Time to move up a gear  Creating a Europe of entrepreneurship and growth
President
The next item is the report by Mrs del Castillo Vera, on behalf of the Committee on Industry, Research and Energy, on Time to move up a gear - Creating a Europe of entrepreneurship and growth.
Pilar del Castillo Vera 
rapporteur. - (ES) Madam President, Commissioner, ladies and gentlemen, we are currently debating a report that is going to be voted on this morning and which deals jointly with a number of reports presented by the Commission with one fundamental and very well defined objective, which is no less than to establish a range of measures enabling us to develop a knowledge-based society and economy in Europe, which is ultimately the fundamental instrument for generating employment and growth and therefore prosperity for all Europeans.
In this report, like other reports by experts, such as the Aho report, which is an extremely complete and precise report dealing with the same issues, or other previous Commission reports, we are being presented with a situation in which we have a very good diagnosis - I would say - of where we are, why we are in this situation and what we need. There is probably no other area in which we have such precise knowledge as in this one, allowing us to promote growth in Europe.
We have a diagnosis and we also have the solutions. We all know that in order to promote a knowledge-based society we need to promote innovation. We all know that we need to promote training so that people can adapt to all the changing situations in employment and can recycle themselves and find new kinds of work. We all know that innovation is necessary so that the social welfare system does not lose its capacity to meet the citizens' needs in terms of health, training, etc. We all know, too, that companies need a favourable framework, a framework that helps them, that encourages them to develop innovation and that prevents them from having to deal with bureaucratic problems, with difficulties in a whole range of fields of action.
This is not the time to list each of the aspects of the report, because they are there and you all know about them. I would like to take this opportunity to place as much emphasis as I can on the need to stop all the talk once and for all and to stop giving reports and analyses wonderful titles, while there is still a degree of paralysis in the national States' actions. The step that has been taken in relation to the 25 national reform programmes is important, but I believe that we should place extremely great emphasis on a very thorough assessment of the progress made with those national programmes.
As time passes, we are being left further and further behind. When the Lisbon Agenda was drawn up, there were expectations in terms of how things would develop. At the half-way point in the implementation of the Lisbon Agenda, the European average - the situations vary from country to country, of course - was worse than when the Lisbon Agenda was drawn up. We may find that in 2010 we have still failed to make any progress and that we have therefore got further and further behind. I truly believe that if we were to hire an external auditor, they would be amazed to see what a good diagnosis we have, and what good remedies and solutions we have, but that, in spite of that, there has been such a complete lack of action in their application.
Like life itself, societies are created by means of cooperation amongst different generations. One generation carries the baton; it is like a relay race, but it is our foundations that are being passed on. Many Europeans are currently growing up and being born. Others, like ourselves, will be retired before too long. All of us need a society in which Europe can continue to have that capacity to compete, to have the leadership and sense of future that it has had in the past, because Europeans used to be determined, with their hearts and souls, to leave a better legacy for the future of their countries and, in our case, for the future of all of the countries making up European society.
That is our responsibility, therefore, and we must put our hearts and souls into it.
Günter Verheugen
Madam President, ladies and gentlemen, the Commission welcomes the opportunity to participate in this debate on growth and employment policy and we are quite clear in welcoming the present report. I would like to thank the rapporteur, Mrs del Castillo Vera, most warmly for her thorough and objective consideration of the issues involved.
We are having this debate a few days before the Commission's decision on the progress report on growth and employment policy in 2006. I share Mrs del Castillo Vera's analysis that we, in Europe, do in fact know perfectly well where our problems are. We also know exactly what needs to be done. We have the right answers to the problems but - and this is where Mrs del Castillo Vera got it quite right - there is a problem with the implementation of the measures deemed correct, in particular at the national level. It is also easy to explain why.
The long-term needs for reform that we have identified for European growth and employment policy always come up against the short-term interests of national politics. There are always elections somewhere. The machinery always grinds to a halt somewhere. Even so, I am in a position to tell you today that the progress report that we will be adopting in a fortnight will be sending out two uncommonly positive signals.
The first signal is that, for the first time, we actually have a functioning mechanism in Europe to coordinate the economic policies of the Member States and the EU itself. That, of course, was the big problem with the Lisbon Strategy, as you identified, in that while its aims were very ambitious, its implementation mechanism was practically non-existent.
