European Council meeting of 15-16 June 2001 in Göteborg - Swedish presidency
President
The next item is the joint debate on:
the European Council report and Commission statement on the European Council meeting of 15 and 16 June 2001 in Göteborg and
the statement by the President-in-Office of the Council, summing up the Swedish presidency.
It is my pleasure to give the floor to the President-in-Office of the Council, Mr Persson.

Persson
Madam President, honourable Members of this important Assembly, allow me to begin first of all by thanking you for your constructive cooperation during the Swedish presidency. It is important for the European Union' s different institutions to support, inspire, criticise and cooperate with one another but never forget that we have a common mission to develop our Union.
The Swedish presidency' s objective was to proceed from important decisions to the implementation of those decisions. Our ambition was not to add new decisions but, rather, to implement decisions already taken. We wanted to concentrate on three areas, which I had the opportunity to talk about when I was in Parliament at the beginning of the presidency. These were enlargement of the Union and issues relating to employment and the environment. In addition, we wanted to develop the Union' s common foreign and security policy.
I make no claim to provide a comprehensive review of the Swedish presidency in my report. Instead, I would offer some reflections upon the last six months. We have worked incredibly hard with the Commission in order to press on with the enlargement negotiations. The objective of this work was to show that the timetable drawn up by the Commission for the enlargement negotiations was realistic. We can now see that, during the Swedish presidency, we did everything we intended to do, and a little more besides. The very ambitious timetable drawn up by the Commission proved to be realistic. This was the basis for the European Council in Göteborg when we said that, in our judgment, we should have completed negotiations with the best prepared countries before the end of 2002 and that we also anticipated the first of today' s candidate countries' participating, as Members of the European Union, in the elections to the European Parliament in 2004. We were given a clear signal concerning the enlargement we wanted to see. We were given this because the negotiating work had been successful. This does not, of course, mean that the enlargement process has been carried out, but an important step has been taken. What is required is continued concentration and continued support for the Commission' s work and for the forthcoming presidencies, but also an appreciation of the fact that many of the difficulties represented by the enlargement process are, in fact, to be found within the European Union as it stands and not in relations with the candidate countries. The most demanding task for us within the European Union is to work out common positions for the fifteen Member States. There is a further demanding task. Our friends and colleagues in the candidate countries have the task of implementing reforms in their countries of such a kind as will prepare them for membership of the European Union. We must not forget, however, that we ourselves have to conduct an internal debate within the Union which, from a political perspective, is probably as difficult as the reforms which our friends have to implement in the candidate countries.
We said in Göteborg that enlargement would be a fact by 2004. To cite the French President' s description of the project, it is an irrevocable process. At the same time, we also said that we must be realistic and appreciate that there are certain countries, such as Romania and Bulgaria, which need extra support in their preparations. We are not talking here about extra financial support, but about support in the work of negotiation.
When Sweden took over the presidency, it was also our ambition to develop the foreign and security policy. We did not, however, emphasise this so much in our presidency programme, even though we mentioned it. Instead, we adopted the strategy of taking action. I am convinced that what we have managed to achieve in terms of foreign policy will be something that develops during forthcoming presidencies, for such development is to the European Union' s advantage when it comes to external relations.
I am thinking, above all, of three important factors. Increasingly, practical foreign policy is linked, firstly, to values, democracy and human rights; secondly, to economic relations, especially trade; and, thirdly, to a just and progressive aid policy, to which, from our point of view, it will continue to be linked. This last consideration is something to which we devote too little time and attention. It is an undervalued factor in external relations. These three factors indicate a development parallel to that of the European Union. If we are then able to act in concert on the basis of our values, we can also exercise influence.
During the Swedish presidency, we have developed our relations with Russia. Not for a moment have we concealed our disapproval of the situation in, for example, Chechnya. Never have we concealed our views on the situation in Russia where the freedom of the media is concerned, but we have, at the same time, developed relations in order to create economic cooperation and a dialogue characterised by trust.
We have also said that Russia is not enough. Russia is just one important factor. In that part of Europe, it is also a question of developing relations with Ukraine, which is a large, strategically important country with a European identity and which must have the option of belonging to Europe. According to the Göteborg conclusions, Ukraine is a country which, together with Moldova, will, in future, be invited to participate in the European conference. In that way, the European Union is also developing a relationship specifically in terms of foreign policy.
During our presidency, we also met the American president for the first time in the group of Fifteen. The fifteen Member States took part in a dialogue directly with the American president, just as we had met the Russian president. In that context, there was naturally a great deal of talk about the Kyoto issue, about which we most certainly do not, of course, have the same views - a fact which there was no point at all in concealing. On the contrary, there is reason for conducting a very open and tough debate, because we believe that the United States is not complying with those obligations it had earlier sent signals it was prepared to stand by. I am pleased that the European Union remained completely united in its dialogue with the United States about Kyoto. That was incredibly important.
Relations with the United States are not just about Kyoto. They are also, of course, about the situations in the Balkans and the Middle East and other international issues on which we hold similar positions and have every reason to cooperate. During the Swedish presidency, the European Union' s active presence in the Middle East has also, of course, been emphasised. That is important. The Middle East is the European Union' s neighbour. If the crisis in the Middle East escalates further - and we can, of course, all see that there is a very great risk of this happening - it will also become our own crisis, which is something that must be prevented using every political means available. Where the Middle East is concerned, too, this has been an extraordinarily active period from the points of view of the presidency, the Commission and also Secretary-General/High Representative Javier Solana.
In this way, a list can be made of foreign policy activities. Think too of North and South Korea, where the peace process must continue and be brought to a conclusion. The European Union, too, might be able to play a role there in the right circumstances. A picture is emerging of a European Union which is becoming more and more active in the field of foreign policy because we stand for common values, common views and a common approach. When we act together, we exercise influence. That is the signal.
Enlargement, foreign policy and environmental issues - these issues were incredibly important to the Swedish presidency. The Commission and Commissioner Wallström provided us with a very good basis in the form of the Sixth Environmental Action Programme and, subsequently, the Commission' s report on sustainable development. In Göteborg, we were able to establish principles for dealing with environmental issues in the future. We were able to establish that these processes must now also be integrated into the Lisbon process. In that way, we were able to take a decisive step towards sustainable development in its three dimensions: economic, social and ecological. That was an extraordinarily sound foundation provided by the Commission and each successive presidency and Commission must now make that foundation more secure and give it ever more practical expression. Perhaps matters are not progressing quickly enough. It is my feeling that they never do when it comes to the issue of the environment. On the other hand, we have the processes. We have a direction in which to move, and the first necessary political decisions have been taken. I believe that the decision taken in Göteborg was an extraordinarily important one.
Obviously, we also discussed the economic issues in Göteborg. We dealt with a number of the decisions which had, as it were, been left over from the Stockholm Summit - European Single Sky, the issues surrounding patents, general economic development, the demographic issue and lasting pension systems. Also on the agenda were matters which do not, of course, give rise to such a very great deal of opposition within the European Union today but, rather, provide something of an impetus for working together on issues which we know will, in actual fact, be of crucial importance to people' s lives in our part of the world during the next 20-30 years.
We have also had occasion, during our presidency, to pilot through to the decision-making stage a proposal concerning transparency in the European Union and the accessibility of documents. Let me say that it would not have been possible to arrive at that decision but for the very active support of Parliament. This is an excellent example of how Parliament, together with the Council and also the Commission, can implement a change. I am obviously not completely satisfied. We could have gone further but, as in all political contexts, not everything is achieved. We obtained a compromise along the right lines. It made the European Union more open, but it was not the finished product. I should like to see the debate continue, but our citizens are nonetheless now better placed to keep track of the things we are doing in the Union and, on objective grounds, to examine these critically and present alternatives - on objective grounds, I say, precisely because the information is available.
During the Swedish presidency, we have also begun the debate on the future. It will dominate the Belgian presidency and will, when 2004 comes around, result in a major decision being taken. The guidelines from Nice have been assigned, that is to say what will mainly be found within the framework of the debate. Now, both you and I know that, in a debate on the future of the European Union, we shall not be satisfied with concentrating on the four issues we cited in Nice. Instead, there will be a broader debate. Let it be just such a broad debate. Let it be a debate on what the European Union is, in actual fact, aiming for and on what it wants to do, and let there then be a discussion on how this is to be achieved. We must not always begin with a discussion on building and developing the institutions and then eventually conclude with the political discussion on what it is we want. Turn the debate on its head: invite the people of Europe to take part, broaden the debate and do not set any limits to it. Progressively structure the debate as a proper Intergovernmental Conference aimed at making the European Union more rational and more powerful. Our ambition was to launch a broad debate, and that is something we have done.
As I said at the beginning, we in the Swedish presidency have taken great pains to cooperate with Parliament. I was doing some totting up yesterday and worked out that Swedish ministers have taken part in debates and discussions in this Assembly or in other constellations associated with Parliament on 86 occasions. It has been incredibly worthwhile for us, and it is something I want to thank you for.
I also want to say that we now believe we have obtained a breakthrough with the Members' Charter and can press for a solution to that issue. That is the way it looks following an initial decision. I am pleased that, when we talk about Parliament and relations between the presidency and Parliament, we can also say that we have received a great many good ideas and proposals from yourselves.
Finally, I want to thank all the officials in the Commission, in Parliament and in the Council who have supported us during the presidency. Naturally, I am also deeply grateful towards my own colleagues in the Swedish Cabinet Office and Ministries who have enabled us to say, as we draw the Swedish presidency to a close, that we have made some progress. In the course of our six months, we took a few steps in the direction we wanted to go. I now hope that the Belgian presidency will do some further work on these major issues. I intend to do what I can to help ensure that my colleague, Mr Verhofstadt, is given all the constructive support he needs, in exactly the same way as I, during the Swedish presidency, have had extraordinarily fine support from Mr Chirac and Mr Jospin, the French president and prime minister. This was an absolute precondition for the success of our presidency and I am deeply grateful for it.
Finally, I want to say that, as our various parliaments around Europe enter their summer recess, there is an issue which I think we have to take away with us, namely the issue which, in all likelihood, is to be a feature of the debate about the future: that of how we are to make the European Union more open and more results-oriented and of how it is to be brought closer to our citizens. How is this to happen? What is that development to look like? What is possible in an enlarged Union? The Union will grow. That is something we now know following this presidency. It will grow and become a large Union with perhaps a further five, ten or perhaps still more Member States both in this Parliament and in the European Council.
Thank you for your constructive cooperation. I look forward to a continued relationship with the European Parliament.

Wallström
Madam President, Prime Minister, honourable Members of the European Parliament, I naturally want to begin by thanking you for giving me the opportunity to come here and present the Commission' s assessment of the European Council meeting in Göteborg. This meeting too was, in the end, about issues of widely differing kinds. Two decisions merit particular attention because they will advance European integration and shape policy in the medium and long term. I therefore want to concentrate on these two decisions in my presentation in this chamber.
First of all, the European Council has given us a fixed timetable for the first round of enlargement. It should be possible for negotiations with those candidate countries that are ready to be completed at the end of next year. The new Member States will therefore be able to participate as fully fledged Members in the elections to the European Parliament in 2004.
Secondly, the European Council gave its support to a strategy for sustainable development. This strategy involves the European Union' s undertaking to take certain measures to ensure that it will be possible for prosperity in Europe and the rest of the world to be maintained in the long term too. Through the Lisbon process, the environment has ended up at the centre of our policy. These are important and practical decisions that the Commission welcomes.
The violence on the streets of Göteborg I was also there and saw it with my own eyes - must not overshadow the important political decisions taken in Göteborg. We all condemn the violence, for stones can never replace arguments. Nor do they reflect people' s interests, either in the Member States or in the candidate countries.
I should like to begin by commenting on the summit' s decisions on enlargement. The European Council drew the following conclusion, and I quote: 'Provided that progress towards meeting the accession criteria continues at an unabated pace, the road map should make it possible to complete negotiations by the end of 2002 for those candidate countries that are ready. The objective is that they should participate in the European Parliament elections of 2004 as members' . The European Union' s commitment to receiving new members has never been expressed more clearly or more precisely than in Göteborg. The process is now irrevocable. The Union is ready to meet the challenge of enlargement.
In Göteborg, more details were provided of the timetable sketched out in the conclusions from the Nice Summit. In that way, it has become a realistic possibility that the negotiations with those States that have progressed furthest will be completed at the end of next year, and the objective has been set of their being able to participate in the elections to the European Parliament in 2004.
The Commission' s timetable for the negotiations has therefore proved to be realistic. The Swedish presidency' s extraordinary way of handling the agenda and its determined way of conducting the negotiations has contributed significantly to this result. The prospects for a successful conclusion to the negotiations are now better than ever.
The negotiations will continue in accordance with those principles that have been established: the candidate countries will be judged solely on the basis of their own merits; the negotiations must take place separately for each country; and those countries which entered into the negotiations at the beginning of 2000 must be given an opportunity to catch up. We want to be clear on this point: the enlargement process can only succeed if there is enough political support. The negotiations must therefore be conducted with a certain flexibility so that the candidate countries' wishes and concerns may be taken into account. Consideration must be given to the social price which people in the candidate countries will have to pay. We cannot make unreasonable demands upon the candidate countries when it comes to the financial burden involved for them in adopting EU standards.
On 15 May, President Prodi presented the Commission' s proposals for a strategy of sustainable development to you here in Parliament. Today, we are pleased to be able to note that the European Council supports a strategy of sustainable development for the European Union. Certainly, the meeting was unable to agree to all the individual measures and objectives listed by the Commission in its communication. Nonetheless, the Göteborg conclusions provide clear indications of the direction in which the European Council wants our policy - and our society - to develop. The conclusions also include a challenge to the Council to examine the individual proposals from the Commission.
According to the Brundtland Commission' s definition, sustainable development is a 'development meeting the needs of the present without compromising the ability of future generations to meet their own needs' . The Göteborg Summit means that the European Union is making significant progress along these lines.
The Göteborg conclusions emphasise firstly that we must become better at framing our policy: We must get to grips with conflicting interests, or policy inconsistencies, in a considered and open way instead of ignoring them. We must strive for a policy which can meet quite a few different objectives at the same time. We must weigh immediate needs against the long-term consequences of decisions and their impact outside the EU. That applies to all the institutions of the European Union. The European Council has called upon them to improve the coordination of domestic policy in different sectors.
The most important decision in this context was the decision to supplement the Lisbon strategy with an environmental dimension. As from next year, sustainable development will be a permanent item on the agenda of the European Council' s spring meetings. That is important progress. The process has been established, and the Commission will prepare for this annual review with a comprehensive report. From a political perspective, this means that the environmental dimension of sustainable development has now been accorded the same dignity as the economic and social issues. The Lisbon process has become still more important by having now become the framework for work on promoting all the dimensions of sustainable development.
The European Council also noted that, in its plan of measures for better legislation - to be submitted to the European Council meeting in Laeken - the Commission will introduce mechanisms whereby all important political proposals will contain an assessment of how sustainability will be affected. The Council also emphasised the importance of enabling parties who are affected to participate. In the forthcoming white paper on administration, we shall be tabling practical proposals for improving consultation with parties affected.
The Member States are called upon to devise their own national strategies for sustainable development. It is obviously an important task for MEPs, too, to follow this up in their respective Member States. These are important decisions because sustainable development can scarcely be achieved if there are no effective procedures or effective decision making to guarantee consistent, long-term policy.
Secondly, the European Council has, in line with the Commission' s proposal, drawn attention to four priority areas for sustainable development. These areas supplement the Lisbon programme' s economic and social objectives.
First of all, climate change. This is one of the most serious problems of our age. The Kyoto Protocol is a first step towards getting to grips with this problem. As you know, the EU is doing its utmost right now to try to rescue the protocol. Climate change entails enormous costs for ourselves and the rest of the world. The greatest cost of all is borne by those who live in poor countries. At the same time, climate policy provides financial opportunities for more efficient energy use, as well as opportunities - if taken proper advantage of - for the use of cleaner, renewable energy sources.
Secondly: public health. This is threatened by, for example, accumulations of chemicals in the environment and the ever more widespread resistance to antibiotics. This is an area which affects people directly and which is of concern to our citizens.
Thirdly, the waste of natural resources and reduced biological diversity.
Fourthly, the transport system. If this is to function in the long term, then limits must be placed upon traffic congestion, the increase in the amount of traffic and the effects upon the environment.
These four areas demand decisive leadership and rapid intervention. The policy proposals presented by the Commission in its communication are still relevant.
Sustainable development must be given the highest priority when the common policy is reviewed. The European Council takes note of this fact - with particular reference to agriculture and fisheries. A number of further specific and overarching measures and objectives for each one of these four priority areas were established at the meeting.
I want to emphasise that sustainable development must not only be focused on the problems, concerns and costs, but that it is just as much a question of innovation, investments, growth and new jobs as of environmental protection, health and quality of life. Sustainable development as a concept and idea makes for new economic opportunities. We are very pleased that the European Council shares this view and has emphasised this fact.
Finally: Europe also has an international responsibility for sustainable development. The presidency' s conclusions again highlight the European Union' s commitment to achieving the UN' s objectives for aid and development aid of 0.7 per cent of GNP. At the beginning of next year, the Commission will present a communication on how the European Union is to be able to contribute globally to sustainable development. That communication, together with the sustainable development strategy put forward in Göteborg, will be the EU' s main contribution to the world summit on sustainable development in Johannesburg next year.
The people of Europe expect the European Union not only to look to today' s needs but also to secure their children' s and grandchildren' s future. People expect us to be involved in solving the global problems constituted by environmental damage and under-development. That is what sustainable development is about. The fact that the European Council in Göteborg approved a sustainable development strategy and also instituted a process for devising and implementing such a strategy therefore constitutes significant progress.
Enlargement is an historic opportunity to guarantee stability and prosperity in Europe for a long time to come. The practical timetable established in Göteborg is therefore of the very greatest importance.
In our assessment, the European Council in Göteborg was successful and produced practical results. The meeting marks the end of a presidency with which the Commission has cooperated well and which has done a lot, especially within my own area of responsibility.

Poettering
Madam President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, I would first like to express my surprise that the President of the European Commission is not here today. This is a debate about the Swedish presidency, about an important summit, and I really am amazed. This comment is not aimed at you, Commissioner Wallström, I respect you personally and I respect your work. However, it is not acceptable for the President of the Commission to be represented by a Member of the Commission from the country currently holding the presidency. This is not just some kind of Swedish project, we are discussing the future of Europe. In future I expect to see the President of the European Commission here in plenary when such important matters are being discussed.

I would first like to make a positive comment and then a critical one. First of all, let me remind you that my group has proposed that we should conclude the accession negotiations with the first countries by autumn 2002, so that the first countries could then participate in the June 2004 European elections. This has been accepted by this House, by the Commission and by the European Council in Nice, and you are now saying this in an even more specific way. I realise that there has been strong opposition to this. However, you have been successful, and we are also grateful that a broad majority of the Swedish people is in favour of enlargement. Mr President-in-Office, if you are right, if you do something positive, then you deserve recognition for that and I would like to express my thanks and recognition to you for having got the 2004 deadline included in the decisions taken at Göteborg.
(Applause from the centre and right)
While we are talking about the Swedish people, an extremely likeable people, I would like to express the hope - in your own interest as well, Mr President-in-Office, as the Swedish Prime Minister - that agreement to enlargement will, in future, be matched by agreement on the single European currency, so that Sweden will remain fully integrated in our European political family. I wish that for you and for all of us, because we are a Community. A decision by Sweden in favour of the euro is also part of this.
(Applause from the centre and right)
But now for a critical comment. There were some tragic disturbances in Göteborg, but I do not want to judge the police's handling of the security arrangements, because I know far too little about that. However, I would like to comment on what you, Mr President-in-Office, said on Swedish television on 17 June. My colleague Gunilla Carlsson, the chair of the Swedish delegation in our group, has already said something about this. You spoke about Fascist forces. To avoid any misunderstanding, let me say that I am most definitely in favour of resolutely fighting Fascists and right-wing extremists wherever they appear, politically speaking, and whenever they use force. But on Thursday, during our preparatory meeting of the Group of the European People's Party, we could see that the flags being paraded through Göteborg were red ones, and no acts of actual violence took place until the Friday to Saturday. You could see portraits of Che Guevara and of Fidel Castro, so you cannot just say that Fascists were involved. We also know, and I can quote a major European newspaper, that the hard core was an anti-Fascist group of left-wing revolutionaries taking belligerent and critical action against the European movement and against world trade. We would have expected you to be just as critical of those left-wing revolutionaries who use force as we are against those on the right who resort to violence.
Europe and our legal system are too important for us to turn a blind eye. We should not, because of superficial party interests, fail to recognise the wider importance of our democratic and constitutional system, and we should join forces against any form of violence, whichever side it comes from, from the extreme right or the extreme left, as an act of democratic solidarity.
(Applause)
Mr President-in-Office, let me make one more observation. You have made great efforts to achieve transparency, indeed that is one of the hallmarks of Sweden, and we have made a little progress as regards publishing documents. You can take some credit for that, but not all of it. For example, our colleague and your fellow citizen, Charlotte Cederschiöld, has helped a lot in ensuring that we have achieved greater transparency in this regard. We should continue to follow this path. We also want greater cooperation with the Council of Ministers and a greater presence here in the European Parliament. There were also some critical comments about this at the beginning, but they did not relate to Sweden, but rather to the Council of Ministers. However, I believe that we can build on your work.
My final comment is about a positive signal: you invited the President of the Russian Federation, Mr Putin, and the American President, George Bush, to the Göteborg Summit. It would certainly be a good thing if we in the European Parliament could also invite these two figures to visit our Parliament, perhaps in the reverse order, first President Bush and then President Putin, as our relations with America and Russia are vital for the future of the European Union.
Mr President-in-Office, it is not for me to award marks, but one Swedish newspaper asked me a few weeks ago what mark I would give if I were. If the next Swedish presidency refrains from scoring veiled party political points and genuinely focuses on Europe's interests, it might deserve "very good". I say that on behalf of all of us. I wish Sweden a positive future in Europe.
(Applause)

Barón Crespo
Madam President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, first of all, I should like to thank the Swedish Prime Minister, Mr Göran Persson, for once again joining us in Parliament and to say to him that in my Group' s opinion, he has passed the test of his country' s first presidency, with the seriousness and skill for which the Swedish government is well known.
I wish to point out that we greatly appreciate his government' s desire to update our relations on issues as important as codecision and Council' s presence in Parliament. I think that we can consider the agreement on public access to documents - which could be improved, but which is an historical first - and the agreement on the information and consultation of workers, which had been on hold for many years, to be significant milestones.
I also hope, of course, that this experience will have helped imbue the Swedish people with a greater sense of affection for the European cause.
One special feature of this presidency has been its work on sustainable development, which it has not only established as a strategy for the future, but which it has also promoted through its clear and robust argument for ratifying the Kyoto Protocol. This is not only an EU-US issue, it is one that affects the whole world, as the Swedish Prime Minister and myself saw at the Council of the Socialist International last week in Lisbon.
Another fundamental issue, that of enlargement, was also an area the Swedish presidency focussed on. I should like to thank Mr Poettering, who expressed his support for a proposal that was originally put forward by my colleague, the vice-chairman of our Group, Mr Hänsch. The proposal was not the exclusive property of the PPE-DE Group; it could be said that it came from Parliament as a whole.
With regard to external policy, Sweden maintained its internationalist approach. I feel that where the Middle East is concerned, not only was there a European majority behind the proposal in the Mitchell report, but also, for the first time, we are not only handing over money, we are also playing a leading role, as the Prime Minister pointed out. His presence with Javier Solana in the Middle East was an important step forwards, which we must support, because it is crucial that we make progress with the Mitchell report and move beyond this point of departure.
In Macedonia too, we are sharing the burden with the Americans - which I think they are beginning to appreciate - and are playing a leading role. The President-in-Office of the Council' s visit to North Korea - which was initially something of a surprise - has also given us greater acknowledgement and greater influence with our American partners and the rest of the world.
I also wish to highlight the significant work Sweden has carried out in the United Nations with an old friend of ours, Pierre Schiori - whom we greatly miss - who has also done great work on behalf of Europe over the last six months.
I wish to pay particular tribute to the Minister for Foreign Affairs, Anna Lindh, who I would say has acted decisively, graciously and with her habitual charm in implementing all of the presidency' s work.
One final point, to some extent, cast a shadow over the Göteborg Summit, namely the violent demonstrations that those of us who were there witnessed at first hand and also on television. It must be said, first of all, that we fully respect people' s right to demonstrate; this is a citizen' s fundamental right. Many people demonstrated peacefully in Nice and in Göteborg. This is, of course, to be welcomed and appreciated, because it means that Europe' s citizens are beginning to take an interest in what we do. We continually complain that they do not take any notice of us but really, the fact that we are beginning to see active demonstrations about what we are doing is a positive development. Nevertheless, we must differentiate between the violent actions of small minorities who act like commandos and, with a nihilistic and violent attitude, seek to destroy the things for which we are working. I wish to point out to Mr Poettering, that the problem is not whether these people are of the fascist or the antifascist persuasion. The dividing line is between democrats and antidemocrats and we must remember that extremes clash, in politics too. There is no need, then, to discuss whether the demonstrations are fascistic or not. What is crystal clear is that these are people who are acting violently and with scorn for the institutions and for freedom. I feel that given this scenario, we democrats must present a united front. It is not that some of us feel more affected than others about what has happened. We have to adopt a very firm attitude on this.
My final observation, Madam President, concerns the debate on the future of Europe. You have not managed to include the convention, but I hope that you will continue striving to ensure that we do so under the Belgian presidency.

Cox
Madam President, Mr President-in-Office, I should like to begin by congratulating the Prime Minister and his colleagues on a successful presidency. It has been a first presidency for Sweden, and I believe both your government and state can feel a justifiable pride in a job well done.
Of all the jobs well done, the one my group applauds most loudly is the clear-sighted, determined commitment which you brought to the enlargement question from Day One of your presidency. It has shone through the presidency, not just since Göteborg, but as an appetite to achieve right from the beginning. That determination has been handsomely rewarded. I know it was a delicate issue. But perhaps the shock Irish referendum result helped the politics of clarification, which I welcome. It is a very important message to the applicant states to say that we want to resolve this issue as soon as we can. The commitment to try to ensure that the first wave can participate in the next European elections as Member States is an important clarification and a very substantial achievement of your presidency. I congratulate you on it.
It is also very important to acknowledge the progress under your presidency for the second wave of applicant states, the Helsinki states - again a wonderful tribute to your focus and determination. I would urge the Belgian presidency and those that follow to maintain that pace, focus and commitment. You are right, Mr Prime Minister, that we have now got to do some of our homework as well. Not all the transitional issues are just for the applicants, particularly in agriculture, regional policy and cohesion policy. Now we have to start biting some bullets; we have to start focusing on the issues.
I hope that the Irish referendum will not get in the way of this process. We have until the end of 2002 for Nice to be ratified. It is a matter for the Irish administration to decide how to proceed. But in the interim this should not be used as a reason for taking our foot off the accelerator on this important issue.
On a matter which has drawn a number of comments, my group fully supports, recognises and celebrates the rights of citizens in a free society to demonstrate. But clearly there were, in Göteborg, anarchic groups whose essential, primary purpose was to undermine democracy itself. You, Mr Prime Minister, more than any of your predecessors at any of these international meetings, went out of your way to meet people, to conciliate, to provide people with places to stay. For the large majority the issue was peaceful and proper demonstration. My group would like to extend its sympathy to the citizens of Göteborg on a very difficult moment in a wonderful host city.
I have one or two other brief comments. On Macedonia, the presidency, along with Commissioner Patten, Mrs Lindh and Javier Solana have proved the value of developing an embryonic common foreign and security policy. The peace remains delicate. There is a difficult balance between peace and civil war, but the intensity of the European effort and the unity of the European effort is in marked contrast to the disunity of ten years ago. That is not just European progress but a measure of significant progress on the ground.
Finally, regarding company law on mergers and takeovers, the presidency has done a wonderful job in fashioning a difficult compromise. I would appeal to Members of this House not to pull the plug on an important measure of economic reform.

Schörling
Madam President, I want to begin by thanking the Swedish presidency for showing great respect for the European Parliament and a desire to engage in dialogue with us. Its presence, both here in the Chamber and in the committees, has been very notable and much appreciated.
Dialogue, transparency and participation are the prerequisites of a functioning democracy. In Göteborg, there was an attempt at dialogue between politicians, demonstrators and a variety of organisations. Unfortunately, it was only a well-intentioned attempt for, in reality, the Heads of State and Government were behind the barriers, and there were no opportunities for civil society and citizens to follow the negotiations concerning the future of all of us. From the closed rooms of this summit culture was born a frustration and impotence also expressed by peaceful demonstrators trying to get their message through to the Heads of State and Government. Unfortunately, a small clique of agents provocateurs also caused violence and disturbances. The stones they threw were, of course, directed not only against the police but against the whole of democratic society and against all those of us who really tried to get a message across. That may well be felt to be very regrettable.
It is also unacceptable that the police should have used live ammunition against the agents provocateurs. An investigation has now been set up to look into how that could be possible in Sweden today.
I am also disappointed at the way in which EU leaders appear to react to the frustration felt at developments in the EU. I also think that no account at all has been taken of the result of the Irish referendum. Instead, an attempt is being made to turn this into an Irish problem, while it is in actual fact, of course, a problem for the whole of the EU.
A majority of the European Parliament too appears now to be making the same mistake, since the Council' s proposal that an open forum should be set up has been rejected and since no substance has been given to the idea of recommending that the next Intergovernmental Conference should be a convention. I really do not understand this reluctance to open up the EU and to enter into a dialogue with people and with civil society. What does the Swedish presidency intend to do in the future to get its colleagues on board and make them understand that this is crucial?
Where the three 'E' s were concerned, it was probably on the issue of enlargement that some real fighting spirit was shown and that something was successfully achieved. I cannot emphasise enough how pleased I am that there is now a fixed timetable for the accession procedure. However, I do not know how much energy was put into the issue of sustainable development. In any case, the results were poor in comparison with what might have been expected, for it was a good proposal that the Commission had tabled. I do not know if it has to do with incredible reluctance on the part of the EU' s Heads of State and Government to understand what sustainable development really entails. How is time now to be found for acquiring grassroots support for a plan and a political process prior to the Rio+10 Conference in South Africa when no practical undertakings have been set out concerning what is to happen to the climate objectives after 2010, how the depletion of fish stocks is to be prevented and how it might be possible to change our current, devastating agricultural policy? EU leaders must assume a global responsibility too. That is something I believe is demanded by the rest of the world and by the people of Europe

Sjöstedt
Madam President, Sweden is sometimes described as a well organised but not particularly exciting country. That is a picture which fits in quite well with Sweden' s six-month presidency of the EU.
From an organisational point of view, the presidency has operated well. Swedish diplomats have worked assiduously at cobbling together various compromises. From a political point of view, it has had a low profile. Everything has been done to show that Sweden is a loyal EU member - loyal both to the EU system and towards the large countries that dominate the European Union. This became most obvious of all when the Irish voted against the Treaty of Nice. Mr Persson immediately made it clear that the Irish people would not be allowed to make use of their right to put a stop to more centralised government and supranationalism within the EU. The Treaty of Nice was to remain in place. This is, in practice, an attack on every small country' s right to prevent changes to the Treaty if it wishes to do so.
Sometimes, compromises have been made at any price. The new rules concerning access to documents were so weak that journalists' organisations in Europe thought that the current rules were better.
In the run-up to the presidency, Sweden prioritised enlargement, employment and environmental issues. The presidency has worked hard on enlargement. The pace has been maintained in the negotiations governing how the candidate countries are to be brought into line with the EU' s regulations. This was important if enlargement was not to be delayed.
The EU' s policy of increased employment is often singled out as a 'left-wing project' designed to counteract the right-wing policy of the currency union. The issue was discussed at the Stockholm Summit, but the only practical decision remembered from that occasion was a decision concerning the deregulation of the financial market. That is not much in the way of left-wing policy.
In the environmental area, the presidency has had some bad luck. Work on the most important environmental problem - the climate issue - was effectively sabotaged by the new president of the United States. At the Göteborg Summit, there was an opportunity to adopt a sound strategy for sustainable development but, when it came to the crunch, the most radical environmental demands had been removed from the text.
In some areas, the presidency has had great success. In addition to the enlargement negotiations, the decision to remove duties for the poorest countries of all is a clear step forwards. The presidency' s work in combating trafficking in women and in pursuit of peace in the Balkans is also commendable. As usual, however, many of the important decisions are being taken in what is more like secrecy. Sweden has loyally done further work on the militarisation of the EU and thus, in practice, in favour of the abolition of Sweden' s policy of neutrality.
During the period concerned, Sweden and the other Nordic countries have entered into the Schengen Agreement, which is the EU' s most important tool for constructing tough new borders to keep out those who live outside the European Union. This area is a real blot on the Swedish presidency' s copybook. Sweden voted in favour of the proposed fines in the case of transporter' s liability, a proposal that involves a kind of privatisation of asylum policy, which in turn would mean that airlines and other carriers would be penalised if they did not screen out refugees who did not have their papers in order when they made their way to the EU. At the start of the presidency, Mr Persson stood here and talked of a refugee policy characterised by solidarity. We can only regret that, since then, the government has, in practice, taken the opposite line.
Finally, a few words about Göteborg, where small militant groups took the opportunity to attack the police and cause extensive damage. Irrespective of what these groups purport to stand for, this is behaviour that can never be defended. Throwing stones and causing damage is not politics but criminal behaviour. That must not, however, conceal the fact that, in Göteborg, there were also tens of thousands of people demonstrating in a peaceful and dignified manner for a better Europe than today' s EU with its EMU and Schengen. What 50 000 people do is, in actual fact, more important than what 300 perpetrators of violence get up to.

Le Pen
Madam President, Mr President-in-Office of the Council, ladies and gentlemen, we spoke a great deal at Göteborg about sustainable development, a fashionable, but woolly concept if there ever was one. There is no doubt that we must praise the Member States' determination to introduce concerns about public health and the environment into all the policies imposed by Brussels. It certainly is high time to do so, following mad cow disease and the foot-and-mouth epidemic.
On the other hand, the determination to present the Kyoto Protocol and the forthcoming global pact as a panacea is absolute tomfoolery. It is a deal designed for fools, and Europe is the only party at the table - another instance where the white man is allowing himself to be accused of single-handedly destroying the whole planet. Neither China nor India will be taking part, because they gain from development, growth and industrialisation. The US is taking a similar approach, at a time when growth is slowing down against a background of increased international competition.
My second point is that you do not voice any criticism to condemn the violent demonstrations that rocked the summit. It is a shame that these tones of indignation are forgotten when it comes to condemning the violence and insecurity that affect millions of our citizens on a daily basis.
The governments of Europe particularly the French government are not even capable of protecting their own people. Their immigration policy, the culture of making excuses, defending the rights of hooligans in the name of human rights, the abolition of the death penalty are all factors which encourage crime, which are favoured over pointing the finger at a handful of left-wing protesters, which, moreover, Mr Barón Crespo rather curiously called fascists unless Mr Barón Crespo had wanted to acknowledge that fascism had found its origins in socialism, all his leaders having been socialist leaders before becoming fascist leaders.
Lastly, it is scandalous that the totalitarian instincts of the European institutions do not offend anyone. Only here could we want to systematically force people back to the ballot box when the result of a vote is not the desired outcome. In 1992, Denmark gave in under threat but Austria quite rightly refused to do so. The Irish people must resist - their 'no' vote, de jure and de facto, has sounded the death knell of the Treaty of Nice. All the people who have not been consulted and who will not be consulted due to a fear of them voting against are lending them their solidarity.

Bonde
Madam President, Prime Minister, all credit to Mr Persson and Sweden for a competent presidency. You have set a new standard or transparency with your home page, but the Swedish signature appended to the regulation on transparency paved the way for the EU now deciding what you must come up with in Stockholm. I asked for the minutes of the meetings on transparency. You did not dare to issue even those, for they would of course show that France, Germany and Spain are opposed to transparency and, were that fact properly to emerge, the three governments would be pressed by their elected representatives and electorate to approve that transparency which Sweden had as an objective. This is an area in which Sweden has committed an historic betrayal.
Sweden has also violated the Treaty by introducing qualified majority voting as a method of taking decisions on future changes to the rules governing confidentiality. Before the unlawful adoption of this method on 19 March, measures constituting progress could be adopted by 8 of the 15 countries. That alone is difficult enough. Progress can now be blocked by France, Germany and Spain, even if we can convince all the other 12 countries that progress is what is at issue. Parliament is now bringing legal proceedings against the Council. It is embarrassing for a Swedish presidency to stand accused of a Treaty violation in connection with transparency.
I also want to criticise the police action in Göteborg. Hooded demonstrators threw paving stones at the police and smashed up shops without being caught. Instead, peaceful demonstrators were taken into custody when they arrived at the ferry port. They were not allowed to take part in the peaceful demonstrations. This is something from which we must learn. Enter into dialogue with the peaceful demonstrators who use arguments. Tell the men of violence that throwing a paving stone at someone else' s window may be interpreted as attempted murder. We who wish to demonstrate peacefully must also learn from the battles. People with hoods on must be expelled from demonstrations. It must never be possible to confuse peaceful demonstrators with criminals. There are no excuses for violence, but there are grounds for consideration and reflection. Why have so many young people given up hope of being able to affect decisions by using arguments? Why do the media give more coverage to people with paving stones than to people with arguments? Why, in general, have no European media covered the many serious debates arranged in connection with the Göteborg Summit?

Raschhofer
Madam President, Prime Minister, Sweden has held the presidency of the Union for the first time. As an Austrian, I know that it is by no means an easy task. The objectives were ambitious. The presidency concentrated on a few priorities, in line with the maxim "less is more". Above all, some important progress has been made towards enlargement of the Union. Some agreement has been reached in the chapters on freedom of movement of persons and freedom to provide services, and I would like to offer my congratulations on that success.
However, there is one point on which I cannot agree with the commentators in the newspapers. I do not seriously think you can say that establishing concrete data for accession is a great triumph. There are a great many questions that remain to be resolved. Following the Irish referendum, the process of ratifying the Treaty of Nice has become uncertain. The question of whether Nice is a sine qua non for enlargement has been the subject of some debate. But the people of Ireland have given a clear signal that the debate on the future of the Union can no longer be conducted behind closed doors and over the heads of our citizens; the public has to be directly involved.
One objective of the Göteborg Summit was to work out a strategy for sustainable development. I see the Council's commitment to shift transport to rail and to encourage the full internalisation of external costs as an important clarification of this. The Community will soon have a chance to match its words with deeds. The forthcoming negotiations regarding the expiry of the transit agreement with Austria will provide a good opportunity in this respect.

Carlsson, Gunilla
Madam President, it is unfortunate that today' s debate on the Swedish presidency - which was of course something new for our country, with all that that entails - has to begin with an observation that it is in danger of being remembered for stone-throwing anarchists trying to stop the meeting and ruthlessly smashing up Göteborg' s pleasant main street and, with it, quite a few good intentions.
The advantages and benefits to people of cooperation were pushed into the background, while violence and hooliganism came to dominate the reports from the meeting. I know that almost everyone here in the Chamber shares the regret I feel, but it would have been safer for the future of democracy if we could have been in complete agreement.
The Swedish presidency ought instead to be remembered for the efforts made regarding enlargement. Securing European freedom and democracy and extending it to include former Communist-occupied Eastern and Central Europe is the absolutely most important task of European cooperation. Hand in hand with this goes a growing debate in which the major issues for the future of European cooperation are presented. Sometimes, the talk is more of how the decision-making processes are to be organised than of what we are to cooperate on and what the EU must not meddle in. I believe that we all too often talk above people' s heads and at a far remove from their everyday lives.
Ireland' s 'no' to the Treaty of Nice is a lesson for us all and a worry not only for the Irish government. The debate concerning the EU' s future must be conducted in more fundamental and more principled terms. What we say and do here is therefore of less importance than our engaging in greater discussion in our constituencies.
In my own country, if I may take it as an example, it is important now to make the most of the interest aroused by the presidency. As the prime minister also mentioned, there now exists the opportunity to conduct a debate on the future of Europe that engages people' s interest. This means that Sweden must now also tackle the issue of the euro. The common currency is so central to EU cooperation that the Social Democratic Party and the Swedish government must take their share of responsibility for Sweden' s becoming a member of EMU.
In other countries, there are other issues which must be brought into focus. I think it is important for Europhiles to stand up for a Europe which is more open to the surrounding world and in which free markets prevail. In a number of Member States, Europhiles should take greater responsibility for the fact that enlargement is now becoming a reality.
Since the Swedish presidency was making every effort to be a presidency for the whole of the European Union, what was most important was that we obtain a breakthrough in the enlargement negotiations. The fact that this did not happen with greater enthusiasm and greater courage is not, in the first place, the fault of the Swedish presidency. It was others who were putting the brakes on. I therefore hope that the results achieved through the negotiations have advanced the cause of successful enlargement and that the thorniest issues which are still outstanding - agricultural and regional policy - do not upset or interfere with the decisions taken in Göteborg concerning dates. Let us ensure that these practical achievements loom larger than the stone-throwing and hooliganism on the part of the left-wing extremists. Let us all work together to ensure that the parliament of the street does not win out.

Andersson
Madam President, when I was travelling home by plane last week, I got hold of a Swedish business paper, Dagens Industri, which does not normally praise the Swedish government all that often. They set their seal of approval on the presidency, and a large headline read, 'Passed with great credit' . I should like to say the same.
The Swedish presidency had three important and major ambitions. There has been a great deal of talk about enlargement. There is no doubt that this issue was handled very well. What is now important in terms of the future - for us in Parliament, for Sweden and for other countries in the Council - is to maintain the pace so that we can meet the objectives we have set.
When it comes to employment, the achievement was not perhaps so outstanding. The examples of deregulation were definitely not so outstanding, for many on the right were disappointed that these were insufficient. It was a question of passing on the baton in the important process concerning jobs and growth. A number of new objectives were set. For example, the subjects of family policy and the older labour force were addressed. Only a small part of the latter is currently present in the labour market, and that is something that needs to be changed for the future.
When it comes to sustainable development, there are two possible perspectives. The first involves a comparison with the Commission' s document and, clearly, not everything from that perspective was achieved. The second perspective is in relation to the current situation. Clear, unambiguous improvements have been made, and the most important thing is that the environmental issues have been introduced into the Lisbon process. What is the problem today as far as these environmental issues are concerned? Well, the problem is that they are sidelined and that they always come last. They are now to be considered jointly with economic and social policy each year as part of an ongoing process. That, if anything, is a success.
I also want to say something about global responsibility. The policies on transport, agriculture and fisheries were singled out. I would also mention transparency, consultation and the provision of information and, in particular, foreign and security policy. On this subject, I should like to say that it is heartening that Sweden has assumed such a large amount of responsibility in this area. It is also pleasing that the Swedish people have understood that we are not talking here about some form of militarisation but, on the contrary, about creating peace and stability in a future Europe and the areas bordering upon it. If Swedish opinion polls are to be believed, there is an incredible amount of support regarding this issue.
Turning now to the debate about the future. Should there be a convention? Yes, but a convention is not enough. We must broaden the debate so that it extends beyond a convention and is conducted with civil society. If we are to conduct the debate with civil society, we must do what Prime Minister Persson said. We cannot begin with the institutional issues. Instead, we must begin with what it is we want the EU to be doing in five, ten or fifteen years' time and with how we are to do those things. In that way, the institutional issues come last.
Turning next to Ireland. We must respect Ireland, but we must also respect the other Member States. There are those who say that we should now call it a day. Should not the Swedish parliament or the other parliaments be allowed to discuss the Treaty of Nice? What kind of view of democracy is it that says that we should pack it in for the moment because the Irish people said no? Are not the other nations presumably also entitled to discuss the issue either in their parliaments or in the particular way they have chosen to? We shall then be able to see what the final result is in 2002, and it will be up to the Irish people to assess the situation at that time.
Finally, a word about the riots. I fully and firmly support what Mr Barón Crespo said. We must draw a distinction between the small number of people who throw stones and those who wish to express a view about continued work within the EU. We must provide the stimulus for a debate with civil society, but we must be tough with those whose only argument is a stone in the hand.

