Resumption of the session
President
I declare resumed the session of the European Parliament adjourned on Friday, 20 November 1998.

Welcome
President
I should like to welcome a group of members of the United States Congress, led by Mr Jim Kolbe, who are now with us in the official gallery.
We are very glad to receive these visitors to Parliament.

President
Mr Valdivielso de Cué has the floor.

Valdivielso de Cué
Mr President, I should like to mention something we are forever requesting at Plenary sessions: that Members should refrain from using mobile phones, as this disrupts proceedings in the House.
I urge the President to take appropriate action to ensure that proceedings in the House and in committees are not disrupted in this way. We are here to deal with the issues entrusted to us by our constituents, and we need the right environment in which to do so.
Indeed, we are fortunate in receiving certain allowances enabling us to engage assistants. Should something really urgent arise, an assistant can pass us a note and we can then deal with the matter.
I am most anxious for a permanent solution to be found to prevent further disruption. Thank you.

President
Thank you, Mr Valdivielso. We shall ask the College of Quaestors to take the necessary steps to overcome this problem.

Agenda
President
The order of business for today and tomorrow has been adopted. However, the following changes have been proposed:
Wednesday: The report by Mr Tillich and Lord Tomlinson on draft supplementary and amending budget No 1/98 concerning Section III - Commission, which it was decided during the last part-session to include on today's agenda, will not be taken because the Council has not adopted the draft budget. This item will therefore be placed on the agenda for the December part-session in Strasbourg.

Aelvoet
Mr President, I should like to make a suggestion on behalf of my group concerning the first item on the agenda for today's sitting. Mr Santer is to make a concrete proposal here as part of Question Time regarding a new anti-fraud instrument for the European Union. The problem is that the Committee on Budgetary Control asked the European Commission some time ago to produce concrete proposals and put them to the Committee on Budgetary Control on 1 December. That has not happened. Meanwhile, the Commission is indeed doing so here today, but during Question Time when we cannot have a proper substantive debate. Consequently our group is proposing that, after Mr Santer's statement, each group should first be given three minutes in which it can at least express an opinion on the substance. I can tell you, Mr President, that the Committee on Budgetary Control was unanimously of the view that it was particularly unfortunate not to be able to address so fundamental a subject in a proper debate. I would therefore ask you to put my proposal to the House.

Theato
Mr President, ladies and gentlemen, I welcome this proposal. We have just received the document which forms the basis for the new Fraud Office, and I have to say that we are extremely surprised to receive it now, having had very intensive meetings yesterday and the day before.
I do not want to be difficult about the timing, but given that it has already been printed up in all the languages, I would have thought that it should have been submitted to the Committee on Budgetary Control as the committee responsible the day before yesterday, or at the latest yesterday, so that we could have discussed it. This is important for the 1996 discharge, and I have to say that I am very disappointed that this procedure has been adopted, given that the documents are all ready and complete. We should have had a proper debate!
(Applause)
President
- According to my information, Mrs Theato, the document in question was only adopted by the Commission this morning. When we receive it through the official channels, we shall follow the normal procedure. The document will be passed to the Committee on Budgetary Control, and at the appropriate time, the House will take a decision on that committee's report. What we cannot do is depart from normal procedure and replace the committee's report, any amendments and the ensuing debate with an improvised debate held here and now, in which each of the political groups would be allowed three minutes. I cannot do that, it is against the Rules of Procedure.
In any case, the President of the Commission is asking for the floor and I must give it to him as he has been referred to.

Santer
Mr President, I am rather surprised at what I am hearing. Since my appointment in 1995, the Commission has repeatedly been asked to inform Parliament first about the decisions we take on Wednesday mornings. This is exactly what we are doing today, with Parliament therefore being the first to be informed of the discussion. Would you rather I had sent it for printing this morning, so that Parliament would not have received it until tomorrow or the day after? In this case, the Commission really is informing Parliament first and I believe that we must also abide by the institutional and parliamentary rules which exist in our Member States.
Thursday:

President
I would remind the House that the entire morning will be given over to voting, with the following items being added:
pursuant to Rule 66(7), a recommendation in the form of a letter concerning the marketing of fertilisers containing cadmium in Austria, Finland and Sweden (Committee on Economic and Monetary Affairs and Industrial Policy); -pursuant to Rule 99, the report (A4-0434/98) by Mrs Schierhuber on inland waterway transport (Committee on Transport and Tourism); -pursuant to Rule 99, the report (A4-0440/98) by Mr Langen on extending the temporary derogation applicable to Germany and Austria (Committee on Economic and Monetary Affairs and Industrial Policy); -the report (A4-0400/98) by Mr Ferri on supplementary pensions, the vote on which was postponed during the November partsession (Committee on Legal Affairs and Citizens' Rights); -the motions for resolutions on various budget headings concerning human rights and democracy in Chapter B7-70, the debate on which took place on 17 November.If there are no comments, these changes are approved.

President
Pursuant to Rule 97, the Council has requested the application of urgent procedure for the draft Council Regulation laying down the requirements for the implementation of development cooperation operations which contribute to the general objective of developing and consolidating democracy and the rule of law and to that of respecting human rights and fundamental freedoms (9581/98 - C4-0507/98-97/0191(SYN)).
The Committee on Development and Cooperation has adopted a report on this subject by Mr Torres Couto which is due to be included on the agenda for the next part-session.
I give the floor to Mr Rocard to express the opinion of the Committee on Development and Cooperation, as the committee responsible.

Rocard
Mr President, the Committee on Development and Cooperation is rather embarrassed about this request. I must stress to you and to all our colleagues that the Torres Couto report is important. Having discussed this in detail and amended many points, we are proud to propose this report to Parliament. We also believe that its adoption is urgent in terms of the policy guidelines of the European Union.
When we learnt that the Austrian Presidency particularly wanted to have done with this issue and to adopt the decision before the end of its presidency, we applauded this desire and indicated our support. We hoped that the parliamentary deadlines would allow this to happen, thus leading me to support this request now. Furthermore, in its extraordinary sitting yesterday - and I must thank you for prompting this, Mr President - the Commission voted on this unanimously.
However, it appears that there is very little time available in today's sitting and that the rapporteur is not completely ready, which would prevent an urgent debate from proceeding under the optimum conditions. Therefore, in my role as committee chairman, I am forced to say to the members of our committee who yesterday voted for the urgent procedure that they should feel free to follow their consciences in terms of the contradiction between the problem of ensuring a proper and comprehensive debate, which we cannot have, and the concern for parliamentary effectiveness which might prompt us to vote almost without discussion. I can only say that the members of the committee should have a free vote, and as for the rest of Parliament, I shall trust in your wisdom.
We understand the Austrian Presidency's desire to use the urgent procedure in order to conclude this issue, but this would involve a discussion this evening and a vote tomorrow. As the conditions are not entirely suitable, I am trusting in Parliament's wisdom.

President
Does anyone wish to speak against?
I give the floor to Mr Galeote Quecedo.

Galeote Quecedo
Mr President, I feel Mr Rocard has put forward the main argument against the request for urgent procedure very clearly: Mr Torres Couto, the rapporteur, is not present at this sitting because there were no plans to vote on his report during this sitting. If only out of deference to the rapporteur, therefore, I feel we cannot accelerate the procedure to that stage.
As a supporting argument, I should like to mention a fundamental issue. Through Commissioner van den Broek, and at the eleventh hour, the European Commission has raised a problem concerning the financing of the Bureaux d'Assistance Technique , such as the European Foundation for Human Rights. This cannot be resolved through an addition to the existing remarks in the 1999 budget. On the contrary, a specific amendment is required. A satisfactory solution must be found to such a serious issue, and we need adequate time to debate it. I therefore feel it would be inappropriate to vote in haste tomorrow on such an important resolution.

President
Thank you, Mr Galeote.
I put the request for urgent procedure to the vote.
(Parliament rejected the request for urgent procedure)

President
Pursuant to Rule 99(2), I have received an objection from 31 Members to the Porto report being dealt with under the procedure without debate. In accordance with Rule 99, this report will therefore be placed on the draft agenda of a subsequent part-session with debate.

The Commission of Tomorrow
President
The next item is the communication by the Commission on 'Tomorrow's Commission'.
I give the floor to Mr Santer, President of the Commission.

Santer
Mr President, ladies and gentlemen, I have come here today to talk about two issues which have been the subject of much discussion recently and which are of the greatest concern to this House, as we have heard from the preliminary discussions. These are the future of UCLAF and the discharge procedure for 1996. As there are direct links between these two issues and the way in which the Commission operates, I must take this opportunity to mention the extensive internal reforms which I started and which I will conclude in 1999. The starting point for our discussion must be to acknowledge that Europe is doing well, that good progress is being made on the major issues and that an extremely high level of integration has been achieved. Europe's very successes present a challenge and require changes to be made in our operating methods and working practices. The unification of Europe must involve a constant process of construction and consolidation. The institutions are both the heart of this process and the means of achieving it. All the more reason then for us to ensure an atmosphere of confidence between the institutions and to manage our relations with each other in a responsible manner. The atmosphere surrounding the discussion of certain issues worries me. I myself want to help re-establish an atmosphere of calm which is conducive to achieving our common goal of a Europe looking resolutely to the future.
The debate on the Bösch report last October was an opportunity to ask certain questions about the future of fraud prevention in the Union. Major progress has been made in this area since 1995. UCLAF's powers have been increased and in 1997 it was given the status of a task force. In July this year we adopted a comprehensive framework for its activities which will shortly be followed by detailed rules of application.
Thanks to UCLAF's efficient work a number of cases involving Commission officials have come to light. Despite this, Parliament has repeatedly questioned the autonomy and independence of our investigators. I must reaffirm, with some force, that they have always had complete freedom.
Nevertheless, a clear separation between inspectors and those they inspect is healthy. To remove any doubts, we must not stop half-way, and the discussion about externalising the service must be taken to its logical end. We have therefore come to the conclusion that creating a completely independent Anti-Fraud Office which is not in any way subordinate to the Commission or to any other institution is the most effective and most defensible way of achieving the goal set out in the Bösch report. We are in total agreement on this.
However, two important points must be clarified. Firstly, the future Office will have the sole task of carrying out investigations both in the Member States and within all the Community institutions and bodies. It will not be involved in proposing legislation or in coordinating with the Member States the fight against fraud affecting the financial interests of the Union. These tasks, as stipulated in the Treaty, will continue to be performed by the Commission.
Next, I must stress that, until the new structure comes into operation, the current UCLAF will continue its work to track down those guilty of fraud, within the framework laid down by the Commission last July.
Our proposal, which was approved yesterday evening, is now before Parliament and the Council. In addition to detailing the aims and administrative structure of the Office, it sets out the basic principles for the conduct of investigations, the rules governing relations with the institutions and the controls for ensuring that the Office's activities are legal. Everyone must now assume their responsibilities as I have done. It is now the turn of Parliament and the Council to play their part. If the political will exists, the decision could be adopted within six months. I was encouraged by the very positive reception given to my statement on this issue by the Heads of State and Government at Pörtschach. I am also sure that this House, which has made the fight against fraud affecting the EU's interests one of its main objectives, will make every effort to ensure that this crucial issue moves forward.
Fraud prevention is one of the aspects raised in the debate on the discharge, and we will have an opportunity to discuss it during the December part-session. However, I must say a few words about it now as it has already become a matter of public debate.
In its resolution adopted on 31 March this year, Parliament made the discharge for the 1996 budget conditional on a whole range of conditions, some connected with that particular year and others of a more general nature.
The Commission gave clear and constructive answers to all your questions and a detailed note is available. I see no reason why this should not be circulated to all the MEPs, in fact I would welcome this.
There are still two or three controversial points on which I cannot accept Parliament's requests. You know that we have prosecuted whenever UCLAF has suspected fraud. I have never compromised on this principle and I never will. As far as the MED programme is concerned, I simply cannot agree to hand over the whole file to the judicial authorities, because UCLAF has not established a presumption of fraud. To do so would be an abdication of our responsibilities and would hardly be compatible with the rule of law as I understand it.
As for Parliament's right of access to the information needed to exercise its power of scrutiny, clearly this is an inviolable democratic principle which I fully support. I am in favour of as much openness as possible but this must be compatible with the law and the proper handling of cases. I have made considerable efforts to maintain this principle, including having had documents sent to Parliament which would not, in my long experience, have been sent to national parliaments.
However, we must distinguish between the situation in which Parliament's general right to information must prevail in the interest of effective scrutiny and the situation in which individual cases need to be handled confidentially.
With regard to Parliament's general right to information, I can confirm the Commission's desire to cooperate fully with Parliament to ensure that the latter can exercise its powers of political and budgetary scrutiny. However, in relation to cases subject to legal or disciplinary proceedings, I would remind you of a universally recognised legal principle: the confidentiality of preparatory inquiries. Nothing must be done to jeopardise these inquiries. The same applies to cases subject to confidentiality rules involving trade secrets and respect for privacy. In such cases the Commission has a particular responsibility which it cannot ignore.
This is why the names were blanked out in the UCLAF report on ECHO which you were sent. I admit that the form of this document invited criticism, which is why I had it redrafted to make it easier to read. The Commission has most certainly not tried to hide anything. I would also remind you that the chairman of the Committee on Budgetary Control and the rapporteurs were able to consult the full document in situ .
Over the years, relations between Parliament and the Commission regarding access to information have always been based on mutual trust. The problems of recent months must not make us lose sight of the fundamentals. The time has come to put these events into perspective and to find ways of rebuilding that trust.
It was in this spirit that I suggested to Mr Gil Robles that a code of conduct should be drawn up in order to clarify the situation and to meet the respective needs of the two institutions.
The discussions on the 1996 discharge have been going on for months. ECOFIN set out its position on 9 March, in the context of the provisions of Article 206 of the Treaty, which provide for a recommendation from the Council. The Council gave a favourable recommendation and the time has now come to settle the matter. I personally feel that all the objective criteria for giving discharge have been met.
There is a direct link between the issues which I have just raised and the initiative entitled 'The Commission of Tomorrow' which will be one of my main priorities for 1999. The component parts of this initiative actually date back to 1995 and the beginning of my term of office. I am thinking in particular here of improvements in financial management and the checks on the use of public funding in the context of SEM 2000 - the System of Sound and Efficient Financial Management. In this respect we have, for example, established a clear distinction between decision-makers and financial managers. This is something of a first in our organisation. We have also created a joint structure for external assistance.
I must also mention the MAP 2000 programme - the Modernisation of Administration and Personnel - which was launched in 1997 and which is increasing the autonomy which the Directors-General have over the structure of their departments, appointments and management. This represents real progress towards giving Commission staff more responsibility.
However, it is only really since the beginning of this year that we have developed a more comprehensive, more coherent and higher profile approach, involving all staff more directly. 'The Commission of Tomorrow' initiative has a simple aim which is to eliminate the weaknesses and develop the strengths of our institution in order to leave everything in order for our successors.
We are looking at three areas: firstly, the future role and tasks of the Commission; secondly, the structures and operating methods of the Commission, and thirdly, internal management.
On the first point, I believe that we must try to answer some basic questions which, albeit with some differences here and there, apply to all the institutions and Member States. How can we cope with the high degree of integration which the Union has achieved? How can we manage the new fields of action such as employment, health and justice and home affairs? How do we establish our priorities in an enlarged Union? How can the concepts of subsidiarity and proportionality be developed in an intelligent manner?
It is in this context that the Commission's structures are being examined. In order to prepare the ground, I have launched a major screening exercise which will provide a clear and comprehensive view of the current situation. In the first half of 1999 I will draw up an overall plan for the structure of the portfolios and the organisation of the departments. I have actually come to the conclusion that this type of reform should have been undertaken a long time ago. The structures must be adapted to cope with the dramatic growth in the number of tasks.
This leads me to the third point on the future of the Commission: internal management, in the broad sense of the term. In the last few years a great deal has been accomplished. Thanks to the current reforms in financial management, the Commission will gradually be able to eliminate practices from the past linked to the massive increase in the tasks to be performed and the appropriations to be managed. In this context, I must draw your attention to an important point. The Commission cannot be constantly asked to take on new tasks without considering the human resources which it has to carry out these tasks. In truth, the Commission itself has too often overlooked this aspect in the past. We are therefore all responsible to some extent. I would hope that we can consider together how best to resolve the problems resulting from the gap between the objectives and the means to achieve them. I consider that the approach adopted recently in terms of legal bases and mini-budgets is positive. There is a golden rule which we must use to guide us: absolute openness and clear rules.
Management reform clearly involves more than just financial matters. Together with our staff and their representatives we are currently discussing ways of improving recruitment, training, assessment, internal communication, disciplinary measures and many other questions. A joint working party composed of representatives of staff and administration has produced a very interesting report which has just been circulated within the Commission and which has been the subject of extensive consultation. The other institutions are also currently being contacted about this. I expect to be able to draw the necessary conclusions from this process in the first half of 1999, which will include amending the Staff Regulations where necessary.
This is a brief outline of the reforms which I am preparing with my colleagues, several of whom were keen to accompany me here today. After the reform of the Treaty, the introduction of the euro, the employment strategy and Agenda 2000, I hope to tackle this other major challenge successfully. I am doing this because action needs to be taken, because I believe in the central role of the Commission and because I am confident in the future of the European civil service. I have accepted my responsibilities as President. I have initiated reforms. I believe that we are on course and I intend to stay there.

Fabra Vallés
Mr President, Mr President of the Commission, you began by saying you hoped for a Europe which looked to the future. Now, I would like to ask you: when do you want it by? When will we be allowed to study the information you provide for us with the help of an interpreter and in the presence of a member of Parliament's administration? When will it cease to be necessary for Parliament to apply pressure to obtain a response from the Commission? When will UCLAF be able to work free from pressure by the Commission?
Mr President of the Commission, you were complaining of too much pressure from Parliament. I can but point out to you that institutions without checks and balances are condemned to self-destruction.

Santer
In political terms, the easy answer to Mr Fabra Vallés' question is that we are already looking to the future. In less than thirty days the euro will be introduced. This will allow Europe to assert itself with regard to the outside world and to take its place on the world stage. We also decided yesterday in ECOFIN on the external representation of the euro. This is our Europe of the future, one which can establish its predominance at international level.
You asked about information. I refuse to believe that UCLAF has been put under any pressure by the Commission and this is confirmed by my discussions with the director of UCLAF. This is why I am now saying that if this is the case, then we should set up what the Commission is proposing: an anti-fraud office which is not only truly independent of all the institutions but which also has the power to act in respect of all the institutions. This will ensure a truly neutral authority in the eyes of Parliament, the Commission and the other institutions.
This is why, after long and careful consideration and with the assistance of Parliament, I can say - given that I took part in the debate on the Bösch report at the beginning of October - that we have truly started on the road to the future in terms of information. This is precisely the aim of our proposal for a new UCLAF. Its name is not at issue here; what is important is the body itself, its independence and neutrality and also the reciprocal neutrality of the bodies consulted.
This is the way in which we are looking forward, so please do not say that Europe is not looking to the future. I know what I am talking about and I can say that Europe is now in a much better position than when I was appointed as President of the Commission in January 1995.

Müller
Mr President of the Commission, if information policy is so important, then why does your proposal - which we will naturally be examining very carefully - not say anything about how the European Parliament is to be kept informed by the new office that is to be set up? This is something that struck me immediately. How can we hope to bring about improvements with the new office if Parliament is to be even less well informed?
My second point is this: the central provisions of your proposal are contained in Article 3 on the office's right of inspection. But there is a very strange contradiction here. Article 3(1) on external controls says that the office can itself apply to the Commission to carry out an inspection anywhere in a Member State. But Article 3(2) is much more interesting ...
(The President cut the speaker off)

Santer
I am well aware that the honourable Member has not been able to examine the substance of the proposal, which is why she has questions. And we are here to answer them, since they raise a number of fair points which we have also considered. You must not think that we have overlooked them. This is why I am happy to answer your questions.
Firstly, the European Parliament, like all the other institutions, is a full member of the Administrative Board and if you read the other provisions in the proposal - which you must have done because you are quoting them - the final paragraph of Article 9 states that the Administrative Board, including Parliament, draws up an annual report and sends this to the institutions. Clearly, this new office, its director and its various departments will be available to Parliament and all the other institutions which are also required to carry out checks and investigations.
In answer to your second question, the new office will be responsible solely for carrying out investigations. The Commission remains politically responsible for referring cases to the Anti-Fraud Office and for monitoring investigations. This is indicated in the provisions. I would therefore agree that you will have to examine the various carefully constructed proposals in detail in cooperation with our legal services in order to get an idea of the general organisation of this body.
You can be sure that we wanted to respond to the objective set out in the Bösch report of a fraud prevention body with real independence and autonomy. This was your objective and we have looked for the ways and means to achieve it. I cannot therefore see any difference in attitude between Parliament and the Commission. On the contrary, I believe that by improving fraud prevention this office can guide us in the future in order to ensure greater openness and to eliminate criticisms like those which have been made recently. I continue to refute that the Commission has exerted or is exerting any pressure on UCLAF.

Malone
Mr President, we must say to Mr Santer that it is encouraging to see that he is proposing certain reforms. Of course, that is important but it is also very important to have the will of the majority. In view of yesterday's decision in Ecofin where now a majority of nine Member States are in favour of, or abstaining on, the question of an extension of duty-free, will the Commission now bow to the pressure of that majority and agree to carry out its long-awaited study into the effects on employment of abolition. This is especially relevant in view of the remarks of the French Finance Minister with regard to the impact of abolition on employment and the stated intention of the incoming German presidency who said that they will push for a lengthy delay. Maybe the Commission will tell us how they will get out of the dilemma now that they are clearly out of touch with people.

Santer
I could talk at length about this problem. It is just as well that duty free is not yet under investigation by UCLAF and so I will answer the question.
It is a bit like the Loch Ness monster which keeps coming up. You should remember that duty free was abolished by a unanimous decision of the finance ministers in 1991,
which must be implemented in 1999. An eight-year period was provided precisely for the purpose of carrying out various studies and adopting legislation. This was the reason for the arrangements made and length of the deadlines set at the time by the twelve finance ministers. I have a clear memory of this discussion which I followed closely because this decision was taken during our presidency of the Council. I must stress that the decision was unanimous.
Now that I am on the other side of the fence, as President of the Commission I must stress that the Commission is the guardian of the Treaty and it must implement the decisions unanimously adopted by the Council of Ministers. If there were now unanimous agreement on another avenue I would be the last person to stand in the way, but the Council is not unanimous on any other proposal. It was a unanimous decision which transposed the directive in 1991 and you approved it. So we must be consistent ourselves, and with regard to the provisions governing our institutions, so that we can remain credible. We must implement the decisions which have been taken. Where would we be if, every time a decision was taken or a directive adopted, the Commission started wondering how to sidestep it or how to scrutinise its application? I believe that we have a constitutional and institutional role to play which we must fulfil. The Commission cannot do anything else in this respect.

Tillich
Mr President, Mr President of the Commission, you had two thousand permanent posts still unfilled at the beginning of 1998, so it was not because of the lack of posts that you were not able to keep checks. Secondly, a Member of the Commission has told me that the UCLAF used Stasi methods, on the lines of East Germany's former security service. I think that firstly he is not in a position to judge and, secondly, he should not make such statements. In my view, this proposed OLAF regulation is simply designed to punish UCLAF for the work it has done up to now, which your services have failed to follow up. This is why I believe you must think we are stupid, because suggesting that OLAF should carry out checks only when instructed to do so by the Commission is tantamount to shelving any controls, at least in your own institution, which you would have us believe is so transparent. Just how do you intend to ensure that the Commission really is transparent?

Santer
I can tell you quite honestly that I have never in my life - and I have been in politics a long time, I became a member of my government in 1972 - thought that any Member of Parliament was stupid. That is something I would like to make very clear. I very much respect Parliament, and as the President of the Commission I very much respect this House, and that is why I absolutely refuse to let anyone say or imply such things about me.
Mr President, I spoke in German so that there was no need to translate. I must say that I myself have never criticised the operation of UCLAF. On the contrary, it was when I became President of the Commission in January 1995 that UCLAF was launched, and thanks to the cooperation with Parliament we have constantly improved its operation. In 1997 we decided to establish a task force to assist UCLAF in its duties. I have never accused UCLAF of using Stasi-like methods.
Anyone making such claims must show me the proof. I have great respect for the difficult work carried out by the Commission officials and I must say that, if certain investigations have been discussed within Parliament and also in the press, then this is because, thanks to UCLAF, certain incidents of fraud have been detected, dating back to before the present Commission. It is therefore due to the activities of our own departments that we are now in this situation which certain MEPs are criticising. There is a saying in my local dialect which I will say in German because you speak German and will therefore understand it better: 'Gutheit ist ein Stück von Dummheit'. In other words, we are sometimes too efficient for our own good.
This is perhaps what has happened with us. We have to some extent become victims of our own initiatives. This is why you must read our proposals, whose broad outlines the Council has approved and whose direction the Heads of State and Government have deemed reasonable, with a clear and independent mind and without accusing us of crimes based on assumptions rather than facts. So please reserve making a judgment, which must be calm and unprejudiced, until you have studied the Commission's communication in detail.