The second positive answer is that the priorities of the Member States have changed to a noticeable degree. We will be able to show in our reports, which cover every single country and every single sector of the economy, that the issues in our strategy are now on the agenda all over Europe. These issues are education and training, research and development, innovation, better conditions for businesses, especially for small and medium-sized enterprises, and improving the employability of those social groups denied access to the labour market. These issues are all the hottest topics on the political agenda in every Member State, and so I am very pleased that the report under discussion today has very clear things to say on precisely these subjects. I would like to emphasise in the clearest possible way how much I welcome the fact that this report so clearly endorses Commission policy in relation to small and medium-sized enterprises and to innovation.
I would like to state very clearly that the future of our growth and our jobs depends on our success in bolstering the innovation potential in small and medium-sized enterprises such that they are able to contribute more and more to growth and employment in Europe. It is from this sector that the extra jobs that we need will come, and so it is important that all of our policies are assessed in respect of whether or not they allow Europe's small and medium-sized enterprises the leeway they need.
We will very soon be in a position to debate the state of growth and employment policy on the basis of the Commission's progress report. I am fairly sure, Mrs del Castillo Vera, that, when that happens, you will share my opinion that Europe is not in a state of stagnation. We are, rather, clearly moving in the right direction.
Patrizia Toia 
draftsman of the opinion of the Committee on Employment and Social Affairs. - (IT) Madam President, ladies and gentlemen, the European Union definitely needs renewed impetus in order to bridge that gap, that divide that exists in relation to the world's other strong, dynamic, competitive economies: I am not just referring to the traditional ones, but to the new ones, too, which have made an appearance on the international stage. Europe is therefore risking a great deal if it is unable to keep pace and to modernise by giving itself that impetus and that extra something that is being requested of it, not least through this debate. It is in danger of losing that compatibility that it has always been able to demonstrate between economic, productive and industrial growth and, at the same time, social cohesion and the ability to promote employment and a more inclusive kind of growth.
I believe that this 'extra something' requires two elements. Firstly, we need to take action regarding new factors of economic and employment growth: human capital, the training of human capital, the enhancement of people's abilities and skills, and technological innovation, which is also understood to mean the ability to transfer the results of research and of what knowledge today places at our disposal into production processes. There is a second element, however, which I should like to mention in closing, and which is key to overcoming this challenge: Europe needs to work together more! Europe needs to provide itself with this strategic ability that is a common outlook. Twenty-five national plans are weakening our ability to grow together: we need one outlook, a more univocal outlook. We need, in short, more harmonised policies in the fields of taxation, of employment and of industrial policies.
Gyula Hegyi 
draftsman of the opinion of the Committee on Culture and Education. - Madam President, in olden times young people learned their professions in the workshops of older masters. In Hungary, before the World Wars and the Iron Curtain, many young people went to western Europe for some years to extend their vocational training by working in the workshops of foreign masters. In this way, they learned both their profession and one or two foreign languages.
We should not invent new things, we should just remember the old traditions. Of course, times have changed and the state has an important role in vocational training. However, as with the individual masters or guilds in the old times, small and medium-sized companies should be involved in providing practical experience for students. Our projects in the field of vocational training are rather modest. We must provide more financial resources for programmes that provide foreign experience and possibly the exchange of students.
Vocational training should also provide language courses, including business technology phrases. It is nice to learn the Hamlet monologues by heart, but carpenters or computer operators should know their professional terms in foreign languages as well.
Andrzej Jan Szejna 
draftsman of the opinion of the Committee on Legal Affairs. - (PL) Madam President, I would like to warmly congratulate the rapporteur, and thank her for all the work undertaken on an issue of such great importance for the future of the European economy. We are unfortunately bound to recognise that the European Community's economic results are consistently disappointing, particularly when we take into account the opportunities offered by the single European market. Particular attention should be paid to the difficulties experienced by small and medium-sized enterprises. After all, SMEs are among the powerhouses of the European economy.