Rutelli
Madam President, I too would like to express my appreciation of the Swedish presidency, of the way it has developed the institutional plan for the Union and, above all, of its contribution to the preparations for enlargement. I feel that, for the first time, many Europeans are aware that there will be representatives from 25 European countries in this House in just three years time. However, we are also aware of the problems arising not just from the pause brought about by the Irish referendum but also from the increasing difficulty of involving the European citizens in planning the future Europe.
My opinion is simple: we must give fresh impetus to the cooperation between Parliament and the Commission. The Commission must - and here I am expressing, once again, my total confidence in President Prodi and the Commissioners - demonstrate that it can handle its responsibilities and is capable of working towards a shared vision. Parliament must take greater pride in being the representative of a democratic institution which will soon include half a billion people, at precisely a time when such a large proportion of the public is critical of globalisation. We are the primary example of a supranational power which is still growing, and this, Madam President, must be stressed: this is Europe's contribution to the future of world government.
I would also like to express my appreciation of the determination with which the Swedish presidency has upheld Europe's position on the environment and emphasised the key points of the Kyoto agreements, not just in terms of rules but also in terms of triggering off a new debate within the scientific community on research, technological innovation and industrial competition, placing Europe's position in the context - as Commissioner Wallström said - of the European strategy for sustainable development.
Finally - albeit a day early - I would like to express my best wishes to the Belgian presidency and say that I have every confidence in the presidency of a founding country of Europe. The Belgian presidency will enable us to contribute to that process which will give us a Europe of 25 countries in just three years, but will also bring us a more democratic Europe which is tangibly closer to the principle of subsidiarity, Madam President.
Many Europeans, including those who voted against the motion in the Irish referendum, are calling for us to reduce the excessive amount of regulations. Basically, they are demanding that Europe deal more effectively with its strategic priorities and stop wasting so much time on matters of minor importance.

Evans, Jillian
Madam President, as many other colleagues have said, one of the most worrying aspects of the violence at Göteborg is that it detracted from the action of many people who were there to demonstrate peacefully so as to make their legitimate concerns known to government leaders. The violence overshadowed the real message that came from the genuine demonstrators outside the summit, which was that people want to be more involved in this process of building the Europe of the future. They want to take part in a real public debate.
The post-Nice process and the Convention are crucial in ensuring that genuine democratic reform can be achieved and that European citizens can play a part in that. We welcome the commitment that was made in Göteborg to move ahead with accession negotiations so that the newest Member States can take part in the 2004 elections.
We also welcome the establishment of a European sustainable development strategy, albeit a much watered-down version of that originally presented by the Commission, which had contained ambitious targets and concrete measures. Sustainable development is about people: their economic and social needs as well as environmental conservation. Putting this into practice has huge implications. We cannot go on plundering our natural resources and then look to science and technology to try and mend the damage. We need a new approach.
Mr Persson referred to the importance of establishing the processes. The Cardiff European Summit in 1998 adopted what is referred to as the "Cardiff process", integrating environmental considerations into all areas of EU policy as the first step towards sustainable development. Göteborg did not provide the next major step in practical terms, after the Cardiff process, but the important link is there and the strategy can be built upon. Hopefully we will see this happen and will see progress in the spring summits from now on. This is essential if the EU is to make a major contribution to the Rio+10 world summit in 2002.
Another welcome decision at Göteborg was the plan to ratify the Kyoto Protocol, even without the USA, before the Rio+10 conference. This will send a very clear message, not only to the United States, but also to the rest of the world, about our commitment to this goal and our determination to combat climate change.

Kaufmann
Madam President, Mr President-in-Office of the Council, the images from Göteborg were alarming. Vandalism, a blind destructive frenzy and criminal violence, all of which should be condemned, and my Group most certainly does condemn them. We must never allow anything like this to happen again. But people who want to make their views known, who want to exercise their right to demonstrate or who want to protest against political decisions should still be able to do so peacefully without any restrictions in future, just as some 20 000 peaceful demonstrators also did in Göteborg.
Committed citizens will continue to see European summits as a political opportunity to express their ideas and expectations, and that is a good thing, because we need to take the public's views into account more when building a democratic Europe. Politicians and governments should no longer be allowed to sweep over the heads of the public and ignore their sentiments.
The Swedish presidency in particular has made great efforts in this direction. It has made an effort to tackle the problem of the democratic deficit in Europe, and we really must recognise that. Unfortunately, the results have been somewhat disappointing. However, that cannot be laid at the door of the Swedish government alone - all governments have to be held to account here.
When it comes to a public debate on the future of Europe, that debate should be a wide-ranging one. It needs to be purposeful and result-oriented. Madam President, Mr President-in-Office, you know that we in this House want a convention to prepare the next intergovernmental conference. We have done some preliminary work here, and it will now be the job of the Belgian presidency to initiate this convention before Laeken. I very much welcome the fact that there are already proposals on the table to extend the agenda and to address further issues in the debate on the future of Europe.

Dell'Alba
Madam President, Mr President-in-Office of the Council, it is by some strange turn of events that the latest protests, a new phenomenon at European summits, reached their climax at Göteborg. 'Strange' because Sweden's various governments have always placed transparency at the heart of European politics, and Sweden has now found itself running the least transparent body, the body to which all the decisions, even the most unimportant, fall, thanks to a false idea of the supremacy of the intergovernmental method. Mr President-in-Office, I hope that your country and you yourself will reflect on this point. When Parliament requests more powers, it does so also in the name of that representativeness which it undoubtedly has and which the governments, in that form - not in general but in that form - do not have. Therefore, from that point of view, Göteborg could be a useful lesson for those governments that are still hesitant about a slightly different vision of Europe, a vision which many Members in this House share.
I would like to congratulate the Swedish presidency on one point in particular, and that is the undertaking assumed - which nobody has singled out because it happened rather on the quiet - regarding the International Criminal Court. The Swedish presidency led the Fifteen to adopt a very important common position, a strong position in favour of ratifying not only the International Criminal Court but also the campaign and, three days ago, it also ratified the Court's Statute. This is an undertaking to which I would like to pay tribute because, in this way, Sweden has contributed to the creation of something which, with Milosevic's arrest, is increasingly close to being achieved.
Finally, there is one thing that I am glad to see you did not manage to do, and that is to decide the locations - mathematically, Italian style - of the agencies, maybe removing the possibility of locating the Food Agency in Parma and giving it to Helsinki instead. This would have been a mistake which, I am glad to say, did not happen.
In any case, "Well done" to the Swedish presidency for its achievements with regard to both climate change and the Court.

Abitbol
Madam President, Mr President-in-Office of the Council, the Swedish presidency will, unfortunately, be remembered for the fact that, for the first time since the European Communities were founded, police officers, who are, by the way, European police officers, fired real bullets at European demonstrators. The Swedish presidency will be remembered for this violence and this contempt, the contempt with which European leaders have treated the result of the referendum in Ireland.
The Göteborg Summit has shown that the European Union was almost becoming a Forbidden City, as foreign to the people of Europe as the Manchu dynasty to the most remote Mongolian tribes and treating them with just as much contempt. The EU is totally indifferent to the peoples' sovereign views remember, if you will, the 'no' vote of the people of Denmark of 28 September 2000, which was treated with equal contempt. I believe that the European Union is in the process and I know that this will perhaps cause some shock of reviving a colonial style approach towards the nations within it, with the slight difference that, in this case, the colonial power intends to develop colonisation rather than to initiate it, as has been the case in the past.
That is why I believe that the reaction of the Irish people, who, for a long time, have had their fingers burnt by history, heralds a general feeling of rebellion amongst the people of Europe - to face up to this new type of almost endogenous neo-colonialism that is emerging, which has wanted to rule over them since Maastricht, Amsterdam and now Nice, and to bring them the benefits of an essentially healthy undertaking namely Europe - whether they like it or not.

Berthu
Mr President, the Göteborg Council took a step in the right direction when it confirmed that the process of enlargement was irreversible and that it had set the goal for the first wave of candidate countries to join in time for them to take part in the 2004 European elections. At the same time, however, this same Council made a serious error when, in paragraph 4 of the presidency conclusions, it appeared to link the decision on enlargement to the fate of the Treaty of Nice. This is an error of legal, political and moral judgment.
It is an error of legal judgment, because, as the President of the Commission stated on 21 June 2001, 'the ratification of the Treaty of Nice is not legally necessary for enlargement to take place' and, moreover, Mr Poettering, this may also be the reason why the President of the Commission is not here today. In any case, I shall not go back to this point because, again from a legal point of view, no one has since contradicted what Mr Prodi said.
It is also an error of political judgment because, from a political point of view, the Treaty of Nice is only essential for enlargement for those wishing to build a European 'super state' . Do they wish to combine the super state, European enlargement and the Treaty of Nice, therefore, at the risk of causing all these projects to fail together?
Lastly, it is an error of moral judgment, because, by upholding the statement made by the General Affairs Council of 11 June 2001, the Göteborg Council showed utter contempt for the democratically expressed opinion of a nation, which shows the Europe that it hopes to achieve in a strange light.
For our part, we want the countries of the East to join a free and democratic Europe, and that is why, Mr President, we are supporting the clear, courageous choice of the Irish people.

Van Velzen
Mr President, Mr President-in-Office of the Council, Commissioner, first of all, I should like to underline that the Swedish presidency has most certainly been a great success, unfortunately not in every respect, but that would be impossible to achieve. The final balance is very positive. I also welcome the support that you continue to pledge with regard to the Belgian presidency. Perhaps you will allow me to draw your attention once more to a few elements.
First of all enlargement. Enormous efforts are being made on that score by the Central and Eastern European countries, but the question of whether the European Union is ready for enlargement is becoming ever more pressing, of course. For example, if I consider how long it has taken us to adopt a common position on the free movement of persons, I am a little apprehensive about discussing far more complex issues, such as agriculture or the funding of the EU. It is therefore of the utmost importance to ensure that the European Union is ready on time. But it is also important to prepare our own public opinion for future events. That is not only necessary in Central and Eastern Europe, but also in the European Union, as we have witnessed during the Irish referendum.
It is great to have Mr Milosevic in The Hague, but I do hope that the money pledged will also be paid out swiftly to the population in the former Yugoslavia, for we need to offer prospects, particularly in those regions. We must also ensure that the European Union takes steps in Macedonia to promote the peaceful co-existence of the two nations and the prevention of any future explosions in the Balkans in this respect.
Mr President, I believe that, where Russia is concerned, our relationship with Mr Putin should not purely be amicable. We should, above all, criticise him for the inadequate enforcement of human rights and, especially, for compromising the freedom of the press. On that score, our message to Mr Putin should be crystal clear.
Finally, the energy policy was a minor failure on the part of the Swedish presidency. It is extremely regrettable that the French/German axis has caused the derailment of the liberalisation process within the European energy market. This appears to me to be a major task for the Belgian presidency.

Van den Berg
Mr President, stones are neither left nor right wing, they are simply anti-democratic. And the best way to deal with stones and anti-democracy is to defend our own European democracy, explain to our citizens why we need Europe, enter into a debate with them and show them concrete results.
My group Chairman has already expressed thanks, and I should like to echo this, in respect of Mr Persson, Mr Danielsson and Mrs Lindh, who have recently cooperated with us in a very concrete manner to give shape to a number of matters.
I would like to say a few words on Europe' s underlying rationale and on a matter that our citizens understand very well, namely foreign policy. Citizens realise that Europe was, in itself, probably the most successful conflict prevention project of the last century, and they also realise that Europe can contribute towards peace and stability.
Over the past few months, under the Swedish presidency and in close cooperation with Commissioner Patten and Mr Solana, we have witnessed how, concerning a number of important issues, Europe has played a more pivotal role, as it were. That was the case in the 'Everything but Arms' sector, which represented a movement towards a more open Europe in trading terms to achieve a world trade round in which development was central. That was also the case in our protest against the American 'missile defence system' initiative and our belief that we need to invest in conflict prevention more efficiently and at an earlier stage. That is similarly the case now that we are on the brink of a war in the Middle East. Despite this, we have tried to bring both parties around the negotiating table, thus considerably strengthening Europe' s presence in recent months. And that was also the case with regard to possibly the most sensitive and most complex problem for Europe, FYROM/Macedonia.
I would like to comment on conflict prevention, because I am very well aware that the Swedish presidency has exerted a great deal of pressure in a direction which appeals to us greatly.
We could, of course, invest enormous amounts in technologies in the hope that that would provide us with a safety shield, as it were. I do not deny the fact that we need new technological developments, but this American initiative is not the right way forward. What we need to do is to invest in diplomacy, conflict prevention and citizens' networks and to enter into all those development aid and trade commitments which, together, create stability in the world. In that way, we can prevent those dozens of conflicts which are taking place at the moment from continuing to spread.
This form of thinking in terms of foreign policy is a new security concept. In my opinion, the Swedes have helped shape that new security concept in Europe. This is a European value which, I believe, is appropriate and which suits us very well. I should like to thank you for this.

Schmidt, Olle
Mr President, Commissioner, Prime Minister, the Swedish presidency also deserves praise from those of your opponents in Sweden who are usually niggardly with their compliments. If it is now permissible to say so, I have often felt both joy and pride during these last six months.
Nonetheless, I have a substantial objection regarding the decision in favour of transporter' s liability, with large fines for those who do not comply with the EU' s rules. In practice, this means that the responsibility of local authorities for those who come to the European Union seeking asylum is to be taken over by airline employees. That is unacceptable.
Prime Minister, you talked in January here in Parliament about a generous attitude on the part of the EU and about ambitions for a humane refugee policy that go beyond the requirements of the Geneva Convention. Transporter' s liability as conceived by the EU is neither humane nor generous. Quite the contrary. To put it in the terms that you yourself used, we in the EU, which is a wealthy part of a global community, ought in actual fact to be able to afford to be both humane and generous.
You have had the foresight, Prime Minister, to give Raoul Wallenberg the place he deserves in history. May we never betray his memory.

Belder
Mr President, allow me to turn my attention to the European Council conclusions in Göteborg and particularly the situation in the Middle East. I believe that that attention is justified. The headline of today' s Neue Zürcher Zeitung, which reads: "Gewalt statt Waffenruhe im Nahen Osten" [violence instead of a cease-fire in the Middle East], illustrates this.
The end of the Palestinian intifada (uprising) is not yet in sight. At the same time, the tension between Israel and Syria is again rising dangerously. There is therefore no chance of a return to the so-called peace process in the Middle East, despite all recent diplomatic efforts on the part of America and Europe.
What are the options left to those mediating parties? The conclusions of the European Council in Göteborg do not really address this cardinal issue. They excel in wishful thinking. Upbeat terms such as "cooling-off period" and "additional trust-building measures" are supposed to ward off the deep-rooted violence.
Should the United States and the European Union therefore leave Israel and the Palestinian Authority to their own devices? Not at all! What is important is that both mediating parties are aware of their diplomatic and military powers. The High Representative, Mr Solana, has broached the subject of essential distribution of roles. Without beating about the bush, he recognises, in his Middle East reports at the Göteborg Summit, the United States' s key position in the required resumption of the peace process.
This sincere statement causes the High Representative to underline the importance of permanent, mutual consultation, thus making 'our efforts complementary' .
It is precisely this objective that requires balanced, European action in the region. That is why I would ask the Council and Commission to inform me of the specific conditions they attach to the considerable support they lend to the Palestinian Authority. Surely, at this moment in time, adequate control of violence must be the primary condition. For precisely that condition will help break the present deadlock in the Middle East.

Salafranca Sánchez-Neyra
Mr President, to many observers, what happened outside the Göteborg Summit appeared to be of greater importance than what took place inside. I am referring, of course, to the violence displayed by the demonstrators and to relations with the United States. With regard to the latter, although it is true that points of disagreement still remain, on capital punishment, for example, on the Kyoto protocol and on the anti-missile shield, considerable progress has clearly been made, Mr President, on the joint declaration on the Middle East and on the joint approach to the Balkans.
On the issue of the violence, I think that we must make a clear distinction between displays of violent action - and violence must be eradicated because in a democracy ideas cannot be advocated by force - and the message that was conveyed in the course of the protests. In the interest of everyone, Mr President, globalisation must be a ship that has more crew members and fewer shipwrecks.
With regard to internal issues, we must make a clear distinction between promises and the reality of the situation. I think that the repeated wish to maintain the timetable for negotiations on enlargement is a factor, but I also feel, Mr President, that the problem of not knowing how this accession process is to be financed or which of the candidate countries will be in the first wave of accessions is significant. It is crucial that we bear in mind that our project for integrating Europe does not only gain legitimacy once every five years when elections to the European Parliament are held. Our project must be given legitimacy each and every day. To this effect, it is not enough for there to be greater and closer police coordination, or for the Commission to set a course for our integration project. What is crucial is that we reach agreement on a common vision of the Europe that we want. No such agreement exists today and yet it is essential if we are to ensure that this project is more what it has been until now: it must be much more the fruit of the dreams and the enthusiasm of our citizens than of the will of our leaders.

Myller
Prime Minister Persson, Commissioner Wallström, Mr President, I would like to thank the Swedish presidency particularly for its perseverance in seeking to highlight issues which are important for the environment and for bringing the environment to the heart of policy together with economic and social issues during its six-month presidency.
Unfortunately, not all of the Council were able to achieve the progress on environmental issues that the work put in by the presidency merited. It is true that conciliations were finally concluded, but not perhaps at the ambitious level that Parliament would have liked to see. Nevertheless, there is no doubt that the Swedish presidency really has sought to achieve results.
Sustainable development is an important step in taking the environment into account in European policy. Strengthening the ecological pillar in sustainable development is also essential since when sustainable development is monitored year by year, we have to be able to set clear targets for the ecological pillar to make this monitoring possible. We have to have measurable goals, quantitative and qualitative targets, sufficient perspectives on how the environmental situation can be monitored to enable us also to tackle the threats we face successfully.
In my opinion the Swedish presidency otherwise succeeded very well, although it would have been good to see a decision on the Food Authority reached at the Göteborg Summit, as work on this should begin immediately.

Cushnahan
Mr President, I would like to congratulate the Swedish presidency on its success and also express my regret that the Irish referendum result overshadowed many of their achievements, particularly in the field of enlargement.
The European Council in Göteborg was generous in response to our predicament and I welcome its willingness to help the Irish Government find a way forward. I regret that it is not going to be easy. With a little more effort by the political establishment in Ireland, a 'yes' vote could easily have been obtained but now that the referendum has taken place, many people, including supporters of the Nice Treaty, will be reluctant to overturn it. It also must be said that the recent remarks of Mr Prodi in the Irish media to the effect that enlargement can proceed even if Nice is not ratified, unfortunately adds to the confusion.
However, my major concern arises because of the existence of a strong eurosceptic core at the heart of the Irish government. While the Taoiseach was speaking to our European partners inside the Council in an attempt to repair the damage inflicted on our reputation, his finance minister, Charlie McCreevy, was outside describing the Irish rejection of the Nice Treaty as a remarkable and healthy development.
I wish to take the opportunity of warning the Council and the Commission to be careful, as Mr McCreevy's continued eurosceptic approach could well be an indication of his intention to provoke another row with the EU over Ireland's budgetary policy in the run-up to a possible autumn Irish general election. I hope that the ratification of the Nice Treaty proceeds successfully, and that when we revisit the issue in Ireland, we will have a different result.

Corbett
Mr President, I, too, would like to congratulate the Swedish presidency on a very successful first presidency of the Union. Notwithstanding that a handful of extremist demonstrators tried to spoil it in Göteborg, we will ultimately look back on solid achievements under your presidency of the Council.
I say the words "presidency of the Council" advisedly because it is not, of course, the presidency of the Union. Every institution has its own president. We have Mrs Fontaine, the Commission has Mr Prodi, the Council has a Member State government by rotation. There is actually no such thing as a presidency of the Union, yet every presidency often presents itself as the President of the Union. This contributes to a feeling in public opinion that puts too much weight on the presidency. Expectations are raised too high. But when you take over the presidency you are not assuming executive office, you are taking the chairmanship of one of the institutions with an inherited agenda for a very short period of time, and people expect too much of it. That is why there are sometimes disappointments at the end of the presidency. Less so this time - and that is because you have done so well - but I would advise future presidencies not to build themselves up into something that they are not, and to get down to the solid work that is necessary for what that post really means.
Your greatest success has been in accelerating the enlargement negotiations and it now looks as though all the candidate countries except Romania and Bulgaria could well be in by the time of the next European elections. That means that this Parliament will have at least 732 Members, possibly more. It will be many more if there is any slippage in that timetable, because any country that has not signed its accession treaty by the beginning of 2004, but comes in during the next Parliament, will have its MEPs added on top of the 732. That is going to cause huge administrative and financial problems for this Parliament. We will do our best to deal with that, but I suspect that, if there are problems, we will get the blame in public opinion for a decision that was taken by the governments.
None of this is of course the fault of the Swedish presidency. On the contrary, the acceleration of the enlargement negotiations should help in that respect. But it is something that all Member States, and all of us, should bear in mind as we move to the Convention to prepare the next Intergovernmental Conference. I hope that it will be a proper Convention, and that the next Intergovernmental Conference is not prepared by the usual small group of foreign policy advisers, but by a wider representative body.

De Rossa
Mr President, I wish to begin by congratulating the Swedish presidency on being very successful. I am particularly pleased that the presidency succeeded in putting sustainable development at the core of European politics. It is extremely important that the European Union is perceived by our citizens as more than an economic exercise and a free market because that, without any doubt, will alienate them further from the notion of European integration.
It is important to bear in mind that economic integration and getting the economy of Europe right is important. It is equally important to bear in mind that there cannot be economic development in a modern economy without a strong social dimension. I would argue that sustainable development and employment are part and parcel of the social dimension of the European Union.
I also wish to congratulate the Swedish presidency on putting the notion of conflict prevention on the agenda in a much stronger way than up to now. Given the traditions of the Swedish people, this is obviously an area very close to their hearts. It is very close to the heart of the people of Ireland who, unfortunately, recently rejected the Nice Treaty, precisely because they misunderstood to some extent the nature of the European Union and what we are attempting to do in relation to the Rapid Reaction Force.
I am pleased that the presidency has been a success and that these issues have been put on the agenda. It is now up to us in this Parliament and future presidencies to develop them further.

Fiori
Mr President, I can only endorse the conclusions of the final Göteborg document. Moreover, I would like to stress a few points which I feel are extremely important for Europe's growth: pensions and the project for financial sustainability, the new cycle of negotiations on international trade reform, the issues relating to public health and a strict relationship between the use of natural resources and economic growth. On this point, for example with regard to some of the areas related to agriculture, we might have wished for more ambition, partly because the current fear is that some of the situations which have been consolidated within the European Union, specifically those relating to the agricultural sector, will be sacrificed to enlargement matters.
With regard to food safety in the context of enlargement too, in our opinion, the tendency is sometimes to subdue rather than aim towards a way of working which will provide guarantees to the consumer. We are still too fresh, if you will pardon the expression, from the crises we have had in recent years - dioxins, mad cow disease - not to see food safety as a priority in the political decisions we have to take over the next few years.
Now, on a political note, we feel that, in some areas, the relationship between the Council and the European Parliament has not been what we would have wished it to be, and on extremely important political matters such as the relationship with Russia and the space shield, for example, we have seen alarming acceleration. If we do not have an adequate debate in Strasbourg, we will be in danger of creating a series of points of no return which could cause deep rifts, particularly in a politically sensitive period such as this one, where some countries - such as Italy, Spain and Great Britain - have stable governments but in others - such as France and Germany - things will change every time there is an election. Therefore, some positions might be subject to pressure which is due more to electoral positions than overall European positions.
In our opinion, the European Parliament must have the extremely important role of redressing the balance.

Lamassoure
Mr President, the European Council at Göteborg took two conflicting decisions. On the one hand, it confirmed the timetable for enlargement, as the European Parliament hoped it would, by moving the goal to complete negotiations forward to the end of 2002. This is wonderful news! On the other hand, at the same time, the Heads of State and Government decided to disregard the implications of the Irish 'no' vote at the latest referendum. Yet, this 'no' vote casts major doubts over the timetable for ratification, and perhaps even as to whether ratification will be achieved.
In order for the Treaty of Nice to be ratified, we must now wait for the national elections in Ireland and for these elections to produce a victory in Dublin of a more united majority than the current majority on this issue, and for this majority to be willing to gamble its credibility on this now highly sensitive area. We also need the new leaders to find persuasive arguments to convince the Irish people to change their minds. Those telling us today that this will be a mere formality are the same people who were burying their heads in the sand before the recent referendum.
This means that, for the candidate countries, the Treaty of Nice is no longer the key to the door of the European Union it has now become the lock, a stiff lock, firmly bolted into place by the Irish people and there are no guarantees that it will be reopened. That is why opening accession negotiations on the basis of the current treaties, in other words, the Treaty of Amsterdam, is the only thing that can guarantee that the timetable promised at Göteborg will be respected. That is what Mr Prodi attempted to say and he was made to keep quiet. The policy of burying one' s head in the sand is not the right strategy to follow.
Institutional reform still has to be carried out, whether or not we have the Treaty of Nice. The European Parliament believes that the reform can only form part of a constitutional approach. In the meantime, however, it is our duty to tell the candidate countries that the only way for them to ensure that the proposed timetable will be respected is by negotiating on the basis of the Treaty of Amsterdam. If the Treaty of Nice is finally ratified by the autumn of 2002, there will still be time to support it. If it is not ratified, enlargement can still go ahead.

Oomen-Ruijten
Mr President, the topic of sustainable development has been afforded a very prominent position in the second chapter of the European Council' s conclusions. Mr Persson talked about sustainable development which has social, economic and ecological dimensions. I share his view. I agree that sustainable development should be added to the Lisbon criteria.
I wholehearted agree with everything that has been written in this connection, for example to the effect that trends which threaten the future quality of our lives must be reversed. I also agree with the statement that 'sustainable development will present significant economic opportunities. This has the potential to unleash a new wave of technological innovation and investment, generating growth and employment.'
But, Mr President, paper can wait. The ink with which these fine conclusions were written was not even dry when, for the discussion of two matters of environmental legislation last Monday, the entire Council cried off. I actually wonder whether those Prime Ministers speak on their own behalves when they reach those conclusions, and I also wonder whether they actually follow what has been agreed in Europe in their weekly cabinet meetings? Also, do they ever stop to think whether those conclusions are consistent and in line with what they tell each other in the first six months, or once every six months?
The moral of the story - I am addressing the Swedish presidency, but this applies equally to all other presidencies - is that the European Parliament, but also the European citizen, cannot be fooled any longer. We are actually fed up with one fine declaration every six months. We also want you to proceed with the agenda and add a concrete dimension to the issues. We have heard too much idle talk. This chatter is no longer acceptable or even believable.

Wijkman
Mr President, I want to begin by congratulating Mr Persson on what has, in many ways, been a successful presidency. There are many positive things to be said about, for example, its approach to enlargement towards the East and to the issues surrounding transparency, as well as about its efforts for peace in the Balkans. I only have a short time in which to speak, so allow me to address two issues concerning which the results have unfortunately, in my view, been relatively poor.
One area in which more ought to have been achieved is, of course, the European Union' s sustainable development strategy. The result from Göteborg was, in the main, a framework decision with extremely little content. I can only hope that, even once the presidency is over, the prime minister will continue to push on with these issues and ensure that we obtain lucid content, clear objectives and timetables when it comes to taking the long-term view in a number of areas.
I note with satisfaction that the prime minister particularly mentioned relations with the Third World, which are naturally a very important part of the work on sustainability. We cannot bring about sustainable development without adopting a global approach from the beginning.
I think, however, that the results have been poorest when it comes to the debate on the future. I do not think that Sweden took the opportunity it in actual fact had as the country holding the presidency to discuss in depth not only the content and direction of the European Union' s future, but also the organisation. I believe that things have, in a way, been made too easy for those who follow. I have heard more from Belgium on this issue, before the country takes over the presidency, than I have heard from Sweden. That is serious, because it is important that we get to have a debate on this issue, especially with a view to transparency, democratisation and the business of securing grassroots support. It is important for Europe, but it is important, above all, for Sweden for, there, we still have a debate which very often comes down to a 'yes' or a 'no' to the European Union and which is not focused upon the content of the Union or upon the way it should look as an organisation.
I can therefore only hope that, during the next few months and as part of the troika' s work, the prime minister will play an active part when Belgium now most certainly pushes ahead with these issues.

Jarzembowski
Mr President, Mr President-in-Office of the Council, Commissioner, I too have to pour some cold water on the matter, since as I see it the Swedish presidency failed in two ways, because it did not manage to settle the dispute between two Member States over Gibraltar and thus free up the logjam in European air transport policy. The public finds it incomprehensible that although important legislative projects like the one on increased compensation arrangements for overbooking in passenger air transport was negotiated in Council, they have not been adopted. It is just as incomprehensible that important legislative initiatives like the creation of a single European sky are already blocked within the Commission.
Mr President-in-Office, this would have been a good example of an area where the Council could have done something, because everyone knows that disputes like the one over Gibraltar cannot be settled at ministerial level, between transport ministers. It is a job for the top man, but in this case the top men have failed on two counts. I do hope at least that the minutes of the Göteborg Summit are factually correct. I say that because the Göteborg minutes say that the Council hopes that this dispute over Gibraltar can be settled over the next few weeks. So we are keen to see if a result will be forthcoming at least two weeks after the Swedish presidency.
Commissioner, I also have a request for the Commission, an urgent appeal in fact. The Commission absolutely must adopt the legislative initiative on the creation of a single European sky before the summer break and forward it to the Council and Parliament. You know as well as we do that the many delays, the incidences of planes circling above the ground, are not just annoying for the public, because of delays in reaching their holiday destinations, and because of business appointments that cannot be kept. It is also expensive. You know just as well as we do that the ridiculous combustion of air fuel in the sky is environmentally unacceptable. That is why we need a sensible European system to bring an end to these delays. We look forward to seeing your proposal on this before the summer is out.

Bradbourn
Mr President, like Mr Jarzembowski, I wish to refer to the transport issue. I read with concern in the conclusions to the Göteborg Summit in particular that the Commission is to proceed with its plans to propose a framework to ensure that "by 2004 the price of using different modes of transport better reflects costs to society". This clearly reflects the principle of infrastructure charging which has been promoted by the Commission since the publication in July 1998 of its White Paper on fair and efficient pricing in transport, subsequently approved in the Costa Neves report, which Parliament approved in January.
These proposals are anything but fair and efficient, especially as far as road transport is concerned. The Commission's own research shows, for example, that the per kilometre cost of running a car in the UK under infrastructure charging would increase by 97% by 2005.
Surely we have learned some lessons from the fuel price protests which brought many Member States to a standstill last autumn. Road users are already being forced to pay through the nose to subsidise other forms of transport, in particular the United Kingdom, and the Commission's proposals will only aggravate this. Despite several years of study and consultation, even the so-called "experts" within this field admit that the science involved in so-called social marginal costing - the process by which these charges are set - is untested and uncertain. Charging people off the road will not encourage the general public to change their travel habits, it will merely provoke widespread dissent and anger. The road user should not be the target of a witch hunt.
Member States should be free to set their own tax regimes and decide their own priorities for infrastructure charging and improvements. I urge every Member of this Parliament to acknowledge the horrendous impact this would have and encourage them to join me in opposing any such proposals every step of the way.

Ôrakatellis
Mr President, the Göteborg Summit was the first summit in the history of the European Union at which top priority was given to safeguarding the sustainability and viability of the social economic development model. If we judge the results of the summit on the basis of which strategies were supported, the most substantial success achieved was the introduction of a step-by-step procedure for monitoring environmental policy with the annual control introduced by the spring summit of the European Council.
Similarly, the requirement to devise national strategies and coordinate the policies of the Member States will be particularly important for countries lagging behind in this sector. We might also describe the initial objectives and measures defined in four sectors - climatic change, safeguarding sustainability in transport, dealing with public health risks and responsible management of natural resources - as being of major importance. I say "might" because no specific concomitant measures on pollution management costs aimed at individuals or companies were adopted.
Likewise, the summit was clearly backwards in coming forwards in protecting public health, a sector in which there are huge risks; one need only cite mad cows and foot-and-mouth. Just yesterday, the first confirmed case of bovine spongiform encephalopathy was reported in Greece. The summit was also backwards in coming forwards in the biotechnology sector, where the European Union basically needs to get moving and apply a technology which will offer important advantages to society in the 21st century.
So the summit clearly failed to come up to expectations and consequently I would not say that it was a landmark summit. However, it is a starting point for moving from declarations and intentions to the application of an integrated environmental protection policy closely bound up with social and economic development.
To conclude, the summit may have announced that the objectives of environmental sustainability are to be incorporated but, unfortunately, it failed to adopt any timetables, binding indicators, objectives or specific measures.

McMillan-Scott
Mr President, I witnessed the violence at Göteborg. To me it symbolised the growing distance between the leaders and the led. I regret that the summit came to the conclusion that it should set aside the Irish referendum result and proceed with business as usual.
The referendum in Ireland gave us an opportunity to sit back and think about the way in which Europe develops. The purpose, apparently, of the Nice Treaty was to provide for the enlargement of the European Union to include the new democracies. It is the paramount duty of all politicians in Europe to achieve that as soon as possible. However, I disagree with the President of the Commission, who wrote in The Wall Street Journal last week that Nice was essential for enlargement. Nice is not essential for enlargement. We could, within the accession treaties, make the necessary adjustment to QMV, voting rights, the number of MEPs and so on, for each country which accedes to the European Union.
We should take this chance now of providing for the peoples of Europe, represented by their national MPs and by their Members of the European Parliament, by establishing not a Convention, but a parliamentary conference. That parliamentary conference should prepare the ground for the next Intergovernmental Conference. Above all, it should begin to identify the sort of choices that Europe needs to make for the future in the economy, social policy, the environment, transport, and the budget - the sort of Europe that the two great political families, the centre left and centre right of politics in Europe, actually look for. That would provide, at the European elections of 2004, a real choice between the proposals of the centre left and the proposals of the centre right. That would make the European elections meaningful and would actually accord with the views of most people in this House that the business-as-usual approach, the top-down approach, cannot be sustained any longer.

Persson
Mr President, I would like to comment briefly on a few speeches, but let me first express my warm gratitude for the praise which the Swedish presidency has received from various party groups in Parliament. I would like to extend thanks to everyone who has worked hard and enthusiastically for the Swedish presidency. The group of senior civil servants led by Under-Secretary of State Lars Danielsson should also, of course, receive particular mention in this context.
First of all, I would like to say something about the demonstrations in Göteborg: We are democrats. We support the right to demonstrate. We are against violence. We condemn anyone who uses violence to subvert political processes. What happened in Göteborg was that we had a wide-ranging democratic dialogue with people of different opinions to ourselves. That was good, as the point of democracy is to be able to get together and exchange views. What happened beyond that was that there was a relatively small group of hooligans who are very active internationally, whom we have seen before in other circumstances and whom I fear we may see again in the future. They must be treated very firmly by the forces of law and order, who did an excellent job in Göteborg, by the way. These militant hooligans often call themselves anti-fascists. That is their own way of describing themselves. I must say that I have never seen anything more fascistic than their methods of operation. Their whole way of addressing politics is fascistic. Their whole way of using violence is the way of fascism. When I use the fascist label for these communists, this is in fact to show that both extremes have merged. We have seen many examples of this before in European politics. Perhaps we will see further examples, but never let us as democrats be pitted against one another in this context. We must present a united front against violence, fascism and communism. That is the lesson to be learned from Göteborg.
I am sorry that the leader of the PPE-DE Group, Mr Poettering, is not present. It would have been valuable if he could have listened directly to these humble views from a representative of the Council. I hope, even so, that he will be able to read these simple thoughts in the minutes.
In his elegant and well-formulated speech, Mr Cox touched on a matter to which I attach great importance, and that is the conciliation which we have achieved on company takeovers. I would be extremely concerned if Parliament did not support the conciliation results. This is a unique event and something which will have fundamental consequences for Parliament' s work in the future. I therefore urge Parliament to show support, in the way described by Mr Cox, for the conciliation process that has taken place.
Let me also say that I value what Mr Van Velzen said about the tendency we have, and to which I referred in my introduction, to see the candidate countries as the ones facing the greatest difficulties. It is clearly difficult for them to adapt to the demands we set, but their reform process is run with energy and clear goals. As we approach the final chapter of the negotiations, I believe that it is within the circle of the Member States that it will be most difficult to formulate positions. In our experience during our short presidency, that is what we had to spend most time on. I fully support the view that we have difficult chapters ahead of us, for example agricultural and regional policy, matters which naturally also form the foundation for the structure which we currently have in European politics.
Let me also say that Mr Corbett from the UK made a very good point about the character of the presidency. I would warn against the development we are now seeing whereby every time a new country holds the presidency of the European Council, there is a belief that the Union must be fundamentally changed. It is incredibly important that those who lead the Council see their task as a continuing responsibility which means that one presidency interlocks with another. Policy must remain stable and, if appropriate, be taken forwards. However, the guiding principle must be the common interests of the Union, and the national aspect must therefore be pushed into the background. This is the way we have operated. Some have seen this as boring, but I am convinced that it is a necessary approach if the working method of a rotating presidency is to survive in the future. I strongly support what Mr Corbett said.
Mr Wijkman regrets the lack of debate on the future of Europe during the Swedish presidency. Let me say directly to him that I have heard this before. What exactly have we been doing during the Swedish presidency? Foreign policy, environmental policy, enlargement of the EU that is as much of a debate about the future as you can have. However, by debate on the future of Europe, some mean the Union' s structures and often add that you have to have some sort of federal impulse to qualify as a debater of the future in the EU. I myself do not share this view, but believe that the debate on the future must now address what we want to achieve. So let us gradually, during the Belgian presidency, the Spanish presidency and the Danish presidency, enter into discussions as to what this political will requires in the form of expanded institutions within the EU. This is the way we should look at it, and that is why what we have contributed during the Swedish presidency has been to the very highest degree a debate about the future. The issues are enlargement, foreign and security policy and the environment.
Let me say to Mr Bradbourn that I am grateful for his words as, from his Conservative point of view, he put his finger on an important point. It has, of course, been said that the environmental conclusions in Göteborg should not be detailed and should not in any way be compulsory or challenging. The criticism from Mr Bradbourn to the effect that they go too far and are too detailed shows, however, that they are exactly that. They are detailed. All those who criticise these conclusions for not going far enough have, in actual fact, been answered quite well and clearly by his speech. I am grateful for Mr Bradbourn' s contribution, but I do not share his view. That is more or less where I stand.
Let me finally say that Mr Dell' Alba brought up what may prove to be the biggest event of the six months of the Swedish presidency. What I am spontaneously thinking of, namely the extradition of Milosevic to The Hague, is not of course a direct consequence of action by the Swedish presidency, but it is a consequence of the firm action by the European Union and others on this issue. It is a consequence of a value-based approach to relations in terms of foreign policy. It is a consequence of our promoting human rights. It may well be that the extradition of Milosevic to The Hague will in future be described as the vital, major event which changed the character of foreign policy, as those who turn on their citizens or others or who wage war on ethnic grounds - wherever in the world it may be - are observed and monitored, made to answer for their actions and held accountable before internationally united political opinion, based on values of democracy and human rights. The extradition of Milosevic to The Hague is a major political event and a victory for all those who believe in a foreign policy based on common values.
Thank you for such excellent cooperation during the Swedish presidency.

President
I have received six motions for resolutions pursuant to Rule 37(2) of the Rules of Procedure.
The debate is closed.
The vote will take place on Wednesday.

Takeover bids
President
The next item is the report (A5-0237/2001) by Mr Lehne, on behalf of the European Parliament delegation to the Conciliation Committee on the joint text approved by the Conciliation Committee for a European Parliament and Council directive on company law concerning takeover bids [C5-0221/2001 - 1995/0341(COD)].

Lehne
Ladies and gentlemen, I would first like to thank my fellow Members for their cooperation during the discussions, and in particular Jimmy Provan for the very fair opinion that he has just presented here in plenary.
Nevertheless, I am going to stir things up a little. I say that quite simply because we should not forget that our amendments at second reading last December have been at the heart of this debate. We wanted to create a level playing field in Europe as regards company takeovers. It is quite clear that the result that emerged from the Conciliation Committee did not give us what we wanted. Parliament offered all kinds of compromises during the negotiations. Jimmy Provan has explained that a compromise was not reached because the Council rejected any kind of compromise, dug its heels in over the key issue in its common position, and was absolutely unwilling to budge a single millimetre. One of our offers for a compromise, one of the last that we made, was for a directive on the level playing field to come into force. This is, by the way, something we proposed some time ago, and which the Council, as I discovered last weekend, has had before it since 1972, that is to say much longer than the 12 years that have been mentioned here. The entry into force of the duty of neutrality is to be made conditional on such a level playing field directive coming into force. Even this, although it really seems quite self-evident, was rejected by the Council.
There was merely agreement with the idea of the Commission convening a group of experts to address this subject and then possibly develop some proposals. I would like to know what the logic is of convening a group of experts once the directive has already been adopted. Normally, you set up the group of experts first and then adopt a directive on the subject in question. I am not convinced at all by the procedure being adopted here.
I have therefore come to the conclusion that this is not so much a compromise as a capitulation by the majority of the Parliament delegation in the face of the Council's position. All this in the context of a number of important decisions going through the conciliation procedure. I have in mind, for example, the Directive on money-laundering , the whole subject of the Lamfalussy follow-up, and everything else in that area. I believe that if we agree to this directive, we are debasing the institutional role of this House, and for that reason alone we should not agree. Quite apart from that, there are any number of objective reasons why we cannot agree to it. The result of this directive will be that in future protected companies will be able to take over unprotected companies. That is the clear consequence of this. Because if we do not have a level playing field, if national legislation in certain Member States makes it permissible to protect companies by limitations on voting rights, by golden shares, by multiple voting rights, by a variety of means of intervention by the administration, and if this is in fact not the case in other Member States, then I would like to know where the level playing field is. Alternatively, let me draw a comparison between the United States and Europe. The Americans have gone in exactly the opposite direction. They have introduced a "business judgment rule" according to which company boards can protect themselves if they wish, whereas in Europe we forbid that. So what will the results of a decision of this kind be, if it is easier for American companies to take over European companies than the other way round? Furthermore, the trend in America also gives the lie to much of what we have been able to read in the papers this morning. The papers always maintain that things would degenerate into chaos or that it would have a negative impact on Europe's financial market if we suddenly rejected this directive. The American experience suggests the opposite, they have gone down exactly the opposite path, and no one could say that America's stock market is less dynamic than Europe's. So it is evident that these connections do not apply.
I would also like to remind you about the vital concept of location advantages. Delaware is a state that has relatively restrictive legislation on company takeovers. It is interesting to note that 40% of the companies quoted on the New York stock exchange are based in Delaware, rising to 60% of indexed companies. My question to you is: why should that be? I can only suggest that I believe these conditions to be a very important factor when companies make decisions about their location. No one has anything against protecting shareholders. I am a shareholder myself. So it goes without saying of course, as a matter of logic, that like most individuals who are shareholders, I am in favour of protecting shareholders, but on equal terms. The phrase used by Jimmy Provan, "one share - one vote", simply does not apply in Europe. That is the key problem. Because this phrase does not apply, it would be wrong at this stage to introduce strict neutrality which would ultimately lead to major imbalances in Europe and would thus probably harm the internal market more than benefit it. To sum up, the Swedish Prime Minister called the directive unique. I agree - in its present form, it is uniquely bad. That is why it must be rejected.