Kjer Hansen
Mr President, there is not a great deal of agreement between the proposal which the Commission is now presenting and the call made by Parliament with a very large majority for UCLAF to be strengthened. What surprises me so much, Mr Santer, is how you can talk about an independent office. How can the new UCLAF be independent when it will still be the Commission that decides what investigations are to be carried out? How can there be any talk of an independent office when it will still be the Commission that decides how the investigations are followed up? The fact is that we are not talking about independence at all, but about the Commission still completely controlling what happens in terms of inquiries. Is it not more a question of people wanting to shed responsibility and trying to run away from the responsibilities which they have in connection with precisely the kind of things we have been dealing with here recently? So, Mr Santer, it is extremely disappointing that you have not been willing to engage in a debate with us on the proposal which has now been put forward.

Santer
Mr President, Parliament will clearly have plenty of time to discuss this point in depth, and when you do, you will see that UCLAF really is an autonomous body with its own legal status. It will be entrusted with the task of carrying out investigations as part of the fight against fraud against the Community budget, both in the Member States and within the Community institutions or independent bodies. This is how it is defined. The Commission is not alone in being able to ask UCLAF to carry out an investigation, although it is the main institution involved in the investigations. Furthermore, the bulk of UCLAF's current investigations are being carried out in the Member States as this is its main job. This is why we thought it necessary also to include the Council in UCLAF. All the institutions have the right to ask UCLAF to carry out an investigation and the future UCLAF may initiate investigations on its own initiative.
I believe that you must read the document and you will then understand that what you have just said is simply not true, and I am not saying this lightly. You must look at the document, which was written by lawyers and which covers all the points which you are calling into question. The Commission did not want to be the only institution with the right to order investigations by UCLAF, so all the institutions are entitled to do this, just as all the institutions are in general represented on the Administrative Board. This is the best possible proof of the neutrality and autonomy of this body in which Parliament has a say like all the other institutions. I believe that this is the best way of guaranteeing the effectiveness of the new office.

Bösch
Mr Santer, the Bösch report to which you have referred is not the one I wrote, because what you have made of it has nothing to do with the Bösch report adopted by Parliament. I would like to tell you something about what has happened and why this suggestion has been made. Commissioner Gradin promised us in July that Parliament would be involved in a comprehensive reform of UCLAF. Parliament's President reminded you of this in writing at the end of November, I think. But nothing has happened. Now you have presented us with a proposal and told us to read what you have put in it. Is this how you intend to restore confidence between our institutions, Mr Santer?
There is another point I would like to make about the substance of the proposal. The Bösch report to which you referred called for UCLAF to be strengthened. You are now destroying all the work the Commission has done up to now to combat fraud. Is this how you mean to restore the public's confidence in the Commission's anti-fraud policy? Those were the two questions I wanted to put to you.

Santer
I can answer these questions very easily. The clear objective of your report - ensuring the independence of UCLAF - is one to which I subscribe, as I have said on many occasions, even back in October during the debate. However, the independence of UCLAF will never be guaranteed if it remains a department of the Commission, managed by Parliament. This is not viable and cannot be considered either legally or institutionally. This is why we went beyond your proposals while maintaining the same objective. Consider this: our proposal undoubtedly goes beyond your own report, but it remains in an interinstitutional framework, which I believe is important. The purpose of UCLAF is not to conduct internal investigations just within the Commission. It is currently involved in over 900 investigations in the Member States where the majority of the investigations are needed. Within the Commission there are only 27 ongoing investigations. So you can see that the majority of the investigations involve the Member States.
The Council and all the other institutions must therefore be integrated into the new body and I cannot see any connection between your question and our proposal which encompasses and exceeds your objective by placing it in an interinstitutional framework, thus increasing the confidence of citizens in the supervisory bodies. This will be the future for UCLAF as a European anti-fraud office and an independent body with its own legal status, assisted by top experts who will be independent and who will offer all the guarantees of independence. I really believe that in this way UCLAF and its independence will be strengthened.

Giansily
Mr President, Mr Santer, a year ago Parliament approved an amendment to the budget on a minor matter of the appointment of a deputy director for an agency answerable to the Commission. Neither Commissioner Papoutsis, who was responsible for the body in question, nor Commissioner Liikanen, as head of personnel, have been able to persuade the director, who has refused to apply the vote of this House. Such a case does not require an UCLAF investigation but simply proves that some of your commissioners are not able to make their officials obey them, and that these officials do not give two hoots about votes in this House. This is why our group does not currently feel able to give discharge as we feel that the fraud detected simply points to an all-powerful technocracy, cut off from reality and which, to some extent, does exactly as it pleases.
My question is: if we refuse to give discharge, are you ready to ask the commissioner for the portfolio where real embezzlement has been discovered - namely ECHO - to resign? In other words, are you ready to sanction incompetence, because, in this specific case, I trust in the personal honesty of the commissioner in question.

Santer
I regret that I cannot answer the question about the appointment of a deputy director. There must be reasons for what happened. I will check on this and let you know the reasons for our appointments. However, you must realise that directors are not appointed by votes in this House, given that the separation of powers exists. It is the Commission which decides on appointments made within its departments, and we do not ask the European Parliament whom it has appointed as its directors. There are some interinstitutional rules which must be respected.
With regard to the refusal to give discharge to the Commission, I would say that the discharge procedure is taking place as stipulated in the provisions of Article 206 of the Treaty. This article says that Parliament gives discharge to the Commission on the Council's recommendation. I said just now that the Council has recommended that Parliament should give discharge. Therefore, ECOFIN, which knows what it is talking about, has already made a recommendation to Parliament. It must not be forgotten that the Council is a branch of the budget authority
As for the resignation of certain commissioners, the constitutional and institutional provisions of the Treaty are clear and I am satisfied with these. The Commission is the guardian of the Treaty and I will abide by its provisions, nothing more and nothing less. This is my duty and my right and I will not move on this point.

Elles
Mr President, I have a feeling that you are trying to shut the stable door when the horse has already bolted. You have said to the House this afternoon that you have transmitted documents to the Parliament which nobody would have transmitted to national parliaments. Well, no national parliament would have ever accepted a report with asterisks or censorship from a bureaucracy to a directly elected parliament.
Secondly, in the framework of the discharge for 1996, for which I am rapporteur, there is a feeling that the flaws in management organisation at the top of the Commission have led to a whole ream of irregularities and misdemeanours at lower levels in implementing policies. You have come forward with some ideas on screening. We asked for that in 1995 and yet it is now nearly 1999. We have not even seen the report on the statute that was asked for by the last parliament. We have never seen anything in that respect.
Lastly, you say you are nominating high-level officials. We all know that is unbridled cronyism to get level of access to top jobs. There is a feeling that many have in this House, that you are in office but you are not in control of the overall system. So how can we today have confidence that you can deliver next year on all the reforms that you have come to this House with today.

Santer
Mr President, I still believe that we have provided Parliament with reports which would not have been given to national parliaments. This is absolutely clear. So, Mr Elles, I maintain my position, and I have been in politics long enough to know what it should be. We are also required to respect the confidentiality of preparatory inquiries and the right to privacy of individuals and officials under investigation. This applies in all countries. I would be amazed if in the United Kingdom, which is also a guardian of human rights, these rights were not respected.
(Mixed reactions) Yes! I continue to believe this and I insist on saying it. You can file a motion of censure against me if you like, but I will say it.
Secondly, with regard to the Staff Regulations for officials, we cannot take decisions on these unilaterally. Decisions must be taken in consultation with staff representatives and trade unions. We set up a joint committee chaired by the former Secretary-General, Mr Williamson, who submitted his proposal some weeks ago. I regret that this is rather late but we only took up our posts in 1995 and the screening could not be carried out overnight. We must all be reasonable, sometimes even this House too.

Dell'Alba
Mr President, I must return to the document submitted to us on the Anti-Fraud Office - OLAF - as there is some uncertainty and confusion about this. Perhaps you can clarify the way in which the Office might initiate investigations. As things stand, the present UCLAF can and does launch investigations on its own initiative. Apparently, according to this document - I do not see this myself but my colleagues do and I should therefore like you to clarify this point - it would seem that the Office can act only on the instructions of the institution which it is supposed to inspect. Could you clarify this point?
Also, with regard to confidentiality, I am concerned that the present UCLAF, in my opinion, has failed to respect this confidentiality in many cases and that some case files have been disclosed. Could you tell us what exactly are the measures used to guarantee that UCLAF itself ensures the confidentiality of investigations?

Santer
Mr President, this is a precise question to which I will give a precise answer. I would refer to Article 3 of the proposal which states that, on its own initiative and also at the request of a Member State or of the Office, the Commission can ask the Office to carry out an investigation. It is also clear from paragraphs 6 and 12 of the explanatory statement that the Office is to be closely involved in the launching - to use your word - of investigations (this is contained in paragraph 6) by allowing the Office to initiate an investigation on its own initiative. Therefore, the Office can initiate an investigation on its own initiative. Clearly, all the institutions can also ask the Office to carry out investigations and you will see that other provisions of the Office's statute contain certain precautions to ensure that confidentiality is maintained.
Based on experience gained during the operation of UCLAF, we have sought to rectify certain failings which exist in the current UCLAF statute and we have achieved this in the document submitted to you. You now have time to examine and scrutinise this and to make comments and amendments so that our work together can produce a joint result.

Morgan
Mr President, you told us that you take your responsibility seriously as the President of the Commission and we want to take our responsibility seriously as a parliament. That responsibility includes holding the Commission to account. That is very difficult when documents are not passed on to us. Can you make a commitment to us today that you will give us a list of all the investigations of alleged fraud and corruption on a regular basis, not on the piecemeal grudging basis as we receive them now and answer when, at the latest, we will see the new Fraud Office operational? How can we be assured that you are not just kicking the ball into touch here? Will it be running during this Commission's ten years and, if so, by when?

Santer
Mr President, I believe I can say that there is no problem about providing a list of investigations launched by UCLAF. I cannot see any reason why this should not happen. However, these investigations will not necessarily lead to the discovery of irregularities or fraud, and the list cannot be published without due regard. The initiation of an investigation by UCLAF does not necessarily mean that an irregularity, incident of fraud or anything else has actually occurred. Generalisations are sometimes made public, which is a great disservice to the operation of UCLAF. We have tried to take all this into account in our proposal.
Secondly, you wanted to know when this new Anti-Fraud Office might start work. I have asked for the goodwill of all the institutions in bringing this into operation and we consider that, if the political will is there, it could be operational within six to seven months.

Buffetaut
Mr Santer, I read with great interest the discussion paper distributed under your authority and entitled 'The Commission of Tomorrow'. I noted on page 4 the Commission's intention, in future years, to concentrate more on the main policy areas of external relations, the single currency, internal security, the single market, economic and social cohesion and common policies, in other words the powers of a government of a sovereign state.
My questions in this respect are: what powers will the national governments still have and does the next paragraph, which says that consideration should be given to greater delegation of simple management tasks, actually apply to these national governments?

Santer
Mr President, this document sets out the future of the European Union as a whole. I will gladly make a statement on this and in fact I have already done so in the debates on the Union. In my opinion, the European Union of the future will always remain bound to the Member States which, while retaining their national identity, will be integrated into the political union. We do not want to build a United States of Europe along the lines of the United States of America. This is not our intention. Economic rules can be harmonised to create a single internal market but the individual nations can never be harmonised. Therefore, national identity must always remain a part of the future Union.
However, thanks to this Union, the Member States have an opportunity to transfer part of their sovereignty to supranational bodies, such as the Commission and the European Central Bank, in order to exercise this sovereignty jointly and equally and in order to become stronger and more powerful on the international stage. The Member States will not just be left with management powers. On the contrary, the Member States must realise that they will have a role to play in the future within the principles of subsidiarity and proportionality. These are the essential principles on which the European Union is built.

Wemheuer
Mr President, I have two questions. Earlier, when Mr Fabra asked about the future of Europe, you said it was the euro. Do you really think that the euro represents Europe's future? Secondly, you said in your speech that we are now going the right way about handling the legal bases issue - which we are not talking about here - and the mini-budgets. Do you realise that the budgetary authority, in other words the Council and Parliament on the one hand and the Commission on the other, agreed as early as the 1993 budget to abolish the mini-budgets, and that we are therefore not going about things in the right way, but have actually defaulted on this agreement in a totally unacceptable manner?

Santer
Europe is clearly not just about the euro; it is not just a single market but much more besides. However, the euro will be a powerful factor in the economic integration of Europe, firstly by allowing the internal market to be perfected, because I do not know of any internal market in the world which can operate with fourteen different currencies without any distortion of competition. The euro will also be a powerful factor in political integration as it will give Europe and the internal market a European identity. Thirdly, it will contribute to establishing a zone of monetary stability and will therefore be a stabilising factor in our international monetary relations. For all these reasons, the euro is a powerful factor in our integration. We are delighted that the euro will soon be introduced in eleven of our Member States and we obviously hope that it will be accepted in the other four countries which are not yet members of the euro zone.
With regard to the mini-budgets, certain decisions were indeed taken in 1993. It was then that cases of fraud were discovered. The existence of the mini-budgets allowed UCLAF to discover cases of fraud in four ECHO contracts. The procedure which was initiated at the time and which is intended to gradually eliminate these mini-budgets under very difficult conditions was made possible due to agreement between Parliament and the Commission, and this is how we should continue.
Furthermore, if you read the reports of the Court of Auditors of the Member States, you will find many irregularities revealed in this way. I had the idea of looking at the report of the Court of Auditors of the German Federal Republic and I could not see much difference between its report and that of the European Court of Auditors.

Böge
Mr Santer, do not rely on the Council when it comes to recommending the discharge. You are the board of directors for project Europe and we are the general meeting, and I would therefore repeat that Article 3 of the proposal has nothing to do with Parliament's original proposal and is completely unacceptable.
In the context of the transparency you have talked about, can you confirm or deny that, following inquiries by the Belgian authorities, the Commission's Legal Service recommended that if Commission officials were asked whether social contributions had been paid as part of Commission contracts with firms, they should claim immunity and carry on the contracts as before? Do these documents exist? If so, would you be prepared to let the Committee on Budgetary Control have them, in confidence of course?

Santer
With regard to the first question, I shall simply say to the honourable Member that the Council is an institution of the European Union and should not be underestimated, and that a Council representative is here today. As you have probably noticed, we have several European institutions. I am perfectly happy with the current operation of the institutions within our European Union, which is my right and my obligation.
In reply to your second question, all I can say is that I do not know nothing about it and therefore cannot give you an answer. If you have any other details, you have the opportunity to tell the House about them. However, as President of the Commission, I cannot answer your question.

President
Thank you, Mr Santer.
That concludes this first item on the agenda.

European Council
President
The next item is the statements by the Council and the Commission on the preparations for the Vienna European Council of 11/12 December 1998.

Ferrero-Waldner
Mr President, ladies and gentlemen, in just over a week the Austrian Presidency of the Council will culminate with the European Council meeting in Vienna. As the first European Council to be held in Austria, it is of course of very particular significance to us. This European Council is also important to all the Member States of the Union, in view of the major issues that are currently being discussed and negotiated in all the Union forums; but first and foremost, these issues are also of major and direct importance to the citizens of our countries.
With regard to many of these questions, we are facing decisions of principle which will determine the course of Europe over the coming years and decades. But in the last few years as well, the European Union has taken a number of forward-looking decisions that now need to be implemented. Here, 1 January 1999 will be an historic date. With the imminent introduction of the common currency, we shall be giving European integration a new dimension. The euro, the only currency which, as the German President Mr Herzog put it, has already become the most stable one in the world even before its introduction, represents the culmination of a success story that goes back nearly five decades.
So what are the core elements of this unique experiment in the history of our continent? They are unity in diversity, solidarity instead of domination, and the common exercise of sovereignty in common institutions. But the introduction of the euro certainly does not nearly complete our task, because however enormous the achievements of the Union and its Member States, of which we are rightly proud, people today still tend to have confused perceptions of our common future. The new structure of Europe following the end of the east-west confrontation and the increasingly rapid process of globalisation have triggered a tremendous dynamic force. In the space of just a few years, some of the cornerstones of our international political system have collapsed. The international economic landscape is changing day by day. The individual states and the international community need to take measures to cope with the new technologies and their impact on man and the environment. Social changes and an unheard-of international mobility are breaking up the structures of the past.
This produces new challenges every day, for which the recipes of the past are no longer appropriate. If we wish to preserve the achievements of the past five decades during this time of radical change, we must be open to reforms and adjustments. The real danger - and let me emphasise this - lies not in change, but in persistent clinging to the past. So the Union needs new impetus. Its strategic concept must be redefined. I believe that is the main purpose of the process of discussion on the future of Europe that was begun in Cardiff and continued under the Austrian Presidency at the informal Council meeting in Pörtschach in October.
In my view, this process of reflection has resulted in two distinct approaches. The first is a clear commitment to the dynamic continuation of the process of European integration. The challenges facing us call for more rather than less Europe. But we also need more ability to act, better instruments and more willingness to apply them on a basis of solidarity.
The second is that we must focus Union activity more specifically on subjects that directly affect and also interest the citizens of Europe. But if we wish to make sure that the people support the further development of the Union, then our priority must be to put employment, a clean environment and security at the top of the European agenda. These considerations will also influence the preparations for the Vienna European Council on 11 and 12 December this year. So we will have to discuss a wide range of important subjects in Vienna.
Employment remains the first priority. Here we can at last see a change for the better. Unemployment in Europe has now fallen below 10 %. So more jobs were created in Europe last year than in the United States. That is no reason to relax our efforts, but it is a sign that things can improve. The coordination mechanism agreed in Luxembourg has therefore passed its first test. The general assessment of the implementation of the national employment plans shows that the governments are making great efforts to genuinely achieve their projects. This encouraging trend should spur us on to pursue the road we have embarked on with determination.
The Union's future employment strategy should be based on three pillars. The first is the employment policy guidelines, which are aimed at making the labour market more flexible and adaptable and making it easier to create jobs in new undertakings. The draft employment policy guidelines for 1999 will be submitted to the European Council in Vienna; they point the way forward, putting the emphasis on equal rights for men and women, lifelong learning, older workers and means of promoting an entrepreneurial spirit.
The second is economic structural reform, to make the markets in goods and labour more competitive and promote the capacity to innovate. The third is a macro-economic policy that effectively underpins and promotes growth.
One very important aspect of economic policy is the external representation of the Union in questions of economic and monetary union. Europe must speak with a single voice in the international financial institutions and in the G7 and assert its major economic influence more effectively than in the past. That important issue must finally be resolved now that the third stage is due to enter into force in a few weeks' time. At present, as you know, the finance ministers are engaged in intensive discussions. We expect practical results to be achieved by the time of the European Council.
The introduction of the euro also makes it all the more necessary to coordinate tax policy more closely. We expect Vienna to provide an impetus towards speeding up the work on these questions. The finance ministers will also be submitting a report on the reform of the international financial architecture to the European Council. In recent months, it has become clear that our capacity to manage financial crises is no longer anywhere near to matching the challenges of a globalised world economy. Europe has an important contribution to make in this respect. Other areas of economic policy to be discussed in Vienna are improved financing instruments for the trans-European networks and further steps towards fully implementing and utilising the single market.
As regards environmental policy, the European Council will concentrate on the concept of integrating environmental aspects in the various EU policy areas. Initial reports have been drawn up on transport, energy and agriculture. At Vienna, it will have to be decided how to pursue this important process further.
Of course, Agenda 2000 is a central area of the presidency's activity. In my statement to the House on 18 November, I reported on the progress achieved here. This morning, I myself held talks with European Parliament representatives on the pre-accession instruments, with a view to intensifying the dialogue and the exchange of information between the Council and Parliament, as we had agreed in the trilogue.
There is extremely wide agreement in the Council on the pre-accession instruments, the TENs and the Guarantee Fund regulation. The technical work on these legal texts is nearing completion. With regard to structural policy, a number of key political questions are emerging and the outlines of a solution have at least been established. Clear trends have also emerged from the agriculture ministers' report adopted on 23 November, which means that agreement should be within reach by March 1999. In terms of the financial perspective, our aim was to establish options for solutions that take account of the dual challenge, namely budgetary discipline on the one hand and guaranteeing the necessary resources for the further development of the Union's policy on the other. At the foreign ministers' conclave on 6 December, we shall endeavour to make further headway in clarifying the key elements and in this way to create a good basis for the European Council's deliberations in Vienna.
By its nature Agenda 2000 is an overall package, which means that it will not be possible to take major decisions on individual questions of substance. But we believe that the progress made during the Austrian Presidency can, as a whole, form a basis for ensuring that the decisive end game in the negotiations can commence right at the start of 1999.
Good progress has been made with the enlargement process over the past five months. The beginning of concrete accession negotiations with the '5 + 1', the progress in the acquis screening with the Eleven and the implementation of the accession partnerships show that the Union, and also our future partners, are approaching these great challenges with both energy and circumspection. The Commission's report on the applicant states' progress contains an open and sound analysis of the degree to which the Copenhagen criteria have been fulfilled, and both the Member States and the applicant states viewed it positively.
This report will also represent the main basis for the discussions on enlargement in Vienna. We wish to give a clear signal of the Union's commitment to successful enlargement, a signal that encourages our partners to pursue their reform efforts in a positive and active manner.
Another important component of the Pörtschach message was that Europe must become more capable of action in the fields of internal security and foreign and security policy. Three reports by the justice and home affairs ministers will be before the European Council in Vienna. Firstly, an action plan to establish an area of freedom, security and justice. Secondly, a report on the implementation of the action plan to combat organised crime and, thirdly, a report on drugs. Other questions will concern implementing the integration of Schengen into the EU Treaty and providing impetus to strengthen cooperation in the field of migration policy. The ministers decided in Pörtschach to schedule a meeting in Tampere in the second half of the year, which will help focus strong attention on internal security in the year 1999. The Vienna European Council will consider important foreign and security policy issues, such as the situation in Russia, the peace process in the Middle East and developments in the western Balkans. It will also consider structural questions, such as preparing for the implementation of the common foreign and security policy instruments provided for in the Amsterdam Treaty and continuing the discussion on security and defence policy issues, which have been given fresh impetus during the Austrian Presidency.
I have given you a brief overview of the most important themes of the Vienna summit. As you can see, it is an extensive and demanding programme, which reflects the dynamic stage the integration process has now reached. In this context, I also wish to express my personal thanks for the good cooperation with the European Parliament during the Austrian Presidency. The ambitious European agenda has given us ample opportunity to work together. Here I am thinking primarily of the regular exchange of views on topical foreign policy issues, the opening of the informal dialogue on Agenda 2000, the flow of information on progress in the enlargement process, as well as the agreement on the fifth framework research programme. I hope we will also manage to adopt the EU budget for 1999 in good time, before the end of the year.
Mr President, ladies and gentlemen, I believe that in the relations between the institutions it is essential to remember the great aims and interests of our citizens, and not to delay our work with problems that can be avoided. That requires an open discussion, which I am happy to engage in now.
Today the Union is perhaps facing greater challenges than it ever has done in previous decades. In the past, it has repeatedly proved able to summon up the necessary creativity and will to overcome great challenges. I am convinced that will also be the case now, on the threshold of the new millennium, and I hope the European Council in Vienna will play its part.