Better regulation and simplification are crucial to increasing the cohesion and clarity of Community legislation and would help to reduce the administrative burden weighing so heavily on SMEs. Future legislative proposals should adopt a broad and comprehensive approach based on detailed consideration of current legislation and an in-depth assessment of the implications. There should be regular contact with SMEs and the organisations representing them so that they can be involved in the implementation and further development of Community programmes.
Dominique Vlasto
on behalf of the PPE-DE Group. - (FR) Madam President, first of all, allow me to thank our rapporteur, Mrs del Castillo Vera, and to congratulate her on her excellent report, especially since it is structured around clear sets of themes designed to improve monitoring of the Lisbon Strategy. I think, moreover, that one issue in particular ought to get us moving: that of reviewing the Community Patent.
For too long, we have been saying, as Mrs del Castillo Vera said just now, that it is crucial for innovation to be promoted via harmonisation at European level. Now, what we are saying needs to be heard. We talk about producing better legislation, and the scope of such legislation is vast. There is also, however, cause to be surprised that Europe is so far behind in terms of innovation. Bearing in mind, however, that a patent costs on average EUR 46 700 in Europe compared with EUR 10 250 in the United States, I think that we know, unfortunately, why this is so. Charging as much as that is the best way of stifling innovation in Europe's small and medium-sized enterprises. This cost is utterly prohibitive. It is therefore a matter of urgency to get the Council to think again and help extricate our companies from this unfortunate situation.
I should now also like to emphasise another important point that we ought to have taken up in this report, namely the Agreement on Public Procurement. In the process of being reorganised under the auspices of the World Trade Organisation, this Agreement offers the 36 signatories, including our 25 Member States, access to their partners' public procurement markets. Nonetheless, a number of these partners are not playing by the rules. One has only to look at what the United States and Canada do. By means of national provisions, they exclude from the scope of the Agreement those public procurement markets that they reserve for their SMEs, even though these countries can put themselves forward in the public procurement markets of the 25 Member States.
I find it unacceptable that the progress made in transatlantic relations is all in the same direction. We therefore have a duty to promote a European Small Business Act on the model of that in place in the United States since 1953. We might be said to be 50 years behind. You will agree that enough is enough. It remains for us to come up with better legislation.
Norbert Glante
on behalf of the PSE Group. - (DE) Madam President, Commissioner, ladies and gentlemen, as we keep on reminding ourselves, small and medium-sized enterprises are the backbone of Europe's economy, employing most of Europe's workers, yet still not without their problems.
I want to point out that the first communication from the Commission in which many problems were addressed reached us in July 1994, followed by recommendations in December of the same year, a second communication in 1998, and then, in 2000, experts found out that not even half of the measures were being put into effect in the Member States. It is necessary to note that, even today, only 55% of them have been, so the Member States have to back up their words with actions.
I would like to say something about the transfer of undertakings, which is an important matter to which too little attention is given when considering the problem as a whole, not only on the part of the authorities responsible for Member States' tax laws but also by the enterprises themselves, which have to start work in good time on the business of transferring their enterprise to a new owner.
There is work to be done by all parties involved. Not least in the Seventh Research Programme, this House has taken action in the interests of small and medium-sized enterprises; enough words have been bandied back and forth, so now is the time for some action.
Ona Juknevičienė
on behalf of the ALDE Group. - (LT) Firstly, I would like to congratulate the rapporteur on the preparation of her speech. Essentially I agree with her. This is yet one more document among a multitude of others that should encourage entrepreneurship in Europe - starting with the expansion of small and medium-size enterprises. Indeed the Community's policy on this question is consistent and, I would say, fair. The problem is that in real life it is often not observed. Laws are frequently ignored and bureaucratic obstacles are created. I would like to point out two problems: I think the success of small and medium-size enterprises depends on their solution. Firstly, there is a problem with business registration procedures. The Commission has promised that by the end of 2007 the so-called One-Window Principle would be implemented in the entire Community. At the Summit Meeting in March, the Member States also agreed to simplify registration procedures for new enterprises. It was agreed that they should not take longer than one week. However, in reality business registration in some Community countries now takes from one day to several weeks. Registration costs also differ markedly. In certain countries it does not cost anything, yet elsewhere the cost can amount to hundreds of euros.