Provan
Mr President, as chairman of Parliament's delegation to the Conciliation Committee, may I thank all concerned who were involved in achieving a result on this directive. I would like to thank the presidency for its work, and the European Commission and Commissioner Bolkestein in particular who acted as a facilitator. Thanks also to all my colleagues on Parliament's delegation who went through numerous tortuous meetings and lost a night's sleep in Luxembourg trying to achieve this result. Also, I must thank the rapporteur, Mr Lehne, who throughout conducted a robust defence of the European Parliament's position and his own views.
The result of the delegation's considerations is before us today and we have to adopt or reject the joint text agreed in Luxembourg on 6 June. This power of rejection or acceptance is a power granted to the European Parliament under the Amsterdam Treaty. The Commission and Council have been working for 12 years to achieve rules and safeguards that are acceptable across all Member States. They achieved this only to find that the European Parliament took a different stance on a number of issues and articles.
Fifteen amendments in Parliament's second reading were not acceptable to the Council. On 29 May, we reached agreement on 8 amendments, leaving three major areas of contention: defensive measures, squeeze-out and minority shareholders and the level playing field. Squeeze-out and minority shareholders have been the subject of a Commission declaration, and a group of company law experts is being set up to look at the overall situation - including the equitable price. Also, we had difficulties with the Council on employee rights to information.
On all these issues, Parliament's delegation made strong representations to the Council in the negotiations and won many concessions. Indeed, from most points of view, it could and would be assumed that the negotiations were a success. However, Article 9 and Amendments Nos 20 and 17, in particular, remained a point of fundamental difference. The history is therefore important in this case.
Fifteen Member States reached common accord and a common position, along with the Commission. That meant that there were two European institutions in agreement whilst the European Parliament took a different position. One Member State then withdrew from the common position - the first time this has ever happened. The Council was then in the position of being unable to concede anything to Parliament by way of negotiation on these matters. Had it done so, all 14 Member States would have felt cheated, having already conceded much to achieve a common position. For one Member State to achieve something, having withdrawn from the common position, would have caused the Council great difficulty in future negotiations.
Therefore, Parliament's delegation was in a very difficult position. I say to Parliament that the delegation itself was divided on the main issue, and that is not a happy position for the chairman of a delegation. The European Parliament had already made its decision clear, and what it wanted was to achieve a directive. We had to take a decision. A vote in the delegation was necessary and that vote was achieved. We had the minimum majority required to approve the negotiation with the Council, and indeed had the support of the Chairman of the Committee on Legal Affairs and the Internal Market.
My own position as chairman was made clear and well understood. While fighting for the powers of the European Parliament, it would have been wrong for half of the delegation to have rejected this directive one late night in Luxembourg, without the full Parliament having the opportunity of the third reading we are having today.
The real issue is whether managers of companies are in control or whether shareholders that own the company should decide. In other words: one man, one vote. Today we have a third reading and, tomorrow, a vote to accept or reject this proposal. I recommend that the European Parliament accept the outcome of this negotiation, otherwise we will do serious damage to Europe's future economic development. We might also do serious damage to the European Parliament, as the European press seems to be totally opposed, along with the Council and the Commission, to what we want to achieve.

Fiori
Mr President, I would like to thank Mr Provan and Mr Lehne. I will take as my starting point the position which was adopted at the second reading of the European Parliament on 13 December 2000 with 399 votes for the motion. An amendment adopted at this time radically changed Article 9 of the common position, enabling an administrative board to take defensive measures without consulting the shareholders once the bid has been made public. The defensive measures could have been subject to prior authorisation of the supervisory authority by the administrative board or in response to a request from shareholders holding at least 1% of the voting rights.
Then we had conciliation. Conciliation was a lengthy operation on an extremely difficult subject. In view of the Council's downright refusal to take this amendment into account, amongst other things, we presented a substantial series of compromise solutions which ranged from the possibility of shareholders holding 20% of the voting rights requesting that a meeting be convened to discuss defensive measures to the introduction of a clause linking the entry into force of the directive on takeover bids to the entry into force of a directive creating a sort of level playing field, that is common rules of play under European company law. Nothing was achieved and the Council continued to refuse any form of compromise we proposed.
I recall, amongst other things - and I am reminding myself more than anyone - that a proposal for a directive whose objective is to create a level playing field does exist: the fifth directive on company law, concerning the obligations of shareholders and third parties in respect of the structure of public limited companies and the powers and obligations of their social organs. This proposal was adopted by the Commission in 1972 and then lay untouched in the Council's drawers for over 10 years pending the common position, after which the European Parliament expressed its opinion on it on several occasions. The five years necessary to transpose ....
(The President cut the speaker off)

Medina Ortega
Mr President, as Mr Provan pointed out, the two institutions with responsibility for adopting this directive, Council and Parliament, are divided. In the Council, a minority opposes it and Parliament is divided more or less down the middle, given that in the delegation to the Conciliation Committee, on the final evening of debate, the voting was concluded with 8 votes for and 6 against, with one Member abstaining. I would say that the divisions now also extend to the various political groups. My own Group will decide this afternoon on how it will vote, which means that until tomorrow we will probably not know for sure whether or not the directive will be adopted.
I should like to begin by saying that I disagree with Mr Provan' s assessment of a possible rejection of this directive. Because the problem we face is whether, as a consequence of the directive being adopted, European businesses - as Mr Lehne pointed out - could be held to ransom by the major international financial operators, who are known colloquially as the 'Sharks of Wall Street' . This is the danger we are currently facing and, as a Member of this Parliament, I state my intention, of course, to vote against the directive, because I believe that the danger of our businesses being devoured by these financial operators, and of being stripped to the bone if they have assets - I am talking here about heavily capitalised companies - immediately condemning workers to unemployment, is much greater than the alternative danger, which is that the operation of the internal market may be impeded. As Mr Lehne pointed out, the Americans themselves have adopted the rather expeditious solution of having at least one State - Delaware - in which highly capitalised companies can be based and where the monitoring of these companies by financial sharks can be prevented.
With regard to public opinion or the press, I also disagree with Mr Provan, because his words do not match what is written in the newspapers that I read. In my opinion, a vote against, at this time, by the European Parliament on an issue as important and significant as this would enhance the prestige of this institution. Because the information that I have from governmental institutions indicates that many governments would probably change their position within the Council if they were aware of the impact of this issue on the business world and, above all, on the unions. Now, in the formula laid down in the proposed directive, the workers are the unwanted guests. The workers are invited to the table but they cannot join in. They cannot take part in the meal and cannot take part in the decision-making. They are simply informed of the decision that is to be taken and, once it is taken, the document provided by the workers is just seen as another document - similar to what the Council does when Parliament has a consultative role - and then the decision is reached without any account being taken of the workers' opinions. I and most of the Members of the Socialist Group will, therefore, probably vote against adopting this directive.

Wallis
Mr President, I wish to begin by paying tribute to Mr Provan's chairmanship of Parliament's Conciliation Committee. He did a marvellous job in very difficult circumstances. I should like to say, on behalf of the ELDR Group, that we are fully and undividedly behind the agreement reached in conciliation and will vote accordingly.
Most of the reasons have been well rehearsed before and we have heard some of them again this morning. This directive is crucial, indeed critical, to the financial services action plan. Therefore if we are genuinely interested in the competitiveness and good functioning of Europe's economy, we have to proceed with this directive. My Group believes that it is in the long-term interests of Europe's citizens.
I want us to consider the interests of those we are really trying to protect with this directive, namely the minority shareholders, so that we can begin to secure investment and ownership in enterprises across Europe. It is now beginning to be the case, and will increasingly be so in future, that many of those investors are Europe's citizens investing for their future, savings and pensions.
Recent events have shown that citizens are becoming increasingly frustrated with the inability of politicians to deal with the effects of globalisation and other aspects of corporate life. For example it seems quite possible that a group of motivated shareholders may be beginning to achieve an about-turn on the projected building of the Ilisu dam in Turkey. Shareholders can act against the Wall Street sharks. Shareholders are property owners; they have rights and responsibilities which can be exercised in many ways this House would wish to endorse. Shareholders will often also be employees.
The conciliation result represents a substantial compromise. This directive has the potential to be the means to allow our citizens to be investors in the future of Europe's enterprise and to secure the health and vitality of our economy.

MacCormick
Mr President, it is a privilege to have the opportunity of taking part in this debate. As one of the majority at the conciliation group in Luxembourg on 5 June, my primary motive in voting was to ensure that Parliament would have the chance to vote on this third reading. It would have been a scandal if, at 1 a.m. in Luxembourg on 5 June, 15 of us had voted it down and prevented Parliament having this debate. We can assure all those visiting this House today that there will not be a more important decision affecting the well-being of industry in Europe than this one. My group will have a free vote on it and I believe others will as well. We will, as individual Members of Parliament, stand by our consciences on this issue at tomorrow's vital vote.
Sometimes I feel I am living in a looking glass land when I hear that all sorts of disastrous takeovers will occur if the directive is carried. Members must remember that takeovers will go on in all events. The issue is whether we have a common set of norms in Europe which govern us all. Will we have a single basic law for takeovers or will we let the chaos continue?
Mr Lehne makes a powerful point about the damage that can be done by golden shares, about the unfairness of the absence of a level playing field. We will not move closer to a level playing field by throwing out this directive. That will make it impossible over the next decade to get anywhere near a level playing field. We must, therefore, move forward on this occasion. It would be shocking not to do so.
It will probably take four years, if we carry this tomorrow, before it comes into effect. Trade unionists and employees of companies throughout Europe will still have to wait four years to get what Mr Medina Ortega already regards as not enough. But they have far less at the moment. If the directive goes through, the board of a bidding or offeree company will have to declare its hand at the time of the bid. It will have to declare its intentions in regard to jobs and the location of work. The trade unions or other employees' representatives will have the right to comment on that before the offeree company comes to a decision. The shareholders of the offeree company will need to know what the view of the employees is. None of this is law at the moment. We are about to deprive people of something of vital importance, unless we carry this!

Della Vedova
Mr President, Commissioner, European companies, workers and savers urgently need a European capital market which is free from protectionist constraints, integrated and efficient. The strength of the euro itself will depend on the strength and attractiveness of the financial markets. The competitiveness of public limited companies is an essential factor for an efficient capital market which is geared to the creation and protection of value for large and, in particular, small shareholders. In this sense, precisely the most disputed article of the directive - Article 9 - is a step in the right direction towards providing, within the single European market, a reliable, homogeneous legislative framework for public takeover bids. This is why the Italian radicals of the Bonino List are going to vote for the directive. Moreover, when we refer to the United States model, I feel that it is not right to pick and choose: either we take the entire model, Mr Lehne, or else we reject the model completely.
In recent weeks, the conservatives and protectionists, who have opposed this measure, have had a wonderful excuse in the shape of the asymmetries between the different countries. The case of the bid by what was actually a subsidiary of Electricité de France to take control of the second Italian private electricity group, Montedison, is symbolic. EDF is a company which is not quoted on the Stock Exchange, which is 100% the property of the French government and which enjoys a legal monopoly in France. Clearly, its aggressive policy of shopping around in Europe is an intolerable distortion of the European capital market. In promising to reinforce competitiveness and competition in the markets of some public services, we are letting statism and monopolistic management in by the back door.
In conclusion, Mr President, in order to avoid these types of operations prompting reactions such as the golden share, block decrees or rejection of legislation such as that which is to be put to the vote tomorrow on the competitiveness of companies, it is necessary for the Commission to intervene with its powers with regard to State aid and abuse and facilitation of dominant positions, to prevent these asymmetries from destroying the European capital market.

Inglewood
Mr President, I should like to start by acknowledging the work which Mr Lehne has put into this report, even though I have not always agreed with him. When publicly listed companies are subject to possible takeovers they should be able to take defensive measures, but when management acts it must behave even-handedly towards all shareholders in any one class. That must be included in the rules. If that does not happen, the integrity of the market is eroded. That leads to an unwillingness of capital to invest and thus under-capitalisation, and hence under-performance of Europe's economy. In turn, pension funds will not be able to secure proper retirement provision for their members and the currency will weaken. This conciliation has seen 15 new provisions introduced into the common position, so it cannot be maintained seriously that Parliament's rights have been trampled on. To claim that could undermine our credibility in the future when we may have real cause for concern.
The principle of having a takeover directive has been supported at first and second readings and now, after 12 years, we have a final agreed text. In this Parliament we frequently complain that we are unfairly perceived as immature and irresponsible, and hence disregarded. Let us now prove these critics wrong and vote for the conciliation. It is one which most commentators and all but one European country, Germany - a country which I normally hold in esteem but which welched on a unanimously agreed position of the Council - support. This, as Mr MacCormick very lucidly pointed out, is the first step towards creating a single market in corporate ownership. It is an integral component of the single market and is in the interests of all Europe's citizens.

Berenguer Fuster
Mr President, when it comes to adopting a position on this final interlegislative phase of the directive, we must not base our positions on its content, but instead consider the role of the European Parliament in the codecision procedure. If we look closely at what has happened, we will reach the conclusion that, so far, the system has not worked.
I know that it is difficult for decisions to be reached in Council, for governments holding divergent positions and countries with different legal traditions to reach agreement, but I have the feeling, or rather I am certain, that this consensus in Council is being sought with no awareness at all of the European Parliament' s thoughts on the legislation' s content. Of course, when agreement is reached within the Council, any proposal by Parliament which goes against this comes to be seen as a threat to an agreement that has been reached, sometimes in extremis and which may hang in the balance. In these circumstances, the Council ultimately becomes intransigent and adopts a position that always implies: either you do what we say or the law will not be adopted.
Mr Provan' s words have shown that the Council has attached less importance to achieving an agreement with the European Parliament than to the feeling that a certain country would not meet a commitment that it had previously given.
When Parliament studied the content of the common position at second reading, it was particularly concerned about two issues: workers' participation and the obligation to neutrality imposed on boards of management.
With regard to these two items, a majority of the European Parliament had the audacity to oppose what had previously been decided on in Council. I consider it to be extremely serious that no consideration was given at first reading to the positions of the European Parliament on workers and their representatives being fully informed and being able to state their opinion on the takeover of their companies and this justifies the European Parliament' s opposition to the common position.
Furthermore, the fact that this Parliament sought a balance between those for and against allowing defensive manoeuvres, far from deserving the criticism heaped upon it by certain self-interested sectors, should have their gratitude, because the European Parliament' s position was not to allow any type of defensive manoeuvring as was suggested, with considerable bias, to the media. You simply have to study the content of the amendments tabled to see that this statement is false.
We do not look favourably on the Council position of rejecting any possible agreement with the positions of this Parliament.

Bouwman
Mr President, Commissioner Bolkestein, ladies and gentlemen, I should like to say a few words about this report. In my opinion, the guiding principle we should all abide by is not only to talk about the internal market, but also about the European social model, as opposed to the Anglo-Saxon model.
This evening, we will be talking to one of the Commissioners about socially responsible entrepreneurship. And that means that we will not only be talking about shareholders, but also about stakeholders, along with consumers, environmental organisations and employees.
Information and consultation are also currently under discussion. Not simply information, therefore, but also consultation. Having a say in the broad sense of the word. We are looking into the request to review the Works Councils Act. We argue in favour of an observatory for industrial change. That is what is happening on the one hand. On the other hand, there are also people who would like to see a European company statute, and who want takeover bids to be regulated.
In my view, we should be sufficiently grown-up, to slowly but surely reach a package deal in which matters of this kind can be regulated in one fell swoop. At the moment, however, we are witness to a more gradual approach. Returning to this Directive, I gather from Articles 6 and 9 d), in particular, that these are only concerned with disclosure of information. I am drawing on my practical experience as advisor to works councils and trade unions, when I encountered difficulties of this kind on a daily basis. With regard to this directive, one could revert back to a situation where all that is required is information and where one hardly has the time to form one' s own opinion. This being the case, to say that the opinion may be sent along with a bid is a hollow phrase. I have heard such hollow phrases all too often, and I do not welcome them.
What we are about to see, therefore, is a very strange coalition tomorrow, with divisions within all the political parties. I naturally defend the proportion, and that will be the largest proportion, of the Greens who will be voting against. A strange coalition indeed, made up of people who defend the pearls of their national industries, as well as people who stand up for more say and better consultation as a matter of principle. I quite definitely belong to the second group. As Mr Simpson has said in connection with the postal issue, I would have liked the ayatollah of liberalisation to have had a bit more nerve and to have regulated this consultation aspect properly from the outset.

Doorn
Mr President, ladies and gentlemen, I have great admiration for what Commissioner Bolkestein has achieved and is achieving within the internal market. Unfortunately, I do not see eye to eye with him today, for I am of the opinion that the mediation outcome should be rejected for the following reasons.
First of all, the proposal conflicts with legislation and practices in my own country, the Netherlands. Although the Dutch Finance Minister may well have stated in a letter yesterday to the Dutch Parliament that the Directive should, in his opinion, be introduced, whoever seeks advice from the social partners in the Netherlands knows better. In fact, until two years ago, the Dutch government was also opposed to this directive. Things can change.
The Dutch system makes provision for protecting companies against hostile takeovers. It aims to afford the Board of the target partnership the opportunity of weighing up all the vested interests in the event of a hostile bid. In this connection, the Board must have the company' s continuity in mind. The approach in Mr Bolkestein' s proposal is completely different. It leaves the decision concerning a hostile bid to the shareholders.
A second argument against Mr Bolkestein' s proposal is the inequality which it creates within Europe. Article 9 only prohibits the legal protection structures. All other methods of countering company takeovers, such as government intervention, are being left out of the equation.
Mr President, one final point. One of the arguments used in favour of adopting the directive is that it has undergone a great deal of doctoring for twelve years and that, if the compromise is rejected, all the work will have been in vain. That is not an argument, in my opinion. Mr Bolkestein has agreed to have studies carried out into a number of points. Besides, I am of the opinion that studies should have been carried out during the twelve years of preparation, not after adopting the directive, but that is just by the by. The Commission could prepare a fresh proposal for a directive very quickly which, if handled intelligently, could indeed provide a level playing field in Europe and could enter into force before the current proposal, which, after all, has a five-year transitional period.

Gebhardt
Mr President, Mr Bolkestein, ladies and gentlemen, conciliation is a question of reaching a balance, a question of compromise. It involves give and take on both sides. As part of the European legislative process we often find Parliament and the Council negotiating hard in the conciliation procedure. However the outcome is generally a balanced result that the European Parliament can accept. But this does not apply in the case of the "takeover directive", which, after many years' work, should now be before us in its final form.
The European Parliament should reject the result which emerged from a night session in Luxembourg. It is worthless. I am saying that to you quite frankly, although I was a member of this House's delegation to the negotiations. However, I can also tell you that we have never been treated so frostily in any of the Conciliation Committees in which I have been involved. There was not a trace of mutual give and take! By an overwhelming majority, the Council's negotiating team largely swept aside the ideas adopted by the European Parliament. I do not want to go through the details already mentioned again point by point. However, I would warn against this House sweeping the decisions it took by a convincing majority under the carpet and accepting an obscure conciliation result. We would lose face and the public would quite rightly ridicule us for our weakness.
In fact the result of the conciliation process that we have before us is so poor that after that night in Luxembourg Commissioner Bolkestein stood before the press and said that legal fine tuning would still be needed. I think that must have been a joke, because there really has been plenty of time for legal fine tuning over all the years. But we should let the Commissioner have his wish! We should reject the text that emerged from the Conciliation Committee and Commissioner Bolkestein can present a workable new draft before long, one which matches not only his ideas but also the ideas of the elected representatives of 370 million Europeans.

McCarthy
Mr President, the job Parliament has here today is quite simple: to adopt or reject the compromise achieved in conciliation. What did we achieve in conciliation? Out of 15 amendments tabled in second reading, compromises were reached on 11. In this House we have a duty to deal with the facts, not to listen to the jungle drums beating from misinformed sources.
I welcome the changes in amendments, made by my own political group, to recognise the legitimate interests of employees in a takeover bid. Here the common text has been modified from a requirement to provide new information to a requirement to provide information to employees at three points in the directive: in Article 6(1), Article 6(2) and Article 9(1d). There are minimum standards. There is nothing to prevent boards of companies or Member States going further than the requirements in this directive, nor does it prejudice obligations to inform and consult under either national or EU directives. We can only, in conciliation, go as far as amendments allow us in second reading. No amendments were tabled requiring the board of a company to consult prior to a takeover bid.
It is no secret that Article 9, and the right of boards to take defensive action without shareholder approval, was the bone of contention in conciliation. But is simply not true to state that the board of a company faced with a hostile takeover cannot take action or is obliged to remain neutral or passive. Defensive and frustrating action is possible with shareholder approval. Indeed, our amendments to the common position mean that a board can get fast-track approval in 14 days.
I have always believed that politics is the art of the possible. In conciliation the Council and the Commission stuck to their key objective in this directive, of protecting the minority shareholders, protecting the interests of investors and defending shareholders against unscrupulous directors and inefficient company boards.
Article 9 and restrictions on frustrating action was the Holy Grail of this text. Therefore we had no scope to rewrite it to allow unapproved poison pill action. But we did achieve a deal on Article 9: we forced the Commission and the Council to freeze the article and to have a group of company law experts to examine key issues, and to come back to Parliament in March 2002. This also includes - as the Commissioner can confirm - the possibility of reviewing Article 9 in the light of the findings of that group. The entry into force of this directive is therefore postponed and Member States can postpone compliance with Article 9 until 2006.
My delegation will vote for this directive.

Bolkestein
Mr President, the Commission is delighted that Parliament and the Council have at last come to an agreement in the Conciliation Committee on the proposal for a directive concerning takeover bids. I should like to thank the Parliament delegation and in particular the rapporteur, Mr Lehne, and Mr Provan, who chaired the delegation, for their important contributions. Once again we have shown that the institutions are capable of finding an acceptable compromise. This proposal for a directive is important for the European Union, it is important for the Financial Services Action Plan, which has been identified as a priority by the Lisbon European Council. It is equally important for industry, for all sorts of companies, because it will provide a secure legal framework for restructuring operations.
Some fears have been expressed about the directive. First, some say that it leaves the companies defenceless when faced with a hostile takeover bid. However, I would remind you that the directive allows any company to take any defensive measure deemed necessary provided that the shareholders agree with it.
Secondly, it is claimed that some European companies would be put at a disadvantage compared to American companies, because the managers of American companies can defend themselves without consulting their shareholders. However, I may point out that if they do not take shareholders' interests into account, management decisions may be contested by any shareholder before the courts.
Thirdly, there are concerns that there is no level playing field in Europe for the protection of minority shareholders. But this directive provides for a first step towards creating such a level playing field by protecting all shareholders, and in particular minority shareholders, in the case of a change of control in their companies. In particular, it provides for a mandatory offer to all shareholders for all their holdings at an equitable price, and with an obligation of cash consideration in certain conditions.
Fourthly, some claim there is no protection for the employees of the companies involved, but this directive provides for complete and immediate information for employees and also gives them the opportunity to state their opinion on the offer. And, of course, the companies involved must obey national and European regulations, especially the employment directives.
Fifthly, some claim that we shall see a huge number of aggressive takeovers across the Union, but the facts tell us otherwise. Today, only 2% of all notified mergers or acquisitions are hostile. The Commission has undertaken to monitor and ensure that no such distortions emerge.
Fourteen Member States and the Commission are in favour of this improvement in company law. The Commission will undertake further work on the definition of equitable price, the squeeze-out procedure and the level playing field for protecting shareholders in the Member States, particularly in response to the European Parliament. We shall produce this work by March 2002.
In conclusion, the adoption of this directive will build confidence in the European institutions and in European financial markets. The efforts made jointly by your parliamentary delegation, the Council and the Commission in order to reach the agreement of 6 June make it worth sending a message that, after 12 years of work on this proposal for a directive, there can be a compromise between the co-legislators in this field. This makes it worth encouraging the further development of company law at European level. I trust in the judgment of Parliament and am confident that it will vote in favour of adopting this proposal for a directive.

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

 

Beazley
Mr President, on a point of order. Commissioner Bolkestein has just joined a long list of his colleagues who have been subjected to a procedure in this Parliament which is no longer acceptable. He was making an important speech to a full House but the only people listening were members of the public and our electorate in the Gallery. I insist that this matter now be referred to the Bureau and that, as of September, we see no further repetition.

We are all guilty of talking. We can, of course, all listen to the Commissioner through our headphones. However, if this Parliament is not conscious of the image it portrays to the public, then it should be. So, as of September, however it may be done - perhaps you could let off a siren at ear-piercing levels - the Commissioner should be heard, like any other speaker in this Chamber, in dignity and silence.
(Applause)

President
 Thank you for your speech, Mr Beazley. However, as you see, I am afraid we only have a small wooden hammer with which to keep order and this is not sufficient. I would like, first of all, to say that I agree with you. However, I must also inform you that this matter is not the responsibility of the Presidency Bureau but the responsibility of the Conference of Presidents. In my opinion, provision should be made for an interval to be left between the last speech - which is almost always the Commissioner' s speech on behalf of the Commission - and the start of voting time, in order to allow everybody the time to listen to the Commissioner' s speech carefully and to be present here for voting time.
I must also say - and I apologise if I offend the people sitting in the public gallery - that the public is not supposed openly to express its opinion or its opposition regarding what is said in the Chamber when it is present during sittings. I am saying this because I noticed several visitors applauding just now: this is not permitted by the Rules of Procedure.

Corbett
Mr President, on a point of order. I wish to draw your attention to Rule 22(3), which states that: "The Bureau shall take decisions on matters relating to the conduct of sittings". It is a Bureau responsibility and I ask the Bureau to take its responsibilities seriously.

President
Of course, Mr Corbett, but the agenda of the plenary sessions is set by the Conference of Presidents. If the agenda does not leave us enough time to apply Article 22, the final result is that, at every part-session here in Strasbourg, we will end up listening to a Commissioner who is talking amidst great confusion because not all the Members are listening properly. In our opinion, too much has been packed into too little time.
We shall now proceed to the vote.

VOTE
Simplified procedure on the amended proposal for a European Parliament and Council directive on the Community code relating to medicinal products for human use (codified version)

[COM(2000) 830 - C5-0763/2000 - 1999/0134(COD)]
(Parliament approved the proposal)
Simplified procedure on the amended proposal for a European Parliament and Council directive on the Community code relating to veterinary medicinal products (codified version)
[COM(2000) 657 - C5-0550/2000 - 1999/0180(COD)]
(Parliament approved the proposal)
Report without debate (A5-0242/2001) by Mrs Randzio-Plath, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a European Parliament and Council regulation on quarterly non-financial accounts for general government
[COM(2001) 100 - C5-0079/2001 - 2001/0056(COD)]
(Parliament adopted the legislative resolution)
Report without debate (A5-0221/2001) by Mrs Grönfeldt Bergman, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a European Parliament and Council directive on measuring instruments
[COM(2000) 566 - C5-0478/2000 - 2000/0233(COD)]
(Parliament adopted the legislative resolution )
Report without debate (A5-0230/2001) by Mrs Palacio Vallelersundi, on behalf of the Committee on Legal Affairs and the Internal Market, on the draft interinstitutional agreement on a more structured use of the recasting technique for legal acts
[2037/1/2000RIV1 - C5-0588/2000 - 2000/2266(ACI)]
(Parliament adopted the resolution)
Report without debate (A5-0224/2001) by Mrs Figueiredo, on behalf of the Committee on Women's rights and Equal Opportunities, on the Communication from the Commission to the Council and to the European Parliament: Framework Strategy on Gender Equality - Work Programme for 2001
[COM(2001) 119 + SEC(2001) 382 - C5-0193/2001 - 2001/2089(COS)]
(Parliament adopted the resolution)
Report (A5-0235/2001) by Mr Zimmerling, on the joint text approved by the Conciliation Committee for a European Parliament and Council directive on the resale right for the benefit of the author of an original work of art
[C5-0220/2001 - 1996/0085(COD)]
Parliament's Delegation to the Conciliation Committee
(Parliament approved the joint text)
Report (A5-0174/2001) by Mr Rothley, on behalf of the Committee on Legal Affairs and the Internal Market, with recommendations to the Commission on a fifth European Parliament and Council directive on motor vehicle liability insurance to improve the legal protection of accident victims
[2000/2126(INI)]
(Parliament adopted the resolution)
Report (A5-0134/2001) by Mrs Wallis, on behalf of the Committee on Legal Affairs and the Internal Market, on action taken on the Community policy on out-of-court settlement of consumer disputes (recommendation 98/257/EC and conclusions of the Tampere European Council)
[2000/2209(INI)]
(Parliament adopted the resolution)
EXPLANATIONS OF VOTE- Zimmerling report (A5-0235/2001)
Echerer (Verts/ALE). (DE) Mr President, I very much wish to state publicly that I have advised my Group to vote for the version of the Zimmerling report on resale rights which has been presented to us. This is despite the fact that there are certain reservations in my own country, Austria, and although there are also reservations on the part of other countries which are entirely understandable. However, I am convinced that we can work towards a still better document on resale rights in Europe, and I am convinced that this is needed for visual artists in Europe and that it is also an indication of the culture and of the cultural values for which we in this united Europe stand, and that we are also sending a signal to the art market, especially in Switzerland and the USA.
We have a few years to make the improvements that need to be made, and I believe that by joining forces we will succeed in toning down some of the arguments or perhaps eliminate them entirely, and work together to ensure legal certainty for visual artists. I firmly believe that, and I will continue to work towards that, and not just during this parliamentary term. I am already curious about what the doyen of our explanations of vote, Mr Fatuzzo, will have to say on this.

Fatuzzo
Mr President, I should not speak on this document because artists do not retire: like love, art never retires. Therefore, I should not speak about this document for I represent pensioners, but, Mrs Echerer, Mr President, many pensioners are also artists. At the end of their working life, many pensioners paint or create works of art, and so I want to protect the pensioners who are also artists. In the same way as there are pensioners who continue to be in love and to live out that love, there are also pensioners who are artists and create works of art. Therefore, like Mrs Echerer, I support this document.

Raschhofer
Mr President, ladies and gentlemen, the aim of the resale right directive was to harmonise the common market. This aim has been achieved, but with rather dubious success. Quite apart from that, it is questionable whether there is really any need for harmonisation in this area. Particularly at a time when things are being streamlined and efforts are being made to achieve transparency, introducing another Community tax is counterproductive. It impedes trade; in fact it could even be said that it will bring it to a halt, because it is only a question of time before the art market shifts away from Europe in favour of the USA or Switzerland.
In fact an imbalance will arise in the art market, with all the negative consequences that implies. Small galleries and the young artists they promote will be particularly affected by this new tax, however small. Even established artists, for whom this directive ought to bring some monetary advantage, have spoken out against it. It is a total mystery why this directive should be used to force something on the people affected that they do not want. By saying yes to this directive, Europe has had its day as a patron of art. That is why we in the Freedom Party have voted against it.

Hager
. (DE) Austrian artists are opposed to the introduction of the resale right. They see the resale right as being a major economic disadvantage, because it will inevitably lead to a drop in the initial sale price. The introduction of the resale right will lead to a migration of the art market from Europe to countries such as the USA or Switzerland, because there is nothing of the kind there and resale prices for works of art will not therefore be forced up. Small gallery owners will be particularly hard hit, as they are far less able to withstand this pressure on prices.
It is impossible to see why the resale right should be imposed on artists against their will as a form of copyright. For these reasons the Freedom Party is rejecting this report.

Tannock
. Although the "droit de suite" compulsory art resale levy report by Mr Zimmerling has been improved on at conciliation, it is still flawed. It has usefully raised the threshold for art work affected to EUR 3 000 but, although the large art galleries and auction houses favour this, as the volume of work is reduced, it does nothing for unknown contemporary artists. It introduces, as a sweetener, a 6-year derogation before application, but my fear as a London MEP is that our world renowned auction houses, such as Sotheby's, Christies and Phillips, will seize this period as an opportunity to move their businesses to offshore jurisdictions outside the EU, such as Geneva, Monaco and New York, with a loss of jobs in London. This will both directly affect employed personnel and indirectly cause damage to ancillary businesses such as framing and specialist art insurers.
Therefore I voted against this measure which seems designed solely to create a level playing field for the French auction houses, who have had such a concept in place for many years already.

Xarchakos
. During today's vote on the Zimmerling Report (A5-0235/2001) I voted against the report and I also urged all my "Nea Dimokratia" colleagues to do so. It is my strong belief that the approval of this directive will lead to the displacement of the art market to the USA as well as to Switzerland, and to an unfair advantage that all the artists from the United States will have when they try to sell their artistic work in Europe. I also believe that the proposal for national limits lower than the Community ones, as far as "droit de suite" is concerned, will eventually harm European artists and will boost the profits of the gallery owners and the auction sales companies. For all these reasons, and since I am a European artist, I decided to vote against.
Rothley report (A5-0174/2001)

Fatuzzo
Mr President, before I came to Strasbourg, I met Mr Fortunato Rossi, a pensioner of 80, who said to me: "I have had a terrible car accident. A Member of the European Parliament - what a coincidence - ran into me: I have got a broken foot and a broken arm and my head is in very bad shape; I have suffered greatly as a result of this. I went to the insurance company and they said that I am 80 years old, I am not worth anything any longer, I cannot earn anything and, therefore, they are not going to give me any compensation. However, if, on the other hand, it had been I who had run into the Member of the European Parliament, I would have had to pay him at least ITL 2 billion. Does it seem right to you, Mr Fatuzzo, that an old man does not have the right to compensation when he is hit by another car?" I replied: "You are right, Mr Not-Very-Fortunato Rossi. I will call for the next report on the subject to provide for fair compensation for elderly pensioners."

Bordes and Cauquil
If the genuine aim of this report was, as it claims, to improve the legal protection of accident victims, we would have voted in favour. Even if, however, the recommendations accompanying the report contain some proposals that would make the situation of accident victims slightly easier, this is essentially a complicated balancing act to avoid harming the interests of insurance companies.
So, for example, in this Europe which claims to be united, insurance companies will be allowed to make people they insure pay an extra premium if they are considering living temporarily in another Member State of the European Union.
All this talk of unity within Europe is worth very little when faced with a small additional premium.
We therefore abstained from voting on this report.

Titley
. I support my socialist colleague, Willi Rothley, on his report which calls for a new car insurance directive to improve the legal protection of accident victims.
Our citizens have a right to receive equal legal protection wherever they are in the European Union. Every year, thousands of people drive across the continent on holiday. Holidaymakers driving from Bolton to Barcelona must be protected on a legal basis.
The overall aim of the directive is extremely important in ensuring that there is a consistent and high level of legal protection. I wholeheartedly support the drive for improved compensation for national road traffic accidents, by obliging insurers to provide either an offer or a refusal of compensation within three months of receiving a claim. Clear and swift decisions are the best way of reassuring victims of the outcome of their claim. Furthermore, this report welcomes an EU minimum of EUR 2 m with future increases in line with inflation. Minimum amounts insured are out of date and this figure is a much more realistic sum.
It is not just holidaymakers who will benefit from this new directive. People buying cars in other countries will also gain confidence from this measure. Insurers should be able to provide insurance for a maximum of 30 days for anyone who wishes to buy a vehicle registered in another Member State and drive it back to their own country to re-register it there.
Public confidence in the legal aspects of road safety across the European Union must increase so that our citizens can travel freely from country to country without fear of huge legal fees and 15 intimidating legal systems. Only by improving the legal protection of accident victims can our citizens take full advantage of driving across the EU and make the most of freedom of movement.
Wallis report (A5-0134/2001)

Fatuzzo
Mr President, the pensioner who talked to me about the previous report was with a friend of his, Mr Tranquillo Verdi, also from Bergamo, and he asked me: "Why is it that you get so absorbed in resolving disputes between consumers and producers of consumer goods but you do not do anything about pensions and pensioners' disputes with the State over pensions, which are also consumer goods? Or maybe pensioners are not consumer goods? I would like you, Mr Fatuzzo," he added, "to ensure that we receive our pensions quickly and on time". And so this is what I am asking you to do, Mr President.

President
That concludes voting time.
(The sitting was suspended at 12.30 p.m. and resumed at 3 p.m.).

ECB and the euro
President
The next item is the joint debate on two reports:
(A5-0225/2001) by Mrs Randzio-Plath, on behalf of the Committee on Economic and Monetary Affairs, on the 2000 Annual Report of the European Central Bank [C5-0187/2001 - 2001/2090(COS)];
(A5-0222/2001) by Mr Maaten, on behalf of the Committee on Economic and Monetary Affairs, on means to assist economic actors in switching to the euro [2000/2278(INI)].

Duisenberg
It is my great pleasure today to present the third Annual Report of the ECB, two and a half years after the launch of the euro and less than half a year before the single currency will become fully visible for our citizens in the form of banknotes and coins.
The year 2000 was a remarkable year for the euro area, as economic growth reached its highest level for over a decade and was accompanied by continued strong job creation. The HICP in the euro area has also, alas, been above 2% since the middle of 2000, mainly owing to oil price increases and the depreciation of the exchange rate of the euro last year. While this increase in the HICP to above the ECB's definition of price stability is not welcome, the ECB cannot and should not avoid short-term price fluctuations caused by such temporary factors. Nonetheless, it is crucial to prevent any spillover of transitory short-term pressures into medium-term inflation expectations. During 2000 the ECB had to be particularly vigilant in this regard in a context of strong economic growth and given that monetary developments clearly indicated the existence of upward risks to price stability. It was for this reason that we raised interest rates six times in 2000. By doing so, the ECB contributed to ensuring the sustainability of non-inflationary economic growth in the euro area.
In this respect, the evolution of long-term interest rates in the euro area in 2000 indicated that financial markets generally expected medium-term price developments to remain in line with the definition of price stability. The forecasts which became available in 2000 painted a similar picture. This is a clear indication that the ECB affirmed its credibility in 2000.
Before sharing with you my analysis of the current situation, let me turn to some issues raised in the draft resolution prepared by your Committee on Economic and Monetary Affairs concerning the monetary policy strategy of the ECB. I should like to begin by saying that I share the view expressed in the draft resolution that the ECB's two-pillar strategy can be understood as a means of analysing all the pieces of information relevant for monetary policy. However, there are other points in the resolution with which I would not agree. These concern the doubts expressed with regard to the definition of price stability, the importance that the first pillar should be given in our strategy and the role of projections under the second pillar.
The Governing Council of the ECB has defined price stability in the euro area as "a year-on-year increase in the HICP for the euro area of below 2%", and has stated that "price stability has to be maintained over the medium term". The definition provided by the Governing Council ensures accountability and gives clear guidance to expectations of future price developments. The phrase "below 2%" clearly defines the upper boundary of the rate of HICP increases which is consistent with price stability. This upper boundary is in line with the practice of the national central banks of participating Member States before the start of Stage Three of EMU. In addition, the word "increase" clearly signals that prolonged declines in the level of the HICP index would not be deemed consistent with price stability. There should be no doubt that the commitment of the ECB to maintain price stability is compatible neither with inflation above 2% in the medium term nor with deflation. In this sense, the monetary policy of the ECB is fully symmetric, fighting both upward and downward pressures on prices which may result in outcomes not in line with our definition of price stability.
Within our monetary policy strategy, the first pillar assigns a prominent role to money. This reflects the fundamental monetary nature of inflation - as supported by empirical evidence, much of which is available from our Working Paper Series - which indicates a stable long-run demand for M3 and good leading indicator properties of M3 growth for inflation in the medium term. The need to follow monetary developments is therefore crucial to analysing risks to price stability in the euro area in the medium term. I should also emphasise at this point that the quality of monetary statistics is among the highest of all statistics available in the euro area. These monetary statistics are based on a fully harmonised reporting scheme across all monetary financial institutions in the euro area. The quality of monetary statistics has recently been further improved by identifying, as a separate item, non-resident holdings of money market funds. Furthermore, we expect that it will be possible for the non-resident holdings of other negotiable paper to be appropriately measured and published towards the end of the year. For all these reasons, M3 will continue to play a prominent role in the monetary policy of the ECB.
With regard to the projections, and in particular to the suggestion that they should be explicitly endorsed by the Governing Council, let me remind you that the Governing Council is accountable only for maintaining price stability. It is up to the Governing Council to take the decisions necessary to ensure the performance of the tasks entrusted to the ESCB by the Treaty. In this respect, the Governing Council decided, for several reasons, to follow a two-pillar strategy. In particular, it was decided not to follow a strategy under which monetary policy decisions would be made solely on the basis of inflation forecasts. While the staff projections play an important role in the analysis, the Governing Council conducts under the second pillar, it is important to understand that this analysis is not centred on these forecasts. Given the difficulties of forecasting over longer-term horizons and the uncertainty regarding the appropriate economic model, the Governing Council does not deem it advisable to use only a single projection to analyse risks to price stability. The uncertainty surrounding forecasts has also been appropriately reflected in the manner in which the ECB publishes them, namely in the form of ranges rather than point estimates.
Turning to an analysis of current economic and monetary developments, after the decision on 10 May to lower the key ECB interest rates by 25 basis points, at its meetings in June the Governing Council considered that, on the basis of the information available, the current level of key ECB interest rates was appropriate to ensure price stability in the euro area over the medium term. Since the last meeting of the Governing Council, there has not been any new information that would justify changing this assessment.
As regards the information contained in the first pillar, monetary developments point towards a favourable outlook for the medium-term maintenance of price stability. After having followed a gradual downward trend since spring 2000, the three-month average of annual M3 growth rates has tended to broadly stabilise over recent months. When account is taken of the upward distortion to monetary figures, M3 would have been growing at around the reference value in the most recent period. Moreover, the annual growth rate of loans to the private sector has continued to moderate, mainly driven by the slowdown in loans to households.
With regard to the second pillar, we continue to expect the currently high rates of inflation to remain a transitory phenomenon and, in the absence of further unfavourable price shocks, inflation rates should fall below 2% in 2002. These developments are expected to take place in an environment of weaker economic growth, which should, however, remain broadly in line with trend potential growth of the euro area.
In this context let me turn to an issue which has attracted considerable attention just recently: the potential impact of the cash changeover on price pressures. In general, price transparency and competition are likely to limit inflationary pressures from the cash changeover. In this respect it is also worth noting the commitment of finance ministers in the euro area, as reflected in a statement issued by the Eurogroup, that, overall, the conversion into euros of all prices, charges and fees administered by their governments will be price neutral or else "smoothed" in favour of the consumer. We call on governments at other levels but also on firms to follow this example set by central governments. In addition, the public's vigilance in monitoring prices and price changes will also be important during the conversion period.
The ECB will continue to pursue its mandate to maintain price stability over the medium term, irrespective of whether prices are quoted in euros or in the component currencies. We shall therefore continue to remain vigilant as regards future developments affecting the balance of risks to price stability, including - in particular - monetary developments, real GDP growth, price-setting behaviour and wage developments. At this juncture, when price developments are mainly being affected by transitory factors, it is crucial that the current upward movement of prices does not become a more lasting one, and it is therefore important that wage moderation continues.
With a view to the introduction of the euro banknotes and coins, I can report that the Eurosystem's preparations are well on track. At the end of June 2001 the total number of euro banknotes produced so far amounted to about 9 billion, which is about 90% of the initial launch stock. Moreover, as an insurance against potential production risks, in March 2001 the ECB decided to establish a Eurosystem central reserve. This reserve will amount to about 10% of the launch and logistical stocks taken together.
On 1 January 2001 the Eurosystem launched the "Euro 2002 Information Campaign", which is designed to complement other information campaigns being conducted at the national level. The main objective of the campaign is not to sell the euro - the euro will sell itself - but to familiarise the general public and specific target groups with the visual appearance of the euro banknotes and their security features and to raise the awareness of citizens about the overall changeover modalities. The information campaign is progressing on schedule. It will become fully visible for citizens once the mass media part of the campaign starts on 30 August 2001, after the unveiling of the final visual appearance of the euro banknotes and their security features.
The Eurosystem is fully aware of the importance the successful introduction of the euro banknotes and coins will have for overall confidence in the single currency, and the careful and comprehensive preparations being made by the Eurosystem are commensurate with this task. We should all bear in mind the fact that the cash changeover is an unprecedented challenge and a huge logistical exercise and that all the parties involved will have to assume their part of the overall responsibility for making the introduction of the euro banknotes and coins a success.
At this point, I should like to comment briefly on the issue of the sub-frontloading of euro banknotes to the general public, a matter on which I have reported to you in greater detail on previous occasions. Let me remind you that the ECB's decisions have been taken in full respect of the general interest, and after a thorough assessment of all the aspects involved. No new elements have emerged which would justify renewed reflection on this issue.
Turning to issues related to banking supervision also raised in the draft resolution on the ECB's Annual Report, I should like to recall, at the outset, that the framework for financial stability in the EU relies on two building blocks: national competence and cooperation. It is our firm belief that the impressive changes in financial markets prompted by the introduction of the euro call for a substantial enhancement of the mechanisms for cooperation between national authorities and with the Eurosystem. This is so because EMU is changing the nature and scope of systemic risk. It is no longer possible to assess threats to financial stability or the potential channels for the spread of contagious risks only at the domestic level. I was therefore particularly glad to see that the contribution of the ESCB to improving the institutional framework for financial stability and, in particular, the development of macro-prudential analysis have been acknowledged and supported in the draft resolution.
The draft resolution also refers to the need to avoid conflicts between supervisory responsibilities and the responsibilities of the monetary authorities. I should like to say, first, that the empirical evidence of potential conflicts between the objectives of financial stability and price stability is unclear and, second, there is no possibility for such a conflict to arise in the context of the institutional arrangements in the euro area. Indeed, the introduction of the euro has entailed an institutional separation between monetary policy decision making, which is addressed to the euro area as a whole, and the exercise of supervisory tasks, which relates to domestic institutions and markets. The decision-making mechanisms for the two tasks no longer coincide, and the risk of conflict has been overcome by the institutional set-up. To conclude my statement, I should like to underscore that the introduction of the single currency has indeed reinforced the need for the strong involvement of central banks in prudential supervision and financial stability.