Santer
Mr President, Madam President-in-Office, ladies and gentlemen, the Vienna European Council will conclude the six-month term of the Austrian Presidency.
It is the first six-month presidency of the Federal Republic of Austria, and I pay tribute to the work that presidency has accomplished. The presidency was marked in particular by the informal Pörtschach meeting, where the Heads of State and Government succeeded in coordinating their views on the future of the European Union more closely. On 21 October this year, I concluded my statement to the House on the Pörtschach summit with the following words, and I quote: 'As always in the history of the Community, the main challenge is to translate ideas on Europe's future into action'. So I propose to begin by examining the main dossiers on which progress has been made during these six months, which the European Council will ratify or close.
Obviously, I will start with enlargement. The Council will examine the Commission's first report on the progress made by the applicant states, as requested by the Cardiff European Council. This report shows that the process as a whole is now under way. The Commission's analysis also shows how the situations differ in the various countries. It points to the dynamic nature of this enlargement process. We judge the progress of the applicant states by the Copenhagen and Madrid criteria. The Council will point out that all the applicant states must make sustained efforts towards achieving the goal of accession.
Alongside this, as you know, the negotiations on Agenda 2000, have begun to progress, thanks also to Parliament's cooperation. We are about to embark on an important stage along the road which will lead us, before the end of the current legislative term, to the adoption of all the measures proposed in the context of Agenda 2000. The Cardiff European Council and the Heads of State and Government at their informal Pörtschach meeting have stated their political resolve to conclude the Agenda 2000 negotiations at the special summit next March.
I think there are several reasons why we should conclude them in March. First of all, the coming European Parliament elections will have an impact on your activities as from March or April, and I note that even now they are having certain effects on parliamentary activity. Secondly, a delay would damage the credibility of and confidence in the Union; and lastly, there are the practical considerations associated with planning the Structural Funds and establishing the appropriate policies, together with the adverse effect which any delay in implementing the pre-accession instruments would have on the pre-accession process as such.
Naturally, the question which then arises is whether we can conclude them in March. I believe we can, because all the data is on the table: the 19 detailed Commission proposals, as well as the Commission's report on own resources. As one of the two arms of the budgetary authority, you will also be signatories to a new interinstitutional budgetary agreement. Of course, the conclusion of a new agreement that satisfies both arms of the budgetary authority will form an integral part of Agenda 2000.
Mr President, I hope this European Council will provide a good point of departure for the discussions that are due to be concluded under the German Presidency. Obviously, until there is agreement on the total package, there will be no individual agreements. Subject to that reservation, I hope we will manage to achieve three things. Firstly, we must reach agreement on the many 'technical' aspects, as I would call them, of the legislative texts. In that context, I welcome the recent successes in relation to the Structural Funds, the Cohesion Fund, the pre-accession strategy and the trans-European networks. Next, we must try to make headway in the political field. Here I am thinking, for example, of some aspects of the agricultural reforms and rural development, of the structural actions and the format of the financial perspectives. Lastly, we must sketch out the broad lines of a final package which must, above all, concentrate on the financial implications of the reforms and the related budgetary issues.
Two items on the Council's agenda are regarded as priorities by the people: employment and an area of freedom, security and justice. Let me begin with employment. In Vienna, the European Council will for the first time evaluate the progress made by the Member States in implementing their national employment plans under the Luxembourg strategy. Who would have thought, two years ago, that we would receive such support from the Member States and the social partners, that we would have European guidelines and national action plans? Who would have believed that the Member States would accept having their employment measures examined, evaluated and even judged by their peers, and who would have believed that an exemplary dynamic process would be created, which can now be driven along by the new wind blowing through Europe? First we discussed that strategy with the Member State governments, and it was together with them that we established the follow-up mechanisms, the exchanges of information and the benchmarking mechanisms.
On the basis of the Member States' analysis in Vienna, the Commission will draft proposals on adjusting the guidelines for 1999. I must admit that they were minimal. I believe that what is most important is to consolidate the process. The national action plans form part of a medium-term strategy, but it is important to give the process new impetus. We are pursuing our strategy for a more entrepreneurial Europe, with a pan-European risk capital market, which will give our undertakings the same advantages as American firms and make up for our delay in harnessing information technology. We have also asked the Member States to amend their unemployment benefit and tax systems and, in particular, to review their early retirement policies.
As regards the area of freedom, security and justice, as you know we decided at Pörtschach to hold a first special European Council on the subject on 15 October 1999, under the Finnish Presidency. That decision reflects my determination, ever since I was appointed, to give priority to this question. With the entry into force of the Amsterdam Treaty and the entry into operation of Europol, we shall be able to register real progress in cooperation on judicial, police, asylum and immigration questions, all areas where the people of our countries have high expectations. We can only frame such policies, which remain national, in a European context. The practical problems relating to asylum, immigration, police cooperation and extradition cooperation that have faced us in recent months make it clear that we must approach these problems at Community level; and I hope the action plan the Council and the Commission will be submitting in Vienna will represent a milestone in the preparations for the Tampere summit.
We will also be having an exchange of views on the development of the European and international economic situation in Vienna. The advent of new governments in some Member States and the acceleration of the international financial crisis after the events of August in Russia have sparked off an intense debate on economic, financial and monetary policies, at both European and international level. The international crisis has abated a little, but that does not mean it has been resolved, so we must remain vigilant and bear in mind the results of our debates. These results, which will no doubt be discussed in Vienna, are as follows.
Firstly, I note that following the debates on interest rates, we have agreed that all the conditions have now been fulfilled for having low interest rates as soon as the euro is born. The dialogue that has already been conducted with the European Central Bank has shown that budgetary rigour would facilitate a monetary policy which, apart from the priority objective of price stability, could take account more generally of the economic situation. It seems to me that since the most recent discussions among the Eleven, there is now broad agreement on this policy mix, and I am sure this dialogue will move forward in a satisfactory way once the euro has been established.
Secondly, I have noted a general desire for closer coordination of economic, financial and social policies, and I feel that real progress is being made in this regard within the group of Eleven, as well as at Council level. At the same time, there are clear signs of a wish to coordinate our fiscal policies. We reported on that yesterday, at the ECOFIN Council, and here too marked progress has been made, although we must always remain realistic when we discuss fiscal matters.
The discussions this autumn also drew attention to the importance of infrastructures to the economic fabric, and to the role of public investment in that context. I am happy to note that while emphasising the importance of these investments, no one called into question the principles of the stability and growth pact. However, some ideas emerged from the discussions on the instruments that could influence investment and I am pleased to be able to tell you that, this morning in fact, the Commission has adopted a document on the subject, which we will of course be forwarding to the European Council in Vienna.
I have only three remarks to make on the subject. The first concerns the European Investment Bank. After the success of the Amsterdam special action programme, I believe the Bank could enhance its role by broadening its range of instruments to promote infrastructure projects and, in particular, the trans-European networks. This could take the form of a special system by which the Bank could, in various ways, encourage risk sharing between the private and the public sector and thereby encourage them to take more part in financing infrastructure projects. In the same context, it would be advisable to broaden the European Investment Fund's eligibility criteria, which would increase the Fund's impact on the development of infrastructure in the broad sense of the term.
Secondly, we must recognise that some trans-European infrastructure projects can be accomplished only with the aid of subsidies if they are not sufficiently profitable in financial terms. Within the general Agenda 2000 framework, our proposed new draft financial regulation for the trans-European networks is currently under discussion. Apart from the proposal for substantial funding, this draft contains a number of innovative ideas. I am thinking in particular of the idea of introducing multiannual budgetary allocations, the idea of using risk capital funds, and the possibility of cofinancing up to 20 % of the total cost of projects instead of the current 10 %. Lastly, there is the matter of the obstacles that are preventing the emergence of a genuine - and I mean genuine - pan-European capital investment market, which Cardiff called for and which could be a real source of job creation because of the capital it could generate for innovative undertakings.
Turning to the international situation, there is now broad agreement that with the advent of the euro, the Union will bear a greater responsibility with regard to the international financial situation and will have to speak with a single voice. We agreed at Vienna that all the outstanding questions on the external representation of the euro must be resolved, including the question of the Commission's participation in international forums. In that context, I am glad that the ECOFIN Council managed to reach general agreement on this matter yesterday, in other words well before the Vienna European Council, and I am also glad that the European Parliament has supported us here. Lastly, I am thinking of the functioning of the international financial institutions as such, and of our responsibility as the largest donor of development aid.
But we must not confine ourselves to financial aspects, and I hope we shall also discuss wider issues in Vienna, such as Europe's role in relation to globalisation, which affects every dimension of our societies. With the new impetus provided by the euro and the Treaty of Amsterdam, the Union cannot remain silent in the face of a world that is waiting for a response, the response of a Europe that speaks with a single voice.
Mr President, these are the main points that we will certainly be discussing in Vienna. However, I would not wish to end my statement to the House without pointing out that we shall be celebrating the fiftieth anniversary of the Universal Declaration of Human Rights in Vienna. That too will be an opportunity to call on the Union to take resolute action to defend the values of that declaration. The European summit in Vienna will, therefore, be a summit that sets out the practical and fundamental approaches to follow so that we can meet the challenges of the twenty-first century.

Medina Ortega
Mr President, I should like to begin by congratulating the Austrian Presidency on its excellent work in recent months. In particular, I would like to say that the special summit at Pörtschach proved a pleasant surprise for Members of the European Parliament. By contrast with previous European Councils, at Pörtschach there was talk of more Europe rather than of less Europe.
The name Vienna has a fascinating ring and this European Council might be the moment for Europe to make some sort of declaration of a very general nature. According to the statement by the Austrian Presidency, however, specific achievements are being sought.
The Austrian Presidency has stressed that at present, it is the public who are of prime importance: our citizens who voted for us and who trust that their problems will be resolved. As the Austrian Presidency has also highlighted, the main problem is unemployment, which is currently the European Union's top priority. Any other problem pales into insignificance against 10 % unemployment, that is, almost 20 million people out of work.
The special summit at Luxembourg, instigated by President Santer, did of course make significant progress in this area. However, it failed to provide the funding required. In my view, the arrangements made at Luxembourg, namely ECU 10 000 from the European Investment Bank and ECU 450 million from the Community budget over three years, are inadequate. It is certainly clear is that if we wish to fight unemployment, we must resort to other methods.
My question to the Council is as follows: would it not now be possible to consider other proposals for the release of funds? I refer in particular to the Jospin proposals, which restate the earlier Delors proposals and which concern the use of a European loan for the major trans-European networks. The Austrian Presidency has also referred to these. Alternatively, why not consider the Prodi proposals for mobilisation of the resources or reserves of the central banks once the euro has come into being?
Clearly, investment is needed at present. This situation also calls into question what seemed to be one of the key principles underpinning the building of Europe: linking the euro to a stability pact in which inflation was the most important issue. At present deflation, not inflation, seems to be the issue, and the world seems to be threatened by an economic crisis. Consequently, the question we are asking ourselves here, in the European Parliament, in the Council and in the Commission is whether it would not be appropriate to take steps to encourage investment.
Does it really make sense to reduce expenditure - including investment - and, for instance, to cut investment, through the stability pact? My view is that the stability pact should be complemented by an employment pact which would allow resources to be made available to combat unemployment.
Finally, the President-in-Office of the Council has also referred to the financial outlook. As we in the Parliament see it, Madam President-in-Office of the Council, there is a danger of aiming for less Europe rather that more Europe because of the financial outlook.
I trust that the Vienna European Council, inspired by the helpful conclusions of the Pörtschach European Council, will move towards more Europe. Without more Europe, it will not be possible to build the Europe we, the citizens of the Community, are hoping for.

Azzolini
Mr President, ladies and gentlemen, in our opinion the recent informal summit in Pörtschach demonstrated, regrettably, that Europe is still in search of an identity. Whereas Europe is now a recognised world power in economic terms - and will soon have a single currency - our governments are being too cautious and tentative about giving it a more dynamic, more political role, both internally and internationally. On this point, I should like on behalf of the Group of the European People's Party to recall the problem - already referred to by the Austrian Presidency - of ensuring that the eleven member countries of the euro zone are properly represented in international forums. So far, convergence has been achieved in only one of the areas under discussion: the balance between stability and growth. Several countries have referred to the need for a dialogue with the European Central Bank. We would now ask the Council whether this is a euphemistic way of covering up difficulties in the relations between the governments and the Central Bank or, as we would hope, confirmation of the resolve to protect the role and independence of that institution.
Furthermore, the painful sacrifices which all our countries have had to make to create a strong and viable single currency cannot and must not be thwarted by second thoughts or, worse still, by dangerous interference which could result in a weak currency without sound prospects. The governments are well aware that a healthy monetary policy is a precondition for the creation of sound growth and development, but clearly there is also a need for appropriate economic policies - albeit coordinated ones - to promote a recovery of the economy and above all of employment, the most urgent issue facing Europe. This is a task which the governments must on no account shirk.
Unfortunately, concerning the other items on the agenda of the informal summit, our expectations were not met. Apart from vows and promises, nothing new emerged in respect of foreign policy, for example on the common foreign and security policy, even though we do welcome Mr Blair's openness on the question of integrating the WEU into the European Union; nothing whatsoever on justice and home affairs, nor on crime and illegal immigration; and finally, nothing whatsoever on the launching of institutional reforms.
I would conclude by adding that the scale of the challenges lying ahead of us over the next few years calls for political vision and a fresh input of ideas. We therefore hope that the forthcoming European Council in Vienna will live up to our expectations and those of all our citizens, thereby fulfilling the hopes expressed by the Austrian Presidency. I nevertheless believe that the European Parliament - the democratic, representative voice of our peoples - also has a crucial, leading role to play in this context, naturally alongside the other institutions.

Frischenschlager
Mr President, Madam President-in-Office, you have given us a long list of subjects. No subject of any importance was omitted, in point of fact. Of course, that makes it difficult to identify the main issues. I believe it is vitally important that we see a political breakthrough at this Vienna summit on one central issue, namely Agenda 2000. We must wrap up this matter - which is important to enlargement, but also to the internal cohesion of the Europe of 15 - during these six months leading up to the campaign for the European elections. I regard this as the decisive issue and hope it will be tackled successfully.
Another matter you did not mention and which really does affect us Members very strongly is the Statute for Members. It is vital that the Vienna summit should resolve this issue too. That is partly Parliament's responsibility, but in the end it is also the responsibility of the Council. It is not just a question of creating a sound working foundation for Members. However, we are going through a difficult phase. There have been scandals and accusations. It is vital that Members can enter the campaign for these democratic elections with a clear conscience, and can discuss European issues rather than having to counter accusations. I would ask you to take this matter seriously and to ensure on 12 December that the subject is dealt with in a sensible way and can be removed from the agenda before the elections, for our sake, as Parliament will, I hope, propose tomorrow.

Pasty
Mr President, ladies and gentlemen, according to the Treaties the Council is not a decision-making body, but is the Union institution which can most legitimately carry out the vital task of providing a political impetus, since all the Heads of State and Government are directly accountable to their respective parliaments.
Prior to a European Council meeting, all we can do is to formulate wishes. However, we must be careful not to draw up an exhaustive list of all our wishes, like the poet Prévert, since that would inevitably lead to disappointment and disenchantment, but try to confine ourselves to a few priorities. I for my part will name three of them.
The first priority is the reforms in Agenda 2000 and the future financing of the Union. We are in fact hearing at the highest level in a growing number of Union countries, including the more powerful ones, that a country's contribution to the Union budget should match the financial benefits it gains from it; this means the general application of the 'fair returns' principle for which Mrs Thatcher became famous in her day. That is at the very least a curious conception of European solidarity on the part of governments which claim to be champions of the utmost social justice. The Union has never before seen so many governments of a socialist persuasion or with socialist participation; and yet never before has the principle of solidarity been so much denied, at least in statements of intent, despite the fact that it acts as the binding force of joint action and is the key to the prosperity of all the Union countries.
Here I would solemnly warn that cofinancing the common agricultural policy would risk dismantling it. I would also warn that any reduction in the appropriations allocated to the Structural Funds, the Social Fund and the Cohesion Fund would put the economic and social stability of our regions at risk.
The second priority is enlargement of the Union. As we have said before, as a political symbol and by virtue of its social, economic and commercial implications, this enlargement goes immeasurably further than the preceding ones. Let us beware of excluding certain states on the basis of questionable pretexts and thereby recreating artificial divisions between the applicant countries. Let us also beware of underestimating the major difficulties awaiting the economic players both of the Fifteen and of the applicant countries.
The last priority I would highlight on the eve of the European Council is reform of the institutions. It is a reform linked to the enlargements that are to come, and it is vital that it is carried out before any further enlargement, but without being used as a pretext for delaying that enlargement. The ball is indeed in the court of the Heads of State and Government. So let us be exacting, ladies and gentlemen, and solemnly call on the Heads of State and Government of the Fifteen to discuss, without taboos or ulterior motives, the real reforms on which Europe must embark if it wants to go on living and developing.

Puerta
Mr President, I agree entirely with Mrs Ferrero-Waldner that the Vienna European Council will represent a turning point in our struggle to resolve the fundamental problems involved in the building of Europe. Chief amongst these is employment. It is for this reason that our group places such great importance on support for employment policies which go beyond the coordination of national policies and Community guidelines.
Dare we hope that we shall have a European employment policy after the Vienna Summit? We should make as great an effort to achieve such a policy as we did when setting up the single currency. Indeed, in our judgment, the stability pact and the severity with which it is implemented hinders the creation of employment and does not promote the best interests of our citizens.
We cannot agree with the statement made recently by Tony Blair and José María Aznar, the Prime Ministers of the United Kingdom and Spain, concerning greater flexibility on the labour market and cutting unemployment cover. The aim, apparently, is to dissuade the unemployed from relying on benefits. However, such a philosophy and such measures will not promote employment policies or justify the European social model.
We find the French Government's philosophy more positive, with its proposal for a 35-hour week. Oskar Lafontaine's proposals are also encouraging, and could result in substantial investment, particularly in the European transport, communications and energy networks. We are prone to criticise the Commission, but it too has put forward interesting proposals which have, to date, been blocked by the Council. I shall mention just two: the reduction of value-added tax on labour-intensive services, and the introduction of an environmental levy to finance policies for employment creation.
With regard to Agenda 2000, Madam President-in-Office, we are concerned about the failure of the ECOFIN Council. Agenda 2000 as a whole has been postponed, along with the report on own resources, the allocation of funds and external representation of the euro.
In addition, the Austrian Presidency's proposal to freeze expenditure in percentage terms and set it at ECU 85 000 million for next year seems to us to be a step backwards where internal solidarity is concerned. The suggestions made by certain Member States are even more alarming. A reduction of the Community budget in real terms has been proposed, which would bring it down to 1.10 % of Community GDP. This would create major uncertainties for enlargement. Indeed the enlargement process lacks the clear plan and timetable essential to its success.
As I conclude, Mr President, I should like to mention the need for clear guidelines where relations with Turkey are concerned. We must also show our solidarity with Central America, and come up with a strategic response to the enormous problems facing the region.
Lastly, I feel I should mention the problem of the European Parliament. We urgently need to reach agreement, once and for all, on a statute for Members of the European Parliament, to facilitate seriousness and transparency within the House and before European public opinion.

Welcome
President
I should like to welcome Mr Gundars Bojars, chairman of Latvia's delegation to the EU-Latvia Joint Parliamentary Committee, and Mr Edvins Inkens, chairman of the European Affairs Committee, who have taken their seats in the official gallery to follow the debate that will be taking place shortly on the reports from the Committee on Foreign Affairs on the accession of the applicant countries. I welcome them to the House.

European Council (continuation)
Voggenhuber
Mr President, Madam President-in-Office, more and more people in Europe are alarmed at finding themselves greeted on the eve of the twenty-first century by the face of the nineteenth century. An increasingly aggressive neoclassical economic ideology is evidently trying to force us into this withdrawal into the past. This neo-liberalism regards unemployment almost as an indicator of modernisation, seeing workers' falling incomes as progress. Deregulation has become a kind of pseudo-religious commandment. Meanwhile, the financial markets are reacting quite euphorically to announcements of staff cuts and redundancies. The havoc which this ideology has wrought in recent years in South-East Asia, in the newly industrialised countries and in Russia has obviously made little impression. Anyone who does not want to return to the nineteenth century is branded a reactionary.
Politics has been concerned for years with mass unemployment and growing poverty. But this has produced little, apart from the literature of political commitment and social poetry. One cannot avoid the impression that some sectors of European policymaking seem to regard themselves almost as the acolytes of this aggressive ideology. So we call emphatically on the Vienna summit to decide on practical actions at last and to stop creating taboos around the central issues of reform. We are calling for quantified and quantifiable objectives with well-defined time-scales and evaluation procedures. We are calling for an end to ruinous European fiscal dumping, for the harmonisation of tax systems, for moves towards ecological tax reform, and for the European Central Bank to carry out its duty of supporting European economic policy objectives within the framework of price stability.
We are calling for the regulation of the financial markets and for job-creating investment not to be taken into account within the context of the stability pact. Finally, we wish there to be a debate on the fair distribution of work through reductions in working hours. Let us move on at last from political poetry to responsible actions!

Sainjon
Mr President, the citizens of Europe, and in particular the unemployed and the young, are indeed expecting a great deal of the European social model and hoping to benefit from the historic opportunity offered by the coming to power of left-wing governments in most of the European countries. Ultimately, these governments do not have the right to fail to implement a policy that lives up to the hopes of our citizens. Faced with the reality of today, we can no longer confine ourselves to generous statements or expressions of sympathy.
The moment has indeed come, with the Vienna summit, to make social Europe our ideal by ensuring that the people feel they are involved in a grand social plan, in one which - I am tempted to say - is worthy of our democratic and progressive traditions. What concerns them most is unemployment, as the minister said. That is where we need to take strong action, and even though we welcome the trend towards falling unemployment in Europe, it is essential that we now implement the proposals made in Luxembourg in November 1997, at the summit on employment, which set as a major priority that no young person must remain out of work for more than six months and no adult for more than a year. Let us follow that road, and let us go further by creating a new welfare state that promotes employment and lifelong training for every citizen of the Union.
Let us indeed ensure that any dismissal or period out of work automatically gives rise to a statutory paid training scheme, which must not represent a kind of 'marking time' period. In my view, this is a way of banishing the term 'unemployment' from our vocabulary. Paying benefits is sometimes a necessity, but there is no point in this unless it is linked to a programme of training and reintegration into work. Throughout his or her life, the individual must alternate between work and training, moving from one to the other without any unwanted break. That is a great innovative project. It is a project that the governments of the Union countries have a duty to support, not just at the Vienna summit but also at the forthcoming European elections in June 1999.

Parigi
Mr President, ladies and gentlemen, on the subject of foreign policy, a sector relevant to this discussion, I would take the liberty of flagging up the Ocalan affair to highlight the Community's shortcomings. The Europe of the left is making the worst possible start: the amateurism and demagogy of some members of the Italian Government have contrasted sharply with the hypocrisy and cowardice - to quote a headline in the 'Frankfurter Allgemeine Zeitung ' - of the German Government, which preferred to leave the hot potato, as it were, in the hands of their Italian progressive comrades, even though the judiciary had issued an international arrest warrant for the leader of the PKK. Added to this, the Greek Prime Minister, Kostas Simitis - whose government had previously, albeit unofficially, refused to take in Ocalan - came out in favour of granting political asylum to the PKK leader but leaving this 'honour' to Italy, a country which, in his words, was 'handling the matter very well'.
I am tempted to say that, if this is how parties belonging to the Socialist International demonstrate solidarity on matters of foreign policy, it is to be hoped that such unedifying conduct is not transferred to the handling of Community affairs. Linked to the Ocalan case is the problem of pressure, threats and acts of terrorism perpetrated or merely threatened by well-organised ethnic and religious groups which have a huge following in Europe, as reported by no less a figure than a leading German left-wing intellectual, Peter Schneider, who states: 'It is clear that Turkey is striving to manoeuvre the Turkish minority in Germany, like a sort of fifth column. The Kurds appear to be behaving in the same way.'
What is more, these immigrants could be incited not only to violence but also to unscrupulous behaviour at election time, casting their votes for citizens or coalitions who promise to protect their interests.
In the view of the Alleanza Nazionale delegation, therefore, the Ocalan case has revealed the current limitations of the Community edifice, namely its immaturity as regards the common foreign and security policy and its non-existence in the field of international justice and jurisdiction. This has been a timely crisis, demonstrating the individual Member States' inadequacies and unwillingness to seek solutions to particular problems which could have serious repercussions in terms of law and order, diplomatic and trading relations. This, then, is yet another reason to adopt at long last a real common foreign policy and to establish a proper European Court, which could be entrusted with finding legal solutions to cases such as that of Ocalan.

Swoboda
Mr President, I should like to return to the real subject, the Vienna summit, and address two points which in my view will decide whether or not that summit is a success, namely employment and foreign policy. On employment, several speakers have already expressed their views. That is not because we cannot think of anything better to talk about; it is because this is an issue of such immense importance to Europe, with its unacceptably high level of unemployment, that we must keep formulating new employment initiatives.
We have achieved much with the Amsterdam Treaty. It was confirmed in Cardiff and in particular in Pörtschach that we need to focus more strongly on employment policy. The Commission has examined the individual Member States' national employment plans. I must say that they have been treated very gently, and I also know that the Commission would have liked to deal with some Member States a little more roughly. I hope this was only the gentleness of the first wave, because I am absolutely convinced that the Commission, and probably also the Council, must take a firmer approach to those Member States which are in fact not matching up to their plans, ideas and objectives.
We must carry out the measures that have already been referred to, notably by Mr Medina Ortega. What about investment in Europe? Are the measures announced in Pörtschach, and which were already contained in the Delors White Paper, actually being implemented now? What about cooperation between Member States on fiscal matters? Do we really have a coordinated tax policy for the whole economy? I sometimes get the impression that members of the Council and some countries are afraid to have the courage of their convictions. They say they want to do something, but as soon as a practical proposal is put before them, they find good excuses for wriggling out of it again. So I wish to state quite clearly and plainly once again that I consider employment policy, more clearly defined guidelines on employment and stricter examination of the various countries by the Commission as of the utmost importance.
I turn now to foreign policy. A good deal has been said on this, and I am glad that Commissioner van den Broek at least is here, who may perhaps be glad in the short term that none of his colleagues from the Council is here to talk to him about foreign policy. But let me remind you that it was stated clearly in Cardiff that Vienna is to decide on a Mr or Mrs CFSP. That was confirmed in Pörtschach. But now I hear rumours that the Council is in favour in principle but cannot agree on names, and that once again it is shying away from the decision actually to appoint a high representative. Either the Council realises that it is important to appoint a representative, and then it must do so - and do so soon, after all the negative experiences we have had; or the Council does not consider it important, in which case it should delete these provisions from the Amsterdam Treaty.
The second option is wholly unacceptable, not least to this Parliament. We are told: yes, Mr or Mrs CFSP is an important figure. We must tie that up in a package with the Commission president and other individuals. My question is this: does the Council, do the Member States not know that in future this Parliament will also be appointing the president of the Commission, but that this will only happen at a later date? Has the Council not realised that the balance of decision-making has changed, and that it has to take the important decision on whom to appoint as the foreign policy representative, in other words on the person who will be the contact and discussion partner for Mr van den Broek and the other Commissioners? This decision must now to be taken. The Council would be giving a clear sign of weakness, a sign that it remains as indecisive as ever in foreign policy matters, if it did not take these decisions in Vienna. I believe this Parliament should say loud and clear that if the European Union's foreign policy is to be changed and rendered more efficient, then we need a high representative of the Council, and that decision must be taken in Vienna!

