how the Commission views the situation. For example, in the United Kingdom, because of animal welfare legislation, the British pig farmer is suffering. In Sweden it is estimated that environmental legislation in their country puts one Swedish kroner per kilogram onto the price of meat. How does the Commission see the protection of European agriculture when it comes to imports from countries which do not have the sort of animal welfare legislation that we have in the European Union? Please, Commissioners, do not use the argument that the consumer will decide. The consumer decides on price. I hope I can get a satisfactory answer.

Fischler
Mr President, ladies and gentlemen, in regard to animal protection may I point out firstly - and precisely in order to counter the argument about international distortions of competition - that this should play a part during the next WTO round and should be considered during the next agricultural negotiations.
Secondly, let me point out that it is of course self-evident that animal protection provisions must be respected. We can never accept, either in agricultural stock-breeding or in stock-breeding in general, that the existing laws are infringed. But what we have also made provision for, especially in relation to encouraging investment in agricultural undertakings, is that if a farmer sets up stock-breeding systems that are particularly kind to animals and invests to that end he will receive greater support than a farmer who is only prepared to observed the minimum standards.

Fantuzzi
I have seen the report of the Consumers Consultative Committee on the reform of the CAP on the DG XXIV Internet page. It is a very harsh indictment, expressing the consumers' point of view and in line with the position of the EBCU. My questions are: how do you react to it and do you plan to do anything to reconcile the two sides, agriculture and consumer demands?

Fischler
Mr President, ladies and gentlemen, I can entirely agree with Mr Fantuzzi here. I really do find it most regrettable that this report is based in part on statements that are consistent neither with our actual proposals nor with the current state of the discussions. I invite you to endeavour jointly with us to give the public more objective information, to protect agriculture against wrong and biased accusations.

Lannoye
Mr President, my question is one for Mrs Bjerregaard. I am, of course, delighted by the cooperation between the two Commissioners on the agriculture/environment problem, but I do wonder about the danger which may emerge as this sector develops in the future, namely the risk of the transfer of pollution.
I believe that biodiversity is vital. So I begin to ask questions when I see that the Commission, and Mrs Bjerregaard's service in particular, has shown it is in favour of using genetic technology and putting genetically modified organisms on the market before there has been any serious evaluation of their impact on biodiversity.
I should like to know if Mrs Bjerregaard is prepared to reconsider the authorisation that has already been granted to some genetically modified organisms if it later emerges that such authorisation has a negative effect on biodiversity.

Bjerregaard
Mr President, on the question of genetically modified organisms, I would like to say that the Commission has been very careful not to put itself into a situation where we have to say either that we want them or that we do not want them. Instead, what we have done initially is to try to ensure that everyone who had a need to know was informed, which we did by implementing labelling of the products at a very early stage.
We then dealt with the second question which was raised, namely the effects of GMOs. Obviously, we are also aware of the connection with biodiversity. This means that in the new proposal which is now before Parliament we are very clear on the question of risk analyses. But we have also dealt with the long-term effects, which is probably what the question was actually about. We should of course examine what is involved when such products are released into the environment and whether there could be any effects in the long term. We are watching this very closely, and as the questioner perhaps knows, proposal 90/220 contains some provisions which mean that GMO products will not simply be approved for all time, but will be subject to reassessment, because we cannot rule out gaining some experience of the long-term effects or obtaining some new information. So, all in all, we are trying to be as careful as we possibly can, and I am also looking forward to the discussion which I will clearly have with Parliament in February.

President
I should like to thank the Commission for its comments.
That concludes this item.

Defence-related industries
President
The next item is the report (A4-0482/98) by Mr Titley, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on the communication from the Commission on implementing European Union strategy on defence-related industries (COM(97)0583 - C4-0223/98).

Titley
Mr President, the European industrial, scientific and technological base is essential to the security of the European Union. It is that base which provides the capacity and capability which makes possible the political and military pillars of the European defence identity as expressed through the CFSP, the WEU and NATO.
That statement is as true today as when I made it in my first report nearly two years ago. Yet that base continues to get weaker despite the fact that Europe has some outstanding companies. We have lost 50 % of the jobs in this sector in the last 10 years. In 1995 the EU imported from the US six times the value of its exports. In 1985 the ratio was 4: 1. The reasons for this are set out very clearly in my first report but can be summed up in one statistic: we have 43 defence-related companies and a defence budget of 94.5 billion euros; The US has 14 defence companies and a defence budget of 212 billion euros. A further 75 % of what we import comes from the USA. We do not even trade with each other, intra-EU trade being only 4 % or 5 % of procurement.
It is not that we are not aware of the problem. I have spent the last 3 years attending endless conferences where everyone is agreed on the problem, most people agree on the solution, but very few people seem willing to take the necessary action. This is one field where rhetoric and action almost never meet. I often feel, in fact, that all the players involved are cautiously circling each other in an elaborately choreographed 18th century dance when in fact what we need at this moment is a good dose of rock-and-roll. I am sure that Commissioner Bangemann will be quite happy to lead that rock-and-roll.
Of course, there has been progress. There has been the establishment of POLARM. We have had the defence armament section in the Amsterdam Treaty. We have had the setting up of OCCAR. We have had declarations by Heads of State saying how important this is. We had the letter of intent of 6 July by the six defence ministers which was actually a vital step along the way, as indeed was the code of conduct on arms sales. We have had the WEAG action plan decided last November but action is not always carried through in this section. Last year there was the announcement of the intention to set up a European aerospace and defence company but nobody can agree how we do it and there is a battle between those who believe there should be heavy state investment and those who believe it should be a private company.
We agreed a long time ago that there should be a single corporate entity for Airbus but this has still not actually been signed. It has become rather like watching the Becket play Waiting for Godot . Westland and Agusta helicopters were meant to be merging but they are still wrangling about simple matters of valuation. British Aerospace and DASA were meant to be merging but could not agree on the basis of the shareholding which is incompatible. We have had the often proposed but never consummated marriage between Aérospatiale and Dassault.
In fact, in Europe, it takes us three times as long to create a merger as it does in the USA and the end result is smaller. British Aerospace/Matra has sales of 1.5 billion dollars compared to its main US competitor with sales of 5 billion dollars. I will say nothing more about the saga of Euro-fighter, the Horizon or the multi-role armoured vehicle. Compare that little minuet with the rock-and-roll in the United States where, since 1992, there has been a mass of mergers resulting in basically 3 1/2 major companies.
That is why it is essential that we take action now. We must use all our resources. There should be no institutional wrangling. There should be no standing on our dignity or on ceremony. The Commission's recent communication is so important because it shows a willingness to use all the means that we have at our disposal whether they are Community or Member State instruments. Firstly, companies have to be allowed to get on with it following commercial logic. Governments should stand back and only use Article 223 where it is absolutely essential.
That is indeed what British Aerospace is doing, which is probably the closest we have got in the industry to a leather-jacketed rocker, in their amalgamation and mergers with companies like Saab and Matra. The recent merger with GEC/Marconi is a good deal because it is based on the principles of shareholder value and a sound financial footing is important if we are to get value for money for the taxpayer. It is also important because what we have seen in the US is that mergers have gone along like Noah's ark, two by two. They have not tried to force too many companies together at one time. That is why I think the British Aerospace merger with Marconi makes good sense.
Secondly, we now need to follow the Commission action plan and apply the principles of a single market as far as possible. We should also use the instruments of CFSP in defining a common position on armaments cooperation, although that common position has to be flexible, bearing in mind the needs of this particular industry. We also need to establish greater clarity in the CFSP and the function of the European defence identity which is why the initiative of the British Prime Minister and the San Malo Agreement are so important. We need to define exactly what the Petersberg Tasks involve for our military so that industry knows what equipment it needs to be providing. On procurement, we must move towards a European armament agency, bringing together OCCAR and WEAG in a loose arrangement, if necessary. There has to be greater coordination here as indeed there has to be on research. We have to establish that the best deliverer gets the contract. We should now no longer rely on a juste retour .
Basically, if we do not start rocking the Americans are going to roll all over us. Having said that, it is not intended that this report should be anti-American. Rather we need a strong industry if we are to compete with or collaborate with the Americans and if we are to fulfil the security demands of NATO under the European defence identity. We should be looking to collaborate with the Americans. This, after all, is a global industry. European companies are not really European companies any more. They have investments in the United States and companies like Boeing have investments in Europe. So let us stop this artificial distinction and build a strong European industry to collaborate with the Americans. In fact, I know the industry will hate me for saying this, but the logical consequence of the Boeing/McDonnell Douglas merger is that the next step forward should be a link between Airbus and Lockheed Martin. Then we will have global competition in the aerospace industry.

Cars
Mr President, democracy and freedom are worth defending. If the will to defend them had not existed in Europe and America when it was most needed, we would not be sitting here today. In Europe, experience has taught us that a feeling of security prevents war and helps bring about the disintegration of powerful dictatorships from within. Where an adequate system of defence provides security, ideas about freedom can penetrate and break down even the thickest of walls.
The men and women charged with the task of dealing with European defence are entitled to have access to new weapons. The question we should now be asking ourselves is whether some of those weapons could be developed and manufactured in Europe. The response of this committee, including myself, is an unconditional 'yes'. It is essential for Europe to keep ahead, and even to be right at the forefront in certain areas. If we have something to offer as producers, we shall also be respected as customers. Otherwise, we are more likely to have to make do with what we are offered, and at the seller's price.
During a long period of peace - something we dare hope may continue - it is natural that we should reduce our defence expenditure. It is therefore all the more important for us to coordinate our dwindling European defence industry, so that by maintaining its competitiveness it will be capable of furnishing us with the arms we need to defend ourselves adequately. There will also be more likelihood of the United States wishing to exchange its experience and defence materials with us.

Swoboda
Mr President, ladies and gentlemen, following Mr Titley's very impassioned plea there should really be no need to discuss this report further. Let me begin by thanking Gary Titley for his report in which he tirelessly addressed and discussed a subject that is most important in both economic and defence and security policy terms. Economically, we should have no illusions. The United States of America, which of course always stands up for totally free trade, for totally free economic development, shows enormous interest and activity when it is a question of defending its own industry and securing its position on the world market.
That is particularly true of anything to do with the defence industry, the aircraft industry and so forth. So unless it is to be naive, Europe must respond to this kind of competition, but without creating new monopoly positions. But what we have here is in fact global competition, to which we must of course respond.
Secondly, in regard to defence policy, we are currently talking - and for the time being we are merely talking but I hope we will soon be taking concrete steps - about a European defence identity. We are talking about Europe having to assume certain tasks without always stealing a glance at NATO or in particular the United States to check what they are going to do. This kind of European defence identity cannot imply full self-sufficiency, yet a minimum of independence for our arms industry, coupled, of course, with cooperation with the Americans, is absolutely necessary. I hope Gary Titley is right in saying that what is currently happening between British and American undertakings does not prevent the corresponding decisions and mergers from taking place at European level. On the contrary, perhaps this will even create a pressure for rapidly taking the necessary decisions now to build up a European industry, not against the Americans but as strong partners.
Lastly, let me point out something that is also contained in the report although it is not its main subject. We in the European Parliament should also talk about disarmament when we talk about defence. The Social Democrats do not believe that all these endeavours to create a European security identity, a European defence industry, conflict with further steps towards disarmament. That is still on the agenda! The safest world is a world in which disarmament is writ large, which is why we should not play one aspect off against the other. Sadly this is a world in which arms are necessary, in which we have to continue to modernise. We should do so at European level while at the same time fighting for global, world disarmament.

De Melo
Mr President, ladies and gentlemen, we are used to Mr Titley's numerous well-prepared reports and speeches on the subject of defence-related industries. Mr Titley's work as a whole represents a commendable effort by this House to bring the matter to the attention of the European institutions and to call for changes to an inadequate policy on the military equipment of the Member States' armed forces. I and my group are in total agreement with Mr Titley's report.
However, I am rather pessimistic about just how dynamic a European arms policy would be within a common defence policy, as mentioned in paragraph 3 of the report. In actual fact I believe that only an effective common defence policy will allow a concerted strategy to be convincingly and properly achieved in the European arms industry. But in my opinion, it will take many years for common actions to be realised in defence policy. We are reassured by the protection provided by the Americans in terms of defence, although we regret our subordinate position in foreign affairs. While this situation continues, I do not envisage there being a strong will, particularly among certain Member States, to develop and genuinely accept an EU strategy on military equipment.
If I may briefly refer to bilateral and multilateral cooperation, for which I do not want to take the credit, these initiatives which often benefit from WEU support must also be praised. However, they can be sporadic and timid, lacking the comprehensive political will of the EU. With every year that passes, we in the European Union are falling further behind our American allies in terms of the quality of our military equipment. This is also true in defence matters. This is why we are increasingly followers and no longer leaders in world policy. Mr Titley's report, by drawing the EU's attention to these problems, deserves credit and also, therefore, our full support.

Bertens
Mr President, the Commission is right to have given priority to developing a European policy on the defence industry. The European industry is fragmented and is losing the competition war to our American rivals. Fortunately, the industry itself takes occasional steps in the direction of cooperation, mergers or expansions. But the legislation has to keep pace with it all.
The Member States made a big mistake in keeping the defence industry out of the single market, at Amsterdam as well. In seeking to defend their own national industry, our Heads of Government have signed that industry's death warrant. I hope today's Commission proposals may change this. But Europeanising the industry also means Europeanising the export control regulations. Last July's code of conduct was a first small step, and now we need further steps.
My group, the Liberal Group, backs the German Presidency's proposals to have this code of conduct made mandatory as part of the legislation. The issues here are not just the industry, but the legislation too. I should also like to thank Mr Titley for giving us so much of his time as we discussed his report, both in the Subcommittee on Security and the Committee on Foreign Affairs. My compliments to him.

Alavanos
Mr President, as the coordinator of the Socialist Group as well, Mr Titley has an important contribution to make to the work of the Committee on Foreign Affairs. However, specifically in relation to armament issues, I think it would be better if his passion and, I would say, fanaticism were to give way to a greater sense of reality and cool-headedness. For I believe it would be a mistake for the European Union to become involved, so to speak, in a frenzy of competition with the United States over arms industry issues when the European Union still has no principles and basic mechanisms for its foreign policy.
When we see that over major issues, as for example the recent attack on Iraq, some countries align themselves with the Americans, other countries pretend an ostrich-like blindness, and others still make critical comments, how and upon what are we to base such an armaments policy? I think we are moving into dangerous territory. The important thing would be to establish the principles and fundamentals of our foreign policy and only then to look at economic and similar aspects related to military equipment for defence.
Of course, I too wish to stress that Mr Titley's report contains important observations which we will support despite our primary overall position, such as the issue of continuing the Konver programme, such as the subject of measures against anti-personnel mines, and such as the subject of a weapons export code which, we fear, will remain no more than a general principle. And we know very well that the European Union countries persist in the iniquity of exporting the weapons they manufacture to various regimes around Europe, even the most odious and bloodthirsty among them.

Schroedter
Mr President, ladies and gentlemen, have you forgotten? We are living in a post-cold war era. Europe is surrounded only by friends. This is an age of peace. It is the age of disarmament. It is the arms industry that is not prepared to adapt to the new criteria of an age of disarmament and that is sounding the alarm. It is calling for industrial mergers that would not be approved in the civil sector. It is calling for subsidies, for political support for arms exports; it is calling for a more flexible policy on cartels. What forces us to give in to these demands when we know that it would be senseless to do so, when we know that this will not solve the global problems facing mankind, the problems of unemployment and poverty, the problems of climate change? Do not forget that we created Konver to replace rather than supplement rearmament. That is why the Greens reject this report.

Maes
Mr President, I must add my voice to the criticisms we have heard here today of this report and the Commission communication. There are too many arms in the world, nuclear weapons must be banned outright and conventional weapons must be drastically reduced. There is too much selling of arms to unstable areas, whether legal or not, and it merely adds to the level of violence and insecurity in the world. The codes of conduct are inadequate and poorly enforced.
If you are asking for a European policy, then we say yes to a European foreign policy and a European security policy which pursues the above priority objectives. We want arms where they are absolutely essential. The only thing to which I can give my unreserved support, and this is my personal view, is that the matter should be coordinated within a common European area. For the rest, I have other priorities.
I should like to see a common policy of arms reduction. I should like to see our own defence industry converted into an industry which pursues peaceful objectives. I should like to see as few people as possible dependent on the defence industry for their livelihoods. I want legally binding export controls for arms at European level. I shall certainly endorse the call for the Council to submit an annual consolidated report on arms exports to Parliament so that we can check on how the codes of conduct are being implemented.
In the meantime, there seems to be very little of the European spirit behind the restructuring operations currently under way.

Féret
Mr President, the European Commission wants to implement a European strategy on defence-related industries. Good idea, it is never too late to do something good like this! The Titley report wants Europe's security and defence identity to be asserted - I am with him up to this point - but he goes on to say that this should be within NATO, which I find very disappointing.
As sceptical as I am, in its time, the Soviet monster was reason enough, in my eyes, to justify the fact that Europe should forget all conflicts of interest that pitted it against the United States in order to present a united front against a common threat. Since then, as the European Union has developed, such points of conflict have only become more apparent. Today, nothing short of an attack by extra-terrestrial monsters could make me forget that Europe is the United States' main competitor and that the United States will not rest until they have thwarted our expansion.
Once again, a free Europe cannot thrive without saying 'no' to NATO.

Speciale
Mr President, I share the view that the Titley report is an important one, and it comes at a significant time. It is very much in line with convictions which many of us hold and which we reaffirm, because controlling arms production and exports, indeed raising this issue, is already a way of preventing policy being made by weapons and those who use them, which is exactly what we do not want. So it is an important report, and for three reasons in particular. First, because it evaluates Europe's defence industry in terms of forming European groups and competing with others, especially the United States industry, supporting scientific research and cutting-edge technology and, finally, in parallel, establishing coordination between the Member States to offer a frame of reference.
Secondly, because talking about the defence industry is a direct reminder of the need to get the common foreign and security policy off the ground, which is essential to the European Union's international credibility - and here I believe coordination with the applicant countries in the enlargement process is important too.
Thirdly, because I think it is right to highlight the fact that we are establishing a code of conduct for arms exports. This code governs a very sensitive area, introduces morality to it, makes it transparent and specifically prevents arms exports being in contradiction with European Union policy. It is significant that the German Presidency recently stated its intention of making the code of conduct more legally binding. That is the right road.
Finally, I think it is right to mention that the Titley report contains a small paragraph, which we should bear in mind, on the ratification of the Ottawa Treaty on Anti-Personnel Mines by all the Member States.
So all things considered, I think this is an important report.

Frischenschlager
Mr President, I would have preferred to see this important report discussed primarily in terms of security policy rather than economic policy aspects, for it represents a major step forwards towards achieving a Common Foreign and Security Policy, and surely the political need for that should gradually become undisputed. Unfortunately perhaps, that requires an arms and arms procurement policy coordinated at European level. Why? Firstly, I am convinced that it is important for Europe to retain some independence in providing itself with military assets. What I regard as important is not so much economic competition but a policy that is independent of the United States.
Secondly, it is also quite crucial for us to reduce our existing surplus capacity in the arms industry only on a basis of coordination, thereby also preventing financial resources from being wrongly allocated to arms contracts that are awarded under the heading of 'we want to protect jobs by creating more employment'. We are all familiar with examples of this kind in our own home countries. I also believe it is important that we consistently include the Central and Eastern European countries. They are facing the biggest problems here and I believe, especially in view of EU and also NATO enlargement, that it is important that we include them here. I regret - here I agree with the direction taken in the report - that the Konver programme is not being continued. We have to demand that it is!
In the end it is not a question of markets. The arms industry is not a question of markets and I believe that security policy is the decisive aspect, which is why it is important that we coordinate the arms industry, arms procurement, on a European basis in the interests of the Common Foreign and Security Policy.

Elmalan
Mr President, ladies and gentlemen, following on from its 1996 communication, in 1997 the Commission put forward an action plan for defence-related industries. It refuses to make allowance for the specific nature of this sector, particularly in terms of the close link between defence and sovereignty, and is determined to apply the principle of free competition for the sake of competitiveness. It is even going one step further by opening the way for a European armaments policy within the framework of a European security and defence identity.
These guiding principles, approved by the report from the Committee on Foreign Affairs, Security and Defence Policy, are reflected in the restructuring policies that have been implemented in the Member States. Such restructuring, in the form of merger-acquisition operations at a global level, is based more on financial grounds than purely industrial ones and has serious economic, social and regional consequences. For example, the French Government is pressing ahead with the restructuring and privatisation of the armaments industries, jeopardising more than 50 000 jobs.
Being active supporters of peace and disarmament, the French Members of my group support cutting expenditure on armaments, particularly on nuclear weapons. We also suggest that an international conference on reducing the arms trade be organised, which could lead to an international convention. But at the same time, we are against the restructuring and privatisation that cost so many jobs. Currently, only 5 % of France's requirements are met by state enterprises and munitions plants. This is why we believe that the arms we need to defend ourselves should be provided by national enterprises, despite the fact that the Commission thinks that the rules governing public procurement should be applied to military equipment.
The industrial activity generated could also go hand in hand with strengthened cooperation at European level, but without giving up all our advantages, technology and know-how to achieve this. Such cooperation will only be effective if it is complemented by the establishment of a genuine Community preference for arms purchases, so we can stand up to a dominant America that has cornered 50 % of the world market. This approach is further justified by the fact that 75 % of major conventional weapons bought by European countries come from the United States.
We also need to begin, and continue with, the process of diversifying and reorientating some military activities to the civilian sphere, particularly the aeronautical, space and electronic industries. As the CGT, France's national state workers' union, stressed, the engineering and technical staff of these armaments plants have industrial skills and know-how and use technologies that could quite easily be used for civilian purposes.
Such diversification will only be truly effective if social measures are also introduced, such as reduced working time and improved training, in order to safeguard employment and keep sites operational in places where economic and social life is almost exclusively dependent on the armaments industry.

Theorin
Mr President, the overarching goal of any security policy is global disarmament. This presupposes a scaling-down of both the manufacture and sale of arms. The EU should take the lead on disarmament and limiting the arms trade. This should be a constant element in any discussion on the European defence industry. Although the international arms trade is a global problem, the Member States of the Union together represent the second most important player in the international arms market and therefore have a particular responsibility.
Mr Titley has certainly done an excellent job, but I cannot agree with him when he says, in paragraph 3, that 'a European arms policy is an essential element in... the establishment of a European security and defence identity within NATO'. Sweden is a neutral and non-aligned country; it does not belong to NATO and will not be involved in a common defence. Moreover, I do not believe that it is appropriate to create an institution to deal with arms production before any decision has been taken on a common defence.
As regards Article 223 of the EC Treaty, in my view armaments cannot be regarded in the same light as other goods and traded freely; on the contrary, they should be subject to special rules. The EU should play an active role, not in making it easier for the arms industry to produce and export weapons, but in tightening up the rules so as to limit the sale and export of armaments.

Sjöstedt
Mr President, fortunately we are living at a time when there is far less likelihood of an armed attack against our countries and more scope for Europe to continue its policy of disarmament and détente. However, such a perspective is entirely missing from Mr Titley's report. Instead, it is all about building a common defence and devising a common code of conduct for the arms industry and exports. A report of this kind should be seeking to formulate a strategy for turning a military capability into a civil one. If the EU adopts a more active and aggressive approach to the export of arms, this will also serve to aggravate conflict situations where they occur in the world.
I also disagree with paragraph 2, where it is stated that European research and technology policy should begin to be used for military purposes. On the contrary, we should be redirecting the enormous resources squandered on military research into the civil sector, where they will at least be of some benefit to the human race.
Furthermore, the report does not adequately take account of the fact that some EU Member States do not belong to NATO or the WEU. Nevertheless, the rapporteur would like these structures to be included in the Western European Union and in cooperation links with NATO.
I am also unhappy that, as we can see, extending NATO to include the countries of Central and Eastern Europe is having the effect of encouraging them to energetically rebuild their defence capabilities, which only leads to more countries in turn equipping themselves with new weapons systems. As a result, tension is likely to increase in Europe rather than the reverse - even if some arms manufacturers are made happy in the process.
I agree that there should be an international code of conduct to limit arms exports, but this proposal goes much further than that. I am therefore going to vote against what is, for the most part, a very reactionary report.

Bangemann
Mr President, first let me thank Mr Titley, and not just for the fact that in terms of substance his report follows the lines proposed by the Commission but also for his realism and for the courage that is indeed required in order to deal realistically such a difficult subject. That is why I want to begin with a very simple statement, before Mr Sjöstedt leaves. This is what we so often see in debates: a Member tells us something or other and then leaves. He never listens to what the others have to say.
Applause
Let me begin with a very simple statement. I do not believe there is much dispute in the European Parliament about the need for a Common Security and Defence Policy. A Common Security and Defence Policy, as its name suggests, is not some kind of policy of aggression but reflects the need in a world in which, unfortunately, we cannot guarantee security by peaceful methods alone, to build up a system that shows the public that we are able to defend ourselves. That is why, even in a neutral country such as Sweden, there is no question at all about having a national defence system of its own.
Mr Sjöstedt, if in relative terms the European Union were to export as many weapons as Sweden, we would have to increase our exports considerably. The reason why NATO adopts a different approach to Sweden than to Latvia, Estonia and Lithuania is partly because Sweden was never part of the Soviet Union. So we should begin by stating quite soberly that we do need to defend ourselves. That is my first point. The second is that if that need exists and if it will take some time before we can achieve a common security policy - which is not easy politically - then, if it is going to take us another five or ten years to achieve that common security policy and if when we have finally achieved it we no longer have a common arms policy, we will face the problem that although we have a common security policy we have no means of producing weapons ourselves.
Anyone who does not understand that is beyond help! That is why the Commission has taken the initiative of telling Parliament and the Member States that we have to do something. For one thing is clear: our industrial policy approach in this area has been purely national to date. That will not get us any further. The complaints that have been made here, by Mrs Elmalan too, I believe, that we are constantly losing ground to American exports to the European Union, are true! The reason is simply that the European industry is too widely dispersed among national undertakings, so that it does not achieve the same overall market penetration as some American undertakings.
We should just look at the order of magnitude. If all the companies that produce arms in Europe joined forces, merged, they would still not be as big as the largest American undertaking operating in this area. That is also a question of industrial policy. The answer lies not just with the Commission, with the European Parliament and the European Union, it also lies with the Member States. All the Member States have said they are aware of the need to restructure the industry. The same applies to the Airbus. Just recently the six countries cooperating on the Airbus came together again. The problem there is quite simple. Each country begins by defending its own interests, and sometimes its own policy. The reason France finds it more difficult to privatise Aérospatiale is not because Aérospatiale does not want this but because the current French Government has more problems with this than a different government would have had. The reason two UK firms have now merged is partly because if this aviation merger takes place, a company that has more influence can of course make more demands. So we must realise that a kind of power struggle is taking place here. It would be naive to disregard that.
At the same time all these trends show that the industry and the Member States have realised that something has to be done here. I consider Mr Titley's report on this very difficult question most encouraging - it is easy enough for some people, including Mr Frischenschlager, to take the position that the right method is in fact to disarm. The European Union would certainly be the first to accept that if we could make sure it applied worldwide. Sadly, that is not an option. That is why we have to take a different road.
We have proposed an action plan that quite clearly states what we can do. I can assure you that the Commission will propose and implement all the necessary aspects of this action plan this year. Standardisation is the first aspect. On public contracts: what Mrs Elmalan said on the subject is the usual reflex in some EU Member States; when a problem arises, people take refuge in protectionism and in a European quota. You could call it agricultural policy transposed to the arms industry. But that is the very last thing we should do. That would not get us any further at all.
So we must muster the strength to create competitive structures. That means: common standards, joint invitations to tender, for the European arms industry can only become competitive if it issues joint invitations to tender and has common rules on the internal arms trade and on arms exports. The European Court of Justice has on several occasions ruled that arms exports also lie within the Community's sphere of competence. The Commission will do all it can to make progress in this area, for if we do not act now, we cannot complain five years hence that we cannot even ensure our own defence any more. I believe we should follow a good European tradition here. We should be able to produce for ourselves what we need for our own defence. That is precisely the Commission's aim and I am glad Mr Titley also sees it that way and supports it.

Sjöstedt
The Commissioner has commented on the fact that Sweden exports arms and the manner in which it does so. I agree with him that this is both irresponsible and a good example of how it should not be done. Take for example the export of arms to Indonesia, or the present extremely aggressive techniques being used to sell fighter aircraft. I too think that such actions are wrong. Nevertheless, instead of having to witness the same mistakes at EU level, I should like to reduce the likelihood of that happening.

President
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Environment, security and foreign affairs
President
The next item is the report (A4-0005/99) by Mrs Theorin, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on the environment, security and foreign policy.

Theorin
Mr President, security policy has undergone many changes. The cold war has ended, and a major war in Europe would seem impossible. The conflicts which we see around us are the result of ethnic, religious and social differences. At the same time, new threats are emerging in the form of massive displacement of refugees, terrorism, international crime and, no less importantly, environmental and natural disasters. Bullets and gunpowder, however, are not the way to resolve such conflicts.
A number of environmental disasters have brought the human race new problems, such as the recurrent flooding in Europe, the dam disaster in Spain and, most recently, the widespread landslides in Central America. It is clear that there have not been sufficient resources to detect or prevent such disasters. Since environmental threats do not respect national boundaries, what is required is international cooperation. There is a growing international awareness of the extent of environmental problems, as illustrated by the UN follow-up conferences on water, desertification, the environment and development, and climate change. Environmental problems can lead to such serious difficulties that they endanger the security of both individuals and countries.
Fresh water is a very unevenly distributed natural resource. Fewer than ten countries possess 60 % of the total fresh water resources on earth, and several countries in Europe are dependent on water imports. In future conflicts, attacks on fresh water may not simply be an end in themselves, but may also be the cause of conflict. An estimated 300 rivers, lakes and sources of groundwater are located in international border areas. In the Middle East, nine of the 14 countries have a shortage of water resources. Local and regional ecological problems can have serious implications for international relations, for example limited water resources or the large-scale displacement of environmental refugees. The number of environmental refugees has now reached 25 million, compared with 22 million 'traditional' refugees. By the year 2010, it is estimated that the number of environmental refugees will have doubled.
These new causes of conflict must be reflected in foreign, defence and security policy and the way in which nations establish and maintain peace and security. We need to mobilise resources to meet the environmental challenge. A much greater effort is required, but our means and resources are strictly limited. At the same time, the change in the security situation has resulted in détente and disarmament. The freeing-up of military resources has given the armed forces a unique opportunity and plenty of capacity to deal with the increasing number of environmental problems. The armed forces have a highly efficient organisation and extensive technical resources which could be used for the enhancement of the environment without incurring any significant costs.
Prevention of environmental crises requires infrastructure, organisation and increased resources. These are to be found within the armed forces, although capability may certainly vary from one country to another. In the main, however, they can supply qualified personnel, technologies, advanced technological resources, organisational capacity and military methods of research and development. Military personnel are well equipped to intervene in the event of disasters and are trained to carry out missions under extreme conditions.
Military activity is also responsible for widespread environmental destruction. Destroying the environment has been an established method of waging war since ancient times. War is also far and away the most serious threat to the environment. The military is responsible for emissions of several gases affecting the climate, fossil fuels, freons, nitrogen oxides and sulphur dioxide. Nuclear and chemical weapons and landmines are some of the most obvious types of armament that cause extensive damage to the environment, even in peacetime.
The committee held a public hearing to find out more about the 'non-lethal' weapons and HAARP, the High Frequency Active Auroral Research Project. However, I very much regret that the USA did not send representatives to the hearing or use the opportunity to comment on the material submitted.
There have been two public hearings to try to shed more light on the complex technical and legal aspects of the 'non-lethal' weapons and HAARP. We have also put forward proposals relating to the economic and practical implications of a training programme for environmental defence troops. My original proposals were dealt with under the Hughes procedure, and the Committee on the Environment, Public Health and Consumer Protection has looked into the environmental aspects very carefully. Against this more detailed background, I am now presenting this resolution on the environment, security and foreign policy, which makes a series of proposals for measures to be carried out both at EU and national level. The resolution recommends that the Member States should seek to utilise military-related resources for environmental protection through the setting-up of a training programme for environmental defence troops with a view to establishing a coordinated European environmental brigade, listing their environmental needs and the military resources available, and exploiting these resources in their national environmental planning while also putting them at the disposal of the United Nations and the European Union in the event of an environmental disaster, or under the Partnership for Peace. Furthermore, the armed forces should comply with specific environmental rules and make good past damage to the environment caused by their own actions.
Civil environmental legislation should be applied to all military activities. We call on the Commission to present to the Council and Parliament - as foreseen by the Amsterdam Treaty - a common strategy which brings together the common foreign and security policy and the EU's policies on trade, aid, development and the environment. It is noted in the resolution that preventive environmental measures are an important instrument of security policy, and the Member States are urged to define environmental and health objectives as part of their long-term defence and security assessments.
The resolution also addresses the problem of the uncontrolled unprofessional storage and dumping of nuclear submarines and surface vessels, as well as their radioactive fuel and leaking nuclear reactors. The Commission is urged to conduct an in-depth study of security-related threats to the environment in Europe and to draw up a green paper on military activities affecting the environment. The report also examines the legal aspects of military activities and calls upon the European Union to seek to have the new 'non-lethal' weapons technology included in and regulated by the international conventions.
So long as nuclear weapons exist, there is a danger of them being used in error. That danger could soon be considerably reduced if the nuclear powers were to implement the six proposals of the Canberra Commission.
Let me conclude by saying that almost every day we receive reports of environmental disasters which could be prevented if we used our available resources sensibly. The resources in question belong to the armed forces, who could be allowed to continue to operate them. All that is lacking is political will.

Olsson
Mr President, the Committee on the Environment, Public Health and Consumer Protection has considered this report and delivered an opinion about which I should like to make a few brief comments. First of all, I am pleased to say that we agree with the background information provided by Mrs Theorin here in the House. However, I should like to conclude my intervention by touching on one or two issues which we view in a different light.
It is quite obvious that nowadays there is no direct military threat to Europe's security. However, there are other bigger dangers, such as environmental devastation, shortages of fresh water, desertification, climate change, accidents in chemical and nuclear power plants and so on. It is therefore vital that we revise our ideas about security and develop them to include environmental threats, and on the whole, the report does just that.
It is a very good sign that we are applying normal civil environmental criteria to military activities - this is a necessary development in the present situation. Tackling the problem posed by earlier nuclear weapons is a major step in this respect. As to how this would be done, the report proposes that the armed forces should be 'trained' to enable them to cope with environmental problems. That would certainly be a practicable solution, but the Environment Committee would like to make the point that if substantial resources continue to be allocated to the military, which is certainly the case today, some of those resources should be switched from military defence to the environmental sector, for example rescue and disaster relief services, the decontamination of land and water, and preventive measures to safeguard the environment. We believe that this is more important than the creation of a special environmental brigade. It is also an idea which could be put into practice.