President
Many thanks, Mr Duisenberg, for your speech.

Welcome
President
Ladies and gentlemen, I should like to extend an official welcome to Mr Alejandro Toledo, Peru' s newly elected President.
Mr Toledo has taken a seat in the official gallery and will be joining us this afternoon in the company of his wife and daughter.
Mr Toledo, welcome to this House.

ECB and the euro (continuation)
Randzio-Plath
Mr President, you have made it clear that all the partners in the European single currency and also in the European Union need to pool their efforts if the historical event of completing the currency union of the 12 is to be achieved, and I can assure you that you have the support of the European Parliament.
The European Central Bank is a very young institution. The euro, for which it is responsible, is not yet even a truly tangible currency. That is why it is so important for the ECB to establish its own credibility. That means that the ECB's mandate needs to be very clearly expressed through its monetary strategy. So far, the ECB has been fairly successful: even commentators who are usually very critical of the ECB's monetary policy are increasingly and quite rightly recognising that Europe needs a specific solution in monetary policy terms and that asset prices should not be the main parameter for monetary policy decision making. Nevertheless, there is still a lack of coherence in justifying individual policy measures. They may well be correct technically speaking, but purely technical explanations are not enough to convince Europe's markets and its public once again that the ECB is committed to price stability and to build up public confidence in the euro, which has unfortunately not improved since it was introduced. Against this background, the European Parliament's demand for immediate publication of the arguments for a decision or otherwise, together with the counter-arguments and the underlying reasons, and also of the summary minutes, could facilitate greater understanding of the ECB.
Max Weber once spoke about the three sources of authority: tradition, charisma and reason. The ECB should develop the form of authority that Weber considered modern - rational authority - as a means of achieving lasting respect and efficiency. Rational authority depends on a reliable assessment of the facts. Forming a judgment in this way provides a basis for a sensible public debate on the issues surrounding European monetary policy. This is essential if one considers that monetary policy is now, more than ever before, effective above all through the channel of the expectations of the financial markets, which have a considerable influence on the behaviour of the economic players. Without a lever of this kind a central bank can fail to achieve its objectives.
Accountability and transparency do not mean that the ECB should publish more and more material. Quality is more important than quantity, and in this respect I would like to specifically acknowledge the quality of the monetary dialogue with the European Parliament. The ECB has improved the transparency of its monetary policy decision making. Nevertheless, more openness and transparency cannot do any harm, indeed in the coming months they should increase confidence in and acceptance of the single currency. The single European currency depends on this, and the following measures would be helpful:
First, the definition of the secondary target of monetary policy in accordance with Article 105 should be set and published in order to make it clear when the ECB can and must support growth and employment in the euro area, and that the ECB also supports conditions for sustainable growth effective in terms of employment at the highest level, as it did at the EU Summit in Lisbon with its target of 3% growth.
Second, it would be helpful in this respect to publish the models used. As long as the European Central Bank does not opt for an inflation target, it should stick to the two-pillar approach, but it should continuously improve its calculation of M3 by increased analysis and research activity. An analytically disciplined extension of the second pillar is also needed.
Third, the ECB's forecasts must be more precise and should not be broad ranges as they have up to now; these need to be narrowed. They should also be issued four times a year. In order to achieve greater understanding and transparency, the ECB should adopt the forecasts produced by its own staff.
Fourth, summary minutes should be published containing the arguments made for and against when making decisions on monetary policy, together with an anonymous account of the voting pattern.
Fifth, we need to establish whether, as part of the revision of the Treaty, Parliament should not be given a kind of right of confirmation in respect of nomination of members of the Executive Board.
Sixth, as an important partner in macroeconomic decision making, the ECB should make its contribution to improving the coordination of economic policies and the generation of an appropriate and balanced policy mix, just as other independent central banks do, without diminishing its independence in the process.
The ECB's priority target of guaranteeing price stability is not, after all, an objective in its own right, but rather a key condition for economic growth and job creation. That is why monetary policy should not be formulated in isolation but rather supplemented by still closer macroeconomic policy coordination in the euro area. The situation still leaves a lot to be desired in this area.
This could prevent economic integration being driven solely by the markets without any account being taken of employment policy and social issues. Another reason for enhanced macroeconomic coordination involving the European Central Bank is the accelerating globalisation of financial markets, which less and less reflects the turnover of goods and services.
This suggests that interest rate variations will have a greater influence on the price of financial assets, while their effect on the real economy has become weaker than it used to be.
Concerns about the independence of the European Central Bank which have been raised as regards the effectiveness of its participation in the macroeconomic policy dialogue are equally difficult to understand. Quite the opposite: I believe that enhanced coordination would not endanger but reinforce the independence of the European Central Bank. A higher degree of economic convergence would also facilitate its task as it would even alleviate the problem of a "one size fits all" monetary policy, and therefore reduce the risk of putting the ECB under political pressure.
The European Central Bank's position is not the same as that of the US Federal Reserve Bank. Its stakeholders are not just one President, one finance minister and the public, its stakeholders are 12 presidents, 12 finance ministers and the public of twelve European countries, who do not always speak with one voice. As the representative of the European public, the European Parliament would like to be a genuine partner in this dialogue regarding the creation of a new political culture in the European Union, which, on the one hand, guarantees the independence of the institutions but which, on the other hand, also takes account of the responsibility of each institution to be transparent and accountable in the interest of a properly functioning democracy.

Maaten
Mr President, this report on switching to the euro cannot be viewed in isolation. It builds on previous reports submitted, inter alia, by Mr Karas and Mrs Torres Marques and upon the recent correspondence between Mrs Randzio-Plath and our President, Mrs Fontaine.
I am delighted to note that the European Central Bank and the European Commission are talking the same language as the European Parliament. Only eight amendments have been tabled to this report, by a group none of whose members, I notice, are present in this debate.
The euro is already a success, as Mr Duisenberg pointed out convincingly a moment ago. It is also the most exciting European project to date. After all, the European Union is no longer a theory but a tangible reality for all citizens in the euro-zone or, rather, all citizens in Europe and all world citizens. That is happening for the first time in the history of our European cooperation.
The launch date is 1 January. The issue will then not simply be about confidence in that currency, it will be about confidence in the European project as a whole, and that European project is, of course, open to all kinds of criticisms at the moment, the most recent case in point being the Irish referendum.
Provided it is done well, the introduction of the euro could , silence all that criticism. It could ensure that all citizens in euro land are proud of the way it has been done, maybe against all expectations. Where it is not done well, on the other hand, the introduction of the euro could also intensify criticism not only of the euro but also of European cooperation. After all, citizens need not read about the introduction of the euro in their newspapers. They can witness it for themselves. Current criticism with regard to European cooperation is that the decision-making process is not transparent, that citizens are not being heard and that the people at the top know it all. But those people at the top can also subsequently be brought very much down to earth in the eyes of the public. That applies to all of us, in fact.
Consumer organisations, as well as organisations in the medium-sized and small business sectors, have informed us of their wish to have small euro notes distributed during the last days of December - as is, in fact, also to happen in the case of euro coins - maybe in the form of packets that can be bought in banks or by switching over cash machines sooner, or in whatever other way. The public at large must gain access to those notes. That is an effective way to discourage counterfeiting. After all, citizens will then know from their own experience what the notes, obtained from a reliable source, look like. It benefits the safety of shopkeepers who will need to stock far fewer euros in their shops in order to have sufficient change on 1 and 2 January. It benefits the public. Fewer exchange problems arise when old currency is handed in to shops and euros are given in return. You know you will receive the right amount of the correct money if you pay in euros and get your change in euros. It can prevent a general sense of irritation.
I can understand the argument of Mr Duisenberg who says: we want to adhere to a decision we have taken. We want to be trustworthy in that respect. I can understand that well because many critics would, of course, exploit this and say that the European Central Bank has changed its mind again. That is not how things work.
However, we do believe that there are fresh facts. These have surfaced following research carried out within industry, which shows that the practical problems would really be enormous if we were not to distribute euro notes beforehand. I am not saying that frontloading is a guarantee that there will not be any problems, for that is not the case. Neither am I saying that, in the absence of frontloading, there will be considerable chaos. I have a reasonable amount of confidence in the consumer, who will know how to deal with these problems. I do believe that by frontloading, we are, in a relatively simple manner, reducing the risk of problems arising .
We would welcome a review of your decision. It would also be a sign of wisdom. Moreover, what happens if, by the end of the year, the pressure mounts and Ministers perhaps decide to change their minds and want to frontload in their own countries after all?
I would like to make a few final points. Of course, there are technical measures that could be taken, and I know that the ECB is also in favour of these: banks opening on 1 January, frontloading of euro coins, as is happening in a number of Member States, providing shopkeepers with better insurance and loading cash machines with small notes. Furthermore, those cash machines are a cause of concern, as far as I can see. We have, in fact, been supplied with recent figures in this respect from the European Commission. I would certainly not object to testing them in different Member States during the last days of the year. I would welcome your opinion on this matter.
The first days of January will be crucial to how much confidence 300 million citizens, and the whole world, can place in the euro. I wish you all the best in the implementation of that project. I do hope that you yourself will be prepared to reflect on our considerations.

Peijs
Mr President, Mrs Randzio-Plath' s report is, bar one paragraph, a balanced report. The Paragraph in question is the ninth. In our opinion, it compromises the Bank' s independence. The Bank' s task is to monitor price stability in the medium term, not overnight. We want an independent Bank. It is therefore inappropriate for Parliament to prescribe the Bank' s monetary policy. This is an essential point, in our view. Without this adaptation, we will be voting against the report, despite the fact that we give our wholehearted support to the rest of the report. Looking back to the year the report was drawn up and - inevitably - this year to some extent, we still have a wish list with regard to the bank' s communication policy. There is room for improvement in its communication with the financial markets and society.
Mr Duisenberg, I asked you at your hearing whether you are able to stay on. You then replied in the affirmative, yet your stepping down is well documented in the press, as if it were a fait accompli after all. There is a desperate lack of good candidates. You have gained a great deal of experience. I would ask you once again: are you able to stay on to complete your term in office?
Concerning the conversion to the euro, you know my position.
Finally, I should like to comment on cross-border payments. Banks and companies will all earn back the costs incurred during the currency conversion, or they will receive compensation. People in Europe will surely not be the only ones footing the bill and experiencing the disadvantages without gaining any benefits. Mr Duisenberg, I insist that both the Bank and the European Commission assume their responsibilities, assigned in the Treaty, and ensure that cross-border payments which, after all, are no longer cross-border in a European home market, will, on 1 January 2002 cost about the same as remittances at home. You are undoubtedly aware that they have not become cheaper of late, but have become more expensive, by half a euro on average! I should like to inform the Directorate-General Competition of the fact that Parliament will resist a fixed fee of EUR 3 for receiving banks. That would mean that, in some countries, the price would, in fact, increase rather than decrease, and that would be unacceptable!

Berès
Mr President, Mr Duisenberg, Commissioner, ladies and gentlemen, the debate that we are holding today has the virtue of enabling both a discussion on the macro aspects of the euro and the practical aspects of the euro and I believe that this is the right time to hold it. Is there one person in my group that questions the independence of the European Central Bank? No, there is not. Does this prevent us from discussing monetary policy? It does not. And I even believe that the changeover to the euro, if we can make a success of this final phase, assumes that we are discussing economic policy as a whole, including monetary policy and, from this perspective, I can only congratulate our rapporteur, Mrs Randzio-Plath, the chairperson of Parliament' s Committee on Economic and Monetary Affairs on the proposals that she has made, and I can only regret some of the votes that were cast in committee. If we want the euro to be the tool of the future that we hoped for, to enable Europe to be in harmony with prospects of growth for all, we must also discuss the monetary policy that you are implementing, Mr Duisenberg, and this is a subject that the people of Europe have a duty and the power to tackle.
Next, to turn to the practical aspects of the euro, I would like to congratulate Mr Maaten on his report, and to remind him that some of the authors of the amendments are here to discuss them and to go over two or three points.
With regard to the issue of frontloading, Mr Duisenberg, I understand that this is very much like a rearguard action; as proof of this, I refer to the agenda of the recent Ecofin Councils and, once again, as I said to you in committee, this is something that I regret. As well as the symbolic changeover to the euro on D-Day, there was a psychological aspect regarding the time between Christmas and New Year which meant other provisions were required. You decided against these and we are sorry to see this.
As for everything else, we still have some months left during which we can run a major publicity campaign so as to ensure that the changeover to the euro is as smooth as possible. In order to do this, the campaign that will be run must emphasise two main points: first of all, the issue of sensitive groups of people and, secondly, the psychological aspects of the changeover. I believe that the aim of the whole campaign should be that as many citizens as possible take on board the idea of the changeover from day one and that they cease using two currencies, mentally as well as physically. To this end, I hope that Parliament will be able to adopt an amendment that we re-tabled on behalf of our group, which would ban dual pricing after a period of one year. This year should give people time to adapt - a real changeover should occur if dual pricing is banned after one year. We must eliminate ambiguity from the changeover to the euro, which we must ensure is an experience shared by all citizens, whilst hoping that they will all join us in using the common currency.

Huhne
Mr President, given the time constraints and also the feeling in my group that the ECB has essentially been doing a good job in difficult circumstances, I would like to concentrate on some remaining structural issues concerning communications and accountability. As Mr Duisenberg will remember, Parliament has repeatedly adopted a transparency package advocating five separate measures to increase transparency. I am delighted to report that the ECB has so far agreed three of them, and we must give them credit for this. We have had no problems in the Committee on Economic and Monetary Affairs in inviting members of the governing Council to appear before us. Last year, we had eleven such appearances.
Secondly, the ECB began to publish regular forecasts or, as they prefer to call them, "projections" in the December 2000 monthly bulletin, and that was a very welcome development. In addition, econometric models are now published in the working paper series. It would be nice if they were in more user-friendly form, for example, on CD-ROM, but there is progress.
The two remaining measures that Parliament is again calling for are a publication of a "Beige Book" setting out conditions in each Member State and publication of summary minutes giving the views for and against interest rate changes. In addition, this year we are asking the ECB Governing Council to deal with a specific problem it has faced in a couple of recent interest rate changes. There was confusion in the markets about what was perceived as an unpredictable decision and the marketplace was clearly not prepared for that decision. Indeed, some people went as far as to say it was arbitrary, so we are calling for the publication of votes on an anonymous basis.

Hudghton
Mr President, Mr Maaten's report makes constructive suggestions for the imminent introduction of euro coins and notes in the 12-member euro zone and refers also to the low level of public and small business awareness of certain aspects of the changeover.
In particular in the report I support the comments on the need for frontloading the general public with notes and coins. I also welcome its emphasis on the role of local and regional public administrations in the changeover.
It is essential that every effort is made to ensure that this so-called flagship event is managed effectively and that the changeover is smooth. Most of my comments, however, are based on a view from the outside, from Scotland, for the time being part of the UK. There may be some problems with public awareness within the euro zone, but we have a much bigger problem within Scotland and the rest of the UK. A Scots newspaper this week published a survey of public attitudes to the euro in Scotland and this showed a lamentable lack of awareness, which was directly linked to a low level of enthusiasm for the currency.
The level of awareness in Scotland may be lamentable but it is not surprising given the attitudes of the political leaders in the Scots and UK governments in recent years. The new Labour London government has been afraid to show support for UK entry, or even to provide factual information, while the Conservatives have simply shown an almost deranged hostility to the euro and have attempted to mislead the public on the implications of joining.
In principle my party favours the euro subject to entry terms suiting Scotland's economy and after a referendum, but ideally as an SNP member I would like to see Scotland an independent EU Member State being in a position to make the decision based on Scots priorities, while retaining domestic control over taxation. In the short term, though outwith the euro zone, there is also a substantial need for factual information campaigning on the implications after 2002 in our relationship with the euro zone, whether we ever decide to join or not. I welcome recent statements from some high street retailers in Scotland that they will be accepting euros in their tills, alongside sterling, from 2002. This can only enhance Scotland's position as a welcoming tourist and business travel destination, as well as familiarising Scots with the euro notes and coins.
I call on the UK and the Scots governments to encourage the process of public information and to seek the support of the European Central Bank and the European Commission in encouraging Scots businesses to gear up for the acceptance of the new coins and notes.

Kaufmann
Mr President, Mr Duisenberg, people feel that they are paying for the lamentable situation with regard to the euro. According to yesterday's Financial Times Deutschland, 49% of Germany's population are against the euro. Over 50% do not believe that it will boost the economy or emulate the stability of the Deutschmark. 30% expect a decline in the value of their assets and 67% expect price increases when we switch over to the euro. The euro has certainly not become a job machine or acted as a brake on inflation, which is precisely what was rashly promised to the public earlier on.
I am very grateful to you, Mr Duisenberg, that the decline in the euro exchange rate is cited in the ECB report as one reason for the increase in inflation, and that the report at least refers to the increasing inflation rate differential between the euro countries rather than putting all the blame for the euro's weakness on the dollar. Monetary stability in the euro area and the external exchange rate stability of the euro are inextricably linked.
It needs to be said just as clearly that the ECB's monetary policy has failed to achieve its own stability targets and that the euro is now even associated with a decline in real income. The responsibility for this is not, however, chiefly attributable to the ECB, whose scope for action is becoming ever more restricted. It is more that the policy of the euro countries has contributed far too little to economic convergence. What is really incomprehensible is that the French proposal to establish an "economic government" has gone unheeded.
The differences in inflation and growth between the individual euro countries, which are in fact increasing, are dangerous and I believe that they should be analysed in great detail in future ECB reports. Uniform interest rates are too restrictive for some euro countries and too expansionary for others. A European monetary policy geared to monetary stability is totally at odds with conflicting national economic, tax and social policies.

Muscardini
Mr President, on 2 May 1998, in Brussels, I pledged the support of the Alleanza Nazionale delegation for the euro. However, I observed that the European currency was getting off to a bad start: the Union had no economic policy and the Council of Ministers had not even issued an outline plan or guidelines so that the national States could work together to tackle major areas such as unemployment, flexibility, the conversion of some sectors and the social and cultural effects of the increase in pace that technological innovations such as the Internet were bringing not just in the market place but in other areas of life as well. Europe had no foreign policy and no strategies of its own for orienting globalisation and world finance, and this, together with the lack of economic strategy and the indifference displayed by institutional bodies towards the citizens, who had been neither consulted nor informed about the matter, meant that the launching of the euro resembled the building of a cathedral in the desert. Yet there was still hope, for there would have been time to introduce political, economic and financial initiatives to cultivate that desert, if only the political will had been there to develop and implement them.
However, in recent years, the euro has not been doing well, and the date of its impending entry into force is looming up like an unavoidable appointment for which the citizens have no enthusiasm and which is often viewed with trepidation by some of those very politicians who have contributed, in recent years, to the barren path the euro has taken. It is a currency which has consistently been undervalued in relation to the dollar and which has consequently penalised investments and savings.
In the same report, Mr Maaten points out how the criticisms we made then - criticisms which, in recent years, we have brought to the attention of Parliament and the Commission on a number of occasions - were justified: indeed, medium-sized enterprises, trade, the craft trades and the agricultural sector, all of which are major production categories, are not yet ready for the transition to the euro. The banking system is not ready either, despite the multibillions invested in purchasing the necessary equipment. These and other issues which remain unresolved give rise to the fear that there will be negative consequences, both for the citizens and in terms of the correct assessment of the real value of the euro.
I will conclude by saying that we support the many suggestions made in the report, but we nevertheless condemn the fact that both their proposal and their implementation are long overdue. This is why we want to know clearly, once and for all, who is responsible for delays, bad planning and failure to assess the situation with regard to the economic sectors and social situations in the field.

Gollnisch
Mr President, ladies and gentlemen, we are six months away from the fateful day, and it is time to concern ourselves with how citizens are going to handle the disappearance of their national currency. They are the last people to be consulted and also the last people to be informed.
The most fervent supporters of Europe will feel an unexpected surge of anxiety when reading Mr Maaten' s report, which describes a state of almost total unpreparedness, the limited, even non-existent, use of the euro in international transactions, including between the countries within Europe, the doubt surrounding the possibility that the banks will exchange citizens' coins free of charge, the absurd charges for cross-border transactions, even though they are made using the same currency and the excessive price increases that the currency changeover is bound to provoke. The litany is long and it does not paint a joyful picture.
The governments demanded the euro for ideological reasons whereas large financial organisations demanded it for reasons that are purely self-motivated. The euro has been around for two years and it has failed to catch on even amongst its most ardent supporters, and still less so within the international markets. The euro has lost its value against the dollar and nothing points to an imminent recovery. The changeover to using euro notes is, therefore, a useless and costly operation without a doubt. It will cause a rise in inflation and cases of public or private embezzlement. It would be better to stop all this while we still have the chance.

Blokland
Mr President, now that consumers will soon be carrying euros around in their pockets, we would benefit from a smooth transition. Rapporteur Maaten was right to commit himself to that cause. The euro' s uncertain success as a currency should not be further frustrated by uncertainty during that transition.
Confidence in a currency is fundamental to every modern economy. The basis for that confidence, however, is rather shaky in the case of the euro. That is why we have nothing to lose by taking precautionary measures during the changeover. It is therefore only fair to do justice to the concerns of all the parties involved. The ECB' s attitude, however, can be described as somewhat inflexible. Further to the Maaten report, Parliament has arrived at a compromise date of 27 December as the date on which to make the first small notes available. It ensures that the changeover is spread out. Those few days leave little scope for counterfeiting. I fail to see why this compromise would not be acceptable to the ECB.
Along with the availability of euros, payment by bank card is another bottleneck. The way in which those transactions are to be processed is not equal to the temporary massive increase in the use of that method of payment. It is to be feared that people will therefore be forced to use the national currencies longer than necessary. This leads to uncertainty when paying in old currency and receiving change in euros.
The availability of cash machines and the extent to which payments are made by bank card differ quite considerably from one Member State to another. In the light of this, has the ECB looked into additional methods for distributing the money? Is it possible, prior to the changeover, to buy euros electronically, for example through transactions on the Internet whereby certain quantities are set aside. If payment for these could take place electronically, the amounts would only need to be paid out in January. That would render conversions in January redundant. It would give an indication of the amount requested and would make it possible to plan ahead.
In addition, it would increase the reliability of electronic payments and provide a stimulus to these. If something of that kind is not possible, we must ask ourselves whether online transactions are mere pie in the sky for the time being.

Berthu
Mr President, like the 2000 Annual Report of the European Central Bank, Mrs Randzio-Plath's report makes the usual assertion that the euro will make a decisive contribution to ensuring price stability within the euro zone, by making it less vulnerable to external shocks. This is the out-dated 'shield' theory. However, it appears now that that theory is only true up to a point, in that it will eliminate currency fluctuations between Member States.
On the other hand, which is more serious, the euro no longer plays the role of a shield: it is now aggravating the crisis stemming from the economic slow-down in the US, since the euro is preventing each country from taking specific targeted action. In fact, Chancellor Schröder recently called upon the ECB to shoulder its responsibilities by supporting growth in Germany. He is wrong and he should realise that he is a victim of the rules of the monetary unification game. The ECB cannot make a drastic reduction in its interest rates in order to please Germany, because other countries are calling for opposite measures. And, incidentally, if rates were lowered, this could cause the value of the euro to fall even further, which would give a terrible impression when we are just about to embark upon the physical changeover of coins and notes.
It seems, therefore, Mr President, that the citizens of Europe might have to pay a very high price for wanting a single currency when we have different economies, especially since, according to the latest available statistics, it is this, even more than the euro itself, that seems to be contributing to causing greater divergences in terms of both inflation and growth.

Karas
Mr President, Mr Duisenberg, ladies and gentlemen, I would first like to thank Mr Maaten for his report and also for having incorporated the content of previous reports including mine into his own, and for reiterating those points that have not yet been fully implemented, because they have not lost any of their importance. Thank you very much for that.
Secondly, there is a lot of juggling with figures, but they are all relative. I would just like to mention a couple from my own country, where we heard yesterday that 63% of people think it is right that Austria should be a member of the economic and currency union from the outset, 43% see the euro as an advantage and 24% are neutral on this, which means that 67% are in favour. That does mean, however, that we still have a great deal to do.
I would also like to make a few points clear for the benefit of the public. The euro is not "coming", as you see on many posters, it already exists, and it is a success. Every country has benefited from it, price stability has grown, Europe's economic independence has been enhanced, exports and tourism have been given a lasting boost by eliminating exchange rate fluctuations, and a start has been made on reducing government and budget deficits. I call on the governments of all the Member States to inform their parliaments and the public about the advantages of the euro in the euro area and not just to give the impression that something new and unknown is about to arrive.
The next point that I consider important is that the euro is not a political project and, please excuse me, Mr Duisenberg, you cannot say that it is just a matter for the ECB - that is a point in your favour, you are doing your job well in this respect - and for the banks, nor is it just something for finance ministers. It is a political project and not just a financial product and I therefore believe that we should involve education policy, small and medium-sized enterprises and consumers more in information policy.

Êatiforis
Mr President, Mr President of the European Central Bank, Commissioner, ladies and gentlemen, today we are debating the exceptional report by Mrs Randzio-Plath on the annual report of the European Central Bank. We do this every year and it is the only opportunity which Parliament has to debate the policy of what is now an important and independent European institution.
This debate is being held within the context of a radically changed global economy. The downturn in the economy, which has brought us to the brink of recession, has created a great deal of pressure. The European Central Bank and other central banks throughout the world are under a great deal of pressure to relax their monetary policy. This pressure emanates mainly from the capital markets, which went into free fall recently and which sometimes appear to have become absurdly pessimistic, just as they were absurdly optimistic until recently, at least according to Mr Greenspan.
The moral of the story is, I think, quite clear. The central banks must not be guided by short-term prospects on the money markets, be they on a peak or in a trough. You must be guided, Mr President, by principles of monetary stability and economic development, as laid out in the Treaty. But if there is to be greater confidence in the euro, the people of Europe and money markets throughout the world must have greater confidence in how you exercise your policy and how you intend to achieve monetary stability. At this juncture, I think that we need to rethink the system of the two pillars of monetary policy.

Gallagher
Mr President, with just six months to go before the introduction of the euro notes and coins, we must focus clearly on this event. The report is timely and Mr Maaten's observations are very welcome. The one clear fact about 'euro day', 1 January 2002, is that it is truly irreversible. It is going to happen and, therefore, we must be ready.
We have made substantial progress on all fronts. Taking public information first, the surveys of public awareness about the euro are heartening. The most recent survey carried out in May by the Irish Euro Changeover Board show that in my country, 95% of people know the name of the single currency, 91% have same prices in both Irish Pounds and the euro and 79% know that euro notes and coins will be introduced in 2002. Seventy-eight percent have seen pictures of the euro notes and coins and 64% know that an Irish Pound will get you EUR 1.27. There is still a distance to go, however: only 36% of people are aware of the length of the dual circulation period, which in my country has been shortened to 9 February 2002.
In addition, there has been quite an amount of legislation to cater for the introduction of the euro, covering areas such as finance and social welfare. In all cases, it is essential that we act on the principle of favouring the citizen. There are essentially two tasks for national and European authorities: they have to oversee the successful changeover to the euro and provide the public with information about it.

Butel
Mr President, ladies and gentlemen, I would like to tell you about the difficulties that the people I meet in my country complain of every day. It is strange, to say the least, to see that the method of self-persuasion used to create the euro has now been replaced by heavy-handed tactics. I am sorry to say that, in my view, the changeover to the single currency has been forced through.
First of all, the people were never consulted to find out if they were in favour of replacing their national currency. In this respect, the example of Ireland is a prime example of the way that Europe works. The people are not consulted any more extensively now about the practical introduction of the euro, even though they are the most important element in this equation. Indeed, the information campaigns in which politicians have participated continually place the responsibility on the citizens - their message is that if the euro is a failure, the citizens must understand that it will be their fault. In other words, the task of young people and the retired is to provide information, following the example of governments and civil servants. Lastly, businesses can give practical training. For example, who is dealing with the difficulties experienced by businesses in rural areas, which are faraway from the centres of learning that are based in towns? How can we ask businesspeople who work 12 hours a day to go to their local Chamber of Commerce to attend information sessions?
To sum up, for all the reasons I have given, I do not think it is acceptable to allow the citizens to shoulder all the responsibility. It is too easy to leave what we are incapable of doing ourselves at the door of others. It was Europe that wanted a single currency, so Europe will now have to put take responsibility for it!

von Wogau
Mr President, Mr Duisenberg, ladies and gentlemen, this debate is taking place at a difficult moment as regards economic policy. Growth is declining and inflation is on the increase. The Federal Republic of Germany, which accounts for a third of the euro area, is bringing up the rear in terms of growth, inflation and net government borrowing. It is no longer the locomotive it once was, it is now the last coach in the train.
At this difficult time it is, above all, important for the European Central Bank, which is a young central bank, to gain credibility. For this reason we too will not be voting for three of the proposals made by the rapporteur in her report.
The first proposal was that core inflation should be the key factor in economic decision making, that is to say inflation excluding energy and food. This would amount to looking at the world through rose-tinted spectacles, because what matters to the public is not core inflation but inflation including energy and food prices.
The second proposal that we will be rejecting is that of setting inflation targets. I am convinced that the European Central Bank was right to establish its own definition of stability shortly after it was set up, according to which monetary stability is an inflation rate of less than 2%. That cannot be altered now. If anything, it is precisely in the current difficult situation that the European Central Bank should be measured by its own yardstick. That is the reason why we cannot vote for this second proposal.
The third proposal relates to the accession countries. The proposal that the accession countries should not in fact be required to meet the inflation criteria of the Maastricht Treaty in the same way, which would also mean a weakening of stability, is something else my Group will not agree to.

Hyland
Mr President, 1 January 2002 marks another significant step in European integration. The change from 12 different national currencies to a single currency is the culmination of months of careful preparation and yet I fear some citizens, even at this late stage, have not grasped the significance of the change and its implications, which I believe are extremely positive.
No other EU policy change will impact in such a profound and personal way on all citizens and at the same time. From children to pensioners, from the corporate sector to small business, each will be exposed to this significant milestone in European administration. Because there is a degree of complacency with regard to all EU change, every effort must be made in the months remaining before 1 January to alert consumers to the importance of what is happening and, more importantly, to assure them that their interests are placed at the forefront by those whose job it is to manage this important change. I am satisfied that everything possible is being done, but nothing can be left to chance.
We know that there are some people who are sceptical. Their views are important to the debate, but we must establish beyond doubt that their worries will not be realised. For example, we all recall the introduction of decimalisation and, despite our assurances at that time, consumers experienced price increases. We all need to put beyond doubt the absence of a cost factor in the exchange mechanism. The House will be aware that banks availed themselves of the transition period to cream off excessive exchange charges and, to some extent, this is still happening.
What assurances can the European Central Bank give that these matters will be scrutinised with the utmost vigour and with appropriate sanctions?

Thyssen
Mr President, by the end of the year, euro notes and coins will be in circulation, and that is almost ten years to the day since the political and legal foundations were laid in Maastricht.
Despite this, many people will not realise until then - and it will come as a bit of a shock - that Europe does affect their daily routine.
That fact on its own is reason enough to pull out all the stops in order to make the transition as smooth as possible, that is to say without causing irritation among the public. Otherwise, I fear that we will be paying for this in years to come in the form of distrust of the European integration process and, as we stand at the crossroads in Europe today, I do not think that we can afford this.
Excellent work has already been done, but we have not completed the task yet, and I would therefore urge that the following be implemented.
Firstly, information must be more extensive, more dynamic, more effective and oriented more towards the target group.
Secondly, consumers must be frontloaded, in terms of both notes and coins. And if the European Central Bank remains opposed to this, I wonder, Commissioner, if you would not be able to take action in order to make this possible, by amending the Regulation of 3 May 1998.
Thirdly, electronic payment must be encouraged, that is true, but it must also become cheaper. A complaint has been lodged with the Directorate-General for Competition in that connection. Commissioner, I would urge you to ask Mr Monti to finally deal with this complaint.
Fourthly, cross-border payment transfers must become cheaper, and I could not word it better than Mrs Peijs did a moment ago on behalf of my Group.
Mr President, Mr Maaten has done excellent work for which he deserves our appreciation. Let us hope that a political Europe will follow the economic Europe, so that our European currency will also receive the credit it deserves.

Kauppi
Mr President, Mr President of the European Central Bank, the first thirty months of operations of the European Central Bank can be considered a success. The bank has achieved stability in monetary policy in the mid-term despite the sudden rise in oil prices, the great uncertainty on the currency markets and heightened tension on the money markets. The faith of citizens in the European Central Bank is primarily based on price stability. It is important to citizens that the currency is stable and that the real level of earnings and purchasing power remain unchanged. However, trust can also be increased by increasing openness and transparency in the work of the ECB. Transparency goes without saying for national central banks, and should also be the case for the European Central Bank.
The changeover to the euro is a unique event in economic history for which there is no precedent in terms of magnitude. Adopting a single currency is a concrete indication of how far European integration has come. Our citizens expect us to do all we can to ensure a smooth transition to the euro. It is important that we prepare carefully to avoid unnecessary problems and thus giving rise to a negative image among citizens. However, we must remember the fundamentals. The euro will not fail due to practical problems encountered during a transitional period of two or three weeks. If it fails due to anything, it will fail because the currency is not sufficiently stable or strong. Our single currency is as strong as the economy behind it. A strong economy, healthy business structures and a functioning internal market are vital prerequisites for the trust of citizens and the global competitiveness of the Union.
In this context I would also like to mention my concern regarding the fate of the Directive on Takeovers to be addressed tomorrow. The directive has taken twelve years to draw up. After much wrangling, the European Parliament and the Council have managed to reach an agreement through the conciliation procedure. If the directive fails tomorrow we will be able to say that while many fine words were heard in Lisbon, here we need action. The value of our single currency depends considerably on these actions on the part of Parliament, the Council and all the institutions of the Union.

Andria
Mr President, Mr President of the European Central Bank, ladies and gentlemen, the efforts of all of us, of the European Central Bank and of Mr Maaten, whose report has dealt with practically all the foreseeable questions that could arise when the new currency is introduced, are certainly commendable. Since this is, in any case, a historic event - indeed, hitherto, all the Member States have had to handle currency exchange internally whereas, now, the entire Community will be changing to a single currency - it may be that all the aspects and consequences of the introduction of the euro will not have been foreseen and that some situations - as yet not clearly defined - might arise after the fateful date of 1 January 2002. From this point of view, it is the duty of all of us to endeavour to make contributions which will not just facilitate the transition but also highlight positive or negative aspects closely linked to the event itself.
This is why I feel I may be allowed to focus on three points. Firstly: in the period which remains before the established date of 1 January 2002, information must be must stepped up in the peripheral and decentralised areas, since it must not be forgotten that people in rural areas still practise a form of hoarding under the mattress which must be overcome in this difficult situation. Secondly: after the transition period, during the following decade in which it is laid down that it will be possible to change national currency into euros at Member States' central banks, all the bureaucratic formalities should be reduced in order to allow the poorest people to change small sums of money without any burden being imposed. Thirdly and most importantly: up until the final exchange date, I call upon the qualified intermediaries, particularly credit institutions, to pay greater attention and apply greater rigour to cash transactions. I am sure that organised crime networks amass cash supplies for illegal transactions ...
(The President cut the speaker off)

President
I hear that, at the end of this debate, Mr Duisenberg would like to say a few words. I will then give Commissioner Solbes Mira the floor.
I am now giving Mr Duisenberg the floor.

Duisenberg
Mr President, I shall try to answer some of the points raised by Members. I have already addressed in my introductory statement the most important ones contained in the two resolutions.
I wish to add some points. Mrs Randzio-Plath asked about the secondary objective in the Treaty. It is our strong belief that if the ECB is successful in maintaining price stability, and thereby creating an environment of predictable stability for entrepreneurs, that is the best contribution that the ECB can make to fostering growth of output and employment. Should the European Parliament be involved, if the Treaty is ever changed, in the appointment of the Executive Board? That is an issue the Executive Board should stay out of. However, the European Parliament is already involved in appointing members of the Executive Board in the same way as the Governing Council of the ECB is involved. On a proposal by the ministers of finance, the European Parliament and the Governing Council of the ECB, Parliament can offer advice so as to enable the Heads of State and the Council to reach a decision.
I fully agree that monetary policy should work not in isolation but in ever closer coordination. However, the ECB will never engage in coordination of our policies with other policies in the economic and financial field, because this would prejudice our primary objective under the Treaty, namely to preserve price stability.
Many points were made about the resolution. I have already addressed some of them in my introductory statement. I am grateful to Mrs Peijs and Mr von Wogau for their support on various points, namely the guarantee of the independence of the Central Bank. I say to both Mrs Berès and Mrs Randzio-Plath, that in no way - and they already know it - would the ECB shy away from a dialogue with the European Parliament or its committees. That has been proven in the past and we will continue to prove it in the future.
Mrs Peijs asked the obvious question: can you stay? The answer I always give, and give again, is "yes". She also pleaded for cross-border transfers to be as costly or as cheap as domestic transfers. I agree with her completely. It may take a little longer than 1 January 2002 to achieve it. However, I believe that in a single market with a single currency, the distinction should disappear, but it may take some time.
I turn to the important subject of frontloading, which has been mentioned by Mr Maaten in his draft resolution and by many other Members. Specific questions have been asked: is it possible or advisable to change the automatic teller machines a few days earlier than 1 January 2002. The answer is "no". That would seriously damage the payments system at the busiest time of the year, namely the last few days of December. The automatic teller machines must still be able to distribute national currencies. If they were disabled for that purpose, the payments system would be seriously damaged. It has to be remembered that between 70% and 80% of total bank note distribution is through automatic teller machines.
It is also important because we too see the potential for problems arising. It is important that the machines are converted as soon as possible. In five countries the old automatic teller machines will have been converted by 1 January. That applies to the Netherlands, Germany, Belgium, Ireland and Luxembourg. In other countries it may take a little while longer, but that is mainly due to the fact that some of these machines are in very remote areas which are not serviced every day, for example in Finland and Spain. It will take a little longer there but in the majority of countries the conversion will take place within one week. In five countries it will occur within one day.
Mr Maaten also asked in his resolution for some priority to be given to the dispersal of small EUR 5 and EUR 10 bank notes in automatic teller machines. This point is well covered in the national changeover scenarios. Apart from Finland, in all other countries it is envisaged to dispense, at least in some of the automatic teller machines, the EUR 5 and EUR 10 notes exclusively via ATMs in the first few days of next year.
There are in place fuller steps that could be taken to smooth the changeover, for example establishing temporary exchange points, for instance in supermarkets. We encourage that. In countries where welfare payments are still largely paid in cash we encourage the use of lower denomination bank notes. We are encouraging banks to open their counters on 1 January 2002. At this juncture, this is envisaged in Austria, Germany, Luxembourg and the Netherlands. We urge other countries to consider the same measures as well.
In its resolution the European Parliament has also made various suggestions. I will not comment on all of them but the European Parliament also suggests what I just said, namely encouraging banks to open their counters on 1 January, a point which is fully welcomed and supported by the ECB. It has been suggested that the date of the annual sales should be changed, postponing them by a few weeks. The ECB is neutral on this point, but I see the merits in it.
Lower fees for credit cards and other electronic means of payment have been mentioned. This is currently envisaged in Austria, Belgium and Finland. Here, too, the ECB, because of the nature of the subject, is neutral but I would encourage national authorities to listen carefully to the European Parliament.
Returning to the questions that have been asked, I would say that instead of frontloading, our information campaign, as it develops from 30 August onwards and intensifies over the months to come until the end of this year and in the first couple of weeks of next year, will be such that the public at large will, I am sure, be fully familiar by 1 January, with how the bank notes will look with their security features. One element of this campaign is that, in the first or second week of December, we will distribute 300 million leaflets to every citizen of the euro area, fully describing the new bank notes and the procedures of the cash changeover. Mr Maaten asked a question which amused me: "What if, in the last few days ministers do change their minds and do nevertheless start frontloading bank notes?" With all due respect, not only to Mr Maaten but also to the ministers, the ministers cannot take such a decision because in the Treaty they have handed over the competence for the issue of bank notes to their national central banks and the ECB. Only the ECB, the Eurosystem, can decide when the bank notes will be distributed and that will be on 1 January 2002.

Solbes
Mr President, following the speech by the President of the European Central Bank, Mr Duisenberg, I wish to comment briefly on a few points. I shall refer basically to Mr Maaten' s report, since I agree with Mr Duisenberg' s comments on the report by Mrs Randzio-Plath.
First and foremost, I should like to point out that access to starter kits for coins is not limited to one per person. I agree with the decisions that have been taken by the various countries. It is possible to obtain more than one kit in all of these countries.
Mr Duisenberg referred to 'frontloading' , which is the advance circulation of low denomination notes in automatic cash machines. I should simply like to make one comment, which is that the Commission report to which some of you have referred is a simple report for calculating how much time would be needed to fully replace a national currency with the European currency according to the quantities currently being made available through automatic cash machines. This is a statistical analysis, which therefore assumes that there will be no increase in the rate at which this money is used and nor does it take into consideration sources other than automatic cash machines. In any event, I wish to point out that the existence of transitional periods is justified precisely because the entire operation will not be able to be completed immediately.
With regard to sales, the Commission takes the view that these should be delayed for two weeks so that they do not coincide with the introduction of notes and coins. Nevertheless, this is a national decision, which must be taken by each Member State.
I must make one comment on the risk of price increases resulting from the changeover to the euro: the Commission has considered the matter and takes the view that the crucial factor for preventing the changeover to the euro being used as an opportunity to raise prices is the dual display of prices in both the national currency and in the Community currency. We have, of course, insisted on other measures, such as requiring public administrations to round down their charges or, in any event, maintaining the principle of neutrality. Some of the positions held by the Commission have been accepted by the Eurogroup, which issued a statement on 4 June adopting these points.
I should also like to recall, in response to some of the speeches I have heard today, that the period for the dual display of prices should in principle be limited to the first six months of next year and then dual pricing should disappear.
The practical messages for the public that you are proposing as regards the awareness-raising campaigns can be introduced by means of the cooperation that Parliament is pursuing with the consultative group on the practical aspects of the changeover to the euro, which is made up of the individuals in charge of the various national campaigns.
I should just like to make one comment on electronic payment: the Commission has tried to ensure that for the purposes of the changeover to the euro, European banking federations and associations move ahead with reducing charges for electronic payment. We have not, however, made any headway on this matter.
Both the Commission and the European Central Bank are committed to moving ahead with reducing charges for cross-border transactions. We are aware that this is not an easy task and that varying approaches between national and cross-border payments might give rise to some conflict with internal market legislation. The Commission is studying potential occurrences in order to facilitate and speed up as much as possible this process of reducing cross-border charges.
1 January 2002 will mark a milestone in the history of European integration. The whole world will be closely observing what happens in Europe. I am convinced that the institutions, the Member States, and the Central Banks will prove up to the task and I wish to thank Parliament once again for the cooperation it has given us in all aspects of preparing for the process of replacing national currencies with the euro.