Brinkhorst
Mr President, again it is a pity that the President of the Council is no longer here. We sort of have a custom nowadays to play to the gallery. I would like to speak on two subjects. One is the question of financial aspects of the Agenda 2000. If the report of the Ecofin of yesterday and the day before is at all correct, then the European Community unfortunately seems to be in quite a disarray. It says in the Agence Europe that the draft inclusions for submission to the Vienna European Council were challenged vehemently by Spain. That shows that, indeed, on this point not much progress is in sight. If the President of the Council were here I would ask her what the strategy of the presidency is in this respect.
Secondly, the issue of the third pillar: In Cardiff there was a lot of talk about progress in justice and home affairs. But frankly speaking, very little progress has occurred since that time. This is quite a major point. We were present at the Civil Liberties Committee yesterday where the President of the Council, the Minister for Interior Affairs, spoke. The integration of the Schengen Accord into the EU treaty framework about 16 months after the signing in Amsterdam should now be in place. It is not. We still do not know at this particular moment what part will go to the first pillar and the third pillar. The danger is, if we are ratifying Amsterdam and nothing has happened, the result will be that everything will remain in the third pillar. To add insult to injury, it seems now that in the Justice and Home Affairs Council there is talk of setting up a special committee to monitor justice affairs which is not foreseen by the first pillar. In the first pillar it is COREPER, it is the Commission, but not the K4 Committee, the Special Committee on Justice and Home Affairs. We would like to ask what is the position of the presidency on this? Will it resist? What is the attitude of the Commission? I see Commissioner van den Broek here. I hope that he could reply that the Commission would not accept any non-legal situations concerning justice and home affairs. In particular, on this committee it is quite important that it will be this traditional structure and it will not be the third pillar and in the governmental structure.

Ainardi
Mr President, employment is indeed a key concern of the Union's citizens and everything possible must be done to combat unemployment effectively and create jobs, especially for young people and the long-term unemployed. The Pörtschach summit was marked by a change of tone, new ideas and greater emphasis on growth and employment. It has to be said that the elections which have recently taken place in some Union countries have all reflected a rejection of liberalism and an aspiration towards a more humane society.
The statements of intent must now be turned into practical action. That is what our citizens expect from the forthcoming Vienna summit. I heard everything that Mr Santer said a moment ago, but when I look at some of the employment policy guidelines for 1999 which the Commission is submitting to the Heads of State and Government, I feel a little disturbed. The Commission is still giving precedence to measures to encourage labour flexibility and social moderation in the name of competitiveness. The recent European day of action by railway workers in protest at the Commission's deregulation proposals clearly reflected the demand for public services which can respond to current needs and requirements in the Union. The recent Franco-German summit reaffirmed the will to create a stronger European social model. It even advocated stringent and verifiable objectives. Very well then, the Vienna summit must now move from words to deeds.
I think there are three essential conditions if actions are to measure up to intentions. Firstly, we must redefine the powers and tasks of the European Central Bank, which must come under the democratic control of the European Parliament and the national parliaments. Secondly, interest rates must of course be lowered, but on a selective basis to encourage job-creation projects. Thirdly, the current stability pact must be replaced by a genuine pact on growth and employment.
In the end, there will be no progress unless the people are involved. There is certainly a need for a genuine social dialogue, for a great public debate on the major European issue of employment. An annual conference on economic and employment policy could make a contribution here by checking what results have been achieved and proposing adjustments to employment policies, if necessary with binding quantitative criteria.

Raschhofer
Mr President, given the abundance of important and weighty subjects on the agenda of the Vienna summit - and the President-in-Office has presented us with very much a mixed bag - we can only wish the Austrian Presidency good heart in the discussions and much success. It will be essential to determine the right steps to take in a few key areas, for example enlargement and Agenda 2000. In view of the many crucial but unresolved questions in the agricultural and structural fields, I wonder how it will be possible to keep to the timetable. I am asking this partly because this is after all - and that is what makes it so difficult - a question of interests rather than visions.
So the Austrian Presidency must make sure it engages the right gear and steers in the right direction. That is a difficult task. It is pursuing the right course in focusing on employment policy, but this needs to be implemented more efficiently. There is no shortage of analyses and dossiers. Here too time is pressing, because there is a long and difficult way to go from taking decisions to achieving practical results, namely more jobs and fewer people without them.

Görlach
Mr President, although there are no leading figures from the presidency here present, I would still like to pay tribute to the work which the Austrian Presidency has carried out to date. It has made headway on many outstanding issues and helped to ensure that results and decisions can be achieved rapidly when it now hands over to the German Presidency. That would seem almost impossible, given the multitude of tasks, as many here have said, but let me point out quite firmly that no doubts must be voiced - and especially not in Vienna, prior to the handover of the presidency - about whether it will be possible to keep to the Agenda 2000 timetable in the first six months. Parliament will organise its work in such a way as to give the Council no excuses. It will be difficult, we will have to pull together, but that is only to be expected.
With Agenda 2000, with the many problems to be resolved - and it would be a good idea for this to be perfectly clear in Vienna - the forthcoming presidency must not forget to do its homework, including preparations for the necessary institutional reforms. We know it cannot complete and carry out this work until there is a further intergovernmental conference, but it must not wait until that new intergovernmental conference to embark on it. It must tackle the work now. Proposals and options must be put on the table in order to push forward the internal reforms, especially the institutional reforms. For what is the use of making progress on the agricultural and Structural Fund aspects of Agenda 2000 - even if only on a basis of compromise - and of the negotiations reaching a stage where the accession of new members at some point can be discussed, if the institutional reforms have not yet been carried out? Parliament will find that difficult to accept, and we know that all our groups argue that the institutional reforms in particular must also be completed before the first wave of new applicants are accepted.
I would like to add a further point. Of course employment will be on the agenda in Vienna. But it would be a good idea if the somewhat unspeakable way in which these matters are discussed in the UK, whipped up by sections of the press, were to come to an end, with the help of all the institutions and also of all the Members. It is not a question here of harmonising taxes in the sense of levelling them down. It is quite simply a question, with regard to employment too, of the Member States finding a way of agreeing on how they can promote investment, naturally also by means of their fiscal policy. We must determine how the labour factor can be relieved a little more of what is in some Member States a quite substantial tax burden, through a rational, agreed and joint approach to taxation, so that it would be worthwhile to create jobs, not just through investment but also through investment plus the numbers of people in employment. We should try together to make this clear. If we are honest, we would surely agree that the way we operate in the European Union is not that different from the way things sometimes go in neighbouring communities. Each side tries to drive away the other sides's investors by means of lower charges and cheaper land. We do not need to do that in the European Union, but what we do desperately need is an arrangement, so that everyone can have a piece of the employment cake!
I fully agree with Mr Swoboda. The Council should appoint the Council's representative for the common foreign and security policy as soon as possible. It should do so as soon as possible, but it should not try to tie up everything that needs to be resolved in the coming months in terms of appointments into one huge package. I would ask it to think again, and to remember that - thanks to Amsterdam - Parliament really does have a say on some appointments. It should bear that in mind, in view of the European elections in June next year.

Donnelly, Alan
Mr President, I would like to start with the point that Mr Görlach finished on and that is the fact that we have elections in the European Union to the European Parliament next year. The Vienna summit meeting will play a crucial role in setting the agenda for the first six months of next year. It will not only be the agenda of the German presidency. We also need to demonstrate that in Vienna there is a commitment to reconnecting the people of Europe with the project of the European Union.
As we know from our own Member States we have failed in recent years to do that. That is why the issue of employment, which was discussed at the informal summit meeting, must be a critical point in the discussions in Vienna. The Socialist Group insists that we get concrete measures aimed at lifelong learning, at education initiatives, trying to give our people a better basic education but also giving them the skills to do value-added types of jobs. Employment must be the core of that agenda.
If we want to engage young people in the European Union project then we have to make sure that we are offering something to them. Most young people today across the European Union, whether they live in Germany, in Finland, in the United Kingdom, in the South of Europe are concerned about their future and they are concerned about their future job, or their future role in society. So we hope that when the Vienna summit meeting is concluded there are concrete measures linked to the employment action plans of each Member State that will help to bring down the overall unemployment level, but particularly long-term unemployment and unemployment amongst young people.
It is also important in reconnecting Europe with its people that we look at our global role. We have suffered in recent months and over the last year from the global economic crisis. We have seen major problems in many markets around the world and of course our own economy has suffered as a consequence. It is extremely important that the Vienna summit meeting send a strong signal that Europe intends to play its part in helping to bring stability to the global economy.
That means we need to press the point again in Vienna for an increase in the transparency and resilience of the international financial system. We have to improve the surveillance processes of national policies. We have to define how emerging market countries can protect themselves from excessive financial instability. Europe cannot only look inward during these meetings, we have to look externally. With the coming Euro the European Union will be a centre of stability in the global economy.
I also want to say something about the labour market and the need for labour market flexibility. There is a big debate in the European Union about whether or not we need labour market flexibility. One of my colleagues mentioned it a moment ago. In a dynamic global economy we have to have labour market flexibility. We have to have employability. The idea that we operate our labour market the way that we operated it ten years ago, or even five years ago, will lead to higher unemployment.
Can I also touch on the question of taxation since Mr Görlach mentioned it in his speech. We know that the Austrian presidency has tried to pursue some measures on tax coordination and I also know that the German presidency will be looking at strengthening tax coordination. But the word is 'coordination'. It is not 'harmonisation'. I am very grateful that Commissioner Mario Monti has changed the agenda in Europe on this matter. We do not look for a single currency and a single market with tax harmonisation. We look to coordinate where it can benefit employment and where it can benefit investment. I think it would be very helpful if the British media, in particular, could learn the difference, particularly since the words exist in English, between the description and definition of coordination and harmonisation.

d'Ancona
Mr President, I have just three minutes and so just two comments to make and a question to put as chairman of the Committee on Civil Liberties and Internal Affairs. My first comment concerns the reluctance of the ministers concerned to liaise with us. Ministers Michalek and Schlögl have always been at pains to consult with us. They do so both at and away from our committee meetings, and only the day before yesterday both ministers travelled to Brussels to discuss things with the committee.
But our satisfaction with this informal arrangement does not, regrettably, extend to the more formal side of things. Article 6 of the Maastricht Treaty requires us to be consulted on a number of important matters, something which has happened under previous presidencies, but it is not happening at present. We are not being consulted on the very important and topical issue of asylum and refugee policy. The so-called 'Austrian strategy document' came to us quite by chance. How can Parliament's voice possibly be ignored over this socially sensitive dossier?
The other example is more disgraceful still. It concerns an action plan to set up an area of freedom, security and justice, that is to say a plan for the future. But again Parliament is not being asked for its opinion. In short, of the four topics which we have just heard will be raised at the Vienna summit - and in addition to the two I mentioned there are also drugs and organised crime - on not one of these four topics has Parliament been asked to give its opinion. That is a breach of Article 6 of the Maastricht Treaty. Hence my question to the Council President, though sadly she has vanished from the Chamber: when will Parliament's opinion be sought on the action plan and also on that other important strategy document?

Alavanos
Mr President, I have three things to say.
Firstly, I think the Vienna summit should take serious note of all the issues brought up by the German, French, Italian or other governments, issues related to correcting the course set by Maastricht, issues concerning the relationship between politics and bankers, interest rates, and whether all that matters is monetary stability or whether we should also look to development and employment, the taxation of capital movements, and other such issues. A debate has commenced. The governments of the Member States have an obligation to get together in Vienna and begin outlining new directions for the European Union.
My second point concerns Agenda 2000, which is certainly an issue which is not going to go away. What I wish to say is that if there are some who - perhaps rightly - would like the European Union to enlarge towards Central and Eastern Europe, they must also be prepared to meet a substantial part of the costs involved, not just pass them on to the south of the European Union and so do away with acquired rights.
My last point is that we should turn our attention to the issues of foreign policy, especially in relation to Turkey. Cardiff was an unpleasant episode and we must return to the Luxembourg criteria concerning the Kurdish problem - a topical issued indeed - the Cyprus problem, relations with our neighbours and human rights. I think the Vienna summit has a duty to do that.

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

Applications for membership
President
The next item is the joint debate on the following reports:
A4-0430/98 by Mr Caccavale, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on Latvia's application for membership of the European Union, with a view to the Vienna European Council (11-12 December 1998) (COM(97)2005 - C4-0377/97); -A4-0428/98 by Mr Bernard-Reymond, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on Romania's application for membership of the European Union, with a view to the Vienna European Council (11-12 December 1998) (COM(97)2003 - C4-0375/97); -A4-0427/98 by Mr Wiersma, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on Slovakia's application for membership of the European Union, with a view to the Vienna European Council (11-12 December 1998) (COM(97)2004 - C4-0376/97); -A4-0431/98 by Mr Kristoffersen, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on Lithuania's application for membership of the European Union, with a view to the Vienna European Council (11-12 December 1998) (COM(97)2007 - C4-0379/97); -A4-0429/98 by Mrs Aelvoet, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on Bulgaria's application for membership of the European Union, with a view to the Vienna European Council (11-12 December 1998) (COM(97)2008 - C4-0380/97).
Caccavale
Mr President, ladies and gentlemen, I must begin with one general comment. The Commission - and I am pleased to see Mr van den Broek here in the House - made a mistake concerning the accession procedure. As the European Parliament stated plainly at the time, it was wrong to divide the applicant countries into two groups, albeit with the linguistic distinction between 'ins' and 'pre-ins'. I think this is clear to everyone, and we are of course glad that the Commission itself has recognised this.
As far as Latvia is concerned, the matter is a straightforward one. This country has taken giant economic strides in the past few years: its inflation has plummeted and is now running at around 7 %; its GDP growth is between 8 and 9 %; its budget has been balanced for the past two years - something I would like to see in several EU Member States; and finally, the privatisation process was launched very rapidly and is almost complete. It therefore seems to me that Latvia complies in full with all the requirements for an immediate start to the negotiations for accession.
Concerning the political criteria, in my opinion democracy in Latvia is a fait accompli , not only because a series of elections has been held in entirely peaceful circumstances and with total respect for democratic principles, but also given the outcome of the much-publicised referendum a few weeks ago. The referendum asked the citizens to decide whether to endorse the new law on citizenship - allowing so-called non-citizens, stateless persons, to acquire Latvian citizenship - or whether to abrogate it.
It was an act of great courage and democratic strength, an important sign of democracy. I wonder how many EU countries would have seen fit to entrust their citizens with such a sensitive decision, on a matter directly affecting all the inhabitants of Latvia, citizens and non-citizens alike.
There do of course remain some outstanding problems: not all the non-citizens have been integrated yet, meaning that roughly 25 % of the resident population still has no passport and remains in an ambiguous position harking back to the former Soviet situation; the administration is still outdated and unable to meet the citizens' needs; the judicial apparatus is still shaky, with statutes that are about to be rewritten and senior judges and lawyers who are not yet equal to their task. In short, the legal order is still in the process of being established.
Mr President, we must not forget the fact that only seven years ago - I repeat, seven years ago, not seventy - the highest flagpole in the land was flying the red flag bearing the hammer and sickle of the Soviet Union. Latvia was an integral part of the Soviet Union, a regime which had abolished all the people's rights, stifled any possible development, and which of course has left behind a terrible legacy. Unless we take this into account - as well as the deportations and the military occupation of the country - we certainly cannot understand why the inherited state administration and legal system has been so ruinous and so damaging.
That is why, arguably, the winds of Europe are blowing more strongly, intensely and vigorously in Riga than in Rome, Paris or London. I believe that we are facing an extraordinary challenge: that of allowing these countries to embark immediately on the negotiations leading to accession. Opening negotiations by no means implies that they will be completed overnight; it does however mean bringing these countries to the negotiating table on a par with the other states, Poland, the Czech Republic, Estonia, Hungary and so on. On this point my report, as adopted by the Committee on Foreign Affairs, Security and Defence Policy, clearly indicates to the Council and Commission that they should reassess their verdict on Latvia and initiate negotiations with this country without further delay.

Bernard-Reymond
Mr President, Commissioner, ladies and gentlemen, Romania is currently going through a fairly difficult period, in terms of its economy, for example. The country's GNP fell by more than 6 % in 1997 and has unfortunately continued to drop in 1998. Despite major progress, inflation remains very high and the currency has lost 25 % of its value since the beginning of the year. The budget deficit is growing, foreign debt is increasing and the social climate is deteriorating. None of these macro-economic indices is very encouraging, and this will make it even more difficult for Romania to carry out the vital and urgent structural reforms that are needed.
This situation is due to a very large extent to its extremely burdensome inheritance, undoubtedly the most burdensome of all the former people's democracies of eastern Europe. But it is also due to the difficulties faced by the government in ensuring the coherence and continuity of its actions, the heterogeneous nature of the ruling coalition and the extremely fickle parliamentary majority. It is against this background that we must examine the situation in Romania with regard to the Copenhagen criteria and in the light of the Commission report of 4 November.
Politically speaking, there is no doubt that Romania has made considerable efforts. If that were the only criterion that counted Romania would now be on the verge of joining the European Union. There is still progress to be made in the areas of protecting street children, the control of judicial power by the police, the independence of journalists, detention conditions in prisons, fighting corruption, and the situation of the Rom community. But there is no doubt that the government is determined to do something about these issues and we are quite certain that each year we will see more progress made in these various fields.
In terms of the economy, while the government has lowered customs duties, liberalised most prices and the exchange market and speeded up privatisation, the legislative framework necessary for developing the market economy is far from complete. As for the transposition of the 'acquis communautaire' there is no doubt that Romania has made very laudable efforts, but substantial reforms are still required.
This being the case, it seems that Romania ought to work on a comprehensive policy in four areas. First of all it must restore a balance in all the main economic aggregates, a sine qua non for any development. At the same time, Romania must determinedly continue with the structural reform of its economy, in particular privatisation, the reform of the banking system, the restructuring of large conglomerates and the modernisation of farming. The third area relates to the human aspect of these structural reforms and involves reforming the administration, fighting corruption and making government action more coherent. These three areas are vital tools if Romania is to make progress towards accession.
Finally, as I was saying earlier, Romania must pursue its modernisation efforts to meet the first Copenhagen criterion, since in this field nothing is ever completely finished. We can therefore see in these circumstances that it is premature to envisage opening up accession negotiations with Romania. It is with considerable regret that we say this since Romania is close to us - it is European culturally, historically and geographically - and it has returned to democracy. There is no doubt that, in the end, it will be able to join, but the road to accession involves major reforms that the Romanian government must pursue or has even yet to start. The European Union should lend it its full support.

Wiersma
Mr President, a year ago Parliament concluded that Slovakia was not sufficiently democratic to join the group of applicants for EU membership with which negotiations could begin. The country satisfied all other criteria bar this one, the most important one, and I think that was a sad day for the people of Slovakia. I believe the decision by Parliament and by the Commission and the Council was the right one. The government of the time was making a pig's ear of things as far as democracy was concerned, and that was why we agreed with the decision that Slovakia, although it met the economic criteria at the time, should not be included in the group of countries with which negotiations would be started in due course.
But yesterday, a year down the line, I was in Bratislava attending a parliamentary debate on Slovakia's ambitions in a newly elected parliament, with a new government which is doing everything possible to make us forget the previous one. Slovakia once more features on the map of Europe, following the September elections in which the coalition government which caused us so many difficulties was kicked out. Slovakia's voters voted for Europe and against isolation.
Today we are talking about Slovakia again, and what a difference! Last year we were distancing ourselves from her critically, but now we can engage with her in a positive way. Our criticism helped to bring about the change. So now we have a duty to send out a positive signal. Today's debate on Slovakia is therefore political in nature and must have a political emphasis, partly because of the history of Parliament's relations with this country in recent years.
The new government is now in place and its first actions are promising. Its plans, as stated in the coalition agreement, sound very hopeful. Slovakia has changed course, towards a normal democratic system in which there is respect for the constitution, acceptance of opposition, a directly elected president, a transparent society with a place for every citizen, including the Hungarian minority which is represented in the new government and, most importantly, where there is an attitude of openness towards the European Union.
The new government is getting on with things fast. It has a constitutional majority. We must support it where we can. But not only does democracy need revitalising, the economy too needs attention. The last government was irresponsible in allowing deficits to accumulate. It left behind a poisonous economic legacy. With help from the EU and others and with macro-economic indicators which remain relatively favourable, Slovakia should be able to solve its economic problems. We hope to see the government taking prompt measures towards that end, as recommended by the Commission. These include tackling financial problems, tackling the inefficient banking sector, transparency in the economy and faster adoption of the acquis communautaire .
I have an observation to make here about my own report, concerning the economic situation. We are asking the Slovak Government to pursue a critical policy on energy, an energy policy aimed at shutting down unsafe nuclear reactors. I think that is an important point. But I see that this is only mentioned in the report on Bulgaria. It is important to me that if I agree to that point being in my report, then it should also feature in other reports as well, so as to avoid the impression that we are only concerned about this in the case of Slovakia and Bulgaria. I think it should apply to other countries too. But that is just a comment in passing.
Slovakia would have liked to see us now recommending to the European Council that accession negotiations should begin. I should like nothing more, but enlargement is a serious matter, and intentions have to be tested against policy. That is not possible at the moment, and it is not a reproach to anyone. The Slovak Government is making a start today on translating words into deeds. As I understand it, a vote of confidence in the new government is being held now or this evening in the Slovak Parliament. The Commission is thus right to recommend that we wait a while. But the Brussels waiting rooms are large, and waiting times uncertain. I think Slovakia is entitled to a second chance, a chance to sit the exam again. That second chance should carry a clear time frame and not a 'we shall see in the year 2000'. The new Slovak Government is ready to go the extra mile. The European Union must respond by reassessing it in the spring of 1999. That is the message which I put before Parliament in my report.
The Slovaks appreciate the risks, but are eager for this further chance. Negative pressure now needs to be followed by positive encouragement. Let us not tie the destiny of Slovakia to that of Lithuania or Latvia, but to the energy and resolve of the Slovak people, which deserves individual treatment. We should look at the results for each applicant country, and where we can speed things up we must do so.

Kristoffersen
Mr President, Commissioner, ladies and gentlemen, it is in fact the reunification of Europe which is now at issue with the enlargement of the European Union, and this reunification also includes the countries bordering on the Baltic Sea. These are the three Baltic states which were brought into the Soviet sphere of interest when Hitler and Stalin divided up Europe at the end of the 1930s through the notorious pact signed by Molotov and Ribbentrop, the foreign ministers from Moscow and Berlin. Now things are opening up between East and West, it will soon be ten years since the Berlin Wall came down, and we have a platform which can help us to bring Europe together again, that is if we have the courage to do so and the real political will to use this platform provided by the enlargement of the European Union. That is the clear direction that we should be indicating here in the European Parliament with a view to the forthcoming summit in Vienna.
As a Dane, it is natural for me to look across the Baltic, a sea which has once again become a source of connections and cooperation. The Baltic area is developing rapidly, and this applies to the three countries of Estonia, Latvia and Lithuania - all three of them. They have regained and rediscovered their identity as independent countries after half a century of Soviet occupation. As rapporteur on Lithuania's application for membership of the EU, I see no reason for placing Lithuania in a different position from the two other Baltic states, even though these are of course individual negotiations and it is not necessarily the case that they will all join at the same time.
It is of the utmost importance for Lithuania - both politically and psychologically - that the positive attitude and atmosphere are maintained, and it is also right to send a clear signal to Lithuania that the EU fully recognises the considerable progress made in terms of economic reforms, the quality and achievements of democracy and the administrative sector, even if there is still some work to be done in that field. Overall, these developments are enabling Lithuania to meet the requirements known as the Copenhagen criteria, and thus also to help ensure the regional stability of the area.
In the resolution on Lithuania which is contained in the report I have drawn up, there is also a reference to the need for progress with regard to Lithuania's long-term energy strategy. This concerns above all the Ignalina nuclear power plant and what is to happen to it. The Lithuanian Government - I am pleased to tell you - is fully aware of the seriousness of the matter, and wishes to cooperate with the EU in setting up a group of experts to assess the options. According to the latest information that I have from Vilnius, the government is to submit a proposal to the Lithuanian Parliament that an expert group should be set up, and the discussions also point to the possibility of shutting down the plant or reducing its activity, but at the same time an assessment will also be carried out of the scope for improving safety. In any event, the debate on Ignalina has now reached a very practical stage. In the dialogue with the government in Vilnius, the question has also been raised of how far the EU is willing and able to participate in the financial costs. However, clarifying the situation and taking a final decision on Ignalina are not expected to be a precondition for the opening of intensive negotiations on Lithuania's membership. I therefore also call in my report for the accession process to be speeded up, so that intensive negotiations can begin shortly.