Titley
Mr President, I hope colleagues are aware of the importance and significance of this report. I refer not just to the quality of Mrs Theorin's work, for which I congratulate her, but the fact that this report was produced by the Committee on Foreign Affairs, Security and Defence Policy. It is a sign that Parliament has recognised that the end of the Cold War has brought with it an entirely new concept of security and that environmental security is crucial to future peace and prosperity. There is no doubt that the scarcity and degradation of environmental resources will lead in the future to conflict and we have to use all the resources available to prevent that happening.
If I have a criticism of the report as it has finally emerged, it is that the way it was amended by both the Foreign Affairs Committee and the Committee on the Environment, Public Health and Consumer Protection has meant that we have tended to throw everything in including the kitchen sink. That is a mistake. We ought to focus on the basic points. What is important to most people is the air they breathe, the food they eat and the water they drink - indeed, the water which helps to grow the food they eat.
I would like to concentrate on that one question of water. It is perhaps the most important security challenge facing us in the next century. For example, if we look at the Caspian Sea region, we find that it has tremendous oil potential leading potentially to great prosperity. But it is also a disaster waiting to happen, specifically in the republics of Central Asia. We all know the horrific tale of the Aral Sea. Equally, there are other conflicts as a result of both the Soviet system which wasted water and the collapse of the system which has led to chaos in terms of distribution of water supply.
There is Kyrgyzstan's hydro-electric power which is undermining the downstream countries. Illegal tapping of water supplies and questions of water access intermingled with nationalist rivalries could easily explode at any moment.
Similarly, if we look at the Indian sub-continent, a growing population accompanied by deforestation is causing flooding which is undermining effective water supply and dykes. The headwaters of several river systems are to be found in Kashmir and we are all aware of the security implications of that. In the Middle East access to the Jordan River is one of the key aspects of the Middle East Peace process, in particular in relation to the Golan Heights. Indeed, the history of Israel-Jordan relations is as much a history of water relations as anything else.
So I welcome the fact that we are addressing these issues at long last. I share with Mrs Theorin the hope that we can use all our resources - specifically military resources of satellite intelligence, etc. to start to attack environmental security. If we do not, then in terms of conflict 'we ain't seen nothing yet'.

Stenzel
Mr President, Commissioner, ladies and gentlemen, Mrs Theorin's report on the environment, security and foreign policy addresses a detail of security policy, namely questions relating to environmental policy, exaggerates their importance and therefore tries to look at the security policy role of the armed forces mainly from that aspect and to change the task and role of the security forces. It has become particularly clear in the former Warsaw Pact member states how the armed forces can pollute the environment, for there the withdrawal of the then Soviet troops very often left serious environmental damage in its wake. Abandoned and often disintegrating nuclear submarines have become a danger to the seas, former barracks have left a legacy of oil-polluted soil. Of course it is legitimate to ask who is responsible for disposing of the military waste, especially in these countries.
But to use this as a pretext for defining armed forces only in relation to their environmental compatibility, to prevent research on the grounds that it is not environmentally compatible, is to undermine the security policy task of those armed forces. Since the end of the cold war has not yet brought peace, we have to reject this basic approach that is taken in the report. To hold the armed forces responsible for the environmental damage does not take us forward, for it would put an unacceptable burden on the defence budget, limited as it is. What is, however, important and right, is for the governments to have to pay for environmental damage and to apply the polluter pays principle here.
In spite of the basic approach taken in the report, which I reject on principle as unrealistic, some aspects are of course definitely worth supporting, such as the inclusion of environmental aspects in military research, gearing the arms industry more to the production of civil goods, the call for a ban on anti-personnel mines and for the immediate signature of the 1997 Ottawa agreement, control of waste from the nuclear weapons industry, control of biological and chemical weapons, the further dismantling of nuclear weapons and in particular observance of the Nuclear Non-Proliferation Treaty.
There is a great danger that weapons of this kind could fall into the hands of irresponsible despots or terrorist organisations and this must be prevented by a network of international agreements and by the appropriate controls. To call for environmental training of military personnel with the aim of setting up an environmental protection brigade is inappropriate here and would get us nowhere since environmental aspects are already taken into account in the national armed forces and in the NATO Partnership for Peace. Of course the armed forces must be prepared to deal with environmental disasters. But that is certainly not their primary task.

Bertens
Mr President, the environment has to be an important factor in our foreign and security policy. That is the essential message of this report. I am grateful to Mrs Theorin for her energetic input here. It would indeed be a good thing for the Union to devise a common strategy in this area. There are already numerous conflicts which have their origins in problems of the environment. Mr Titley mentioned some of them: water in the Middle East, overpopulation as a factor of conflict in the Great Lakes region, deforestation and floods in southern Asia.
It is clear too that the armed forces are part of the social fabric, of a society in which high priority is given to protecting the environment. Where possible, we must make use of military personnel to resolve environmental problems. Airborne surveillance of illegal fuel dumping by tankers in the North Sea is a good example of how the military can be used to good effect. Environmental troops could usefully have been deployed to cope with the fires in Indonesia.
But this report also contains many things which are unrealistic and unnecessary. We must not start setting up new centres, writing countless green papers and forming new task forces. And we must leave it to national governments to switch budget funds away from the defence sector. It is not Parliament's job to tell governments that they must have the army running environmental policy. Each Member State must reorganise its budget as it sees fit, and then the environment will naturally be one of the issues dealt with.
My group, the Liberal Group, wants to see the report pruned to its essentials. We shall table amendments to delete a number of paragraphs. My group will wait to see what happens to those, and we shall then decide whether to support this report or not.

Gahrton
Mr President, Mrs Theorin has written an important report which has been improved during its passage through the committee. Nevertheless, it still lacks muscle in some respects, for example the responsibility of the armed forces for environmental destruction in peacetime, claims for damages against the military and, above all, space-based weapons systems.
There is a remarkable contrast between the explanatory statement and the resolution itself. In the explanatory statement, HAARP - the High Frequency Active Auroral Research Project - is said to be a military research project on the lines of 'Star Wars' which is environmentally damaging, has an unknown effect on people's lives and is legally questionable and probably in breach of international law. However, none of this is mentioned in the resolution, which only refers to further investigation. The Green Group thinks the time has come to say loud and clear that this research has got to stop, and this we do in our amendment.

Kronberger
Mr President, Commissioner, the realisation that security policy is closely bound up with environmental questions is to be welcomed on principle. The conclusion that military activities have far-reaching environmental effects is also important. But I would also draw your attention to a circumstance to which more account must be given in our future peace policy work. In Africa as also in the Middle East, in South America and in the states of the former Soviet Union wars are being waged about oil and other resources. Only when we manage to do away with this central source of war over the past century and move instead towards renewable primary energy sources will we see the first real success in regard to long-term peace protection on an environmental basis.
I regard one point as particularly important here. The EU should launch an offensive against the increasingly widespread problem of mercenaries, which is very much implicated in this fight for resources. Mercenary troops should be prohibited worldwide and their European headquarters should be prosecuted.

Spencer
, Security and Defence Policy. Mr President, I want to endorse the conclusions this report comes to. It seems to me clear that the impact of the environment on security is both immediate, important and growing. I absolutely endorse what both Mrs Theorin and Mr Titley said about conflict over water and resources and how central this should be as we plan the Common Foreign and Security Policy over the next ten years Equally, I am not going to add to comments that have been made on the impact of the military on the environment. You can see that in the Kola Peninsula. You can see that in the insecurity of nuclear sites in the Soviet Union of the kind that has been highlighted by General Lee Butler.
However, I want to say a word about the HAARP Project Mr Gahrton mentioned. Having listened to the hearing and done some considerable work myself I find the dangers of experiments with polar electromagnetism to be potentially very damaging and possibly calamitous. I say that without making any particular judgment as to the potential military applications of this technology, either as a weapon for disrupting an enemy's climate or its adaptability for the use in non-lethal weapons in either a military or a civilian situation, or perhaps most dangerously of all as a covert continuation of 'Star Wars' defence policies.
The fact is that when we look at this issue and when we listened in the hearing on HAARP, we appeared at times to be listening to science fiction. But that science fiction should not blind us to this turning into a considerably threatening reality. I echo other speakers' comments in saying that I regret that the American administration, despite contacts at the very highest level and contacts inside NATO, did not feel it reasonable to come to this Parliament and express a view. In the absence of that, I have to say that this Parliament must take the view that this is a matter which should concern us all and to which we should return in the next mandate. There are unanswered questions and this Parliament deserves some answers both from the Americans and from scientists involved in this issue.

Bjerregaard
Mr President, let me begin by thanking the rapporteur, Mrs Theorin, for her considerable efforts, which also - if I may be allowed a brief personal comment - admirably complement much of the political work that she has carried out in the past. Clearly, this report covers a number of areas besides those I work with on a daily basis concerning the environment, but I shall be dealing with the report as a whole.
The Commission has taken great interest in Parliament's report and the motion for a resolution on the environment, security and foreign policy which it contains. As has also been emphasised here today, it deals with a complex subject, the great importance of which is now being realised by the international community as a whole. The report is commendable because it clearly points out many of the connections which exist or could arise between the environment, lack of natural resources and security. A number of examples have also been provided in this debate, such as refugee problems and overpopulation or - in terms of the environment itself - water and climate.
The Commission's services have been investigating a number of security problems and their economic consequences in a broader context. As part of this work, we have held a number of seminars, including one on the environment and security. It was decided that, as a follow-up to these seminars, the Commission should produce a paper on the interaction of foreign policy, security and sustainable development, with the aim of starting a debate with the parties concerned and decision-makers throughout Europe. As a result of this, my own services are already in the process of taking a closer look at some of the points in Parliament's report concerning the risks connected with global climate changes and the exploitation of resources, which could lead to an increase in environmental refugees, crisis situations and - as Mrs Theorin herself emphasised - direct conflicts.
DG XI has started its work on the environment and security. This will focus on issues such as water resources and water shortages, which Mr Titley touched on in particular, whether we are dealing with the Caspian Sea, the Aral Sea or the Black Sea, which Mr Spencer and I had the opportunity to look at more closely a little while ago. We shall also be focusing on soil erosion, lack of natural resources, transfrontier problems regarding the destruction of forests and biological diversity and the security problems which could follow as a result. In this context, we shall also look more closely at the effect on policy in other areas, such as trade, development aid and cooperation. This work therefore covers a number of the proposals which have also come from the European Parliament, particularly the resolution's very important first paragraph.
On various occasions, the Commission has expressed its concern at the deforestation and desertification in Africa. A large part of the emergency aid under the Lomé programme has been earmarked for combating these two phenomena, which of course have many causes, some of which are quite clearly of a military nature. However, the Commission has neither authority nor expertise in the area of military affairs. It does not have access to military activities or resources, because these are exclusively the concern of the national authorities. We in the Commission will therefore not be in a position to ensure that some of the paragraphs in the motion for a resolution are followed up. This applies to paragraphs 18 and 29. The Commission participates fully in the common foreign and security policy, and we shall therefore try, together with the Council presidency, to act as spokesmen for the views expressed in the resolution in the various international security forums, including the UN.
Finally, Mr President, the Commission welcomes the fact that Parliament has produced this resolution and report. It shares Parliament's concerns about the connection between environmental degradation and future risks in terms of security. As I said, we have already started working on some aspects of the problem, particularly those which directly concern the environment. With these comments, I would once again like to thank the rapporteur, Mrs Theorin, for an excellent report and for the debate which we have had here today.

President
The debate is closed.
The vote will be taken tomorrow at 9 a.m.

Comprehensive partnership with China
President
The next item is the report (A4-0479/98) by Mr Bernard-Reymond, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on the communication from the Commission - Building a Comprehensive Partnership with China (COM(98)0181 - C4-0248/98).

Bernard-Reymond
Mr President, China, an immutable yet changing country, has once again recently given us an example of its contradictions and its difficulties. Having shown encouraging signs of opening up on human rights issues, a series of hurried trials have just reminded us - as if there were any need to be reminded - that unfortunately this country remains hostage to an authoritarian policy that shuns freedom, democracy and human rights.
Over recent months, there have been several encouraging signs such as the signing of two UN conventions on economic, social and cultural rights and on civil and political rights, the fact that there has been indirect contact with representatives of the Tibetan people, the Taiwanese representative's visit to Peking, the freeing of political prisoners, the troika's visit to Tibet, the fact that Mary Robinson, the United Nations High Commissioner for Human Rights, visited Beijing, and the public dialogue between the United States and Jiang Zemin which took place on Chinese television.
We are, of course, not so naïve as to think that, in themselves, these things all constitute a bold new policy, but the simple fact that they took place and the fact that the authorities in Beijing deemed them necessary, was, in itself, an incentive to continue and extend dialogue. It was in this context that the Commission decided to draw up a new communication, which the Council has approved before Parliament has even given its opinion on it - hardly a good example of democracy to show China.
The Commission has adopted five guidelines that you already know about and that have been approved by the Committee on Foreign Affairs, Security and Defence Policy. I note with satisfaction the fact that these guidelines make political dialogue a priority, along with proposed aid to China to help establish the rule of law in compliance with international requirements. We need to maintain political dialogue with this future major actor in the multipolar world, a power that could act as a stabilising influence in that region of Asia. But political dialogue is equally necessary in order to persuade China that the key to becoming part of international society lies in the respect of universal values. In view of this, we welcome the legal and judicial cooperation programme put forward by the Commission, providing a total of ECU 13 million over four years. In this programme, respect for individual and trade-union freedoms should be made a priority, even though the legal security of economic society is also necessary, particularly as regards protecting investments and intellectual property.
However, ladies and gentlemen, we are considering these guidelines at a moment when Xu Wenli, Wang Youcai and Qin Yongmin have once again been imprisoned, and where a wave of arrests and trials forces us to ask just what this crackdown means. Of course, we know that the prospect of the tenth anniversary of the events in Tiananmen Square is worrying Beijing, but we fear that the roots of such a hardline stance go much deeper than that.
On an economic level, China is undergoing major change. Having learned from international developments over the past twenty years, from the development of globalisation and the efficiency of the market economy, China has decided to open up to the world and move from a centralised and bureaucratic economy to a socialist market economy. It has rapidly reaped the benefits of this change. For a long time now growth has been 10 % or more, currency reserve levels have been high, foreign investment has increased considerably, external trade is in full expansion and inflation is gradually being brought under control.
The Commission proposes to support this trend by offering to cooperate in such diverse fields as human resources development, administrative reform, social protection, reform of the financial sector, combating poverty and regional disparities, the transfer of technological know-how in the energy sector, widening scientific and technical cooperation and protecting the environment.
But, as always, these sweeping changes have also exacerbated or created major disparities: between town and country, between coastal regions and the interior, between Beijing and local authorities, between the poor and the newly rich, between those in and out of work, and in environmental matters. The authorities' desire to overcome these difficulties without endangering China's unity and whilst preserving its internal stability is justifiable but does the path which the Beijing authorities appear to have chosen not increase the danger rather than avert it?
A changing society needs flexibility, decentralisation, accountability, initiative, debate: in short, democracy. Anything that is inflexible, authoritarian and centralist may fool people for a while, but in a changing economic society such an attitude always leads to obstacles being created, which in turn will trigger explosions or lead to that society being ostracised and isolated. Although Europe is still willing to enter into constructive dialogue, it does not want China to follow any of these roads. Europe would like China to gradually become part of international political and economic society. We are prepared to help it to reach this goal. However, China must be capable of being as courageous in the political world as it has been in the economic world. We strongly encourage China to do this as we know that, for all peoples, freedom is the future of history.

Seppänen
Mr President, three large economic areas the size of Europe have collapsed over the last year and a half. The neo-liberalist doctrines of the IMF have been unsuccessfully applied to all three, that is to say, South-East Asia, Russia and Brazil. Now it would appear that China is to be the next target of assault by international market forces. China is nevertheless a politically more stable fortress that the other countries I have referred to. Its stability could be vital for the whole world, including Europe and the United States. If China's currency is devalued, European and American competition will not stand the pressure.
Mr Bernard-Reymond's report rightly stresses the importance of a constructive but unconditionally critical attitude towards Chinese society. China is crumbling from within as a result of environmental problems. Its population is predicted to grow to one and a half billion quite soon. When subject to rapid intensive and extensive economic growth, nature and the environment become vulnerable. 80 % of China's energy is produced from coal, the country relying on exports for other sources of power. Burning coal in China adds to the world's carbon dioxide emissions, and China produces more emissions than any other country in the world apart from the USA. China, however, is not bound by an international agreement on climate, and, as a developing country, does not have to be. It would be in its own interests, however, to reduce emissions.
The report fails to discuss environmental problems thoroughly enough, and hardly at all, in fact. The Committee on External Economic Relations has focussed its attention on these problems, which the rapporteur has largely ignored. The sale of modern technology that protects the environment and innovative products that incorporate environment-friendly technological know-how would be an important growth industry for companies in the European Union.

Dupuis
Mr President, ladies and gentlemen, I believe that the picture painted by the rapporteur, Mr Bernard-Reymond, clearly illustrates the failings of the so-called constructive dialogue policy which the European Union has pursued with China for many years now.
He has highlighted all the shortcomings, or some of them at least, and the whole thing really is a failure of major proportions. It must be pointed out that the Union and the Member States showed the same condescending attitude towards the citizens of the Soviet Union, who it was felt did not count as such. For years, we believed that what worked for us, namely democracy, was something that did not apply to them, and for some time now we have been applying the same analysis to China. We have been following the same policy of not acknowledging that Chinese citizens, like us, have a right to democracy.
This is particularly serious as the situation in China is much more desperate than we are often told. Tens of millions of people are unemployed due to social and economic contradictions. Contrary to what people would have us believe, it is not the communist system - and this is indeed the issue here - that will guarantee the stability which our socialist colleague was discussing, but rather democracy, with its safeguards, its opposition forces and its social control mechanisms. Only democracy could help China to rid itself of such contradictions once and for all.
It would be better to push China, to demand that it and its leading communist class relinquish their monopoly on power, their violent monopoly over tens, even hundreds of millions of people. Such violence is the reason behind the tens of thousands of political prisoners - and these are official figures. I would ask everyone to consider for a moment the conditions in which individual political prisoners are today being held in China, Tibet, Inner Mongolia and Turkestan. We forget about them, we listen to dissidents when they are released from prison and we applaud them, but we forget that tens of thousands of other political prisoners are being subjected to violence and torture and very often killed, even as we debate this report here today.
This is the policy of constructive dialogue with the People's Republic of China that the European Union is endorsing and it is a disaster. We have seen examples of such a policy with the Russian loans at the beginning of the century, and even if the situation is not entirely comparable I believe that, as far as our businesses are concerned, we should perhaps be slightly concerned at the risk to the high levels of capital invested by firms from the Member States of the European Union, which are in danger of waking up tomorrow to find themselves in a situation of unprecedented confusion in the face of enormous losses.
Next door to China is the world's largest democracy: India. The European Union acts as if it has forgotten that this country and this great democracy exists and that at least there we can count on the ruling democratic classes there. But no, we dig our heels in, we head straight for China and we forget these other examples. My socialist colleague mentioned the Asian tigers but he forgets that South Korea, following the recent economic growth crisis, has further developed its democratic institutions. He forgets that democracy in Taiwan, which is a Chinese country, is working better and better. He forgets the positive examples but he also forgets about North Korea, a vassal of the People's Republic of China. In a few years' time, when the North Korean regime has fallen from power because, for one reason or another, there is no longer any support from the international community, we will discover that there were millions of deaths in North Korea, and we will act as if we are surprised by this.
These are the sorts of regimes we are encouraging with our constructive dialogue policy. We have not seen any progress in the People's Republic of China. The rapporteur pointed out that international conventions have been signed, yet a few weeks after they were ratified new dissidents were arrested and sent to the notorious 'laogai', the Chinese concentration camps. We saw young Chinese people being arrested for surfing the Internet. This is the China we wish to support and for which we are providing de facto support with this constructive dialogue policy.
I am pleased that Sir Leon Brittan is here with us, as Parliament's policy used to be rather different, as shown in its urgent resolutions. No fewer than twenty resolutions have been tabled over the past five years, calling, in particular, for the release of dissidents. None of them was released as a result of pressure from Europe. Two or three were released due to pressure from America, namely Wong Dan and Wei Jingsheng, but we achieved nothing. Mr Hada, the democratic leader of Inner Mongolia, is still in prison, as are the dissidents from Eastern Turkestan, and as are tens of thousands of political prisoners. We do not have a High Representative of the European Union for Tibet, as Parliament has requested. We have achieved nothing here either for human rights or for political freedoms.

Titley
Mr President, I would make it clear from the beginning that the Socialist Group is in favour of the Commission's communication about building a comprehensive partnership with China. We emphasise the word partnership which is about dialogue between two parties not one party constantly lecturing another. As Mr Bernard-Reymond is aware, my initial concern at his first draft report was that we were spending most of our time lecturing China. I would like to thank him and pay tribute to him for the way he has been prepared to take on amendments and adapt his report. I feel it is now a far better balanced report.
China is, of course, important, not just to the EU but to the world, as we saw when everybody was trembling at the prospect of a devaluation of the currency. That does not, of course, justify us ignoring our own traditional positions. We have our own standards and our own beliefs in relation to democracy and human rights and we are quite entitled to express those and expect our partners to respect the same principles. However, we have to recognise that changing a system is not easy and that China in many ways is actually a developing country, not a developed country.
Therefore, we should be looking to encourage progress and reform. Mr Dupuis is right. The political and economic reforms go together. They are not isolated from each other. Sudden dramatic about-turns, such as those we had with the Cultural Revolution in China, do no good to anybody. They disrupt and increase poverty. We should be prepared to recognise when China is moving in the right direction, for example, the transition to Chinese rule in Hong Kong has gone far better than most people ever expected and we should recognise that. We should be trying to encourage China to take its place in the world system, particularly its membership of the WTO. That will allow us then to get to grips with issues like counterfeiting and lack of respect for intellectual property, which are major concerns for us at the moment.
We should, of course, be constantly driving home the message of human rights but we have to recognise that access was given to Mary Robinson and that China has moved towards taking on board the UN conventions. We need to ensure these are ratified and we are quite right to condemn the recent crackdown which goes against the trend we have seen in the last 12 months.
We have to be aware when criticising China that we ought to be looking at ourselves. We must speak as the European Union with one voice in our relations to China. It is no good one or two Member States deciding to go it alone for trade reasons. The European Union has to have a common policy in relation to China.
My final observation is in relation to Taiwan. I am glad we were able to change the report's comments on relations with Taiwan because, while we should not interfere in the relationships between Taiwan and China, our position should be very simple. Any solution to Taiwan should respect international law and the right of self-determination. Beyond that, of course, it is a matter for the Chinese to resolve.

Jarzembowski
Mr President, the Christian Democrats support the line taken by the Commission and the rapporteur, whom we thank for his good report. We believe that only through constructive dialogue can we make progress. In reply to Mr Dupuis I would say that I share many of his views, but none of our urgent resolutions did any good. We must begin a constructive dialogue and strengthen it, and I hope the other side, the People's Republic of China, understands that we are willing to meet it halfway if it does the same for us.
Both sides bear a great responsibility. Firstly, the European Union would like and hopes to see the People's Republic of China take the necessary domestic steps to enable it to become a member of the World Trade Organisation as soon as possible. We are also quite prepared, if it so wishes, to support the People's Republic of China in achieving its own objectives, to support it in transforming its economic system from a bureaucratic planned economy into a socialist market economy. Above all, we believe that in the interests of trade and investment the approach taken by the People's Republic of China must lead to reforms of the legal and taxation system, otherwise world trade cannot continue to flourish.
Signing the UN conventions does not suffice for the development of human rights and democracy and we should tell our friends quite clearly that as we see it the principles of democracy and human rights also require the recognition of, in particular, political parties of a different tendency, the recognition of the cultural autonomy of regions such as Tibet, the civil rights of the individual and the release of persons imprisoned because of the exercise of their civil rights. This message should in fact have got through today too.
Allow me to make one more comment on the subject of peace and stability in Asia. Recognition of the existence of the State of Taiwan and of the rights of its citizens to self-determination is a fundamental condition for stability there. The talks between the representatives of the People's Republic of China and of Taiwan are promising signs that both sides are moving towards a peaceful solution.

Cars
Mr President, the Swedish writer Per Ahlmark has collaborated with a number of famous peace researchers in different parts of the world to show, quite convincingly, that democracies never go to war with each other and that disasters causing hunger over a wide area do not occur in countries which have a free press and market economies. In the twentieth century, the victims of dictatorships can be reckoned in their millions. The dictators have driven these people out in time of war, they have executed them, degraded them in concentration and labour camps, or starved them to death. Among the most notorious mass-murderers of our time are Hitler, Stalin and Mao, but others have existed - and still exist - who are their equal in many respects, among them Pol Pot, Verwoerd, Saddam Hussein and Kim II Sung, to mention but a few.
Since Mao's time, China has made considerable progress. In Europe, we welcome this and share in the happiness of hundreds of millions of Chinese people who are enjoying better lives as a result. But the people of China still have enormous problems to contend with. China is still far from being a democracy; there is little room for freedom of speech or to form trade unions. Those who have called for democracy and human rights in China have been given long prison sentences. Executions are common, the Tibetans are oppressed and Taiwan is subject to blatant threats from Beijing. So long as this situation continues, it is the duty of the European Union and of this Parliament in particular to call for change and to use all the means at our disposal to bring it about. It is in our interests, but to an even greater extent it would be in the interest of China and its people too.

Ephremidis
Mr President, the communication by the European Commission, and by extension, I think, the debate as it is taking place, seem somewhat ignorant of history. They have no basis in reality.
You are not prepared to take any account of the fact that China, that great country, that great nation, emerged only 50 years ago from foreign wars, from a status of prolonged colonialism, from civil wars, and within 50 years it is striving to create its own model, one which matches its history, its culture, which goes back 5 000 years before our debate today. That is why the Commission's statement is of questionable credibility, it is presumptuous, self-interested in its objectives, it aims to explore how, through what loophole and by what artifices European multinationals can take part in the sharing of the enormous cake represented by the Chinese market.
So what is the statement doing? I have no time, so I will try to mention only a few points.
At one point, the statement mentions continuing reforms which we will assist. If that were sincerely aimed at China's development, at the prosperity of its people, we should all be in agreement. No such thing! The real aim is to establish reforms which will draw China in and subject it to your own model and to the standards dictated by your multinationals.
Elsewhere, the statement speaks of assisting the reforms in order to forestall crises in China such as those in other Asian countries. But, ladies and gentlemen, those countries - the three you referred to earlier - had long been immersed up to the neck in your own models and liberal measures. And yet the crisis still occurred. Is that where you want China to go as well? Has there not been a crisis in your own countries too, despite unrestrained liberalism? Where are you looking for the causes of the crisis and seeking reforms according to your own models, supposedly out of concern, in case China suffers a crisis?
And another thing which means an attempt to intervene in China's internal affairs: yes, let us have bilateral trade, but where this concerns Chinese enterprises which, inside China, do not conform absolutely with the rules of the free market, then we must adopt special dumping measures against them. That is blatant and inadmissible intervention.
And finally, the rule of law, democracy and so on, so that we can have 'partnership' and close relations with China. That, of course, would be a very good thing for the Chinese people, for the European Union and from an international perspective. But why are you closing your eyes? The rather small country of Latvia, with which you have very close relations and which you are striving to bring into the Community, has 700 000 inhabitants out of 2.5 million who do not have the right to call themselves citizens, who have no rights at all. Why? Because they suffer the sole disadvantage of being Russian-speaking. Why do you want such relations with them? Why can you not see that? This, then, is hypocrisy, self-interest and presumption. One of the speakers even said that you aspire to teach them.

van Bladel
Mr President, China has opened the door a crack, but at the same time there is great pressure from within the country to ensure that the door does not open too far. China wants a share in the economic leap forward in the global economy, but is not yet prepared to accept the consequences of that as far as shifting its political position is concerned.
Democracy and respect for human rights are managed from a position of fear. The rapporteur actually uses the word 'authoritarian'. In practical terms, for example, we see the founder of the Democratic Party of China receiving an eleven-year prison sentence. It is all a little game they play. On the eve of the American visit and the talks of the International Olympic Committee, the dissidents are released. A few weeks later, a large number of other dissidents are imprisoned again.
They are playing games with the rest of the world - games which do not sit well with the comprehensive partnership envisaged by the Commission. They are not compatible with that. I think they are frankly unacceptable.
It is true that all the European Member States are queuing up to do business with China. But I totally agree with Mr Dupuis. These investments can only be successful if China becomes an open and democratic society. Our partnership can be helpful here. The rapporteur suggests a constructive dialogue, but that has to lead to meaningful economic and political measures. Otherwise, I can see Parliament pursuing a constant debate on constructive dialogue which achieves nothing, as we saw before in our critical dialogue with Iran. Constructive dialogue has to result in progress. The rapporteur's suggestion that a human rights clause should be included in the trade and cooperation agreement with China which is now coming up for renewal is a step in the right direction. My congratulations to the rapporteur.

Gahrton
Mr President, democracy in China has suffered a severe setback in recent months. That is why I, as chairman of the delegation for relations with China, together with other members of the delegation and numerous colleagues, have tabled a separate amendment in which we not only express our concern, but also call for concrete information from the Chinese authorities regarding the large number of people who have been arrested recently. It is vital that we continue to exert pressure on the Chinese Government and do not allow them to believe that we only see the positive developments. Of course we cannot do that.
Why are the Chinese people behaving in this way? The situation in China is certainly very serious. I should like to quote the French professor, Jean-Louis Rocker, writing in the report of the annual conference organised by the European Union - China Academic Network, which took place last week in Madrid: 'In recent years numerous demonstrations, petitions, sit-ins and violent actions have taken place in most big cities in order to protest against the degradation of living conditions'. There is a feeling of social unease in China which the authorities harshly suppress. There is good reason for the European Union to reconsider its policy towards China.

Swoboda
Mr President, the rapporteur Mr Bernard-Reymond deserves congratulations. He has drafted a very good report. We have had a number of discussions and draft amendments and I believe that has resulted in a very balanced report. As Members we are in an extremely difficult situation in regard to China. I could quote Mr Gorbachev, who said 'life punishes latecomers', but perhaps China would find that rather difficult to accept given the man who said it and against the background of the fact that the Soviet Union disintegrated in a manner that was not exactly positive and that it would be a disaster for China and the world were history to repeat itself in this regard. That is precisely why we must remain in continuous dialogue with the Chinese and with the representatives of China and convince them that it is important for them, for China, to carry out the appropriate reforms and that this is not being forced upon them from the outside but forms part and parcel of the democracy movement in China.
Here we must consider three important issues, the political, the economic and the human rights issue. Let us not be naive enough to believe we could eliminate any of these. Let us not be naive enough to believe we could fight for human rights unless we continue the political dialogue at the same time and also support and promote the economic development of China. China is an important partner and it is precisely those who keep saying that we need the United Nations and the Security Council for security policy measures and decisions in the world who must conduct this political dialogue with China, even in China's present, unhappy political form.
In regard to the economic question, of course I know that a number of undertakings have purely economic or trade interests. But our common objective is the progress of economic development in China. It cannot be in our interest to see China collapse; on the contrary we want China to develop economically. Our policy and that of the European Union must be that at the same time - not as an alternative or substitute for that objective - we remain unyielding on the human rights issue and endeavour to persuade China to make progress with political democracy, in its own interests and in the interests of human rights. For however many mistakes Mr Gorbachev made, those words are crucial. They apply for China too and in the case of China they could have far-reaching, disastrous results and consequences for the whole world: life punishes latecomers!
China will be the first to be punished if it does not try in good time to make parallel progress in the economic, political and human rights fields. That is why I so much endorse what the report is now endeavouring to do: it is trying to approach China through dialogue, rather than prescribing from above in a kind of imperialist manner how China should conduct itself; instead China is being invited to join with us in making the world a better, fairer and economically more successful place.

Cushnahan
Mr President, Mr Bernard-Reymond's report constitutes a valuable contribution to the on-going and evolving debate about the nature of the relationship between China and the European Union. It is important that we engage in a positive and constructive relationship with China. However, it must be an open and honest relationship. The European Union has consistently supported the principles of democracy and the protection of human rights.
While we want to be positive about many of the changes that are taking place in China, we cannot, and indeed must not, turn a blind eye to the continuing abuse of human rights, in particular the scandalous treatment of political dissidents and members of religious faiths. Failure on our part to speak out simply because many of the leading Member States of the European Union have profitable trading relationships with China would be an abdication of our responsibility and would undermine the moral authority of the Union to speak on other situations elsewhere in the world where human rights are being blatantly breached. Furthermore, it would be a betrayal of the philosophy of the founding members of this Union.
As far as Hong Kong is concerned, I welcome the fact that the handover has taken place without many of our worst fears having been realised. However, we must continue to keep a watching brief on Hong Kong and I welcome the publication of the Commission's recent report in that regard to which I hope we will be able to respond. There have been a number of instances where the independence of the rule of law and the observance of human rights have been called into question. These fears must be addressed as must also the wish to see the introduction of an accelerated timetable for the introduction of universal suffrage.
With these few comments, I commend the rapporteur's efforts and I very much welcome the report he has produced.

Brinkhorst
Madam President, Mr Bernard-Reymond's report indicates that there is no reasonable alternative to a balanced and comprehensive approach. That is the view of a large majority of this Parliament. I also welcome the fact that we do not now have a series of endless urgencies on incidental items but that we have a comprehensive approach. This Parliament needs to take a mature approach and this is what Mr Bernard-Reymond has done. As Mr Gahrton has indicated, the Delegation for China tabled Amendment No 11 which points out that it is very important that certain of the negative developments at the present time should be tackled. I would like to hear how Sir Leon Brittan sees this turnaround on democracy and human rights. It is an important and a negative development.
As other speakers have said, there are also positive developments. We should at the present time see that in economic terms China is in the midst of a hurricane. If that hurricane swamps it we will also feel the effects. There has been economic and political courage on the part of the Chinese which is worth noting. On Hong Kong, as others have said, things are better than we expected. That is why I should like to emphasise that between the extremism of Mr Ephremidis and - my apologies, Mr Dupuis - the non-alternative of the ARE, which has tabled 26 amendments but really has no alternative policies, Mr Bernard-Reymond's policy is the right one.
We want to apply pressure to China on human rights, not only for moral self-satisfaction but because it is in the best interests of China itself. That society can only develop if it takes into account pluriformity, human rights and political opposition. That is the road ahead as the example of Russia has indicated. The size of China is such that there are not many models that can be applied to that country. For that reason we hope that Mr Bernard-Reymond's approach will be shared by a large majority of this Parliament.

Caccavale
Madam President, ladies and gentlemen, it seems to me that, yet again in dealing with China, Europe has demonstrated that it is weak with the strong and strong with the weak. It is easy to get angry with Sierra Leone or Guinea- Bissau, but much more difficult to tell the truth about what is happening in China today. Every kind of opposition is fiercely repressed, all freedom of expression and opinion is denied, the only representatives of a possible opposition to the communist regime, which tortures and butchers those who oppose it, are convicted after farcical trials. And we continue to have this accommodating attitude. We see it in this report too. Despite Mr Bernard-Reymond's excellent intentions, it seems that, here again, Europe is demonstrating that it is completely subservient to the de facto logic of trade.
What has happened in the last few weeks cannot be passed over in silence. I strongly believe that if Europe is worth anything, if it still has a purpose, it must speak out in defence of human rights, especially when dealing with the strongest countries which obviously set an example, as is currently the case with China on the Asian front, and not only there. In the light of all this, how can we still consider granting aid and subsidies and maintaining relations with people who torture and butcher their political opponents? In the light of all this, I ask you all whether there should not be a radical change in the attitude of the European Parliament and the Commission towards this bloody and oppressive regime.