The second problem - control over the activities of enterprises, overseen by various State institutions. In Lithuania at the present time, 152 controlling bodies are in operation. Business people mention this as one of the biggest problems and sources of corruption. Recently 300 Commission employees made a commitment that by 2009 they would work for at least one week in small and medium-size enterprises. That way they will attempt to understand the problems. This is a welcome and concrete step. Perhaps similar initiatives should be extended to other parts of Europe, but would the Community endorse them? I am certain that we will have to eliminate bureaucratic obstacles to business expansion. Then we will be able to say that we are creating Europe through business and that we are encouraging its growth.
Guntars Krasts
on behalf of the UEN Group. - (LV) Thank you. I have no doubt that achievements in innovation, the skill to make use of them and the capacity to revive the entrepreneurial environment, particularly in the small and medium-sized enterprises sector, will establish Europe's place in global economic competition. Europe must adopt a proactive and leading position on global economic and social regulation. Thus, for example, if we wish to catch up with the USA in the sphere of innovation where, according to an assessment by the European Commission, we are currently lagging behind by 50 years, it is vital to change existing relations between science and business, and between business and the regulatory role of the state, as well as the models for funding science. Restrictions, not lack of enterprise, are the reason why the majority of Europe's residents want to be employees and not employers. We welcome the report's emphasis on the role of the common market in fostering entrepreneurial activity. The spheres in which the common market is not functioning properly are services and the free movement of labour. A task that is behind schedule in the promotion of the free movement of labour is achieving comparability between Member States' degrees and qualifications, which has become particularly topical following the 2004 enlargement and the accession of Bulgaria and Romania. I hope that the report will stimulate MEPs to rethink and understand the errors that have crept in, not least in the recently adopted services directive, and in rejecting the introduction of the European patent. Thank you.
Godfrey Bloom
on behalf of the IND/DEM Group. - Madam President, just for a moment I should like to test our wonderful interpreters. 'European Union entrepreneurship' is an oxymoron, is it not? The whole raison d'être - if I may lapse into the vernacular of this place - is to stifle small business. Rule upon rule, regulation upon regulation are generally made by people with no commercial experience at all. I went through the list of over 700 MEPs just yesterday, and I could not find more than about 5 people who had bona fide business experience.
The Commissioners go on the Microsoft yacht for their holidays, the British Prime Minister has close relations with Lord Browne of BP, and so on and so forth, but that has nothing whatsoever to do with business.
Business in Western Europe is millions upon millions of small businessmen and women living a life of quiet desperation, trying to put their livelihoods together. Small businesses account for over 52% of the UK's GDP.
You tell us in this place what age we may recruit at; you tell us what colour they may be; you tell us how much leave they must have; you tell us how much their pensions will be. It goes on and on. If we really wanted to get this place sorted out and we really wanted entrepreneurship, I would suggest that we only have Commissioners and MEPs who have actually done an honest day's work in their lives. There are none!
(Applause from the public gallery)
President
While I can indeed understand that some of the speeches made in this House meet with the approval or disapproval of visitors, I really must ask those in the galleries to refrain from expressing their views.
Ashley Mote
Madam President, I wonder how many people in this Chamber have had an idea for a new business, raised the money themselves at their own risk and successfully run that business for 20 more years and generated jobs and wealth. I see that not a hand goes up, and yet here we have a Commission talking about authorising entrepreneurs and about level playing fields - which is the most fundamental contradiction of the word 'entrepreneur' you could possibly imagine. The whole point about entrepreneurship is creating something that nobody has ever thought of before.
There sits the Commissioner talking about criminalising the use of imperial measurements on exports from the UK after 2009. As a consequence of that, the manufacturers of tyres, bicycles, clothing, medical equipment, dairy products, frozen foods, specialist papers, domestic appliances, hand tools, computer components and oil and gas components will all suffer, every single one of them. One of them in my constituency will be faced with going out of business because there is no way he will be able to sell his components to the oil and gas industry in the United States. They are not going to pull their drill up thousands of feet just to check a measurement - no way! He will either become a criminal to stay in business or he will go out of business.
Years ago I walked into the office of one of the biggest industrialists in the United States and behind him was a notice that said: 'If you are not part of the solution, you're part of the problem, so get out of the way!' That is a message I commend to this House.