Aelvoet
Mr President, Commissioner, ladies and gentlemen, the demands of the various applicant countries undoubtedly have to be analysed against a new background. Following the informal summit in Pörtschach, a good many observers commented - rightly, in my view - that they had the feeling that the Council had been stepping on the brake pedal rather than the accelerator as regards enlargement. So we must watch with some concern to see what happens at the Council meeting in Vienna. We also see that the enlargement process is taking place against the background of an international financial crisis, and an economic crisis too which affects not only South-East Asia or Russia or Japan, but is gradually spreading to the whole of the world. It is indeed a long time since so many voices were heard calling at IMF and World Bank level for clear international rules to define and demarcate the framework within which market forces operate. Clearer still is the demand of ordinary people, in the European Union too, for action on the part of government or the state, not to take responsibility for everything but certainly to lay down rules. This international background also prompts us to look carefully at the difficult and demanding processes of transition which the applicant countries are having to go through.
The Copenhagen criteria set out not only political criteria - a state based on the rule of law, human rights, democracy - but also a smoothly functioning free market economy. So in most of these countries the share of the private sector really needs to grow, otherwise you cannot talk about a free market. But it is of paramount importance that the privatisation process taking place there should be transparent and more socially responsible. Otherwise the call for rapid privatisation may easily lead to a 'gold rush' situation where some people grab the national wealth whilst the majority are left far behind. One need only look at Russia for an example of that. We believe the Council and Commission must monitor the progress of privatisation very carefully.
We were very happy with the Commission's announcement at the beginning of November concerning the reports on the applicant countries and the related proposals for accession. We in the European Parliament were especially pleased to see the Commission really keen to sustain the tempo by holding out the prospect of negotiations in the relatively near future to Latvia, Lithuania and Slovakia. I hope the Council will move at the same speed.
As regards the Commission report on Bulgaria, as rapporteur for Bulgaria I am very glad that credit is being given to the efforts which this country has made. Macro-economic stability has largely been achieved, inflation has been drastically lowered, the banking sector has been brought under control, and a higher priority is to be given to agricultural reform and the promotion of SMEs. The parliament has already approved all the new legislation needed for administrative reform. The challenge now is to implement this reform on the ground without giving the impression that the restructuring is being done on the basis of party affiliation. Major legislative initiatives have also been taken to promote decentralisation.
There are two points of particular difficulty between the European Union and Bulgaria. Firstly there is the visa requirement, the fact that they are on the negative list. Parliament and the Commission are pulling together on this, but the Council will not easily be persuaded to relax its policy. So we in Parliament are continuing to send very clear political signals for a political solution, but we know that some adjustments may be needed to simplify administrative procedures as far as possible, so that things can be made easier for Bulgaria's citizens pending a general relaxation of policy.
The second stumbling-block is of course Bulgaria's energy policy. Parliament is aware of the efforts made here at least to secure an energy strategy for the medium term, but we are absolutely not in agreement with the government's suggestion that the decommissioning dates for the four first-generation units at Kozloduy should be put off, possibly to the year 2012, which is altogether unacceptable. We believe it is in the interest of the safety of the Bulgarian people in the first instance, but also of course of all other Europeans too, that efforts should be made towards specific and proper implementation of the 1993 Nuclear Safety Account.
We hope that the process of accession for the Bulgarian Government and people will be dynamic and rapid, and we very much hope that in Vienna the Council will match the pace set by the Commission, so that enlargement is not delayed but moves forward swiftly.

van den Broek
- Mr President, on 4 November I had the honour to announce here the publication of the first set of regular reports on the 12 candidate countries that are progressing towards EU membership. Since 4 November the Commission's reports have been the subject of intense scrutiny, notably by the candidates themselves but also by the Member States and the European Parliament. I am pleased to say that with the exception of one or two mild and somewhat understandable expressions of disappointment on the part of some candidates, their reaction to the Commission's work has been positive. Indeed, the candidates have for the most part shown their readiness to respond constructively to the Commission's analysis.
I welcome this opportunity for a more in-depth debate on enlargement in Parliament. We have heard, and I have welcomed very much, the reports by the rapporteurs which we have heard this afternoon. They have presented their draft resolutions on each of the five pre-ins from Central Europe.
I would like to say something more now about the Commission's standpoint on these five candidates and I will also be pleased to respond at the end of this debate to any points or questions raised by honourable Members. I would begin by recalling that enlargement is a process that concerns not five countries but thirteen. In that respect I would say to Mr Caccavale that for us the difference between ins and pre-ins does not lead us to think in terms of various waves of candidates. I will come back to that point at the end of my intervention.
The Commission published as a result 12 regular reports covering the 10 candidates from Central and Eastern Europe, Turkey and Cyprus. The thirteenth country, Malta, reactivated its application for membership in September. Of course we can only welcome this. As you know, it has been announced that we will finalise the update of the 1993 opinion on Malta, I hope by mid-February of next year.
Turning now to the regular reports on the Central European countries, I should like to emphasise right at the outset that the Commission's analysis was conducted in an objective and impartial manner and free of all political prejudice. Our assessment was based on exactly the same Copenhagen and Madrid criteria as last year's opinions. In order to treat all candidates fairly, the reports cover only decisions or measures that have actually been taken or implemented since last year's opinions. Legislation in the pipeline will, when adopted, be highlighted in forthcoming reports. Our analysis shows that the all-inclusive enlargement process remains broadly on track and that the momentum of the candidates towards enlargement is grosso modo being maintained.
I shall now give a short resume of our findings per country. In broad terms the Commission is very much encouraged by the achievements of the countries in question. I shall take Slovakia first. Last year the Commission considered that Slovakia was the only candidate that did not fulfil the Copenhagen political criteria. However, following last month's general election a new government has taken office and a new impetus for political and economic reform is palpable. That was also our experience when representatives of the new government visited Brussels not long ago under the leadership of the new Prime Minister Mr Dzurinda. The new political situation in Slovakia following the recent parliamentary elections brings that country an important step closer to EU membership. I must underline, however, that Slovakia will continue to be treated in exactly the same way as the other candidates, namely on the basis of the Copenhagen criteria.
In consequence, the Commission will recommend the opening of negotiations on condition that its political institutions demonstrate their ability to function in a stable and democratic manner. It will also be necessary before opening negotiations to verify that Slovakia has undertaken measures to remedy its economic situation and that it also has introduced greater transparency into its operation. You know that was one of the main features regarding the economic criteria criticised in our report - or at least we said that the new government would have to address the situation it had inherited.
It is also against that background that, although I very much welcome and understand the plea of Mr Wiersma to have an interim report from the Commission, it would be very difficult for us to produce an interim report on activities which would have to start in the coming months and to reach precise conclusions on the economic points which currently do not allow us to recommend the opening of negotiations. I fully agree with the rapporteur that the political change that seems to be developing after the parliamentary elections gives us hope, as we have concluded in our report, that in the foreseeable future the recommendations for negotiations can be made. I refer you to the conclusions of the report on that point.
On Latvia, the Commission's opinion last year concluded that this country met the political criteria for membership, although we said then that a number of shortcomings had been identified, notably concerning the integration of non-citizens. The rapporteur also referred to that. This year we have highlighted in the report the positive result in the referendum on the citizenship law which gave an important boost to this process of integration. It will certainly ease the way for the naturalisation of non-citizens and stateless children. After this referendum we issued a statement to that effect.
As far as its economy is concerned, Latvia has made some impressive progress in the past twelve months. GDP growth is high and inflation continues to fall. Latvia now comes close to fulfilling the criterion of being a functioning market economy. But it still falls short because its track record of reform is not quite substantial enough. It still has to plug gaps in its regulatory framework, especially in the financial sector, and it will also need to simplify the legal environment for enterprises and consolidate macro-economic stability. But if the momentum of reform in Latvia is maintained, it should be possible to confirm next year that Latvia would be regarded as meeting the economic criteria and hence to also propose at the end of next year that negotiations be opened.
I also agree with the rapporteur that Lithuania has recently made significant progress. The Commission confirmed its view in the opinion that Lithuania fulfils the political criteria though it should intensify the fight against corruption and pursue reforms of the judiciary. There were advances in economic reform, although it is fair to say that after their analysis our experts came to the conclusion that Lithuania cannot yet be regarded as fully satisfying the economic criteria, especially as many policy decisions have only recently been taken and because it lacks a sufficiently sustained track record in reform. So, additional measures are needed and some recent developments still need to be tested in practice. Privatisation needs to be completed and to mention one example, its bankruptcy law has not been functioning long enough to assess the impact of that very important new law.
As far as the nuclear power plant in Ignalina is concerned, the Commission's general conclusion on Lithuania was not predicated on the situation regarding that power plant. I have set out in brief the reasons why Lithuania still does not yet meet the economic criteria for the opening of negotiations. On the other hand, we would hope that Lithuania will present a satisfactory comprehensive energy strategy and will re-state a firm commitment that there will be no re-channelling of Unit 1 of Ignalina. However, I say again that it was not the state of this power plant that led us to the conclusion that negotiations should not yet be opened. When you look at the conclusions for Lithuania in our report, you will discover that there is a clear incentive that opens the prospect in the foreseeable future for negotiations.
Bulgaria meets the political criteria and is making progress in filling the other criteria for membership. It has made advances, most notably in the fight against corruption and judicial reform but needs to broaden its efforts further. It has also stepped up the pace of its preparations on the acquis and made clear progress in the enforcement of intellectual property rights and on financial services, critical points of last year. But, in general, Bulgaria has to ensure the implementation of legislation after its adoption. The rapporteur Mrs Aelvoet mentioned the energy sector and we hope that Bulgaria will step up its efforts to adapt this sector in preparation of EU integration and in particular the closure commitments for the Kozloduy nuclear plant have not been appropriately addressed yet. We are in close contact with the authorities in Bulgaria to reach the right conclusions on this.
Bulgaria does not yet fulfill the economic conditions and still has considerable work ahead. At the same time the significant progress that has been made is a cause for satisfaction, in particular the overall stabilisation of the economy. The government continues to show determination in its commitment to reforms. Priorities in the coming period should include transparent privatisation and also industrial restructuring.
Last but not least, Romania meets the political criteria, but needs to make a concerted effort to root out corruption and strengthen its public administration. Particular attention should also be paid to improving the work of the courts and protecting individual liberties and the rights of the Roma. I hasten to say that as far as the rights of the Roma are concerned, many of the candidate countries still have to do quite a lot of work to ensure that social exclusion and discrimination is abolished. The Romanian economy, unfortunately, has weakened since the opinion. This was also the conclusion reached by the rapporteur, Mr Bernard-Raymond, and the regular report sets out in some detail what needs to be done. We know that the Romanian authorities are aware of the urgency and importance of the problem and we are working very closely with them to help them put in place the required measures.
Obviously I could go into more detail but honourable Members have in their possession the very detailed reports so I will conclude by saying that on the basis of our various assessments, the Commission did not deem it necessary to make new recommendations for the opening of negotiations. However, it has tried to give clear perspectives to that effect and these were incorporated in our conclusions. We can say that the candidates have made efforts to maintain the momentum and the Commission has also played its part and will continue to do so. I would like to repeat that the only way to preserve the credibility of the process, not to mention the credibility of the Commission, is to continue to work on the agreed basis that each candidate country is judged on its own merits. In that sense, I repeat that we do not speak about pre-ins and ins as belonging to two different groups which will always remain separate. The opening of negotiations has to be recommended when the applicant country has made sufficient preparations to warrant this. Obviously the same goes for membership which should happen when each candidate is ready.
Finally, like the rapporteurs, I hope very much that the Vienna Summit next week will give further encouragement and express its wish to maintain the momentum of the enlargement process and reconfirm its firm commitment to this process. I hope that in the coming months under the next presidency the Member States will realise the preparations they have to make towards enlargement. That would be the most encouraging signal to the candidate countries because from reading their newspapers they could have the impression that the European Union is so focused on its internal problems that it is failing to maintain the momentum on its part to respond positively to the efforts of the candidates to keep the whole enlargement process on track.

Titley
Mr President, I should like to begin by reiterating that the Socialist Group welcomes enlargement and believes that it should be an all-inclusive process with no reserve positions, no closed groups, and with every country being judged entirely on its own merits regardless of what is happening elsewhere. However, we must recognise that it is not a 100 metres sprint but a marathon we are engaged in. A country sprinting ahead at the moment may not last the pace. Equally, a country lagging behind at the moment may eventually outpace the others.
Therefore, we cannot be unduly influenced by sudden short-term initiatives but rather should make our judgments entirely on the long-term measures that governments are taking and the sustainability of their reform programmes. To do anything else would be to raise unreasonable expectations both in the candidate countries and among the peoples of the European Union. We must realise and remember that whatever solutions we come up with must be acceptable to the peoples of the European Union and the applicant countries and will often have to be approved by referendum.
Slovakia has made huge political progress which we must recognise. But we need to see whether its new government is able to fulfil its commitments. Similarly, Latvia has made huge progress, in particular in relation to the referendum on citizenship. But, again, we must see if this new government is able to sustain that progress. Latvia and Lithuania have made enormous progress economically but, as Commissioner van den Broek has indicated, we must see if they can sustain that. Similarly, Bulgaria has made great progress after a poor start but we noticed a Commission opinion that it is beginning to fall back.
We must ensure that there is proper implementation and enforcement of the European Union acquis . It is not enough to take on the legislation, you have to be able to enforce it. That is why I do not agree with those who claim that we should start now to negotiate with Latvia and Lithuania. We should be flexible; we should seek the opportunity to open negotiations as soon as possible but let us not rush this process for fear of undermining it.
There are two issues which must be of concern. Firstly, nuclear safety. We know the Soviet-designed reactors in Central and Eastern Europe cannot be upgraded safely at reasonable cost. All countries must have a comprehensive energy strategy which is fully in line with nuclear safety account agreements before they can join the European Union. Mr Kristoffersen has mentioned Ignalina. Lithuania has agreed to close Ignalina for good when the pressure tubes need replacing. Talk of expert groups must not be allowed to distract us from that. There can be no re-channelling.
Finally, I should like to emphasise what Mr van den Broek said about corruption. Citizens will not accept an enlarged Europe if it is only going to give opportunities to corrupt officials, drug barons, gangsters and paedophiles. We must take action there.

Rübig
Mr President, ladies and gentlemen, on behalf of the Group of the European People's Party, I should like to thank Commissioner van den Broek for his efficient work in the Commission. I should also like to congratulate the new government of Slovakia and especially the Slovakian people, who elected their government democratically. The prospects for Slovakia's accession have begun to change since October, and in its first statement to the European Parliament in Strasbourg, the new government under Prime Minister Dzurinda declared that it wanted to speed up the accession process. We must now respond to its efforts.
The democratic forces in Slovakia need a clear signal from the European Community confirming that it is on the right path, and the forthcoming summit in Vienna is the right occasion to give this. It must make it clear that if Slovakia achieves sustained political stability it can join the group of countries which have already started negotiations as soon as possible. Instead of the Commission producing a final report on Slovakia, the Council should deliver its opinion on Slovakia's application to join as part of an extra Commission report during the first six months of 1999.
The Copenhagen criteria, which have hitherto been a deciding factor in assessing applications to join, should be met as soon as possible. I think that Slovakia marks a genuine breakthrough in European history!

Bertens
Mr President, the Liberal Group is full of praise for the work the Commission has done, and its progress reports on the applicant countries rightly make it clear that all the applicants still have a good deal of work to do. The fact that negotiations begin is of course no guarantee that accession will be granted. It is merely an acknowledgement of the progress that has been made, and the Czech and Slovenian governments have to take on board the fact that they have not yet made sufficient progress. The Commission warns against complacency, and rightly so. The approach which has been chosen is leading to greater dynamism and can resolve difficult stalemates, of the kind seen over citizenship in Latvia, for example.
There is some confusion in Parliament as regards the progress of negotiations. We must be careful not to send out the wrong signal to the applicant countries. Our response must be encouraging, but based on real expectations. In accordance with our own resolution of exactly a year ago, we receive annual progress reports. The desire of some groups in this House for reports every six months is, to my mind, the result of woolly thinking. My group is against unnecessary work, and in my view the Commission would be hard pressed to produce a report of this kind every six months. Nor must we give the impression that being part of group 2 means that applicants are being put on ice. That is clear from progress in Lithuania and Latvia.
All things considered, my group is in favour of starting negotiations with Latvia and Lithuania now. They have, after all, reached the point Estonia was at in July 1997.

Pasty
Mr President, ladies and gentlemen, the legislative elections which took place in Slovakia at the end of September confirmed what I personally never doubted - that Slovakia's politicians, like the Slovak people, were profoundly attached to the rules of democracy and respect for basic freedoms. It is true that, in the recent past, the ruling party and the opposition had sometimes clashed over differences of opinion, but is that not welcome proof of democratic vitality?
Now that this has been demonstrated, I, like the rapporteur, Mr Wiersma, hope that by the middle of 1999 Slovakia will be able to join the group of Central and Eastern European countries with which the European Union is officially due to start accession negotiations. We all know that the Slovak people, or at least the overwhelming majority of them, want to join the European Union because their country's history and culture belong to the Greater Europe that we are trying to build together.
If their accession were to be slower than that of their close neighbours it would have disastrous psychological and political consequences which are to be avoided at all costs. I have no doubt of the Slovak people's desire to comply with the accession criteria defined at the Copenhagen summit. On the question of the protection of minorities and, in particular, of the Hungarian minority, I would point out that it has always been represented in the Slovak Parliament in ratio to its numerical size, which is not always the case with minorities in other Central and Eastern European countries.
Of course, the rights - in particular language rights - of that minority should be guaranteed. But that minority should also show more determination to be integrated into the Slovak nation and give up any separatist inclinations; I welcome the fact that elected representatives of the Hungarian minority are part of the new government. Furthermore, like the other applicant countries, Slovakia needs to continue to make huge efforts to reform its economy if it is to succeed in making the difficult transition from a state-run economy to a market economy; we Europeans have a responsibility to help our Slovak friends overcome these difficulties.
To conclude, we welcome the fact, along with the rapporteur, that the road is now open for Slovakia to join the vanguard of countries applying to join the European Union. We need to help our Slovak friends to overcome the remaining hurdles lying ahead, provided that they - and I do not doubt this - make the necessary effort to join us.

Ojala
Mr President, I intend to speak in particular about the situation of the Romanies, or gypsies, in the applicant countries currently under discussion. Some of these reports have mentioned the status of Romanies and other ethnic minorities and have also raised the issue of sexual minorities with respect to the situation in Romania. However, I fear we shall have problems if we are merely to examine the status of gypsies on a country-by-country basis in the enlargement negotiations. The gypsies, or Romanies, are a very large minority in Europe. There is a Romany minority in all applicant countries, including Latvia, which is represented here today, although it is quite a small one in that particular country. The problems of the Romanies are nevertheless cause for much concern. For example, in the Czech Republic, which is in first place among the applicant countries, there are immense problems. I hope the European Union will be able to increase cooperation with the Council to improve the status of Romanies.

Gahrton
Mr President, in a recent article in 'Dagens Nyheter ', President Ulmanis of Latvia expressed deep concern that interest in extending the enlargement process eastwards appeared to be cooling fast in some EU quarters. A source of particular irritation was the arbitrary division of the applicant countries into two groups, particularly in the case of the Baltic countries. Messrs Caccavale and Kristoffersen, in the reports which they prepared for the Committee on Foreign Affairs, Security and Defence Policy, had succeeded admirably in eliminating any noticeable distinction between Estonia on the one hand and Latvia and Lithuania on the other, hence the proposal to specify the requirements more precisely so as to enable those countries to move up to the A-team quickly. Unfortunately, any such advance has been reversed as the result of an unholy alliance between representatives of the British Labour Party and Swedish Liberals.
Naturally, the Green Group would like to see a text that was favourable towards the Baltic states, although in Lithuania's case, this would obviously be dependent on the closure of the Ignalina nuclear power plant. However, it is clear that more and more people are beginning to have cold feet at the prospect of an enlargement process that would double the size of the present EU. Perhaps they also suspect that the new wave of EU Member States might not be quite so 'obedient' as the former ones. This is the interpretation we should be putting both on Mr Ulmanis's 'Dagens Nyheter ' article, as well as the recent address by the Polish President, Mr Kwasniewski, to the European Parliament in Strasbourg.
For my part, I am convinced that the European Parliament should welcome a new wave of Member States that dare to be a little disobedient and demanding, unlike my own country which wags its tail in the hope of receiving a pat on the head from the Council or Commission. I am going to vote in favour of Latvia and Lithuania being treated equally in membership negotiations.

Lalumière
Mr President, Commissioner, it was with pleasure that I read the reports on the five applicant countries which the Commission has placed in the second group for accession, even if, Commissioner, you reject that expression.
These reports emphasise the progress made in at least four of them; the fifth, Romania, is unfortunately still encountering major difficulties. The progress made means that the differences between the countries in the first group and those in the second seem to be diminishing. I am glad because I have frequently regretted the way this has been presented, as decided by the Commission and confirmed by the European Council in Luxembourg in 1997, since it risked opening up dangerous rivalries and conflicts and discouraging countries in the sensitive area of Central Europe.
But current trends seem to be reducing that gap, which I very much welcome. I hope that we can begin negotiations with these new countries as soon as possible even if there has to be a new report in the meantime, as you have requested, Commissioner. Against this satisfactory overall background the rapporteurs have naturally emphasised particular features in each country - the spectacular economic performance in Bulgaria, where the economy was lagging far behind, the political developments in Slovakia, giving it a much more encouraging outlook, intensive efforts in Latvia to improve the treatment of the Russian minority, etc. In a word, there is progress everywhere.
But we should not think that these developments mean that there is still not a lot of ground to be covered, and we would be doing all of the applicant countries a disservice - whether they are in the first or second group - if we confused the progress they have achieved with ultimate success. It is one thing to adopt reforms and another thing to put them into practice.
This is true, for example, of the reforms in the public administration and the civil service. It takes time to eliminate the political pressures and political selection criteria that were normal under the former regimes. The delays in the administration and civil service reforms, along with various other problems, are tending to hinder the proper preparation of negotiations and documents submitted to the Commission. We could be equally pessimistic about the independence of the judiciary, a notion that is taking time to sink in in some countries.
I should like to make one more point. The efforts demanded of the people living in the applicant countries are considerable, and the risk is that the European Union might seem to be the main cause of the sometimes dramatic difficulties encountered by many people in these countries. We are well aware of the danger that Europe might become the scapegoat. Commissioner, could not the Commission channel more aid into social programmes targeting the most disadvantaged groups of the population? Joining the European family will not be a success if the man in the street ends up associating Europe with suffering and pain.

Truscott
Mr President, following the launch of the accession process on 30 March 1998 in Brussels under the British presidency, EU enlargement is gathering ever greater pace. The initial fear of a separation between the ins and pre-ins is being overtaken by the logic of the screening process and the EU's pre-accession strategy. There should be no discrimination between any of the applicant countries as they endeavour to meet the Copenhagen criteria, tackle absorbing the acquis communautaire and prepare for the single market and the euro.
However, as the reports before us today show, and as the Commission has indicated in its composite paper and regular reports, not all applicant countries are proceeding at the same speed towards meeting the criteria for membership. In looking at the Baltic states, for example, I do not accept the argument that we are looking at three peas in a pod. Estonia, Latvia and Lithuania have different cultures, traditions, economies and experiences although they have also much shared history and cooperation.
We should recognise progress where this has been made, as the Commissioner said earlier in this debate. With this in mind, I believe it is right to highlight the progress made by Latvia so that a decision can be made to start negotiations with Riga before the end of the German presidency. Latvia has made real progress in its citizenship laws, with the economy, in administration and in preparing for the implementation of the acquis . Lithuanian progress has also been remarkable, but less impressive, in the field of nuclear energy, privatisation, institution-building, the judiciary and the establishment of a system of standards and certification. Estonia has continued to make steady improvements in most fields but has made disappointing progress on its legal treatment of the Russian-speaking minority.
For its part, the EU must press on with its reforms to lay the groundwork for enlargement.

Trakatellis
Mr President, I would like to draw the House's attention to the issue of nuclear safety, which is one of Agenda 2000's priorities.
With the accident at Chernobyl, the nightmare which almost the whole of Europe lived through has revealed the true scale of the dangers associated with the operation of nuclear plants and has brought to the fore matters such as safe operation and the storage and treatment of radioactive waste. This has made it necessary to work out a more specific policy for the safety of nuclear installations, a need made more urgent still in light of the accession procedure and the beginning of agreements with the countries of the former Soviet Union.
The Commission's position, as expressed in its related statement about the applicant countries, is that reactors which do not conform with safety requirements and which cannot be upgraded to an acceptable level should cease to operate. Bulgaria was the first country to receive financial aid, while at the same time undertaking a clear and legally binding commitment to carry out short-term improvements, and then, by 2000, to shut down four reactors. Bulgaria has already requested a review of the agreement and an extension, while the Commission is very rightly opposed to that request. We cannot afford the luxury of sitting here just twiddling our thumbs. The European Parliament asks that the agreement on shutting down the dangerous reactors at Koslodui should be adhered to, an issue which must certainly also be raised at the European Council in Vienna. It must be made clear to the Bulgarian Government that any request to extend or depart from that course would be an extremely dangerous position which would sabotage its efforts to accede to the Union. There is nothing more important to Europe's citizens than avoiding another Chernobyl.
A second point concerns Romania. Today, we are asking the Romanian government and parliament to reach a final and fair solution in the matter of property restitution.