Barros Moura
Madam President, ladies and gentlemen, I too approve of the five-point strategy proposed by the Commission which has already received the Council's support. This strategy is aimed at helping China to become an increasingly prominent player on the international stage. In this respect, bearing in mind its own interests and the need to define an independent policy from that of the United States of America, I believe that the European Union should support China's accession to the World Trade Organisation given the obligations inherent in this.
I am pleased to see that progress has been made in the area of human rights. However, I feel that the realpolitik of the economic and commercial interests of the European Union, or rather of certain Member States, should not make us think that China is already applying the rule of law because it is not! But we should support the progress being made in this direction. However, I believe that we should give our Chinese partners a stern warning with regard to the recent worsening of certain problems involving human rights, the persecution of political opponents and ethnic and national minorities and, in particular, the situation of workers laid off without any union rights, trade-union freedoms or respect for the right to strike.
Turning now to the specific matter of Macao, in my opinion the rapporteur has handled this well because he has understood the specific situation of this territory arising from its history and its particular characteristics. Macao can act as a gateway for China to the West and to the European Union and as a bridge between Europe, in all its diversity, and China.
In this respect, I believe that the European Union should monitor the transfer of Macao to Chinese rule at the end of this year as closely as it did with Hong Kong, in order to support the application of the 'one country, two systems' principle. There are many problems still to be resolved relating to human rights and fundamental freedoms, nationality, the guarantee that China will respect the ban in force on the death penalty, religious freedom, freedom of association, the regulation of the two official languages of the territory - Chinese and Portuguese - and the need to establish an independent judiciary as quickly as possible, specifically with a local court of last instance.
I believe that the European Union can help the civil society in Macao to develop. I would ask the Commission to prepare a communication, as happened with Hong Kong, on future relations between the European Union and Macao and, at the same time, to produce regular reports on the situation. In order to ensure that everything works correctly, a Commission delegation is needed for Macao. I must point out that the current delegation to Hong Kong has not been able to assume its responsibilities of also representing the European Union in Macao. I would ask the Commissioner to explain the unacceptable attitude demonstrated by the European Union delegate to Hong Kong, who seems to be ignoring the fact that he is also responsible for representing the EU in Macao.

Porto
Madam President, the building of a comprehensive partnership with China is to be welcomed in all respects as this is in our interest, it is in the interest of China and it is also undoubtedly in the interest of world peace and prosperity. This has been duly emphasised in the Commission communication and in Mr Bernard-Raymond's report, both of which should therefore be congratulated.
It is clear that this therefore lends particular importance to paragraph A-5 of the communication and to paragraph 41 of the motion for a resolution, which expresses the hope that the transfer of Macao to Chinese rule will be done correctly. This transfer must happen in a way which benefits the Macao population and also China, which has much to gain from the existence in Macao of a democratic and prosperous society and of another gateway to the rest of the world.
However, the role which Macao can play is also of primary interest to the European Union. This role must be totally independent of Hong Kong's role, as has just been mentioned. The alternative to links with us is surely not links through Hong Kong, which the people of Macao are entitled to reject in view of the fear that this would put them in a subordinate position with a real risk that they would become lost, without their own voice, in the massive territory of China.
Macao has its own identity and lies in an area which is very different from China, giving us twice as many opportunities to become closer. This identity and these opportunities have to date justified the participation of Macao in the World Trade Organisation and the conclusion of a trade and cooperation agreement between the European Union and Macao - unlike with Hong Kong - which must be maintained after the transfer to Chinese rule. This therefore represents a clear opportunity which the European Union would be foolish to waste. An obvious step towards maintaining and increasing our presence would be the immediate introduction of our own representation in Macao. This would not cost much as the Macao authorities would certainly be keen to share the costs with us. I would ask the Commissioner whether he intends to take any steps in this direction?

Brittan
Madam President, I am pleased to have the opportunity to respond to Mr Bernard-Reymond's balanced and well-reasoned report. I am glad to see that for many parts of the House, in particular Mr Swoboda, Mr Brinkhorst and Mr Porto, there is considerable support for its balanced approach. The European Union has a profound interest in helping the emergence of a stable, prosperous and open China that embraces political pluralism, free markets, the rule of law and assists in building a secure international order. To those such as Mr Dupuis' wing who believe that we have not been strong enough on the human rights situation, or Mr Ephremidis who approaches things in a rather different way, I have to say that I do not believe that they have put forward a real alternative.
The essence of our approach is that it is a long-term one. It has to be pursued in good times and in bad, unless there is a fundamental change in the situation. There is no doubt that both economically and politically the situation in China today is less hopeful than it was even a year ago. I do not believe that is a reason for fundamentally changing the approach we have followed or the one that is commended by Mr Bernard-Reymond both in his speech and in his report.
The adoption of the report is timely. Under Prime Minister Zhu Rongji China has launched a series of key economic reforms. Against the backdrop of the Asian crisis, however, these reforms are likely to come under pressure this coming year as economic growth slows. Recent events in China have also given rise to serious concerns related to respect for human rights. In these circumstances it is important - indeed essential - for us to convey the right signals to China. Our communication set out a number of fundamental objectives.
Firstly, we want to engage China further through an upgraded political dialogue into the international community. Over the past decade China has taken welcome steps on arms control, non-proliferation regimes, on preserving the global environment, combatting international crime and drug trafficking. We should build upon China's desire to be recognised as a global responsible actor on the world stage and develop dialogue on global issues of common concern. The history of the past shows that can yield practical results and is not just an idle dream.
Secondly, we need to integrate China further in the world economy by bringing it more fully into the world trading system and by supporting the process of economic and social reform that is under way. China is the fastest growing market for European goods and services. It is clearly in our interest to bring it more fully into the global economy. Access to that market is too restrictive. We do not want to retaliate though by creating a self-defeating cycle of protectionism. On the contrary, the openness of the European market will constitute our best contribution to helping China face the current crisis in Asia but we remain committed to opening markets further, including China's. To the proposition that China should join the WTO, the answer is Yes, but on commercially meaningful terms, agreeing to the opening up of its economy. That is appropriate for a country of its size and state of economic development.
I make no apologies for referring to the question of size. It is the case that in a country the size of China - and it is not going to disappear and it is not going to change because we say nastier things or pass nastier resolutions - it is only by engaging honestly, economically and politically, being frank and candid, that we stand a chance of bringing about change in that country. The European Union is dedicated to supporting China's transition to an open society based upon the rule of law and full respect for human rights. Of course we are not satisfied with the current situation in China. We have chosen a pragmatic and results-oriented approach on this issue in which we challenge the Chinese authorities on issues and events of concern to us such as the recent spate of dissident trials and arrests. We are not silent on those issues but, at the same time, we expand our areas of cooperation. Both poles of the policy are necessary.
The dialogue on human rights has been useful but we have made it very clear to the Chinese authorities that we now need to achieve specific and tangible progress to maintain the credibility of this dialogue. Recent developments in China that have been referred to have underlined that need. We have asked for the release of dissidents imprisoned after the recent crackdown and that issue will remain on our agenda until these dissidents are released.
Most importantly, we have made clear to the Chinese authorities that we will identify benchmarks by which progress in the dialogue will be judged. This innovation will ensure that the necessary pressure and momentum in the dialogue is maintained. The question arises: What kind of benchmarks? The kind we will be looking at include the following demands: Firstly, we need more detailed information on political prisoners, their number, the charges on which they have been sentenced, their health conditions, as well as access to some prisoners for European and NGO representatives.
Secondly, we want to see specific steps taken to improve prison conditions and reform the penal system, including conditions of appeal and access to judicial review in line with international standards. The latter point is particularly relevant with regard to the death penalty and the situation of dissidents convicted for so-called counter-revolutionary crimes.
Thirdly, we want to see benchmarks for progress towards the ratification of the United Nations Human Rights Covenants which includes the follow-up to Mary Robinson's visit and closer cooperation with the European Union within the human rights dialogue.
Fourthly, another category of benchmarks relates to ethnic minorities especially those in Tibet. It covers a wide range of issues such as the transparency of demographic information, the free use of the Tibetan language as well as open and clear information on alleged incidents involving ethnic minority groups and dissidents.
Despite these recent differences on human rights, I hope you will agree that European policy towards China, as exemplified by the Commission communication and Mr Bernard-Reymond's report, has progressed significantly in a positive direction in recent years. I am heartened to see that our communication and your report are broadly in agreement with each other. That applies to Hong Kong as well. I am sorry that I am not able to promise an early opening of a delegation in Macao. We are having great difficulty in getting the resources and support we need for the delegations we want to open. We will certainly examine the specific suggestions made in the report and incorporate them as fully as possible into the substance of our relations with China.
The challenge of developing a comprehensive and robust relationship between China and the European Union is one of the great geo-strategic challenges for the next century. It is my belief that we have laid solid foundations to allow the European Union of the future to meet such a crucial challenge and that we should be steady in our approach, firm in what we have to say but balanced in our policy.

President
Thank you, Sir Leon.
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Regional policy and competition policy
President
The next item is the joint debate on the following reports:
A4-0412/98 by Mr Azzolini, on behalf of the Committee on Regional Policy, on the communication from the Commission to the Member States on regional policy and competition policy (COM(98)0673 - C4-0247/98); -A4-0421/98 by Mrs Riis-Jørgensen, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the XXVIIth report by the Commission on Competition Policy - 1997 (SEC(98)0636 - C4-0379/98).
Azzolini
Madam President, Commissioner, I am delighted that 'my' Commissioner, Mrs Wulf-Mathies, is in the Chamber, especially as I am sure she will understand and listen very carefully to what I have to say.
I do have to thank my Committee - the Committee on Regional Policy - for entrusting me with this report on regional policy and competition policy just two years on from 1997. My 1997 report was entitled 'Cohesion policy and culture, a contribution to employment'. These are two very important subjects which definitely add value to other European issues that knowledgable colleagues have discussed in detail here in the Chamber.
Commissioner Wulf-Mathies is naturally very well aware of how difficult some Member States find it to transpose directives, legislation and regulations, and it is hardly news to most people involved in the work that, altogether, only five of the fifteen Member States of the Union have had a systematic approach to Community legislation for any length of time. This means that, at bottom, there is no culture of methodology. As Commissioner Wulf-Mathies has frequently told us in committee, communication is needed, a great deal of communication. But I would say that simplification is also needed because some Member States, obviously out of lack of understanding, are continuing to swim against the tide, and perhaps do not have the determination to act.
Being an Italian rapporteur, I do not want to confine this criticism to my own country, but it is regrettable that some Member States which could be taking advantage of the benefits of belonging to the Union are, in actual fact, often using no more than about 52 % - when everything is going well, and in my opinion things are not going well - which shows that there is still a gap between the 'Union' as a body and the 'Member States' as a periphery. So I do ask everyone to think about this as a real issue. It should not be marginal if it is true - and it is true - that the top priority of the Union is its economic and social - I stress that word - cohesion policy.
That being so, I must also concur that the rules of competition should represent a guarantee of the correct and transparent operation of the internal market and that exceptions to free competition, claimed by some Member States, are in fact only justified by the need to maintain and strengthen that economic and social cohesion.
I agree with the Commission's statement on the multisectoral framework for regional aid for large investment projects, proposing to limit this type of aid to those projects requiring major inputs of capital which, without seriously distorting competition, have an undeniable impact at regional level, as a genuine source of direct and indirect employment.
What I would urge, however, is that it should be possible in future - in the near future, Commissioner, not the distant future - to extend this procedure, currently at the experimental stage, to all sensitive sectors still governed by specific rules on control over state aid. I am thinking of sectors like shipbuilding, the motor industry, iron and steel and textiles, all areas in serious crisis and needing to achieve social and economic cohesion even earlier than the rest. But I have to say that certain provisions, like those on the maximum intensity of aid to Objective 1 and 2 regions, seem too strict. Equally, the rules on competition must be applied in way which takes account of the need to strengthen cohesion, precisely to prevent the proliferation of certain substitute fiscal measures which are bound to damage the internal market but which, because of the lack of methodology I mentioned earlier, many Member States end up adopting.
I have received 25 amendments to this report and I am grateful to the Members who tabled them. I am definitely in favour of some of them, but not of others, because I want to signal very clearly to the Commission that I entirely agree that the content of this communication must not be distorted by 'interference' of a different kind, which has been discussed elsewhere.
I want to assure those colleagues that no discourtesy towards them is intended. I am simply determined to keep to what is strictly necessary for a report assessing a communication from the Commission and calling with equal seriousness and rigour for the Commission to adopt our proposals. After the period of great tension between the Commission and Parliament at the last part-session in Strasbourg, we are now asking that same Commission to pay greater attention to social cohesion, after having clearly made a good start with economic cohesion. So I hope the Commission will not only continue its work with determination but will also take proper account of Parliament's recommendations.

Riis-Jørgensen
Madam President, I am privileged to have been appointed rapporteur for the report on competition policy for the second time during my career in Parliament. I should like to begin by praising the Commission for the excellent work it has done in the area of competition policy. I have very much enjoyed working together with the Commissioner, and I think there has been superb cooperation between the Commissioner and the Committee on Economic and Monetary Affairs. In my speech, I would like to concentrate on the five proposals for improvements I have identified in my report, and I look forward to hearing the Commissioner's comments on them.
The first concerns the democratic control of competition policy. In my first report, we proposed a specific procedure whereby the Commissioner comes to the Committee on Economic and Monetary Affairs every quarter to give an account of policy in the competition sector. We have been very pleased with that and it has worked very satisfactorily. The committee now wishes to create a permanent and more standardised procedure. This procedure makes the same demands, but represents a more formal arrangement between the committee, Parliament and the Commissioner.
The second point concerns small and medium-sized enterprises, which are very important when we are discussing competition policy. The committee regards it as important to ensure that SMEs are able to evaluate their legal position and can find out for themselves which side of the competition rules they are on - or in other words, whether or not they are in breach of the rules on competition. I am myself a lawyer by profession, but I have no objection to SMEs being able to avoid paying too much money to lawyers to help them find out whether they are in breach of EU rules. I am therefore calling on the Commission to put forward proposals or guidelines on how to use the so-called de minimis notice. This is discussed in paragraph 10.
The third point also concerns SMEs and is dealt with in paragraph 15 of my report. Again, it is a question of how SMEs can ensure that they comply with the EU's rules. Here too, I should like the Commission to publish guidelines and criteria on what the relevant market is and how it is defined. Those are the two points concerning SMEs.
Then there is the question of state aid. I know the Commissioner agrees with the committee that there is far too much state aid in Europe, but what can we do about it? We should always remember that it is the Member States who distribute the money. So it is not the EU which distributes the money, but the Member States who are the villains of the piece. I think it is important for Parliament to ally itself with the Commission in the campaign against state aid. The committee's proposal is that we should make things more transparent, so that third parties are able to see the extent of state aid. I propose that we set up a register in which the level of state aid is published and that this register should be put on the Commission's website, so that everyone can easily go and find out the level and purpose of the aid, including state aid given under block exemptions, so that all state aid, regardless of whether it is referred to the Commission or simply takes place in the Member States, is publicly accessible. It is important for individual companies, both small and large, to be able to find out whether they are being exposed to unfair competition. Internet access will help, because in that way the company concerned will be able to check the level of state aid for itself. It will also have, or so I hope, the opportunity to complain to the Commission in a simple way via the Internet.
I have one more proposal concerning state aid. This has been inspired by the Commissioner responsible for the single market, Mr Monti, who has set up a 'scoreboard' showing the good guys and the bad guys of the single market. We could do the same thing, in other words set up a list of the good boys and the bad boys - or girls - in terms of state aid.
Those are my proposals for improving competition and some instruments for increasing transparency and improving legal certainty for SMEs. I hope very much that the Commissioner will enter into a dialogue with us on the subject of these proposals. Once again, I would like to express my thanks to Mr Van Miert for the sincerity and enthusiasm with which he takes care of Europe's interests in these matters. And in passing, I should also like to thank him for his excellent work in bringing to an end the tubing cartel in Denmark and Europe and thus creating price freedom and low prices for consumers, because ultimately that is the most important target group for competition policy. The important thing is that consumers get lower prices and more quality for their money.

Sierra González
Madam President, as draftsman of the opinion on the XXVIIth Commission report on competition policy, I should start by saying that Community competition policy is gradually becoming more transparent. From a legal point of view it is also becoming more efficient and its administration has improved. This is most certainly due to greater decentralisation of the implementation of certain regulations on competition to the relevant national authorities, and to the reduction in unnecessary notifications. If we continue along these lines efficiency and transparency should improve still further. Decentralisation has, however, come up against a serious obstacle: some Member States lack the legislation needed to implement Community legislation. In other cases, national case-law does not allow Community legislation to be directly implemented.
In addition to these legal difficulties, other problems have arisen concerning state aid. Legal protection can be reduced, depending on whether national law or Community law is applied. Thus, Articles 85 and 86 of the Treaty allow enterprises and individuals to enjoy greater legal protection and therefore greater rights of appeal under national legislation than they would under Articles 92 and 94 of the Treaty. No ruling has been given on which law should take precedence in such cases. The issue has not been resolved, and disputes continue.
Finally, I would like to point out that the procedure adopted for the supervision of state aid for regional development purposes ought to be subject to the demands of economic and social cohesion. Further, the method of determining resources must take account of the legal concept of ultraperipherality.

McCarthy
Mr President, the Azzolini report on the communication from the Commission to Member States on regional policy and competition policy comes at a very pertinent time, only months before Member States are expected to deliver their list of state aid areas to DG IV and at a time when big decisions are to be taken by Member States on the future maps of structural funds for both Objective 1 and Objective 2. Let us hope that this will be at the Berlin summit in March.
In this debate I will restrict my comments to the issue of coherence and the linkage between regional policy and competition policy. We know that concentration is the name of the game now in both the Community competition policy and indeed in structural fund assistance. Of course, in the Commission communication consistency is a stated objective. We support those principles, we support coherence and consistency. We perhaps differ on the point of how we deliver that coherence and how we actually ensure some flexibility around the issues. I must say that it is somewhat disappointing that some of the amendments to this report are seeking to look for exemptions for areas under Article 92(3)(a) in my view seeking to secure Objective 1 status by the back door. My group will not be voting for those particular amendments. Parliament is asked to take into account the need for this consistency and we are in favour of ensuring better coherence. This is evident under Article 92(3)(a), Objective 1 areas, and the principle is very strongly adhered to in this area. Nonetheless, there is a need for the Commission to acknowledge in its proposals, as is the case in the communication, and I quote 'that Member States must have a margin of manoeuvre to pursue regional policy goals specific to their situations in addition to areas designated jointly for purposes of Community and regional policy. The Commission is aware that Member States deploy diverse goals and objectives for national and regional aid policy. We need to respect this diversity and we need to find a balance between diversity and achieving coherence.'
Therefore, the context of concentration and consistency, referring to Article 92(3)(c) areas, is somewhat restrictive and let me say why that is so. The timetable in which Member States will produce their maps to DG IV predetermines potentially Objective 2 areas on the future structural fund map. I will give you a very good example of that: in the 1994 to 1999 reforms the then Conservative government submitted a map to DG IV in the hope that those areas would then automatically be Objective 2 areas. I am glad to say, the Labour commissioner, Bruce Millan, spotted this and was very clear about the fact that these areas could not possibly qualify for European Objective 2 under economic social cohesion need areas. This is why we need to have that flexibility and we do not believe they should be, in fact, in the same map, even with the measure of flexibility that the Commission has proposed. In some ways this Commission communication has been overtaken by events and I am delighted to see that in the General Affairs Council this week there has been a victory for common sense.
I believe it is important that we have had this debate. I believe Member States must address themselves to the fact that there must be better coherence but we need the flexibility to ensure that we are getting the right areas for state aid and Objective 2. In that sense, the time of change, the time for concentration has come but the Commission must not complicate or impose additional constraints forcing integration of these areas through prescriptive mechanisms. It is wise for the Commission to have chosen the route of allowing some margin of manoeuvre and thereby trying to encourage Member States in their efforts to make these maps more consistent.

Hatzidakis
Madam President, as a member of the Committee on Regional Policy I will speak on the report by Mr Azzolini, whom I would sincerely like to congratulate on his work, which was exceptionally difficult because there were conflicting interests and - I think I need not explain - the issue of 'national aid' speaks for itself.
I also wish to congratulate the Commission on its generally courageous attitude towards this issue. The aid provided by Member States to their various regions can indeed constitute a distortion of competition and consequently impede the normal and effective operation of the internal market. That is why the basic principle must be that when national aid is permitted, over and above the areas covered by the activities of the Structural Funds, such cases should be exceptional and should only be permitted in special cases when justified by the need to achieve economic and social cohesion. In that sense, there is indeed a need for closer links and correspondence between the competition policy and the European Union's regional policy.
Consequently, I agree with the Commission's intention to reduce the eligible areas, so far as Community aid is concerned, from the present 51 % down to 35 % - 40 % of the population, a reduction completely in line with the corresponding reduction of eligible population which will be entitled to structural aid in the future.
I also agree that the criteria for state aid should correspond to those for Community aid. However, I must express my concern and opposition to the restriction of the extent of the permitted national aid for Objective 1 areas to only 50 % of the cofinancing for those areas which are below 60 % of the Community average in terms of GNP, and to 40 % for areas above 60 % of the Community average.
We also ought not to forget that even if 66 % of national aid in total goes to the less developed areas, the considerable economic resources of some wealthy Member States enable them to subsidise areas which, even though they may be less well developed at the national level, are not among the most disadvantaged in the European Union. That, of course, goes against both the principles of competition and the need to achieve economic and social cohesion, because it means that already wealthy regions grow still wealthier, so widening the gap compared to the European Union's less developed areas.

Vallvé
Madam President, Commissioner, I should first like to congratulate Mr Azzolini on his report, particularly as it deals with such a complex and complicated issue. In the context of competition policy a ban on state aid should guarantee the operation of the free market, and it is therefore necessary to regulate state aid and also regional aid in those Member States whose regions are empowered to grant it. When identifying areas where such aid can be authorised - as provided for in Article 92(3)(a) and (c) of the Treaty - care must be taken to ensure compatibility with state aid to Objective 1 and Objective 2 regions.
I shall now turn to the Objective 2 regions known as 'areas undergoing restructuring'. State aid should be targeted at such areas: areas in the process of rural restructuring, with a low density of population, with population loss, and with an aging population. State aid to such regions should certainly be authorised.
Other areas undergoing restructuring are experiencing an industrial crisis of some sort, with high and rising levels of unemployment.
In the areas where it is granted, state aid is important in order to supplement and guarantee better economic and social cohesion and also territorial cohesion.
In conclusion, I should like to support what Mrs Riis-Jørgensen said concerning the need for transparency in connection with aid of this nature. I believe such aid should remain available, but the process of awarding it ought to be as transparent as possible. It should also be made clear that in no way will this aid prejudice the freedom of trade and the single market which must prevail within the European Union.

Novo
Madam President, Commissioner, ladies and gentlemen, the basic issue raised by the Commission document involves deciding whether public, state or regional aid should be restricted territorially. As proposed by the Commission, this involves accepting the increasing and almost inevitable overlap between maps of Objective 1 and 2 regions and the map of regions which may be granted public aid. This perspective does not seem quite right as, in our opinion, public aid must be granted whenever the social sustainability of certain sectors is at risk, particularly because of employment reasons, and also for many different reasons where problems of economic and social cohesion are involved, regardless of the location of the territory where these are occurring. It is obvious that control and monitoring systems will be acceptable and necessary in order to prevent abuses and instances of unfair competition. However, these systems must not be confused with or turned into a comprehensive and universal obstacle to the granting of public aid where such abuses and instances of unfair competition are identified.
In our opinion, Mr Azzolini's report, on which I congratulate him, does not tackle this question with sufficient clarity or depth. However, it does deal adequately with the need to make the decision-making on specific regional situations more flexible. If approved, the amendments, which deserve our support, should extend and increase the degree and scope of this flexibility.
The Azzolini report also emphasises the priority given to the most disadvantaged regions, for obvious reasons of economic and social cohesion, the inclusion in the framework of possibilities of public aid for areas which will fall within the 'phasing-out' of the next Community Support Framework and the rejection of the Commission proposal to significantly reduce the state aid to be granted to the regions and sectors which need it and which will become eligible for it.
Finally, on the plus side, we should note the reference made to the need to monitor and control the public aid granted to transnational undertakings in order to prevent them from relocating and to prevent them from taking advantage of public aid without developing long-term economic activities in the region.

Baggioni
Madam President, ladies and gentlemen, regional policy and competition policy work towards objectives that do not seek to achieve the same outcome. Competition policy is based on the principle of banning state aid to businesses, with derogations from Article 92(3)(a) and (c) that are restrictively applied in the free competition environment of the single market. As for regional policy, it is based on the principle of providing aid for regional development by redistributing the Community budget, and it provides financial support for projects involving all the socio-economic actors in a particular region, including businesses, albeit in a minority capacity.
If we want greater coherence we must draw a distinction between the two zoning systems when the diagnosis for certain regions indicates that it would be to their advantage. The Member States must still be free to define their own business development policies, as if these were to be brought exactly into line with regional policy it would remove the specific benefits of the zoning of regional aid and the regional planning problems.
Deciding on the level of coherence should be left to the Member States which, in any case, are responsible for submitting proposals for negotiation with the Commission. The Commission must also realise that there is a risk it could harm many still fragile regions with its proposals for drastically restricting the intensity and duration of aid granted under Article 92(3). This is particularly true, as has just been said, of regions which will undergo a 'phasing out' period.
Finally, as regards the list of regions assisted under Article 92(3), I should like to ask the Commission to reconsider the possibility of including the regions that the Amsterdam Treaty has acknowledged as having permanent handicaps, namely island regions, including those that are not eligible for Objective 1 status.

Schroedter
Madam President, ladies and gentlemen, Commissioners, the Member State governments and you too, ladies and gentlemen, have always emphasised, in relation to Agenda 2000, that the Union's new structural policy must observe the guiding principles of concentration, efficiency and administrative agreement. I would add that transparency must also be a basic guiding principle. Accordingly the Commission has presented a proposal for implementing these principles and establishing broad coherence between the Structural Fund aid and national aid. That is consistent and it is a sensible solution. I hope the Member States also decide to follow that line consistently.
What it so significant is that this is the only way to restrict competition about standards and the abuse of aid. But we will also find that the different authorisation times in the different Member States will make it very easy to circumvent this. So I ask the Commission to tell us how it proposes to organise the authorisation timing so as to prevent this from happening.
Let me also point out that the Commission proposal does not deal with one particular problem, namely subsidy shopping. National undertakings can still go on taking up aid unchecked and thereby damage regions. So in that respect there are a few things missing in the proposal. How are you going to resolve this question?

Raschhofer
Madam President, the Agenda 2000 proposals as also this report seek to strengthen the complementarity between competition and regional policy. The arguments put forward for this are the ever widening divergences between policies and the overlaps in the various aid maps. But those who support this approach are forgetting that the desired equal cover of national and EU aid areas makes it even more difficult for the Member States and regions to support their own problem areas by using their own resources. That reinforces this policy of positive discrimination in favour of the most disadvantaged regions.
In any case the objectives of Agenda 2000, namely greater concentration and coherence, already involve a serious cutback in aid to the relatively successful regions. It would be not just absurd but in fact inconsistent with the very principle of subsidiarity to also deprive them de facto of the instrument of national aid.

García Arias
Madam President, I should like to congratulate the speakers, the Commissioner and his department on their reports. The public tend to perceive competition policy as essentially an economic issue. They think of it as the system of ground rules governing the relationship between businesses in a market economy. That is indeed what it is. Yet they sometimes overlook the implications these arrangements can have for their daily lives as consumers and workers. In particular, they fail to appreciate the impact of these arrangements on their lives as ordinary citizens. For instance, monitoring concentration of ownership and dominant positions will become increasingly important in view of globalisation and the development of new technologies. This is particularly true in the energy and telecommunications sectors, the information society and the audio-visual industry. As far as these are concerned, not only is concentration taking place, but enterprises are becoming increasingly interrelated both amongst themselves and with the financial groups which control decision-making bodies.
This is why public statements such as those made by the Commission Director-General responsible for energy are so alarming and a cause of such concern to all democrats. I should like to take this opportunity of countering the Director-General's remarks. They stem from a reprehensible philosophy of secrecy and confidentiality - in the worst sense of the word - which would confine debate on matters directly affecting consumers and citizens to the European Commission's offices. Such matters ought of course to be debated instead in the marketplace and with as much exhibitionism as possible. I quote from Mr Benavides' derogatory description of the parliamentary debate taking place in my country.
It is far easier for the economic and strategic power groups we sometimes euphemistically term lobbies to penetrate the Commission's offices than it is for the ordinary consumer or for the ordinary citizen to do so. It pains me to say this, as the Director-General responsible for energy is a Spanish official, but it appears that where the so-called 'transitional costs' relating to competition in the Spanish electricity sector are concerned, he has departed utterly and absolutely from the principles of neutrality and objectivity. As the relevant political authority, the Energy Commissioner should immediately relieve him of responsibility for this matter, as this is the second time Mr Benavides has allowed himself to be swayed by external pressure and because considerable misgivings have been expressed in Spain as to his objectivity and impartiality in this regard.
I do not expect the Commissioner responsible for competition policy to comment at the moment. I am confident that a thorough and objective study of the legality of this aid will be undertaken, bearing in mind the needs of consumers and small enterprises. They should, in theory, be the ultimate beneficiaries of the free market and of liberalisation, yet in this instance, they have come out unanimously against this aid - aid which I consider to be illegal. They will be forced to pay for it through their electricity bills, like a modern generation of feudal serfs. Not only will they have to pay for the losses the liberalised companies will allegedly incur over the next ten to fifteen years in a situation of free competition, but this will be covered by a legal argument alleging that the electricity companies have an acquired right to be indemnified or compensated.
I believe this would mean setting a serious legal precedent in the liberalised sectors, which has in fact already been invoked by Telefónica, the company which until recently held the monopoly over the telephone service in Spain.
Madam President, it is consumers and citizens who are the touchstone where liberalisation is concerned. If the European Union cannot guarantee that they will not be crucified by the processes of liberalisation, the European institutions, including our own, will become ever more distant from the citizens.

Rack
Madam President, I want to confine my comments to two aspects. First, let me unreservedly agree with what is stated so clearly for the first time in paragraphs 17 to 20 of Mr Azzolini's excellent report: tourism is a good thing! For many parts of Europe tourism is the key to survival. But subsidised tourism is a bad thing, it is unacceptable, because it does not produce sustained structural improvement but simply throws away and wastes huge amounts of European money. When an undertaking that receives a large amount of aid relocates to the next place, it generally leaves far more damage than useful things behind it. So let us put an end to this nonsense as quickly as possible! Let the Commission apply its collective wisdom to finding good solutions.
This brings me to the second aspect I want to address. We also need good solutions to Agenda 2000 as a whole and to structural reform in particular. We need these good solutions quickly. We have barely two months left under the German Presidency's new timetable and we have to put this time to good use. The Commission and the European Parliament have done good work together in the past months. Now the Council has to show that it can reach consensus. It will certainly not be easy to accommodate fifteen different opinions on this difficult subject. The Council must now show that it is prepared to cooperate with the Commission, but also and in particular with Parliament, which has been playing a very responsible part in this process so far and sought to find common, rational and objective solutions, but which must now also attach great importance to being included in the final decisions.
We cannot wait another seven years for the assent provisions of the Amsterdam Treaty to enter into force. We want to have a constructive say now.

Gallagher
Mr President, at the outset I want to congratulate both rapporteurs on the presentation and, of course, the preparation of their reports. I, of course, agree that the internal market for the free movement of goods, persons, services and capital should operate in an even-handed manner. For an internal market to succeed, all regions within Europe must be able to economically compete effectively in such an arena.
At present there are some regions within my country and within Europe lagging behind the European Union average for economic performance. It is only right and proper that the poor, disadvantaged and peripheral parts of Europe, namely Objective 1 regions, continue to be entitled to grant aid to the industries setting up within their region to the maximum of 40 % or indeed higher, if necessary. The Commission has already brought out new revised state aid guidelines which have been approved by the 15 Member States of the Union. These guidelines provide that Objective 1 regions will be entitled to grant aid to endogenous and inward investment companies setting up within their localities to a ceiling of 40 %. Non-Objective 1 regions within the Union will be entitled to grant aid to industry to a limit of 20 % only while those areas within the Union, which are doing better than the Community average, will only be entitled to grant aid to industry to 10 %.
This may appear unfair competition but it is necessary to bring the less well off regions up to a Union average. I agree with the state aid guidelines and, of course, favourable state aid policies to Objective 1 regions, including my own constituency of Connaught-Ulster, will go a long way to ensuring the creation of long term sustainable jobs in the region. It is also important that such policies are complemented by a higher proportion of spending under the ERDF so as to guarantee that any infrastructural deficit which exists in our transport network is rectified in the near future.

Holm
Mr President, I should like to thank Mr Azzolini for his excellent report. As regards the Commission's proposal concerning regional aid, I find it both unacceptable and ridiculous. The reason for this is that the Commission is proposing that only those areas which receive EU aid should be eligible for national regional support. This implies that the Commission does not believe that the Member States are capable of conducting a regional policy which is in the interests of the respective countries and their citizens. Instead, everything is to be centralised and managed through the EU and Brussels. Decentralisation and flexibility are conspicuous by their absence. It is not that I am opposed to a policy on regional aid, it is the way in which national regional aid is to be distributed that I find unacceptable.
Sweden has a long tradition of regional aid, the purpose of which is to achieve a balance and to iron out differences between the various regions. It was implemented in the interests of social solidarity and was an extremely costly process. However, it was worth the expense and was a sound move, in my view. The Commission's proposal rules out this kind of social and economic solidarity, which is a mistake. Consequently, I believe the rapporteur has tried to remedy the worst deficiencies of the Commission document, and that Mr Macartney has also tabled a good amendment which I shall support and which substantially improves the report.

Moretti
Mr President, all too often the situation in reality suffers when rigid and theoretical rules of economic policy are applied in the name of free competition. There is a risk in this Chamber of allowing the European Parliament's priority objective of economic and social cohesion to fade into the background and be compromised. The cost will largely be met, so runs the script, by the new Objective 2 regions and, under the Commission's plan, all the benefits and advantages will be enjoyed by the applicant countries. Objective 2 groups together areas with a very wide range of characteristics and needs, but the restrictions announced will further penalise our disadvantaged areas and have negative and indiscriminate impact on all the areas in the new Objective 2, which covers urban, industrial, rural and mountain areas, or areas dependent on the fisheries sector. The chorus of Members of Parliament asking the Commission to modify its position is swelling daily: I hope the increase in volume will at last convince the Commission.