Institutions for occupational retirement provision
President
The next item is the report (A5-0220/2001) by Othmar Karas, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a European Parliament and Council directive on the activities of institutions for occupational retirement provision [COM(2000) 507 - C5-0596/2000 - 2000/0260(COD)].

Karas
Commissioner, ladies and gentlemen, the Commission proposal before us and the report of the Committee on Economic and Monetary Affairs is, I am proud to say, a very good example of successful, dialogue-based work on a Commission proposal between all the groups and experts in this House, while remaining open to compromise. It is also a good example of how seriously we take our work and of how we implement our projects, observing schedules, and also of how good we are at preparing decisions, unlike the Council. This example highlights the differences between the European Parliament and the Council in dealing with Commission proposals and decisions. I would therefore like to start by very sincerely thanking all the coordinators, and in particular Mr Kuckelkorn, Mr Hume, Mr Ettl, Mr Pronk, Mrs Lulling and many others for their cooperation.
Why is this directive needed? It is needed because we have all committed ourselves to creating an internal market for financial services, because we need to eliminate the financial obstacles from the Action Plan for Financial Services - of which this directive is a part - as quickly as possible, because the second pillar does not include any Community legislation for activity under the second pillar, for retirement provision. What is this directive about? It is principally concerned with issues around coordinating supervision, with the question of approving cross-border activity, with investment rules and with certain necessary accompanying measures.
We in the committee have come up with many suggestions for improvement. We are convinced that with regard to the Commission proposal we have had wide-ranging discussions and taken points on board. But let me make it clear right away that we also thought that a change in title was needed to make this clear. This is the proposal for a European Parliament and Council directive on the activities and supervision of institutions offering occupational retirement provision services. It is a financial services directive. It is not a directive that regulates occupational retirement provision as a product taking into account the mobility of employees and all its consequences. It regulates the activity of the companies offering financial services. This clarification is necessary. In connection with this clarification we need to say that this is an initial and essential step along the path towards a European system for the second pillar and occupational retirement provision.
A third point of clarification is also necessary: the second pillar complements the first pillar, but is by no means a replacement for it. Nor is it a compromise. In reality, it represents an agreement between the two sides of industry in the context of legal provisions in force between employers and employees. It therefore has to strike a balance between liberalisation of the financial market and social security. Social security and employee information need to be accorded a special significance.
I would just like to list the key amendments. First, we have given great emphasis to the principle of the level playing field, that is to say equal access for all providers as long as they meet the requirements. Secondly, we have clearly defined the prudent person principle, we have set a limit for the switch from quantitative investment rules to qualitative ones, and we have called for a report from the Commission after three years; furthermore, more flexibility in assessment and in guaranteeing security for consumers is needed. Thirdly, we have called for a switch to the principle of deferred taxation, because in order to avoid distortions in competition we need certain common rules, and we are calling on the Commission to clearly control non-discrimination, as stipulated in the Treaty, and to make that a starting point. We have defined the work of the pension forum, and we have established biometric risks as an option. It is not the product that is defined, but rather the obligation to make it available.
To conclude, we have more clearly worded the issue of the country of origin principle and that of information relating to employees and employers and their representatives. We believe that we have succeeded in striking a balance between a financial services directive and social security and that we will obtain a large majority tomorrow. I hope that the Council will accept our proposals so that we are not blocked when it comes to implementing this directive in line with the European Parliament's decisions.

Pronk
, draftsman of the opinion of the Committee on Employment and Social Affairs. (NL) Mr President, I want to extend a warm thanks to the rapporteur for his enormous achievement in which he also managed to incorporate the work of the Committee on Employment and Social Affairs, not by copying everything verbatim, but by including the essence of what we tried to say.
I also want to thank the Commission for the extremely enjoyable way in which we were able to work together, so much so that our joint effort has culminated in a tangible result. That must give the Commission food for thought, to the effect that something must be done on this score fast. Some people believe that, when we talk about this directive, it concerns an abstract, econometric matter.
That is not the case. It concerns an essential financial directive which has major social implications, and that is what this is all about. Millions of people are involved in one way or another in the way in which we want to give shape to our future pension system in Europe.
In this connection, the Commission was right to use three pillars as a starting point. Here, we are regulating a major component of the second pillar.
The first pillar is currently under discussion in the Council and will also be debated in this Parliament in due course. The third pillar has been regulated in the past. But that is an extremely important matter, and we must very much bear in mind the specific nature of this second pillar.
The specific nature means that the social partners have an important role to play, that it remains a financial directive and that we should not mix the pillars up. The rapporteur has managed to achieve these objectives. I believe that we managed to do the same in the opinion we issued, but the rapporteur has adopted this in his report very skilfully.
The only point that we wanted to take further than the Committee on Economic and Monetary Affairs - and I actually find it quite amusing as a member of the Employment and Social Affairs Committee - was further simplification of the directive.
Mr President, I should like to thank everyone and hope that the Council will produce a Directive soon.

Lulling
Mr President, first of all, I would like to thank the rapporteur, my colleague Mr Karas, for the time and the effort he has put into this report. As draftsperson of the opinion of the Committee on Women' s Rights and Equal Opportunities, I would primarily like to stress the importance of respect for the principle of equality between men and women - which is laid down in the Treaty - by institutions for occupational retirement provision, upheld, moreover, by the directives on equal treatment in public and professional social security systems. I am pleased to underline the fact that my ad hoc amendment has been adopted and is included in the report.
I also tabled an amendment specifying that the institutions for occupational retirement provision should take into account careers that have been atypical or interrupted owing to family responsibilities of both men and women by also providing solutions to guarantee the continuation of membership. This amendment was not retained in the text but, in my opinion, the institutions for occupational retirement provision clearly cannot escape from providing adequate solutions for these situations.
We have had and we will have in the future more epic debates on the question of knowing whether supplementary pensions must include mandatory cover for biometric risks. I am in favour of a pragmatic approach - which was also advocated by Mr Karas - namely that institutions must offer cover for these risks as an option, in the form of, for example, disability pensions and provision for survivors. This will obviously incur a cost, which should not, however, be dependent on gender or an individual health check.
One of the issues which must be resolved in order to establish a genuine single market in supplementary pensions and pension funds is that of providing a tax treatment to avoid the dual taxation of contributions and benefits, as well as the tax exile of pensioners who are trying to avoid paying taxes, but also the mass of bureaucracy involved in the exchange of information and the recovery of taxation between countries. The Commission only tackled this problem in a statement, and not in this directive. Caution is the watchword, do you not think, Mr Bolkenstein?
I therefore believe that it is premature for Parliament to issue an opinion now in favour of a specific model - in this case, the TEE regime - as has been done in the report, albeit only in a recital, given the fact that direct taxes fall within the sovereign affairs of the Member States. Let us wait before issuing an opinion in favour of one particular model in this extremely sensitive area.
Having said this, Mr President, I think that the lights are flickering from the shock of these thoughts...
(The President cut the speaker off)

Villiers
Mr President, I should like, first of all, to welcome some visitors from Kent who we are fortunate enough to have in the gallery today. I would also like to thank Mr Karas for all the very hard work he has done on a very difficult report.
We have to bear in mind that what we are creating here is an optional scheme for companies and financial service providers to take advantage of if they want to. If we do not create an attractive framework, this directive will be a dead letter because no one will use it. If we overload this directive with prescriptive detail, with centralising details, it will not reflect the diversity of pension arrangements across the EU and, again, we will not have people taking up the opportunities provided by the directive.
So where would we lose out if companies decided that they were not going to bother to use this directive? We would lose out largely on the prudent investor principle. A European Commission survey recently said that, had we used this principle across the European Union over the last 15 years, our pension funds would probably have performed at least twice as well as they have in fact performed. Private sector estimates put the increase in the return on savings that could result from using the prudent investment principle at up to 3%. Pension assets could be around 21% larger across the European Union if we had been using the prudent investor principle already.
What we have here is the potential for increased return on savings without increased risk. That is a very real and practical benefit to the people who elected us to serve in this House on their behalf. That is a benefit that we should not throw away by piling into this directive overly prescriptive details, for example, on authorisation, on biometric risk, on guarantees. We need to take a pragmatic approach in order to gain those benefits of an increased return for our savers in a first attempt at defusing the pensions time-bomb.

Kuckelkorn
Mr President, I would like to take this opportunity to make a couple of fundamental points about the Commission's proposal for a directive. We have said quite enough about the technical details in recent days, weeks and months - we have exchanged views, we have sometimes argued and sometimes agreed. I would like to particularly address the Commission and the representatives of the Council. I would especially like to say a few words to the Commission about the history of this and about the development of this directive.
As rapporteur for the resolution, I have had an opportunity to deal with both the Green Paper and the Commission communication on the results of the consultation. Whereas in the Green Paper you were still talking about supplementary retirement provision in the internal market and tried to make the European public believe that something was being done for the majority of Europe's citizens, your present proposal for a directive simply reflects the interests of the European financial sector. As I see it, you have either done a U-turn or you were only concerned about the internal market for financial services all along.
Your intention now is to give the financial market pride of place. You are shifting this issue onto totally new ground. This would be acceptable in itself, if we were really only dealing with a pure financial market directive. However, your proposal encroaches way into the territory of the product formulation of the occupational retirement provision systems already in existence and, as I see it, you are giving the investment sector a significant competitive advantage over traditional providers. This is because you want to give financial products equal tax treatment but without obliging the financial sector to offer the same security as second pillar institutions, which in return benefit from their own security, that is to say from tax advantages.
I am not giving away any secrets if I tell you that we have obtained all the position papers and proposals drafted by the finance industry, and in particular the investment sector. It is already easy to get the impression that a large part of the Commission's text bears the hallmarks of lobbyists. I regard the similarities with the finance sector's proposals as a great cause for concern.
I would also like to take this opportunity to give a brief indication of the main themes underpinning our actions in relation to the Karas report in recent months. Security of occupational pensions is the top priority for us. In this respect we are responsible for something that we wish to establish, something that, at the end of the day, must work and must benefit our citizens.
Permit me to make a few more comments on the subject of registration and authorisation. Does the institution have to be authorised before it starts its activity and be checked by the authorities, or is it just registered? Mr Karas has made a new proposal on this, one that we shall be supporting. Furthermore, the collective nature of the second pillar is important. This provides a demarcation from the third pillar. We are not just talking about any savings product here, we are talking about occupational pensions, the nature of which is totally different from speculation in blocks of shares.
We have also considered it important to achieve improvements in relation to codetermination. However, in this case we agree with the reference to national employment law. With regard to biometric risks, we support the rapporteur's wording. We have executed something of an about-turn here, but I think that it is in everyone's interest for us to be able support this directive or this proposal.
In addition to these substantive points, we also regarded a number of other considerations as being important. We parliamentarians should not let ourselves be frightened off by technocrats who say that all this would not be possible and that it would not be compatible with the treaties. We are involved in the codecision process and have to act in line with our own views. We are elected so that our views can act as a correcting force. The European public expects us to ensure that law is not just made by officials and lobbyists, but rather that political decisions are chiefly made by Parliament. Nor should we tie our own hands by arguing that it is impossible to negotiate a hundred amendments with the Council. My message to the Council and the Commission is a clear one: stop playing about with this directive!
To some extent, there have been major differences between us over this report. There have been heated discussions not only between the groups, but also within them. Tomorrow we shall be voting on a text which tries to reflect all strands of opinion. At this point, I would like to thank the rapporteur, Mr Karas, for his work. If the voting goes as promised, I shall be recommending that my Group votes for your report.

Huhne
Mr President, I will be brief in saying that my Group had two fundamental objectives in dealing with this proposal from the Commission. The first is to support the Commission as far as possible in its effort to keep it simple and not to include unnecessary complications such as biometric risk. The compromise which Mr Karas has engineered in Parliament is one that we can live with. We would have preferred to have the original Commission proposal in its simplicity, but I recognise the considerable political difficulties which Mr Karas faced and thank him for his efforts in engineering that.
The second key objective of my group was to stiffen the resolve of the Commission, to be more liberal and more 'market opening' in its approach to the abolition of quantitative rules. The Commission's draft directive envisages that Member States will be able to continue to set quantitative limits on the operation of pension funds. I am delighted that Parliament looks as if it is going to insist that there is a five-year time limit. I very much hope that the Commissioner abandons any attempt at realpolitik, involving dirty compromises in the Council, and sticks to what is Parliament's clear desire. We want to ensure that pensioners have high returns without any additional lack of security, applying the prudent person principle.
Those are the two key objectives for us and if we manage to get them voted in Parliament tomorrow, this legislation will lay the ground rules for a vast growth in private pensions in the Union. It will improve the investment returns to existing pension schemes and thereby improve pensions. It will establish, for the first time, a pan-European investor base for growing and integrated euro-area financial markets.

Jonckheer
Mr President, Commissioner, the vote taken within the Committee on Economic and Monetary Affairs, on which the committee was divided and following which, in fact, 133 amendments were reintroduced in plenary, is more than enough evidence of the differences in the approach to this draft directive.
In our group, we are interpreting it in the following manner: the main aim of this directive on occupational pension funds is to eliminate all the conditions restricting financial institutions, particularly in the choice of financial shares, with the exception of general prudential rules of a so-called qualitative nature, and the principle of mutual recognition will be fully applied in addition to these rules. We are faced with a situation which is well-known in the establishment of the internal market. As for the degree of harmonisation or integration, or even the degree of liberalisation and openness that is desired, but with regard to what Fritz Scharps calls positive integration not going as far as the objective of liberalisation, from this perspective, I would simply like to bring up three points which we feel are particularly important.
the problem of cover for risks as such, what are known as biometric risks: we support Amendment No 108, tabled by Mr Herzog;
the problem of tax competition - as in Amendment No 117 - another example which shows that we are making further and much quicker progress towards integrating the markets without any previous tax harmonisation: we are unable to support this point of view;
the question of covering risks with capital, which relates to Article 18 of the directive: Amendment No 116, which was tabled, is, in our view, a reasonable amendment.
Our political assessment of this draft directive is, therefore, that once again it has shifted away from its objectives, which are not just the unity of the market but social cohesion and solidarity as well.

Herzog
Mr President, the directive drawn up by the Commission contains an obvious bias. It is concerned with using market valuation to encourage supplementary pensions. Although the report by Mr Karas corrects this bias in places, it also makes it worse in others. We are faced with a reference model which is primarily that of the industry of supplementary pensions in place in Great Britain and other countries. Yet, in some countries, these organisations do not or only occasionally enter the financial market; in other countries workers are given cast iron guarantees, but the directive obviously does not aim to do this. In particular, it is not concerned with the coherence of national pension systems based on the principles of solidarity, security and universality.
That is why we tabled amendments on two aspects. The first, on the one hand, relates to guarantees for the people concerned, and the second, on the other hand, to public supervision and prudential actions. We believe that this text is unacceptable unless it is subject to considerable amendment.
First of all, we must improve the guarantees given to the people. The directive includes risks of discrimination and lapses in solidarity. Membership of a supplementary scheme is not compulsory, which explains the considerable inequalities. There is no provision for inter-sectoral mutualisations. The quality of benefits will suffer if the population falls. Continuity of membership cannot be guaranteed if mobile workers change jobs or sector. The definition of rights does not mandatorily include biometric risks. The guarantees of actual benefits are not organised. And we are aware of the risks taken by those who join fixed contribution schemes, pointed out, moreover, by many well-respected macro economists.
We are proposing amendments on all these points, as well as on the second issue giving us cause for concern which is the need to improve social and prudential supervision. The Commission is offering insurers the choice of opting for occupational pension schemes. The Karas report strengthens this provision by casting aside government authorisation. This opens the door to competition and gives rise to two risks: the first is that solidarity work may be abused and that prudential systems that have been imposed on insurers will be weakened. Mr Karas incorporated our amendment seeking to establish the principle of interactive management, but that will only have any real bearing if the institutions involved are not treated like standard financial investors throughout the directive. The prudential framework laid down by the Commission is vague and the report imposes the country of origin principle, which we find unacceptable, since the destination Member State must, of course, also retain the possibility of establishing coherence with internal social law. Lastly, prior tax harmonisation is still not included in these texts, which means we are once again opening the way to fiscal dumping.
Ladies and gentlemen, we are today faced with a key test on the way that the European Parliament perceives its responsibilities in the area of social protection.

Crowley
Mr President, rather than reinvent the wheel and go back over everything that was said, it is important to look at the reality: our population is getting older, living longer and retiring sooner. There must be provision for proper pension protection and payments in the future. The only way to achieve this is by coupling the different systems that are out there with the second and third pillar, as suggested by the rapporteur.
The areas of concern I have about the amendments and some of the proposals put forward relate firstly to tax harmonisation, which I oppose totally, and secondly to increased regulatory supervision over the operation of these funds, because we already have a raft of legislation governing investment vehicles and investment instruments.
I could advise Members of this House, and perhaps Member State governments whose observers are here today, to look at the Irish model, where we have committed ourselves between now and 2025 to putting 1% of our GDP towards a future pensions fund. That would mean IEP 700 m per year being put into the protection of pension payments for people from the year 2025 onwards. If more countries were willing to do this, then we would not have the same sense of urgency or danger that now faces many pensioners in Europe today.

Ilgenfritz
Mr President, our public pensions systems are too expensive and have also ceased to be financeable. The gap between those actively employed and pensioners is becoming ever greater. Urgently needed reforms are constantly being postponed. The cost of these systems within the Union also varies very widely. For example, Austria devotes 15% of its GDP to pensions, making it the record holder, as the EU average is 11%. The high costs in countries like Austria are partly attributable to the fact that we have virtually introduced a separate insurance system for each professional group. This leads to all sorts of injustices that are no longer tenable. However, as others have already said, there is a crisis looming in pension provision not only in Austria but all over Europe.
The public pension system can simply no longer be financed and is also becoming a burden on the younger generation. A pan-European market for occupational retirement provision is bound to help in this regard.
However, in establishing this system, this second pillar, we should not impose an even greater burden on our small and medium-sized enterprises. They could not tolerate a further increase in ancillary wage costs. The consequences would be disastrous and would, above all, have a negative impact on Europe's employment situation.

President
The debate is adjourned until 9 p.m.

Support for national strategies for secure and lasting pensions through the open coordination method
President
The next item is the Commission communication - Support for national strategies for secure and lasting pensions through the open coordination method.

Diamantopoulou
Today the Commission has adopted a communication entitled "Supporting national strategies for safe and sustainable pensions through an integrated approach". This communication is a proposal on specific objectives and working methods for cooperation in the field of pension reforms in accordance with the method of open coordination as decided upon in Lisbon.
Over the past two years there has been a significant change in attitudes towards European cooperation, particularly in the social field. We can see a change in the attitude of those who are in charge of the national protection policies. They are now agreed in calling for an open method of coordination to be applied to pensions in the long-term future.
Our proposal puts this forward as a "soft" type of policy-making at European level, that is "soft" compared with legislation or with existing policies. I refer, in particular, to the coordination of economic policies. It is very clear in this communication that the new open method does not replace the existing methods. This proposal does not take away the national responsibilities of the national policy-makers. The ambition of this communication is to promote the development of an integrated approach to the challenges imposed by ageing and societal changes in the pension systems.
What is the content of this communication? There are three main axes: the first one concerns the adequacy of pensions. The second one concerns financial sustainability, and the third one, the modernisation of the pension systems in response to societal change. I will expand on each of these axes.
Adequacy describes the fundamental social goals of pension systems in order to prevent social exclusion of older people and to give them the opportunity to maintain their living standard in old age.
Second is financial sustainability. In order to be achieved in a spirit of intergovernmental and intra-generational fairness throughout, this requires a high level of employment, respect for the growth and stability pact and a good regulatory framework for the private systems.
The third axis concerns the modernisation of pension systems. According to this axis the pension systems have to be more compatible with the need for more flexible workforces. That means that they have to meet the needs of the new models of working organisation; they have to meet the needs of less stable families and of greater equality between men and women. It should also make them more transparent, predictable and adaptable to changing circumstances.
Under the heading of these three axes there are ten concrete objectives. We - and the Social Protection Committee, which has done excellent work - are going to measure these objectives by means of indicators. It is because of the Social Protection Committee that we have an analysis of all pension systems and the reforms that have taken place in all Member States. The Social Protection Committee, then, is working on the economic and social indicators. Next year we are going to adopt these indicators in order to measure the objectives.
What is the proposed procedure? How the Member States meet the particular objectives is up to them and depends on national strategies. The communication suggests that the Member States should submit these first national strategies by the end of summer 2002. There will be a first joint monitoring procedure during the 2003 spring European Council.
This report on the national strategies will be based on an integrated approach, and, politically, this is the most important element of the communication. It will be necessary to take into account, not only pension reforms in a narrow sense, but also employment policy and the management of public finances. In order to prepare these strategies, different governmental departments will have to participate and, of course, the social partners.
Why have an integrated approach? The need for this is based on an understanding of the interaction between pensions and other policy areas. Employment strategy is one example. A successful employment strategy makes it easier to finance pensions, but pension reforms can create employment incentives. A second example is public finances. Consolidating public finances today makes it easier to cope with the budgetary impact of ageing tomorrow, but insufficient control of pension expenditure could destabilise public finances.
Of course, there is close cooperation between the Committee on Employment and Social Affairs and the Committee on Economic and Monetary Affairs. They are going to present a joint report and their contribution is crucial, but the European Parliament can play an important role in this process. We wish to have your opinion on this communication and, in particular, the objectives proposed. As the Commission and the Belgian presidency are keen on making good progress in time for the next European Council, we would be grateful if you could give this opinion before October.
The more informal regular contacts between the European Parliament and the Social Protection Committee will also continue on a regular basis. Some other modalities of cooperation may also be discussed, and I am open to any suggestions from Parliament.
In conclusion, it is politically very important that the Member States are keen on this cooperation in the field of pension reform. This is one of the most sensitive and difficult reforms in all Member States and that is why it is of great political importance. We believe that with this cooperation, between the Commission, the European Parliament and the Member States, we can establish a comprehensive approach. This will be useful to the Member States and help implementation of the reforms.

President
Thank you, Mrs Diamantopoulou, for what I agree is a very significant statement from the Commission.

Jensen
Mr President, I should like to begin by paying some compliments on the work that has been done so far. I think, in fact, that some splendid things were put forward in connection with the Göteborg Summit, and I also think that the work which has now been done on the reports from the individual countries shows that it is only right to broaden the agenda. We must not just talk about the growing burden of the elderly and the economic consequences, but also about how we obtain a good pension system. I also think, however, that it is important that this work should not just remain work done behind closed doors between politicians, officials and experts. Moreover, I should like to ask the Commissioner what plans she has to put some impetus into a broader public debate about this coordination of pensions made to run in parallel. The open method must be open in the true sense of the word, so that the public is also involved. What will the Commissioner do? Will she give an undertaking that more efforts will be made to increase public...
(The President cut the speaker off)

Fatuzzo
Mr President, they asked me, the representative elected from the lists of the Pensioners' Party in Italy: "What are you going to Strasbourg for? They will never talk about pensions!" Well, the words of Commissioner Anna Diamantopoulou just now have been as sweet as honey to my ears. I welcome this initiative: it is a great day for pensioners all over Europe! My congratulations to Mrs Diamantopoulou and the whole of the Commission! The most important thing will now be to monitor the pension funds and appoint as their guardians in the 15 States, not the Beagle Boys but people who care about the future of pensioners. I hope that the Commissioner will agree with me.

Hughes
Mr President, I thank the Commissioner for the statement. I look forward to reading the communication. It is one of the most important debates we need to have.
I have a couple of questions. There is indeed a major demographic shift under way within the Union, and we must try to ensure that we retain older people in the labour market. However, there is a big problem: those older people will be the people with outdated skills. Does the Commissioner agree that this will lead to the revolution we have been pressing for, with a shift away from a concentration on initial education and training towards continuing training and lifelong learning? This will become essential.
There are some contradictions and difficulties: for example, there is a tendency everywhere in the Union to raise retirement ages, and yet at the same time there are widespread public subsidies for early retirement. Is there not a danger that the finger of blame will be pointed at the Union, because these difficult issues are being forced upon Member States for decision at this stage?

Diamantopoulou
Mr President, there are two main issues here. First, the transparency of the pension systems. One of the objectives of the third axis in the modernisation of pension systems is to make them transparent. This means that information must be clear and readily available not only to EU citizens but also to third-country nationals. There are major problems in this area at present. In order to achieve the degree of transparency aimed at, we need some kind of indicators. Clear information should be available on demand. We cannot impose the reform structure or the structure of pension systems on Member States, but we can measure it with a series of indicators. Unfortunately, I cannot give you any more details on this at the moment.
Second, the issue of lifelong learning and the problem of early retirement. There is a clear link between the age limit and the need of active ageing. The majority of Member States have an age limit of 65, but this is not the rule, it is the exception. There are many different early retirement systems in place in all Member States which have caused many problems regarding the financial sustainability of the pension systems. That is why we propose this combination of policies: on the one hand, we propose the reform of the pension system and a change in the age limit, on the other hand, we propose policies for activating ageing populations, i.e. incentives for retaining older people in the labour market, incentives for training and, in some cases, subsidies for establishing an SME or other undertaking.
So I very much agree with you, we need this integrated approach. We cannot just decide to increase the age limit, we must implement other policies at the same time.

Van Lancker
Mr President, I too should like to thank the Commissioner for this important statement which, in terms of pensions at European level, represents a fresh social challenge with financial implications, as opposed to a financial problem accompanied by a number of social aspects. In my opinion, the Belgian presidency should be very grateful for your contribution to the debate.
Commissioner, I should like to ask you two questions. The first one concerns the objectives included in the document. I note that the ten objectives which we adopted from the original statement have been whittled down to three. Although there are three key objectives - and that might benefit clarity - in my opinion, a number of crucial elements have fallen by the wayside, such as solidarity between generations and solidarity within one generation. Another aspect which I miss is the link between the pension pillars. What are the roles of the first, second and third pillars? Those are questions which are no longer addressed here. How does the Commissioner intend to include problems of this kind in the debate at this stage?
Secondly, you were right in calling for a global approach. Göteborg has stated that the agreements must be included in the wider economic guidelines. That has not been provided for in the plan.

Kauppi
Mr President, I too agree that pension policy involves an enormous challenge. As far as the young generation of Europe is concerned, this is perhaps the largest challenge we will see in the field of economic and social policy in the decades ahead. Open coordination is naturally a positive thing and I warmly support it. It is good that the Commission is now looking for indicators and also seeking to increase public debate on this very important issue.
My real question concerns whether, however, you see any opportunities for slightly stronger measures, in other words in the future could we also highlight questions of pension policy, for example, in slightly more binding documents such as Stability and Growth Agreements and employment policy guidelines, and, for example, issue warnings to those Member States who are not managing their pension policy properly and ensure that, in the future, through reasonable funding, we will be able to pay sustainable, good pensions to the pensioners of Europe.

Êoukiadis
Mr President, allow me to start by congratulating the Commissioner, although it would appear that I am not alone as the large majority wishes to do likewise. Even Mr Fatuzzo, the pensioners' representative, is well pleased. And indeed, what we have heard is impressive. Of course, from what I have read in the press, you have taken these initiatives in the teeth of opposition from numerous members of the Commission, who consider them somewhat progressive. The point is: with Article 140 talking of a high level of protection, what can reform mean if it does not maintain a high level of protection?
But, mainly, I wanted to raise two questions. We talk of decent pensions through complementary pillars. So far so good. But have you checked if this complementarity can be applied to the entire pyramid of workers, and especially to small and medium-sized enterprises and low incomes, or do we need to take a different approach here? Secondly, as the objective is not just sustainable pensions, but decent sustainable pensions, should we not look at what margins will be earmarked for pensions from increases in the gross domestic product?

Diamantopoulou
Mr President, as far as Mrs van Lancker's questions are concerned, there are ten basic objectives, which I simply split into three categories in order to simplify my presentation; but there are still ten basic objectives covering adequacy, financial sustainability and modernisation. Of course, one of these objectives is the one you referred to, i.e. the inter-generational balance. There will be many more indicators, including indicators on the economic and social dimension. They will, of course, be the subject of discussion in both the Commission and the Council and, as you know, the Social Protection Committee and Parliament are in constant communication.
As far as the role of the guidelines on employment are concerned, I did not quite understand your question. If what you meant was that some of these objectives should be included in the guidelines on employment, I should tell you that the first cycle of the employment strategy will end next year during the Spanish presidency, when the five-year period expires. We shall see how we can take the issue of quality or issues relating to older workers into account at the changeover.
As far as the question of decent pensions and the role of the three pillars is concerned, it is very difficult, in fact I would say it is impossible for the Commission to issue specific guidelines on the role of the three pillars in each country. But what is clear is that we need to safeguard decent pensions, which is why the role of the first pillar is very important. And, of course, there is always a link between an increase in the gross national product and support for the first pillar, subject to the principles governing the stability and growth pact.

Rübig
Mr President, young people are particularly affected by pensions since, after all, they contribute to pensions during their working life and subsequently benefit from those pensions. Do you have in mind providing information, through schools in particular, about the future shape of pensions systems and about the fact that mobility will, of course, be encouraged if these ideas are actually implemented?

Cercas
Commissioner, we are today going to be initiating a process - which will certainly be very beneficial to Europe - of generating great added value for the much-needed modernisation of our social protection systems. I wish to ask you a question and perhaps make a small suggestion. The focus of the Commission' s action will be an annual report assessing the various national strategies. Do you not think, Commissioner, that it would be useful for the Commission also to work on the basis of other information, to accept what in situ missions and universities can provide and, of course, information or debates that we could provide from Parliament, so that you are not limited to what might merely be the interests of each of our governments, which might be more interested in making propaganda for themselves than in seeing the reform implemented?

Thorning-Schmidt
Mr President, I want to concur entirely with my colleagues' praise of the Commission' s initiative. It is splendid, and the Commission is right in what it says. As you said in your proposal, Commissioner, it is very important that the Member States should be committed to the plans you have now put forward. Unfortunately, I can already foresee aspects of the debate that will take place in my own Member State when the Commission begins discussing pensions. It would therefore be very interesting, Commissioner, if, today, you could unambiguously confirm the impression I receive when I read your communication, namely that the Commission is not in any way out to undermine existing pensions in the Member States or to harmonise pension arrangements in the Member States. I assume that you will confirm this, and I believe that doing so will be incredibly important in the forthcoming debate in our respective Member States.

Diamantopoulou
Obviously this problem is a problem faced by young people and in most countries right now there is a risk that future generations will not be able to have the same rights as the present generation. It is up to the Member States to make the public aware of the problem, given that the extent of the problem varies from one Member State to another. But I think that the very fact that this discussion has started at European level and that we have agreed to work together on this problem, which now has European dimensions, is important from the point of view of public awareness.
As far as the second question is concerned, first: these reports cannot be annual reports and they will cover longer periods of time. Secondly, the statistics which the European Commission uses are Eurostat statistics and statistics from the national statistics offices, which receive huge financial support, with the Commission and governments working together to ensure that they all operate to the same standards. Because I agree with you that not all the national statistics offices are performing as well as they should, there are a lot of lacunae and there are a lot of statistics which are not reliable. So what we are trying to do is to support the national structures so that they operate to the same standards.
The third question concerns the question of harmonised pensions. I think that I really need to be categorical and absolute here. There is no question, no question whatsoever of harmonising pension systems, both for political reasons, because there is no legal basis for such a move, and for technical reasons, given that it is quite impossible for us to homogenise or harmonise systems which have different structures, different funding methods and which often operate in very differently organised economies. I refer, of course, to the example of Denmark.
But what we do need to highlight is the fact that, although there are different structures, there are common problems which have to do with the demographic problem, with new forms of employment which have to be taken into account, with the question of unemployment and with the question of new family structures. These are problems common to all countries.
We also have common objectives. The common objectives are sustainable pensions, the financial sustainability of pensions, both state and private, and the modernisation of pensions, as I set out in my initial intervention. Common grounds and common objectives bring about a form of collaboration in which everyone keeps their particular structures and quirks but collaborates within an overall framework.

President
Thank you once again, Commissioner, for making that significant statement here this afternoon and I am sure all colleagues will wish you every success with this difficult dossier.

Question Time (Commission)
President
The next item is 'Question Time' (B5- 0329/2001). We shall look at questions to the Commission.
Part 1

President


Glenys Kinnock
Question No 27 by (H-0541/01):
Subject: ACP capacity-building Would the Commission clarify why it is that none of the Euro 20 million ACP capacity-building project, which has been designed to prepare the ACP countries for the beginning, by September 2002, of negotiations on economic partnership agreements with the EU, has yet been disbursed?
Does the Commission not agree that this delay causes serious difficulties for the ACP, and means that there has been a serious failure to honour a critical commitment?

Nielson
The Commission is aware of the importance of this project and the need for early action to ensure that the ACP States will be ready and better prepared to open negotiations with the EU on economic partnership agreements from September 2002. So where do we stand today in the implementation of the project? As foreseen, the pre-qualification tendering procedure for the programme management unit was launched in June this year and the tenders will be opened on 20 July at the ACP Secretariat General. The committee evaluating the tenders will consist of three members designated by the ACP Secretariat and three members designated by the Commission. This committee will decide which companies will participate in the tender for the programme management unit. I expect that this programme management unit will be in place by December this year at the latest; with some luck, a couple of weeks before.
This would keep us within the original time schedule foreseen for the implementation of the project. The project will not be fully operational before the programme management unit is up and running. However, in view of the importance of some of the activities in the project in particular, the Commission has taken steps to begin on an ad hoc basis to implement some of the actions foreseen in the project, and this is already going on. It includes seminars on capacity building sessions of the ACP Ministerial Trade Committee for negotiations of new, WTO-compatible, trading arrangements with the EU. Two sessions of this kind have taken place, one in Johannesburg on 10 and 11 April 2001 and a second one in Brussels on 13 and 14 May.
Secondly, a seminar was organised at the second meeting of the heads of ACP organisations working on regional integration on 3 and 4 May this year in Brussels and further seminars are scheduled to take place in the period July/September this year. So all these action-oriented seminars are actually in the process of taking place. We can either be satisfied that the preparation and implementation is on track or be disappointed and frustrated because it is such a slow track, but this has to do with more general problems, which we may not be able to take care of today. Let me also say that, important and useful as these activities are, they are not, and never were, preconditions for the opening up of trade negotiations in September 2002 in accordance with the Cotonou Agreement. But I understand well why the question has been put.

Kinnock
Mr President, I should like to thank the Commissioner very much. The fact is, of course, that we are already more than half way through the preparatory period for these negotiations on EPAs, so these delays are rather difficult for the ACP to deal with; they are delays that affect thousands of livelihoods in the ACP and so there is deep concern. I understand the Commissioner's difficulty in explaining why this has happened.
I wanted to ask you specifically: is the Commission prepared to be flexible about the start time, end time and terms of these negotiations?

Nielson
The short answer is 'no'. The Cotonou Agreement is quite clear and - not that I expected this follow-up question - that is the substance of the problem and the reason I said what I did at the end of my answer. The dates involved are negotiated dates. Not adhering to them would create more problems and, in any case, one can always discuss whether one more seminar would change the world, rather than face the need to make difficult decisions that will become part of this entire process for our partners in the ACP group.

President
As the author is not present, Question No 28 lapses.

John Joseph McCartin
Question No 29 by (H-0539/01):
Subject: Kosovar Albanian prisoners in Serbia While the recent partial release of Kosovar Albanian prisoners in Serbia is very welcome, does the Commission agree that this serves to deflect attention from the urgency of releasing all the remaining prisoners, some of whom are very ill? In particular does the Commission have any information on Skender Ferizi, Besim Zymberi and Bedri Kukalai, in prison since the Dubrava massacre in Kosova in May 1999?

Patten
The Commission very much welcomes the recent release of a significant number of Kosovar Albanian prisoners. This does not, however, diminish the need for a speedy resolution of the remaining 203 cases currently before the Serbian courts and which these courts are reviewing.
The Commission has raised with the ICRC the cases of the three individuals mentioned in the honourable Member's question. We are awaiting a reply. We do not have any other information concerning their cases.
The International Committee of the Red Cross is following the condition of individual prisoners as well as maintaining contact with their families. The Belgrade authorities have informed UNMIK and Mr Haekkerup, most recently during the UN Security Council delegation visit to Belgrade. The cases of the remaining prisoners currently being reviewed should be finalised soon. We understand that they are considering a proposal from UNMIK that those deemed criminals should serve their remaining sentences in prisons in Kosovo. The Commission welcomes all efforts towards a speedy resolution of the remaining cases of detention, as well as the resolution of the fate of the 3 600 individuals still listed as missing from all communities in Kosovo.

McCartin
I want to thank the Commissioner for his full answer and also to congratulate him on the efforts I know the Commission and, indeed, the Council are making to bring about more humanitarian and satisfactory conditions for democracy in that region.
I draw the Commissioner's attention to the fact that many of the prisoners who are still suffering in prison without trial have been wounded and are ill, and no information has been made available to their relations. In fact, relations visiting or trying to visit these prisoners have been subjected to intimidation. No normal process of law has been put into effect against them. It is extremely important, because of the financial contribution we have been making in these areas, to make the authorities accountable to the public for the way these prisoners are being treated.
It happens - and this is a new dimension to our relationship with these countries - that the three prisoners I mentioned have relations in Ireland and, because of the interaction between voluntary organisations in Ireland and Kosovo, pressure is being put on me as an MEP to find a solution to this problem.

Patten
I congratulate the honourable Member for acting so vigorously on behalf of his constituents. I very much hope that the prisoners to whom he has referred will be able either to join or see their relations in Ireland as soon as possible.
The honourable Member knows that I have regularly raised the question of the prisoners with President Kostunica and other senior officials in the Federal Republic of Yugoslavia. We have pressed the authorities there to re-examine all cases, and either release prisoners for lack of evidence, where that is appropriate, or where there is evidence, launch an expedited appeals process. I hope the Federal Republic will actively consider handing over to UNMIK those who are legitimately convicted to continue their sentences in prisons in Kosovo.
We will continue to press with this issue. It is very important. It raises considerable humanitarian concerns in Ireland and other Member States.

President


William Francis Newton Dunn
Question No 30 by (H-0546/01):
Subject: Police capability Recently there was a first Police Capability conference with a view to the agreed goal of creating a five-thousand-strong police force to be available for the Union' s civilian peace-keeping operations. Will the Commission report now to the Parliament concerning what progress was made and what are the next steps?
Second part
Patten
The ESDP annex of the Göteborg European Council conclusions sets out where the European Union has got to as regards the development of a police capability for crisis management operations outside European Union territory. The honourable Member will recall that at the Faro meeting of the European Council in June last year, Member States signed up to an ambitious target of 5 000 police officers for international missions to be available by 2003. Preparatory work has progressed well since then. The necessary structures are being established in the Council, including a police unit in the Council secretariat.
The ESDP report to Göteborg contains a police action plan, which sets out the next steps in the process. A ministerial conference will be held by the end of 2001 at which the Faro commitments should be turned into specific pledges. The Belgian presidency will also continue work with the police experts' group to look in more detail at the modalities for implementation of the Faro commitments, particularly qualitative aspects, such as training, selection criteria and equipment. The Commission is being supportive of the efforts of Member States in creating this crisis management capacity, for example with the funding of training projects through the OISIN programme.
The Commission has also become more involved over recent years in local capacity building and police reform in post-conflict situations. Just to give some examples, the Commission is funding major initiatives for reform in justice and home affairs, including police, in a number of Balkan countries under the CARDS programme. In that context, the Commission will take over the WEU police mission in Albania. The Commission is also providing technical assistance and training to the police in Central America, in Guatemala and El Salvador, as part of the implementation of peace agreements in those countries. Furthermore, the Commission has recently started a programme of support to police training in Algeria.

Newton Dunn
I wish to thank my friend, the Commissioner, whom I have always found very helpful. This was an extremely full and helpful reply. I am sure that Parliament is most appreciative.
One matter surprised me a little, although I will read his reply in detail to study it, and this is the police unit set up within the Council. Am I right in assuming that command of a police force which is sent by us actually rests in the final analysis with the Council and not with the Commission, even though policing is demonstrably a peacekeeping and not a military operation?

Patten
The honourable Member invites me to dig deep into the soil of competence and its related terrain. The provision, deployment and management of EU police officers for external crisis management missions is a competence of the Member States and the Council secretariat. So a police unit has been established in the new politico-military structures in the Council secretariat to carry out the detailed police action plan, which I referred to earlier, in coordination with the Member States and the Committee for Civilian Aspects of Crisis Management. I would not dare to trespass on what is legitimately the territory of Member States, but there is a role and a responsibility for the Commission.
I described how we have considerable experience in the field of police training. Indeed, we can make a particularly important contribution by trying to ensure that training in this area, and in others which are related to civilian crisis management, is compatible with that provided by the UN. The UN and the European Union - the European Commission - now have more experience than others in this area and it is absolutely imperative that we ensure that the training provided - whether for police officers, people running penitentiaries, justices of the peace or magistrates - is compatible and appropriate wherever their services are required. There is an important role for the Commission, but it is not the role of a sixteenth Member State.

Purvis
Will the Commissioner advise me whether these policemen will be, or can be, armed and what their terms of engagement might be?

Patten
That will need to be determined case-by-case and situation-by-situation. Let me explain one of the problems we have in providing the policing capacity which is needed.
What we are looking for is not a conventional community police officer. What we require is a trained officer - man or woman - who is capable of the traditional policing functions of detection, who is capable of providing community policing, and capable, from time to time, of the sort of paramilitary policing which is needed, for example, in parts of the West Balkans.
In the country I know best there are very few police forces who have that sort of capacity, which includes the regular use of arms. The police service in Northern Ireland is an example of a service which has that sort of all-round capacity. That is one reason why it is difficult to provide exactly what is required, but whether or not arms will always be necessary will depend on the circumstances. I hope that the success of policing will mean that arms, increasingly, are not required.
Questions to Commissioner Lamy

President


Ulla Margrethe Sandbæk
Question No 31 by (H-0540/01):
Subject: Poor peoples' access to medicines Given the mounting evidence and public concern about the negative impact of WTO patent rules on poor peoples' access to medicines, will the EU support and promote proposals from developing countries at the forthcoming TRIPs Councils and the WTO ministerial meeting in Qatar for WTO members to agree a review of public health and development implications of TRIPs and a moratorium on trade disputes with developing countries over TRIPs compliance until the review is complete, together with a revision of the TRIPs Agreement to allow developing countries the option of reducing the length and scope of patents on public health grounds?