Cars
Mr President, the new Social Democrat Chancellor, Gerhard Schröder, and his 'green' Foreign Minister, Joschka Fischer, have intimated that the enlargement process should not take place too quickly. I find such a remark disturbing. Together with the other Liberals, I firmly believe that enlargement is taking place too slowly rather than too quickly.
The Commission is trying very hard to support the efforts of the applicant countries to improve their legal and administrative systems and their economies. We welcome what is being done. As soon as the applicant countries fulfil the basic requirements, the EU should open wide its doors to them. The EU must therefore speed up its own reform process. Those politicians who regard it as their duty to throw stones into the EU machinery should take careful note of that. Flaws in the EU institutions should not keep others out.
We, as Members of the European Parliament, also have to try to overcome the reluctance, sometimes even opposition, of the citizens of most Member States as regards enlargement. We have to show them that enlargement will bring much greater benefits for everyone.
The Liberals hope that Mr Schröder, Mr Fischer and the others will adopt a more constructive tone, and that the Commission will not tire in its efforts to create a Europe that is both complete and sound in body.

Giansily
Mr President, I wish to speak as a member of the joint delegation with Romania in giving my opinion on the excellent report drafted by our colleague, Pierre Bernard-Reymond. I agree with his entire analysis, which is extremely objective, and I particularly share his regret that the structural economic reforms have slowed down, leading to an increase in macro-economic imbalances.
In a country where, for nearly half a century, economic power was confused with political power, people are psychologically illprepared for assimilating the acquis communautaire and for turning Romania into a market economy. I have to say that President Emil Constantinescu is to be praised for his fierce and constant determination to link his country with the European Union. Two successive prime ministers, Victor Ciorbea and Radu Vasile, have kept the same man, Mr Alexandru Herlea, in the extremely sensitive post of minister responsible for European integration for two years, and he has managed to forge a relationship of mutual respect and considerable confidence with the Commission's advisor and with this House. He has displayed an excellent knowledge of the issues as well as a extremely laudable intellectual honesty.
In the light of his analysis, the rapporteur concludes that Parliament cannot recommend the opening of accession negotiations with Romania. For my part I would ask for special efforts to be made in 1999 to find PHARE programme funding for this country. It is the only applicant country, a former member of the Warsaw Pact, which does not border on any of the 15 Member States of the European Union, and it has suffered from a kind of insularity handicap in that from the early 1950s until 1990, whichever way it turned, it had no neighbours to negotiate with apart from those subservient to Moscow. Bulgaria, Serbia, Hungary and Ukraine were hardly models of democracy. We have a special responsibility towards Romania, once a member of the Latin Union, and we should bear take that in mind.

Schroedter
Mr President, I think it is very important, as Commissioner van den Broek has stressed once again, that we should regard the accession process as a dynamic process. The groups must not be seen as closed, and above all the countries must not be divided into different categories. I would make this point particularly with regard to Romania and Bulgaria. On the other hand, we agree with the Commission's criticism that there has been a marked decline in Romania's political efforts. We are concerned at the restrictions on press freedom, and the European Parliament is particularly critical of the criminalisation of and discrimination against homosexuality in Romania. We call on Romania to take decisive steps to restore the dignity and human rights of these people.
We also call on the Commission to come up with more than just fine words, and to give a clear signal that it wishes to negotiate in partnership. One such signal would be to review our visa policy towards Romania and to restore partnership and equal treatment.

Papakyriazis
The colossal enterprise of enlarging the European Union, an enterprise on an historic scale and which has gone past the point of no return, ought really to be a foregone conclusion being implemented already, not a vision to be implemented sometime in the future. I believe that today's procedure to a certain extent confirms just that choice and I would like to believe that the Vienna summit will make it official.
Moreover, this procedure today is a paradoxical vindication of the European Parliament's insistence that the accession procedure should take place for all eleven candidate countries from a common starting point, Mr van den Broek. The countries we are talking about as a group today, taken together, prove the correctness of our choice.
As regards Bulgaria, I am glad to hear confirmation of the European Parliament's support for Bulgaria's accession, as expressed in the Commission's positive progress report. Congratulations are due to Bulgaria, to the Bulgarian government and all the political parties, the Bulgarian state, Bulgarian society and the Bulgarian people. However, we must not overlook the large amount of work that still needs to be done. Here are three indicative points: firstly, the completion and practical implementation of the legislation on public administration and judicial authority, to ensure that it will be real, effective, independent, transparent and fair; secondly, social protection and social policy, and the establishment of real social dialogue; and thirdly, of course, Koslodui, on which Bulgaria undertook a political commitment to the European Union's authorities for the progressive shutdown of the four units which cannot be upgraded or restored.

Gomolka
Mr President, ladies and gentlemen, as chairman of the European Parliament delegation to the EU-Latvia Joint Parliamentary Committee, I should like to begin by thanking the rapporteur, Mr Caccavale, who has given a very detailed account of the most recent developments in Latvia's progress towards joining the European Union. He has drawn some very necessary conclusions and given clear reasons for them, which is why his report and the motion for a resolution deserve our full support. The report quite rightly draws attention to the progress which Latvia has made over the last few months and years. 3 October this year was a particularly important, perhaps even historic date, when there were not only parliamentary elections, but the public were also asked to take part in a referendum on proposed changes to the citizenship laws. The fact that they voted in favour can be seen as proof of Latvia's political maturity, and it should enable the relatively large Russian population to be integrated more successfully than has previously been possible.
Any efforts to increase the number of true citizens and to combat disintegration deserve our support. The decision to make it easier and simpler to gain Latvian citizenship has clearly been taken with an eye to the future, and is all the more important when one thinks of the country's dark and tragic history, since the ethnic mix of its population is partly the result of decades of occupation. So the clear majority in favour of relaxing the citizenship laws is not just an expression of political maturity, it is also evidence of human greatness. It is precisely because the decision taken by the people of Latvia was such a complex one that it deserves recognition. Latvia deserves our support, and this would also be in our own interest.

Bösch
Mr President, Commissioner van den Broek, ladies and gentlemen, I should like to offer my warmest thanks to Mr Wiersma and the Committee on Foreign Affairs for their report on Slovakia and our relations with that country. It gives a very clear account of the new situation in Slovakia since the parliamentary elections at the end of September. Commissioner, if the process of enlargement really is to be seen as a dynamic and open one, as the Commission has always insisted, then events in Slovakia must surely put this theory to the test. Why should we not be dynamic and open when a country like Slovakia shows, with an election turn-out of 85 %, that it wants to come in from the cold and join its neighbours in the first group for accession?
We quite understand that the assessment you have presented to us, Commissioner, has not been able to take account of the most recent developments in Slovakian politics and society, which is why the rapporteur's demand - which I am sure will have the support of the overwhelming majority in this House - is all the more important that we should agree to re-evaluate Slovakia's position in the spring of next year, in order to do justice to its new situation. I would strongly urge you to do so. I think this would be in the interests of the Union as a whole, and would encourage further positive developments in the Slovak Republic.

Voggenhuber
Mr President, the European Union has given the applicant countries a very thorough examination. Our preliminary findings were recorded in the avis , and the acquis screening is now a further stage in the evaluation of these countries. I would be glad to see the Central and Eastern European countries turning the tables and delivering an avis to the Union on how well we are doing in making the necessary reforms and preparing the conditions for accession. I think their report on our efforts would be fairly damning. It would note our many failings, how we are dragging our feet on institutional reform - which, to tell the truth, we have not even started yet - the never-ending negotiations on agricultural reform, and our inability to react appropriately to new developments such as those in Slovakia.

Burenstam Linder
Mr President, the preamble to the Treaty of Rome establishes that the foundations should be laid for an ever closer union among the peoples of Europe and that the barriers which divide our continent should be removed. It is a triumph for the EU that it has now reached the point where ten countries that were once cut off by an iron curtain are now endeavouring to establish democratic regimes, freedom and reforms within the European Union. We have given rights and made promises to those countries and we cannot let them down.
We welcome the Commission's reports. The country which has made most progress during the last 18 months, namely Latvia, will be invited to take part in membership negotiations next year, provided nothing unforeseen occurs. Lithuania has also made noticeable progress. This gives further encouragement to the reform process in the other Central and Eastern European countries which have not achieved quite so much.
The effect of all these countries striving to qualify for EU membership has already been very advantageous for the Member States. Their efforts to step up democracy and improve human rights has fostered peace in Europe. We should be aware that it is not just in the former Yugoslavia that a complex pattern of ethnic rivalry has sparked off serious conflict. Timely reforms have led to more stable economies and improved markets. The budgetary cost arising from expansion towards Eastern Europe is negligible in comparison with the economic and political gains for those countries, as well as for us.
I hope that the Council of Ministers, with its present socialist bias, will not decide to apply the brakes to the enlargement process. It is a matter of some concern that the political leaders who opposed German unification are now adopting a tone which could be interpreted, rightly or wrongly, as favouring a slowing-down of the enlargement process. The Socialists probably find it more difficult than the Conservatives and Christian Democrats to see the outstanding advantages for peace and prosperity of replacing communism with a market economy. Pressing on with enlargement is thus a major obligation for the European Parliament.

Evans
Mr President, as a member of the Joint Parliamentary Committee with Romania, I would like to share a few of my thoughts. As the rapporteur, Mr Bernard-Reymond, says in his very fair report, Romania has experienced a range of difficulties and has probably not moved as far along the road to accession as we or they would have hoped. I have visited Romania several times over the last ten years and in that context it is impossible not to recognise and acknowledge the huge progress and massive changes that have taken place in Romanian society, business and education, much of this in conjunction with EU partners and the TEMPUS programme for example.
The rapporteur has already referred to the economic situation but, with reference to Parliament, Romania has many difficult decisions to make. Its legislators are not yet sufficiently progressive to meet the challenges ahead. For example, they must be prepared to rescind Article 200. They must improve their judiciary processes and, contrary to what Mrs Schroedter said, I feel they could pre-empt the EU by abolishing the necessity for EU citizens to have visas to visit Romania. That being said, Romania is unquestionably European by its history, culture and language. It has had a turbulent past but has now turned the corner and I look forward to still being a Member of the European Parliament when we welcome our Romanian colleagues here.

Schwaiger
Mr President, the action and the ambitions of the new Slovakian Government, led by the Christian Democrats, are designed to ensure that Slovakia is included as soon as possible in the group of applicants currently negotiating accession. Its programme of reforms is designed to strengthen its constitutional institutions and to give fresh impetus to a pluralist society and the economy. It is now vital to use funding from the PHARE programme to give whatever support is needed for the democratic development of the organs of state and government. Rapid progress is being made in the creation of democratic structures and there is a clear desire for reform. What is now needed is to provide rapid and appropriate support for putting these reforms into practice, including the establishment of a statute for minorities.
Our economic support should focus on the setting-up of businesses and providing better opportunities for starting up small and medium-sized firms. The Slovakian administration is more than prepared to adopt the acquis communautaire as soon as possible, so we should ensure that intensive training and information is provided by our management and administration colleges. It is now important for the Commission to give the political signal at the Vienna summit that Slovakia is making rapid progress with its political reforms. It should also confirm Slovakia's positive economic developments in an interim report some time over the next few months, so that Slovakia can be included in the first group of applicant countries next summer.

Konrad
Mr President, ladies and gentlemen, this is a very important debate. It is important because we are making it clear that the EU is considering not six, but eleven applicant countries with great interest. One of these is Romania, which is a country I think we need to look at very carefully. It is true that the pace of reform has slowed, particularly the economic reforms. It is true that there is more corruption, that the shadow economy has grown once again, that there are delays in the structural economic reforms and that the IMF has blocked loans. But it is also true that Romania and its people want to join the European Union, and I think that we in the Union should do everything we can to support this process.
We must be determined to provide constructive support for Romania's development, and this involves more than just money. I think we must make it quite clear that when the applicant countries encounter difficulties, which are only to be expected, these difficulties must not be exploited by those who have never wanted enlargement to be a success and who have always tried to delay it. I am very confident that Romania will one day become a member of the European Union - there is every likelihood of this happening - and that we in the European Union are only doing what we have always wanted, which is to make the western European Union into a pan-European Union.

Flemming
Mr President, I am very pleased that this report supports Slovakia's accession. Slovakia is a particularly dear neighbour of Austria's and therefore of the European Union, and I hope that it will be allowed to join as soon as possible. There are two problems, however: Mochovce and Bohunice. Mochovce is certain to attract our attention, and Bohunice is a permanent source of concern and worry for the public. I would be against making the closure of Bohunice a condition for accession negotiations to start, but I certainly cannot imagine this House agreeing to the accession of Slovakia while Bohunice is still in operation.

van den Broek
Mr President, I will respond very briefly. First of all, I am grateful for Parliament's very constructive comments, from which I conclude that it is fair to say that Parliament broadly endorses the conclusions of our reports as well as the content, the analysis. I think it is most important, as far as the applicant countries are concerned, that this should be combined with a message of further encouragement, and then I think the speed and momentum of the process can be sustained and consolidated.
I have taken due note of the concern which persists here and there about forms of differentiation - different groups and so on. Let me say this. Apart from the fact that - like you, I would imagine - we stand by the principle that each applicant must be assessed on its merits, rewarded for the progress it has made and not kept back with those who have advanced more slowly, we are all in favour of the fact that those very countries which, through no fault of their own, have more work to do, for example before they can open negotiations, deserve extra attention and extra assistance from us. I would remind you that I told you last year that it was precisely for this reason that we created the catch-up facility within the PHARE programme.
I can also tell you that applicants which have not yet opened negotiations will, in the first quarter of the year, in terms of the screening process too, move from multilateral to bilateral screening and thus into a process which is more akin to that in the first group, if I can put it like that.
Lastly, I would reiterate that what counts is what the countries themselves achieve. You may well find - and I am picking up the thread here of what Mr Titley said this evening - that a difference will soon become apparent amongst the countries which are already negotiating between those which are moving forward faster and those which are slower. Whilst tactically we do exactly the same as regards the number of chapters dealt with, the number of chapters completed and so on, differences may of course develop in the course of the year, and some negotiations may make more progress than others. Credit has to be given accordingly, and we feel that the Commission - and the Council too, which leads the negotiations - must adapt and allow for any such differences. So we agree on that.
My final comment is this: several speakers this evening have again referred to the importance of closing down unsafe nuclear reactors. I can assure you that the three applicant countries which face this phenomenon and its troublesome political, economic and social implications are well aware of the pressure there is from Parliament, the Council and the Commission to address the problem and devise programmes for decommissioning these plants. We shall liaise closely with these applicants towards that end.

President
Thank you for those clear answers, Commissioner.
The joint debate is closed.
The vote will take place tomorrow at 9 a.m.

EU/Turkey relations
President
The next item is the report (A4-0432/98) by Mr Swoboda, on behalf of the Committee on Foreign Affairs, Security and Defence Policy, on the communication from the Commission to the Council and the European Parliament on the further development of relations with Turkey (COM(97)0394 - C4-0490/97) and on the communication from the Commission to the Council: European Strategy for Turkey - The Commission's initial operational proposals (COM(98)0124 - C4-0634/98).

Swoboda
Mr President, Commissioner, ladies and gentlemen, this was really not a very easy report to write, and it is also not a very easy time for me to be presenting it. I would like to mention ten points which I feel are seminal to this report, and which I hope you think are too.
First of all, I think that relations between the European Union and Turkey should become less tense despite the current difficulties, and I agree with the Commission that our relations should be developed on the basis of the Customs Union and the Commission's strategy paper, which has been very positively received in Turkey. This is the way forward.
Secondly, Turkey should also clearly recognise, as I say in my report, that the door is open. There is absolutely no doubt about this, and Turkey should acknowledge the fact. Thirdly, we also want to have Turkey as a member because we think that it can play an important part in establishing security in Europe and in Europe's economic and social development.
Fourthly, financial relations between Turkey and Europe must therefore be well regulated. I welcome the fact that the Commission has put forward proposals on this which Parliament is to examine separately, and I would suggest that we should also consider which EU programmes, particularly those for the East European applicant countries, could also be applied to Turkey.
Fifth, I would stress that the Copenhagen criteria also clearly apply to Turkey, of course. Sixth, we - that is to say, the Council, the Commission and Parliament - feel that Turkey has a long way to go - some people would say that it is getting even longer - to meet the Copenhagen criteria, particularly the requirements of democracy, the rule of law and respect for the rights of minorities, whether these be sizeable minorities like the Kurds or smaller ones like the Armenians and the Greeks. Turkey must respect the rights of all its citizens.
Seventh, my report works on the assumption that Turkey itself should propose how and when it intends to meet the conditions set by the European Union, particularly the political criteria. I would like to get away from the situation where we make demands and then have to examine whether they are good for Turkey and whether Turkey has done anything about them. No, if Turkey accepts - and this is the condition it must meet if its application to join the European Union is to be considered - that it has to meet the Copenhagen criteria, then it must itself come up with some proposals very soon on how it intends to try to fulfil the individual requirements relating to democracy, the rule of law and recognising the rights of minorities.
Eighth, it is very important for us that Turkey should have good neighbourly relations with all its neighbours, including Greece, of course. As I have repeatedly said, Turkey, which itself understands the importance of family relationships, should not be surprised if we support one of the members of our family here in the European Union, namely Greece, in its efforts to establish good and fair relations with its neighbour. I also support Greece's proposals on how to solve the present disputes, proposals which are entirely acceptable and fair towards Turkey.
Ninth, the Cyprus problem is something we want to get to grips with, and for this we need Turkey's cooperation. We want to find a fair solution, and we do not want the matter to be resolved unilaterally. The Turkish inhabitants of Cyprus should be given every opportunity to cooperate and to have their say, but this must be within the context of a joint solution for both the Greek and Turkish populations, and it must also be clear that Parliament wholeheartedly supports Cyprus's efforts to become a member of the European Union.
Tenth is the Kurdish question, which has sadly become a particularly topical issue over the last few days. Let me make this quite clear: we want to see a peaceful solution to the Kurdish problem. We reject any form of terrorism or violence, and we also reject any solution that would compromise or destroy Turkey's unity and integrity. We fully recognise Turkey's right to have and its interest in having a unified state, but within this unified state the Kurdish people must be able to uphold their cultural rights and in particular their language and its use in the media, books and so on.
I think that in spite of the Ocalan crisis, Turkey can still find a way to resolve its Kurdish problem once and for all, and the European Union should help it to find a peaceful solution to this problem and to combat terrorism. We in the European Union and in this House will certainly not support terrorism, particularly if Turkey is prepared to find a peaceful solution to the Kurdish question. It was on this basis that I wrote my report, and it is on this basis that I think that we can make a new start, resolve a number of thorny issues and achieve open relations with Turkey. But we must make it perfectly clear to Turkey that the political and economic criteria have to be met if Turkey wishes to become a member of the European Union.

Schwaiger
Mr President, ladies and gentlemen, the Turkish Prime Minister Mesut Yilmaz is obviously making it difficult for us to discuss the development of relations with Turkey dispassionately and to come up with coherent proposals for the European Union sine ira et studio . Threats against the government of one of the Member States, Italy, a boycott on Italian goods and political attacks on the European Union are, I think we would all agree, hardly the best way for the largest of our associated countries, Turkey, to achieve closer relations with us. However, we should not allow the excellent report by Mr Swoboda, which could provide guidelines for our partnership strategy, to be swamped by the reactions to the issue of the handing-over of the Kurdish leader Mr Ocalan.
I also welcome the Commission's decision to issue its usual annual report on the state of relations between the European Union and Turkey in the same form as the progress report produced for the other applicant countries. This means that we will have a clear list of the progress, or lack of it, that Turkey has made on the political, economic and social requirements. We in the Committee on External Economic Relations feel that it is important in the medium term progressively to consolidate and intensify economic and political cooperation with Turkey in a spirit of partnership.
For the European Union this means - as its side of the partnership - fulfilling its financial commitments in the context of the Customs Union, including Turkey in European programmes such as Leonardo, Socrates and Youth, and coordinating policies on energy, transport, the environment and combating drugs. I would agree with Mr Swoboda that we should not issue Turkey with a list of demands; it simply needs to have a kind of action plan on Europe to improve the coordination of all its efforts in the fields of democracy, the rule of law and human rights, including also the accompanying economic conditions and the adoption of the acquis communautaire , and it should raise the profile of these efforts, which are its guideline for intensifying cooperation.
If the Swoboda report can be used, as before, in a positive spirit to tackle the problems which exist between Turkey and the European Union, assuming that it is adopted by Parliament tomorrow, then we feel able to vote for it as a set of guidelines. However, we feel that if it becomes excessively bogged down in certain issues, it will simply be counterproductive.

Titley
Mr President, a very important event in EU-Turkey relations is occurring at this very moment. It may come as a surprise to parliamentarians that it is not taking place in this Chamber but in Turkey because at this very moment Galatasaray are playing Juventus. If that becomes the occasion for mob violence against Italian citizens, I would submit that it would set back EU-Turkey relations a long way. Having seen what happened to Manchester United when they visited Turkey a few years ago, I fear the worst this evening.
The Socialist Group condemns absolutely the hysteria which is being whipped up against Italy by sections of Turkish society over the Ocalan affair. We condemn any interference in the decisions of the judiciary in a Member State governed by the rule of law. I want it to be said loud and clear that those of us who want to see a more positive policy towards Turkey will have our voice silenced if the Turkish Government or Turkish society encourages mob rule against citizens of the European Union. An attack on one country of the EU is an attack on us all.
Having said that, we welcome the Swoboda report and in particular the way the rapporteur has drawn on the expertise of various organisations in Turkey such as unions and human rights groups to make a positive and constructive contribution to the development of EU-Turkey relationships. The Socialist Group has been consistent in its line on Turkey's application for membership of the EU. We believe that Turkey would make a valuable contribution to the peace and security of our region. We do not accept religious or cultural reasons as an obstacle to Turkey's accession to the European Union. However Turkey must be judged on the same basis as any other country. It must adhere to the Copenhagen criteria and the Commission's report makes it very clear that it does not. I support the rapporteur's suggestion that it is now up to Turkey to give us a timetable for concrete reforms to demonstrate just how serious they are with their application. Turkey also has to accept the EU's right to negotiate admission with any country it feels fit to negotiate with.
However, it is important that we are not passive in relations with Turkey. We must try and help find a political solution to the Kurdish problem which in many ways is the cause of much of Turkey's paranoia and insecurity. We know that Turkey's problem is that the government is weak and the state is strong. Therefore we should be looking to strengthen the government by support for reform of the public administration, by improved interpretation facilities and by ensuring the democratic organisation work at grassroots.

Oostlander
Mr President, first of all may I compliment Mr Swoboda on his balanced, tactful and thorough report. It sets the scene for the European Union's relations with Turkey. Firstly, it confirms that Turkey can in principle accede to the Treaty of Rome, as can any democratic and constitutional state, on the basis of the political values which we in the Union hold in common. That in no way means, of course, that a state with a large Islamic population cannot join. Nor, for example, would we be opposed to a Bosnia with a large Islamic population group if at some stage it applied for membership of the European Union. I would like to make that point emphatically, so that no one can pretend there is any difficulty on the European Union side.
But we must insist that a country wishing to join does indeed meet the criteria, just like any other country. Because we are not joining another country; other countries are joining the Union. The Union expects countries expressing the wish to join the Union to take real steps in the right direction, not only economic measures for their own economic structure, but primarily steps to secure the political values which obtain in a constitutional state and a democracy.
Union members have to be constructive in resolving their own minority problems. They have to be constructive in helping to promote international peace and the rule of law. In that respect, Turkey currently leaves much to be desired, because she is oppressing her own minorities, has problems along her eastern borders and has nothing constructive to offer towards a settlement of the Cyprus question.
Turkey's government must not act as if it can demand membership of the European Union on its own terms. It cannot ignore the measures which remain to be taken.
I think we would do well to ask Turkey to draw up a time-scale, as the report also suggests, with a plan for taking the political measures required by the European Union. If they do not do that, there will be no further progress, but if they do, those measures will be warmly welcomed.

van Bladel
Mr President, Commissioner, Mr Swoboda's report importantly confirms Turkey's eligibility for membership of the EU, provided she satisfies the economic and political criteria. In that respect, the analysis of the situation in Turkey has not materially changed since we concluded the Customs Union with her.
Once again, we have here a list of wishes which we know from experience and having dealt with three Turkish governments will not be satisfied in a hurry, however desirable that may be. I therefore warmly welcome the Commission's initiative of a European strategy for Turkey. The Commission, and I have to say the Commissioner in particular, has to my mind always played a constructively critical role in this difficult relationship with Turkey. As a result, the Union and Turkey have never been totally cut off from one another. I hope that role will bear fruit within the foreseeable future.
An hour ago, Mr Swoboda presented his contribution to preparations for the Vienna summit, but I did not hear him say anything as rapporteur about the priority which should be given at that summit to discussing the European strategy for Turkey. I think that certainly is a priority, because otherwise there is a danger that all these well-prepared operational proposals, the deepening of the Customs Union, will be lost sight of.
The arrival in Rome of the PKK leader Mr Ocalan and the question of whether or not this terrorist leader should be tried may perhaps be at the forefront of people's minds at the summit. So this obstacle must be removed prior to the summit, by action of the kind that befits a constitutional state of the EU; this means that Germany, as the next holder of the Union presidency, must uphold the detention order so that Mr Ocalan can be put on trial. Packing him off to Moscow would be to funk the issue, and would merely further complicate and frustrate our relations with Turkey unnecessarily.