Karamanou
Mr President, Commissioner, ladies and gentlemen, the need for additionality and coordination between the competition policy and the Union's regional policy, aiming to provide equal development opportunities for all the regions and to secure economic and social cohesion, is one which I hope we all understand, along with the need for Europe's economy to adapt and respond successfully to the new worldwide competitive environment.
A Union with huge differences in economic and social development between its various regions certainly can be neither credible, nor viable, nor competitive. That is why the policy of economic and social cohesion, real economic convergence, a reduction of inequalities between the regions, the concentration of resources upon the Union's poorest areas and solidarity between Europeans are the essential parameters for a development which will be the more effective and competitive the more fairly it is distributed.
It is a fact that the European regional policy has led to great improvements in the development rate of areas which were characterised by macroeconomic imbalances and low competitiveness, such as Greece. However, there are still important regional inequalities which could become more acute, as a general phenomenon, as a result of economic and monetary union and the Union's enlargement. So the policy of economic and social cohesion is a long-term and continual process which, in any event, must be compatible with competition policy if it is to be effective.
However, it is known that several Member States are pursuing national strategies and state subsidy policies which are in many respects incompatible with the European cohesion policy to combat regional inequalities. Indeed, if we include all the horizontal branch and regional forms of aid, it becomes evident that it is the wealthier areas which benefit most, and not the disadvantaged areas.
For that reason, I think the Commission's proposals, and in particular the efforts by the Commissioner responsible, Mrs Wulf-Mathies, to achieve a new, fair and efficient regional aid system are on the right lines, and we support them. However, I have a slight reservation concerning the extent of permitted aid for Objective 1, which could have an adverse effect upon the achievement of economic and social cohesion, as Mr Azzolini very rightly and appropriately pointed out in his excellent report, on which I congratulate him.

Thyssen
Mr President, as is customary every year, the Commission's 27th report on competition policy provides a good picture of the Commission's thinking in this area and of its specific policy data. Flexible operation of the single market can only be achieved, certainly following the launch of the euro, if competition conditions are fair not only in law but also in fact, and if there really is equality of opportunities for all businesses.
The Commission's efforts to ensure that there is free competition within the single market are thus vitally important. The Commission does good work here, and the fact that its decisions are not always palatable to those Member States which it is forced to reprimand in no way detracts from the value of that work.
I must compliment the rapporteur, Mrs Riis-Jørgensen, on the work she has done. I thank her for her fine and constructive cooperation, and all I can really say is that her report sets out what we in the PPE Group wished to say on the subject. So I have nothing more to add, in point of fact.
I just have one question for the Commission, a very specific question. Last year, in June 1998, the Court of Justice ruled in a case against Italy's National Council of Customs Agents that people in the professions are entrepreneurs like anyone else and are subject to Articles 85 and 86 of the Treaty. I should like to hear from the Commissioner whether that ruling has implications for all the regulated professions. The PPE Group's view is that account must be taken of the special role of certain professions in the general interest of society. We should have liked to know the Commission's thinking on this. I appreciate that I am rather springing this on the Commissioner. I do not necessarily expect an answer here and now, but perhaps a written reply? Forgive me, Commissioner, for not waiting to hear your answer now, but there is a group of 100 people waiting for me 50 kilometres away. Unfortunately, I have to leave the Chamber straight away.

Hautala
Mr President, I think it is very important that both Commissioners are here at the same time, so that we can speak about regional policy and competition policy together, and speak too about regional aid and state aid. The Commission should make its work more effective, encouraging as great a degree of transparency as possible with regard to all public aid. In my opinion it makes no difference whether it is a matter of state aid or regional aid. We should be creating a situation where every citizen and business would at any moment in time be able to acquire information about how much state aid or regional aid has been granted to which project. There should be a page on the Internet where information could be listed on all public aid in order to ensure transparency.
Another issue I wish to raise is the importance of real commitment on the part of business to regional aid programmes. Thus, if a company receives aid it must remain in the region. It must stay there for at least five years and ensure that jobs are preserved. It cannot just pack its bags the moment it has been given public aid.

Cellai
Mr President, we definitely need a strategy which targets better coordination of regional policy and competition policy at European level. The Commission plans to reduce the percentage of the total population of the Union receiving state-funded regional aid over the period 2000-2006. Geographic concentration is welcome if it serves to improve the effectiveness of this type of aid and create positive discrimination towards the less favoured regions, especially when 85 % of state regional aid for industrial projects today goes to the four richest Member States and only 8.3 % to the least developed four.
In these lean years for employment, synergy between national aid and Community aid can open up new paths and inspire new hopes. In particular, national regional aid could be granted to provide an incentive for productive investment, paying particular attention to the creation of jobs directly and indirectly linked to the investment. Investment in jobs must then be maintained in the region concerned for at least five years, so that national aid does not encourage relocations.
To conclude, while taking note of the guidelines imposed by the Commission, I am perplexed by certain points which do not seem to me to encourage greater economic and social cohesion, as rightly emphasised in the excellent Azzolini report. I refer to the reduction in the maximum intensity of regional aid especially for the new Objective 2 regions, where the maximum intensity of aid is reduced from 30 % to 20 % or even 10 %, in which case these regions will receive less aid than they did in the past.
In addition to that there is also a problem for the ultraperipheral and island regions which, because of their difficult geographic position and their particular intrinsic nature, are already amongst the least favoured regions in the whole Community. As the elected representatives of the citizens of Europe, it is our duty to voice the needs of the people in the least favoured areas and to remain constantly vigilant to ensure respect for the fundamental principle of economic and social cohesion in the policies of the Union.

Read
Mr President, I rise to speak on the competition report introduced by my colleague, Mrs Riis-Jørgensen, to whom I offer my congratulations on the quality of her work. I want to particularly praise Paragraph 14, where she is asking the Commission to examine unfair practices and also Paragraph 22 which is recognising the need for increased consistency between national aid schemes, Union aid schemes and competition policy. I want particularly to support the amendments from my colleagues Mr Hendrick and Mme García Arias which talk about the possible abuses of dominant positions.
All over the European Union we are seeing a merging of the ownership of the old, publicly owned utilities: telecommunications with broadcasting, electricity with telecommunications, railway links used as telecommunication networks, gas companies investing in water and over all banks taking a major share in these utilities. This is not, in itself, an unwelcome development but it does exacerbate the risk of an over-concentration of ownership of the essential utilities. The whole point of the liberalisation process is that it should bring the benefits of efficient, competitive, consumer-sensitive utility supplies to be widely available to consumers, both domestic and business.
The reported situation in Spain, therefore, is of major concern. It would be against the whole spirit and letter of European Union competition rules if the costs of the transition to competition in electricity supply were to be met initially out of public funds and this then to be passed on to the consumer. This is a most serious distortion of the level playing field, particularly if the money is then to be used to gain a share in other utility markets. I hope that the Commission will deal with this point in response because it is particularly important that the issue is highlighted and that the Commission response is on public record. The rapporteur in this report mentioned naming and shaming and on the basis of the evidence available, this is a situation of sufficient seriousness to merit a considered reply from the Commission. I am sure that this will be forthcoming. I have apologised to you, Commissioner, because I cannot stay. My colleagues are going to take a careful note of your response. I know that we will want to follow up this issue.

Baldi
Mr President, ladies and gentlemen, first I would like to congratulate the rapporteur, Mr Azzolini, on his excellent work.
In the 1960s it was the European Assembly, today the European Parliament, which was concerned about regional imbalances, drafted the plan for regional policy and started the procedure for implementing it. 30 years later, the geographic distribution of economic prosperity, in other words the achievement of economic and social cohesion, constitutes Parliament's, and especially our political group's, main interest.
Certainly, ever since the Treaty of Rome, competition policy has been an integral part of the European economy as an essential factor in competitiveness for each of the European regions, whether less favoured or developed. Before the Treaty of Maastricht, competition policy and the policy of economic and social cohesion ran parallel, but with the new provisions of the Amsterdam Treaty, currently in the process of ratification, it has become necessary to strengthen the complementarity and balance between them, given that cohesion, which expresses the duty of solidarity between the Member States, has become the priority for the construction of Europe.
There is a danger, which is that aid from the European Union to particular regions may distort work already in progress in the market in favour of certain areas. Here the rapporteur has highlighted the importance of having competition rules capable of guaranteeing the proper and transparent operation of the internal market, bearing in mind that exceptions to free competition, in the form of aid to Member States, are justified for the purpose of preserving economic and social cohesion. While, on the one hand, the European Union's structural policy has contributed to reducing the existing development disparities, in particular in the cohesion countries, on the other hand it has also led to an ever-growing number of objectives, programmes and Community initiatives, a fragmentation of subsidies, and a complex and inconsistent approach to zoning.
I think the rapporteur's approach to all this is fundamentally correct and I hope Parliament will follow his lead.

David
Mr President, I welcome very much the Azzolini report and I agree with the essential arguments which are put forward. Although the European Union's competition policy and its regional policy have very different roots, there is now an obvious need to have greater coherence and consistency on coordination between, on the one hand, national state aids, competition policy and the European Union's regional policy.
I have to say that I have one reservation and that is whether we should have virtually total co-terminosity between the two kinds of maps that we are talking about. I fear that we could be aiming at uniformity for the sake of uniformity. I really believe that there is a real need for a measure of flexibility, that recognises that there are particular situations in different parts of the Union.
Flexibility is needed essentially because we are talking about two different kinds of aid. On the one hand, there is aid for developing the infrastructure and human resources of the less prosperous regions. That is done through the European Union's structural funds. On the other hand, there is aid for particular industries and enterprises through national state aids, like regional selective assistance in the United Kingdom. That is national state aid. In many cases, of course, the two will naturally go together. But in some instances we need to acknowledge that to help certain areas we sometimes need to support industries that are adjacent to Objective 1 and 2 areas.
Why do we need to do that? One simple reason is that people are increasingly travelling significant distances to work on a daily basis. To help people in one area occasionally you have to allow state aid to industries in another area. Often, of course, firms developing in one particular area help the region immediately next to it. There is a knock-on effect to economic development. Therefore, there is a strong case for flexibility and with that one reservation I support Mr Azzolini's report in total.

McCartin
Mr President, I agree with Mr Azzolini when he says that regions which are coming out of Objective 1 must not be treated as strictly as the Commission is proposing to do. Regions that have just emerged from a state of low economic development usually suffer from serious deficiencies in their infrastructure.
In the case of Ireland where I come from, it is estimated that it would take 10 billion euro to bring our road networks up to the average EU standard, even if we have just enjoyed six years of very generous structural funds. In all the regions of the EU which are just emerging from economic backwardness we must realise that there is still a serious burden of the past to be carried. Until genuine economic equality has been achieved the Commission must be extremely careful not to impose rigorous harmonisation which could lead to a reversal of gains already made.
The Commission must also be aware that countries that have oppressive tax regimes, which are retarding economic growth and creating unemployment, are sometimes the authors of their own misfortune and it is their national policies that drive some industries to locate elsewhere. Such tax regimes must not be imposed by the Commission as the norm for the EU as a whole. Rather, we must promote as normal for all Member States the tax regimes which have been shown to be successful. The basis for the European convergence model must be the successful tax regimes rather than the ones that are creating difficulties.
It is important to explain to EU citizens that they can only enjoy free trade and the benefits that it brings if they are prepared to have a body to enforce discipline and fairness. There will always be those who will attack the efforts of the European Commission as bureaucratic interference but we must be prepared to explain to our citizens that they can only enjoy consumer benefits within a single market if fairness and equality is enforced. It is also fair to say that levels of preferential treatment, either in the form of tax concessions or grant aid, that are not acceptable within a Member State are also unacceptable within the European Union, whether these are in the form of benefits that come from the EU or from national governments.

Randzio-Plath
Mr President, Commissioner, ladies and gentlemen, the deepening of the single market, the creation of economic and monetary union and the globalisation of markets change the conditions of competition and the rules of play in competition policy, not just at international level but at European level too. When I look at the Commission's report on competition policy, I find that it addresses many of these new problems and also considers the fact that in an era of globalisation we will have to reckon with an increasing number of mergers, of forms of cooperation and mega-mergers. However, I wonder whether we always draw the right distinction between strategic alliances and the possible emergence of monopolies, which would be harmful to competition. When I look at the Communities' competition law in regard to, for instance, cartels and subsidies I find, however, that it is in fact being reviewed continuously and as required.
In regard to state aid it certainly needs emphasising that this aid is still needed. But we have good reason to criticise the very high subsidies granted in a few Member States. It is also right to criticise the fact that increasingly few resources are being made available for the aid agreed under the common market rules, in the field, for instance, of small and medium-sized undertakings, environmental protection, research and development, while more and more aid is being given to individual undertakings. That is certainly not in the common interest of effective, free and fair competition.
At this moment in time, distortions of competition as a result of tax aids are more important. Not enough cases of this kind are being investigated. More and more Member States want to attract business to their national locations by granting tax reliefs to undertakings, in the financial and insurance sector, as also in other economic sectors. That distorts competition. I believe the aid rules must look more closely into these distortions of competition. The Commission must investigate more of these cases. The list of 85 cases of tax reliefs, some of which are reminiscent of tax havens, currently before us speaks volumes.
The Commission must also play its part in preparing the next round of WTO talks, for we do need competition law that also works at international level. Here the current GATT and WTO rules need to be supplemented by internationally effective competition rules. I believe it would be important to have national reports on competition, like the WTO national trade reports. I also believe it would be important to try to establish minimum standards for all states in order to prevent anti-competitive practices, and to set up independent competition authorities. That could lead to effective, international competition rules under which the signatory states undertake also to make their national competition law internationally applicable.

Viola
Mr President, ladies and gentlemen, Commissioners, I want to begin my speech by congratulating Mr Azzolini on the excellent work he has done on his report on competition and cohesion.
Moving on to the substance, I want to say right away that the idea that the two maps used by DG IV and DG XVI should coincide might actually make sense if, in applying all its financial and constitutional instruments, the European Union would deal with the geo-economic problems by implementing Community competition and cohesion policies in the same way. Failing that, it would make more sense to leave the Member States free to act where the Union is not in a position to do so, although within the limits laid down by the regulations of the two separate Community policies, or, alternatively, to support countries or take their place where Community resources and, above all, the European logic dictated by the requirements of the single currency market permit this.
The Treaty of Rome defines competition policy in order to eliminate any form of distortion likely to interfere with the free play of market forces. From Rome to Maastricht it was recognised that we needed a cohesion policy geared to strengthening the less favoured regions of the Union, thus substantially pursuing the same purpose - a homogeneous common market. Between Maastricht and Amsterdam the aim was adjusted, as it was recognised that the free play of competition and market homogeneity could only be achieved through a policy of economic and social cohesion that paid more attention to territorial reality. It is in that spirit that the Amsterdam Treaty adds, for example, a reference to the island regions, so that they can start from a level playing-field and compete on an equal footing while respecting market forces.
Now, on the other hand, we are seeing a development in competition policy, which is attempting to take account of cohesion policy by including it in its most important regulations, but all it is really doing is complicating those regulations. In fact, on the say-so of the Commission and regardless of Parliament's opinion, only the island regions will be left on the sidelines, and the Commission will have to explain to them why, in addition to losing Community aid, they are also going to lose national aid, or why, faced with the Community's refusal to take their case into consideration, notwithstanding the Treaty, and for the sake of consistency with what DG IV wants, they will no longer be able to seek the state intervention which allowed them to compensate for the competitive disadvantage they suffer.

Metten
Mr President, regional policy and competition policy can be complementary and need not conflict with one another. It is the wealthy Member States which make greatest use of the instrument of state aid, and cutting down on this by a more rigorous implementation of competition policy will definitely help the poorer Member States by creating a level playing field.
But regional policy can actually lead to unintentional distortions of competition. I am not talking here about explicitly giving preference to the poorest regions, because that is what we are trying to do. What I am talking about is regions which cannot, by any criterion, be deemed still to need assistance, but which continue to receive a great deal of aid and are also able to benefit from discriminatory tax regimes because they did need assistance in the past.
Our regional policy is too slow to react to change. Part of the reason for this is that we take a decision just once every six or seven years on which regions qualify for aid, and we do that on the basis of figures which are already a few years old. Thus it can happen that Ireland is still an Objective 1 region in 1999, the criterion for which is a GDP of less than 75 % of the Union average. Yet Ireland's GDP in 1997 was already above the Union average, and the following year it was actually 116 % of average GDP for the Union.
To say that a country like Ireland has to adjust to no longer being an Objective 1 region under the new financial perspective and that it therefore needs both operating and investment aids for a few more years, whilst discriminatory tax regimes can continue till the year 2010, seems to me too daft for words, because that aid enables Ireland to lure firms away from other Union countries which are now poorer than Ireland.
The statement in the Azzolini report that the provisions are too strict for initial investment for whose who have since become too rich will certainly be too much for some of my group to swallow.

Fernández Martín
Mr President, I should like to thank Commissioners Wulf-Mathies and Van Miert for their presence here today. There is no doubt that to date the single market, together with its necessary consequence, economic and monetary union, has been the greatest achievement of the process of building the new Europe. Such success would not have been possible without a policy guaranteeing competition as the best security for economic growth and job creation. Nevertheless, free competition and growth must never compromise social and economic cohesion, key elements of the acquis communautaire , to which the Union devotes a significant proportion of its budget.
I should like to focus on the need to tackle the thorny issue of state aid. According to the existing arrangements, agreements between enterprises, the abuse of dominant positions and unjustified state aid are regulated by constant monitoring to safeguard competition. However, what sort of aid could be justified? This is not a trivial question and has never been clarified, though the Commission attempted to do so in 1975, 1979 and 1988. The interpretation of Articles 92(1), 92(3)(a) and 92(3)(c) still gives rise to a number of problems. As regards the regions with the greatest objective and structural deficits, the only possible interpretation has to be the one that will provide for the greatest development of these areas. Any other interpretation would certainly be branded as eurocentrist, difficult to justify and therefore unacceptable.
Mr Van Miert is a politician and not a technical expert. He will surely understand that I would be failing as a politician if I did not take advantage of his presence here today to enquire about the current position regarding the problem being discussed by the Spanish Government and his department in connection with state aid to the Canary Islands. I realise this is not the time for him to give me a detailed report, but I trust he will be able to give his opinion on the state of the discussions, and reassure public opinion which is very sensitive to this issue.

Walter
Mr President, Commissioners, Mr Azzolini's report on the links between regional policy and competition policy is a most important one. It deals with concerns that directly affect the people in the Member States and the regions. The resolution may not have any direct impact on the progress of the regional policy reform, yet it must be regarded as directly linked to it, given that we are talking about coherence between European and national regional aid.
Some Member States have no problem with the requirement of coherence which the Commission is laying down in order to secure its competition policy aims because almost their entire territory is covered by European aid. But the situation is different in some other countries. Here the dual approach of concentrating the European objective areas on the essential ones, which is right, while at the same time calling for maximum coherence with national aids, sometimes imposes a double burden that is very difficult in regional policy terms. How can we explain to the people living in the regions concerned that both European and national aid is prohibited, despite the imminent threat of unemployment, despite the absence of promising job prospects?
It is a contradiction in terms for the Commission quite rightly to provide for multiannual transitional periods for phasing out European aid, which ensures that the regions have time to adjust, while using a sledge hammer to reduce national aid and calling for this to be phased out as quickly as possible. The 2 % flexibility margin is not enough, nor is it convincing. Nor is there any justification for it being 2 % rather than more or less. That does not mean that the Commission's endeavour to bring about greater coherence is wrong as such. In the long term we need a more balanced coverage if we want to avoid distortions of competition. But the Commission is not taking sufficient account of the special problems of the regions when it subordinates everything to the imperative of free competition and tries to cut back European aid while at the same time taking away any means of granting national aid to compensate for this in a flexible manner. That would take away any chance of adjustment for many of the regions.
In that respect I welcome the fact that agreement seems to be emerging between the Council and the Commission on taking a more flexible approach to the flexibility question, on not specifying any target dates and giving the Member States more margin for decision. So the discussion we held in Parliament has had the desired effect.

Wulf-Mathies
Mr President, we have arranged that I will speak first and try to respond to Mr Azzolini's report. My colleague Mr Van Miert will then address the many concrete questions raised in connection with the competition report.
First I want to thank Mr Azzolini for his most interesting and careful report. I am also grateful that we agree at least on the question of principle, namely that we need greater coherence between national and regional aid policies. Let me emphasise again, as others have rightly said, that different problems are involved here. In relation to Objective 1 we already have equal cover between competition aid and regional aid from European resources. So no problems can arise here, whereas problems can indeed arise in areas where we have less competition aid and where the need for concentration - for Agenda 2000 to lead to greater geographical concentration - basically means that the aid must be reduced from two sides.
Nevertheless I believe that we must begin by emphasising the logic of our policy. For it makes no sense, given that we concentrate European resources on a minimum number of eligible regions, namely those that have to undergo the biggest structural adjustment processes, for us then to allocate all the resources to these regions, not just European money but also the higher aid intensity. It makes no sense to embark on a kind of division of labour that would mean that European structural policy looked after the less eligible areas and that national aid was then concentrated on the areas most in need of structural adjustment. I do not think that would be logical. What we are in fact proposing is to widen the Member States' regional margin for play, for as a rule national competition aid covers areas wider than those that can be supported through the Structural Funds. That means that over and above European structural aid the national states and the regional authorities have a variety of means of supporting their structurally weak areas.
Mrs Randzio-Plath was quite right when she said that unfortunately far less use is made of aid that is authorised, aid for environmental improvement and technological development, than of aid for individual undertakings, which very often does not offer any guarantee that this investment will lead to integrated regional development. That is why I believe that it does indeed make sense to establish more congruence between Objective 2 aid and Article 92(3)(c).
A number of Members have pointed out that on 25 January this year the Foreign Ministers' Council reached agreement on a compromise, which I shall briefly describe to you because it is important to your further discussions. Let me take up what Mr Rack said, namely that Parliament can play a careful part in the discussions and in seeking Agenda 2000 solutions only if it also has the appropriate information. I shall therefore read out part of the Foreign Ministers' agreement: 'In the interests of efficient programme planning, the regions undergoing economic and social adjustment must to a large extent be the same regions that are assisted by the Member States under Article 92(3)(c). Here the Community's aim should be to achieve better coherence by the end of the period 2000 to 2006, with the Member States making the appropriate efforts - in accordance with their situation at the time.'
As I am sure you will notice, this is not necessarily the most direct way of saying that we want to improve the situation. And I am sure it is no secret either that Mr Van Miert and I myself would certainly have wished to see better coherence. Nevertheless, I believe that the compromise the Council has now reached will at least lead, on the one side, to rather more flexibility, which is something Parliament has always called for, but - and I believe it is important to note this, given also what Mrs Schroedter said - will also impose an obligation on the Member States to contribute through this regulation to a greater concentration. Mrs McCarthy may no longer be here, but I would say that consensus will win the day only if we actually succeed in the end in bringing about greater coherence, not because we are purists or take fundamentalist positions in the Commission, but because that is the only way we can actually achieve the effects we want.
In regard to timing, the problems of competition policy and structural policy do indeed differ. We take the view that the agreement that has now been reached in regard to the common communication will help us find sensible and closely coordinated solutions in both competition and structural policy. Regarding subsidy shopping, let me point out that we are calling for a certain sustainability of investment for both policies, to ensure that once they have pocketed the aid undertakings do not then relocate and then claim new aid, be it national or European.
In relation to structural policy I just want to point out that I believe that if the monitoring committees play more part in the evaluation and are also given a more substantial role, there will be careful discussion about the sustainability of the investments and that the a major criterion for granting or not granting aid will be whether the assisted undertaking really is established in that region. That could mobilise a substantial steering instrument. I hope that in future the monitoring committees will ensure this too.
Let me return now to the concentration of aid on the most disadvantaged regions. During this debate many speakers have said that this concentration is the crux of the reform and that without concentration any positive effects for poorer regions would be reduced out. That is why I think it is so important that we do not counteract our own endeavours by watering down the 75 % criterion. For the rest, the ultraperipheral regions do not face any problems, because they all fulfil the strict 75 % criterion. In the case of Objective 6 regions we must indeed differentiate, as we must for islands, because there the state of development differs widely and we must all take that into consideration. We would be doing ourselves no favour if we said that exceptions would guarantee everyone their own special rules; instead we must ensure that the level of aid is adjusted to the severity of the problems.
In that sense I hope we will agree during the further discussions on Agenda 2000, and above all its implementation, on the need jointly to promote the necessary coherence so that the structurally weakest areas can catch up.

Van Miert
Mr President, firstly I should like to offer my sincerest thanks to the two rapporteurs, Mr Azzolini and Mrs Riis-Jørgensen. This is not the first time that I have had the pleasure of debating our annual report in person here with Mrs Riis-Jørgensen. I am truly delighted by the quality of the reports, and also of the debate. As a result, it is rather a shame, Mr President, that there is so little time to respond to the many comments made and real issues mentioned. Therefore, I would like to ask you to forgive me for only responding to a few of the points that have been raised, but this is down to necessity.
Firstly, I should like to answer Mrs Riis-Jørgensen's question about democratic control and transparency. It is a fundamental issue as the Commission has a direct and specific responsibility in this field. It is both logical and necessary that, at any point in time, the Commission should be prepared to appear before Parliament or before the responsible committees to explain the decisions that it is taking or refusing to take.
Mrs Riis-Jørgensen, I am fully prepared to commit myself to coming here every month and talking to the responsible committee, which is much more than the three visits a year that were made a few years ago. This is all I ask. I am in your hands. There are plenty of issues and problems to debate. So it is up to you: if you invite me each month, I will be here.
With that said, I should very quickly like to turn to the report by Mr Azzolini, as Mrs Wulf-Mathies has already responded to a number of comments. We need to agree on the objectives of this process. Currently, 51 % of the population live in regions eligible for Structural Fund aid, and 47 % in regions eligible for national or regional aid. With enlargement on the horizon, and bearing in mind that all the countries involved will be eligible for such aid, our policy is threatening to become illogical, given that the aim of regional policy is to help the regions in greatest need. Therefore, we, Mrs Wulf-Mathies and ourselves, must now work together to try to reduce the number of eligible regions. We must make an effort to concentrate aid and try to be as consistent as possible. And I am delighted by the fact that, at Commission level, we have been able to reach an agreement on this.
This is a rather delicate and at times politically difficult operation because even reducing the number of eligible regions by only 4 % - and reducing them from 47 % to 43-42.7 % is not difficult - is already causing a great deal of political upset. Even a small reduction spurs all manner of forces into action, standing up to demand that their region remain eligible. But if we do not do this, I feel that we will not be doing our job or our duty given the forthcoming enlargement of the European Union. Therefore, we must work along these lines and accept that our policy will have certain effects.
We also need to decrease the intensity of aid. On many occasions you have specifically criticised the problem of relocations. Such relocations can be explained by the fact that sometimes, in certain regions, the intensity of aid is such that firms leave other eligible regions to move to regions where the intensity of aid is much greater. You have called on us to do something about this.
So, in answer to your request, we are reducing the differences in intensity whilst also remaining within acceptable limits as the limit for A regions is 40 or 50 %. For the outermost regions the limit may be even more, but for C regions I believe that an intensity of 20 % is a suitable ceiling and, in certain circumstances, could even drop to 10 %. As a result, I believe that this is a better balance and, what is more, the national authorities will still be able to do a lot for the most needy regions. Therefore, in the future, our policy will be much more balanced than before.
I will finish there on your report as there are a number of questions on Mrs Riis-Jørgensen's report also awaiting an answer. Firstly, there is the general question of state aid. Many of you have said that the economically most developed countries award the most aid. This is indeed true, and it is also why we are trying to be much stricter. I can tell you that, last year, we made a series of negative decisions on state aid, as many as 31, compared with only 9 in 1997. This is clear proof that, little by little, we have become far stricter, as should be the case. You know what the consequences of this are, sometimes involving disputes with governments, regional authorities and so on. But that is the price that has to be paid for a more credible, consistent and coherent state aid control policy. There is no other solution. We must be sure of what we want.
Having said this, there are grounds for forging ahead with this issue. Mr Metten talked specifically about fiscal aid. Mr Metten, as you know we currently have approximately thirty cases to consider, but I should like to ask you where I can find the human resources to do so. Once again, we have been given an extra job to do, which we are quite prepared to do as there is a need for it, but no one in the Council of Finance Ministers has asked if DG IV has the means to do this job. No one has asked if we have the tax consultants to do it. No one has asked this question. Once again, we have been given an additional responsibility, which we would indeed like to carry out, but for goodness' sake, from now on, there should be more consistency by giving us the means we need to carry out this type of work.
As regards state aid, I would particularly like to mention the matter of the energy sector in Spain very briefly. I am aware that this issue is gaining extraordinary political proportions. This is how the situation stands. Firstly, the Spanish authorities would like to liberalise the energy sector more rapidly than in other Member States or than stated in the directive, and we can only welcome this. This much is clear. Secondly, it is true that this operation, not only in Spain but in other Member States, will involve what we call 'stranded costs', but in principle it is a state aid issue. So the Commission and DG IV must be notified of all these cases, as well as DG XVII, so that we can examine them separately but coherently.
After the contact I had with the Spanish minister a few days ago, the Spanish Government has now agreed that it will also notify us of Spain's case. This will mean it can be examined by my service as it should be, in accordance with the principle that stranded costs should be classified as real costs linked to public service obligations previously imposed on businesses by the public authorities, and which now, in the liberalisation process, are in danger of causing the businesses involved to lose out. This is the background to this whole exercise. For the moment, I cannot say any more than that. Once we have been notified, we will, of course, attempt to clarify the situation as quickly as possible.
Another issue is that of the Canary Islands. We have already approved what we call REF, the economic and fiscal regime. And now, we have been notified about the ZEC, as we call it - the Canaries special region. The fact that the Canary Islands will remain an A region will clearly let us consider allowing more aid than if they had moved from an A ranking to a C ranking. It allows for a broader based approach. However, for the moment we are examining what the government has brought to our attention. At this point, I cannot tell you any more.
Mr President, I see that I have already exceeded my speaking time. Please allow me, by way of conclusion, to highlight an issue which unfortunately has not been fully debated here today, namely the modernisation of competition policy. Mrs Riis-Jørgensen, I will take the liberty of suggesting a subject to the Committee on Economic and Monetary Affairs and Industrial Policy so we can debate it. You know that we have already taken a series of steps as regards state aid and in other areas such as vertical restraints, and so on. But there are others and, very briefly, I should very much like to have an opportunity to discuss them with the responsible committee.
So we are attempting - and I will stop here - to ensure that our competition policy is more transparent, more efficient and more credible, but also that it is well enough prepared to face the challenges ahead. Enlargement is one such challenge, and it is an extraordinary one. However, before the end of this Commission's term of office, we must also ensure that together we can say that we have done everything possible to prepare for the future and to allow the Commission to do its job properly.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Climate change
President
The next item is the statement by the Commission on climate change.

Bjerregaard
Mr President, ladies and gentlemen, I am pleased to report to you today on the results of the climate negotiations in Buenos Aires and the follow-up work for the coming months. Parliament has put forward a very interesting resolution and I note with satisfaction that we are agreed on the great majority of points. My assessment of the Buenos Aires conference is also that it was a success, although the overall result was limited.
To begin with the Community achieved its minimum objective, namely a Plan of Action with a Work Programme for concrete decisions on outstanding issues arising from the Kyoto Protocol and the Convention, which as you know will be taken up by the Sixth Conference of the Parties in less than two years' time.
Secondly, the EU played an important role in getting the G77 countries and China to the negotiating table, so that they could feel more closely involved in the process. I continue to focus on better relations with the developing countries in connection with the preparations for the Fifth Conference of the Parties, not least by prioritising the practical formulation of the mechanism for sustainable development, the Clean Development Mechanism.
Finally, there is a commitment on the part of the Argentinian Presidency to strengthen political control of the process by holding ad hoc meetings at ministerial level in the enlarged Executive Committee between annual meetings of the Conference of the Parties. I believe that such ad hoc meetings are crucial in keeping the process on the right track.
On the whole, therefore, I think that the Fourth Conference of the Parties succeeded in making good progress towards implementing the Kyoto Protocol. As regards the individual parts of the Buenos Aires Plan of Action, I have the following comments to make: we have some hard work ahead of us in formulating detailed rules on the mechanisms, in particular because monitoring and recording are needed in order to prevent these mechanisms from being used as loopholes in the environmental legislation. I therefore think it important that a decision should be taken at the Sixth Conference of the Parties on the three mechanisms together, so that the package will include a strong and cohesive system for monitoring the mechanisms.
We also want to continue the debate on how we can achieve the Convention's final objective, namely to prevent dangerous climate change, at the same time ensuring that the burdens are shared fairly and taking into account our common but differentiated responsibilities. I call upon honourable Members to consider how we can best resolve this difficult question, especially having regard to the reluctance of the developing countries to take part in discussions on their own obligations, which was in fact again clearly demonstrated at the Fourth Conference of the Parties. It is important that we do further work on implementing policies and measures to combat climate change, not just at international level but to an even greater degree in the EU and hence in the Member States. I also agree with Parliament that we must concretise how we can achieve our aims, since good intentions are certainly not enough. The Commission, Parliament and the Council must take their responsibilities seriously and come up with concrete actions and decisions.
In this connection, I stress that some important proposals have been presented which require a decision, for example the proposal on taxation of energy products. I strongly urge Parliament to deliver its opinion on this proposal before the parliamentary elections, so that the new momentum from the German Presidency can be used to advantage and so that political agreement can be reached at the meeting of the ECOFIN Council in May.
In the field of taxation, our first objective must be to ensure that the proposal on taxation of energy products is adopted, since an increasing number of Member States now seem to agree that such taxation is necessary. If the German Presidency does not succeed in bringing about agreement - which I certainly hope it will - we can still consider what we can do with the proposal for a CO2 tax, which was originally presented in 1992 and which, as you know, has not been withdrawn by the Commission.
With the Plan of Action and the internal policies and measures, our aim is that the Kyoto Protocol should be ratified and take effect as quickly as possible. I am strongly in favour of speedy ratification. But this means that we must put our own house in order, so that ratification will not be just an empty gesture. In this context, the more proactive stance of certain American industrial interests in the effort to combat climate change and the signature of the Protocol by the USA can be regarded as positive steps. There were signs in Buenos Aires of a more positive attitude on the part of certain sections of the American Congress. But the goal has still not been attained, far from it, and honourable Members have a valuable role to play in continuing - as they did in Buenos Aires - to persuade their colleagues in the American Congress that the Protocol must be ratified. Here I have to say that I am sceptical with regard to declarations from Argentina and Kazakhstan signalling their willingness to enter into a binding commitment at the Fifth Conference of the Parties. In the long term it is important that the developing countries should be involved, but the real test of such voluntary commitments is their final effect in practice. In order that a country can take advantage of the benefits of the Protocol, it must sign it. It must also honour in full the obligations it has thereby taken upon itself. Moreover, we must - as we have said before - ensure that we do not just get more hot air into the system through having unambitious objectives.
So let me come back to our internal programme of work. As I already announced in September, I shall be presenting a communication in the spring of 1999. This undertaking was welcomed by the European Council in Vienna, which concluded that it would take a decision on the basis of a report from the Commission on a comprehensive EU strategy for climate policy at its meeting in Cologne which, as you know, will be held at the beginning of June. I entirely agree that we need a comprehensive EU strategy. The year 2008 looks far ahead in the future, but we must act now if we are to have any chance of achieving our objective. In the Commission communication therefore, we will concentrate on those elements that are crucial to ensuring that the EU can achieve its objectives. These key elements include common and coordinated policies and measures, the Kyoto mechanisms and links with third countries. The communication will contain a full analysis of the effects of the trade in emission rights, common implementation and the Clean Development Mechanism. I assure you that I will do my utmost to expedite the adoption of this communication so that it can be presented promptly and be ready for the Cologne summit.
Mr President, ladies and gentlemen, I will say in closing that, generally speaking, I can support Parliament's resolution and I look forward to further very constructive cooperation in our common effort to combat climate change.