Lamy
Mr President, the European Union recognises that the lack of affordably priced medicines is a serious problem in many developing countries, particularly for the poorest people in these countries. We also believe that intellectual property rights are essential for encouraging creativity and innovation. In our opinion, they also encourage investment in research and the development of new medicines.
The TRIPs agreement, a WTO agreement on intellectual property, should not, therefore, be a barrier it should be part of the solution that you are looking for. Criticism of this agreement is generally based on the fact that it would limit the political options in developing countries in the area of public health.
Our position focuses, in the main, on one key point. We believe that the agreement allows WTO members sufficient scope to put in place an intellectual property regime that is able to meet their concerns in terms of public health. Our belief is that it is up to the WTO members, within the Council for Trade-related Aspects of Intellectual Property Rights (TRIPs Council), to interpret this degree of flexibility, rather than leaving this up to a panel.
That is why the European Union has already been working for some time in order to reach a consensus between the WTO members instead of leaving the way open to legal disputes. This is also why we supported the request from African countries to bring up the question of access to medicines at the WTO. This debate took place at the last Council meeting held on 20 June 2001.
We presented a document, which summed up our views on some of the provisions of the agreement, such as Article 31, for example, which does not specify the grounds for issuing a compulsory licence. We believe that these concerns regarding public health can, legitimately, be considered as good grounds for granting a compulsory licence.
Another issue is that of respecting procedural restrictions. On this point, we think the procedure provides enough flexibility in cases of national emergencies and that the current rate of HIV/AIDS infection in some developing countries constitutes this type of emergency and that intellectual property can also be lifted if a patent is required in cases of public non-commercial use.
Our position on this point is, therefore, constructive. We are committed to protecting intellectual property, which is an important stimulus, but we also believe that this must and can be achieved within the existing legal framework, as long as it is clarified in order to take account of urgent public health situations.
To refer to the recent debate at the WTO, many developing countries, such as India, Brazil and some countries in Africa, Latin America and Asia, presented a document which welcomed this debate. Like us, they stressed the need to ensure that this agreement does not compromise the rights of WTO members to draw up and implement health policies designed to safeguard public health.
This group of countries also stressed that the use of compulsory licensing was a crucial instrument for putting in place these public health policies and giving wider access to medicines. Lastly, they believed it was necessary to look into extending temporary provisions to implement this agreement.
According to the information available to us, none of the WTO members have yet requested a debate on reducing the term of patents. The patent term is currently set at 20 years and further negotiation of the agreement would be needed in order to change this requirement. The same is true with regard to the idea of a moratorium on possible trade disputes, which is not permitted under the current agreement.
We therefore maintain the position that we have held in this matter, to the satisfaction, I believe, of most of the parties involved, which is to find an appropriate balance between the interests of the patent holder and public health concerns. We shall continue to discuss this issue in a constructive manner. The TRIPs Council will be holding further meetings in July and September. It is, of course, rather premature to issue an opinion on the content of the decisions that come out of these meetings but, whatever those decisions are, rest assured, Mrs Sandbæk, that the Commission is committed to finding the right balance between these two objectives - namely, to acknowledge inventors' rights and to provide access to essential medicines - and we will continue to be committed to this over the coming months.

Sandbæk
Thank you very much for your answer, Commissioner, but you say that the present provisions allow an interpretation. This implies that it is the Commission's interpretation and that the provisions might be interpreted otherwise. Therefore I should like to ask whether the EU will call explicitly for a mechanism to ensure implementation of an interpretation of the TRIPs which favours public health care for the poor, so that we know what the interpretation will be. Does the Commission believe that existing transition periods and other provisions give developing countries sufficient flexibility to implement the TRIPs Agreement?
You said that you do not believe that we should enter into new negotiations. I can understand that the EU will not go as far as to press for an in-depth review seeking to reducing the length and scope of patents protection on pharmaceuticals for developing countries or exempting them altogether, but I should like you to explain further why you cannot do that, as it would be a nice thing for the EU to do.

Lamy
The first of these three points relates to the interpretation of the TRIPs agreement. We have our own interpretation which we have made clear, but we will not leave the matter there. We shall be discussing this interpretation at a meeting of the TRIPs Council, which we and others have requested. Like others, we believe that the text has achieved the right balance but that WTO members must hold a debate on its interpretation so that it is they and not the judges who decide. Therefore, this certainly shows political will.
The second point on transition periods has not, as far as I know, been the subject of any requests. There have been no disputes on this issue either, since, as I am sure you are aware, Brazil and the United States settled the matter out of court last week and I would like to point out that the European Union was not involved.
The third and final point concerns the length of patents protection. In this case, we believe that the current length of patents protection again provides an adequate balance between the need to preserve intellectual property and public health requirements. I believe our position on this point to be effective. We are among those who draw attention to the issue of access to medicines. Admittedly, there are other issues including those relating to public health systems and the availability of care. I believe that, in this matter, we are being true to the position that we hold generally, namely, to bridge the gap, using an acceptable and proactive approach, between the concerns of developing countries and those of some countries in the North, that are concerned about the protection of intellectual property.

Rübig
Mr President, we all know that in the pharmaceutical world there is a very long time lag between inventing a new product and having it ready for the market, generally 10 to 12 years. The product then still has to be launched and another 20 years must elapse before third parties can manufacture it. That is why the question arises as to whether instead of resorting to patent rights and compulsory licences, it would not be better to have a development fund for such cases and to make an effort, at international level, to make a large amount of money available so that by means of bulk purchasing medicines can be made available at correspondingly low prices. Let us not forget that the selling price is a combination of manufacturing costs and licence fees. Companies would be able to supply medicines at more favourable prices if volume purchasing applied. So my question is whether the Commission could take an initiative in this area.

Lamy
That is a very good question. There is a tiered pricing option mid-way between the strict protection of intellectual property, the patent system in other words, and exceptions to this system such as compulsory licensing, and this is the option that we have considered in conjunction with the pharmaceutical industry and some of the countries concerned. Tiered pricing involves a pharmaceutical laboratory reducing the prices that we pay on our markets by around 10% for countries such as Africa, for example, whilst still owning its patent.
This process is beginning to get off the ground although its scope is, in our view, fairly limited at the present time, and it will be the subject of an international initiative, which has, moreover, already been launched by the Secretary-General of the United Nations. The idea is for there to be a joint fund, to which several countries have already contributed and which will be used to buy medicines wholesale at low cost, which will therefore solve this part of the problem regarding price-related access, provided that the necessary funds are in place. For the time being, however, the funds are still very limited.
I would reiterate that the price of medicines is just part of a much wider problem which, in the main, relates to the health care system, distribution and the ability of the people concerned, particularly in the case of AIDS, to take their medicine regularly, something which involves extremely complicated medical procedures. In general, however, to answer your question, yes, the international community is moving in this direction and the European Union will follow suit since some funding has already been earmarked for this purpose.

President


John Purvis
Question No 32 by (H-0571/01):
Subject: Testing cosmetics on animals and the WTO Under WTO rules, imported products must be treated the same as 'like products' of domestic origin. In past cases of dispute, a decision is based on the end product and not the way a product is produced. It has been argued, therefore, that the introduction of a ban on the marketing of cosmetic products if they are tested on animals will result in a trade war as the process, i.e. not testing on animals, would not be taken into consideration.
In light of the Parliament' s vote on 3 April 2001 to move towards such a ban, what action would the Commission take to avoid a potential trade war and does the Commission consider that the WTO rules should be interpreted to include the processing of a product when deciding on its 'likeness'?
Questions to Commissioner Solbes
Lamy
This question relates to the testing of cosmetics on animals and considering the issue in the context of the WTO.
The Commission shares Parliament' s objective of improving animal welfare and we fully acknowledge that placing restrictions on animal testing would contribute to the achievement of this objective. On the other hand, the European Union is also required to provide a high level of health protection and to ensure that its policies are in line with its international commitments. Now, a marketing ban that is based not on the product characteristics but on manufacturing procedures would certainly force many of our trading partners to change their policy and legislation in order to be able to enter our market. This could, in fact, provoke a reaction. We should be aware that, until now, animal testing is the only method used in most countries to assess the safety of products intended for consumption, particularly cosmetics.
As far as we are concerned, we remain convinced that there are other methods, aside from a marketing ban - which is Parliament' s position - which can be used to bring an end to testing the finished product and its cosmetic ingredients on animals. This is the purpose of the proposal that the Commission made in order to ban animal testing within the European Union. In our opinion it is the acceptance of alternative testing methods by the international community that will provide the most effective contribution to animal welfare. We are committed to encouraging the use of in vitro cosmetic testing, particularly within the OECD in order to move forward in this direction.
In order to provide a precise answer to your question, Mr Purvis, we believe that there is a strong possibility that the WTO may challenge a marketing ban, if it enters into force. There are many issues to be considered in this matter such as extra-territoriality and proportionality of this and many others measures.
As for the issue regarding 'like products' , the GATT panels supported the fact that the determination of identity criteria of two products can only be based on the characteristics of the end product and not on the way that the product is produced. In other words, production methods and processes cannot be taken into consideration when coming to a decision on the issue of a product' s identity.
We therefore believe that any defence against an attack based on a product' s identity has little, or hardly any, chance of succeeding at the World Trade Organisation. This is also the reason why, on a number of occasions, we have drawn Parliament' s attention to the danger of moving in this direction from the point of view of respecting our international commitments, which we believe should also be one of Parliament' s concerns.
Our proposal must, therefore, be appreciated within the context of protecting animal welfare, guaranteeing a high level of health protection and avoiding legal disputes, which would certainly cause problems for everybody concerned.
We believe that this situation - meaning rules which allow measures on production methods to be established only within strict limits - is far from satisfactory. This applies to the WTO' s current legislation. This is the reason why we hope to be able to include these issues in the agenda of the next round of WTO negotiations. If current legislation can be changed - and we hope that we are able to clarify it in this area - then so much the better. As the texts currently stand, there is a risk that disputes will arise.

Purvis
I take it from you that it is very unlikely that any agreement could be reached. Just a month or two ago the American Ambassador to the EU stated that the cosmetics area could be the basis of one of the biggest trade disputes, putting bananas and all the others far into the shade, if it was not resolved.
So I take it that you are telling us we are going down a path that could lead to near disaster. Have you tried to quantify the potential for retaliation against European industry of other injured parties, and what that could mean in terms of lost jobs in Europe?

Lamy
Mr Purvis, it is my job to handle the trade disputes that we are currently involved in. It is preferable that I avoid disputes altogether. I believe that my task, therefore, particularly in my dealings with the Council and Parliament, is to be totally honest when a Council or Parliament decision might mean we are in danger of losing a dispute. I am sure you have a good understanding of the risk. The proof of this, in fact, is that we are now discussing the implications that all this will have on sanctions.
I cannot say what the current situation is because, in order for sanctions to be taken against the European Union, a panel would have to be set up, we would have to fail before this panel and the amount of sanctions would then have to be assessed. In general, the amount of sanctions is assessed by considering the volume of trade affected. In a hypothetical scenario, in other words, a scenario where this proposal ends up becoming a European Union proposal, which is not yet the case, if it is challenged and if we lose, the volume of trade in question must be assessed and, at that point, we would have an idea of the system of sanctions.
I would reiterate, so that you have all the details, that in this case, sanctions do not necessarily and do not generally target the industries which are at the root of the problem. They target others, since sanctions are chosen by the party who wins the dispute at the WTO.

Kauppi
Mr President, it is very good to hear that the Commissioner is not afraid of a trade war but responds very positively to the idea that these important political aims set by the European Parliament, for example, such as a ban on the marketing of cosmetic products tested on animals, are political decisions, not a question of protectionism, and thus it is important that our representatives defend these issues at international level. You yourself referred to the possibility of bringing up in the next WTO round the question of whether in the future more attention could be paid to the way the product is produced in these trade issues, in other words not merely the end product. Has there been any discussion on this? Can you shed any more light on this reference of yours? Do you believe this is a possibility?

Lamy
With regard to the first point of your question, Mrs Kauppi, I am, of course, responsible for applying the policies that the European Union has decided upon, including those taken on external issues. It is my duty, and I think that I do this openly, to explain that, when a political decision taken by the European Union brings us into conflict with our international commitments, as would be the case here, then the people who are taking this decision must be made aware of the risks they are taking. If you want to run this risk, do so. I will handle it. Incidentally, I believe that there are more intelligent, less risky ways of resolving this issue.
In particular, we could consider a compromise solution between our proposal to ban testing and your position to ban marketing, in other words, that of labelling requirements. From the point of view of international trade legislation, these requirements present less of a risk than a ban on marketing. If we could move in this direction, in order to bring together both our points of view, I believe that we would avoid provoking useless disputes.
My second point relates to our desire to have some of the WTO rules clarified, in order to allow the European Union to move in the direction that it wishes, and this concerns production methods, for example. We hope to move in this direction since we are relatively isolated at the moment. One of the reasons for this is that we are faced with the belief of some of the developing countries that the use of these production methods may equate to protectionist measures. We are, therefore, in need of some very strong arguments in order to show that this matter is not about protection, it is a matter of collective preference and that we each have our own ethics. Within the European Union, animal welfare is part of our ethics, although this is not necessarily the case in other countries - as we can see - and perception varies according to the level of development.
This is our position. We will do everything that we can so that this issue is placed on the agenda of the next round of negotiations, so that progress can be made. I make no secret of the fact that, at the moment, our position is hardly shared at all in other parts of the world.

Schierhuber
Mr President, I was very pleased to hear just now that Commissioner Lamy believes that it is very likely that during the next round of WTO negotiations production and labelling methods will also have to be considered. What I would like to ask you, Commissioner, is whether you are willing to accept that imports from third countries are also subject to the same criteria that apply to production at European level, be it in agriculture or elsewhere. Are you prepared, for the sake of public health, and that is what is at stake here after all, to take such steps to counter this opposition during the next WTO round?

Lamy
Of course, Mrs Schierhuber, I am willing to do all of this because, and I reiterate, one aspect of the European Union' s trade policy is to apply the collective preferential scheme to its external trade in the same way as it is applied to internal trade. From this perspective, it is quite straightforward. It is sometimes slightly more complicated, as demonstrated, for example, by the panel on hormone-treated beef, at which we were unsuccessful. As we imposed a ban on hormone-treated beef within the Union, we banned imports of it as well, but the conditions of this ban meant that it was found to be in breach of international legislation.
In general, the principles which apply are those of non-discrimination and of proportionality and the national treatment principle. These are the principles that we wish to see taken into account in the agenda on the environment at the negotiations, especially everything which relates to the precautionary principle. We have some way to go before this can be done. There are risks in what we are doing within the European Union - in some cases, perhaps - with regard to existing laws which are considered to be excessive. Therefore, on the one hand, we must adjust our internal approach and, on the other, we must adjust international legislation to our own preferences, which is only possible if other countries are in favour of changing this international legislation which is outside of our control. Since we do not have any particular unilateralist tendencies, we must, therefore, change the legislation on a number of points or, at the very least, clarify its position on these issues.
This is the situation at the current time. We are aware of your concerns in this area. We support them, particularly from an ethical standpoint. I cannot hide the fact that, as things currently stand, some of your plans will pose serious problems from the WTO' s point of view.

President


Mihail Papayannakis
Question No 33 by (H-0565/01):
Subject: Greek stability and development programme As the current economic outlook grows bleaker, the Member States are naturally revising the targets set out in their stability and development programmes. Has the Greek Government provided details of its current estimates for economic growth and to what extent do those estimates differ from the rather ambitious economic growth targets of 5% - 5.5%? The IMF, for example, forecasts that inflation in Greece in 2001 will reach 3.4%, and considers that there is no realistic prospect of the economy growing at the projected rate of 5%-5.5% from this year. Moreover, Commissioner Solbes Mira has stated that a 3% economic growth rate in the eurozone countries is very high. In the Commission's view, what impact could failure to achieve these targets have on employment and the balance of public finances in Greece?

Solbes
According to the spring economic forecasts presented by the Commission, Greece' s GDP will grow by 4.4% in 2001 and inflation as measured by the decrease in private consumption will slow down slightly to 2.8% of the annual average, compared to 3% in 2000. Given this context, public administrations' accounts will balance out in 2001, the labour market situation will improve and the unemployment rate will fall for the second consecutive year, reaching 10.3% in 2001.
With regard to real production growth, the Commission' s estimate is slightly lower than that given by the Greek authorities at the end of 2000 and is reflected in the stability programme drawn up in spring 2001.
The Commission forecasts take account of shrinking world demand in the first few months of the year and therefore differ from those given by the Greek authorities.
Nevertheless, contrary to what might appear to be the case, the macroeconomic forecasts of the Commission' s stability programme are worse than the Greek forecasts. For the moment, there are no grounds to believe that the medium-term prospects for the stability programme are any less valid.
We, as the Commission, will soon be initiating work on the autumn forecasts and for the moment do not envisage making significant changes in the case of Greece.
According to recent announcements by the Greek authorities, given the new, less favourable, international climate, the national forecasts will be adjusted more towards the Commission' s spring forecasts. In any event, in the 2001 update of the stability programme, which is due to be presented by the end of the year, the Greek authorities will undertake the necessary adjustment of their medium-term macroeconomic outlook and an assessment of the impact of this on public finances. To summarise very briefly, the economic situation is not particularly favourable, but since this assessment still falls within the levels forecast in the stability programme and in its 2001 update, we do not feel that the problems are as serious as some speakers are suggesting.

Papayannakis
Thank you, Commissioner. I should just like to correct your last finding: I do not foresee any deterioration in the situation and, may I say, nor do I wish for one. I am just a little concerned by what I see. You say that the programme will be updated at the end of the year. But Greece's entire economic policy is already being drawn up on the basis of the assumption that there will be a large budgetary surplus rather than equilibrium, as you said, and that unemployment will fall. At the same time, there are absolutely no data concerning Greece in all the statistics on the Union. You have no official data. At least those of us who read the statistics do not. If you have some other statistics, then maybe things are different.
This was the thrust of my question. And my question does not refer just to Greece; it refers to all the countries of the European Union, which is why I should like you to tell me more about public finances and changes in unemployment. I think this updating exercise should already have begun.

Solbes
I shall endeavour to reply to this second point. As I was saying just now - and Greece' s case applies to the other Member States too - the stability pacts are based on figures provided by the countries themselves. It is true that the Commission' s estimates in some cases give higher or lower figures than those given in the stability pact, but leaving aside the figures given in the stability pacts, which are, nevertheless crucial to understanding developments in public finances, we can already state that our estimates for a growth of 2.8% today represent an excessively optimistic position. We also feel that our actual growth percentages will be much closer to the Union' s growth potential, which stands at around 2.5%.
Nevertheless, even with this growth rate of close to 2.5% - a little above or a little below - we feel that employment will continue to be created in the Union and, for the time being, we have not yet seen any significant fall in employment growth or an increase in unemployment. Unemployment continues to fall. For the moment, therefore, we continue to be relatively optimistic about developments in this field.
With regard to the issue of public finances, it is true that the less favourable economic climate might have some impact. With this eventuality in mind, the Commission has already stated its position on public finances to the Council, indicating that, in our opinion, we should allow the automatic stabilisers to play their full role in those countries that have achieved a more or less balanced position in terms of public finance and in other countries that have a national debt of around 60%.
In this situation, the countries in which the automatic stabilisers should not be allowed to play their full role should be the four countries with deficits of more than 1% and the three that have a debt of close to 100%. Italy is included in both groups. The remaining countries are Germany, France and Portugal where deficit is concerned and Greece and Belgium in the case of national debt.

President


Bernd Posselt
Question No 34 by (H-0578/01):
Subject: The euro in the former Yugoslavia To what extent is the Commission involved in the introduction of the euro in Bosnia-Herzegovina, Kosovo and Montenegro, where the currency is at present the German mark, and what is its view of this development?

Solbes
Mr President, I will try to respond to Mr Posselt with a degree of detail. Firstly, I would point out to him that the Commission is not responsible for the introduction of notes and coins. As he knows, notes are the responsibility of the Central Bank and the system of central banks and, in the case of coins, it is the national authorities who are responsible. However, with regard to the changeover process, we must distinguish between activities within the eurozone and those outside it. Within the eurozone, it is the central banks and the mints, or the Finance Ministries, who have decided on the changeover plans. Outside the eurozone, it is considered basically as a commercial activity and it is left to the whim of the market. That means that the national banks are not, therefore, involved in the logistics and channels for distributing the new coins or recovering the old coins, and they must maintain the systems they have traditionally used for this type of operation.
Nevertheless, it is true that there is concern within the European Central Bank and in some national banks, in particular the German Central Bank, as a result of the enormous number of German Marks in existence outside the eurozone, that action should be taken to support the changeover situation in the countries outside the zone. In this respect, on 14 December 2000, the European Central Bank took the decision to allow frontloading or the pre-supply of euros to those financial institutions which are branches or subsidiaries of European banks in the countries outside the eurozone. Clearly, if the Central Bank is working on the possibility of pre-supply, the first step has been taken for this type of financial body to be able to move ahead with the process following the change of currency.
In the former Yugoslavia there are three different cases: Bosnia-Herzegovina, Kosovo and Montenegro. In the case of Bosnia-Herzegovina, we are talking about a currency board with a national currency linked to the Mark with an exchange rate of 1 to 1. However, it is the case that that currency belongs to Bosnia-Herzegovina and will not undergo any change in itself. It will no longer have a relationship with the Mark, but a set relationship with the euro and will be approximately half of the euro, which is the same as the Mark-euro relationship. With regard to Kosovo, there is a significant level of possession of physical currency. It is an economy where the currency circulation is based on notes which are not normally from the area and which, in particular, are not from the Mark zone. The Yugoslavian Dinar is still legal tender, but it is also the case that the Mark is in circulation and it was recognised as a currency which can operate and the circulation of the euro will clearly not change that situation. There is a specific problem of how to change these Marks which are circulating into euro notes and coins. According to my information, the German Central Bank, which, at the time, became aware of this situation, is thinking about which solution to adopt for this type of situation. The problem of Montenegro is similar. In November 1999, it decided to unilaterally establish a double currency system between the Mark and a parallel currency; on 1 December, the Government of Montenegro declared the Mark to be the only legal currency in the territory of the republic and, as in Kosovo, the Commission has no powers to act and, in our opinion, it will also fall to the Federal Republic of Germany' s Central Bank to take the relevant decisions in order to carry out operations other than frontloading operations which, as I said before, will be carried out using branches and subsidiaries of the European banks which work in that area.

Posselt
Commissioner, thank you very much for your very helpful and detailed reply. I would just like to ask a supplementary question. Just today there have been major reports in the German press according to which the accession countries are planning to circumvent the euro criteria by introducing the euro unilaterally, as it were. On the strength of what you have said, this seems somewhat unlikely to me, but I would nevertheless like to ask you if this is a concern and whether the Commission is dealing with this issue in the accession countries.

Solbes
Mr President, this issue has been widely debated and the position is clear for both the Central Bank and the Commission and Council: to participate in the euro means to fulfil the conditions of the Treaty of Maastricht. That basically means maintaining a period of exchange rate stability for two years, approximately, not from any old moment but logically from the moment they are members of the European Union and, in accordance with the interpretation of the Council of Ministers, they must be part of the exchange rate mechanism for a period of two years.
Some countries have raised the difficulties caused by reversing stable exchange rate systems such as they have at the moment (this is the case with Estonia, with its currency board linked to the Mark) and that it would mean returning to a system of greater flexibility and of currency flotation in order to retrieve a situation of stable exchange rates. For that reason, the official interpretation and application is that the situation of the countries which have a currency board, if they are linked to European currencies, is compatible with the exchange rate mechanism, although these decisions are clearly adopted unilaterally by the countries involved. To put it another way, the responsibility to maintain stability of the exchange rate falls to the national authorities and they will not receive any type of privileged treatment, apart from that resulting from their presence in the exchange rate mechanism. This is the situation which has been maintained and clearly, sensu contrario, the interpretation must be that neither the Central Bank nor the Council nor, of course, we in the Commission, are in favour of 'euroisation' processes which in some cases have been suggested and which, in our view, in no event should allow entry to the euro through the back door or allow countries which do not fulfil the conditions set for all Member States of the European Union to benefit from the advantages of being in the euro legally.

Purvis
Mr Commissioner, you have primarily concentrated on the logistical and technical aspects, and you have only just begun to touch on the monetary risks that could ensue from what you call the gigantic holdings by foreigners of German marks but also presumably of other euro zone currencies. If these holders begin to get concerned about how they are going to exchange these holdings, or about what the euro is going to be, is there a risk of them moving into the dollar or other currencies and thereby destabilising the euro even more than it has been?

Solbes
When there are people who possess significant quantities of notes, above all within the eurozone, and of national currencies outside the eurozone, two types of situation arise: normal saving by these people and the quest for protection in the face of their exchange rate situation. In both cases it is perfectly justified to possess these holdings. And there is no problem in changing these holdings into the new euro, via their commercial banks, via the European banks which have branches or subsidiaries in the area.
Certain different cases are raised: the possible existence of European currency on unofficial or black-market networks. There must clearly not be any favourable treatment for this type of situation. The same rules must be applied as for exchange in the European Union, that is, in those cases where somebody is identified as the holder of a quantity of a currency, the exchange takes place without any type of risk, even for quantities greater than the minimum amounts laid down in the money laundering directive. When quantities are exchanged which do not reach the limits of the directive on money laundering, the exchange may take place without requesting identification of the holder of the funds. However, in my opinion, when the quantities are high and exceed those laid down, identification should be demanded.
You have raised a different problem. Since this requirement is going to be maintained, is it not possible that some of these holdings will move to the dollar. Firstly, we do not have that impression, given the figures for the inflow of notes into the different central banks; secondly, in the countries which have signed up to the obligations of the money laundering convention, the same criteria I have mentioned must be applied for exchanges from European currency to the dollar. The situation you mention could only arise in certain countries which have more lax legislation, which today allow a European currency to be exchanged for another currency, the dollar or any other, without being subjected to those requirements.

President
Thank you very much, Mr Solbes, for your answers today. I imagine that there will still be some Members waiting for you in the corridors to continue asking you to predict the future. But I thank you for your intervention.
Questions to Mr Monti

President


Per Stenmarck
Question No 35 by (H-0535/01):
Subject: Competition In 1996, a complaint was lodged with the Commission's Competition DG concerning abuse of a dominant position by the port of Helsingborg. The complainants, two of three shipping companies which use the port, considered that excessive fees were charged because of this dominant position. Pending a decision, one of the two companies has paid only half the amount of fees for using the port. The port of Helsingborg, therefore, now has a claim of SEK 240 million (approximately EUR 26 million) on the company. Almost five years since the complaint was lodged, the parties are still awaiting a decision from the Competition DG. Notification has been promised several times but as yet nothing has been forthcoming. The consequence of the delay is that two small companies do not know what financial parameters they have to work within. Is it reasonable for parties to have to wait almost five years for the Commission to take a decision?

Monti
As Mr Stenmarck mentioned, two complaints were indeed lodged in 1997 alleging abuse of a dominant position by the port of Helsingborg. The complaints have been under active investigation by the Commission since that time. This case raises many complex factual and legal issues and the markets involved have potentially changed significantly in the light of the opening of the Øresund bridge in July 2000.
The Commission is fully aware of the situation of the parties. A series of meetings has been held recently with the main parties concerned, partly to obtain their views on recent market developments and partly to establish whether they see any prospect of reaching a mutually acceptable settlement. If there is no settlement, the Commission will continue its investigation with a view to completing this as soon as possible.

Stenmarck
I first want to thank the Commissioner for his reply. When, as in this case, the issue is a complaint submitted to the Commission in 1996, i.e. five years ago, there is really only one acceptable course of action, namely for the Commission immediately to decide on its position. This has not been promised by the Commission, which is why I cannot say that I am satisfied with the reply.
It is an issue of fundamental significance that excessive fees have been charged by a port which, it has been alleged, has a dominant position. I would like to emphasise that I have no view on whether this is right or wrong, but all parties are waiting for the Commission' s decision and all parties are very much dependent on the Commission' decision. I think it is unreasonable for it to take over five years for the Commission to make a decision. I would therefore put the question to the Commission: When is a final decision likely to be forthcoming?

Monti
Yes, it has been a long period. I agree with you about that. On the other hand, as I am sure you are aware, this case is very complex. From a factual point of view, the Commission has to take into consideration the evolution of the port's activity over almost a ten-year period.
The market itself, which is at the core of any competition analysis, is very difficult to determine. It depends on the type of traffic considered: foot passengers, cars, transportation of goods and so on. In addition, as I mentioned a moment ago, the situation has changed greatly with the opening of the Øresund bridge last year. In addition, to make things more complex, there is no direct precedent. This explains why, as Mr Stenmarck underlines, this decision is eagerly awaited.
The Commission is in the process of analysing, in particular, the consequences of the opening of the bridge on the definition of the markets. All parties concerned will be asked to contribute all relevant information. The case is being given top priority and will be resolved as soon as possible. But I cannot, at this stage, indicate a time or possible outcome. That will depend on the facts.

President


Luis Berenguer Fuster
Question No 36 by (H-0537/01):
Subject: Opening proceedings against Spain for State aid to the 'Tierra Mítica' theme park in Benidorm (Spain) The Spanish media have claimed that the Commission intends to open proceedings against Spain for providing State aid to the 'Tierra Mítica' theme park in Benidorm, although the proceedings were going to be held up.
Does the Commission in fact intend to open such proceedings?

Monti
I would like to reply to Mr Berenguer by making reference to a recent event. At the meeting of 20 June 2001, the Commission decided to set part of the procedure laid down in Article 88(2) of the EC Treaty in motion, with regard to aid allegedly granted by the public authorities to the theme park 'Tierra Mítica'. This decision was the subject of a press release issued on the same day, 20 June. The text of the decision, without the confidential information, will be published in Spanish in the Official Journal of the European Communities.

Berenguer Fuster
Commissioner, the truth is that I composed this question in May and when I learnt that the proceedings had been opened I considered withdrawing it, but, before I had done so, something happened which led me to change my mind. That was a disproportionate attack against me by the President of the region, Mr Zaplana, for having put this question. And that is not acceptable, Commissioner. When, in the face of innocent questions which are simply intended to clear up issues which the government of the Generalitat were hiding, there is a violent reaction, that means that there is more to this than meets the eye and I therefore urge you, Commissioner, to have your services vigorously investigate, removed from the political pressure they are no doubt going to be placed under, what is behind this: tax benefits, the granting of guarantees or, what seems to me more serious, the creation of infrastructures financed with European funds to the exclusive benefit of a private company.
The truth is that the leaders of my Autonomous Community are such peculiar liberals that they propose that hospitals and schools should be private, while the public sector is busy building merry-go-rounds and amusement parks.

President
Thank you very much, Mr Berenguer. I do not believe that you have asked a question, but Mr Monti can always reply to your 'non-question' .

Monti
I would like to answer the same question put by Mr Berenguer Fuster and say to him that, as in all instances involving proceedings, we are looking into this issue with a great deal of care and attention. Perhaps I could now give Mr Berenguer Fuster some additional information, in other words the main issues on which the proceedings are based, which are the funding of infrastructures required for the park to operate, the value of shares, and, in particular, the grounds and the name 'Tierra Mítica' which has been transferred to the park' s private management company, the conditions of a shareholder loan of eight billion pesetas, the reduction in city tax by Benidorm city council to benefit the park and, lastly, the possible financial contribution of six billion pesetas by the tourism agency of Valencia - the subject of the written question by Mr Berenguer Fuster dated 11 April 2001. I wanted these facts to be seen outside the context of the more political comments that Mr Berenguer Fuster made earlier.

Sornosa Martínez
Commissioner, with a view to achieving the greatest transparency and clarity in the opening of these proceedings, I would like you to tell us whether you have opened them simply as a result of these innocent questions - because they really were innocent questions seeking information - or whether there are really sufficient reasons, because it contravenes Community directives for a regional government to subsidise what it must not subsidise and in the least appropriate way. If that is the case, I would like you to respond because, as Mr Berenguer told you earlier, there is information in the media which seems to give prominence to the person who is simply asking questions and to the genuinely guilty party, i.e. the Valencian government.

Monti
I would like to add that this complaint is insignificant compared to the original complaint submitted to the Commission. In fact, the plaintiff has constantly made further complaints as the project for the theme park has progressed. The Commission received 18 successive letters from the plaintiff in relation to the project. This is a complicated issue, which has also given rise to a great deal of correspondence between the Commission and the Spanish authorities, which is one of the reasons for the amount of time which has passed since this matter first came to light.
In answer to Mr Berenguer Fuster, I mentioned why the Commission opened proceedings so as to provide Parliament with a more detailed framework. Perhaps I should mention the other points, namely those in which the plaintiff alleges that the grounds where the park is built were purchased cheaply, that some of the park' s costs were met by the regional authorities, that the principle of the private investor was not respected, that loans were granted to benefit the park, that injections of capital have been given to the park and that funding for training and direct regional funding has been provided.

Gasòliba i Böhm
Commissioner, as the rapporteur some years ago of a report on the European Union' s competition policy, I know that public aid is one of the most complicated issues and that for years it has been distorting the application of competition policy within the Union. Given the factors which the Commissioner has mentioned in relation to the issue raised by Mr Berenguer, I would like to know - if indeed it is the case that there has been an inappropriate application of public funds, in this case in the region of Valencia - what compensation mechanisms are in place to rebalance competitiveness between similar existing structures in other tourist areas.

Monti
In the question submitted by Mr Gasòliba i Böhm, there is a slightly more general reference to the rationale of monitoring State funding. In this case, one might well wonder why the Commission believes that the funding given to a theme park such as Tierra Mítica can affect intra-Community trade. In fact, the Commission believes that large theme parks like Tierra Mítica are much like other tourist destinations, and this affects - or might potentially affect - tourist numbers. On the other hand, these theme parks are an added tourist attraction for the area where they are built.
Moreover, the Commission has already adopted several decisions with regard to State funding for theme parks as well as other tourist investment projects such as hotels or marinas. Lastly, in the present case, even the advertisement for the theme park explains how to find the location from abroad.
Without wanting to pre-empt the outcome of the proceedings that have recently been opened, I would stress, to give a more direct answer to your question, that if the Commission does discover that funding has been granted illegally it will set about recovering the money. Now is not the time, however, to pre-empt the outcome of the inquiry in any way.

President


Lennart Sacrédeus
Question No 37 by (H-0551/01):
Subject: Limit on government subsidies for film production in small countries The Swedish press reports that the EU competition authority has proposed a 50 per cent limit on national state aid to the film industry. This announcement has also been interpreted as the possible introduction of a ceiling as a first step towards reducing the limit to 30 per cent. These reports have appeared at the same time as the Commission continues to avow its intention to guarantee linguistic and cultural diversity and equality within the EU.
Film production in Europe differs from that in the USA in regard to the large number of languages in the EU. Against that background, producing films in the small Member States, such as my own country Sweden, without any support at all, is in many cases financially impossible. A film in a minor language is obviously severely handicapped compared with a film in English, and it is therefore clear that some support is absolutely necessary to ensure that domestic film production can continue in those countries with smaller populations.
Does the Commission not consider that the introduction of an EU ceiling to limit national state aid to the film industry is directly contrary to Article 151 of the Treaties which states that 'The Community shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity...', and is the Commission therefore prepared to take action to prevent the introduction of such a limit?

Monti
Mr President, in the meeting held in Stockholm on 12 June 2001 with delegates from the national film institutes and the cultural departments of all the Member States, the Commission representatives made it clear that the Commission does not intend to take a restrictive approach to aid for film production granted on cultural grounds, as suggested in Mr Sacrédeus' question. The 50% aid intensity limit was fixed by the Commission, in its decision of 1998 on the French scheme of automatic aid to film production, with reference to the French situation. According to that decision this limit does not apply to difficult and low-budget films. It is up to each Member State both to define the notion of "difficult" and "low-budget" films and to fix the aid intensity applicable to this category of work according to national criteria.
Furthermore, apart from this derogation for other Member States with a comparatively limited cultural and linguistic influence, the Commission has made it be known that it will study potential further derogations where they prove necessary to ensure the viability of films with great cultural content. In practice, the 50% aid intensity criterion constitutes a benchmark that can be exceeded on genuine cultural grounds.

Sacrédeus
I would like to thank Commissioner Monti for his clarifying reply. This issue has aroused great interest in cultural circles and among representatives of the film industry in Sweden. As one man and one woman, people have reacted to the way this could possibly be interpreted with regard to linguistic and cultural diversity in small Member States.
I would like to put a follow-up question to the Commissioner: bearing in mind the answer given, is there any guarantee that film production in countries with languages which are not widespread, i.e. film production in minor Member languages, will regularly be exempted from the 50 per cent rule so that, in principle, all film production in, for example, Swedish, Danish or Portuguese could be counted as not exceeding the 50 per cent rule?

Monti
. I am happy to provide further information in response to Mr Sacrédeus' question. First, on cultural diversity - a key point in our Community - the diversity of characteristics in the schemes operated by Member States reflects the cultural diversity in the European Union. Accordingly, the Commission does not wish to impose any particular model under the review. The Commission does not want to harmonise the provisions of the different schemes but just to ensure their compliance with the four specific compatibility criteria that were set out in the French decision.
On the issue of whether the 50% aid intensity threshold applies to smaller Member States with limited cultural markets and could an exception be envisaged for them: Well, the answer is that the 50% aid intensity threshold applies in principle across the board to all Member States without distinction. It is to be noted that in the absence of territorialisation, the 50% aid intensity criterion becomes irrelevant. The Commission might consider applying exceptions to the 50% aid criterion if such a limit would make cultural production impossible. The Commission has already established an exception for difficult low-budget films. For certain smaller Member States, in the case of territorialisation, the Commission might consider authorising higher aid intensities on a case-by-case basis, if it is established that the 50% aid intensity level would not ensure cultural production because the cultural area and market diffusion were limited.

President


Piia-Noora Kauppi
Question No 38 by (H-0557/01):
Subject: Sharing third-generation mobile phone networks with rivals The Commission is at the moment contemplating what position to take concerning the idea of sharing infrastructure in third-generation mobile phone networks. At this stage, the Commission has stated that telecommunications companies might breach EC competition rules if they choose to share infrastructure with their rivals.
The European Investment Bank has also stated that it will take competition concerns over mobile phone networks into account when deciding whether to finance third-generation projects.
When will the Commission state its position on this very important matter? Is the Commission aware of the EIB's plans and does it think that competition concerns should be taken into account when making decisions on EIB funding?

Monti
Thank you, Ms Kauppi, for this extremely interesting and timely question. It is true that currently, given the prevailing market conditions and, in particular, the decline in the market valuation of most technologies companies, network sharing has been seriously envisaged by certain third generation operators as a means to alleviate their debt burden and lower their network deployment costs.
The Commission has already indicated that, in principle, it considers network infrastructure sharing positively, due to the potential economic gains, always provided that competition rules and other relevant Community laws are respected, in particular those of the licensing directive. This view has been expressed in the Commission communication on the introduction of third generation mobile communications in the European Union that was adopted on 20 March 2001. Certain forms of networking infrastructure sharing, notably site and mast sharing, could greatly contribute to reducing the environmental impact of network deployment.
So far, the Commission has not been formally notified of any agreement between 3G operators, therefore, it is not yet clear how network sharing will take place and how it will be implemented. Some operators may choose to engage in network infrastructure sharing within a limited geographical area, while others may opt for full geographical coverage. In the same vein, some operators may choose to share only sites and masts, whereas others may choose also to share antennas and what I would call 'active elements' of their networks, such as radio network controllers.
From contacts with operators and manufacturers, it appears that the degree of cooperation among 3G license holders will be influenced by the availability of new technology which will enable operators to share even active elements of their networks, without having to exchange or share sensitive information among themselves or otherwise compromise their independence as competitors.
The Commission has already had some preliminary discussions with national regulators on the competition law issues raised by network-sharing. At this stage, the Commission can only require parties to ensure that when they conclude network-sharing agreements, competition among themselves and with third parties is not restricted or affected. Any restriction of competition could be tolerated only if it brought benefits to consumers and fulfilled all the other conditions set out in Article 81(3) of the Treaty.
In any event, the freedom of contracting parties to disengage from their network-sharing cooperation and deploy their own networks in areas where they previously shared infrastructure should be preserved. Given that the Commission has not yet been formally notified of, or had occasion to examine, any case of network sharing, it is uncertain at this stage whether the Commission might need to issue, in the future, any kind of specific guidelines on the competition law aspects of network sharing.
Finally, as regards the EIB, the Commission is aware of the Bank's intention of taking account of competition considerations in assessing projects for loans. The Commission clearly welcomes this intention as ensuring coherence between the Bank's objectives in rolling out projects in accordance with its mandate, particularly following the Lisbon European Council and Community policy in a liberalised environment.

Kauppi
Mr President, it is always good to put the final question at question time. I would like to thank the Commissioner for his excellent answer. I was very pleased that the Commission takes a positive view of network sharing. At the moment the different ways in which this can be achieved are still open. I also understand your view that the competition rules must, of course, be respected and that these concrete assessments will only be able to be made once you have applications and notifications on this issue in your hands. You also referred to the Commission possibly providing specific guidelines on this issue, should the need arise. Furthermore, I would like you to confirm that, in your opinion, at the moment all the possible methods of network sharing - both geographical and the other methods to which you referred - are also open from a competition point of view. Is this your final opinion?

Monti
As you underlined yourself, Ms Kauppi, the Commission has an open attitude on this issue, provided that the competition rules are respected. As to the aspect of possible adoption of possible guidelines from the competition angle on network sharing, as I said in my previous response, the Commission has not yet received any notification of a network sharing agreement. Thus it is still too early to have a clear idea about possible anti-trust issues which may arise from such forms of cooperation among competing network operators and which may require the Commission to publish some sort of guidelines in order to provide further needed clarification for the industry concerned.
What needs to be made clear is that network sharing is subject to the same rules of competition law as other forms of cooperation or collaboration among competitors. It would be wrong if operators believed that network sharing deserves different treatment under competition law provisions.

President
Since the time allotted to Questions to the Commission has elapsed, Questions Nos 39 to 77 will be replied to in writing.
That concludes Questions to the Commission.
(The sitting was suspended at 7.20 p.m. and resumed at 9.00 p.m.)

Institutions for occupational retirement provision
President
The next item is the continuation of the report (A5-0220/2001) by Mr Karas on behalf of the Committee on Economic and Monetary Affairs on the proposal for a European Parliament and Council directive on the activities of institutions for occupational retirement provision [COM(2000) 507 - C5-0596/2000 - 2000/0260(COD)].

Kauppi
Mr President, I would like to take this opportunity to thank all the parties involved, and especially our rapporteur, for the constructive approach he has taken. Mr Karas has done a remarkable job with this proposal for a directive.
The sustainability of pensions will be one of the biggest challenges which our societies will have to face in the coming decades. Occupational retirement provisions will play an important role in this connection in many Member States. The question of whether the coverage of biometric risks should be made mandatory has been one of the biggest issues for Parliament. I will concentrate on that issue.
I should like to point out a few reasons why the coverage of biometric risks or guarantees should be kept optional. Firstly, beneficiaries in many Member States already have cover for these risks via separate insurance products. Citizens should not be forced to pay twice for cover they do not need. Secondly, biometric risk cover is expensive and this expense is passed on to the beneficiaries. Mandatory biometric risk cover will cost each citizen, at a conservative estimate, around 1-3% of annual returns per year. Compounded over a 40-year savings period this could significantly reduce overall scheme returns. Thirdly, mandatory biometric risk cover will also damage the level playing field by providing an advantage to insurance providers. The European citizen will benefit if he or she can choose from a wide variety of providers. Fourthly, I fully agree with some of the previous speakers. If we want to promote the second pillar we need to get employers excited about the new rules. If the rules are too restrictive and costly to the company they will probably have no voluntary supplementary scheme at all.
Finally, I say to Mr Kuckelkorn that we cannot secure something which does not exist. The worst case scenario for beneficiaries is that there are no flourishing second pillar pensions at all. Security can only come after that.