Ephremidis
Mr President, the rapporteur has obviously made an effort to add gloss to this report, but I do not think he has succeeded. His report is biased, it is full of suspicious omissions and is governed throughout by a syndrome of unprincipled and unjustified goodwill towards Turkey.
You want examples of omissions? Not a word about the negative consequences of the deluge of millions of Turks if the negotiations on enlargement and accession go ahead and Turkey gains access to the Community's labour market.
Does he say anything about a constitution or about penal law? Not a word about the torture, the disappearances, the murder of detainees under the penal code in force. True, he says something about the Cyprus and Kurdish problems, but he deliberately ignores Turkey's expansionist declarations about the Aegean, which are accompanied by threats of violence.
It is also characteristic that he tries to legitimise the de facto dominant position of the Turkish military government in Turkey's public life when, in paragraph 18, he calls for talks on accession, negotiations etc., to be held with the armed forces. Where before has such a thing ever been proposed? In what country? Why does he propose this for the Turkish military government in paragraph 18?
For those reasons and many others, for which one minute is not enough ...
(The President cut the speaker off)

Ceyhun
Mr President, we do not wish to see any torture or executions in Turkey, and we are therefore grateful for the balanced tone and clear goals set out in Mr Swoboda's report. He opens the door for Turkey to become a member of the European Union and urges that a timetable should be drawn up for democratic reforms there. He thus spells out in very practical terms the basic requirements for membership of the European Union. I very much regret that such clear thinking was not possible a year ago in Luxembourg. This has strengthened forces in Turkey which detect a spirit of the crusades within the Union and want Turkey to change, whereas the forces of democracy have been weakened.
The Member States now have another chance to give a sign in Vienna that will strengthen democracy in Turkey, and I hope they will be guided by Mr Swoboda's report. I think the ball is now in Turkey's court. After a report like this it really has to put its cards on the table, and this is why I am very glad that we too have another chance to do so now.

President
Thank you, Mr Ceyhun, and congratulations on your maiden speech here in Parliament.

Dupuis
Mr President, Commissioner, the Swoboda report is certainly heading in the right direction. However, I am slightly uneasy about its general criticisms concerning the rule of law in Turkey. More than one Member State - and Mr Ephremidis should not feel that I am getting at him because I am not thinking of his country in particular - should be doing some very deep soul-searching about the rule of law at the moment, and I am thinking here particularly of the host country of the European Parliament.
That said, what is undoubtedly missing from the Swoboda report is the whole issue of the Council's clumsy treatment of Turkey over enlargement, excluding Turkey for no reason from the list of countries that will one day become members of the European Union. And one thing that is really not playing the game is the unilateral cancellation of our side of the Customs Union. When there is an agreement you cannot unilaterally delete part of it and only keep the parts that, as we have seen, are beneficial to the European Union.
However, I think that there are a certain number of good things in this report and I must congratulate Mr Swoboda on setting a timetable. What is vital is making sure that relations between the European Union and Turkey are based on a calendar of reforms leading to accession. I would urge - and I think the Commission would agree with this - that the timetable should be fixed as soon as possible so that we can start working towards a particular target instead of remaining in this state of flux, which has unfortunately already been going on far too long.

Roubatis
Mr President, I would first like to congratulate Mr Swoboda on the very meticulous report he has presented and on his thorough work. He has prepared a report which is on the right lines, because our aim here is not to make things difficult for Turkey, but rather, to make them easier, and to help Turkey along in the procedure which it has requested, so that its application to join the European Union can one day be taken seriously.
But what is the European Union? I think this is something that Turkey will have to understand. It is not just an economic community, but above all an association of free countries and their citizens, who share certain values in common. What are those values? Democracy, respect for the individual and his rights, freedom of thought, the protection of minorities and respect for diversity. I am afraid that in Turkey there are many who do not understand what those values mean, and I think this report will help them do so.
In Europe we suffered the trials of the war. Turkey, which was neutral during the last war, perhaps does not understand what peace means to us. Perhaps that is why Turkey so easily and so often threatens peace, threatens to take up arms even against members of the European Union itself. Of course, in the EU we are not perfect when it comes to protecting the rights of our citizens, but we recognise what Turkey does not recognise: that democracy's greatest imperative is respect for our citizens, who must not be exposed to high-handedness, torture and disappearances. Genocide must never be used as a weapon for the subjugation of a minority group. As I said, Turkey itself requested membership of the European Union and certainly has the right to reconsider. But if it does not wish to reconsider its application, it must respect the principles I mentioned.
And another thing: Turkey must take immediate steps to renounce war, to accept the process of the International Court at The Hague and to accept that it must stop the war against its own citizens. That is when it will find that it has friends here in the European Union, friends who are interested in helping it forward, friends who want the Turkish people to progress to a point where one day they will be much closer to Europe.
Yet again, I wish to congratulate Mr Swoboda. This report is a very important one and I hope it will not be misunderstood in Turkey, because it was prepared by people who want to help that country finally move into the twenty-first century.

Bianco
Mr President, taking up the last point made by the previous speaker, I would say that our intention is to help Turkey move closer to the European Union. I believe, moreover, that Parliament, the Council and the Commission have always pursued this goal.
We are conscious of Turkey's central geopolitical position and the role which it can play in creating the conditions for peace in a particularly sensitive region. However, Turkey must also understand the reasons for certain objections, opposition and criticisms raised in the course of the negotiations. One outstanding issue which obviously cannot be overlooked is the Kurdish question: although we respect Turkey's territorial integrity, this cannot be considered a purely domestic problem, not least because it is crucial in terms of protecting minority rights. On the other hand, harsh and violent attitudes will not resolve the matter either, and the terms in which Turkey has referred to Italy are not always palatable.
In our opinion, this is not the way to solve such problems. Only through dialogue and conflict settlement can these goals be achieved, goals which the European Union must pursue with determination and by common accord. Sometimes, I must say, we have felt isolated, even though at the end of the day the European Council - through the Austrian Presidency - and the Commission did speak out in solidarity. These are problems which can only be tackled by all of us together.

Speciale
Mr President, in my opinion Mr Swoboda has produced a good report: it is well-balanced, clear and also firm where it needs to be. All of us - I do not believe that we differ on this point - are keen to keep the door of the European Union open to Turkey, and consider that - as Mr Bianco has just said - Turkey could in theory make a major political contribution to the EU. But the problem is that certain obstacles still exist at the present time, and it is on these that we must focus. The principal obstacles are above all political ones, concerning democratic guarantees, law and order, and minorities. It has to be said that, on balance, the domestic situation within Turkey is unacceptable: unacceptable both to us and in the light of the Copenhagen criteria. This is Turkey's problem, and it is Turkey which must adapt its structures and its conduct.
Mr Swoboda is right to say that we must ask Turkey and its government what it intends to do, when and how. We must now enter a new phase: we can no longer merely utter declarations of principle, repeating that Turkey is important and that we are keeping the door open; it is now up to Turkey, if it wishes to join the European Union, to say precisely what it intends to change, when and by what means, and how it intends to adapt its structures which conflict with the Copenhagen criteria. That is the point!
Turkey's recent attitude to Italy has, to my mind, been a serious error of judgement on the part of the government and society at large, because its aggressive, even violent attitude has created a very poor impression not only in Italy but throughout the EU at an awkward moment for Turkey. It has thus made a serious mistake. The Italian Government did what was necessary, as everyone has acknowledged. It arrested Ocalan, because an international arrest warrant had been issued by Germany, and acted in accordance with its constitution: neither in the past, present or future can anyone be extradited to a country which carries out the death penalty and does not furnish adequate human rights guarantees. This is Italy's position and that of all the Member States of the European Union.
Turkey has a further problem, over and above those already mentioned: it cannot say that there is solely a problem of terrorism and not a Kurdish problem. This is a key point: until Turkey admits that there is a Kurdish problem, and not just a terrorist problem, it will not be able to comply with the Copenhagen criteria or to give us satisfactory answers. There are other issues apart from the Kurdish question, but this is typical of Turkey's attitude. Now is the time to put our detailed criticisms to Turkey and to demand answers.

Stenzel
Mr President, Commissioner, ladies and gentlemen, at the Parliamentary Assembly of the Western European Union in Paris yesterday, I had the opportunity to listen to Turkey's Foreign Minister, Mr Cem. Turkey is obviously glad of any opportunity to appear at any forum on the European stage. It was significant that Mr Cem thought that he detected a change of position in Turkey's favour in the last Commission report, which described Turkey as a candidate and not - as it suddenly was in Luxembourg - a 'non-candidate' pushed out in the cold. This was the impression he had had, and it is a positive sign that relations are improving between the European Union and Turkey.
At the same time, it was striking that Mr Cem refused to be deflected from the terrorism problem as Turkey defines it, and he said not a word about the Kurdish problem. This is why I very much welcome the fact that the European Parliament report clearly addresses this issue and demands that Turkey should explain its position very clearly, because Turkey must be judged by the same standards as all the other applicant countries. I am convinced that we now have a major opportunity to find a political solution to the Kurdish problem, because with the agreement between Turkey and Syria, the forthcoming agreement between Turkey and Israel and the shelving of the Ocalan issue, there is a real chance of ending the 15-year guerrilla war that has claimed so many Turkish and Kurdish victims, and there is now a window of opportunity to find a political solution to the problem. I think that we too must do everything we can to urge Turkey to get to grips with the problem and find a political solution to it.

Langen
Mr President, I think that any steps which are likely to improve relations with Turkey are both right and proper, and I therefore unreservedly support the main elements of the Swoboda report, together with the Commission's proposals and the progress report. There are just three points on which I have reservations. The first is the lack of openness in our dealings with Turkey, which is why I hesitate about the wording of paragraphs 1 and 29 of Mr Swoboda's report holding out the prospect of membership once again, whereas all the facts and every practical consideration indicate that this is misleading. Everyone would surely agree with me that Turkey belongs to the family of western democracies and must be part of that family. For this reason, it should not have to see its application to join put off indefinitely once again. The 1963 Ankara agreement, signed 35 years ago, does admittedly say that the possibility of Turkey's accession to the Community would be examined, not as an obligation on the Community, only as an expression of its willingness to do so. But if we now give Turkey the impression once again that accession is imminent, we are being misleading, we are not being honest or open and, as so often happens here in Parliament, we are simply leading it up the garden path.
I would be in favour of developing a special relationship with Turkey. I fought tooth and nail for the Customs Union here in Parliament and I am a member of the Joint Parliamentary Committee, but raising the bar again now and offering the prospect of accession under far more stringent conditions than applied to any of the others who have joined is simply unrealistic and unfair. There is one further point which this report does not mention. Parliament would be well advised to deliver a clear opinion on the failure to implement the financial protocol of the Customs Union. How can we make demands of Turkey if we cannot eliminate the obstacles that we ourselves have created through Greece's permanent veto?

Lambrias
Mr President, from this platform I have repeatedly stressed that if there is one country among the European Union's 15 Member States which would be delighted if Turkey joined the Union, that country is Greece. This is because geography dictates that Greece is Turkey's neighbour. If those two countries were to work closely together, given that they occupy sensitive positions at the crossroads between Europe and Asia and between the Balkans and the Mediterranean, that cooperation would be valuable, productive and constructive for the whole of Europe and, I would say, for the security of the world as a whole.
But an essential prerequisite for that, obviously, is that relations between those two countries should be friendly and based upon the principles of international law. Unfortunately, while Greece, along with the other 14 countries, was prompt to subscribe to the Customs Union, Turkey, as if emboldened by that fact, has increased its provocativeness, aggressiveness and rashness towards Greece, to the point that its territorial claims are constantly on the increase. Consequently, it is no mere quibbling that makes Greece decline to sign the financial protocol. It is because the conditions of the Luxembourg Council's decision requiring Turkey to demonstrate a truly European orientation have not been satisfied.

van den Broek
Mr President, may I begin by thanking Mr Swoboda most warmly for his thorough and in my view balanced report. I think I can say that the Commission to a large extent agrees with the rapporteur's analysis, and his conclusions too.
I too was in fact anticipating this debate with mixed feelings just now, given recent developments in our relations with Turkey and specifically following the detention of the PKK leader Mr Ocalan. Nevertheless, I think we need to take a rather longer view and bear in mind that in recent times - beginning in 1995 with the conclusion of a Customs Union, but also more recently with the devising of a separate European strategy for Turkey - the European Union has chosen to measure the situation in Turkey against the Copenhagen criteria - easily identifiable in terms of Turkey's desire to be recognised as an applicant for membership. A progress report has been drawn up, in other words the European Union has I think clearly manifested its good intentions and also its political belief that it is important to further develop a lasting institutional tie with Turkey. We can certainly try, through assistance and cooperation - and there are proposals for that - to improve the economic position, to broaden and deepen the Customs Union, and to further align Turkey's laws with those of the European Union, but one thing we cannot do is dictate to Turkey how it should manage the political criteria laid down in Copenhagen. In that respect, the Union has set the standard at exactly the same level for all applicants. Noblesse oblige. That holds good in this case for Turkey too.
In view of the time, I shall come to an end. I do in fact hope that on one of the major issues, the Kurdish question, which has caused us no end of trouble in our whole assessment of human rights in Turkey, the beginnings of a political solution may now be in sight, a solution which certainly can only be possible once the problem as such is acknowledged to be a problem. We have not really got to that stage yet with Turkey. But can we not say here that the European Union is willing to look, together with Turkey, at ways of resolving this very important problem? The prospect of a solution would give a huge boost to Turkey's whole relationship with the European Union, it would improve the relationship enormously and also considerably improve the chances of solving other similarly important problems such as Cyprus, relations with Greece and the Aegean.
I will leave it there. The recent developments and complications over the detention of the PKK leader have in any case made two things abundantly clear: how important it is that we should actually get an international criminal court which can deal with this kind of thing and, secondly, how important it is that we should now start to look seriously for a political solution to the Kurdish question.

President
Thank you, Commissioner. I think that Mr Swoboda can be pleased with this debate.
The debate is closed.
The vote will take place tomorrow at 9 a.m.
(The sitting was suspended at 8.05 p.m. and resumed at 9 p.m.)

Members' Statute
President
The next item is the report (A4-0426/98) by Mr Rothley, on behalf of the Committee on Legal Affairs and Citizens' Rights, on the draft Statute for Members of the European Parliament.
Mr Fabre-Aubrespy has the floor for a point of order.

Fabre-Aubrespy
Mr President, pursuant to Rule 128 of the Rules of Procedure, I should like to table a motion for the debate on the this item to be declared inadmissible for three reasons.
The first reason is that the report draws upon the Amsterdam Treaty, which is mentioned in the preamble in recitals B, D and E. This Treaty has not yet been ratified, it has not yet entered into force. It is an affront to French Members and Senators to apply this text before it has even been ratified, particularly as, only yesterday, they debated the constitutional reform preceding the ratification of this Treaty.
The second reason is that the draft Statute included in this report adds provisions to the Treaty establishing the European Community, to the 1976 Act and to the Protocol on the privileges and immunities of the European Communities - something it does not have the power to do. For this reason, the provisions which aim to penalise MEPs holding other parliamentary mandates are inadmissible.
The third reason, Mr President, is that this report is an own-initiative report. It must therefore respect Rule 148, intended as a legal basis, and Rule 50, which applies in accordance with paragraph 6 of that Rule. Therefore, the proposal that it contains must, and I quote, 'respect the principle of subsidiarity and the fundamental rights of citizens', which is not the case in this instance. It must also respect paragraph 4 of the same Rule: 'Where a proposal has financial implications, Parliament shall indicate how sufficient financial resources can be provided'. This requirement has clearly not been met; this proposal does have financial implications for the Community budget and there has been no suggestion of how to finance it.
These are the three reasons why I am calling for this text to be declared inadmissible and this is why I am questioning it now.

President
Thank you very much, Mr Fabre-Aubrespy. The Chair believes that the report we are about to debate is admissible as the Council has expressly asked for our opinion on this matter and, according to the Rules, this is a valid way to give our opinion. Therefore, the Chair believes that it is not inadmissible and, as it is not inadmissible, we will begin debating it and, at the appropriate point, we will vote on it.

Fabre-Aubrespy
Mr President, your point of view is most interesting, but it is not up to you to give it on the motion I have tabled. It is, however, up to you to ask whether there is a speaker for and against this motion before putting it to the vote, as stated in Rule 128 of the Rules of Procedure.

President
Mr Fabre-Aubrespy, I know that you are very familiar with the Rules but at this moment in time the Presidency is applying these rules and believes that there is no need for a debate and vote on your proposal as the report is admissible. If, Mr Fabre-Aubrespy, you do not agree, you can appeal to the Committee on the Rules of Procedure, the Verification of Credentials and Immunities, of which you are not only a member, but a very well-known member.
Ladies and gentlemen, the Chair has decided on its position. This position, Mr Fabre-Aubrespy, may be wrong, and you all know how to appeal against it. But, in any case, the Chair will begin the debate as it believes that the report is admissible. I have explained my reasons for this: although the changes to the Amsterdam Treaty have not been adopted in all the Member States, Parliament's comments on future-related matters are valid, and all the more so as the Council has asked for our opinion on this matter.
I shall now give the floor to the rapporteur, Mr Rothley.

Rothley
Mr President, ladies and gentlemen, the Members' Statute represents an opportunity for Parliament. It can take on a new profile: more independent, more self-reliant; it can come of age as a Parliament whose members are accountable to the electorate and to the European Union. One aspect of this new profile is that Members would be paid by the European Parliament itself. Equal pay for equal work. Which brings us to the first problem. There will always be governments and members of national parliaments who maintain that the Members of the European Parliament must on no account earn more than the members of their own national parliament. And there will always be Members of the European Parliament who consider it unacceptable that they should earn less than national MPs. That is just how things are, and they will be no different two years, five years or 20 years from now.
For that reason we must address the problem now. I do not believe we can achieve this aim in one fell swoop. That is why we in the Committee on Legal Affairs and Citizens' Rights are proposing a transitional system. The Members who are elected for the first time next June will receive the average salary, which will be compulsory for all new Members. Why? Because the average is a token of our respect for the democratic decisions of national parliaments. It makes no sense for the Italian Government to attack the Spanish Parliament for paying its members too little. Nor does it make any sense for the Spanish Government to attack the Italian Parliament for paying its members too much. That would be utter nonsense.
Europe cannot function if any one country forces its own system on all the others. In short, the use of the EU average is a mark of democratic respect. For the Members who are re-elected, there will be problems in terms of pensions and fiscal legislation, and that is why they should have the right to choose between the new system and the present system, but only for a five-year period. During the next Parliament, we shall take a decision that will apply uniformly to all Members for the sixth legislative term, beginning in the year 2004.
If you share my earnest wish that we should have a statute before the elections in June of next year, the proposal tabled by Parliament must be moderate, it must be immediately convincing, it must be obviously sensible, and it must be entirely selfexplanatory. So what are the other proposals? There is the idea of linking MEPs' salaries to those of judges or Commissioners. Almost all our governments grumble about civil servants' and judges' salaries. If we say we want a percentage of a civil servant's, judge's or Commissioner's salary, the Council will immediately lower the portcullis. So anyone who wishes to kill off the Statute need only propose this sort of linkage.
There is another reason. A Member of Parliament is an independent political player who is accountable to his or her electorate and to the European Union. No part of me is a judge at the European Court of Justice, nor should I ever wish that upon myself!
Hiding behind the pay packet of a civil servant or a judge, rubbing our hands with glee whenever civil servants or judges are awarded a rise and shrugging off any responsibility, may be cunning but it is not prudent. The European Parliament should decide freely, independently and confidently about the remuneration of its Members. This alone befits the dignity of Parliament. The other disadvantage of the linkage proposal is that it does not name any figure. That is no way to solve the problem facing the European Parliament, and there is indeed a problem facing us. This issue has set people talking about Parliament; it must not bring us into disrepute.
As for travel expenses, it is high time we solved that problem. We must not create the impression that we only take action if the big stick is wielded. But we can only solve the problem if we talk about pay. No one can expect a Member of Parliament to work here for ECU 2 827. That is not realistic. This is why rates of pay and the system of reimbursement for travel expenses are inextricably linked. This is why we must name a figure and include the following sentence in our resolution: 'The Bureau shall decide in the light of the Statute'. The fact is that having a statute will enable us to put our House in order. In other words, the political logic behind our proposal is that we are prepared to solve our problem, and now it is up to you in the Council to play your part. That is the political rationale of this proposal.
Some say there are too many details. The Dutch fiscal authorities are taxing our colleagues to the hilt, and some say these are mere details that do not interest us. No, these are not trivial details. We have heard enough fine words. We have heard enough political rhetoric. We have a problem to solve. Politics is all about solving problems. That is why we are here. I have often been thinking lately of one of Churchill's delightful witticisms: democracy, he said, is the worst form of government except for all the others. That is also what I should like to say of this proposal. It is the worst proposal except for all the others, and that is why I would ask you to approve it.
(Laughter and applause)
Méndez de Vigo
 on Institutional Affairs. (ES) Mr President, I trust that after the 109 amendments we are to vote on tomorrow, this statute, currently only in draft form, will prove a great step forward from what we have in place at present. I most earnestly hope so. Indeed I am sure this will be the case, for one simple reason: this statute is of crucial importance to Parliament. It represents a success for Parliament, which listed it amongst its priorities when negotiating the Treaty of Amsterdam. No one thought the requirement for a statute would be included in the Treaty, but we managed to ensure that it was. That was the first success.
Secondly: this statute is very important for Parliament because it serves as its charter. The Statute is about much more than just our salary. It lays down the rules by which we must regulate our conduct, as representatives directly elected by the citizens.
Therefore, the proposal we must take to the Council, which has to approve it unanimously, ought to be a reasonable proposal, as Mr Rothley has said. If it is not, it will fail because of the requirement for unanimity. In that case, the success achieved so far would turn into failure.
In its opinion, the Committee on Institutional Affairs, which I have the honour to represent, has made three requests. First, that the rules adopted be transparent, so that the citizens can be aware of the rules governing the conduct of Members of the European Parliament. Secondly, that all existing rules be brought together in a single document. Thirdly, that equal treatment be given to all Members.
In my view, the present state of affairs, which results from a previous situation, no longer makes much sense. After all, we are all elected representatives and we are all doing the same job.
This is why I believe that if we vote for a reasonable text tomorrow, we shall prove the strength of our conviction, the political strength we acquired at Amsterdam. I trust, Mr President, that we shall indeed be able to do so.

Green
Mr President, this report is, in my group's view, of the utmost importance in the development of the democratic legitimacy and the credibility of this House. Of course, it should not be so. We should be judged here on the way we carry out our functions, to legislate, to monitor the work of the Commission and the Council and to set the budget of the Union. Sadly, that function, which I believe has been developed and carried out in a constructive and progressive manner during this parliamentary term, has been obscured by a barrage of criticism in all our countries in recent years.
That criticism which reaches a crescendo in our press with monotonous regularity centres on the system of allowances and expenses accruing to Members of this House. I want to pay tribute to the two Presidents of our Parliament during this parliamentary term. Firstly, Klaus Hänsch and now José Maria Gil-Robles have worked to introduce the reforms necessary to restore to this House and its Members a degree of dignity and public acceptability.
This is the first time I have taken the floor for my group on this issue in this chamber. In the last four and a half years I have been engaged in a continuous round of discussions within my own group and with my counterparts in the other groups of this House to ensure that we can now take the fundamental decisions necessary to solve this problem. This, in my view, represents the last opportunity in this parliamentary term to end, once and for all, this most damaging public vilification.
I for one hope passionately that tomorrow this House will adopt an appropriate package of reforms. We all know that there will be some out there who will argue that whatever we do it will not be enough. Sadly, there are some in this House who, over recent years, have deliberately and dishonestly added to the debate by misrepresenting and misreporting detail and motivation.
Let us therefore do what we believe is right, what we believe is defensible and what we believe our citizens will see as reasonable. Let us also be entirely open. It is clear that the issue of the expenses regime could not be solved until we also dealt with the inequality of Members' salaries. The gross disparity between the salaries of Members doing identical jobs in equally trying circumstances in terms of travel, hours, inconvenience, the disruption of family life and so on, is simply not acceptable. It was of critical importance, therefore, that the intergovernmental conference in Amsterdam in June of last year included a request that the European Parliament bring forward a proposal for a Members' Statute. The Rothley report is our response to that request.
In my group's view it is not acceptable to propose a Members' Statute which simply pulls together the varying conditions, immunities and privileges of the 15 national parliaments of the European Union, collates them and then calls the result a statute for Members of the European Parliament. If this statute is to have some integrity and credibility it must look at the role of a Member of the European Parliament. We must define a statute which is appropriate for the work we do, the environment in which we work, the travel which is an integral part of our job and the incompatibilities which result.
I want to congratulate Mr Rothley for the extremely effective job he has done in this respect. I must say that there is probably no single Member in this House who will be satisfied with every aspect of Mr Rothley's proposals and I conclude therefore that he has got it about right. We cannot dodge the important issue of a Member's salary so I propose to deal with it now. It is simply a fact that Members of this House should be paid the same salary. In any similar environment with working colleagues coming together it would not be acceptable that salaries with such diversities are commonplace. It runs counter to all logic and common sense and lies at the base of all our problems.
The big question has been just what is an appropriate salary for MEPs? Mr Rothley's average of the salary of all our national parliamentarians is an ingenious solution. It is not by any means the highest salary to be found amongst national parliaments nor the highest salary we could have proposed. Yet it represents an appropriate salary. It has the virtue of being transparent and understandable and my group rejects other formulations as being opaque and opening up the criticism that we are manoeuvring for some super, inflated wage.
In order to facilitate the clear problems for those colleagues who would suffer a substantial loss of salary under this system Mr Rothley proposes a transitional period, whereby in the next parliamentary term colleagues who are reelected can choose either the new salary or an existing one. While some colleagues are unhappy with that transitional phase, and I put myself in that category, it has to be recognised that we are talking in terms of a considerable downward movement of some Members' personal income. Such a transitional period would at least give them the ability to plan their future. New Members will of course enter this parliament under the new system immediately.
The report proposes that salary should be subject to Community rates of taxation. This is a controversial proposal which I believe divides most groups in this House, and mine is no exception. Many Members feel that they wish to continue to pay the same tax rates as those fellow-citizens whom they represent. Others feel that they will be receiving a European salary and are entitled like others employed directly by the European Union to pay European Union tax rates. I think this one will come out in the wash, ie it is difficult to predict what the result of the vote in this House will be on this issue.
The other side of the coin of a single salary is a system of reimbursement of travel costs based on actual expenditure. For me this is fundamental. I cannot accept that we adopt a common salary and in the same breath continue to allow an expenses regime which is based on anything other than actual cost. I have no doubt that such a proposal would be entirely unacceptable to our citizens, our voters and indeed to our governments. Mr Rothley's proposals in this respect are excellent and I hope they will be supported. The compromise amendment tabled by my group and the Liberal Group with the rapporteur's active support, I believe, adds even greater transparency and clarity to this issue and I hope that it will command support.
The other and major section of this draft Statute is that of the incompatibilities and other elements which define our rights and responsibilities, our mandate and independence as Members of Parliament. A series of amendments in the names of many groups, mine amongst them, have been tabled which add balance to the report and I hope they too will be adopted.
If tomorrow we succeed in producing a draft statute we will have taken a first and major step to solve this long running and open sore. It will then be up to the Council to acknowledge the commitment of the Parliament and its Members, to take the very tough decisions which I hope we will do tomorrow. It will then be up to the Council to indicate that they are prepared to give the green light to the next stage, ie detailed interinstitutional negotiations so that a statute can become a reality before the European elections in June of next year. Time is short. Consensus on an issue of this sort is extraordinarily difficult to secure. We will tomorrow, I hope, secure the majority we need. Let us hope that in Vienna the Council can do likewise.