Graenitz
Mr President, may I remind the Commissioner that, according to one of our sayings, words and deeds are often oceans apart. If we want to keep to the timetable that was drawn up in Buenos Aires and if we want to draw up our own timetable for that purpose, we shall have to cross those oceans together in the fastest possible time with the firmest measures we can implement, otherwise we shall be left sitting helplessly on one shore as the climatic disaster breaks out on the other.
I think it is essential, Commissioner, to do a number of things at international level. One of these - and a very important one too - is to continue the dialogue with the developing countries that was so productive in Buenos Aires so that we can develop the proposals for the clean development mechanism together with these countries. I also believe that, even though we have had little joy on this from the outset, we in the European Union must come up with some very specific proposals as to how emissions trading should ultimately work, how monitoring can be carried out and how individual emissions and reductions in emissions are to be assessed, so that we are armed with this information when the time comes.
I also believe it is essential to incorporate these issues more effectively into our strategies for negotiating the accession of the applicant countries to an enlarged Union. In Kyoto, the countries whose applications are being considered for accession in the first wave undertook to make the same reductions in emissions as the Member States of the European Union. The crux of the matter now, however, is to involve them in the preparation process, so that we do not have a situation in which they accede to membership of the Union without having made the necessary preparations and therefore cannot be integrated into the European system of burden-sharing.
I think some of my colleagues will want to deal in greater detail with European burden-sharing. I only wish to say that, besides the coordination of national plans, it will also be necessary to ensure that we have the required legal bases at EU level and that we create such bases wherever they are lacking, because unless we pool our efforts we shall not achieve the goal we set ourselves in Kyoto.
I also believe that these measures will have to be accompanied by the development of safeguards in the areas of health, agriculture and ecological protection, because as the change in climate becomes ever more apparent, dangers will emerge that we may never have contemplated. It is my belief that, as we prepare to enter the new millennium, we now have the opportunity to achieve sustainable development, rapid technological progress and above all a fairer distribution of the world's resources, and I hope we have the strength and the courage to grasp that opportunity.

Spencer
Mr President, before I speak to the resolution, can I clear up a translation error. In the English interpretation of what the Commissioner said, reference was made to the withdrawal by the Commission of the CO2 tax. In fact, you were much wiser than that. You did not withdraw the proposal, you amended it, and that amended proposal is still on the table and I hope the Council will take it up. I trust that all the language versions will be consistent with what you actually said. I am grateful for a copy of the text in English.
I had the honour to lead Parliament's delegation to the Buenos Aires Conference and the report from myself and other colleagues is available to Parliament. In my view, COP IV was a moderate success dragged screaming from the jaws of what might have been a negotiators' deadlock. The Buenos Aires Action Plan promises some progress by the time of COP VI in the year 2000. For the first time it reflects interest in the principles of contraction and convergence and of global equity which this Parliament has voted for regularly.
My report draws attention to the helpful and positive role of the Commission in Buenos Aires for which I am grateful and for the courtesy which it showed towards Parliament. My report also draws attention to the failure of the Council either to recognise, to use, or intelligently to consult MEPs during the course of the Conference. The latest Council guidelines on MEP involvement, decided on a week before Buenos Aires, are positively insulting to Parliament. I have raised the matter with the President and I hope that the Committee on Institutional Affairs would look at this in the context of the next IGC.
The Union learnt the lessons of our relative failure in Kyoto and reached out towards countries in the Group of 77, looking for allies in the cause of sanity in protecting the climate of the planet.
I would like to use my last few seconds to make an appeal to the Commission. Despite what the Commissioner said about the possibility of political progress between COPs, I should like to encourage the idea of a structural review of the whole process of the Conference of the Parties. In my view at the moment it is far too prone to technical logjams stopping political initiatives. The rhythm of the Conference of the Parties makes it difficult to take political initiatives between conferences.
I was in Bonn yesterday talking to Michael Zammit-Cutajar of the Climate Change Secretariat and I suggested to him that maybe the time had come for a structural review of the way we organise this whole process, perhaps using our old tried and trusted friend the Group of Wise Men - or Eminent Persons or whatever we call it nowadays - to stand back from the detailed negotiations and look at the destination of this process. It seems to me, having been to all these COPs, that we are caught now between this being a continuing and at times difficult negotiation and, at the same time, being an institution with administrative responsibilities. I hope the Commission will take up this suggestion. I thank the Commissioner for her statement and I commend the resolution to the House.

Kestelijn-Sierens
Mr President, Commissioner, ladies and gentlemen, it is difficult to claim that Buenos Aires was really a success. Whilst the Kyoto talks managed to agree on a reduction of greenhouse gases, regrettably no detailed rules were agreed on how exactly this should be achieved.
I think it is fair to say that the Union has done what it could, and I warmly congratulate Commissioner Bjerregaard on her hard work and determination. We have the Buenos Aires action plan and we should give this our full attention, because important decisions will have to be taken at the climate conference in the year 2000.
I should like to emphasise two points. Firstly, if the Kyoto protocol is to come into force, it has to be ratified by at least 55 of the parties which account for at least 55 % of all emissions. We must keep hammering home the point that it is essential for the USA to ratify. If the biggest polluter - the USA - and Russia do not ratify, for example, then Kyoto is meaningless.
My second point is that emissions trading can only be allowed if the bulk of the effort is made at national level. I quite agree with Commissioner Bjerregaard that we must set a ceiling on emissions trading. We must not, so to speak, export the problem.
The positions of the Union and the USA are diametrically opposed to one another here. The Union rightly maintains that action to combat climate change only makes sense if everyone plays their part. And this has always been the position of Parliament, even if it is not explicitly stated in the resolution now before us.
Finally, regarding the harmonised energy tax, we too are in favour of a tax of this kind, but provided it is fiscally neutral. Our group has tabled two amendments calling for a harmonised tax, and they should be understood in that context.
I have one last question to the Commissioner. Where does she stand on the question of a possible tax on aviation fuel, to be introduced at European level? There are those who say, perhaps rightly, that the answer lies in better technology so that the level of emissions is reduced. But the increase in air transport means that measures will definitely be needed in this area too.

González Álvarez
Mr President, how can one fail to agree with the Commissioner when she proposes specific measures, follow-up procedures, cooperation with developing countries and taxation in connection with the production of energy? I am sure we all agree with her, particularly as she has put forward specific measures to ensure that what has been agreed is carried through. According to scientific opinion and to the United Nations' report, 50 000 deaths and losses totalling 12 billion pesetas were caused by natural disasters in 1998. I do not myself believe these disasters were all that natural. I am not sure what the losses amount to in euros, but 12 billion pesetas is certainly a lot of money.
In my opinion, there are a lot of economic powers and governments that should be taking appropriate action, if only because of the economic consequences of these natural disasters. We, however, are going further, and we truly believe the European Union's proposal was the best, despite being rather cautious. The European Parliament has expressed this view on several occasions.
Scientists also tell us that emissions must be brought down to between 50 % and 60 % of their 1990 levels, if we are to have a positive impact on climate change. We are aiming at an 8 % reduction in the emission of six greenhouse gases. If we do not even achieve that 8 % reduction, we shall be endangering the future of the planet.
We therefore welcome your proposals, Commissioner, provided you do ensure that the Member States comply with them. In particular, we should like to see the load spread fairly between industrialised and developing countries. We are opposed to the idea of making developing countries start to pay, as the United States would have them do. It is for us to pay.

Fitzsimons
Mr President, I was part of the delegation with Mr Spencer and Mr Linkohr at the conference in Buenos Aires. How one judges the conference is a matter of opinion. Mr Spencer said it was a moderate success. I think that is a fair description. I recall Commissioner Bjerregaard saying at the press conference at the end that we would have wanted to achieve more, that we always do, but that this was as much as we could persuade the other parties to the conference to agree to. The European Union showed real leadership, supported to a large extent by the candidate countries, the G77 and China.
I also recall the President-in-Office of the Council saying that at Kyoto we agreed on concrete reduction targets and greenhouse gas emissions by the industrialized countries. In Buenos Aires we kept the momentum of Kyoto by establishing the action plan which was one of the objectives of Buenos Aires and deciding on other measures like the elaboration of a compliance system.
The international press treated the conference with a certain amount of cynicism; some called it a fiasco. It was a difficult conference because there were long, tortuous and turgid negotiations but I cannot but support Mr Spencer and congratulate the Commission. I also applaud the decision by the United States to sign the protocol. While recognising that it may be a diplomatic formality, as we say in the resolution, at the same time it is very effective and signals a change of opinion in the United States.
We must also applaud the COP IV host countries, Argentina and Kazakstan for signalling their willingness to enter into a binding commitment at COP V to reduce their greenhouse emissions further. That is progress of some sort, small though it may be. So, it is a good resolution. I support it as does my group and, along with Mr Spencer, I commend it to the House.

President
Ladies and gentlemen, Mr Fitzsimons, I would ask you not to exceed the time you have been allocated. The services tell me we are running late. I have no wish to cut you off, and I am confident you can regulate yourselves. I know you are all very responsible and will take this reminder in the spirit in which it is meant. Mrs Hautala now has the floor for one minute on behalf of the Green Group in the European Parliament.

Hautala
Mr President, the European Union has had a very positive role in worldwide negotiations, and, in my opinion, the Commissioner deserves personal recognition for this. But at the same time the fact remains, and it gets ever more embarrassing from one day to the next, that the Union has not been able to take any decisions of its own which would lead to establishing its own commitments too. For that reason it is vital that we debate the issue of energy taxation, something the Commissioner mentioned earlier. It is also important that those countries that wish to go further than others can, in addition, adopt this original proposal for a carbon dioxide and energy tax. It would be interesting to hear what estimates the Commission might have here. We must remember that the Treaty of Amsterdam makes provision for a situation where some countries can move forward more swiftly than others, if those others are not ready. But I am sure that industry has also realised that climate policy can give it a competitive edge, and this should be seized upon.

Weber
Mr President, Commissioner, ladies and gentlemen, was Buenos Aires a flop? I do not think so. It was not a flop, it just suffered from the last night at Kyoto when the Americans tried to introduce flexible mechanisms into the protocol without which they were not going to sign up. It must also be said that the Conference President did not show the same diplomacy as Ambassador Estrada, who led the proceedings at Kyoto extremely well, but that is just a minor detail.
My group agrees with the idea of pursuing a 50/50 position in the flexible mechanisms. This means that at least 50 % of the reductions must be made at home before the flexible mechanisms may be used. The European Union must continue to support this position.
I therefore agree with the introduction of the flexible mechanisms, which will finally allow the cost of emitting one tonne of carbon to be calculated in economic terms. This will have repercussions on the tax systems of the industrialised countries which are included in Annex I. I particularly dislike the pressure put by the developed countries, in particular the USA, on the developing countries to undertake to reduce their emissions too. It must be said that the developing countries, which are non-Annex I countries, do not even have any quota to sell under Article 6. I recall a comment by the Chinese delegate at Kyoto, who said that the Americans have three cars per family whereas the Chinese go to work on foot and yet the Americans and the Europeans want to stop the Chinese from going to work on the bus. We must be serious about this and rather more flexible with regard to the developing countries.
I would now like to turn to a subject of great interest to me, which is forestry. The Kyoto Protocol stipulates that funding can be granted for reforestation, particularly for carbon sequestration and especially within the CDM or Clean Development Mechanism. This can play an important role in allowing the industrialised countries to support and provide funding for reforestation projects in developing countries. The NGOs concerned with the protection of the environment point out that it is essential that only projects which respect biodiversity are subsidised. We must ensure that projects for intensively managed plantations are not subsidised at the expense of protecting biodiversity.

Blokland
Mr President, the outcome of the 1997 Kyoto conference on climate change was rightly seen as a turning-point, albeit only a first step in the right direction. It represents a first attempt to reduce greenhouse gases and so halt the progress of man-made changes to the world's climate. It is most important that the Kyoto Protocol should be speedily ratified by all the parties, notably the United States and Russia. Pressure is building towards this, particularly amongst business circles in the United States.
It is clear that much remained to be done after Kyoto in terms of concrete follow-up. The follow-up conference in Buenos Aires has resulted in a single programme of action with pledges and timetables. That was a welcome development.
Much consideration must also be given to dialogue with the developing world. But there is a danger that it may be restricted to the conclusion of agreements on emissions trading. Firstly, in my view, the European Union itself must work to cut greenhouse gas emissions within the EU. It is also very important to assist other countries, for example by the transfer of cleaner technology which can be provided through development aid. It may be that emissions trading takes place within the continent of Europe. Emissions trading will only take place with countries outside Europe if those countries actually take steps to reduce greenhouse gases. If countries within the EU itself make an effort, this may encourage non-European countries to play their own part in cutting emissions.
To achieve this reduction in emission levels, environmental policy needs to be incorporated into other policy sectors, such as energy, transport and agriculture. Appropriate ways to do this are the promotion of efficient energy use, renewable energy and energy taxes. Once again, I would advocate the introduction of a tax on aviation fuel.
Lastly, our responsibility for these issues is a shared one, but each individual country has an individual responsibility to contribute to resolving the problems too. The individual citizen likewise has an individual responsibility. So work is needed to create a worldwide awareness of the fact that things cannot go on this way and that a new model of sustainable economic development is needed, based on respect for the natural world and its Creator.

Kronberger
Mr President, the slower-than-slow approach to reducing emissions that was adopted in Buenos Aires is like trying to have a wash without getting wet. An effective policy on the global climate will not be achieved until the real cost of emitting active substances into the atmosphere is borne in full by the polluter. For that to happen, we need a suitable legal framework. The oft-repeated excuse that reducing emission levels is too expensive is suicidal. A society that is unwilling to invest in the preservation of its own vital resources, and hence in the survival of the human species, is doomed to extinction. The emissions catalogue that was negotiated in Buenos Aires is no way to tackle the problem. In the long run, problems can only be solved at the point where they actually occur.

Linkohr
Mr President, I must say that one pleasant side-effect of the debates in this House on the global climate is that we are always in agreement. That is the one ray of sunshine. But when we compare our declarations of intent with the actual outcome, the picture begins to cloud over. I shall simply use the figures I have obtained from the Commission. Total CO2 emissions in the European Union rose by 2 % between 1990 and 1996. In 1997 there was a small reduction, but the winter weather was mild in 1997, and there is nothing to suggest that we have wrought any fundamental changes. The reduction we saw in the first half of this decade, which has now given way to further increases, can be explained away. We replaced coal with gas. We replaced oil with gas. As a result of German reunification, an entire region was deindustrialised. In addition, existing plants were modernised. These are processes that will not be repeated. In other words, accelerated economic growth in particular means that, by the year 2000, we must expect CO2 emissions to be higher - and indeed measurably higher - than their 1990 levels.
Let me cite the example of my own federal state of Baden-Württemberg; it is quite a highly industrialised state. Since 1995, per capita CO2 emissions have risen considerably there as a result of economic growth. So the tide is definitely not turning. That makes us stop and think. Now of course we can say, 'Very well, we need to try harder' and so on. But we have tried harder in some respects, as a result of which - and these too are Commission figures - there has been an average annual increase in energy efficiency of only 0.6 % since 1990, whereas 2 % increases were being achieved in the eighties and the late seventies.
That too makes us stop and think. It implies that we are capable of achieving less now than we could manage ten or fifteen years ago. What we need - and this is addressed to the Commission and more especially, of course, to the Council - is an action plan with measurable targets. I should really like to know exactly what each country and each industry has to do, what is expected in terms of transport policy and even what households should be doing. Above all, we have to ask ourselves how this can be funded. So how can it be funded? And this brings me to my final recommendation to the Commission. Put something on the table here; suggest a way to reach agreement with the banks so that investments in the energy sector can be prefinanced, because funds are not being advanced at the present time for energy investments, and I believe this is the main reason why we are not making progress. The technology is generally there, but the money is not!

Pimenta
Mr President, although Mr Linkohr has taken two-thirds of my speech, I am actually 100 % in agreement with what he has said. I want to start by thanking the Commission and particularly the Commissioner for their work and personal commitment and also for the way in which, in Buenos Aires, they received and worked with the representatives of this House. Unfortunately, the Council adopted an attitude which it cannot maintain. In institutional terms, Parliament must now adopt a position in relation to the Council and each of the Presidencies, and before the next intergovernmental conference at that.
The second part of my speech is connected with what Mr Linkohr said about policies and measures. My concern is that reductions are not being made in many areas of the EU and in the majority of the world's countries. In Portugal, for example, electricity consumption grew by 6 % last year, which was double the growth in production. It is clear that this cannot go on.
I support the Commission's intention to prepare a directive - which I would like to see as soon as possible - in order to establish certain compulsory minimum levels of penetration of renewable energy. We have spoken to Commissioner Papoutsis and we agree that the directive is urgently needed. The penetration of renewable energy in the market has been shrinking because of the fall in the price of oil and natural gas, and also given that the cost of energy does not currently include environmental costs.
Secondly, we have the Structural Funds and the European transport network which are areas over which the Committee on Agriculture and Rural Development has some influence through the budget. The Member States must be forced to use this money to consider transport options which consume less energy.
As for the applicant countries, PHARE and TACIS now have no influence over their energy consumption. If this situation continues, Mr Linkohr's prediction will come true: as soon as the acute crisis has ended, emissions will increase.
To conclude, I must say that the Commission could perhaps support the initiatives of certain companies such as BP and others, which are assuming positive attitudes towards climate change, by organising a major event in Brussels on the positive role that could be played by companies prepared to take this issue seriously.

President
Thank you, Mr Pimenta. After your first few words, Mr Pimenta, I was considering withholding two thirds of your speaking time, but you then went on to exceed it by a minute. Once again, I must urge Members to keep within the time they have been allocated, as the services tell me we are running late. I know you all have very important issues to raise, but I would ask you to be concise. My remarks are addressed in the first instance to Mrs Breyer, who now has the floor for one minute.

Breyer
Mr President, Commissioner, you referred to the role of the United States. I believe the issue today is a different one. It is about the need for the European Union to take the lead here. To put it plainly, loopholes in the Protocol such as the scope for emissions trading must not be used as a means of wriggling out of responsibility. Which takes us straight to this question: what has happened to the promised measures? I should also like to hear from you exactly what is to happen now with regard to the implementation of the White Paper on renewable energy sources? You referred to the key role that the energy tax is to play. All right, we now have a proposal on an energy consumption tax, but that is surely a tiny step. After all, the Commission itself has admitted that the implementation of this proposal will not prevent a 6 % increase in emission levels by the year 2010. What did you say about the most intractable problem of all, namely transport? We know that CO2 emissions by vehicles are set to rise by 38 % between now and 2010. Here too, I would ask you to answer the questions my fellow Members have been asking. When will kerosene finally be taxed? When will you make some serious efforts to honour the promise that was made to us last year? We need action, not paper and not fine words.

Pollack
Mr President, we need to lift our eyes from concentrating only on the fiscal measures. We seem to do quite a lot of wringing our hands about the Council's reluctance to agree an energy tax and other fiscal measures. I agree with the Commissioner that it is time the Commission put its own house in order on climate change. I want to hear some detailed commitments that this is happening.
Early in the debates we heard some nice aspirations about sustainable agriculture and I applaud that. However, I want to ask the Commission what action it is taking to green its approach to the single market, to the way it is implemented and to the way competition policy works, to the way in which it spends overseas aid, to its policy on trade, to its accession negotiations, which a lot of colleagues have mentioned, and the structural funds as well as the CAP. We need to see active implementation on strategic environmental assessment with an eye to climate change and to use this as a tool for assessment of policy at European level, especially external aid as well as policy here in the European Union.
We also need more work on exactly what clean development technology transfer will consist of and the relationship with our overseas development assistance. Active implementation of CDMs is going to be pivotal to winning the support we need for the Kyoto protocol from the developing countries. Without some support from them for the notion of equity, we will continue to have problems trying to get America to ratify.
If we can make progress on some of these issues, the European Union could go forward with confidence to set the tone for COPs V and VI. Certainly we know that climate change is not going away and it certainly will not go away because of the text that Parliament is going to vote tomorrow. The United States is not going to ratify simply because we asked it to. This week the Environment Ministers are down in the Antarctic watching how it is melting away, looking at what the problems are going to be. We need some kind of commitment from the Commission and I hope that we will hear the Commission and the Council ensure that the European Union takes the necessary action to deal with the points I have raised as well as the perennial favourites of energy taxes.

Virgin
Mr President, Commissioner, of all the environmental challenges facing us, climate change is undoubtedly the most complex. Every country in the world is tangibly affected. Emissions do not pose a threat in the short term, but in the long term they are infinitely more serious.
The first hesitant steps towards a negotiated solution have been accomplished with a certain amount of pain. Since the commitment which has to be made can impinge noticeably on a nation's finances, it is essential to find solutions which benefit the environment at the lowest possible cost. There is no doubt that trade in emission levels provides such a solution. Therefore, in my view, it is absolutely crucial for the Commission to carry out a wide-ranging study into how this instrument should be used to ensure that the problem of climate change is dealt with in the right way.
Research carried out in Scandinavia shows that trade in carbon dioxide emissions in the Nordic countries would cut costs by 50 %. Although a reduction in emissions may be hard to verify, the research shows that the benefits of a successful outcome are so substantial that a huge effort needs to be made to establish a sustainable system.
It must also be in the EU's best interests not to unilaterally adopt economic instruments which have the effect of substantially increasing costs, for example in comparison with the USA, putting us at a competitive disadvantage. In future negotiations, we should put right some of the mistakes that were made at Kyoto. For the sake of the future, we should not dismiss economically sound methods which have shown themselves to be effective. The phasing-out of nuclear power would lead to serious problems if it became a reality. Instead, this excellent source of energy should be developed and improved.

Baldi
Mr President, ladies and gentlemen, following the Kyoto Conference on Climate Change and the conference in Buenos Aires last November, the European Union has drawn up its own genuine action plan covering certain crucial issues. First, it covers funding mechanisms to help developing countries face the challenges linked to climate change. Secondly, it covers future work on policies and measures to be implemented which are already on the agenda for the next conference of the parties to the United Nations Framework Convention. Thirdly, it covers the development and transfer of clean technologies, which will help developing countries not to repeat the environmental blunders the developed countries have made, and fourthly, it covers the basic rules for the flexibility mechanisms contained in the Kyoto Protocol, although agreement needs to be reached on an institutional structure for these.
I agree with Members who have said that dialogue is fundamental, but I also want to mention that, in just two months, the Joint ACP-EU Assembly, which has a working group on climate change in small island states, will not only be adopting a highly important resolution for the developing countries but will certainly be making a statement after two years of work. I would therefore like to ask Mrs Bjerregaard why on earth we have received no satisfactory response from the Commission when, for example, we have highlighted the importance of acting in synergy with other Directorates-General, such as DG VIII and DG XI, on science, research and development. We are extremely concerned for the ACP countries and we have called for a disaster prevention fund because we believe the small island states are extremely vulnerable to climate change. So I would ask the Commissioner either to respond here and now or to let those of us who are working in very close synergy have some answers as soon as possible. This is becoming crucial for us because the crises occurring in Africa and the ACP island states are leading to grave disasters.

Bjerregaard
Mr President, I should like to thank Parliament for the debate. I think that Mr Linkohr was quite right and that he put his finger on something we may have noticed in these debates. Parliament and the Commission are in agreement, but the reality we come up against is different: it could be said that the other parties we have to deal with, who are crucial in ensuring that all this will come to something, are not thinking on the same lines as ourselves. In the course of the debate, I have heard a number of suggestions as to how we can do more to persuade the other parties to become more actively committed to the line that we have taken. So I entirely share the view of Mrs Graenitz that it is important for us to continue the international effort, not least in relation to the developing countries. I agree with Mrs Graenitz and others that the applicant countries must be more closely involved. I think it was Mr Pimenta who also stressed this point. It is what we are trying to do all the time. It is also what we did in Buenos Aires but clearly, on the point of energy policy and its consequences, there is a great deal still to be done in relation to the applicant countries.
Mr Spencer was quite right about the interpreting error - that happens from time to time when one speaks a minor language - so I am happy to confirm that what I said was that the CO2 levy, which had originally been proposed in 1992, was not withdrawn by the Commission. I also think we have good reason to consider how we organise the process. We had some discussion of this in Buenos Aires. I also mentioned that the continued Argentine Presidency had plans for a more political process, but I am happy to take part in discussions on other ways of tackling it.
Mrs Hautala stressed - and I think quite rightly - that we must meet our own objectives. If we want to stick to the line we have embarked upon, then we must also be in a position to see it through to the end, and that is indeed what we intend to do, both by presenting a communication and also by taking the matter up at Council meetings. In other words, the Commission must come up with a further plan, which I will be happy to discuss with Parliament.
The question of a flight tax or a kerosene tax, which we have discussed once or twice, is somewhat more difficult. We have also taken this up in a number of forums. The last occasion on which I myself pressed very hard for it was at a meeting we had under OECD auspices with the environment ministers. It was very clear that there was powerful opposition from the USA, Canada, Japan and others, so the question is whether something can be done at European level, because the opposition at international level is formidable.
I share Mrs Pollack's view that there are a great many areas we must tackle. There will be some initiatives on the internal market. Later in the year, I think, we shall have an opportunity to discuss the problems relating to the WTO. I think Parliament may remember that there was a joint communication from Sir Leon Brittan and myself, and we certainly intend to continue this cooperation up to the forthcoming WTO negotiations. Fortunately, I can say that the German Presidency has included the proposal on strategic environmental assessment on its prioritised list, so it is also my hope that we can make further progress in this area.
Mr President, there may well be many things we need to discuss, but let me close by thanking Parliament for its support for the line we have embarked on. I look forward to the continuation of that cooperation. We really need all our forces if we are to convince the other parties that we have set the right course.

President
Thank you, Mrs Bjerregaard.
I have received a motion for a resolution tabled pursuant to Rule 37(2).
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Food treated with ionising radiation
President
The next item is the report (A4-0008/99) by Mrs Bloch von Blottnitz, on behalf of Parliament's delegation to the Conciliation Committee, on the joint text approved by the Conciliation Committee for a European Parliament and Council Directive on
I.the approximation of the laws of the Member States concerning foods and food ingredients treated with ionising radiation (3631/98 - C4-0021/99-00/0169(COD))II.the establishment of a Community list of foods and food ingredients treated with ionising radiation (3632/98 - C4-0022/99-00/0169B(COD)).I give the floor to the rapporteur, Mrs Bloch von Blottnitz.

Bloch von Blottnitz
Mr President, I must, of course, express my pleasure at our having finally arrived at a joint text for the directive on irradiated foodstuffs after ten years. It is worth noting that the Council alone has spent eight years considering the draft, which further testifies to the controversy that surrounds this method. Naturally enough, we might ask why foodstuffs should be irradiated at all, since it has been proved that vitamins in fruit and vegetables are killed off and also that the irradiation of products with fat content releases free radicals, which, as we know, are carcinogenic. But I should also like to remind the House that, for as long as we have not had a standard framework, we have naturally had no compulsory labelling either. Since irradiation is practised in several countries, such as France, Belgium and the Netherlands, and since we have a single market in which irradiated products are traded, there is no real point now in maintaining the old position that Parliament once adopted. We must prohibit it. Just wait, Mr Bangemann; it is too soon to be rejoicing.
This will not now happen. Eighteen months after the entry into force of the directive, labelling will become compulsory. This naturally also applies to spices and other ingredients, even - and this is very important - if such ingredients constitute less than 25 % of the product. In addition, we have managed to ensure that, after 1 January 2003, irradiation will only be permissible if standardised and validated verification methods are in place. You certainly did some resolute stonewalling on this point, Mr Bangemann, and the only reason why we were able to overcome the resistance of the Commission is that the Council was on our side for once. That was naturally very gratifying. Another important point is that changes to the list of foods and ingredients - which, for its part, has to be on the table by 31 December 2000 - are always governed by the provisions of Article 100a of the Treaty.
It has also been established that the treatment of foodstuffs with ionising radiation must not be a substitute for hygiene, nor must it be used in production processes or in agriculture. It used to be the case that when food started to go off, ionising radiation was applied, and the eye was deceived, so to speak. This will no longer be possible in future. But the crucial point will naturally remain the extent to which we educate consumers on what it means when foodstuffs are treated with ionising radiation. This, of course, is not something that the average housewife would know. I can only hope, and we shall be pressing this point, that it will not appear in such small print that it is overlooked, because I still take the view that there is no real need to irradiate foodstuffs. We should do better to ensure that we eat whatever is in season. It is not absolutely essential to prevent onions, potatoes and so on from germinating. For all that, we are naturally in favour of the agreement we have now reached. Goodness knows how hard it was to achieve this agreement, and we shall do everything in our power to ensure that those who buy these products actually know what they are buying. If that can be achieved, then I believe we shall have established a good Community system. I am pleased that progress has been made at long last, and at the end of the day it is almost satisfying, if not entirely so, that we have all received our dues.

Graenitz
Mr President, in several European languages the verb 'to congratulate' is reflexive. I believe that today we not only need to congratulate the rapporteur on her report but that we can also congratulate ourselves as a Parliament for our dogged, lengthy and ultimately successful efforts to achieve a number of improvements to the original Council proposal and hence to the common position too.
Even though I myself do not believe it is necessary to treat many foodstuffs with radiation, because I share the rapporteur's view that the healthiest food is local produce consumed when it is ripe, I believe that labelling is of great importance to consumers as a means of indicating to them what they are buying and what they can expect from their purchases. I also consider it important to emphasise that ionising radiation cannot replace good agricultural practice, which means that food should only ever be irradiated when it is fresh. I also believe it is very important to validate and standardise inspection procedures, so that the Member States can exercise an unambiguous right of control and so that consumers are ultimately able to assert their rights.
At this particular time, when the issue of food safety is under widespread scrutiny, it is essential to have such a directive. I also believe that the large size of many farms in the applicant countries makes it necessary for us to ensure that the directive is adopted before any enlargement of the Union, so that there is a body of EU food-safety legislation which can be applied to these farms from the outset.

Schnellhardt
Mr President, ladies and gentlemen, the treatment of foodstuffs with radiation conjures up diabolic visions in the minds of many people, while sending many a practitioner and expert into transports of delight. European policymakers were faced with the task of reconciling these two extremes and making the practical application of radiation treatment possible. The treatment of foodstuffs with ionising radiation must be possible, we believe, where it is prudent and necessary, but not as a substitute for health measures and hygiene. I do not believe what Mrs Bloch von Blottnitz said about radiation being used on food that is going off to make it fit for consumption again. Not even radiation can do that. That will be explicitly stated in future directives too. It is a very important principle.
In my opinion, it goes without saying that the food in question poses no health hazard whatsoever. But that has to be re-emphasised, because we have heard the opposite message again today. Food treated with ionising radiation is not radioactive food, and we, the population of the EU, can consume it without becoming seriously ill. Harmonisation at European level is therefore an urgent necessity. The legal position in the various Member States has hitherto been unduly disparate. Whereas food has been treated with radiation for years in France, Belgium and the Netherlands, for instance, irradiated foodstuffs are prohibited in other countries, so there is no trace of the single market here.
The result of the conciliation proceedings with the Council is good and has our approval. The market in food treated with ionised radiation will gradually become a single market too. Compulsory labelling will also enable consumers to make a choice. I believe this represents a major success, and I cannot help emphasising the specific role played by my group in the inclusion of standardised and validated verification methods in the directive. Without validated verification methods, there can be no credible labelling system. And without a credible labelling system, there can be no consumer confidence.
On the subject of confidence, I must repeat - and I agree with Mrs Bloch von Blottnitz here - that spending ten long years on a directive is not something we can afford to do very often. Let me say to the Commissioners that we certainly cannot afford a repeat with regard to the chocolate directive or the labelling of alcoholic beverages. Directives like the present one should not become the norm. It is high time we started to build up consumer confidence by acting quickly.

Hyland
Mr President, I welcome this directive because it creates a legal framework for the single market in foodstuffs treated with ionising radiation. It sets high standards and limits to production which may be treated. Improving food variety and quality through added value is now central to a modern food sector. The quality of the product, information on its source and full details of the added value process must at all times be fully available to consumers.
Food products resulting from new research must only enter the food chain after the most stringent tests have been undertaken. Consumers must at all times be protected from the uncertainty of inadequate testing of new products. In a nutshell, public health and consumer protection must be paramount to all other considerations for Europe's agrifood sector. This Parliament has played a key role in ensuring that the concerns of consumers are taken into account and that the eventual risks related to the control mechanisms are minimized. The highest standards of food quality must be the primary goal of national governments and the EU. And measures which enhance and improve food quality must be supported.
I am pleased that in Ireland there is a growing appreciation of the professional role of farmers in providing quality raw material to a food sector committed to the highest standards of consumer satisfaction.

Whitehead
Mr President, in her absence, I should like to congratulate Mrs Bloch von Blottnitz for seeing this very difficult conciliation through. It might have come more quickly. Anything which includes the word radiation is bound to be fraught with difficulties, misunderstandings and misgivings. What is the proper use of ionised radiation? Essentially it has to be where consumer safety benefits. It is for the consumer and for the consumer's health. It is not where producer profits benefit because of the cosmetic effect on fruit and other foodstuffs of limited durability.
We do not benefit from eating strawberries which have passed their natural span simply because they can be artificially preserved. We do, however, benefit from maintaining the natural span of spices and preservatives which are used in our stores and which are kept for long periods of time. We have a strict range of products which can be sold now throughout the single market. We can understand that in each Member State the same conditions apply and the same safeguards apply. With enlargement soon to come, we should also understand that this is an important benchmark for the applicant states where all kinds of temptations lie in wait for the agricultural sectors in those countries, as Mr Schnellhardt has already said.
This is perhaps the first time we have been able to come to some sort of consensus on an aspect of radiation and radiation treatment. It will not be the last.