Ettl
Mr President, Mr Karas, ladies and gentlemen, I would first like to thank you, Mr Karas, very sincerely for your work, and in particular for essentially making bricks without straw. In the world of politics, we sometimes find ourselves dealing with "deceptive packaging". There is nothing new about that. In the field of consumer protection, the term "deceptive packaging" is used when the content is not what it says on the label. The Council - sometimes working in conjunction with the Commission - has recently adopted the image of a product counterfeiter. I am quite deliberately saying product counterfeiter, rather than refer to a peddler of phoney products, which sounds very harsh.
It is a similar story with the product assessment of occupational retirement provision systems, the second pillar of the pension system. They are trying to make the public believe that they are talking about a supplementary pension system, without having to meet the necessary quality criteria including the pension requirements that the Committee on Employment and Social Affairs regards as necessary, for example, guaranteed payment of retirement provision until the end of the insured person's life, the payment of benefits to surviving dependants or the covering of risks in the case of disability.
In addition to these quality requirements, financial risk and collective agreements between the social partners, which thus give those insured a voice, at present also have a fairly significant part to play. An additional factor that still militates against the freedom of movement of employees, and above all against their mobility, is the rather uncoordinated tax policy of the European Union in this context. Particularly in the case of occupational pension schemes, employees who take advantage of the freedom of movement of persons within the EU and make the European ideal a reality by switching jobs to other Member States can lose out because of differences in taxation, including double taxation.
Unfortunately, the key features of a comprehensive second pillar in the pension system have scarcely been taken into account here. That is why the proposal for a directive before us should not be labelled "supplementary pension system - second pillar", but should rather be seen for what it really is, namely a financial services product which only covers one small part of the full range of the second pillar.
I say that because there is one thing we should not overlook in this context. Of all the measures relating to pension security, benefits and quality for the end consumer are a priority, whether we are talking about traditional state or adjustable contribution systems or about additional or supplementary pensions systems provided via the capital market. The Council seems to have forgotten about this in this particular context, even if we have to admit that the capital growth resulting from this product is generally to be welcomed.
The fact that despite this there have been qualitative improvements in some areas of the proposal is no doubt something we owe to the rapporteur, who has tackled all the key issues very prudently. However, there is one thing we should be clear about, and that is that state pension systems can only be supplemented by good occupational pension systems or private pension funds and schemes, otherwise with increasing life expectancy we could sacrifice social symmetry. It is not difficult to imagine what that could mean. With these comments, I recommend that if the voting goes as promised earlier you should vote in favour.

Schmid, Herman
Mr President, I, for one, am quite disappointed both with the Commission' s proposal and Mr Karas' report, as I believe they concentrate wholly on the needs of the financial markets and ignore those of employees and future pensioners.
I would particularly like to focus on two aspects which I think are missing. With regard to pensions, it is the issue of security which is crucial to people. There should at least be a value guarantee whereby the contributed capital can be paid out even if it does not grow or increase. For example, what happens if these pension funds become insolvent or bankrupt or cannot fulfil their commitments? The report does not contain a single word about this.
It is almost even stranger that another important aspect is missing. When we started discussing supplementary pensions, it was said that this was an important EU issue, as we have a common labour market and expect workers to move between the various European labour markets. In that case, they will face many problems with regard to pensions.
It is currently very difficult to accrue pension rights earned consecutively in different countries. How should this be done? No answer is given to this question. In many countries, long qualification periods are applied. How will this be handled in a mobile labour market? Many countries have regulations involving double taxation. How will this be solved? There are a number of such questions.
I therefore think that we need a completely new proposal from the Commission which takes as its starting point the needs of employees and pensioners rather than simply dealing with the needs of the financial market.

Peijs
Mr President, today, we are, in fact, disregarding the three countries that have already realised their pension systems, to address the Member States with predominantly pay-as-you-go systems. Out of anxiety about this Directive, France has even, in great haste, included a few small pension funds in the first pillar. In the corridors, it appears that Member States know very well that their pensions are not sustainable. But with the elections just around the corner, the P-word has become taboo. However, their citizens have known for a long time what the score is.
The UK, the Netherlands and Ireland consider the events that are unfolding in countries such as Germany, France and Italy with suspicion. According to the Treaty, we do not carry each other' s debts. A naïve thought. If three major Member States, due to huge budget shortages, lay claim to the lion' s share of the capital market, the interest rate will increase accordingly in the three Member States that have provided for old age, simply on the basis of the law of scarcity. Inflation will rise, our carefully saved pensions will melt away quickly, and in so far as they are welfare- and inflation-proof, they will get us into major difficulty.
Government leaders have put pensions on their agendas. Member States have followed suit and monitored each other. That is anything but sufficient. We must be far more critical of Member States which do not make sufficient provision within their national debts and budgets for dealing with demographic problems. Those problems will not only affect pensions, but will also dominate labour markets and the health and building sectors.
Commissioner, I should like to ask you how long it will be before the generation of Europeans that work where work exists can have portable pensions? It is precisely those people that we need in order to moderate wages in the euro zone and maintain our export position accordingly. We must not penalise but reward these people for their mobility. Help has now been given to financial markets. All that remains is to help the people. What are your plans in that connection?

Brie
Mr President, this morning Mr Karas said that there will be a large majority in favour. I will not be part of that majority. I believe that the Commission's proposal and also the report imply a continuation of the fundamental change in European retirement provision systems and also in social security in general. By that I mean a move away from legal systems based on solidarity and towards private capital-based systems.
My criticisms relate above all to two issues. The first is this: are occupational pension schemes in the EU to be subject to Community-wide competition? I have certainly learnt a great deal over the last ten years about competition and what it can achieve, but no one can convince me that an issue as fundamental as social security provision in old age should be subject to competition. There are three specific problems here. The first is that there are no binding rules governing the security of contributions paid in. Secondly, I believe that the supervisory arrangements are inadequate, and, thirdly, there is the fact that in your report, Mr Karas, there is the additional option of an occupational pension being paid out by way of a lump sum. That implies enormous risks in old age.
The second major problem is this one-sided orientation towards financial markets. Everything that can be said has already been said about that. As I see it, this has more to do with the present and future of Europe's capital markets than it has with the future of pensions. The scope for maintaining and updating legal pensions systems based on solidarity has not been used to the full in any Member State of the European Union. However, what we really need is European coordination of occupational pension systems, as is already the case with legal pension insurance systems. That problem has not been solved here.

García-Margallo y Marfil
Thank you very much, Mr Karas, for your intelligent work, which has a very clear objective: to ensure that this proposal for a directive will see the light as soon as possible.
To this end, and with a view to removing any obstacles which could be raised by the Council, I have presented two amendments to resolve a problem, a Spanish problem, but one which also affects other nationalities. I will put it in Aristotelian terms. Major premise: in Spain there are funds without legal personality, established for the payment of retirement benefits. Minor premise: these funds are administrated by certain entities which do have legal personality. Conclusion: these entities must be subject to the same conditions and requirements as bodies which play identical roles in other countries and which do have legal personality. Mr Karas and I have prepared amendments which he will lay out tomorrow orally, which I hope will solve this problem.
The second issue I would like to refer to has been mentioned by some speakers; it relates to the fiscal problems raised by these funds. The proposal for a directive does not say a word about it, because that is not its purpose. There is a Commission communication of 19 April which deals with the problems caused by fiscal obstacles for crossborder pensions. The most important of these problems, which is in third place chronologically, relates to situations of double taxation or non-taxation when there are differences in the tax systems, as is the case within the European Union. The solution, according to the communication itself, is the harmonisation of rules on pensions; nevertheless, this committee desists from this audacious route and prefers to use the current rules, which - in my judgment - will be insufficient. I know that the Commissioner will ask me to approach the States, but I only have a voice in this Parliament and only he can be my interlocutor.

Bordes
This report puts forward prejudices that are nothing other than stupid but which, in addition, are used as a justification for reducing pensions and increasing the length of one' s working life. To use arguments related to demography and what the report refers to as the 'constantly increasing life expectancy in conjunction with low birth rates' equates to deceit if the considerable increase in the profitability of work is also concealed.
Given that every worker is increasing their level of productivity, the same number of working people produces more than enough to improve their own standard of living and to guarantee a comfortable pension for three or four times as many pensioners as was possible 25 years ago. If this increase in production capacity were not entirely channeled into profits for the privileged few, society might be able to ensure that all pensioners were paid a full salary, without having to force them to work longer.
Your economy turns everything into goods, including the pensioners that you wish to hand over to the finance sharks but, in the same way, it is the working class pensioners who are worn out from working that you are turning into goods, and this is appalling. The inability to ensure that old people live a retirement that is free from material concerns is one of the most striking examples of a self-indulgent society.

Figueiredo
Mr President, the proposal for a directive dealt with in this report seeks, as we know, to harmonise conditions for the provision of services by professional pension management institutions and their investment rules but, in a broader sense, seeks to create a single market for supplementary pensions, placing it in the context of actions of financial services towards the greater liberalisation of the movement of capital. Consequently, we disagree not only with the proposal for a directive but also with the report itself, which seeks to reduce to a minimum the prudential rules liberalising the procedures and the investments of funds in more volatile financial instruments, thereby supporting risk capital, which, in the current climate of financial speculation, is a serious risk for workers' rights. This situation is particularly serious for Portugal because it could undermine the Portuguese prudential rules, specifically the mandatory investment of 50% of professional pension funds in public stocks, as well as putting unacceptable pressure on the capitalisation funds of the public social security system.

Bolkestein
I must begin by saying that the Commission very much welcomes the efforts of the European Parliament to complete the first reading of the proposal for a directive on the activities of institutions for occupational retirement provision within such a very short timeframe. I wish to congratulate Mr Karas and his team for the seriousness and quality of their work. Their work has been welcomed by many speakers tonight, a sign that his work is welcomed by almost everyone.
Mr Karas' report proposes many amendments to the Commission's proposal. It is quite unusual to have over 100 amendments to a proposal for a directive which contains only 20 articles. The average is five amendments per article. It is quite unusual and a sign of the complexity and sensitivity of the issue. It also confirms the importance which the European Parliament has attached to that matter. The hearing organised by the Committee on Economic and Monetary Affairs on 6 February was certainly most helpful in that it collected the views of the beneficiaries, industry and supervisory authorities. I am particularly pleased to note that the European Parliament agrees with the basic philosophy of the Commission's proposal. That proposal seeks to achieve - as is well known - the twin objectives of, on the one hand, a high level of protection for beneficiaries and, on the other, the affordability of pensions. It establishes minimum, but nevertheless stringent prudential standards and proposes a qualitative approach to investment rules. That has been discussed by many Members in this debate.
These common prudential standards would permit cross-border membership of pension funds and allow an institution in one Member State to manage company pension schemes in other Member States.
Before I come to the specific amendments and give the Commission's opinion on them, I should like to reply to a question put to me by Mrs Peijs. It concerns the transferability, or portability, of pensions. Transferability must basically be governed at a national level. However, for the time being, some Member States do not regulate, allow or enable the transfer of pension rights between the various providers of second pillar provision, even within their own territories. The reasons for that state of affairs are related to very complex tax, social and legal provisions. This is a crucial element that needs to be addressed to facilitate the free movement of workers within an internal market. The Commission has therefore planned an initiative on the portability of pensions which we hope will be proposed before the end of the year.
I should now like to give the opinion of the Commission on the specific amendments. The Commission can accept Amendments Nos 1, 4, 7 (in part), 8, 10, 16, 17, 25 (in part), 28, 55, 63, 65, 66, 82, 84, 91 and 92. The Commission can also accept the spirit of Amendments Nos 15 (in part), 29, 33, 35 (in part), 36, 37 (in part), 38, 39, 40, 43, 46, 47, 52, 53, 54, 62, 67, 68, 69, 71, 72 (in part), 77, 78, 80, 85, 86, 87, 89, 93, 94, 95, 112 (in part), 118, 131 and 132. But the Commission is regrettably not in a position to accept the other amendments which, for the most part, aim at widening the objective of the directive. The directive which the Commission has proposed has a limited ambition, namely the creation of a prudential framework with stringent prudential standards to ensure security and affordability and allow for mutual recognition. The directive is not designed to interfere with the way in which Member States organise their pension systems, the extent to which they wish to rely on state pensions and encourage the use of funded pension schemes, as long as the Treaty rules are respected.
In that regard, and in accordance with the approach taken in most other Community legislation adopted in the financial services field, the directive cannot regulate the products offered by pension funds, nor can it define the precise arrangements for the payment of benefits which are often dependent on national tax, labour and social law. Cover of biometric risks, in particular of longevity, is an important aspect of the fight against poverty and insecurity among elderly people. But this directive should not stipulate how and to what extent benefits ought to be paid out or which biometric risks need to be covered by the institution.
Those are the reasons why the Commission cannot accept Amendments Nos 2, 3, 5, 11, 12, 18, 19, 20, 41, 48, 98, 106, 108, 114, 115, 121, 125 and 126. In the same spirit, the directive should not interfere with the way in which the Member States organise the governance of pension funds. Involvement of social partners in the management of a pension fund is an issue which is sometimes enshrined in national and social law. That is something that cannot be imposed in all Member States by means of a directive. Therefore the Commission cannot accept Amendments Nos 6, 21, 49, 50, 61 and 101.
Some amendments refer to the need to tackle fiscal barriers as a necessary complement to this directive. Indeed Mr García-Margallo y Marfil put a question to me on that aspect of the directive. As you know, the Commission has recently adopted a communication on the tax aspects which calls for the elimination of unduly restrictive or discriminatory tax rules. The tax and prudential aspects of the crossborder provision of pensions are complementary but need to be dealt with separately. That is why the Commission is not in a position to accept Amendments Nos 30, 31, 32 and 117.
The same comments could apply to the problems linked to the transferability and portability of pension rights to which I referred a little moment ago. That is a crucial aspect of the creation of an internal market for pensions and for cross-border labour mobility. I have said it before and I repeat it now. But it does entail very complex tax, social and legal considerations and that makes it impossible to cover this element under this directive. We will be speaking later on this year or early next year about the Commission initiative in this respect. The Commission cannot therefore accept Amendments Nos 7 (in part), 26, 56, 57, 58 and 74.
The qualitative approach to investment and technical provisions is based on the assumption that Member States must keep the option to have more detailed rules. Supervisory practices and traditions widely vary from one Member State to another. This restricts the degree of prudential harmonisation that can be attained. Some flexibility must therefore be left to the Member States to introduce more detailed requirements at national level. That is especially true as regards the calculation of technical provisions and investment. The same argument applies to the way in which supervisory authorities organise their work, especially for the registration and authorisation procedures. That is why the Commission cannot accept the following amendments: Nos 22, 23, 24, 25 (in part), 27, 42, 44, 45, 51, 59, 60, 64, 72 (in part), 73, 75, 76, 79, 81, 83, 88, 99, 100, 102, 103, 104, 105, 109, 110, 111, 113, 116, 123, 124, 127, 128, 129 and 130.
A few amendments concern the scope of the directive. Institutions that already benefit from a single market framework should not be covered by this directive, with the exception of life assurance companies for which Member States must retain the option of applying this directive for their activities that are linked to pension provision. In the same way, and in order to facilitate supervision in those Member States with tens of thousands of institutions, it is important for them to keep the option of excluding them from the scope of the directive, and that is why the Commission cannot accept Amendments Nos 9, 13, 14, 15 (in part), 34, 35 (in part), 37 (in part), 107, 119, 120 and 122.
Finally, the directive creates the right framework for the cross-border management of pension schemes. In the case of cross-border activity, the scheme must be run in conformity with the social and labour legislation of the country where the sponsoring company is established. Supervision of compliance with this law is carried out by the competent authority in the host country. Moreover, to make this mutual recognition effective, an effective system of exchange of information and correct enforcement of the directive must be put in place as recommended by Parliament. But this ought to be done at the initiative of the Commission. Those are the reasons why the Commission cannot accept Amendments Nos 70, 90, 96, 97 and 133.
I should like to conclude with the following remarks. This proposal is an essential element of the whole strategy for the sustainability of our pension systems. It allows pension funds to take full advantage of both the euro and the single market and it makes sure that these funds operate as efficiently and as safely as possible. The ball is now in the Council's court. I hope that a political agreement in Ecofin is achieved in the not-too-distant future. That is essential to demonstrate our political will to respect the commitments made by the European Councils in Lisbon and Stockholm.
In concluding I would once again like to thank the rapporteur, Mr Karas, for the excellent work he has done.

President
Thank you very much, Commissioner. I always greatly admire the attention you pay to detail when you are informing Parliament why the Commission cannot accept certain things.
The debate is closed.
The debate will take place on Wednesday at 12 noon.

Solvency margin for insurance undertakings
President
The next item is the joint debate on the following two reports:
A5-0211/2001 by Mr Ettl, on behalf of the Committee on Economic and Monetary Affairs on the proposal for a directive of the European Parliament and of the Council amending Council Directive 79/267/EEC as regards the solvency margin requirements for life assurance undertakings [COM(2000) 617 - C5-0557/2000 - 2000/0249(COD)];
A5-0212/2001 by Mr Ettl, on behalf of the Committee on Economic and Monetary Affairs on the proposal for a directive of the European Parliament and of the Council amending Council Directive 73/239/EEC as regards the solvency margin requirements for non-life insurance undertakings [COM(2000) 634 - C5-0558/2000 - 2000/0251(COD)].

Ettl
Mr President, Commissioner, the Commission has presented two proposals for directives with a view to changing the legislation governing life and non-life insurance companies. I would like to comment on both proposals at the same time, as the two have a great deal in common. By means of these two proposals, which are part of the Action Plan for Financial Services adopted in Lisbon and to be implemented by 2005, the existing legislation on non-life insurance dating from 1973 and on life assurance dating from 1979 are to be strengthened and improved.
The solvency margin is the additional capital reserve that insurance companies have to create as a buffer against unforeseen events. The general aim of the proposals is to provide improved protection for policyholders by increasing the capital resources of insurance companies and by ensuring more efficient state supervision of insurance companies. Higher solvency margins or risk buffers not only increase confidence in the performance of insurance companies, they also generally reduce system-related risks on the financial markets. Efficient, viable insurance companies do much to enable the opportunities of the single market to be perfected and exploited to the full.
These directives establish a basic framework of binding stipulations and checks and allow national legislators to adopt provisions going beyond that degree of regulation. This approach is understandable, bearing in mind subsidiarity and the considerable cultural differences reflected in the laws governing supervision in the Member States, and from a consumer policy standpoint is to be welcomed.
One point especially worthy of note is that national insurance supervisory authorities will be empowered to intervene as soon as danger looms, even if this is not a classic early warning system. The same preventive supervision is likewise set out in "Basel II". This document was put forward by the Basel Committee on Banking Supervision of the Bank for International Settlements.
The Commission proposals relating to smaller mutual associations should be endorsed. Although the upper limit for exemption from these directives, expressed in terms of annual contribution income in the last three years, is to be raised from the present EUR 500 000 to EUR 5 million, the provisions will not result in these associations being forced out of the market. These mutual associations in many cases operate purely at local or regional level, and they will be able to continue these activities. However, if these associations require a pan-European concession to become active at international level, it will be sufficient to send a simple communication to the national supervisory authority to the effect that they are willing to subject themselves to the provisions of the solvency directive on a voluntary basis. This will absolutely guarantee that these associations are able to survive, and it will be for individual associations to extend their area of business or otherwise.
Both proposals for directives are to some extent interim measures chiefly involving changes of a technical nature. The Commission will be submitting a further "Solvency II" package in which it will revise overall regulation of this sector in the longer term. Things will no doubt hot up then! The "Solvency I" package before us today should therefore be endorsed, particularly as this is in the interest of the public and of policyholders. The sooner we can implement these interim measures the better. For that reason I have endeavoured as rapporteur to give a high profile to informal explanations of the views of the Council and of the Commission under the fast-track procedure, and to work towards a compromise between the Council, the Commission and Parliament. The reports before us therefore already reflect the common position so that it would be possible to adopt both directives at first reading. I hope that will be possible - it depends on your steadfastness and your capacity for raising objections, Commissioner.
Permit me to make one final observation on the procedure itself. This particularly applies to fast-track codecision procedures. This procedure requires flexibility, something that has largely been absent, chiefly at Council level. This is not the first time I have had to say that. Codecision means more than just one side having to be flexible. This criticism applies not only to the Council, but also to you, Commissioner, although somewhat less so in this case, and somewhat more in the previous one. This kind of attitude towards codecision in this sector can only impair the deepening of the European Union or integration. We also need to reflect upon the ability of our decision-making processes to function properly. Certainly we need to do some thinking in the wake of the Irish referendum. With those concluding remarks, I urge you to vote for both reports.

Villiers
 Mr President, I speak in two capacities, first on behalf of the Committee on Legal Affairs and the Internal Market. Their rapporteur, Mr Ripoll y Martínez de Bedoya, unfortunately cannot be with us this evening. The Legal Affairs Committee approved the proposal and had no comment to make on it.
Secondly, speaking on behalf of my Group about Mr Ettl's report, I would like to congratulate him on the work he has done. He has done a good job and clearly worked very hard on this.
As Mr Ettl has said, these are largely technical updates, but still important. We have not had a revision of these directives for nearly 20 years, so we are engaging in a bit of a fine-tuning exercise to modernise and update them. Like Mr Ettl, I will address the two simultaneously as they raise similar issues.
I welcome these proposals as part of the wider financial services action plan which is so important for the future of the economy of the European Union Member States and could potentially deliver such great benefits to ordinary people across the European Union. There will be increased competition, increased consumer choice and lower prices in financial products which the financial services action plan can deliver, if we manage to get it right.
Like most of that action plan, and based on ordinary single market principles, these directives too are based on the single passport system to enable insurance companies to sell across Europe, so long as they comply with their own home regulations. That is a principle which is, and should remain, at the heart of the legislation we adopt in this area.
I welcome this effort to update solvency margin requirements: the rules relating to the capital buffer that insurance companies are required to hold against unforeseen contingencies, particularly high claims and poor investment performance. What we are doing here is essentially a warm-up for Solvency II. The more wide-ranging reform in this area will come with Solvency II. Nonetheless we need to ensure that we get the minor amendments properly sorted out before embarking on the more wide-ranging reform which we will see in the Solvency II regulation.
Particularly welcome are the efforts to match regulatory capital more closely with risk profile. This is a principle we have also seen operating in the proposals on capital adequacy and solvency margins in relation to bank and investment companies. The same arguments can equally well apply here in that we are encouraging prudent risk management and rewarding those that manage and reduce risk.
I am pleased to see a reference to the use of external ratings removed - it was initially proposed by the rapporteur. We do not necessarily want to rule this out forever, but it is premature to introduce it in this context. It is something we should consider in relation to Solvency II, but it needs more thought and discussion before we can introduce external ratings in this context.
I am pleased also that a sensible compromise was reached on early intervention powers, which could be a useful addition to the armoury of the regulators in securing proper prudential supervision. The similar compromise on future profits was also very sensible. We are going to see the use of future profits phased out over an eight- or nine-year period, which will give the industry time to adapt to the new conditions.
It is important overall to make the general point that in these proposals, as well as all others we deal with on industrial and financial services, we should make every effort to ensure that they are not overly bureaucratic and that the framework is as easy as possible for firms, both large and small, to operate in. That is the only way we will get healthy competition.
Finally, I should like to comment on the timing. It is clear that there is general agreement that we should get on with these reforms as quickly as possible. Mr Ettl did a very good job in coordinating with the other two institutions. Like him, I very much hope that we can sort this out at first reading. It seems to me that we may have been doing some of the Council's homework for it, and tidying up some of those aspects which will contribute to a sensible regulatory framework.
I thank Mr Ettl for the work he has done on this.

Bolkestein
Mr President, it is a real pleasure for me to respond to Parliament on behalf of the Commission. I should like to congratulate both the Committee on Economic and Monetary Affairs and the Committee on Legal Affairs on their rapid and thorough analysis of the Commission's proposals to amend the solvency margin rules for life and non-life insurance undertakings.
The solvency margin is perhaps a somewhat more complicated - a technical, even dry - subject, but it is of very practical and real importance. It is to protect insurance policy holders by requiring insurance companies to hold extra regulatory capital to act as a buffer against unfortunate circumstances.
The Commission's proposals are to strengthen and update existing rules which, as has been mentioned tonight, have been in force for almost 25 years. I am pleased to note that the amendments before Parliament are entirely in line with the thrust of the Commission's proposals. While many are of a technical nature, some represent very practical measures which will provide clarity and improve transparency, such as the requirement for competent national authorities to establish guidelines that govern the acceptance of supplementary contributions by the members of a non-life mutual. The same goes for the requirement for the Commission's report to examine how national supervisory authorities have made use of their enhanced powers of supervision. Those amendments are very useful improvements to the original Commission proposal. In this regard I should like to thank the rapporteur, Mr Ettl, and the shadow rapporteur, Mrs Villiers, for their efforts and contributions to the preparations of the two reports. I am happy to be able to inform Parliament that all Parliament's proposed amendments are acceptable to the Commission.
Whilst it is always hazardous to count one's chickens before they are hatched, I understand that there is a shared political consensus to seek adoption of these proposals within a single reading. It is my own personal hope that their efforts will be rewarded and that this proposed legislation will indeed be adopted with a single reading.
It is fair to say that this report has been a good example of successful cooperation between our two institutions. The Commission has an ambitious financial services programme which can bring many real and tangible benefits to our citizens and to industry. It is my hope that the excellent cooperation which we have enjoyed on this report may be carried forward, not just for the wider Commission review of the overall financial position of an insurance undertaking, called Solvency II, but also for the whole financial services action plan.

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

Electricity from renewable energy sources
President
The next item is the recommendation for second reading (A5-0227/2001) by Mrs Rothe, on behalf of the Committee on Industry, External Trade, Research and Energy on the Council common position for adopting a European Parliament and Council directive on the promotion of electricity produced from renewable energy sources in the internal electricity market [5583/1/2001 - C5-0133/2001 - 2000/0116(COD)].

Rothe
Mr President, Commissioner, ladies and gentlemen, as the President just explained, this is the second reading of the proposal for a Directive on the promotion of electricity produced from renewable energy sources. There is a legitimate hope that the first European legislation on renewable energy will soon come into force. This European legislation will help to increase the share of renewables in the electricity market. I am firmly convinced of that.
The directive will help us, the EU, to achieve our voluntary target of doubling the share of renewables by 2010. It will make an important contribution to innovation in electricity generated from wind, solar, hydro and biomass. In this way, the EU will demonstrate that it is willing to shoulder its responsibility for climate protection and a sustainable energy supply.
Just a few weeks ago I would not have made these statements in this way, as the Council common position differed from Parliament's position on some key points and the Council was initially showing little willingness to change its position. However, tomorrow you will be voting on the result of an intensive and productive negotiating process. There are 10 compromises worked out with the Council in an informal conciliation process on Amendments Nos 1 to 11, but without Amendments Nos 2 and 4. This demonstrates that the Council and Parliament have really moved closer together in this regard.
At this point I would like to very sincerely thank the shadow rapporteurs of the other groups, in particular Mrs Ayuso González and Claude Turmes. They have devoted a lot of time and energy to this process and have demonstrated a willingness both to fight and to compromise. I also owe an equal debt of gratitude to the Swedish presidency, which successfully endeavoured to shift the Council closer to Parliament's position. Last but by no means least I would like to thank the responsible Commission officials who played a very important moderating role in the negotiating process.
As is generally the case with compromises, we can perhaps be satisfied, if not exactly enthusiastic, about the outcome achieved. I regret that we have not been able to set any binding national targets. Even more importantly, I regard the definition of renewable energy sources before us as quite simply wrong. In order to make it easier to achieve the targets, some Member States have insisted on including the biodegradable component of household waste in non-separated refuse incineration. This not only runs counter to Europe's objectives for waste avoidance and treatment, but it also gives the wrong message and discourages greater use of genuine renewable energy sources.
I nevertheless request that you vote for the compromises reached with the Council. On the one hand, the directive will, by virtue of the amendments secured by Parliament, lead to a significant increase in the use of renewables. On the other hand, I am firmly convinced that it would not have been possible to achieve anything further, even in the conciliation process.
Now let me turn to the key positive results. First of all, the Member States will have to gear their incentive measures to indicative national targets. If it becomes clear that the overall EU target - doubling the share of renewables - cannot be achieved, then the Commission can make proposals for mandatory targets.
Second, before proposing any harmonised support scheme, the Commission will have to report on the success of the various national systems in achieving an increase in the market share of electricity produced from renewable energy sources.
Third, once any harmonised scheme comes into force, investor confidence regarding investments already made must be guaranteed.
Fourth, access to the grid for electricity from renewable energy sources is guaranteed. This should not be jeopardised because of feed-in or transmission charges.
Finally, proof of origin of electricity generated from renewables will guarantee transparency for the public.
We have enormous potential for renewable energy sources here in Europe. We must exploit this potential in order to discharge our responsibility for sustainable development.

Ayuso González
Mr President, ladies and gentlemen, Commissioners, renewable energies are not a panacea for reducing emissions of CO2 nor for resolving the energy dependency of third countries, but they can increasingly contribute to alleviating these problems, as long as they become competitive. I would therefore firstly like to congratulate the Commission on this report, as well as the Council, in particular the Swedish presidency, and the rapporteur, Mrs Rothe, on the effort they have made to find the necessary common ground so that in the end this directive can see the light and, furthermore, that it may do so in a way which is reasonably satisfactory for the majority, although it is true that not all the ambitious objectives which Parliament intended on first reading have been taken up.
This directive for the promotion of renewable energy is a bet on our future and an investment in the environment. That is why it is important to offer a legal framework to those who have already taken that gamble and are investing in this respect. Specifically, it is very important to negotiate sufficient transitional periods for current aid to maintain investor confidence. It is important to give priority to electricity from renewable energy sources in terms of access to the electricity network and that they are not discriminated against in the imposition of transport or distribution tariffs, especially in the peripheral regions. In order to justify the need for this directive, we must bear in mind, on the one hand, the differing degree of competitiveness still existing between renewable energy sources and conventional sources and, on the other, the external costs obviated by this type of technology.
I therefore believe that we must welcome them and, like Mrs Rothe, I would also like to ask this House to approve the compromise amendments which have been reached after so much effort.

McNally
Mr President, I extend my heartiest congratulations to Mrs Rothe for her exemplary work with colleagues in Parliament as well as with the Council and the Commission. She and Mrs Ayuso González have both expressed certain disappointment at the result, but I would say to Mrs Rothe that she should feel relief that what looked possible at one time has not come about. She has made considerable progress.
It is eminently sensible to promote renewable energy because it enables us to fulfil our environmental objectives, creates jobs and ensures security of supply. The items enumerated by Mrs Rothe are targets, not yet mandatory. But I am pleased that we have the fall-back position should Member States fail in their duty. There is a definition which excludes the use of municipal waste, gives permission for successful support mechanisms to continue and thereby boosts investor confidence. My own country, the United Kingdom - the windiest country in Europe - has some lessons to learn from work in other countries.
We need other measures as well as this directive. I know the Commissioner would agree on the need for a framework for energy support. We need research and development in the Sixth Framework Programme. We need to look at the single market to ensure that it does not contradict the aims of this directive and we need to make sure that renewables take their full place when we consider the Security of Supply Green Paper.
Congratulations again to Mrs Rothe. I very much look forward to a positive result tomorrow.

Beysen
Mr President, Commissioner, ladies and gentlemen, I should first of all like to thank Mrs Rothe for the sterling work she has done and by means of which she has laid the keystone for the first component: legislation in the field of renewable energy sources.
Where should we focus our attention? First of all, upon the target figure of 12%, to be obtained by 2010. It is, of course, very tempting to underline that it would have had a greater impact if it had been a binding target percentage, rather than an indicative target figure, as it is now. I personally am in favour of imposing binding target figures, as long as the prescribed target figures are realistic and obtainable. Also taking into consideration the many unknown factors in the development of renewable energy, it appears to me particularly sensible to determine indicative target figures on the one hand, but at the same time to give the Commission some scope to submit proposals containing binding target figures to the Council and Parliament if it were to transpire that results were inadequate.
The second area of attention concerns the clear delineation of waste originating from separate waste collection and waste originating from combined waste collection. Needless to say, I can only consider the incineration of separate waste and, more specifically, the biologically degradable component of industrial and household waste, as a renewable energy source. Opponents wrongly claim that the incineration of household waste would curb the use of so-called real renewables, such as wind and solar energy, increase CO2 emissions and undermine recycling policy and restrictions on waste production.
It is therefore proof of sound judgment that, in its definition of what are, and are not, to be regarded as renewable energy sources, the common position leaves room for different types of renewable energy sources and, more specifically, for the incineration of separate waste. I can fully identify with this position.

Turmes
Mr President, I would like to congratulate three ladies this evening. First of all, I congratulate Mrs Rothe, who successfully negotiated on behalf of all Members of Parliament. Next, Mrs Zackari, who ensured there was flexibility during the Swedish presidency and who, in fact, steered the Council towards a compromise that was acceptable to Parliament, and finally, Mrs De Palacio, who represented all those in the Commission who fully support the cause of renewable energy sources, without whom Parliament would not have been able to reach the compromises made with the Council.
Tomorrow, we will take an historic step towards renewable energy sources in Europe, which will provide 22% of electricity in 2010. This is a large proportion. I am very optimistic, even though I am aware that the first steps taken towards a new technology are always the most difficult. This is because, on the one hand, production costs have yet to be optimised, but the costs will fall as soon as mass production is reached.
There is another aspect that we are very familiar with, as politicians - relations involving power. The lobbies change sides once the technologies assume a greater economic significance in our societies, and the example of Germany is a wonderful illustration of this. The unions in Germany, which were against renewable energy sources and in favour of nuclear energy some five years ago, have changed sides because there are now more supporters for renewable energy sources than for nuclear energy.
I believe that this directive has also ensured that our industries are world leaders in areas that still have greater potential than we ourselves do in terms of renewable energy sources. Think of countries such as Brazil or India where we will gain market share.
I would also like to announce that I am going to nominate certain members of certain governments for the Nobel Prize in Chemistry and in Physics. When they manage to prove scientifically how a tonne of tomatoes burns all by itself, thereby producing renewable energy, I feel that they certainly will deserve the Nobel Prize. If I understand matters scientific correctly, you need plastic to burn tomatoes.
In order to avoid these sorts of exceptions, I feel that the Commission has a large part to play in preventing public funds being spent on incineration. Public funds must be used to develop the right technologies, particularly methanisation.

Seppänen
Mr President, the most important renewable energy source is hydroelectric power. Without it the part played by renewable energy sources in the energy production of EU Member States would be very low, although the important role played by wind power in Denmark cannot be underestimated. Other renewable sources of energy are difficult to find. The view of the Council, according to which the incineration of unsorted waste is considered to be renewable energy, is unsustainable. Hydroelectric power should be supplemented by forms of energy other than waste incineration. Parliament is sticking to its target of twelve percent of gross energy consumption being produced by renewable energy by 2010, but this is not far away, so achieving this target may be wishful thinking. The lack of funding for the Altener Programme indicates that the EU is not playing a major role in achieving this target. Achieving this target is thus entirely down to the Member States.

Kronberger
Mr President, this directive is a significant step towards meeting the Kyoto objectives and a milestone on the path towards a sustainable energy sector and sustainable energy policy in the European Union. I would especially like to thank and congratulate the rapporteur. However, given the shortages of resources which are becoming apparent and in view of the rise in oil and gas prices and the risks attending nuclear energy, we have no cause to sit back and congratulate ourselves on what we have achieved.
Above all, we have to make it clear to the Member States of the European Union that there are economic and social advantages in achieving the targets laid down. Of course I would have preferred to have mandatory targets, but we now have to do more work convincing people to give renewable energy sources a chance in the market on a voluntary basis.
Labelling of all energy sources is another long-term objective, because energy consumers have the right to know what primary energy sources their electricity is generated from.

Rübig
Mr President, Commissioner, I too would like to offer my congratulations and also to congratulate Mrs Rothe on having called for mandatory targets, because the likelihood that we will get these mandatory targets is in fact very great.
I also believe that it is necessary to have efficient and fair cost sharing within the European Union, so that incentives for renewable energy sources are comparable and that the same yardsticks are applied.
I wish to call on the Commission to actively apply best practice and benchmarking processes, because it is very important for the Member States, and particularly for the accession states, to find out where the best and worst values are to the found.
I also believe that small and secure cycles have a major role to play in Europe's future and security of supply, and, as we have already seen in the case of water cycles, that they represent the best and cleanest forms of energy production, and so I consider that this affords us many new options. If the operators of the transmission networks could now also guarantee that there will be no discrimination, and that renewable energy sources will even be given priority, then that is something we could be very satisfied with.
This directive is, of course, an interim stage, but I believe that it is a step in the right direction. I hope that the Commission will also soon present a general certification model that we can make progress with.
All in all, I believe that with this directive Europe is taking a great step forwards and I would like to sincerely congratulate everyone who has worked on it.

Corbey
Mr President, Commissioner, ladies and gentlemen, as has been stated before, sustainable energy has many advantages. It reduces the dependence on imports from third countries, it can be generated locally and it offers prospects for regional development. But more than anything, it is clean energy. The European Union backed an ambitious wish list during the climate negotiations in November last year. Europe was prepared to take the lead, for the US could not be counted on then either.
The Sustainable Energy Directive offered a good opportunity to put our money where our mouth was. At first reading, the European Parliament had opted for binding objectives and for a strict definition, so that not everything could simply fall within its scope. Unfortunately, this approach fell on deaf ears at the Council, and the European Union, which had called for domestic action for two weeks in The Hague, cried off.
The compromise that is now before us is the best that can be achieved. My sincere congratulations to the rapporteur. It is sound work. This compromise requires a broad base and that is what we desperately need in the times ahead, for Europe cannot take a passive stance and wait to see what is going to happen. In the foreseeable future, we will once again have plenty of opportunity of showing that we are serious about sustainable energy. We must now prove that we are prepared to face the challenge. First of all, a common European research agenda is needed if we are to develop the technology which will speed up the transition to a low CO2 economy and if we are to learn from each other. The Sixth Framework Programme for research offers the ideal platform for this.
Secondly, large-scale investments are required. Sustainable energy is often associated with small-scale solutions: a solar panel on every roof and a few windmills in every village. That is wonderful, but unfortunately not enough. Sustainable energy also requires large-scale projects, and this is why Government commitment is required. It is once again time to translate words into action in order to turn this Directive into a success.

Wijkman
Mr President, I too would like to congratulate Mrs Rothe. I think that she has carried out excellent work and, step by step, has led this process towards an increasingly positive outcome.
I agree with Mr Turmes that the decision which we hopefully will take tomorrow is an historic one. It means the European Union taking a highly significant step towards a different energy system, a system which gives serious consideration to the climate issue and the need to diversify the energy system and to ensure that an increased proportion of our energy comes from energy sources which do not have an adverse effect on nature or the climate.
A transition to renewable energy sources is an important step. In parallel, major efforts must be made to ensure that our energy is used more efficiently. We have established a target in the directive whereby at least 22 percent of electricity is to come from renewable energy sources. Like Mr Turmes, I am an optimist in this respect. If demand increases, we know that performance and quality will increase and costs fall. This is the rule of thumb for all new technology.
Of course, such a development is conditional upon energy policy generally being developed in the right direction. It is conditional upon subsidies for fossil fuels, particularly coal, being phased out, external costs for various energy sources being internalised in prices and research receiving a considerable boost.
The development we are now seeing is vital for Europe. It is naturally also vital for the candidate countries and the developing countries. I hope that, within the framework of this programme and the EU' s operations as a whole, we shall be able to develop systems which support candidate countries and developing countries alike in moving in this direction.

Caudron
Mr President, ladies and gentlemen, Mrs De Palacio, first of all, may I offer my hearty congratulations to my fellow Member, Mrs Rothe, for the work she has done on this very difficult issue. Admittedly, the negotiations with the Council and Commission were painstaking, but an outcome was reached. We were able to come to compromise agreements which will allow improvements to be made to the Council and Commission proposals.
I would also reiterate that the aim of the draft directive is to create a framework to enable a considerable improvement in electricity production from renewable energy sources. This directive provides a response to several major concerns such as sustainable development, environmental protection and respect for the Kyoto commitments, but also with regard to diversifying our supply sources, reducing the European Union' s reliance on energy and, lastly, the creation of new jobs.
Having said this, I would like to go back to two difficult points, which were raised at the beginning of our discussions:
on the one hand, the issue of non compulsory national targets. The issue is whether the national targets should be compulsory. We must remain realistic. Setting indicative targets has never provided much motivation for Member States. The discussions have not enabled us to reach an agreement, however. Fortunately, several proposals plan to make them compulsory in the long term.
on the other hand, the issue of whether or not to include waste incineration in the definition of renewable energy. The Council insisted on including it but this step did not receive unanimous support. As I personally see it, this seems to run counter to the Union' s efforts in the field of waste prevention and recycling. It is to be feared that this use of waste would essentially justify their production, which does not seem to be a good solution.
To sum up, I would also say that we must support the provisions laying down facilities governing grid access. In conclusion, Mr President, as a militant and strong supporter of renewable energy sources, I welcome the progress made, but I hope I have pinpointed the difficulties which still need to be overcome in a world where the market and the search for short-term reductions in costs and prices take precedence.

Valdivielso de Cué
Mr President, I think it is fair to congratulate Mrs Rothe on the excellent work she has done on this report and, above all, on the spirit of creativity and consensus she has demonstrated in producing it, trying to avoid the conciliation procedure, which would have done the sector few favours given the urgent need for a directive in as important a field as renewable energy.
I believe that on all issues relating to energy, we must be aware that we must improve sources or otherwise we will make planet Earth uninhabitable within a few years. It is essential that we guarantee support for this type of source for a considerable period, thereby allowing our industry to make decisive and long-term investments in this energy alternative. Therefore, to ensure a stable framework for renewable energy, within the timescale proposed in the report - although a broader timescale would have been desirable - is a proposal which we all can and must support.
With regard to the goals which we have set for ourselves, despite the fact that we should have been more ambitious, I believe that the objective of 12% of energy coming from renewable sources by 2010 is something which must be broadened but, in principle, it is a good start. Furthermore, it is essential that, in the future, when this amendment is amended and the sector is more established, we set binding objectives for each Member State and we will thereby demonstrate that the European Union also takes its commitments seriously in the environmental field.
In summary, I consider it essential and urgent that we reach a pact at European level in order to support this type of energy source. Lastly, although I know it is not easy, we must state that, if we do not act immediately, in a few years time the coming generations are going to be facing a ruined planet. Therefore, for the sake of solidarity, we must leave behind a much more habitable world, and a future like that urgently requires all these renewable sources of energy.

Carraro
Mr President, I too would like to congratulate the rapporteur and the committee on their excellent work. This is an important measure which, at last, defines precise targets for increasing the share of electricity produced from renewable energy sources, laying down precise time-frames. It does not matter if these time-frames span several years; what is important is that we have precise targets against which to measure our progress. We must be aware, however, that a lot of work will be required to reach these targets and that it will be necessary to follow this measure with sufficient investment in research.
Finally, I would also like to express my support for the joint text, and I would like to thank the rapporteur, Mrs Rothe, in this regard too for her balanced and competent approach to the disputed issue of the incineration of urban waste. I too would have preferred the text prepared by the Committee on Industry, External Trade, Research and Energy, but I feel that the compromise reached with the Council is adequate and should be supported.