Zbigniew Krzysztof Kuźmiuk
(PL) Madam President, there are many reasons why the European Union loses out when competing with other countries. It does badly against both highly industrialised and developing countries. I cannot run through all the factors involved, but the main ones are inadequate support for SMEs and inadequate investment in science and education.
I would, however, like to focus on a different aspect today, namely the very marked differences in development within the European Union, at both national and regional level. If we are to create a genuine European scientific and technological area, we will first have to bridge the gap between the richer and poorer Member States. This obviously calls for additional resources, by which I mean not just the structural funds or funds allocated to agriculture, but also to resources for research and development, science and education.
Unfortunately, the richer countries have managed to secure almost all the funding set aside for such purposes, arguing that they are more effective in these areas. It should therefore come as no surprise that the differences between the rich and poor parts of the Union are becoming more rather than less marked, and that the European Union is developing at a significantly lower rate than the United States or the Asian countries.
Günter Verheugen
Madam President, ladies and gentlemen, there are two more things I should like to say.
The first is that, however much one might wish to go along with the criticism of the conditions - and the Commission, as you know, does not hold back when criticism is merited - there is one thing that should not be overlooked, and that is that Europe's economic statistics show an upward trend. Growth this year has surpassed expectations by far; a fall in unemployment is making itself very definitely felt; European firms are producing more, and we are becoming very much aware that the Member States' priorities are changing as they become keener to improve the conditions for entrepreneurship.
Secondly, when compared with - for example - the United States, it is indeed the case that there are fewer people in Europe who are prepared to set up a business themselves or to run one, or - to put it in the way a Member did a moment ago - to take upon themselves the risk of using their own money to create jobs for others. The causes underlying this are very interesting, and are to be found in our culture. It is for that reason too that the Commission has been such an energetic advocate of coupling together entrepreneurship and education; as early as at school and university, it must be possible to guide young people towards entrepreneurial activity. Remarkable successes are making themselves visible in the countries in which this is being done, while, in those where it is not, there are quite simply too few enterprises, and the plain and simple fact is that no jobs will be created in the absence of a business to create them.
What we are currently learning - and it is a matter of considerable interest - is that 'learning by doing' is still the best way to go about it. Reference has already been made in this debate to the 'Enterprise Experience' project, which I started with the aim of getting all the senior civil servants from my own offices to work in a small or medium-sized enterprise for at least a week. The first fifty to do so have now got back, and the results are fascinating. Every one of them - and yes, I really do mean every one of them - has come back with important proposals for improvements, for ways in which we can make life easier for small and medium-sized businesses, and these deserve to be the subject of serious discussion. On the other hand, though, the firms that took our official on and enabled these to work for them say that they learned a great deal from it and now have a far better idea of what is feasible at the European level and of what is not.
I really do want to encourage the Member States to take similar initiatives. Businesses change so quickly that it is absolutely necessary that those who create the conditions under which they operate should have a real knowledge, derived from their own observations, of what actually goes on in them and of what effect what they do has on them.
President
The debate is closed.
The vote will take place at 11.00 a.m.
Written statement (Rule 142)
Jean-Pierre Audy
(FR) I voted in favour of the excellent report by Mrs del Castillo Vera on the subject of entrepreneurship and growth. This report is an essential contribution to achieving the objectives laid down in the relaunched Lisbon Strategy, designed to make Europe the most competitive region in the world by refocusing on growth and employment while maintaining the balance between the three pillars of the process: the economy, the social dimension and the environment.
If the EU wants successfully to meet this enormous challenge to bring about growth and employment, it needs to take account of small and medium-sized enterprises (SMEs) which, let us not forget, account for 70% of the total number of jobs in Europe, with 75 million workers. Having constructed the internal market by taking an interest in consumers at the same time as relying on competition, the EU must from now on take an interest in producers and, while protecting us from the harmful aspects of globalisation, ensure that European creativity is given full rein. Finally, I deplore the fact that the disastrous monetary policy of the European Central Bank (ECB) has not been criticised, as monetary policy is not being put sufficiently at the service of economic growth.
(The sitting was suspended at 10.50 a.m. and resumed for voting time at 11.00 a.m.)