Bangemann
Mr President, it is always a very silly situation when people feel they have been proved right, because it is very easy, of course, to feel vindicated by events and to say 'there you are, for ten years I have been fighting the good fight, and the others have finally recognised that I was right'. But it really has to be said, as I have told Mrs Bloch von Blottnitz - and I believe this may not be primarily the fault of Parliament - that for ten years the Council has purely and simply turned a deaf ear to the argument which was presented here by Mrs Bloch von Blottnitz and which I have advanced at every Council meeting for the past ten years, namely that the situation we had was worse for the consumer than what we have been proposing. Why? Because we have placed very tight restrictions on the scope for using ionised radiation.
My second point is that we have always pressed for labelling, so that every consumer can choose whether or not to buy one of this limited range of treated food products. Consumers can leave them on the shelves. No consumer will be deceived into buying these products unwittingly, because they will be labelled. As for the honourable Member who has now left, Mr President, I shall get up and leave in the middle of one of the next sittings to bring home to the honourable Members of Parliament how idiotic it is, not to mention discourteous to the Commission, for anyone here to comment on the chocolate issue and then simply to go away before the Commissioner can deal with the point that has been raised.
Protest
Oh I see, you have put your jacket on. I thought you had left, because you were in shirt-sleeves when you spoke! Well, as far as chocolate is concerned, the problem is exactly the same. We proposed labelling so that all consumers can make an entirely free choice as to whether the chocolate they buy is made entirely of cocoa bean ingredients or whether they will accept the use of other vegetable fats. Mrs Bloch von Blottnitz rightly said that we should have a certain amount of trust in the consumer. That is the view of the Commission too. So why not let consumers choose what they want? Some of them can then insist on buying chocolate with only cocoa fats, while others might not mind taking other types of chocolate.
That has been precisely the problem with the radiation too. As long as we did not have a common set of rules, some Member States treated all sorts of food with ionising radiation, and it was not labelled. I am now in my eleventh year as a Commissioner. If Parliament is gracious to me, I shall see out my term. If not, I would not be unduly upset either. But for ten years I have been putting the case for this directive to the Council; for ten years I have been advancing these arguments - and this applies to many parliamentary debates too, by the way - and it has been like talking to a brick wall. Sometimes one really does wonder whether it is at all possible to come up with a reasonable set of rules which everyone can accept while appreciating that they might not represent any one person's ideal solution. There is no such thing as an ideal solution in a democracy anyway, because wherever a hundred people are gathered together, at least three or four different opinions will emerge. But labelling will give consumers the freedom to choose for themselves. Given the range of opinions on such subjects, the only answer is to give the individual a set of reasonable options. That is why I am glad that we have finally reached this point.
But if I were a Member of Parliament, I should think thrice before celebrating this as a parliamentary triumph.

President
Thank you, Commissioner, for your frankness in speaking to the House. However, it has provoked a comment from Mr Fernández Martín.

Fernández Martín
Mr President, following the misunderstanding which arose and the Commissioner's remarks, I feel it is incumbent on him to apologise to the Member he addressed so discourteously, and to the whole House. He cannot just get up and leave in the middle of a sitting.

Bangemann
Mr President, I shall not do that, because the purpose of this debate is to draw some clear political lines at long last. I did not say that Parliament alone was to blame; Germany, my own Member State, has blocked the solution of this problem for ten years. I have spent ten years repeating the arguments that Mrs Bloch von Blottnitz has presented this evening. I am damned if I will apologise, because this is a proper democratic discussion. You have been wrong for the past ten years, and now you do not want to admit it! That is unacceptable. Duplicity kills democracy!

President
You will know what it says in the Bible about a sinner that repenteth, Mr Bangemann, and I think you should see Mrs Bloch von Blottnitz in that way.

Schnellhardt
Just a brief comment, Mr President. Commissioner, I have absolutely no idea why you should be pillorying Parliament. With regard to the chocolate directive, I was merely trying to express precisely what you went on to say. The Council thinks it is entitled to drag this whole thing out, and the other business too. But if you can quote anything in our Rules of Procedure or in the Maastricht Treaty to show how Parliament could have been any quicker in dealing with this matter, I shall naturally be more than willing to act on your advice when the other two subjects come up. But I agree with you entirely that both of us - the Commission and Parliament - should pillory the Council. That was all I said.

President
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Aid to ACP banana producers
President
The next item is the recommendation for second reading (A4-0012/99), on behalf of the Committee on Development and Cooperation, on the common position adopted by the Council (10460/98 - C4-0583/98-98/0014(SYN)) with a view to adopting a Council Regulation establishing a special framework of assistance for traditional ACP suppliers of bananas (Rapporteur: Mr Liese).

Liese
Mr President, ladies and gentlemen, a rapporteur can discover some astonishing things when he listens to the debate on the preceding report. I was certainly rather surprised to hear Mr Bangemann say that he would not be unduly upset if he were unable to complete his term of office. That would not be a matter of indifference to me if I were a Commissioner bearing responsibility for Europe. And perhaps I would work inside the Commission to ensure that the cases criticised by Parliament did not give any further cause for criticism.
But let us move on to the bananas. Our debate on my report at second reading deals with bananas at a time when this subject is in the international spotlight once again because of the possible escalation of the dispute between the EU and the United States, as well as some Latin American countries, and because of the threat of a trade war. The report, which was adopted unanimously by the Committee on Development and Cooperation, deals with one aspect of the banana problem; although it is undoubtedly relevant to the WTO issue, it only deals with the payments to banana producers in ACP countries.
In 1997, the United States and several Latin American countries applied for a WTO panel investigation. The WTO panel found that the EU market organisation of that time did not conform to WTO rules. The Commission then submitted a proposed amendment package, which was accepted in 1998. As part of the package of proposals, the Commission suggested that additional payments be made from the EU budget to the ACP banana producers. There is still some controversy, even within the WTO, as to whether the adjustments made to the actual organisation of the EU markets meet WTO requirements. I believe I speak for everyone here when I emphasise that it is not for the USA to take this decision, but rather the competent WTO authorities. It needs to be emphasised time and again that the USA has no right to take unilateral action in this matter. Speaking personally and on behalf of no one, however, I must also say that the European Union will surely have to prepare itself to accept the WTO ruling, and that further adjustments may have to be accepted at some future date.
The report, however, is only concerned with the package of compensatory payments proposed by the Commission, even though they are not part of a legal framework. It asks the question how these compensatory payments are to be made, in what form and to which producers. Here too, there are various positions within the European Union. There are differences between the Council and Parliament. The Council has rejected some important amendments which Parliament tabled at first reading. Some of these decisions are beyond my comprehension as the rapporteur, and I am sure the whole committee finds them equally baffling.
One of Parliament's main priorities was to support 'fair trade' producers. This has always been a parliamentary priority and should also play a very prominent part in the allocation of funds to producers, rather than the minor role suggested by the Council in the common position. We believe that payment should depend on compliance with minimum standards in terms of working conditions, and we believe that grower and producer organisations, the farmers' organisations, should be involved in the allocation of the funds. The committee also decided by a majority vote to increase the funding of the programme and to diversify the funding targets in some respects, as set out in Amendments Nos 19, 9 and 15. As the rapporteur, I voiced my opposition to this, but I had to bow to the majority of the House.
One of the key amendments, in my view, is our exclusion of multinational corporations from eligibility for support under this financial instrument. It surely cannot be right, when everyone believes that Europe's purpose in this market organisation, in everything we do in the banana business, is to protect the small and independent growers against the large multinationals, if we table an amendment to precisely that effect, specifying that support payments are to be made to small and independent growers and not to multinational concerns, and if this amendment is then rejected. That, however, is exactly what the Commission and the Council have done, even though Parliament adopted the amendment by a large majority at the first reading. The committee has tabled it again, and I would ask the Commission to reconsider its position very carefully, because the European Union will forfeit all its credibility if we operate on the basis that it is all right to support the multinationals as long as they are working in the ACP countries, but if they are working in Latin America they are evil, and we must erect a wall of bureaucracy to keep them out of the European market. That, in my opinion, is hypocrisy. It divests our entire policy of any credibility. I believe the European Commission should express itself quite clearly on this. Otherwise, I shall be more convinced than ever that our policy on the banana issue is rather too deeply steeped in hypocrisy. There is a principle involved here, and we must apply it consistently.

Carlotti
Mr President, Commissioner, on behalf of the Socialist Group I must endorse Mr Liese's report on the establishment of a special framework of technical and financial assistance to help traditional ACP suppliers of bananas to adapt to the new market conditions. I support this report because it takes account of the interests of the most disadvantaged suppliers. Small independent producers must be given special assistance and the multinational firms which possess banana plantations in several countries should not be eligible for assistance. I also support this report because it stresses the importance of respecting social standards, working conditions and the environment and because it stipulates special support measures for fair trade bananas.
We socialists hope that assistance will be granted to improve quality and we believe that it is essential to help diversify production because, for many ACP countries, the banana is the only source of income. Thus the contributions made by MEPs, added to the proposals accepted by the Council at first reading, such as taking into account the particularly dramatic situation of Somalia, will, I believe, all help to produce a very satisfactory regulation, provided that we are able to allocate a budget to the tune of approximately ECU 500 million for more than ten years, depending on how the ACP countries and the market develop.
However, what concerns us, as you suspected Commissioner, is the new line taken by the United States of America at the WTO, with threats of sanctions against numerous European products and delaying tactics and stratagems which do not befit a great country. In a few days, the WTO will rule on the import regime for bananas and therefore on the possible sanctions that might be taken by countries which consider themselves to be prejudiced by this regime. I fear that the World Trade Organisation's decision may once again serve American interests. I hope that these decisions will not be imposed on the European Union without us having a chance to respond or at least show our political will to defend our own producers and the producers of the poor countries of Africa, the Caribbean and the Pacific at any cost. I believe that we have more than trade agreements with these countries: we have moral commitments.

Fernández Martín
Mr President, ladies and gentlemen, Commissioner, as I said last June during the debate on the first reading of this report, the reform of the common market organisation for bananas proposed by the Commission was forced on us following the decision taken by the World Trade Organisation's group of experts further to the complaint from Ecuador and three other countries.
Now as then, Parliament, by a substantial majority, supports the Commission's proposal in principle. Some amendments have been put forward, and we would like to see them incorporated at the second reading. In the interim, however, a critical event has taken place in the progress of what has become known as 'the banana war', and as a result, the debate has become political rather than technical. What happened was that the United States showed its true colours and is now openly threatening the Union with trade reprisals against a list of European products if we do not modify our policy on protecting the banana production of ACP countries.
Weakened by certain developments at home and abroad, the United States administration has been unable to withstand the enormous pressure exerted by a number of American banana multinationals, and is preparing to take the law into its own hands. The most extraordinary scenes were played out only yesterday at Parliament's REX Committee meeting. In this very House, the ambassador of the United States gave a splendid example of how that would-be empire understands WTO regulations, demanding they are complied with when it suits it but disregarding them whenever it sees fit.
I should like to take this opportunity to congratulate Commissioner Brittan on his forthright defence of the legitimacy and legality of our regulations at yesterday's REX Committee meeting. Given the uncertainty of the current situation, I would ask the Commission, at the second reading, to accept Parliament's suggestions as they appear in Mr Liese's report.

Fassa
Mr President, Commissioner, ladies and gentlemen, on behalf of the ELDR Group, I must compliment Mr Liese on his energetic support in this report for the European Union's position on the framework of assistance for banana producers. The stress on diversification, Somalia's special position, and not least, socially sustainable production and fair and supportive trading conditions, are definitely some of the report's strong points.
These very points indicate the philosophy of the European Union, which gives us the right idea of the free market. It is wrong to think of the free market as a market without rules and where everyone competes regardless of relative strength. Obviously that kind of free market would see abuse of power by the strongest economic operators or countries to the detriment of the others. That is exactly what the European Union must do everything possible to prevent, by all necessary, useful and appropriate means.
It is precisely because we support this view of the free market that my group opposes Amendment No 9 to Article 1(2) of this report, tabled by the ARE Group. The original text talks about a special framework for banana producers, to be implemented for a maximum period not exceeding ten years starting on 1 January 1999. We believe that text should be maintained. We must take action to put the ACP banana-producing countries in a position to stand on their own feet and not keep them in a state of permanent immaturity, which in our view would be the result of accepting the ARE amendment.

Sierra González
Mr President, Commissioner, any changes to the organisation of the market for bananas must not be to the detriment of Community or ACP producers. Though it may be too early to establish whether ACP banana suppliers have been adversely affected by the changes made, appropriate preventive measures should be taken, based on the values which underpin the principle of fair trade. These values should be extended and applied to the promotion of alternative economic activities for those producers least able to adapt to the new market conditions, and should include technical and financial support for ACP suppliers who are in a position to adapt, enabling them to do so under the best possible conditions.
The aim is not only for the special aid regime to reflect the Union's desire to meet its obligations to its traditional suppliers, but also for it to contribute to the fight against poverty. At the same time, it should send a clear and unambiguous message that the Union will not bow to unacceptable pressures, such as those currently exerted by the United States with its list of reprisals.
I would urge the Commission to take into account the amendments contained in the Liese report, particularly those inspired by the principle of fair trade, which only received cursory attention in the common position. This is most disappointing. It is also unfortunate that the large multinationals may be able to receive aid from Union funds in ACP countries.
It simply would not make sense to help the rich instead of the poor.

Martinez
Mr President, we have two symbolic issues before us this evening. On the subject of laying hens, we will shortly be discussing the Kindermann report on the revolting practice of battery rearing which is symbolic of hyperproductivity. With Mr Liese's report on bananas, this is symbolic of globalism.
This issue has been around for many years in this House. Europe produces around 800 000 to 830 000 tonnes of bananas from Guadeloupe, Crete, Martinique, the Canaries and Madeira. We buy around 830 000 tonnes of bananas from the ACP countries, including the Côte d'Ivoire and Cameroon. And then there are the dollar bananas from Central America which the Germans particularly like. Initially there were two million tonnes of these, and they were subject to customs duties, as were cereal substitutes. Then, under the pretext that Sweden, Austria and Finland were joining the European Union, thereby prejudicing the United States, we agreed to import 2.5 million tonnes of Latin American bananas without customs duties or with reduced customs duties.
Yet all this is not enough for the United States. They referred the matter to the World Trade Organisation, we went through various panels of first instance and appeal, we amended our legislation and the issue was referred again to the WTO; this evening, now that we have given in, we are even going to have to compensate the poor ACP countries that are going to lose out.
This smacks of hypocrisy, given all our talk of defending the financial interests of the European Union. Mrs Cresson and Mr Marín may have redirected a few pence here or there, like any good socialist, but in this case, 14 billion francs have been given as gifts to a multinational firm, Chiquita. Who are we to talk about the financial interests of the European Community?
We are calling into question our regional policy in Crete, Madeira, the Canaries, Guadeloupe and Martinique. We are calling into question our cooperation policy with the ACP countries because the import licences are being called into question. We are calling into question our human rights policy because, in Honduras, it is the multinational firm United Brand, now owned by Chiquita, which keeps order. We are calling into question our social policy because the people producing these bananas are slaves earning only EUR 35 per month. We are calling into question the superiority of European law because we are submitting to the law of Geneva and the World Trade Organisation.
And once again, faced with the United States' Section 301, our Europe of 370 million inhabitants, of the euro, a Europe with new power, is submitting in Kosovo, in Iraq and now on the issue of bananas. We are toeing the US line. I hope that we can slip on this banana skin in order to get back on track, but I doubt it.

Vecchi
Mr President, we have now reached the second reading of the proposal for a regulation we are forced to adopt, following the World Trade Organisation ruling, so as not to penalise further the traditional banana suppliers of the countries of Africa, the Caribbean and the Pacific. On the whole the common position of the Council improves the original proposal for a regulation, thanks primarily to the European Parliament's action at first reading.
In particular I would mention that there is now a stronger possibility of using some of the resources provided under the regulation to promote diversification by suppliers unable to continue banana production in decent conditions. On other points Parliament will back its own amendments, above all with a view to ensuring that small and independent producers can use the resources.
The Council's common position accepts Parliament's amendments designed to take account of the special position of Somalia and its banana producers. This is the only commodity that unfortunate country can export to the European market and its fate largely depends on being able to maintain and strengthen banana production.
That is positive, but I would still point out that for the last two years, despite clear recommendations from the European Parliament, the Commission has frequently appeared to want to boycott Somali banana exports. The country's banana regions have been seriously damaged by the natural disaster which has struck in the last two years but, incredibly, the Union has decided not to respond with aid.
So the Union must immediately undertake to give Somali banana producers direct access to the assistance provided under the regulation we are debating.
This would be a very tangible way to encourage the rebirth of Somalia and prevent its definitive departure from the Community 'Banana Club'.

Porto
Mr President, Commissioner, regardless of the validity of each side's reasons, the banana issue cannot fail to shock because of the disproportionate reactions of the Americans. Just how disproportionate the current reaction is with regard to this product can be seen from the fact that the European Union has been pursuing a protectionist agricultural policy with regard to various goods produced in the United States itself for four decades now. As there has never been such a reaction before, we can only conclude that the US administration is more concerned about one or two multinational firms producing bananas in Latin America than about its own farmers. Having said this, its reaction is also disproportionate in view of the production claimed by the European Union, which is relatively small and comes from peripheral regions such as Madeira and the Canaries or from poor ACP countries where there are no alternatives capable of supporting the rural population with a minimum decent standard of living.
We are not therefore talking about rich regions but areas which understandably deserve some support. This applies to the financial support currently being suggested, the level of which is to be determined shortly, thereby removing any doubt about the seriousness of our proposals.
Finally, the retaliation that has been announced of limiting the imports of various products is also disproportionate and inappropriate because it will indiscriminately penalise countries, regions and sectors which have nothing to do with bananas. Looking at the list, we can see that in order to defend one major multinational whose name has already been mentioned several times, European sectors where small and medium-sized businesses predominate are to be condemned, to a large extent involving the poorest countries and regions. It seems to us to be in even worse taste that attempts are being made to divide the European Union by granting an exemption to Denmark and Holland, because of their alleged good behaviour, when this is a common policy which we accepted jointly once it was decided.
Disregarding this sad episode - which we hope will rapidly enter into obscurity - we must now look at the basic question of whether this will be the pattern for the future, with the two major world powers with very particular responsibilities in international trade being at loggerheads?

Santini
Mr President, I want to concentrate on a single issue that was touched on just now by Mr Vecchi: the case of Somalia. I would stress, with satisfaction this time, that the Council regulation finally takes sufficient account of this problem, which was something I highlighted in vain as rapporteur for the banana COM, when we debated the general problem as well as certain particular issues in this House. Somalia is emerging from a couple of seasons which have been disastrous to say the least, in terms of environmental calamities piled on top of those of the past. Between October 1997 and January 1998, 70 % of the banana plantations were destroyed by a flood which submerged the plants for four or five months, permanently undermining their ability to survive.
Despite desperate appeals, the European Commission decided not to intervene in any way, either with European Social Fund money, STABEX resources, or any other kind of resources. From the first, during the debate on the COM, it has refused to recognise the civil war, endemic and uninterrupted for some 30 years now, as force majeure , a disaster like those which have secured lavish compensation for producers in the Caribbean islands, for example.
Since last June all exports of bananas from Somalia have been suspended. Either there are no supplies or such as do exist are not cheap enough, in short, they are not marketable. Now with this regulation Somali producers can finally lift up their heads. But they should be able to have direct and immediate access to the financial benefits through their independent association, which was set up to counter the old excuse that there were no clear and authoritative recipients for aid in the past.
Well, now the organisation of Somali producers exists and is recognised at both continental and international level. DG VIII, especially, must take this into account.

Pinheiro
Mr President, ladies and gentlemen, I should like firstly to thank the Committee on Development and Cooperation and in particular Mr Liese for the hard work put into this dossier. Before turning to the amendments, I should like to remind you briefly why this proposal is so important for the Commission. Last year the Council adopted the measures necessary to bring the common market organisation for bananas into conformity with WTO rules. These have now been applied since 1 January and will radically alter the market conditions for traditional ACP banana suppliers. In our opinion this will jeopardise their continuing viability on the EU market, in particular since the special important licence system has been dismantled and there will no longer be a mechanism to bridge the gap in competitiveness between ACP and dollar bananas.
In order to enable traditional ACP suppliers to maintain their presence on the EU market as agreed under the Lomé Convention, the Commission has in parallel put forward this proposal establishing a special framework for technical and financial assistance. This support is intended to help them to adapt to the new market conditions and in particular to enhance the competitiveness of their production. I think we are agreed on the need for this regulation and for the need to get it in place as soon as possible so that the traditional ACP suppliers can continue their efforts to improve their competitiveness. This action is required whatever the outcome of the ongoing discussions in Geneva.
Turning to the matter in hand, I should like to emphasise how much we see eye-to-eye on this proposal. We have taken on board four specific amendments but our agreement goes much further than that. Let us take diversification. We agreed that funding should be available for diversification projects where improvements in competitivity would not be feasible or sustainable. We all know that there are parts of the banana industry in the traditional ACP countries where production will probably not survive in a more competitive EU market. These farmers should be given assistance to diversify into other crops. There is now new wording introduced in the common position to provide for this.
Another area is social and environmentally-friendly banana production, so-called fair-trade bananas. This is an important facet of an ACP country strategy to improve its competitiveness. This is why specific wording was added to the common position but I must stress that this is not a regulation about fair trade. There are many other methods by which an ACP country can improve its banana sector in a sustainable way. These include improving transport links and distribution, designing new marketing strategies and providing training and technical assistance to farmers. It should also be recalled that the list of programme criteria is not a prescriptive nor an exhaustive one. The wording has been kept simple to allow for the necessary flexibility.
Another area where we agree is the need for open and transparent consultations. This is part of good working practice to ensure that producer groups and banana growers associations are involved in the process of designing strategies for the banana sector. We are already encouraging these discussions. They are also an integral part of the ACP-EU partnership. Specific wording does not need to be added to the regulation on this point.
There are one or two areas where we have somewhat divergent views. This is where we have not been able to accept your proposed amendments. Our arguments are the same as they were for the first reading in June. One of these points is the provision of the direct aid to farmers, a form of income support. This concept does not reflect our overall objective of improving the level of competitiveness of traditional ACP banana production. Providing income support will postpone the day when non-competitive producers must leave the market. It is a short-term measure. It will not produce a sustainable industry. Investments must be made to the infrastructure of the banana sector to unblock the bottlenecks, to produce an efficient industry for the countries as a whole.
To give you an example, one of the important producers, where the banana is very important to the economy, is St Lucia. For those who do not know it, St Lucia is a very hilly country in which it will take you more than an hour to drive a distance of 20 km. There the key to improvement of banana production, competitiveness and productivity will be to be able to water the crop on a drop-by-drop basis. As some of the farms are relatively small, to do this they would have to get together. So we started very early to try to form a strong farmers' association so that they could share this kind of watering system. But this also requires the support of the government so some infrastructure related to this major work will also be taken up by government. Therefore, the provision of such aid runs the risk of a challenge from our trading partners for being incompatible with international trade rules.
We also believe that regulations should not include specific budget figures in order not to prejudge the annual budgetary discussions as agreed in the Joint Declaration of 1982. The annual figure of EUR 45m is the correct one and additional money should not be set aside for urgent measures. This will create expectations. We would need to discuss what constitutes an urgent measure and in my opinion it will delay the implementation of this project.
All projects should be integrated as part of a country strategy within the global envelope envisaged. Nor should the door be left open to extend assistance beyond the ten years proposed. This is not because I am absolutely convinced that ten years will be sufficient but because at this juncture we must have some radical changes as soon as possible in order to gain that competitiveness. To give the idea of an extension at this stage would be to send a wrong message.
One final issue is the position on multinationals. In this regard, the only one concerned, if I am correctly informed, is Fyffes in Surinam, Belize and the Windward Islands. The reason we have some resistance is very simple. It is not because we want to finance rich multinationals. It is because quite often it is important not only to have joint financing for some projects but also because, on the specific allocation of funds, one should look at the specific situation of the one who puts the demand and on the merits of the project. This would give us greater flexibility and would in the end be more effective regarding the country. If you ask me if I expect multinationals to have a large share, the answer is No. But we should allow this joint effort to be made if the multinational - in this case, Fyffes - wants to contribute. I do not see why they should not co-finance such efforts.
Finally, I should like to say a word or two on Somalia. This country, as you know, has been without a government as such for a long time. Therefore, it was impossible for it to ratify the revised Lomé IV convention, the one which was revised in Mauritius. So, in principle and in theory Somalia was not entitled to any aid from the European Union. The Commission proposed that, bearing in mind the conditions prevailing in Somalia, and the fact that in some parts of the country the situation was more peaceful and the people were willing to make efforts for the development to continue our assistance, including in the case of bananas. And so we did.
What is the current difficulty in Somalia? It is not the definition of a quota or providing funds for assistance. It is to identify who should be the one that should a grant a certificate for exporting bananas from Somalia. There are some indications conveyed to us that one of the factions that is at war in Somalia is willing to have the possibility of certification. This would be equivalent to financing the war effort of that specific faction. That we cannot do. That is the reason why discussions are continuing. We want the association of producers to be the ones issuing the certificate rather than any political faction in Somalia. I am confident that with the support of our Member States and in particular the efforts that Italy is deploying, we will be able to overcome these difficulties.
Finally on the WTO panel, I am absolutely in agreement with those who say that it is not a technical problem any more. It is a clear situation in which the economies of different small countries - and if you visit them you would understand why they depend so much on this product as there are not many options - are being absolutely ignored in comparison with the interests of two multinationals. On top of that, the fact that the United States is apparently not prepared to accept the rules of the WTO means that we will have to rethink this concept of globalised liberalisation. My feeling is that if we leave this we turn a blind eye to the interests of the small and the poor and I do not think that Europe would be fulfilling its duties. So far the Commission has stood very firm in this dispute. I fully agree that Sir Leon Brittan has done a very good job. But we must be aware that if we do not stand united, be it in Parliament or especially in the Council, we will weaken our position very much. I sincerely hope that will not be the case.

President
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Universal telecommunications service
President
The next item is the report (A4-0386/98) by Mrs Read, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the Commission communication on the first monitoring report on universal service in telecommunications in the European Union (COM(98)0101 - C4-0249/98).

Read
Mr President, first of all, can I say that the Parliament and the Economic and Monetary Affairs Committee recognise that the implementation of universal service is at a very early stage and I hope that my criticisms, as set out in the report, will be taken in that spirit.
I want also to remind us all that the European Parliament's support for the liberalisation process of telecommunications goes hand in hand with the introduction and implementation of universal service. It is very clear that market forces cannot, at least in the short run, deliver on universal service. If this does happen through market forces in the next year I shall be the first to congratulate and draw attention to this.
Unfortunately, as the text of my report makes clear, there is a lack of information from the Member States on which to assess progress. I give some examples: there is a lack of truly harmonised national data, there are failures to achieve uniform tariffs across an operational territory. It is particularly disappointing that in half the Member States there has been a substantial rise in rental charges for the residential consumer. Of course, this weighs particularly heavily on the infrequent user, often elderly, housebound, who cuts down on telephone calls. It is important, too, to draw attention to the disabled users. Remember in the voice telephony directive, the Parliament placed great stress on the rights of disabled users to access to telephones, both from a social point of view and also from the point of view of being able to gain work often from home. Disabled users on the whole in the Community still do not benefit from satisfactory, special arrangements. Indeed, the general trend seems to be that there is a penalty for residential users. Although charges have come down they have come down disproportionately in favour of international calls which of course heavily favour the business user. I am not being critical of those reductions in charges but I am drawing attention to the unsatisfactory skew against the residential user.
I wanted to draw particular attention to Paragraph 9 in the report which talks about the lack of definition of affordability by the Member States. Without that definition of affordability it really does deprive consumers of a sound legal base with which to defend their interests. I know how hard the Commission worked on getting the balance right between being over-prescriptive from the point of view of directives and allowing Member States some discretion, but it does rather shake one's faith in the amount of discretion that is left to the Member States when on something as basic as the definition of affordability there really has been comparatively little progress.
After I had drafted this report, BEUC, the European Union consumers' organisation, produced their own analysis on the implementation of the voice telephony directive. Like me, they recognised that it is comparatively early days. Nevertheless, the evidence contained in the BEUC report and the lack of satisfactory evidence supplied to the Commission give some cause for concern.
I will end on a personal note because I think the views of consumers in this field across the European Union really are important. I tried to change my telephone. Formerly a British Telecom consumer I switched some 18 months ago to Ionica, a company that sadly has now gone out of business. I transferred my number, as my colleague Mr van Velzen laid down and as the Commission rightly proposed. When I now try and change to a cable company I am told that number portability is not possible. If I want to keep my own number my only choice is to go back to British Telecom, the old public monopoly. It was a salutary lesson for me that, in spite of all the efforts of the Commission and the efforts of the Parliament, in practical terms it is still very rare to find true effective competition at local level for the domestic consumer. I very much hope that the Commissioner will accept this report with its criticisms and I hope that it will strengthen his arm and those of his officials in making greater and speedier demands on the Member States to truly implement a universal service in the telephone field.

Camisón Asensio
Mr President, I should like to begin by paying tribute to the wonderful parliamentary work undertaken by the rapporteur, Mrs Read, during the preparation of this report. I must also say how pleased I am that almost all our amendments - eight in total - were adopted by the Committee on Economic Affairs. These amendments were of great importance to us. Amongst other issues, we called for increased social support for the most vulnerable users - the less able - the dissemination of information to consumers, due consideration of the needs of low-income users and a halt to the current discrimination against residential consumers.
Given our commitment to the aim of putting a genuine information society in place as soon as possible, we are also delighted that this initiative represents a further step towards the implementation of agreements concerning interconnection arrangements, making preferential tariffs for schools, libraries and other educational institutions a reality. I am of course referring to the Internet.
We remain concerned that the European Union has not yet adopted a uniform approach to providing a sensitive response to the needs of the disabled. Even now, one Member State is proposing to make free access to directory enquiry services available only to the visually impaired. Another has so far failed to put forward any proposals. I am aware that reduced connection charges and free specially adapted equipment are available in many Member States. I recognise that substantial progress has been made, but the final goal, the ideal, is yet to be achieved. In addition, if we are serious about making the European Union increasingly cohesive, a determined effort is urgently needed to put in place the facilities which should be available to consumers in less populated areas.
Universality of service in the telecommunications sector must be further promoted. I refer not only to take up but also to improvements in the quality of the service offered. For instance, we should press for an across-the-board reduction in the waiting time for connection to the network or for supply, and of the time taken for repairs to be carried out. Equally important are improving accessibility to services and the regulation of costs, particularly as regards implementation of the option of spreading payment, types of prepayment, and less distressing disconnection procedures. The introduction of reasonable rates for selected calls and provision by the operators of a range of service packages tailored to the customers' needs should also be considered.
In conclusion, Mr President, this report certainly represents a significant step forward, but a lot of ground remains to be covered.

Ribeiro
Mr President, a motion for a resolution from the Committee on Economic and Monetary Affairs and Industrial Policy is now before us, relating to the first monitoring report on universal service in telecommunications. In this motion, Mrs Read has given us an excellent opportunity to reflect on the changeover from what were public services originating in the public sector to the so-called universal service to be provided by private companies.
Our worst fears and expectations have been confirmed. The promises and commitments made have not been fulfilled. The liberalisation and privatisation of the sector has not led to the fall in prices for the economically weakest users which universal service should have provided as a result of the much vaunted virtues of competition. On the contrary, the most powerful users economically speaking, namely multinational firms, have benefited from the change, and the private operators which have come to dominate the sector have even been able to obtain other lucrative benefits through the public financing intended to mitigate the change, contrary to the spirit of universal service, not to mention the public service obligations.
It is true that the current competition in mobile telephony, in addition to causing changes in social behaviour, has altered the parameters of the telecommunications market. However, this cannot justify the rises in rental charges and the increased costs of local calls, even to the extent of creating perverse situations where prices for currently competing products are increased in order to assist the introduction of new and more lucrative products.
Portugal and Portugal Telecom - and it is impossible in many respects to determine whether the latter is the original or copy of other telecom services - appear, in this process and in this monitoring report, to be in a rather unsatisfactory situation from the point of view of social balance and justice. These elements should be inherent in universal service if this is not just to be an attractive way of dismantling the public service.
Portugal is participating in the global tariff increase and is one of nine countries which have increased rental charges. It is also, with Germany, one of only two countries which have increased installation costs in addition to having created the activation charge which particularly penalises the poorest users. This monitoring report therefore also provides a way of assessing something which is much more than just a name - ' universal service' instead of 'public service' - it is a whole philosophy which is self-revealing as it has shown how commitments which were used as justification or even a pretext have been sidelined or even ignored.

Crowley
Mr President, I too would like to join with my colleagues in welcoming the report by Mrs Read. In particular it now gives us an opportunity to look at the question of liberalisation and its effect on the universal service question.
What is common to all the public utilities across Europe is the fact that they were originally established to ensure there was a social equality with regard to the distribution of services. Whether one looked at telecoms, post office services, water supplies and so on, there was this idea of universality. No matter what part of a country one lived in one got the same level of service at the same cost as everybody else. Because of the advent of liberalisation and greater competition, which I welcome, let me hasten to add, we have also learned of some of the mistakes that can be made by just having a headlong rush into liberalisation. There must be some restrictions and some controlling mechanisms and methods with regard to that liberalisation.
Some of my colleagues have already touched on the points. I would like to deal with four particular points: firstly, ensuring that there is no cherry-picking of the most profitable and easily serviceable areas of telecoms. Secondly, dealing with special facilities for the elderly population, particularly in this year, the International Year of the Elderly. When we look at the increase in the numbers of people who are over 55 years of age in the European Union there is a social necessity to ensure them ease of access to telecommunication networks at very low cost, sometimes at no cost at all. To give you one example, in Ireland telephone line rental for people who are on the old age pension is free. Next, the disabled. Because the new technologies which have been brought forward do offer new opportunities for communications and for greater interaction of people with disabilities and the wider community that should be encouraged and given at a lower rate. Finally, with the Internet now being presented to us, we must ensure that this resource is tapped for the greater good not for exclusivity.

Lukas
Mr President, I welcome the consideration given by the rapporteur to the aspects of social policy that have taken on a new dimension in the modern information society. I also support the amendments that are designed to take account of these new factors. We must, for example, be absolutely rigorous in ensuring that disabled people are given access to service models that meet their special needs. The development of public access to the Internet, in schools and libraries for instance, is an extremely important matter to which this and other Parliaments ought to devote more attention in the future.
The information society must not lead to wider social disparities. If access by part of the population to the information media is denied or obstructed, stark differences in education levels will result, and these could create a glaring inequality of opportunity in the job market.

Rübig
Mr President, ladies and gentlemen, the liberalisation of the telecommunications sector was a pioneering strategy which not only represented another step from the single market towards a European domestic market, but also had a significant dimension in terms of employment. This development was referred to when we assessed the implementation of the reform package. The information society is currently responsible for every fourth new job in the European Union. For that we owe our thanks to the Commission, and especially to Mr Bangemann.
The Read report makes the accessibility of the basic services at acceptable prices and standards of quality a prerequisite of our support for the present liberalisation process. I would like to go further than that. The provision of a universal service can ultimately be a logical result and product of liberalisation. What exactly are the universal services? They are generally held to comprise a minimum range of telecommunications services of a certain quality that can be made available to all users at reasonable prices. This includes access to standard public telephone services, such as 999 calls, directory enquiries and special facilities for people with particular disabilities.
This subject is therefore important in terms of the general confidence which the European technology of the future must enjoy. It is also clear that in many areas, market forces cannot be given free rein from the outset. That is why the concept of affordability is such a topical issue these days - and rightly so. The affordability principle means that the Member States set geographical average prices, price ceilings and so forth. One of the important aspects of this mechanism is the scope for easing unreasonable burdens on providers of universal services. But I do support the Commission when it says that such measures can only apply until the market is competitive enough to exercise effective price control itself.