Martin, Hans-Peter
Mr President, I too would like to congratulate the rapporteur, but I also wish to make a couple of observations. It is a matter of concern for us all that mandatory targets have not been agreed upon, but the various UN conventions provide a model here. I am thinking of Rio, where as a correspondent I was able to follow things in detail and see how from little acorns great oaks can grow. Much as there is to criticise in the basic structure of Europe's institutions, by means of this twin-track approach we have given the Commission a chance to take the initiative and subsequently propose mandatory targets. As she is present, I would like to take the precaution of calling now on the Commissioner to do that.
It is also possible to learn something from successful systems. Spain, Germany and Austria have arrangements and means of handling renewables that others could also adopt. This is not to say that the world should simply adopt the German approach, but rather simply save unnecessary additional expenditure which subsequently leads to excuses that it was not possible to reach the targets.
When the rapporteur says that proofs of origin will guarantee transparency, that fits in very well with my repeated demand that the European institutions should set an example by being completely transparent for the benefit of the public.

De Palacio
Mr President, ladies and gentlemen, I am very happy to congratulate firstly the rapporteur, Mrs Rothe, on the excellent work she has done throughout this year and almost two months, very soon after the Commission approved this directive, as well as all the Members who have participated in the work throughout these months of intense discussion and debate. I would once again like to express my respect and admiration for the excellent technical quality and knowledge you have demonstrated in your cooperation, your work and your amendments.
I hope that the debate today and the vote tomorrow will conclude the discussions on this directive and that we will therefore be able to adopt a text at second reading without the need for a conciliation procedure.
This is an issue on which - as we have demonstrated - we must work together. This proposal forms part of the Commission' s response to two great challenges. The first great challenge is the problem of how the European Union should take its Kyoto commitments seriously, how to genuinely implement measures - undoubtedly at a certain cost - which demonstrate our will to fulfil the commitments made on an international level. That is our first objective, but we must not forget another interesting element of this proposal, which is increasing the European energy supply, that is, increasing the security of our supply, not to mention issues which some speakers have mentioned relating to the technological capacities of industrial development and, therefore, employment and our presence in international markets.
The Commission is pleased to be able to say that we can support all the transactional modifications proposed by Mrs Rothe. Although I am not going to list them, I would like to refer to certain points which have been highlighted during the debate.
Firstly, the issue of biomass. It is a delicate issue and we will have to see whether we can finally include the production of electricity from the incineration of unseparated municipal waste within the scope of the directive. That is to say, including that biodegradable waste. You are aware of the Commission' s initial position but I believe that, for the sake of achieving an initiative, the concession made in this area is warranted in order to achieve this result.
Strictly speaking, this waste is of a renewable origin, and that is why the Council has defended its inclusion. Nevertheless, the Commission had not proposed it within the definition of renewable energy, since this goes against a key point, the objective of reusing and recycling waste, a crucial question in the integral treatment of waste proposed by the Commission within its sustainable development strategies. However, I must stress that the Commission believes that we must reach a compromise, a pragmatic solution in order to prevent a conciliation procedure and a delay.
We therefore accept the proposals put forward by Mrs Rothe; however, we cannot accept Amendments Nos 12, 13 and 14. Furthermore, we believe that the proposals in Amendments Nos 2 and 4 are not necessary and we agree with and support the proposal in Amendment No 11.
Ladies and gentlemen, I am optimistic - some of the speakers such as Mr Turmes have said so - that, over the next few years, the increase in the use of renewable energy is going to lead to a reduction in costs and, therefore, it is going to make it easier to incorporate its use into our energy mix in a clearer and easier way. This is a key pioneering initiative. Some of you - such as Mrs Ayuso, amongst others - have said that today is an historic day. In a year and two months - since the Commission approved its proposal - we are going to have an approved directive. I must stress that the reduction in costs is going to allow for an increase in renewable energy for producing electricity, I stress that this is a truly revolutionary proposal in many respects because, although some have said that the objectives are only indicative, these may become obligatory in relation to certain mechanisms, and this is the first time, in a field such as this, that we have set indicative objectives State by State. This is an extraordinary political burden and, in this respect - I am sorry, Mr Caudron - I cannot agree with your assessment.
In the next few months, I hope to be able to propose an initiative for the extension, the genuine promotion, of the use of biofuels and the acceleration of its incorporation within the European Union.
I would once again like to congratulate Mrs Rothe on her excellent work, as well as all the Members and the Swedish presidency on your work on this initiative. I hope that, tomorrow, the vote in this House will allow for the approval of certain consensus amendments which will allow it to be adopted on second reading and prevent any further delay, even to the point of conciliation, in the resolution of this issue.

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

Implementation of the Internet Top Level Domain ".EU
President
The next item is the report (A5-0226/2001) by Mrs Flesch, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a European Parliament and Council regulation on the implementation of the Internet Top Level Domain ".EU" [COM(2000) 827 - C5-0715/2000 - 2000/0328(COD)].

Flesch
Mr President, Parliament used the enhanced Hughes procedure to approach this proposal for a regulation. In other words, the Committee on Industry, External Trade, Research and Energy has collaborated very closely with the Committee on Legal Affairs and the Internal Market. I would like to give my heartiest thanks to my fellow Member, Mrs McCarthy, who was the draftsperson of the opinion of the Committee on Legal Affairs and the Internal Market and with whom I was able to work in a particularly pleasant and, I hope, effective manner. I would also like to thank the services of Parliament and the Commission, which gave me a great deal of assistance in this matter.
The proposal for a regulation provides for the implementation of the Internet Top Level Domain '.EU' , and the European Union should thus assert its visibility in cyberspace as an individual site but also one that complements the national domains, and transpose the trusted environment which the EU has created via the internal market onto the Internet.
Generally speaking, I think I can say that the philosophy of the proposal for a Commission regulation has not been damaged by the amendments proposed by the Committee on Industry and the Committee on Legal Affairs. Mr President, I believe that the parliamentary committees are proposing amendments that will make the text of the regulation more accurate and clear in relation to the demands of businesses using these services and service providers.
As for the general principles, the amendments highlight the desired objective of creating the image of a high-quality brand for the '.EU' domain and they confirm the principles of non-interference, self-management and self-regulation for Internet management, which Parliament regularly advocates. They also make it compulsory for the Registry to manage the '.EU' domain name in the general interest, to observe transparent and non-discriminatory procedures and to conform to best national practices.
The amendments also stipulate that when the regulation is implemented, the principles relating to privacy and the protection of personal data must be taken into account. More specifically, the Parliamentary committees are proposing that the scope of the regulation should be limited to the European Community. In order to designate the registry, a call for expression of interest will be published in the Official Journal of the European Communities; and the difference between registry and registration office, as well as their independence from one another, will be highlighted.
As a general rule, registrations will be done on a first-come, first-served basis, but a so-called 'sunrise' clause has nonetheless been put in place to enable the temporary protection of the rights of former right holders. A policy and procedure designed to revoke rather than prevent speculative and abusive registration of domain names will be adopted; lastly, the Member States will be able to prevent the registration under the '.EU' domain of domain names containing established geographical, geopolitical or historical concepts which impact upon the territorial organisation of a Member State.
The guidelines approved by the Council on 27 June 2001 - in other words, very recently - do not appear to be very far removed from the text that I am proposing for Parliament to vote on, so it should be possible to overcome the difficulties between the institutions. Admittedly, there are still some difficult discussions ahead, but I feel that we should be optimistic and believe that a common position can be established in the coming months.
In conclusion, Mr President, I would therefore ask Parliament and you yourself to adopt the report with the proposed amendments.

McCarthy
. Mr President, the initiative to create the ".EU" Domain name will be a necessary boost to expansion in the e-economy. We know that the key brake on this expansion is the lack of confidence, particularly amongst consumers. A European TLD, therefore, should be synonymous with a zone of e-confidence. In addition it should allow European companies to ensure their visibility and presence on the European stage. As Mrs Flesch said, we have worked very closely on this report. We have jointly made some very important recommendations. They give greater clarity to the text and they spell out in detail the role the registry should perform.
I have concentrated in my committee mainly on the issues of the internal market, intellectual property aspects and the general policy framework. Let me highlight some of the amendments. The idea of Amendment No 36 was that the registry should adopt terms and conditions to incorporate an accredited code of conduct for online trading and therefore give businesses the opportunity to join an accredited online extra-judicial dispute resolution scheme. This will respond to business concerns to see added value to ".EU" Domain names and will again create this zone of e-consumer confidence in line with the Lisbon conclusions.
While registration should generally be on a first-come, first-served principle, we have nonetheless proposed that rightholders, who have prior rights in law and public policy, should have the opportunity to pre-register. We have tried to address the growing problem of cyber squatting by asking the registry to run a mediation and arbitration service, either free or on a cost-recovery basis to deal with speculative and abusive registration of domain names. We are proposing the setting up of a policy advisory committee, as is the practice in country domain names, to assist in dealing with what can be registered at top level.
Commissioner, we understand the need to make progress on the establishment of ".EU" and the need to ensure we respect the principles of the Internet world, namely self-regulation and self-management. But it is important to get the principles right from the outset, to ensure success, and that is why we have spelt this out in detail. Mrs Flesch and I had excellent cooperation. We now look forward to similar cooperation with the Council and Commission. We hope they will seriously consider our recommendations, and that we can come to a speedy decision to enable ".EU" to get off to a running start as soon as possible.

Harbour
Mr President, on behalf of my Group, I should like to give a very warm welcome to this report and to thank Mrs Flesch for her very comprehensive and detailed work, which shows her experience in the field. I should also like to pay particular tribute to Mrs McCarthy who I have worked with in the Committee on Legal Affairs and the Internal Market. Between our rapporteur and our draftsman, they produced a very sound report.
What is important about this report is that they have resisted the temptation to complicate what was basically a simple text proposed by the Commission. Essentially, Commissioner Liikanen, the word from Parliament is to go and get on with it. We do not want to over-complicate it. We have made some worthwhile improvements, but the fundamentals of what you proposed have been left unaltered.
That is important because, we must remember, the ".EU" domain name is actually a late entrant into a highly competitive and crowded market. It has to justify its existence. For it to be successful we want companies and organisations to use it. Therefore, the registration procedures have to be simple, easy and cost-effective. We must bear in mind that the policies and procedures adopted by the registry will need to reflect best practice in the field. Because we are coming into this late, there is no excuse for not getting it right. So some of the safeguards that both Mrs Flesch and Mrs McCarthy refer to, about protection of trademarks and avoidance of vexatious registration - cyber-squatting - are particularly important.
I want to highlight two particular issues of concern that I raised during the debate and was particularly pleased were reflected in the amendments. Mrs McCarthy referred to her amendment seeking to enable organisations with a prior title to a name to have a priority period of registration. That is very important. We do not want to disadvantage companies which are already active in this field which feel that they must protect themselves and want to take on the ".EU". We do not want them to feel that they are going to be held back in any way. They must have a priority period of registration to avoid this problem of vexatious registration, of people who just want to make a "quick buck" moving into that field and taking hold of that registration.
It will be very important for the new registry - and I direct this particularly to the Commission - that the launch date and the priority registration period are very well publicised throughout the European Union so that people understand those rights.
Secondly, we have to ensure that the ".EU" name does not, in any way, displace existing Member State domain names. I proposed an amendment, which I am pleased was accepted by my colleagues, that makes sure that the ".EU" registration is not empowered to issue any sub-domain names using Member State identities.
In conclusion, this is a worthwhile enhancement of the European Union's information society capabilities in a very fast-evolving world.

Carraro
Mr President, I would like to add my appreciation to that already expressed for Mrs Flesch's report. I feel that it is a particularly well-balanced and competent report, and so I can only endorse its approach and contents.
I feel that this report represents a further step along the path embarked upon months ago now by the Commission and Parliament together, towards progress in the information society, to catch up, to eliminate that gap which exists between the information society of the continent of the European Union and the more advanced information societies of other parts of the world, specifically the United States. This is a further important stage, which may be more significant than others in terms of public opinion, but also or precisely because of this it is important that it is completed quickly.
Well then, without wishing to go over the ground already covered by other Members, I would like to stress just one further point: my satisfaction that the path adopted is continuing to secure self-regulation for operators in the context of the Internet as well. I feel that we must constantly stress that the Internet is a wonderful experience, and it must be so also when we create a European domain for, apart from anything else, it has been entrusted to self-regulation, to the ability of the operators to manage themselves. Therefore, we must continue along this path of enhancing European information technology, but we must avoid restricting independence or, in any case, smothering in red tape an experience which has been positive precisely because it has been allowed to develop spontaneously.

Plooij-van Gorsel
Mr President, Commissioner, ladies and gentlemen, I should like to congratulate the rapporteur, Mrs Flesch, on the excellent result that she has achieved within the Committee on Industry, External Trade, Research and Energy, in consultation with the Commission and the Council. Consequently, no further amendments have been tabled for this plenary. All of this has been achieved within the space of six months, while the Commission has needed three years to draft a proposal. It is now important for the Council and Parliament to keep the momentum going. Indeed, the users have been waiting for this with bated breath. Mr Liikanen, I will then obviously expect from you a quick, practical and simple implementation which befits the Internet culture.
The introduction of the ".EU" Top Level Domain is said to afford the European Union a higher profile on worldwide information networks, and it also represents added value for the Internet naming system in addition to the national domain names. Two elements are crucial in this connection.
First of all, the organisation that keeps the register must be independent and must carry out its work in a transparent, non-discriminatory manner. All interested organisations must be represented in the register.
Secondly, the Member States must establish in good time the domain names they want to use exclusively. Clear criteria are needed in that connection. That includes the first come, first served principle, as well as clear rules which can prevent abuse of the system. In the Netherlands, we remember all too well how the city of Amsterdam had to buy back the domain name www.amsterdam.nl for an extortionate sum of money, because that name had already been claimed by a pornography business.
The swift advent of the ".EU" Top Level Domain offers an excellent opportunity to boost public confidence and that of businesses in online trade. This would encourage economic growth and the competitiveness of European industry, and hence employment. The legal framework of the internal market also plays an important role in this field.

Crowley
Mr President, I too would like to join in the congratulations to the rapporteur, and to the draftsman from the Committee on Legal Affairs, with regard to the proposal put before us. Like previous speakers, I welcome it because it is time that we in the EU had our own domain. It will allow more business to operate on the new e-economy, and will also get rid of some of the uncertainty and some of the difficulties there are with regard to the different domains that exist at present.
The one area of concern I have is in relation to the Internet Corporation for Assigned Names and Numbers - ICANN. As this is a body which is regulated under US law, they are already in the process of registering the ".EU" domain and allowing people to buy ".EU" domains as well. I would like to know if possible from the Commissioner what action he has taken to deal with this possible conflict in the future. I, along with other Members in the House, have full confidence in the Commission ensuring that there is an innovative and new way of guaranteeing security for this domain in the future.

Cappato
Mr President, I would like to congratulate the rapporteur. I too, like Mr Carraro, would like to talk about the crucial role of self-regulation for the Internet system. From this point of view, a consultative committee which is too heavy handed with regard to the relationship between the representatives of trade associations, businesses, trade unions and service providers could cause some concern. We must avoid making the procedure for managing the ".EU" domain too rigid and concern ourselves, instead, with filling this domain with rights of European electronic citizenship. This is a proposal that I would like to make to the Commission: to consider immediately how, including by means of the '.EU' domain, new rights can be guaranteed such as rights of access, and rights of interaction with the European petitions institutions, the Ombudsman, and in participation in competitive examinations and procurement competitions. Thus, with interaction between the citizens and the institutions of the European Union, we will be able to fill the '.EU' domain with material of genuine European telematic citizenship

Valdivielso de Cué
Mr President, I believe that one of the main reasons for the excellence of this report is the quality of the person who produced it, because it is a real pleasure to work with her. As is well known, through the Internet, the citizens of the whole world can now discover new realities about countries, companies, associations and, in many cases, ways of life from the opposite ends of the Earth.
The development of this interactive means of communication is exponential and access to it in many developed countries is practically universal and, in others, is just a question of time. Furthermore, we have all been witnesses to the frequent bad use of the Internet. I believe that within the Internet top level domain ".EU" we must prevent cases of improper uses of names which may harm the image of the European Union and its Member States, because the top level domain ".EU" is going to be the European Union' s shop front to the world, it is going to be our logo and is going to be part of our heritage, and as such it must be dealt with, supervised, controlled and protected.
In summary, I believe there are certain facets of economic activity which must be subject to control, if the intention is to achieve a good result, and the top level domain ".EU" must, in my view, be one of them, so that it may be synonymous with quality, reliability of the information hosted by it and the consistency of its contents.
I would like to remind you that the European Union has an excellent image and what we have to do is maintain it and support it.

Martin, Hans-Peter
Mr President, following the fairly technical introduction we have heard, we should not lose sight of what this is all about. It has repeatedly, and quite rightly, been said that Europe does not have a face. If you are a publicity-minded entrepreneurial type and want to acquire an e-mail address, it will be ".at" ".com", ".net" or ".org". Europe is now acquiring a face, an address. It will be valuable in itself if we can bring this off and if the Commission finds the right approach. We will become ".EU".
The fact that we are so late in doing this has a lot to do with the fact that we have not in reality grown together to form a single entity as we pretend we have. It is to be hoped that Europe will gradually develop from being a single market to having its own identity, by means of policy. We know that a lot has gone awry. I regard it as progress that a certain element of labelling is associated with the ".EU" domain. I am relying on the Commission and everyone responsible to make sure that there is no sloppiness if we do get this top-level domain, with incidents like the ones described by the previous speakers occurring. Just remember the "Amsterdam.nl" case.
However, as part of the enlargement and re-regionalisation of Europe I would also like to see all regions having the opportunity to use appropriate sub-domains. On this point, I am not in agreement with the report before us.
I also, however, welcome Amendment No 15, in which the rapporteur refers to the basic principle of transparency, which brings me to my oft-repeated demand that the European institutions should set an example by being completely transparent for the benefit of the public.

Niebler
Mr President, ladies and gentlemen, I too would like to warmly congratulate the rapporteur of the Committee on Industry, External Trade, Research and Energy, Mrs Flesch, on her excellent report. Mrs Flesch, you have really managed to capture the key aspects of the ".EU" issue in your report and thus set the right course for the European Parliament.
With this regulation, we are helping to construct the European home, in this case in a virtual form. The ".EU" top-level domain will promote Europe's identity more effectively on the Internet, which has numerous advantages. E-commerce in the European Union will be promoted. Through the ".EU" top-level domain, consumers will be able to recognise that a company working via the Internet belongs to the single market and will have greater faith in it.
Up to now, as Mr Martin pointed out, European companies using the ".com" domain have sometimes been taken for American companies rather than European ones. European companies, organisations and private individuals will get concise new addresses long since bagged by others under the current domains. For example, there are already well over 10 million ".com" domains in the European Union.
Now that the Council has pronounced itself in favour of introducing the ".EU" top-level domain, just a few days ago in fact, we can help, by adopting the regulation before the summer break, to ensure that registration of the first ".EU" addresses can begin in spring 2002. Therefore, particularly at a time when over 90% of the most frequently visited web sites are in the USA and about 70% of e-commerce is transacted in the USA, I can only urge you to vote for this proposal.

Van Velzen
Mr President, I should first of all like to thank the rapporteur for her outstanding cooperation and the excellent way in which she has worded her report.
I should like to home in on a few points. Firstly, the method of registration of a '.EU' domain. The principle underlying the registration policy is that anyone who wants to register a '.EU' domain also has the related trademark rights. Two interests need to be weighed up in this connection. On the one hand, countering abuse and, on the other, making registration for SMEs and for citizens as simple as possible. Two models are possible in this connection.
The first model prescribes extremely strict requirements to be applied in advance of someone obtaining such a '.EU' name. This will then lead to a shortage of names because the thresholds are too high. The second model prescribes subsequent intervention in the unlikely event of improper use or speculation. That is why I should like to refer to Amendment No 34, which spells this out clearly.
We prefer the second model because it is much more SME-friendly, results in many more domain names and - in my opinion - in many more domain registrations. That is the right way forward in my view.
My second point concerns clarity on behalf of citizens and businesses. '.EU' offers EU citizens clarity, for it stipulates that registration is only possible for people or businesses lawfully based within the EU. That is what Amendment No 24 is about. That translates into more legal certainty, more confidence and an increase in e-commerce within the European Union. I believe that that is what it is all about.
Finally, my third point. All of this fits in with the EU policy which we aim to pursue. We want to assume a favourable position worldwide in the Information Society. In my opinion, the '.EU' Internet Domain sets the right tone for this, for which I am extremely grateful.

Rübig
Mr President, Commissioner, ladies and gentlemen, in terms of gross national product Europe leads the world, and I think it is a good thing for us to make rather more effort to market Europe in the future. I welcome the fact that we want to become the most competitive area in the world and I believe that we still need to put in a lot of effort to achieve that. Our competitors throughout the globe are sleeping; they have launched good initiatives, which makes it important for us to act as efficiently and quickly as possible in this area.
We have over 18 million companies in Europe, and I believe that it gives them an extremely valuable marketing advantage if they are immediately and easily recognisable throughout the world. Consumer confidence is fundamental for business and that is why the presence of the European Union on the Internet with a top-level domain is particularly important.
I also consider that an efficient dispute resolution system is needed, and one that is as cost-effective as possible but at the same time neutral and non-discriminatory. Especially in the case of speculation or misuse of registered names, it should be possible to take drastic action quickly and efficiently, because that is a very significant issue for the parties involved and can create a need for effective action on their part.
It is also very important that the Registry should be put out to tender, as this will guarantee optimum support in Europe. I wish the Commission and, in particular, Mrs Flesch, every success. I believe that you have taken an important step for the European Union.

Liikanen
The proposal to set up the '.EU' top-level domain was first tabled by the Commission last December after public consultation over the whole year. In Internet terms, it is a lifetime. European Internet users are becoming increasingly impatient to have a '.EU' top-level domain where they can register pan-European names. It is becoming imperative, therefore, that the EU takes the necessary steps to implement '.EU' as soon as possible. In this respect, I am pleased to note the common orientation agreed last week in the Council, which was a major step forward.
With regard to Parliament, I would particularly like to thank Mrs Flesch and Mrs McCarthy for their contributions as rapporteurs. Their work has contributed significantly to a situation where we are very close to an agreement between the institutions, which would enable implementation of the '.EU' top-level domain soon. I am extremely happy about the high quality discussion we have here today in this plenary.
As far as the amendments are concerned, the rapporteurs in particular have proposed a number of amendments, which will significantly improve the text of the regulation. This includes reinforcement of the key principles of Internet management, clarification of conformity with the Community data protection rules, and more precise definitions relating to the role and the functions of the registry. The Commission also welcomes the support given by the rapporteurs to the Commission's proposals for an advisory committee.
There are also a number of proposed amendments which the Commission can accept in principle, subject to further clarification. These include the proposal that the Commission would be authorised to levy a management charge on the registry for services provided. If the intention is to ensure that the registry remains cost-neutral to the Commission, this is acceptable, although the Commission would welcome a clearer reference to avoid any suggestion that a standing charge of any sort is imposed on the registry.
With respect to the proposals for a policy advisory board to the registry, the Commission agrees that broad consultation with the European Internet community will be a prerequisite for the proper functioning of the registry. At the same time, it will be important to clarify how such a body would interact with the Commission and the Member States committee.
The 'first-come-first-served' approach for registrations is supported by the Commission, as it is one of the underlying principles for the registration process proposed by the Commission. We would, however, point out that this general principle must be subject to the rules and principles adopted as public policies in relation to the registration of the '.EU' , just to avoid the problems which have been mentioned by a few speakers tonight.
Similarly, the Commission has no objections to the requirement for registrants to respect a code of conduct, although care needs to be taken to avoid confusion and any suggestion of a priori controls. Mr Carraro also made comments which I endorse.
The Commission is fully committed to transparency principles and supports the publication of a call for expression of interest in the Official Journal, as was also mentioned by Mr Martin. However, the procedure of publication of the conditions of implementation of the registry and of the policy framework in the Official Journal may prove a very cumbersome procedure and alternative publication may be more efficient. Why not this time a website? When talking about '.EU' ; why not go to the public on the website?
There are however, some proposed amendments which the Commission cannot agree with. In relation to the proposed amendments on the preventive measures to be adopted by the Member States on the geographical and geo-political basis, I would like to point out that should the Member States impose individually such measures to the registry, this could lead to conflicting measures or various incompatible approaches. The issue of geographical and geopolitical names is, however, an important political issue for some Member States and is fully recognised by the Commission.
I am convinced that the compromise which was reached at the Council, introducing a new paragraph for Article 4.1a may offer an alternative which Parliament may wish to consider further.
The proposal to require the registry to ensure that companies registering a name are legally established in the Community is also problematic. Given the automated nature of the registry process, it is not practical for the registry to carry out a priori checks on registrants. Apart from questions of technical feasibility, the Commission would view such a requirement to be an excessive burden on the registry and an unnecessary barrier to registrants.
The proposal that the registry should be obliged to supply information to third parties with a "legitimate interest" is also unacceptable as such to the Commission. It is not clear exactly how such a provision could apply, and we suggest that the registry will, in any case, be subject to existing legal provisions for disclosure.
There also seems to be a linguistic problem surrounding the concepts of "public policy" and "public order" in the French and English versions. Here the Commission must reiterate its position that the public authorities must only be involved in those areas of registry policy where matters of genuine interest to the public at large are involved and not in the day-to-day operational decisions of the registry.
Mr Crowley raised the question about '.EU' and I also received an e-mail at the end of June, talking about the creation of 'www.eu' and a welcome to use our services. Of course, it was slightly embarrassing, but we must make it clear that, after verification, we are aware of the existence of so-called alternate routes outside the domain-named system; top level domains coordinated by ICANN and of the recent introduction of the alternative route www.eu by the organisation called 'The Universal Registry'.
The future '.EU' top-level domain will, however, operate within the ICANN-approved named system, partly because of the need to ensure that most EU users can access addresses under '.EU' , but also because the Commission supports the principle of a single authoritative rule for the domain-named system. Alternate rules operate quite legally within the Internet, but have relatively limited visibility and can be difficult to access, because the majority of browsers, quite naturally, point at names servers related to ICANN-authorised top-level domains.
To Mr Cappato, the Commission has just accepted a communication on e-Commission and that is a big challenge to guarantee that all the activities of the Commission will be online, that we will be able to give access to all citizens, but also in the medium and long-term, to interact with our partners and citizens.
Of the 40 amendments proposed by the rapporteurs the Commission can accept in full Amendments Nos 1, 2, 3, 4, 5, 7, 8, 10, 11, 12, 16, 17, 19, 21, 22, 25, 26, 28, 31, 35, 38, 39 and 40. The Commission can accept, in part or in principle Amendments Nos 9, 13, 14, 18, 20, 29, 30, 32 and 36. Mr van Velzen mentioned Amendment No 34. There are positive elements here but for particular reasons of revocation the Commission included that in the amendments which the Commission cannot accept, which are Amendments Nos 6, 15, 23, 24, 27, 33, 34 and 37.
In conclusion, given 40 amendments of which the Commission can accept 32 in full, in part or in principle, these amendments indicate that Parliament and the Commission are clearly pursuing a common objective to ensure that the '.EU' Top Level Domain will soon be a successful registry.

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

Radio spectrum policy
President
The next item is the report (A5-0232/2001) by Mrs Niebler, on behalf of the Committee on Industry, External Trade, Research and Energy, on the proposal for a decision of the European Parliament and of the Council on a regulatory framework for radio spectrum policy in the European Community [COM(2000) 407 - C5-0449/2000 - 2000/0187(COD)].

Niebler
, rapporteur. (DE) Mr President, ladies and gentlemen, first of all I would like to thank you all very sincerely for supporting my report. In the Committee on Industry, External Trade, Research and Energy we had a very intensive and fruitful debate on the subject of radio spectrum policy, and I received some good amendments not only from my fellow Members of the Committee on Industry, External Trade, Research and Energy, but also from Members of the Committee on Regional Policy, Transport and Tourism and the Committee on Culture, Youth, Education, the Media and Sport. I was pleased to incorporate these amendments into my report. In formal terms, these amendments ultimately fitted very well into a compromise that was excepted by the committee with 49 out of 50 votes, with one abstention.
The subject of my report is the Commission's proposal for a decision on a regulatory framework for radio spectrum policy in the European Community. It relates to establishing which institutions will, in future, make decisions about radio spectrum policy and via what procedures. The proposal specifically does not lay down any substantive guidelines about allocating frequencies, that is to say it does not stipulate whether specific frequency bands are to be made available for telecommunications, broadcasting, transport or military purposes. Instead, the proposal is limited to institutional and procedural issues.
The purpose of the directive is to create a reliable regulatory framework which provides a basis for consistently deciding questions about the harmonisation of the use of the radio spectrum, allocation procedures and conditions of use at EU level, in cases where the implementation of EU policy objectives requires the use of frequencies. We need to distinguish between two types of issue here. Firstly, strategic policy decisions have to be taken. On the other hand, policy guidelines also have to be implemented. We are therefore talking about technical implementation measures here. We are already familiar with this distinction between political decisions and technical implementation measures from the Lamfalussy report.
The major significance and consequences of the proposal flow from a number of aspects. The radio spectrum is, because of the ever greater demands being placed on it, increasingly becoming a scarce and valuable economic resource and a decisive factor in employment. Allocation of sections of the spectrum for uses such as communications, broadcasting, transport, police, military and earth observation purposes is becoming more and more complex. Strategic decisions have to be taken in order to balance the needs of commercial users and non­commercial users. Just how valuable radio frequencies have now become is demonstrated by the result of the UMTS licence auction, which the Member States held last year for a narrowly defined section of the spectrum. For Germany, for example, companies were willing to pay EUR 50 billion, and in the United Kingdom it is well known that the auction brought in EUR 38.5 billion. The allocation of frequencies to the various user groups and users must therefore - and this is already a topical issue - be carried out in the most transparent and democratic way possible, whether at Member State level, at European level within the CEPT, and now at EU level as well, if decisions are to be made about Community activities reliant on frequencies.
Of course it goes without saying that European-level decisions about frequency policy have to be made by the European Parliament and the Council. In general, it should be for politicians and in particular the elected representatives of the people to make decisions about an issue as important for society and the economy as frequency policy. The job of putting these decisions into practice, that is to say technical implementation, can be entrusted to the Commission. In doing this, the Commission should also be able to call on the expertise of the CEPT, by seeking advice on how to solve technical problems from the CEPT. The amendments which 49 of the 50 Members in the Committee on Industry, External Trade, Research and Energy agreed provide for exactly that to happen.
However, two of the amendments from the Group of the Party of European Socialists, of which the Commission is no doubt aware, undermine this approach. I am talking about Amendments Nos 22 and 23, which have been tabled in the plenary. Ultimately, the aim of these amendments is to prevent Parliament and the Council making joint decisions about frequency policy in future. Instead, only the Commission and the Council will decide on these matters. I cannot support that, and I therefore urge you to vote against these amendments. On the other hand, I can recommend to you the amendments tabled by the Group of the European Liberal, Democrat and Reform Party and those of my own group, which have been tabled for legal reasons following a recommendation by the Legal Service.

Pohjamo
Mr President, Commissioner Liikanen, I would like to thank the rapporteur Mrs Niebler for her efforts on this important issue. Due to their increasing use, radio frequencies are becoming an increasingly limited and valuable commodity. As draftsman of the opinion of the Committee on Regional Policy, Transport and Tourism, I would like to emphasise the importance of the transport sector and the equal rights of each means of transport to use radio frequencies for operational purposes, above all to ensure passenger safety. Air and sea traffic, for example, are completely dependent on the use of radio frequencies. The different needs of different regions also need to be taken into account.
Some of the amendments put forward by our committee were adopted by the Committee on Industry, External Trade, Research and Energy while others were not. On behalf of our Group I introduced two amendments in plenary which reflect the opinions of our committee. Amendment No 24 concerns the regional aspect and draws attention to the fact that different circumstances such as population density and distances, industrial structure and traffic conditions must be taken into account in harmonising radio frequencies. Amendment No 25 concerns transparency. The publication of information on the use of frequencies is important but publication is only beneficial if the information published includes all the data necessary for the effective use of this information. Transparency is connected to achieving efficient use of unused areas of the radio spectrum. The annex to the proposal for a decision is too general and apparently confuses reserving the use of frequencies for different purposes with allocating frequencies to users. I would like to see support for these two amendments.

Junker
Mr President, ladies and gentlemen, Mrs Niebler has done a brilliant job with this very difficult subject, which I had to deal with on behalf of the Committee on Culture, Youth, Education, the Media and Sport. No one will deny that, in view of developments in technology, a new regulatory framework on frequency policy is needed. However, certain basic principles have to be borne in mind here, since although the technology itself is neutral, the way it is used is not.
The Committee on Culture, Youth, Education, the Media and Sport, whose unanimous opinion I am presenting here, has, amongst other things, considered how it can be guaranteed that adequate transmission capacity is reserved for content addressed to the general public. In other words, in addition to economic issues, consideration also has to be given to political, cultural and social aspects, and also to the right to privacy and to consumer protection. This applies first and foremost to broadcast programming content relating to the expression of cultural diversity, freedom of speech and pluralism, which therefore plays a significant part in shaping opinion as part of the democratic process.
This is all the more important given that the proposal quite rightly stresses the fact that radio frequencies are a scarce resource and that this will not change in the longer term. It would therefore be wrong to place too much emphasis on economic efficiency. Products geared to the general public should also have a guaranteed place in an open competition-oriented market for electronic communication networks and services.
The Committee on Industry, External Trade, Research and Energy has not entirely taken on board the views of the Committee on Culture, Youth, Education, the Media and Sport in this respect, as we would have wished, but it does recognise the principle of freedom of speech, and this is a key reason why we are willing to vote for the report as it stands.
It is also emphasised elsewhere that democratic, social and cultural interests connected with frequency use need to be taken into account. The Member States should also be expected to comply with that requirement, including Italy - please note, Mr Berlusconi.

Van Velzen
Mr President, Mrs Niebler carried out sterling work in her capacity as rapporteur. I should like to congratulate her on the quality of her report. In this connection, I should like to broach two subjects which are a little controversial.
Subject one is the possibility of stepping up the harmonisation of the military use of the radio spectrum. We know that a huge proportion of the spectrum is used by the military. That is, of course, understandable in an historical context, but if we are working towards a common security policy, we will also have to question whether the level of efficiency is proportionate to its use. I believe that that is not the case. It resembles one large patchwork at the moment. In my opinion, the private sector, in particular, needs a larger proportion of the spectrum.
What can we do? Normally speaking, we could attempt to harmonise, but that is of course extremely difficult. That is why I propose a step-by-step plan. First of all, we must prioritise in terms of military and civil use. Secondly, Member States must be transparent in terms of the use of the military spectrum. Thirdly, the Commission, Council and Parliament, and all those involved, must join forces, finally, to open a discussion on this topic and, especially, to look for ways of bringing about harmonisation in the future. Not easy, but it has to be done.
My second point: a separation of political affairs and technical implementation. Many of the CEPT actions are technical, but all these technical points have a great many political ramifications. That is why I believe that it is of great importance for the political aspects to be discussed more among the Commission, Council and European Parliament, and for the technical side to be left to the CEPT to take care of. But I believe it is crucial for us finally to discuss the political framework in this arena too. That is why I warmly recommend this amendment.

Mann, Erika
Mr President, I would like to thank all three institutions. Although Mrs Niebler is not an institution, she has behaved almost like one! I would like to thank her sincerely for her report. But I would also like to thank the Commission and the Council. I would like to thank the Council, because it has changed its position in a way that would have been unthinkable until recently, as I am sure the Commission will agree. However, thanks are also due to the Commission because it has shown such persistence in pursuing this subject over the years, although we did not expect that it would act so quickly.
Nevertheless, I have to tell the Commission that to some extent it has been unnecessarily tough, not least regarding the amendments put forward by Parliament, and that it has not perhaps shown the institutional flexibility that it might have or that might have been expected from the Commission. Mrs Niebler has quite rightly pointed out that there is a considerable difference between technical measures and strategic decisions on policy, and that when it comes to strategic decisions the European Parliament really ought to play a greater role than provided for in the report, so that transparency is guaranteed and democratic structures are actually established. This is even more important if you bear in mind that the Council is by no means in agreement with the Commission that the Senior Official Group should be established. That only leaves us with the Senior Official Committee, which means that the institutional framework for taking democratic decisions will be distinctly limited.
I personally would therefore support Mrs Niebler's new proposal in which she suggests establishing a "call-back procedure" in the wake of Lamfalussy. My Group has, in any case, tabled certain amendments. I hope that the House will be able to accept these amendments. They will also be supplemented by an oral amendment which I hope the House will support. We can take on board the Council's proposal, in which it proposes that in cases going beyond technical measures the Commission should propose a legal instrument to Parliament and the Council. I hope that we will have your support for this and I hope that the Commission will be able to live with this amendment.

Thors
Mr President, I would like to express my gratitude that the work of the Echelon committee has received such coverage in the Finnish media this evening. It is one of the major news stories of the day. I would also like to say to the Commissioner that we appear to have got into the habit of celebrating Tuesday evenings here together- all the usual suspects, as we are on these issues. It is almost a little absurd.
The rapporteur and the previous speakers have highlighted the significance of efficient use of the latest resource to be in short supply, namely frequencies. It is important that we have transparency in the use of these. As Mr Pohjamo said, it is also important to report the terms for the frequencies used. It should also be possible to reserve frequencies for services useful to society on special terms.
As has been mentioned, it is actually the institutional issues which are difficult. I personally am a little afraid that we may have worked a bit too quickly and that we are in the process of developing quite a few hierarchies. We talk about technical implementation provisions. We also talk about the political level and the mandates given to the CEPT. In other words, the system is quite complicated. Our group came up with a proposal for a call back procedure. However, I hope we agree that what in this context have been called technical implementation measures do not include technical matters. Otherwise, we would be moving much too far into the CEPT' s territory.
There are also certain other aspects which may need correcting tomorrow. There is still a proposal to send observers to the High Level Group. Parliament' s proposal refers to both a high level group and a committee. We simply cannot have both representation in a high level group and also a call-back procedure. That would be too much. We must look at how we can correct this before tomorrow.

Rübig
Mr President, Commissioner, ladies and gentlemen, what we need is a set of uniform procedures for frequency allocation. The objective should be to achieve the greatest economic benefit possible. The UMTS has demonstrated that there is a need for action here. If a kind of virtual property arises as a result of frequency allocation, would it not make sense to permit licensing in this field in such a way that a new source of income is again available for finance ministers which, combined with equity capital formation for the companies involved, brings a benefit for both sides? I think that we need to look for totally new theories for frequency allocation and that we should also have the courage to implement them.
I often get complaints from CB users. Mr Scheibenbogen writes to me regularly. This is quite simply because there is still no single market for equipment use in Europe, so that we need to find an approach in the area of hardware too so as to secure a single market.
Article 7 is about publishing information. I would be interested to hear from the Commissioner in what form this information is to be made available in future. I would like to see more detail in Article 10(1) about the powers of investigation for regulatory authorities, whilst of course observing the principle of proportionality and preserving business secrets.
I believe that these principles are particularly important for the future, and I will be pleased if we can congratulate Mrs Niebler on the adoption of this very important report tomorrow, because she really has done sterling work.

Paasilinna
Mr President, I would like to thank Mrs Niebler for her excellent report. The radio spectrum has become a central means of communication, bringing with it money and power. With no standardised allocation procedures, we all know the result of the third generation mobile phone deals - one company in the sector is currently going bankrupt every week. In some Member States there were no charges at all, while others used hybrid systems. The result of all this is a confused situation, not to mention unemployment. This was supposed to give us a cutting edge in global competition.
Because radio waves transcend borders, it is clear that we need common European principles to administer them since, to put it bluntly, fifteen different interpretations of the same thing is a barrier to marketing. The Electronic Europe strategy demands that everyone should be included on equal terms. This makes things considerably more difficult and conflict must be removed. At the same time, cultural diversity should be encouraged and in this regard I mean, for example, public radio broadcasting, which must be given the necessary frequencies. I approve of this kind of political decision making but when deciding on commercial issues we have to have a level playing field with the same procedure, whether this be auction or some other procedure, throughout the whole of Europe so that the system does not end up on the verge of collapse as it is now. For this reason I support Amendments Nos 22 and 23 and Mrs Mann' s oral amendment. I think that this will see us achieve a balance in these sub-areas and gain an understanding of what is important and what is business.

Liikanen
Mr President, the Commission is pleased with the progress on its proposal for a decision on radio spectrum policy. I too would especially like to thank Angelika Niebler for her report. This proposal is part of a whole which the Commission would like to see adopted by the end of the year.
The Commission would like to state that the wide-ranging discussions of recent years are now producing results, as the general importance of the radio spectrum and the need for efficient decision making are starting to be recognised. Today, following discussion in the committee, the issue is having its first reading in the European Parliament. The timing is ideal, since, after much discussion, the Council, for its part, last week reached consensus on the new text which largely confirms the Commission' s original aims. Following its examination of Angelika Niebler' s report and the new amendments, the Commission can state that it is satisfied that Parliament in principle supports the Commission' s proposal. Despite this, the Commission has some detailed observations on various parts of the report.
From the Commission' s point of view the most problematic aspect of the report is that it does not sufficiently distinguish between, on the one hand, issues which fall under the codecision procedure and, on the other, issues to be decided by the committee procedure. All the amendments to be approved must comply with the comitology rules agreed for the EU institutions, which guide the use of the committee procedures and according to which the Radio Spectrum Committee will also have to operate. Some amendments propose that all the decisions should be made by the codecision procedure, in other words that this procedure be adopted in agreeing the Community' s common policy and also in agreeing such technical implementation measures required in order to comply with the policies agreed. In the opinion of the Commission, the latter, i.e. technical implementation measures, should be agreed by committee, where they would be determined using the committee procedure. In addition, the report presents amendments according to which the European Parliament could revoke or amend measures already realised via the committee procedure. In the view of the Commission, this conflicts with the Comitology Decision.
I would like to remind you of the main principle of the proposal: whenever the European Parliament and the Council, using the codecision procedure or by other means, agree Community policy concerning the radio spectrum, such as the Galileo project or the Single European Sky project, they agree at the same time that radio frequencies are available in order to realise this Community policy in practice. In this context the committee procedure is needed to enable us to decide on the technical implementation measures which are essential in order to realise the agreed Community policy. To clarify the matter further it can also be stated that the committee procedure is not used to agree Community policy which may depend on radio frequencies or such harmonisation which go beyond merely technical implementation measures. In such cases, the codecision procedure is used.
For this reason the Commission cannot accept those amendments from Parliament which conflict with the central approach of our proposal for a decision. Parliament' s amendments, according to which, all the decisions made by the committee procedure would be brought before Parliament and where Parliament would have the right to amend or revoke them if they concern issues other than purely technical implementation measures are against the rules set out in the Comitology Decision. According to the Comitology Decision, the Commission must re-examine draft measures if, according to a resolution by Parliament, they exceed the implementing powers provided for in the instrument on which they are based and inform Parliament of the action it intends to take on Parliament' s resolution and of its reasons for doing so. In this context the most important amendments from the Commission' s point of view are Amendments Nos 10 and 19, and the Commission also requests that the Members of the European Parliament reconsider their opinion on these amendments as they already have regarding Amendments Nos 21, 22 and 23.
However, I would finally like to emphasise that the Commission greatly values Parliament' s seeking to play an active role in the decision-making process regarding the radio spectrum. For precisely this reason the Commission referred in its proposal to the existing opportunities for doing so - the codecision procedure and the committee procedure. As for the other amendments, the Commission can approve Amendments Nos 1, 2, 4, 5, 6, 8, 17 and 22 - 25. We accept Amendments 3, 7, 9, 11 - 13 and 20 in principle. The Commission is unable to approve any other amendments.
To conclude, I can state that the opinions of the institutions on the aims of the proposed decision have converged. This should be seen as a guiding principle in further preparation for the entry into force of the decision. On this basis the Commission is ready to continue open cooperation with the European Parliament.

President
The debate is closed.
The vote will take place on Thursday.
(The sitting was closed at 11.40 p.m.)