Porto
Mr President, I am standing in for my colleague, Mr Mendes Bota, and I must start by saying that telecommunications has now become a permanent part of our lives. It is integral and indispensable to the information society which Europe increasingly wants to join and it is the gateway to a global market of which the European internal market is the vanguard.
However, there are several points to be considered. Firstly, there is a great disparity between tariff trends in terms of installation costs and rental charges and between the costs of local, regional, national and international calls. Some countries have low costs, others have high costs, but this report does not give a clear and comparative view of the costs of using the European telecommunications networks in the various Member States. We believe that the more open the telecommunications market becomes to competition from the private sector, the more responsible it will be for regulating itself and for ensuring a minimum harmonisation of the European tariff system.
Secondly, it is clear that users on low incomes and the more peripheral and isolated regions are the sectors most prejudiced by the current tariff regimes. This is an aspect often neglected by the Member States.
Thirdly, the use of the Internet has exploded, and it is now being adopted by individuals, companies and institutions. However, it is in no way accessible to everyone and it is far from forming a basic instrument for the promotion of solidarity and equal treatment. Negotiations on creating an Internet card or code are continuing but the Internet remains outside the universal service in telecommunications.
We totally agree with the adoption of measures which will allow special tariffs to be granted to schools, libraries and other equivalent institutions and to charitable and non-profit-making organisations. Public access to the Internet must be regarded as a personal right and as a strategic position in the fight against a new form of emerging illiteracy which will afflict all those in the future who have not mastered the use of the modern information technologies or who do not have access to them.

Bangemann
Mr President, may I express my sincere thanks to Mrs Read as well as to everyone else who has contributed to this discussion for their comments. The Commission is trying to find sensible solutions to this diverse set of problems. The report we have presented is not entirely up to date, because it cannot yet cover the implementation of the voice telephony directive in its amended form. In other words, when we present another updated report this year as part of our task of evaluating the implementation of the existing directives, we shall be far better able to deal with some of your questions.
In the meantime, I should like to focus especially on four questions that have resurfaced in this discussion. First there is the question how the Member States have established what affordability means. Some Member States, anticipating the amended voice telephony directive, have already introduced more stringent measures to protect consumers. Amongst other things, there are price-monitoring and prepayment systems, particularly in the field of mobile telephony. Six Member States - Denmark, Germany, Spain, France, Finland and the United Kingdom - have already notified us that they have transposed the amended directive. We expect that Belgium, Greece, Ireland, Italy, the Netherlands, Austria and Sweden will shortly announce similar measures.
As one speaker said in the course of today's discussion, affordability depends to a great extent on income levels in individual Member States. These vary widely. Average incomes in some areas are three or four times the average income in another. For that reason we are really relying on the Member States, in accordance with the solidarity principle, to take greater responsibility in this area than we could take ourselves. What we shall be able to do, however, is to provide details in the new report of the progress that has been made in implementing the stricter consumer safeguards.
The second question relates to support for low-income users and disabled users, as well as for occasional users. We have recommended special tariffs for such users precisely because we wish to counteract the first adverse effects of liberalisation that we, like others, expect to occur. We have now managed - and Mrs Read knows this, as do her colleagues who have spoken on this subject, because they have all been studying these things - to achieve quite considerable reductions in mobile call charges this year, which incidentally has had a knock-on effect on standard call charges for fixed-network subscribers. Moreover, the amended voice telephony directive provides for special tariffs for low-income users, price ceilings and affordability criteria in Article 3 and prescribes special measures for disabled users and users with special social needs in Article 8.
This, it should be said, has now been transposed into the national law of five Member States - not just of France, as the report stated, but also of Italy, the Netherlands, Sweden and the United Kingdom. The new report will show us how things have developed from there. The Commission, like Parliament, is anxious to ensure that the new legislation is actually benefiting these groups of users.
How should the operators of the universal service be chosen? The Commission has no objections to any system that ensures the provision of a convenient, cost-effective universal service. The services may be put out to tender, but they may also be based on a cost calculation, prices then being fixed to cover only the net cost of the service. That is why we do not wish to come down on the side of any particular process.
The final question concerns the widening of public access to the Internet and especially the use of the Internet by public institutions. We have always said that this is absolutely crucial to the development of the information society, and we are now gratified to note that competition has developed among service providers, as a result of which interfaces have become more user-friendly and charges have been reduced. That is not the case everywhere, Mr President, and Mrs Read was right to criticise this state of affairs. The root of the problem has been the so-called rebalancing of tariffs, whereby the relatively cheap local calls have become more expensive while the price of the relatively expensive trunk calls and international calls has been reduced; since Internet access is obtained through a local number, it initially became more expensive than it had been.
But that is now in the past. We have certainly been observing price reductions; special rates for schools and other special tariffs are in no way inconsistent with the rules of competition, and we encourage these as long as the marginal cost is covered. I can promise you that we intend to re-examine the universal service in connection with the review of legislation scheduled for the end of 1999, and that we shall subsequently communicate the results to Parliament.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Public procurement
President
The next item is the report (A4-0394/98) by Mr Tappin, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communication from the Commission on public procurement in the European Union COM(98)0143 - C4-0202/98).

Tappin
Mr President, as colleagues will know, this report offers a broad outline of the progress we have made and should be making in the immediate future on the question of public procurement. In general, the Commission is showing that our past discussions during the debate on the Green Paper have been listened to. What we now need is to ensure that although the broad approach is right, the detail must be equally precise, firstly, in terms of social and environmental standards and sustainability.
Following the adoption of the Amsterdam Treaty where the EU underlined its commitment to the greening of European policies, we need to clarify how these principles will affect public procurement legislation. Members may remember from previous discussions that we asked the Commission for an assurance that there would be horizontal harmonisation of EU directives. It is ridiculous if the right DG does not know what the left DG is doing. The same applies to parliamentary committees. It is even worse if we are aware of the discrepancies but do not take positive action to eliminate them. In this way we have to confront the problems of building a certain model within our Union which is not always reflected in the directives we pass.
We have further requirements placed upon us by global or international commitments. We must recognise these. This is not a plea for one policy position or another but a recognition of the need for clear legislation which builds upon a secure base and thus becomes operational. Until we address this problem, which does not only affect procurement, we lay ourselves open to allegations that the Member State is the origin of all clarity and wisdom and it is the EU which is generally mucking up the system.
Since, following the Green Paper, we have agreed that contracting authorities have a right to set environmental standards if they so wish, we need to know exactly how they can implement those rights without breaching the overriding rules on competition. I shall say again - and let us be clear on this - we are not recommending a particular policy. We are recognising the need for clarity, simplicity and applicability. In the same way, concerning the issues of social affairs and employment, we have consistently said that public procurement is not a vehicle for promoting a particular policy in this area but adhesion to the rules and regulations of procurement must not be allowed to impede good employment practices. Again we need clear guidelines on how this can be operationalised.
The Commission has promised a report on this. We wait with bated breath. We want to see how they are taking forward the principles of clarity, simplicity and legal applicability and making public procurement legislation pertinent, effective and enforceable within our modern society. Any further legislation put forward now must cover these areas. This point is important. We are already looking to exempt telecoms from the procurement directives. I do not think anyone would dispute that, generally, the choice available to the average user is increasing. There may be some differences still which can be identified at national level but it is clear that the process of liberalisation in this sector is irreversible. However, we are now also looking at the future liberalisation and possible exemption from procurement rules of other sectors.
There are a couple of issues here. Firstly, we are waiting for the Commission to come forward with proposals for the process which they intend to use for these sectors: which article, what will be the criteria for deciding who can or cannot apply. Secondly, we go back to the point we made at the very beginning of the Green Paper negotiations, namely the issue of competitiveness. We must never forget that procurement legislation exists to benefit and protect the consumer. That is the reason why we favour competition. It is supposed to benefit the user so the underlying principle of any decision on competition must always include the consumer to ensure they retain the right to choose the most cost-effective service for them. Retaining consumer choice will be a key element in proving that real competition exists.
As I have said before, new simple procedures must not undermine the principles of best practice through full competition. I am aware that getting a fixed definition of what constitutes competition is not going to be easy. It is not our aim to make it harder but if European industry is not to continue being disadvantaged by a requirement to prove de jure and de facto competition, it is a challenge we have to face. We have tabled an amendment to this effect and hope the House will support us.
I wish to make just one oral amendment tomorrow. I should like to thank the Commission for listening. I spoke to Mr Monti outside. I have another engagement now and I know he will understand my reason for leaving.

Van Lancker
Mr President, ladies and gentlemen, Commissioner, we in the Committee on Employment and Social Affairs naturally looked at this communication primarily from the point of view of public procurement, on the one hand, and respect for social legislation and the use of social clauses on the other. I am very grateful to Mr Tappin for incorporating many of our conclusions into his report.
This is not the first time we find ourselves debating this subject. I have to say, Commissioner, that I am quite disappointed that the European Commission has not had the courage to take an important step forward in this communication, but has settled for an interpretative text here.
We for our part are convinced that 'soft law' is not enough. The practice surrounding social clauses differs widely in the various Member States. There are huge difficulties of interpretation and so we think that clear legislation is required. I shall focus on two points here.
Firstly, public contracts must indeed be adaptable to the needs of the market, but the market must not be abused, Commissioner, as a way of weakening social legislation. Contract guidelines must therefore explicitly state that international and national social legislation must be respected, as well as collective labour agreements, both by main contractors and subcontractors.
Secondly, very many Member States and local authorities use public contracts to take positive measures to help the long-term unemployed, the integration of migrants or the launch of neighbourhood campaigns. The Court has clearly ruled that such positive measures are not in conflict with the principles of competition. But to avoid confusion, Commissioner, the guidelines must state very clearly that positive measures are admissible and in what way social clauses can be introduced.
Now that the United Kingdom too, under Labour, has radically altered its position on social clauses in public contracts, I look forward to seeing how the Commission will respond to our recommendations.

Paasilinna
Mr President, Commissioner, ladies and gentlemen, the Commission has issued a communication on public procurement: it wishes to establish a legal framework, to simplify procedures, and bring a degree of flexibility to the market. In addition, however, it is important to bear in mind the broader social objectives: principles of humanity, the demands of society and the working principles of the public sector, which are not always directly compatible with models of private enterprise.
I would like to thank my colleague, Mr Tappin, for an excellent report. He feels that it is necessary to harmonise the social principles of the Union with EU legislation. Workers' rights, such as minimum pay, working hours and health and safety, have not been such obvious issues to those who have profited from competitive bidding. Why, for example, in the privatisation of transport, has it turned out that old drivers are being got rid of while at the same time they have started using old buses? In developing EU procurement legislation the regulations need to be tightened up, and we have to make methods of monitoring their enforcement more effective. Obviously, there have been problems in adhering to the content of directives.
The are even grounds for suspecting that it is not just a question of practical problems, such as legal complications or problems of varying labour market cultures. What if it were also that bidding for public procurement contracts is not compatible with other principles that apply in the public sector? Public corporations have also had to meet certain social policy objectives while involved in the business of procurement. The quality of services has to be improved, employment figures have to rise, and environmental questions have to be tackled. I await the report promised by the Commission on the total impact of procurement.
Both the Commission communication and Mr Tappin's report raise the issue of the need to make it easier for SMEs to access the public procurement market. That is only right. It is important as there appears to be a danger of cartels forming connected with bidding for procurement contracts. SMEs, and especially those that are obliged to observe labour legislation and environmental standards, need more information and training, however. That is particularly important when it comes to using information technology as mentioned by the rapporteur, and that too has to be broadly applied, as it speeds up and simplifies processes.
We should also remember that local authorities, because of their democratic nature, generally have a better sense of morality than the business world.

Peijs
Mr President, the directives on public procurement were an important step in our efforts to make the European market more competitive and more open. A good deal has changed in Europe since the first directive in this area. A sector like telecommunications has been liberalised, and there have been optimistic signs here and there concerning public contracts. Generally speaking, red tape was once again the villain of the piece. The procedures which business and industry had to grapple with were unbelievably complex and inefficient. We talk of a 720 billion euro market which really must be opened up if we ever want to have a truly single market. But at what cost?
The directive provides for thresholds whereby it is no longer possible, above a given threshold, to tender in a private or national capacity. In principle, that is a good thing. The problem is that the incredibly complex bureaucracy involved makes it virtually impossible for small and medium-sized businesses to get a look in. The fact is that under the system, framework contracts are not really feasible.
Large companies simply decide to have nothing further to do with public contracts and concentrate solely on the ordinary market. The concept of the economically most advantageous bid is also frequently understood as meaning the cheapest bid. That works against sustainable building methods, for example, since public authorities are interested only in the lowest price. Many authorities have no provision for the service of capital, a system which is short-sighted and expensive for the citizen in the long run. It is a poor system for small businesses, which do not have the longer-term strength of a bigger company that can calculate its profit out of capital resources. So it is right that the Commission should give special attention to SMEs.
In the meantime, a large or medium-sized company can use digital systems to obtain information on published calls for tender. But there is a good deal of ground to cover between the announcement of an opportunity and actually securing a contract. In addition to the expense of putting together a bid, the firm or consortium has to demonstrate that it is financially sound and has enough experience in the field in question.
Registration systems may be the answer here. These mean that companies only have to prove once that they are sound and competent, but for an authority which does not put work out to tender often, it makes no sense to set up a system of this kind. I have therefore tabled an amendment jointly with Mr Langen and my group, an amendment which won the backing of the Committee on Economic Affairs, to have the threshold amounts increased.
This places the majority of contracts outside the scope of the directive. To my mind, the thresholds are at present unacceptably low, given the huge amount of bureaucracy - hence the need to raise them.
The European Commission produced a green paper in 1996 and now it has produced a communication. The communication does include some constructive proposals, but not a word on threshold amounts. I hope that Parliament will give a clear message to the Commission with this report that things have to change, and that the Commission will address the matter.
My group will be voting against Mr Tappin's Amendment No 5. It is unacceptable for firms to be blacklisted because accusations have been made against them. In my country, you are innocent until proved guilty. That would make competition far too easy. We oppose Amendment No 4 because we have no idea what it means. We have already requested a number of split votes and, lastly, we congratulate Mr Tappin on his report.

Schörling
Mr President, in its communication, the Commission has stressed the importance of full and fair competition. However, similar emphasis has not been placed on the fact that it should be possible to apply environmental and social criteria to public procurement. This point has been made by the rapporteur, as well as by Mrs Van Lancker in her capacity as draftsman of the opinion of the Committee on Employment and Social Affairs. They are proposing certain amendments which would mean that environmental and social considerations are taken into account in public procurement, but in my view the wording should have been tighter and clearer. Nevertheless, the Green Group will vote in favour of the amendments, which still go further than the Commission's proposal or the report itself.
It seems to me to be quite a commonly held view that applying environmental and social criteria to public procurement would destroy free competition. Nothing could be further from the truth, since environmental and social considerations naturally involve additional costs for individual firms. If public procurement is not subject to the same extra costs, then those firms will be at a disadvantage - so much for full and fair competition.

Secchi
Mr President, first I would like to express the support and appreciation of my group for the Commission's initiative designed to improve the Community's legislative framework for public procurement. As has already been mentioned, this is an enormously important area of activity, representing over 10 % of the Union's GDP.
There are many innovations, an ambitious timetable has been proposed, and naturally we hope the various measures can be implemented smoothly.
There are two points I want to make: the first is to explain why I have tabled Amendment No 1 to paragraph 30, which is about making the competitive dialogue procedures more widely available. I have to say that I am opposed to the possibility of post -tendering negotiations because even if they could be done transparently - and I find that hard to believe as there does not seem to be much point to them beyond publicity as an end in itself - surely such negotiations would damage parity of conditions, given that only the successful tenderer would enjoy its results. That is what is behind Amendment No 1.
I also tabled Amendment No 2, but I hereby withdraw it so obviously I shall not dwell on it. That just leaves Amendment No 1 from me.
At a general level, I want to take this opportunity to emphasise the need to make the tender procedure more transparent at European level, both procedurally and in terms of the dissemination of information.
This laudable initiative must not prejudice the need to simplify and remove some of the red tape, as my colleague Mrs Peijs and others have already said, particularly with a view to further integrating small and medium-sized firms into the single market.

Langen
Mr President, ladies and gentlemen, I wish to draw your attention to one aspect of these directives and of this report by the Commission. Parliament, through the Committee on Economic and Monetary Affairs and Industrial Policy, has called for a marked increase in the thresholds, and I believe, Commissioner, that the Commission ought to display considerably more courage in this matter than it has done in the past. The thresholds that apply today are far too low in many areas. In particular, experience has shown that, with cross-border transactions accounting for less than 3 % of public procurement, the whole bureaucratic fuss, if I may say so, is a waste of time, because the thresholds are so low that no genuine competition takes place at all.
That is why our amendment provides for a marked increase in the thresholds, amounting to an average rise of 100 %. It is a proposal that we ask you to incorporate into the next amendment of the directives, and we would urge you not to wait until something happens on the international front, but to ensure that Europe takes the lead in increasing these thresholds. There is no point at all in insisting that all procurement contracts are put out to tender if the procedure is insufficiently transparent, small and medium-sized businesses do not bid, and these thresholds are ultimately devoid of impact on the competitive structure in Europe. That is why we ask you, Commissioner, not only to improve the transparency of the public procurement system, but also to take the initiative now in preparation for the next round of international negotiations in the GATT framework in the year 2000 by substantially increasing the thresholds, not only for services but also for public works contracts. I believe that this, along with the exemption of telecommunications from the utilities directive, will signal Europe's future intentions with regard to the development of public procurement.
If additional transparency can also be achieved through the use of modern media, such as the Internet, I believe all these things will put us on the right path, and I am convinced that the Commission can also take action to that end with the support of Parliament.

Monti
Mr President, first I would like to thank the European Parliament and the rapporteur, Mr Tappin, for the very significant contribution which his report makes towards making procurement policy more effective and adapting it to the needs of today's society.
The largely positive assessment of the action programme launched by the Commission with the communication on public procurement, which emerges from reading Mr Tappin's report and the motion for a resolution, is further evidence of the fruitful spirit of cooperation developing between the Commission and the European Parliament in this sector.
So it gives me great satisfaction to welcome the proposals and suggestions in the report on which there is a substantial convergence of view between our two institutions.
This applies first and foremost to Parliament's manifest concern about environmental and social issues, which the Commission fully shares and has already addressed in the communication. It is our intention to examine these issues in depth to identify appropriate ways of reconciling the objectives of competition and transparency pursued by the rules on procurement contracts with the legitimate environmental and social protection requirements, which have been strengthened by the Treaty of Amsterdam.
Here we should not forget that the current rules already offer concrete opportunities for achieving adequate levels of protection, environmental in particular, but also social, without this altering the fundamental purpose of procurement policy, which remains essentially economic in nature. These opportunities are not widely known and the Commission therefore believes they should be promoted and their scope clarified. That is why we propose to adopt instruments for this specific purpose as soon as possible. If this proves inadequate, the Commission will certainly consider whether it is appropriate to put forward more incisive proposals. With reference to the social aspects mentioned by Mrs Van Lancker, Mr Paasilinna and Mr Schörling, I would point out that respecting current social legislation forms part of the clear and recognised obligation to comply with current legislation - all current legislation, not just social legislation - arising not from the directive but from the national legal system into which the directive is transposed. Positive action is far more feasible than is commonly believed. Of course it must respect the principles of the Treaty, and the interpretative communication we will be publishing is precisely intended to clarify all this.
I would add that there are provisions in the directives to exclude candidates failing to comply with national social legislation. The case-law of the Court of Justice confirms, in the Benjes judgment, that social requirements can be taken into account if this is stated in the general specifications for a contract. Again, the Commission will spell out the possibility of taking these requirements into account in its interpretative communication.
As to the need, mentioned by Mr Secchi in particular, to simplify the current rules and related procedures and make them more flexible and adaptable to market developments, the Commission intends to clarify the scope of obscure or complex provisions and, if necessary, modify the current system. With a view to this, proposals are being put forward designed to exclude from the scope of Directive 93/38 the sectors and/or services covered by it which operate under conditions of effective competition - water, energy, transport and telecommunications - and establish more flexible procedures, like the procedure known as 'competitive dialogue' and the framework agreements system. With two 'public procurement' consultative committees, we are examining a new competitive dialogue procedure which ensures maximum transparency, as well as allowing greater flexibility.
Mr President, the report also specifically refers to the need for the new initiatives announced in the communication to help to ensure healthy and effective competition between economic operators during the tendering procedure. This is an aim the Commission has always pursued in public procurement and it is the ultimate purpose of the interpretative communication on concessions and other forms of public and private partnership, which will be published in draft form in the next few weeks.
I would also like to touch very quickly on the important point raised, in particular, by Mrs Peijs. We are aware of the difficulties currently faced by small and medium-sized businesses in taking part directly in tendering procedures, especially cross-border. To reduce these difficulties and encourage the participation of small and medium-sized businesses, the Commission is drafting a communication to highlight the possibilities for giving SMEs increased access to public procurement in general, both through appropriate legislative changes and by identifying the opportunities currently offered by the existing programmes.
Internationally, the Commission will continue to act to ensure that the principle of reciprocity is established in the context of the current World Trade Organisation negotiations on the modification and simplification of the public procurement agreement.
I agree with Mr Tappin when he says that communication simply announces the initiatives the Commission intends to take and presents them in general terms, without providing details and particulars on each of them. Mr Tappin is absolutely right. That is inherent in the very nature of a general policy statement like the communication in question. Obviously the details on each initiative will emerge when the initiatives themselves take shape. As regards the legislative initiatives, these will be based on Article 100a of the Treaty and their adoption will therefore require the active participation of Parliament.
Finally, on the drafting of the interpretative instruments, while emphasising that this is an institutional responsibility entrusted to it by the Treaty, the Commission naturally appreciates the support of Parliament. In this regard I have already proposed that a discussion group should be set up in Parliament for ad hoc informal meetings, tasked with interacting with the Commission departments concerned, and I think this idea should be studied in greater depth and acted upon, while still, of course, respecting the separate spheres of responsibility of our two institutions.

Schäfer
Mr President, even at this late hour, a certain degree of attentiveness is required. I found it difficult to follow the Commissioner's interesting remarks because the background noise level had risen very perceptibly in this Chamber, where sound carries over considerable distances, as a result of individual conversations. Please ensure in future that we can listen in silence to every speaker. Please advise Members and parliamentary staff that conversations involving groups of people can be conducted outside.
Protests

President
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Jobs of the future
President
The next item is the report (A4-0475/98) by Mr Thomas Mann, on behalf of the Committee on Employment and Social Affairs, on jobs of the future in Europe.

Mann, Thomas
Mr President, Commissioner, ladies and gentlemen, numerous academic studies and publications by employers' associations, organisations representing small and medium-sized businesses, trade unions and public institutions have served as the basis for my report on jobs of the future in Europe. I am grateful to my colleagues in the Committee on Employment and Social Affairs and the Committee on Women's Rights for their amendments, most of which I have incorporated into the report. In the brochures I have obtained, even the glossiest of them, I find only a catalogue of achievements. There are no visions or specific statements of intent for the next 10 to 15 years. Globalisation, fierce international competition and ever shorter lifespans for innovations and decisions are resulting in deep-seated insecurity for everyone, from managers to part-time staff.
The hearing organised by the Committee on Employment and Social Affairs, in which the Union of the Industries of the European Community (UNICE), the European Trade Union Confederation (ETUC) and the European Union of Crafts and Small and Medium-Sized Enterprises (UEAPME) took part, also made it clear that the current structural transformation is moving too fast to permit any long-term forecasts. What are the trends that might influence the jobs of the future? First of all, as we enter the information and knowledge society, we shall need suitably qualified employees. They must have facts at their fingertips, they must keep educating themselves, even in their spare time, and they must be able to master technological equipment. Once they have amassed a wide range of knowledge, they will be able to move from one discipline to another, switching from the occupation for which they were initially trained to another occupation and repeating that process three or four times in the course of their working lives. They will have to be specialists and all-rounders at the same time, and will have to acquire key skills such as in-house communication, public relations, creativity and the skills of conflict resolution. As hierarchical structures dissolve and staff assume an increasing amount of responsibility, they must also be good team players. They must be multilingual and able to empathise with foreign cultures.
School curricula and training programmes in the Member States will have to be reformed so as to emphasise knowledge of applied technology, educational breadth, new career profiles and the mentality of lifelong learning. It is not only wrong to demand too much of people; it is also wrong to expect too little of them.
Secondly, in order to achieve high employment potential, in addition to these multiskilled employees there will be an increase in the number of job opportunities which involve the performance of basic tasks. These are required in manufacturing and in labour-intensive industries. Millions of people will obtain this type of work and will contribute to gains in productivity.
Thirdly, I cannot share the euphoric vision in which the service sector appears as an indestructible generator of jobs, because not every job that is done without payment today can be transformed into external paid employment. Demand for services provided by regions and individuals will certainly increase. These include care services, from the training of carers and care management to care of the elderly, home care and health care in hospitals and nursing homes. Some services are business-related, ranging from insurance to corporate services; others are distributive, such as transport and communications; household-related services include retailing and catering, while other services relate to the social sector, covering areas such as employment and personal finance.
Tourism will be a strong growth area, from travel agencies marketing products designed for specific target groups to rural and cultural tourism. To pave the way for new entrants to these jobs of the future in the Member States, the European Commission will need to launch initiatives but must, of course, respect the principle of subsidiarity at the same time.
Fourthly, there are good prospects in the fields of biopharmaceuticals and agricultural biotechnology, although public acceptance must be secured before these industries can take off. No such controversy, however, attaches to systematically applied environmental technology, in which we Europeans already lead the field. Considerable growth should be seen in research and development, which are the source of the innovative products and processes that enable companies to secure niches in the world market. The TIME industries - telecommunications, information technology, the media and electronics - will be among the beneficiaries of the changing employment structure as networking and decentralisation take hold.
I believe there are three priorities with regard to sustainable jobs in the European Union. First of all, European support programmes - and this, Mr Flynn, is addressed to the European Commission - must be maintained in the long term without any reduction in their volume. These include start-up programmes, schemes designed to enhance the competitiveness of SMEs and measures whereby women, who are still a disadvantaged group, can upgrade their qualifications and enjoy real equality of opportunity.
Secondly, the flexibility that is required for the jobs of the future demands a reorganisation of the work process. There is a need for more company agreements to be concluded, providing for such things as part-time arrangements designed to enable parents to reconcile their occupational and family responsibilities, as well as proper social protection and childcare facilities.
Thirdly, instead of merely considering how to share out the existing workload among more people, the Member States must launch education and training campaigns. The current presidency of the Council would do well to give up the idea of an EU-wide alliance for work, which is still a nebulous concept, and replace it with a far more meaningful and, what is more, an achievable alliance for the future. Millions of people, especially those who are marginalised and unemployed as well as young, experienced and women employees, are waiting for this ambitious step towards a new dawn.

Weiler
Mr President, ladies and gentlemen, I did not understand your last comment at all, Mr Mann. There is absolutely nothing contradictory in the fact that the alliance for work which the German Federal Government is pursuing nationally, and which it is pursuing at European level during its presidency, is a useful contribution to employment growth. So I am quite amazed by your comment because, as you know, we support your report in principle. We also support your proposals on the environmental orientation of future economic activity and on the sabbatical year, and we hope that your group will not succeed in watering down the content of your report.
We see your report as a tile in the mosaic of the parliamentary quest for more employment, as part of the continuous process that we have been pursuing in Parliament for the past four years through the employment policy we initiated, through the Amsterdam employment summit and through the Luxembourg guidelines, despite some governments having dropped the occasional spanner into the works. I also think you were right to include in your report the Commission's critical assessment of the national action plans, because there is little point in our being unwilling to learn from past mistakes. But I am pleased, and I take the liberty of stating it here, that the priorities of the German Presidency will be the fight against youth unemployment and female unemployment. This was not such a matter of course in Germany as you have implied.
I support the proposals contained in your report regarding the various means of creating sustainable jobs, and particularly the two main avenues. The first of these is the redistribution of existing work. That is hardly a new proposal, but we should not underestimate it in the context of a democratic society which enables mothers to hold down a job and which allows fathers to fulfil other social responsibilities besides their paid employment.
In my opinion, the second avenue of strengthening growth potential and improving basic conditions also requires special support. By this, of course, I mean support for new business activities, for the tertiary sector, care services and, needless to say, for our great hope for the future, the SMEs. By basic conditions I do not mean the supply-side policies that some countries have been pursuing, but the conditions for a modern system of education and vocational training. I was also pleased to hear Mrs Edelgard Bulmahn, the German Federal Minister of Education and Research, emphasising to our committee that many Member States - including Germany, unfortunately - have education systems that are not Europe-friendly, not to mention their systems of further education, which are essentially at odds with the objectives we always proclaim in connection with lifelong learning.
Another important aspect is undoubtedly the acquisition of key skills, team skills and holistic thinking; we agree on that, and you know that I laid particular stress on the need for the men of our society to learn this kind of team skill. I also thank Mrs Bulmahn for her pledge that Germany for one would be doubling its education and research budget over the next five years. That, of course, is a signal by which we shall judge her. We all know that the transfer of knowledge between the academic world and industry, in terms of real exploitable discoveries, is far too slow and that in many Member States it falls far short of what is required. Our best bet in the initial stages, of course, is to support small and medium-sized businesses, which are the most powerful generators of new employment.
I should also like to mention one other target group that is often neglected in this debate, namely the foreigners who live with us in our EU Member States and whose enterprising spirit has done a great deal to provide additional employment. Let me say here that I consider it a scandal that in my home state of Hesse, foreigners are currently being subjected to an unacceptable campaign of discrimination.
My last point concerns the lack of emphasis on what women can do in small and medium-sized businesses. Their innovative capacity and their creativity are simply not able to come to the fore in the real world. I believe the European Union should provide special support for enterprising women who want to start up in business.

Pronk
Mr President, I should like to thank Mr Mann for his report. I think he has made a good attempt to focus attention on a number of new sectors in which jobs can be created. He mentioned small businesses. He also mentioned the need to learn. 'Learn, learn, learn' is the title I would like to give his report, because we can only create enough jobs if we have a population capable of meeting the challenge of the new technologies. I think that is a most important point to make, and his report makes it.
We in the PPE Group of course support this report most warmly, but it is naturally something of a compromise. I think Mrs Weiler is right in calling it a mosaic. I have to say that some of the pieces added to the mosaic are worth rather less than others. The bits added by the rapporteur himself are rather better than those put in later, and that is a danger.
When I was learning German, I had a little book entitled Schwere Wörter - difficult words -the differences between German and Dutch. What we are getting at the moment from the German Government are schöne Wörter - fine words. No new deeds. At most it is going as far as the previous government went, but no further. Absolutely nothing new is being done in real terms. But the language used is splendid. Old ideas are being dressed up in splendid new words. But we are interested in deeds, in action. I think it is important that the rapporteur has emphasised the need for action, for real and new jobs here and not various kinds of redistribution and other solutions, and not the fine words of the Federal Chancellor. What we need is action, and it is on this that we shall ultimately be judged.

Lindqvist
Mr President, jobs are the Achilles' heel of the EU. The economy and competition have dominated cooperation in the EU for far too long. EMU has become a kind of mantra for the Member States which has pushed them into fighting inflation, meeting the convergence criteria, reducing their budgets and cutting back public spending, at the expense of creating new jobs. From a European perspective, these things are important, but the approach is too narrow and one-sided. EMU is actually making it more difficult to increase the number of jobs in the future. I believe that peace, employment and the environment are the only areas by which our European citizens set great store.
The sections of the Amsterdam Treaty devoted to employment are commendable. The approach should be based on intergovernmental cooperation, with objectives and guidelines set at European level and the possibility of coordinating national efforts. A good way for countries to do this would be by adopting sound ideas from other countries, for example variable taxation, shorter working hours and time off for study or training.
I would emphasise the fact that transport, the environment and energy are the sectors of the future. I should for example like to see the EU, together with the Member States, making a substantial investment to ensure that, over the next ten years, petrol is replaced by environmentally friendly fuels, creating a large pool of environmentally friendly jobs in the process. There is a market for vehicles powered by ethanol, methanol, electricity and so on.
Last summer, I visited a company in central Sweden: a small paper mill with 300 employees. I asked the managing director what his biggest problems were in terms of the workforce. I was anticipating that they would be pay, taxes and EU rules, but he told me that above all people wanted to know about schools, childcare, medical facilities and communications. Basic public services are absolutely crucial when creating new jobs in many places, not least the northern part of Europe. The Liberal Group supports this report.

Crowley
Mr President, I would like to welcome, very warmly, the report by my colleague, Thomas Mann, because it looks to the future and that is what we are talking about. Not trying out failed systems of the past, not trying out failed mechanisms of the past, but dealing with the reality of what we are presented with. Despite the risks and the dangers which new advances and new technologies present, they also offer us a wonderful new opportunity to correct some of the errors of the past, to be more socially cohesive within Europe.
A lot of mention has been made within the report and by colleagues speaking here tonight, and I am sure the Commissioner will also touch on it, about the importance of lifelong learning and education. There is a very old saying 'Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for life'. By investing more of our resources into giving real education and real training to our people then we can guarantee that they will benefit from the huge explosion in job creation opportunities which will be presented.
But there are dangers relating not just to individual actions taken by Member States but also to the question of tax harmonisation, about increasing taxation. That is the biggest disincentive to investment which will hit job opportunities. No longer can we have a huge state sector which will automatically take the overflow from the unemployed and give them meaningless jobs. People now demand that they must have a meaningful role to play in life, with dignity. If that requires them working part-time, so be it. If it requires bringing more women back into the workplace, so be it. Nobody should be denied the opportunity to ensure that they can play their full role in life. But likewise, nobody should be forced, out of necessity, out of poverty, to take up a job opportunity that is not suitable for them. Let us focus on education, let us work together for the common good.

Wolf
Mr President, actions, not fine words - that is absolutely the right approach; that has to be appreciated from the outset. An employment pact, rather than an alliance for goodness, beauty, truth or other intangible values, seems to me to be the proper step for us to take at this time. There is much in Mr Mann's report that we are able to endorse, and we are opposed to any attempt by the PPE to emasculate it, but there are also a few points in it which are rather unclear. So that we can have these points clarified, I shall try to present them systematically.
There are two possible sets of measures. Additional demand for work can be created. This can be achieved by means of an employment-oriented economic policy, by restructuring society and the tax system in line with environmental objectives, and by developing the tertiary sector to create social tasks which are necessary but which the market does not perform. The second set of measures is designed to cut back the available volume of work. This can be achieved by redistributing the workload, reducing working hours, introducing part-time work, reorganising the work process, cutting the supply of work to employees by granting individual and collective rights to leave of absence and by granting sabbatical leave, which Mr Mann had in his report but which his group now wishes to delete. This training measure has the dual effect of improving the quality of human resources after the sabbatical year and drastically reducing the available labour pool during it. These measures can be taken, and we can close the labour gap in the European Union: 27 to 34 million, the Commission has calculated. To do this, however, we must consciously address the problem, and for that we need a very substantive employment pact, not just a finely worded document. We are in agreement on that.

Damião
Mr President, this report is like a mosaic which has the virtue of being in many different parts and therefore raising many issues. It is a report which has not confined itself to simply expressing our concerns or to obtaining the unanimous approval of the Committee on Employment and Social Affairs (our concerns necessarily involve opposing exclusions from the current development model), but has put forward certain solutions which have already been mentioned such as work-sharing. However, we all know that work-sharing is an approach that produces immediate but inadequate results given the scale of the problem. We therefore have to find new ways of tackling this problem by recognising that we need to establish companies rooted in the people which, as has already been said, can help to solve the problems of the elderly, of community services and of the environment and which can be recognised and compensated in tax terms. Companies involving the people and rooted in the people have a new role which must be welcomed and encouraged.
We know that the social security systems are now playing a role which they are unable to fulfil and for which they were not created. Never, since the post-war years, have so many depended so much on these systems, either totally or partially, and they cannot withstand the pressure. Therefore, only employment can produce appropriate, reliable and genuine social integration. Jobs must be created and this means achieving agreement and cooperation on investment, because jobs which appear only in social statistics, which have no social quality, which have no future and which are inappropriate forms of social interaction between people are surely not the European social model which we want to build. Therefore, it is not with jobs 'for statistics' that we will solve the problems, nor can quick fixes of training and work help us to tackle this mosaic which has to be sorted out.
We look to the Commission, knowing that, with the White Paper, we have overcome the obstacle of indifference. It is time to act!

Hatzidakis
Mr President, I should like to sincerely congratulate our esteemed friend and colleague Mr Thomas Mann on his very good work, although I think the end result is less good compared with the initial proposals he himself put to the Committee on Social Affairs.
In any event, be that as it may, I think this report is particularly important for two reasons. The first reason is that we are in a period of very rapid developments. We are in the age of globalisation, biotechnology, the information society, and it is essential and important for the European Parliament to look at the issue we are considering today, jobs for the future. The second reason is unemployment, which is the scourge of the working population in the European Union in particular, and that is therefore yet another reason to consider how to deal with the developments that are coming and which are before us.
In a free economy, it is clear that the state cannot foresee exactly what is going to happen. It can, however, do two things. Firstly, it can support flexible, up-to-date and effective systems for the training and retraining of working people so as to keep pace with developments; and, secondly, it can put emphasis on language education, which also encourages the mobility of working people, especially in the context of the common market.
Above and beyond that, it is clear that the sectors to which attention should be turned, even in an indicative way, can be identified. And here, quite rightly I think, the report points out that, firstly, one such sector is information technology and the electronics industry; a second sector, and one of particular interest to my own country, is tourism, agri-tourism and more generally the leisure industry. Thirdly, emphasis should be placed on the tertiary sector, the provision of services. It is clear that this sector will grow at the expense of the secondary sector; and, of course, a fourth sector comprises small and medium-sized enterprises, which are much more flexible and can create many jobs, as has been demonstrated.

Heinisch
Mr President, ladies and gentlemen, allow me to raise three points. A major problem group throughout the European labour market of the future will consist not only of young people and adults without any training qualifications at all, but also those whose training qualifications are outdated or irrelevant. Vocational training and further education systems must be adapted ever more rapidly to changing employment structures. Joint efforts by the Member States to introduce innovations in this sector seem to hold the greatest promise. Leonardo II in particular will offer excellent opportunities for cooperation in education and training, and it is imperative that these opportunities should be taken.
Secondly, the people of Europe have hitherto made little use of the single European job market. A mere 2 % have been living and working for any length of time in a Member State other than their own. Jobseekers are still too frequently unaware of employment opportunities beyond their national borders, and obstacles to the mobility of trainees and labour have still not been removed. Initiatives such as EURES and Citizens First are steps in the right direction, but are not yet the complete answer. It is up to Parliament, the Commission and the Council to launch new initiatives. One particularly useful development has been the introduction of the Europass Training document, which guarantees the transparency of vocational qualifications acquired abroad.
Thirdly, additional employment opportunities can be created in Europe if new businesses are set up on the basis of innovative technology, new marketing potential or new service functions. This, however, depends on young people in particular being able to take full advantage of these assets. Even during initial training and then in the course of lifelong learning, entrepreneurship and knowledge of business practices must be imparted and encouraged. At the same time, however, it is also necessary to eliminate excessive legal regulation, financial obstacles and information gaps. The availability of venture capital, for example, is a key factor here. Finally, may I again express my very sincere thanks to Thomas Mann for his excellent report.

Rübig
Mr President, ladies and gentlemen, a few weeks ago, the unemployment rate dipped below 10 % for the first time in several years. That is encouraging, but let us not rest on our laurels. In particular, it would seem important to highlight positive trends and future job markets. Thomas Mann's excellent report is especially valuable in this sense. He quite rightly states that employers have an obligation to ensure the continuous training of their employees. The point here is that the ability of staff to apply the latest specialised knowledge will primarily serve the interests of their employer. That is why lifelong learning must be at the forefront as the prime instrument with which we can increase the level of employment throughout the Union, because only consumers can create jobs. For this reason, it is essential to supply products and services that will actually be bought.
Care should also be taken to ensure that when a company changes hands there is a possibility of securing the jobs of the existing staff and subsequently expanding the workforce. The report also refers to the fear that technological change could result in more redundancies than new jobs. We must work resolutely and systematically to allay those fears. The information society, for example, is the most dynamic economic sector in the European Union. It already accounts for 5 % of our total GDP, is growing faster than every other sector and is creating more jobs too. More than four million people are already employed by companies in the field of information and communications technology. More than 300 000 new jobs were created in this area of the information society between 1995 and 1997. But this potential has not been exhausted by any means. There are still about 500 000 vacancies for ICT specialists. Opportunities abound. All we have to do is take them.

Schiedermeier
Mr President, ladies and gentlemen, Commissioner, as the last speaker on this item, let me examine the problem under a slightly different light. What are jobs with a future? The crucial thing is not the type of work that will be done, but rather whether jobs will still be available in the future. The way I see it, some of the jobs of the future already exist. And so what I should like to analyse is why these jobs of the present have a future. That is not even a difficult task. The management team or, in smaller businesses, the manager, must be quick to recognise market openings for their products and services and must adjust their range rapidly to keep up with customer demand. To that end they require employees who are well trained, highly motivated and always prepared to undergo further training. Such workforces do not grow on trees. They need to be well treated, well informed and well paid. Greater flexibility is more essential than ever today, but it must be a two-way flexibility that benefits not only the company but its employees too.
Modern workday patterns must not be detrimental to employees, as the latest example from the Volkswagen works in Wolfsburg illustrates. Duties at work must not exclude anyone from his or her own family or from society. National governments must play their part with a balanced taxation system, including tax relief where necessary, and must not capitulate under pressure, as in the case of your new government's DEM 630 legislation, Mrs Weiler. So much for my basic analysis.
Inadequate school education, a lack of vocational training, an absence of further education and insufficient skills prevent many people from obtaining employment. Discrimination against the older age groups and against disabled people must henceforth be prohibited by law. We in Europe should learn from one another in this field. The rapporteur, Thomas Mann, has made many good proposals. The latest technological developments and in particular the service sector offer opportunities for the creation of secure, sustainable employment in which women and men would enjoy real equality. I am all for defending the welfare state in the market economies of Europe, but I reject any attempt to spoonfeed people, because that could prevent the creation of jobs with a future.

Flynn
Commission. Mr President, employment is Europe's top political priority and I welcome this report on the jobs of the future and I congratulate the rapporteur for his excellent work. Thank you Mr Mann. It follows on, of course, from the Commission's employment rates report of 1998 which identified the constraints on Europe's employment performance and the sectors where employment is lagging behind in Europe. I welcome many aspects of the report and, for example, that the resolution identifies the high road for Europe. We should expand our capacity to provide high quality products and services which are at the forefront of technological change and which lead to high quality jobs. The emphasis is given to the potential which exists to increase employment and services; the need to reform education and training systems and to allow for lifelong learning; the emphasis that needs to be given to women in employment policy and the importance of targeting small and medium sized enterprises in employment policy; the call for involvement of the social partners in the formulation of training policy and the calls for greater links between industry and sites.
Now the Commission is called upon to act on a number of points in this resolution and I would like to make the following brief comments, if I may. In Paragraph 21 the resolution mentions the Philoxenia programme. This is a tourism programme which was proposed by the Commission in 1996 but which has still not been approved by the Council. Let me clarify that the Commission has not withdrawn the proposal and has no intention of doing so. I believe that the German Presidency may discuss it.
Regarding Paragraph 24, within the framework of the Employment and Labour Market Committee, the Commission has launched a series of peer reviews which aim at identifying good practice in employment policies in the Member States. The results of this peer review will be included in the 1999 joint employment report. Lessons drawn from this review will be used in the drafting of the employment guidelines. I would like to make the point, however, that specific policies to be carried out in each Member State are normally best determined at national level.
In Paragraphs 32 and 33 I welcome that the Parliament recognises women as a special target group. Women's unemployment is higher than that of men and the level of employment is also much lower. Community action in favour of employment of women already exists, of course, both in the Community initiative NOW and in the mainstream European Social Fund, Objective 3. But more can be done and more has been proposed in the reform of a social fund which is now being negotiated. The new fund will include specific action for women to allow them to fully exploit new job opportunities.
As regards working time, dealt with in Paragraph 16, the formulation given by the Parliament in its resolution embodying Parliament's proposal to the Luxembourg job summit, adopted in October 1997, reflects what should be the position at European level. It is stated, and I quote 'that Member States need to address the issue of promoting flexibility on the labour market with regard to working hours, working time and working patterns, such as career breaks and sabbaticals, etc, through a non-legislative, non-compulsory process based on social dialogue at the level of the individual enterprises'. I would like to say to Mr Mann that he is right when he says that portfolio jobs will be the order of the future, three and four changes in a lifetime. That can only be accomplished, Mr Mann, by emphasis on lifelong learning, by saying what Mr Crowley said, that we have to have a different situation for education and training so that everybody can participate in the labour market.I would like to say to you, Mrs Weiler, that it is my understanding that there will be a much strengthened German national action plan. That is my understanding, having been to Bonn and spoken to the German government on this particular issue. They are focusing extremely highly on the question of young unemployed people and the question of women in the labour market. The key point in so far as the strengthening of the German plan, is going to be that they are putting up the money, the millions and billions of deutschmarks, to satisfy the implementation of the guidelines. That is what we want to see from the implementation in every Member State.
Now I understand very well, Mr Pronk, what you are saying about new services and the interesting thing about it is, of course, that there is a huge gap. But it is not in agriculture or manufacturing or the public sector. It is in the services sector, the communal services, the business services, distribution of services and the whole question of leisure. It is there that we have fallen behind the United States and we have to make up that difference because our employment rate has been falling for the past 25 years. But it cannot happen, Mr Lindqvist, unless there is a huge resource put into child care and the means to bring all of the resources of the labour market to bear and that includes giving much more attention to women.
I have to say to you, Mrs Heinisch, that the question of mobility is a key element here, in so far as the European labour market is concerned. We do not have a good record here but we are putting in place in the EURES network, a system that is making it possible for people to move more easily around the Union and hopefully bring about a situation where that mobility can be increased.
Finally, half a million jobs are vacant this evening in the European Union in the information society and in technology. Your are quite right, Mr Rübig, half a million jobs. But the industry tells me that in five years it will be 1.2 million vacancies in Europe that we cannot fill. I say that the only way that we can come to grips with this is to change, Mrs Weiler, and reform the education and training systems so that the technology that is here today, which will be obsolete in ten years time, is matched up by an educational system, Mr Crowley, that will allow everybody to particpate and everybody to have a chance to work in this Union.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 9 a.m.

Protection for laying hens
President
The next item is the report (A4-0481/98) by Mr Kindermann, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council Directive laying down minimum standards for the protection of laying hens kept in various systems of rearing (COM(98)0135 - C4-0196/98-98/0092(CNS)).

Kindermann
Mr President, this Commission proposal is intended to replace, from 1 January 1999, the existing directive 88/166/EEC on battery cages with a directive on the protection of laying hens kept in a variety of rearing systems. These are only minimum standards. The Commission's proposal implements the revision clause in Article 9 of the existing directive, whereby, on the basis of a report by the Scientific Veterinary Committee, it must put forward proposals for adaptation to take account of advances in our knowledge. All new rearing systems will have to have nests, perches and litter. Conventional cages without nests and litter may continue, exceptionally, to be permitted by Member States, but they must allow at least 800 cm2 floor area per bird and be at least 50 cm high at all points. Under certain circumstances, old systems may continue in use until 31 December 2008 at the latest.
Our committee welcomed the Commission proposal because it is a step in the right direction, in other words it seeks to improve the conditions in which laying hens are kept. In the first place, there is the increasing of the minimum floor area per bird from 450 to 800 cm2 , a measure which we particularly welcome, since the widely held view is that the current rules do not allow birds to follow their natural behaviour patterns, with the result that they are not kept in a manner appropriate to their species.
Regrettably, in formulating minium requirements for other rearing systems, the Commission only went half way. The rules for non-cage systems in enclosed premises are incomplete, and above all there are no provisions on stocking density. On free-range farming, there are no provisions at all. We find that unfortunate, since the new directive will mean greater competition between the different rearing systems. We therefore call on the Commission to bring forward a proposal on this shortly. Also regrettable in the committee's view is the fact that the new 'enriched' cage with a nestbox, perches and litter, which in future is to be the standard cage, is not defined in detail. I think we have helped to remedy that.
We also suggested that the date on which the new directive comes into force should be put back by two years, because the timetable envisaged by the Commission is totally unrealistic. By the deadline it is setting, there will not be any cages on the market in the form specified for commercial use. We also want a tighter definition of the Commission's monitoring activity. This is because if the Commission merely tightens up the conditions for farming and changes the obligation to conduct on-the-spot inspections into an option, it is not carrying out its duty to ensure that the directive is complied with throughout the EU.
I shall move on now to the socio-economic considerations. In addition to the option of cofinanced investment aids under the efficiency Regulation 950/97/EC, the committee is proposing the introduction of a system of aid which is independent of production, limited in time and paid on a reducing scale. We think this tax mechanism will encourage reluctant Member States to adopt higher standards of animal welfare, and we urge the Council and Commission to consider this proposal closely.
The committee also wants care to be taken to ensure that Community producers are not disadvantaged vis-à-vis imports from non-Union countries. In particular, this means that imports must meet the same animal welfare, veterinary and hygiene standards as EU products. At this point, I should like to add a few words on the demand for a total ban on battery cages, made primarily by animal welfare groups. The committee did not use the term 'battery cage' in connection with the new proposal for a directive, because it is inadequate and misleading. There are at least three types of cage and each one, including the so-called 'enriched' cage, can be used as part of a battery. So the term 'battery cage' only tells us how the cage is used, but nothing about its dimensions and properties. Our committee therefore suggests that the term 'conventional cages' should be used to describe the cages defined in the current directive.
It is true that the October 1996 report of the Scientific Veterinary Committee concludes that 'because of its small size and barrenness, the battery cage as used at present has inherent severe disadvantages for the welfare of hens.' But the key words here are 'at present', because the Veterinary Committee also says that alternative farming systems have serious disadvantages due to the risk of pecking and cannibalism ...
The President cut the speaker off

Needle
Mr President, firstly I should like to say that I very much welcome the constructive and well-informed work of Mr Kindermann as a significant improvement to the Commission proposals which the Committee on the Environment, Public Health and Consumer Protection feel are an inadequate compromise between the understandable concerns of producers and the welfare of laying hens.
The life-sized photograph I have brought with me tonight from a national newspaper showing the realities of space that are allowed by a conventional or battery cage says more than many hours of debate here possibly could. Sadly, my committee is of the opinion that without financial measures in Member States to assist producers to move to alternative methods, it is unlikely the welcome aims of the directive will be effectively met. They meet neither the aspirations of those seeking to achieve the best possible welfare standards, nor provide a realistic framework for EU egg producers to remain competitive or change rearing methods and retain sustainable employment levels.
In those circumstance, the committee gave priority to tackling the inherent severe disadvantages as quoted in the report of the battery system and therefore calls for an EU-wide ban on the use of such cages to be implemented as soon as possible but together with appropriate financial measures to be put in place by Member States with support from the Commission for alternative systems and relevant studies.
The Commission is also urged to take a strong negotiating position at the forthcoming WTO negotiations on equal welfare conditions for imported eggs, and particularly egg products, in line with the recommendation of the Commission Egg and Poultry Advisory Committee.
Therefore, in conclusion, I hope that tomorrow Parliament will adopt amendments such as Nos 50 and 92 tabled by my colleague Mr Watts and others and that the passage of Mr Kindermann's good report, thus amended, will be seen as a positive step towards the end of these cages - however we describe them - in the European Union.

Watts
Mr President, I would also like to thank the rapporteur for his report and for the constructive and comprehensive way in which he has tackled this very sensitive and controversial issue. Like him, I welcome the Commission proposal to reform the battery cage system. There appears to be recognition across the board that the existing battery cage system has got to go. Whilst the proposal, from my point of view, does not go far enough, it signals the end of the existing battery cage system of production. And about time too!
According to the European Commission's own Scientific Veterinary Committee, the battery cage system has - and my colleague Clive Needle just referred to this - ' inherent severe disadvantages for the welfare of hens'. Only yesterday a new report highlighted the pitiful plight of the battery hen, crammed into a cage at just 18 weeks, no room to flap its wings, not enough room to stand fully upright, not able to scratch, doze or bathe. After a year, at the end of their working lives, the scrawny near-naked birds are slaughtered and turned into pies, soup or petfood. One in three of these birds sent for slaughter have fresh broken bones and almost all birds suffer from osteoporosis. The cage is factory farming at its very worst.
However, if we believe the cage system to be cruel we should ban it completely. My amendments and those of other colleagues seek to do just that. By 2009 the battery cage system of egg production will be no more. A ten-year phase-out is the best way of promoting the welfare of laying hens. A ten-year phase-out is fair on the industry with a clear and certain future to plan for. That future is free-range production. In Britain it works. It protects the welfare of the hen; it is profitable and it is popular. 89 % of the British public believe keeping hens in small cages in cruel. Almost half of all Britain's households now buy barn or free-range eggs. Some supermarkets like Marks & Spencers have banned battery cage eggs completely and now only sell free-range eggs. This is the cruelty-free future we should all plan for and I hope we will all vote for tomorrow.

Sonneveld
Mr President, the new directive on battery cages is a political issue of the first rank. We get a great many reactions on this from the public. But it is also relevant to the farming operations from which many EU poultry farmers derive their living.
This latter fact means that we must take care over our legislative work and give producers a powerful incentive to review their systems of production in such a way as to ensure a higher level of animal welfare in farms which are economically viable in the European Union. That must never mean an approach which forces all EU poultry farmers to switch to free-range egg production, even though this method is set to become increasingly important. An alternative must remain in place, whereby birds are kept in greatly improved cages. Tests on systems of this kind show that their quality of life is much better. The Scientific Veterinary Committee will have to give a ruling on this too, and other aspects will have to be considered such as environmental considerations and the working conditions of poultry farmers. If we want these greatly improved systems to take off in the very near future, we must make it more expensive to keep laying hens in conventional battery cages by significantly increasing the statutory number of square centimetres required per bird.
Whichever of the two production methods the European poultry farmer opts for in the next few years, in the interests of fair competition we shall also have to take full account of the conditions in which imported eggs are produced, whether fresh or as egg products. What we must resist is any threat of a total ban, from a given date onwards, on the whole system of keeping hens in cages, even greatly improved cages.
The majority of the PPE Group will be supporting the line of the Kindermann report. We do so with grateful thanks to the rapporteur. We greatly appreciated his expert guidance as we tackled this subject.

Mulder
Mr President, to start with I must compliment Mr Kindermann on his report and on all his hard work. I think he has produced a good report.
The Liberal Group believes, in the first place, that in this case we should have not a directive, but a regulation. We think it is most important to have this proposal acted on in the same way in all the countries of the European Union. We cannot have certain countries falling short of the requirements. So that is one important argument which the Liberals wish to express.
I have to say that I have rarely received as much post as I have in recent weeks on this matter. My group has always been in favour of consumers deciding what they want to eat, and if they want to eat eggs from cages with a larger floor area, then we are very much in favour of that. In this respect, we therefore support the Kindermann report's advocacy of 800 cm2 , rather than the 450 cm2 which are the rule at present.
We think that as much research as possible is needed in the meantime into alternative systems. We shall look with great interest at the Commission's reports on this matter.
There is one thing we do not like. In the USA, a major exporter to Europe, the area for laying hens is 350 cm2 . And no one in America is making any fuss about it. It is of course totally unfair competition if American eggs are imported free of any restriction under the WTO rules, and we strongly urge the Commission to raise this issue forcefully at the WTO talks. We have to have fair conditions of competition. We are very much in favour of mandatory labelling. The customer has to be able to make a choice. We hope that they will do exactly what they tell us in their letters.
Lastly, my group will be divided in its vote on Mr Watts's amendment seeking to have all battery hens banned from 2009.

Bloch von Blottnitz
Mr President, a cage is no place to live in. And Mr Kindermann's honest and well-intentioned report will certainly do nothing to change that, because all it achieves is better cages and then only in ten years' time. What we want is no cages at all, and I therefore hope that the amendments tabled by my honourable friend Mr Graefe zu Baringdorf will be approved tomorrow, because until we stop thinking of animals just as commodities with a sell-by date, supplying us with products as cheaply as possible, we shall not have decent and appropriate methods of animal husbandry. We really must start seeing animals as they really are, namely living creatures, and not commodities to be used and then discarded at will.
I therefore urge the House to vote for our amendments tomorrow. It would also be very beneficial to consumers if we do so, in the interests of health. Only decent and appropriate methods of livestock management will produce healthy products.

Nicholson
Mr President, I should firstly like to congratulate the rapporteur on his report. It is a subject that causes great concern to many people. It is extremely difficult to achieve the necessary balance between all the elements involved and the Committee on Agriculture and Rural Development amendments are just about as good as we can achieve at this moment in time. I know some will want to go further and much faster. But I do not believe that we are in the right position to do so at present. In the long term we must aim to achieve the ultimate. This can only be achieved in cooperation with the industry.
We need to ensure that the industry is in a profitable position for these new regulations and others that will be required in the future which are extremely expensive to implement and to carry through. The industry is in no fit position at this present moment in time to take on board the challenge that has been presented to it. Profit margins are low. I would support the amendment to provide assistance to modernise but with no expansion through increased numbers of birds within the industry.
We must also be very conscious as we burden our industry with extra costs that other world producers will not have the same criteria or pressures. We have witnessed this in the pig industry, the beef industry and the milk industry. I know it is a hobby-horse of mine but I firmly believe that if we in the European Union are going to set down such strict criteria and tie the hands of our producers so tightly then we must not allow imports into the European Union that fall below the criteria under which are expected to produce. That must be the bottom line.
I urge the Commissioner to stand firmly behind the producers in the European Union because, while we will respond to him and the producers will respond to him, he must defend them against the world when it tries to take over our markets.

Flemming
Mr President, Commissioner, I am in favour of abandoning the use of cages for laying hens. Naturally, I welcome the Commission's initiative to improve things and draw up a new directive, but that is not enough. Even the Scientific Veterinary Committee agrees that the current method of keeping birds in cages is particularly problematic. I think it is an especially cruel form of livestock management which should be eliminated as soon as possible.
Of course perches, litter, baths and nestboxes are an improvement, but are we not once again encouraging producers to invest money which will very soon prove to have been wasted? The fact is that more and more consumers throughout Europe are calling for a blanket ban on cages. This will come, the only question is when.
We have 250 million hens in conventional cages, and only eight million free-range hens. Certainly we cannot change that overnight, but we can change it in maybe eight, nine or ten years, and the amendments tabled by Mr Ebner, Mr Watts and Mr Graefe zu Baringdorf are all aimed at achieving that. Europe's farmers have enough land to make the change, and the extra jobs will no doubt be easy to fill! And battery farming cannot be healthy. These poor hens usually die after a year, they last no longer than that, whereas a normal chicken usually lives for four to five years.
The extra cost to the consumer of an appropriate system of poultry management is estimated by the Commission - and for this too we thank them - at two euros per person per year. Anyone who has ever seen a battery cage operation goes right off eggs for a very long time! But the enlightened, informed consumer is perfectly willing to pay a little more and - once again I quote the Commission here - wants to see cages scrapped. Please vote tomorrow in favour of Amendments Nos 52, 62 and 67. You will all find that your breakfast egg tastes a little better!

Tamino
Mr President, it is as well to bear in mind that the current legislation on laying hens goes back to 1988 and should have been revised in 1993. So this debate is taking place at least five years late, and yet the revision proposed by the Commission, which ought to guarantee both the welfare of the animals and the quality of the product, is not at all satisfactory. The extraordinary logic underlying the rearing of laying hens in batteries will be recalled: they are no longer regarded as living creatures but as objects, industrial machines, parts of a production line. Unfortunately, 93 % of eggs are produced like this in Europe, but the consumer does not know that the eggs he buys come from egg factories, where the hens are kept in narrow cages, piled up to ten storeys, like a sort of concentration camp. There are four or five hens in each cage, they cannot spread their wings or scratch the ground or perform any of the activities typical of their natural behaviour.
But a few extra square centimetres do not solve the problem. That is why the Greens urge all colleagues to support the amendments tabled with a view to eliminating cages over the next few years and proposing free range rearing at a density compatible with the characteristics of these birds, a law which is, moreover, already in force in Switzerland.
Finally we support the request to the Commission to make it compulsory, as soon as possible, to label eggs so that the consumer will know how the hens laying them are reared.

Sandbæk
Mr President, I find it deeply depressing when animal welfare is only taken really seriously in this Parliament when it is a question of fox trapping or seal hunting and when it is indigenous populations who have to pay the price with their own welfare, which is sometimes even more precarious than that of the animals. We have 70 amendments to a report on chickens, seeking to improve conditions for laying hens, in particular by imposing requirements for more space and stimulus. This is somewhat illogical when what really disrupts the welfare of the hens is that they cannot satisfy the particular egg-laying needs which are natural to them. And that will not be altered by giving the hens more space, which will only help to legitimise the situation for many years to come. We should be more ambitious than that. We should of course in the long term ban battery cages for laying hens. In order to minimise the disadvantages for the egg producers, we could pay transitional premiums for a switch to alternative production systems. Neither the Commission paper nor the Kindermann report contained proposals for such a ban. I can therefore only urge everyone to support the amendments which seek to achieve this.
If the EU wants to speak up in the forthcoming WTO negotiations for including animal welfare in world trade, a domestic ban on battery cages would undeniably strengthen the EU's credibility and hence its negotiating position. As a next-best solution, the Commission's proposal for compulsory labelling of the production system used should be welcomed. All the indications are that a great many consumers are willing to pay extra and choose alternatively produced eggs. But that is only possible if the market is transparent. For example, the designation 'fresh eggs' is confusing. All eggs should be fresh. Besides, these eggs do not come from free-range hens, as some may be tempted to believe. In Denmark, a labelling scheme of this kind specifying the production system was recently introduced, and there was a marked shift in consumer choice, since it was then clear which eggs were from battery hens. Politically aware consumers are generally far more responsible than politicians. The committee's proposal that labelling should also include egg products is a good step in the direction of better consumer information, and the proposal that the new minimum requirements should also apply to imports from third countries needs to be supported.

Pinel
Mr President, ladies and gentlemen, we should not just improve battery rearing, we should ban it. If we look at battery rearing in general, we can see that firstly it destroys biodiversity, secondly it destroys jobs and rural employment in particular and thirdly it constitutes a real hell on earth for these poor birds.
I personally cannot accept billions of hens spending their unfortunate lives in a space smaller than a shoebox. These birds also have to live through having their beaks being cut, their decalcified skeletons fracturing repeatedly and the skin being burnt from their feet and abdomen by the ammonia from their droppings. How can we talk about quality after that? Finally, at about the age of one year when their production drops, they are gathered together in scandalous conditions and piled up for their final journey. On arriving at the abattoir, one in three have broken feet. As with sows, their sorry state means that their flesh cannot be sold, even in pieces. They will end up as the filling for ravioli or in stock cubes.
There is a fourth aspect which should be decisive in this dossier and which should result - if we are fortunate enough to live in an intelligent economic and social system - in a total and definitive ban on this type of rearing. This fourth aspect is the health of consumers. Here are birds which eat flavourless food with no consistency but which is loaded with hormones, if only natural hormones resulting from the animal's stress, and antibiotics whose improper use has significantly contributed, through a process of habituation, to penicillin-based antibiotics becoming ineffective in humans.
It is clear that these diabolical methods and this gigantic-scale production do not benefit consumers, who are entitled to expect more than poor quality food full of water and medicines, or producers, who can only watch as prices crash with the resulting risks of bankruptcy, or of course the animals who are the first victims.
The solution is obvious but it goes against the interests of the large multinationals. Priority must be given to a system which is healthy, which creates jobs and which is capable of revitalising the rural environment. Basically, priority must be given to everything which is contrary to the concept of meat factories. We need free range rearing where the hens can wander across grass and gravel. We need quality products which obviously are a little more expensive, by say two euros per person per year, but which will reduce the social burden and medical costs.
Finally, we should not forget that one of the basic elements at stake in this type of dossier is quite simply the future of the rural environment.

van Dam
Mr President, Commissioner, ladies and gentlemen, we should 'go to work on an egg', as the advert has it. For many Europeans, a hen's egg is a welcome part of their breakfast. But increasingly, they have cause to wonder about the conditions in which that egg is produced. Animal welfare organisations have enlightened us on the subject. Thousands of laying hens, shut up in iron coops with no freedom to move, that is an appalling thought.
Sadly, consumers' purchasing behaviour does not change to reflect their concern. Because more humanely produced eggs cost slightly more, many people continue to buy eggs from battery hens. In our relatively prosperous Europe, it is all the more surprising, since the price of eggs in the last few decades has risen very little and they have thus effectively become cheaper. Ten or so eggs will cost you just one euro, a price by weight which few foods can rival. That exceptionally low price is only possible thanks to mass production on as small a surface area as possible. I am convinced that the economic motive is out of place here. Animals are part of God's creation; they may be subordinate to man, but they still deserve a decent and appropriate quality of life.
In 1996, the Scientific Veterinary Committee reported on the welfare of laying hens. On the basis of that report, the European Commission has proposed new minimum standards. I agree with the rapporteur that this proposal is a step in the right direction, but no more than that. Battery cages must be got rid of entirely, and the sooner the better.
The Commission is proposing a lengthy transitional period, so that existing batteries may remain in use for a further ten years. But there are amendments seeking to stretch that period further, and even to allow new battery cages to be introduced for a further two years. Given that producers have known for years that new standards were coming, I think that is an ill-judged concession.
Imports from countries whose systems are even less kind to animals must not lead to distortions of competition. Producers who switch to animal-friendly systems must not suffer financially as a result. Getting rid of battery cages is a matter of civilised behaviour. And we must make sure that once they are scrapped in the European Union, they are not then reassembled in countries outside the Union. I therefore urge the Commission to consider, as part of its interim reporting, the possibility of a scheme for dismantling battery cages, tied to the provision of aid for systems of production which allow the birds their proper dignity.

Lukas
Mr President, I too very much regret the fact that neither the Commission report nor Mr Kindermann's report proposes ending the practice of keeping laying hens in cages. As long as cages continue to be used, even if they are bigger and fitted with a perch, we cannot really speak of appropriate methods of keeping these birds. The European Parliament ought to prove that it wants no half-hearted compromises in matters of animal welfare, and it should vote for those amendments which seek to have the cage system done away with altogether.
The fact that 93 % of eggs produced for consumption in the EU come from battery cages must not stand in the way of a ban on this shameful form of mass animal torment. Rather, this figure proves that the European consumer is not sufficiently aware of animal welfare issues, or of questions of product quality.

Fischler
Mr President, ladies and gentlemen, first of all I must thank Mr Kindermann for his extremely competent and detailed report. I am happy to see that Parliament's basic position on the protection of laying hens kept in various systems of rearing is the same as that of the Commission.
What objective is the Commission pursuing with the proposal we are debating here today? Firstly, a real improvement in the welfare of laying hens on the basis of scientific knowledge. The present system of battery cages is very much a candidate for being improved or replaced. Secondly, in order to facilitate the switch to methods of rearing which are more appropriate to the basic needs of laying hens, we wish to ensure that the minimum standards result in production costs which are comparable for the various alternative methods of rearing and the improved battery cage system.
Acceptable systems are non-cage systems and so-called 'enriched' cages. These are enriched in the sense that they have not only perches, as already mentioned, but above all nestboxes and scratching areas. Thirdly, a ten-year transitional period is envisaged for existing barns, but new and converted barns will have to meet the new standards straight away.
Fourthly, the directive will be revised after seven years to take account of any further scientific progress. Egg labelling will be mandatory. Let me comment now on the amendments which have been tabled. In drafting its proposal, the Commission took due account of jobs, the environment, health and the economy. Amendment No 1 is therefore consistent with the Commission's thinking and we accept it. This does not apply, however, to Amendments Nos 20, 21, 45, 51 and 61. Amendment No 10 represents an improvement in the wording and seeks better protection for poultry. So this amendment too is acceptable.
The Commission's proposal amounts to the same thing as Parliament's Amendment No 13, but this amendment can also be accepted as it makes the text clearer. Amendment No 15 is acceptable, since the provisions on feed and water systems in the Commission proposal relate to cages. In systems other than cages, however, the space per hen can be reduced. The distinction between single-floor cages and multi-floor systems is perfectly acceptable. So Amendments Nos 16 to 19 can also be accepted.
Amendments Nos 22, 23 and 29 are also acceptable. These are improvements to the Commission proposal. The remaining amendments are not acceptable to the Commission for the following reasons: Amendments Nos 2, 37(3) and 36, 42, 59, 69 and 70 are not consistent with Community policy. As for Amendments Nos 5, 38 and 55, current WTO rules do not allow the Community to use animal welfare provisions as an instrument of trade. As you know, however, the Commission is considering whether, at the forthcoming round of WTO negotiations, animal welfare provisions might be introduced as a new element in the WTO's terms of trade.
Amendments Nos 4, 54, 57 and 68 are superfluous to this proposal. Amendments Nos 6, 12, 43, 44, 45, 51, 58, 63, 64 and 65 have no scientific basis, and our proposals have to be constructed on a scientific basis. Amendment No 8 is linked to Amendments Nos 24 to 28, 30, 32 and 33. These, together with Amendments Nos 9, 14, 46, 49 and 56, do not constitute improvements of any kind and therefore cannot be accepted. Amendment No 7 clearly concerns a linguistic problem, because this amendment corresponds exactly to the English text of the Commission's proposal.
Amendments Nos 50, 52, 60, 62, 66 and 67 are premature in the Commission's view, since the matter concerned is still under discussion. It is therefore a good idea to postpone the date of the directive's entry into force. This then makes Amendment No 11 and the related Amendments Nos 31, 34, 35, 39, 40, 41, 47 and 48 perfectly acceptable. Finally, I agree with the view that a directive is preferable to a regulation, and consequently I cannot accept Amendment No 53.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 9 a.m.
The sitting was closed at 0.15 a.m.