Fontaine
Mr President, ladies and gentlemen, over the past few weeks, the report by our colleague Mr Willi Rothley has caused much ink and many words to flow. But what should surprise us most yet has been passed over almost in complete silence, is the fact that for almost twenty years now MEPs - who are elected by universal suffrage as everyone knows - have been waiting in vain for a common statute. Commissioners have a statute, the judges at the Court of Justice, the advisers to the Court of Auditors, the Ombudsman - thanks to our efforts - our officials and, of course, the members of our national parliaments all have a statute but the Council does not deem it necessary for an MEP to have one.
Nonetheless, if ever there was a situation which was so complex that it needed appropriate measures to be taken from the outset, it is that of the MEP. The reality for MEPs is indeed complex in many respects. Their parliamentary allowances are aligned with those of their national colleagues but, as everyone knows, the differences according to nationality range from the same amount to triple the amount - not to mention the substantial differences in tax systems. This unfairness is compounded by the fact that members of national parliaments in some Member States - on paper the lowest paid in the Union - receive direct compensation in their country which their European counterparts are not entitled to.
The second element of this diverse and complex reality is that of distance. Some colleagues live close to our places of work - Brussels and Strasbourg - and some are even on site. Others, in contrast, live on the periphery and spend a day or even longer travelling to these places, sometimes having to use several forms of transport.
Also, the lack of a common electoral system - and we are awaiting the results of the report from our colleague Mr Anastassopoulos on this - leads to further injustices. Some of our colleagues are elected representatives in Member States whose size allows them to travel around relatively easily to visit their constituents. Other colleagues are elected representatives in vast constituencies where they have to be particularly thorough on the election trail because they also face a preferential system.
Mr President, ladies and gentlemen, I should simply like to say to those who have avidly studied this matter for some time now that they would gain more respect if they were sufficiently objective to take the realities of the life of an MEP into account. But perhaps this is too much to ask from those who clearly still aim to discredit MEPs systematically. Every person in this House would sincerely like to see transparency in all expenses payments. Every person is also aware - as Mrs Green said a few moments ago - that the disparities I have highlighted cannot be tolerated amongst colleagues who sit on the same benches and who do a job that is often exhausting but which, unfortunately, is only appreciated by those in the know because of the lack of media coverage of their work.
Every one of us has reached the conclusion that only a common statute for Members would let us respond to the demand for both transparency and equality, which go hand in hand. This is the reason why - I have almost finished, Mr President - I am delighted that the Council has finally agreed to incorporate the principle of a statute in the Amsterdam Treaty. I should like to congratulate our President, Mr José-María Gil-Robles, for having achieved this. I am very pleased that the Committee on Legal Affairs and Citizens' Rights and its rapporteur worked towards this, along with the PPE Group. And I should like to thank those colleagues who actively cooperated in the deliberations of the working party we set up. I hope that, tomorrow, we will vote through a text on which there is the greatest possible consensus and that in adopting it later the Council will at last both accept its responsibilities and strengthen the dignity of our institution.

Cox
Mr President, my group attaches the highest priority to this report and to the work done by our colleague Mr Rothley. We do so for political and institutional and not for personal reasons because some will gain and some will lose under this system. Frankly, if we were to be paid nothing there are some begrudgers and commentators who would still raise questions. We are also acknowledging that this Parliament has been dogged constantly by debilitating, negative publicity especially on the issue of allowances and Members' expenses. It is damaging our credibility. It is reducing our legitimacy in the eyes of citizens and we have to fight back. Too often many of us scramble to defend the system that we really do not believe in and for some of us is really indefensible. Our current system is complex and reflects the fact that the issue was fudged 20 years ago with direct elections. We now have the power of Amsterdam and I am pleased to see that with an accelerated pace we have responded to the challenge of the Cardiff conclusions. I hope tomorrow that we will, in a final vote, deliver a very strong message from this House into the hands of our President to respond to the challenge of Cardiff to say we have listened, we have paid attention and the ball is now firmly in the Council's court.
In particular I congratulate the rapporteur. Many thought this could not be done and certainly could not be done in the timescale. He has done it. He has done it with the colleagues and the Committee of Legal Affairs. I would also congratulate my own colleague, Willy De Clercq for his role in chairing that.
On the detail, briefly, my group wishes to add dimensions other than the economic and that now is clearly a matter of consensus. My group wishes to support the final vote of the Statute, even if there are things in it we would have preferred to see otherwise, because we want to get the message over. My group will support the explicit salary that is referred to by the rapporteur and the majority of my group will support the European tax conclusion. Overall we believe in equal work for pay of equal value. There are other details but I will skip them.
Ultimately we support this draft because it gives us the capacity as politicians before our electorate, before the next election, I hope, to shift the focus from the politics of envy, from the politics of allowances and expenses, to the politics of the Union itself, which is our vocation and which is our mission. To advance that, I have already initiated a round of meetings through my group with senior Members of the Council because they are now the ones, I hope from tomorrow, who must bear their responsibility to help us to rid ourselves of a yoke that for too long we have been stuck with.

Crowley
Mr President, I speak today on behalf of my group with regard to the proposal put before this House. At the outset I want to pay a very particular and special tribute to our rapporteur, Mr Rothley, who had a very difficult task and who has come forward with his own, honest opinion with regard to what would be achievable in the overall context. Unfortunately, I do not agree fully with what he has written in his report. However, I can state at the outset that my group fully supports the idea of having a common statute for Members and for putting forward a motion for a resolution containing a proposal for a common statute.
Where we diverge somewhat, is with regard to what should actually be in that final resolution and draft Statute. On the question of principle, no Member of this House surely has so little respect for him or herself that they feel they should not be paid a proper salary at a level common to each and every one of us. Unfortunately, due to errors in the past, and due to a lack of political will in the past, not by Members of this House, but by the Council, we have failed to get agreement with regard to that common salary and common situation.
There has been much negative publicity foisted on this House, some of it generated from Members within this House for their own political gain and political beliefs and some from former Members who have attacked the parliament to gain themselves a higher national profile for cabinet positions and so on. So we must show respect for ourselves by being willing first and foremost to lay down guiding principles and secure the agreement of the Council and then decide on what the exact remuneration should be. By stating explicitly now what we feel the common average should be we allow the Council to say: that is too high. With a transitional period we would ensure that the inequalities will be continued and that Members who are reelected to this House, who presently earn two times or two and a half times what I earn at the moment will continue that inequality. If we truly believe and truly want a common statute there should be no transitional system. There are other actuarial methods and accounting methods for dealing with pension contributions, health questions and so on.
Finally, I want to draw Members' attention to one other point. The voting list which will be put before us tomorrow has been drawn up in a very unusual way. We have on the voting list questions related to the draft Statute and questions related to the annex. But the amendments relating to the draft Statute and the points of principle of the draft Statute are put onto the annex side and the questions relating to the annex side are put on the draft Statute side. So we are not being given the right to determine first whether we agree with the principle or not and vote on all the amendments related to that. I would ask the services to please ensure that we are given a proper voting list tomorrow morning.

Sierra González
Mr President, when commenting on the report on the draft Statute for Members of the European Parliament, one must first recognise that the rapporteur must have been working against a deadline. Nevertheless, he contrived to incorporate into his work - quite rightly, in my opinion - absolutely essential provisions to safeguard independence and transparency.
However, in just the same way as I am bound to recognise the merits of his work and the areas where we agree, I am also bound to state where I differ. In particular, my differences centre on three main issues, namely the proposal for determining Members' salaries, recourse to external assessment to determine the latter and setting up optional transitional arrangements during the fifth legislative period.
Why do I differ? As regards the proposal for Members' salaries, I accept the rapporteur's view on the need to achieve equal treatment. However, it must be borne in mind that in some Member States, implementation of his methods will result in the return of inequalities between Members of the European Parliament and Members of national parliaments.
Concerning external assessment, it does not seem appropriate to assess Parliament's operation by applying business standards, because Parliament is not a business. Resorting to external assessment in this way may be interpreted as an attempt to avoid responsibility for the salary determined.
Finally, in connection with the transitional arrangements, I differ because, as I see it, the same status, in this case that of a directly elected parliamentarian, can bring with it different rights.
In conclusion, I should like to make it clear that although I recognise the obvious merits of this report, I could not vote in its favour unless the amendments concerning the issues I mentioned are adopted

Aelvoet
Mr President, the worst thing which can happen to us, ladies and gentlemen, is to muddle on with the existing arrangement, which is untenable because it leads to a different income for the same work and is also tied to laughable travel expenses which provide some Members with a second and third income on which they pay not a cent in tax. That is indefensible. Let us now push for a good and decent system. So I hope Mr Rothley's proposal is adopted and that average earnings will be the model, because it would not make sense to hide behind a percentage of something else, it would make no sense and it would be cowardly, and I hope too that immunity and incompatibility will be part of the Statute.
There are of course a few points in it which we shall find hard to bear, but we are prepared to accept those in the circumstances in order to escape from the bad system we have at present, for example the transitional period, the fact that we are still making the reimbursement of travel expenses conditional on approval of the Statute, and the voluntary supplementary pension. I hope in any event that we shall get this settled tomorrow, and then perhaps we shall be able to use the shower cubicles and wash off the mud.

Maes
Mr President, the great virtue of Mr Rothley's report is that it exists at all. There will doubtless be quite a debate on it, and we too have one or two comments. On behalf of our group, we wish to put ourselves firmly alongside those who favour a common European statute for Members of the European Parliament, simply out of respect for the parliamentary office we hold and which our successors will hold after us. We are convinced that the European Parliament has an image problem, but we believe the Council must at last understand the necessity of applying once and for all this principle of equal pay for equal work, not least in the case of the European Parliament. Our group also feels that the enacting of a statute of this kind is a clear manifestation of the desire for European integration and of the great symbolic significance which a European Parliament can have, a real parliament acting as the cornerstone of European unity and as a symbol.
We therefore think that a transparent arrangement is needed which is based on reimbursement of the actual costs incurred and which precludes the possibility of abuse. One wonders - and a number of members of our group have asked the question, Mr Rothley - whether everything needed to be set out in so much detail in the report, or whether a few things might not have been covered in an annex. On the other hand, we fully appreciate that there must be no doubt concerning the basic salary, and an average of the kind you propose is acceptable to many of our group's members, although it must be linked to a system of European tax rules, because otherwise you will have equal pay but inequality again due to different national rules on tax.
Lastly, we cannot agree to a transitional arrangement. I appreciate that you put that in for reasons of pragmatism, but we think in principle that anyone running for European office next time should do so in full awareness of the situation and acceptance of the new Statute. On supplementary pensions, you have made three proposals. Some of us, myself included, really want these provisions on supplementary pensions to be left out. We would prefer to see nothing regulated and paid by the European Parliament, but instead a proper social statute, of the kind you suggest, forming part of the Statute as a matter of course.
Mr President, to us and to every Member of the European Parliament, it is not the money which matters most. European parliamentary office is an important office. It will need to be more important still in future. The power of this Parliament needs to grow, and its lack of a statute has certainly held it back in the past. We hope the choice we make tomorrow will be a common choice for a common statute, and that notwithstanding our differing opinions we shall prove that this choice, which is made out of principle, is the right one.

Fabre-Aubrespy
Mr President, ladies and gentlemen, here we are meeting to discuss our future statute at a Brussels mini-session on a Wednesday evening at 9 p.m. with no public present.
What a wonderful example of transparency and democratic legitimacy we are setting at the end of what has been an exceptional procedure - and I am not even talking about the astonishing casualness which you have demonstrated, Mr President, with regard to the Rules. On three occasions during this procedure it has been necessary for the Conference of Presidents to intervene. It first intervened to authorise what is and what can be nothing but an own-initiative report, on the basis of Rule 148. It then intervened to impose a rushed timetable, marked in particular by an extraordinary meeting of the Committee on Legal Affairs and Citizens' Rights - a six hour meeting held in Strasbourg on 17 November. Lastly, it intervened to correct - literally - the report by the Committee on Legal Affairs and Citizens' Rights in an exceptional meeting held here last Wednesday at 8 p.m. I might add that several meetings of the secretaries-general have been given over to this report.
Why such urgency? Why such attention? Why such concern amongst the group chairmen? Because, ladies and gentlemen, it was absolutely essential that a text be drawn up at all costs, no matter what its contents, before the Vienna summit. Because the ball had to be thrown back into the Council's court to hide our own inability to change the current system for reimbursing travel expenses - a system quite rightly criticised because it is shocking - and to make the Council take responsibility for the status quo .
This is what we are being asked to do, and we are doing it by flouting rules, by applying a Treaty which has not been ratified and by adding to texts of the highest legal level. We are doing it by failing to exercise our future powers. A proper statute should cover the different requirements which apply to Members. A proper statute should not only address financial matters, of course, but also incompatibilities, privileges and allowances, and rules of conduct. A proper statute should provide a legal basis - which currently does not exist - for the system for reimbursing expenses and paying allowances for the exercise of office, and should also give this system the transparency it is sorely lacking.
Such was the aim of the draft Statute that we tabled in Amendment No 106. In place of this, the draft from the Committee on Legal Affairs and Citizens' Rights is a collection of incoherent, outrageous and ridiculous measures. The incoherency arises from stating, in recital A, that any difference in the Statute for Members on grounds of nationality shall be prohibited, yet it also refers to national systems when these are more beneficial. The outrage lies in mentioning the need to avoid difficult personal situations and to preserve already acquired rights, or those being acquired, by implementing a transitional system and a dual scale for salaries. No one is forcing Members to stand again and, ladies and gentlemen of the Socialist or Social-Democrat Groups, as you claim to be, you are simply trying to obtain something which is denied to employees in companies in your respective countries. Lastly, the ridiculous nature of this statute lies in stating that the parliamentary allowance will be paid in advance, to prepare for any eventuality. As a general rule, all work merits pay but, in this case, all pay merits work.
This statute will not protect Parliament's image. I have never seen such a pathetic display of national sentiment, such a display of willingness to take one's personal situation into account. The European Parliament has never seemed to me so far removed from the concerns of public opinion.

Barzanti
Mr President, this House is about to perform an act of great courage and far-sightedness. It has been our ambition for some time - and it might now come about at last - to have a statute laying down the rights and obligations of Members of the European Parliament, the nature and prerogatives of their mandate, and the precise means of exercising it. This has been made possible by the Amsterdam Treaty which, although not yet in force, is the frame of reference for our discussion and for the expeditious, enthusiastic work of the rapporteur, Mr Rothley, who is a past master with difficult dossiers.
We owe it to ourselves to perform this act. The resolution on a uniform electoral system and the blueprint contained in it - the rapporteur was Mr Anastassopoulos - was likewise a significant step forward in highlighting the urgent need to endow Parliament with its own autonomy and hence with a form of democratic legitimacy, ensuring that it is no longer a gathering of national representatives but a forum which allows the peoples of Europe to have their say in a process inspired by solidarity and federalism. A uniform electoral system is a precondition if the work of all MEPs is to be comparable. What will the Council do about it? That is by no means a peripheral question.
We also owe it to public opinion, to the peoples of Europe, to take this decision. All too often our Parliament, or certain of its Members, have been the focus of malicious rumours, of disparaging and insidious campaigns by the press. Full transparency is therefore required about everything, not merely out of defensiveness but because there should be nothing to hide. Finally, this act of ours is a challenge to the Council and the Union's other institutions: they too must clarify the conditions under which not only political appointees but also officials of all grades perform their duties.
Given that I agree with the overall structure of the texts being put forward here, I shall merely touch on certain points where I and other members of the Socialist Group would like to see additions or express doubts or dissent. The first of these is the temporary nature of the provisions outlined, but I shall not dwell on this point.
Next, it would be useful to investigate the incompatibilities more thoroughly, including not only that of exercising the office of member of a national parliament but also, for example, that of mayor of a city or community having more than 100 000 inhabitants. I know that this is a matter to be settled under electoral legislation, but it would nevertheless be helpful to offer some guidance in this respect, for example along the lines set out in Amendment No 89. Clearly the content of the annexes will have to become operational once the Statute itself has come into effect, in the light of the provisions contained in it, and will have to be implemented on more than just a mechanical basis.
As far as Members' allowances are concerned, I do not think it right, even provisionally, to apply the criterion of a mathematical average of the allowances in force today - or whenever the sum is fixed - in the national parliaments. Why should the average of such dissimilar amounts, for duties so different from ours, miraculously produce a fair and acceptable result? It would be preferable to link this calculation to allowances granted for the exercise of offices or duties in another European institution and to a deliberate, straightforward and carefully weighted assessment, equal for every one of us and subject to Community taxation: Amendment No 13 is very pertinent in this regard. A figure can be put on the amount - it is not true that this will not be specified - once the House has voted.
My purpose in speaking frankly and openly here today is to attain a goal which none of us can underestimate. When casting our votes, let none of us lose sight of the sense of pride and dignity which must guide us in voicing the ideas and feelings of the European peoples. It is vital to cut through the demagogy, adverse propaganda and opportunistic moralising: we must be in a position to perform our difficult and complex work on a salary which is reasonable and equal for us all - for all MEPs, whose circumstances vary and who accept different degrees of inconvenience in performing the same duties. We must ensure that our Parliament really does serve everyone: it must be more efficient, more transparent and ultimately more democratic, a Parliament which strives to be truly European.

Añoveros Trias de Bes
Mr President, I should first like to congratulate my colleague Mr Rothley most sincerely. I really do mean what I say! I may not agree with Mr Rothley, but I admire him nonetheless, because he has shown himself capable of coping with the most difficult circumstances, tight deadlines and pressures from all and sundry.
Our President does indeed have to take to the Vienna Council a document on which to negotiate. Yet in this case, as I stated this morning in our group, we have let ourselves down. We have been slow to deal with such an important issue which affects us directly, and we are in grave danger of mishandling it altogether.
Of course we support the Statute. It has our full support. I very much fear, however, that what we are to vote on tomorrow is not in fact the Statute for Members of the European Parliament. What we are really voting on is the Members' payslip. What seems to be of prime importance is how much a Member will earn and what for. It is the only statute in existence to contain such an inordinate number of figures and details. That is not what transparency is all about. It is a travesty of transparency. There is no reason for the Statute to contain an annex which is an integral part of it. Rather, that annex, whilst referred to in the Statute in the appropriate way, should be regulated by Parliament itself at a later date, with the benefit of all necessary transparency. That is the legally correct procedure, and you, Mr Rothley, know that as well as I do.
We do, however, have a good opportunity to improve the draft by means of amendments. Mr Rothley has been extraordinarily receptive with regard to these. Some issues are not really economic, but they are essential to the Statute, such as the transitional periods, taxation, pensions and incompatibilities.
In addition, Mr President, we must make every effort to avoid an obvious risk: that the Statute may prove to be to the detriment of many of our colleagues. Having heralded the Statute, stressing its transparency, impartiality and solidarity, it would be absurd and contradictory to allow unfair and detrimental differences to arise.
Once again, I stress the importance of taking advantage of the many amendments which do make sense and help to make the text more reasonable. We should not forget that we are regulating our future and that of our successors. God forbid that due to a misunderstanding of the nature of transparency, we produce legislation to be ashamed of, and which is not only unfavourable but also seriously detrimental to us.

Thors
Mr President, tomorrow we shall be able to show that we are willing to play our part in achieving clarity and precision. Despite considerable resistance, the Liberal Group has managed to move the process forward so we can submit our proposal. I am delighted to note that this is the general view tonight, which was not the case when we began in July. We can therefore ask the Council to resolve the issue so that it can be removed from the agenda, which is no more than Europe deserves.
I am glad that it looks as if there will be a broad majority tomorrow, and that everyone appears to be democratically minded enough to approve it. Our objective is a system with independent representatives, and one where we do not have an auction in which the lowest bidder wins. The transitional regime is reasonable in view of the fact that a considerable number of candidates have already decided whether or not they wish to participate.
As we have mentioned, our group is split over taxation. I share the minority view that national tax regimes can continue to apply in the future. I think it is important for us to broadly accept this principle. Consequently, it is not up to us to decide this matter, but a valid decision is required by the next parliamentary term. I hope we will be able to support other reforms which we can decide for ourselves.
Finally, I should like to say that there have been times when we have come up against the obduracy of the rapporteur, but on the other hand his tenacity has made it possible for us to discuss the proposal and put it to the vote tomorrow, and for this I should like to thank him.

Ribeiro
Mr President, since we are members elected by 15 nations to a supranational structure of states, should we not have a single statute? Undoubtedly we should. However, perhaps over-concerned with the media, we are currently showing our inability to give the signal that the Council needs so that it can reach the unanimity that the European Parliament itself seems regrettably so far from achieving.
The basic question is this: does a single statute necessarily mean a single salary? Obviously not. Our position, which we reached after much consideration and with due respect for the opposite point of view, and which we announced quite clearly almost two years ago, is that our emoluments should refer to the country and the people we belong to and where we live. If the proposal is approved, the report would be taking the idea of allowing, albeit provisionally, different salaries for members of the same national origins to absurd lengths, particularly as we approach a single currency.
Finally, on a subject that was a burning issue some time ago, perhaps we should take care not to moralise and stir up trouble about the cost of members' travel expenses, especially in the case of people who come to meetings from a very long way away. Smoke might get in people's eyes but there is no smoke without fire.

Ullmann
Mr President, ladies and gentlemen, there are many things in the European Union that are still far from European. This even applies to the European Parliament. The work of its Members is still governed by rules that were devised at a time when this House was merely a parliamentary assembly of MPs from the Member States. What we are planning now is nothing more or less than the Europeanisation of the pre-European conditions in which our parliamentary work is conducted. Our debates have shown to all and sundry that this proposal touches on some very raw nerves - on issues of social standards and individual circumstances and indeed on the broadest possible diversity of unique personal dilemmas. From where can we draw the strength we need for this step on the road to Europe?
The Treaty on European Union tells us. The European Parliament, it says, shall consist of representatives of the peoples of the States brought together in the Community. We are not simply representatives of the people, but representatives of the peoples. Anyone who does not know what that means would be well advised to come along to the Committee on Petitions, where he would see that our mandate is not to represent one people but rather all the peoples of the European Union. At the same time, however, we do represent a single people in that we represent the people of the Union, which now expects its Members of Parliament to take this step whereby they can establish their credentials as representatives of the peoples.

van Dam
Mr President, more than 20 years ago now, the Council undertook to draw up a statute for all Members of this Parliament. We never got one. That is not in itself so bad, because having a Community statute may nurture the idea that Parliament represents one people. But the European Union is made up of a rich diversity of different peoples. We are elected by the people of our own nation and must also bear in mind our national interest.
However, the interim solution of being paid a salary by the Member State and expenses by Europe has resulted in disparity, an uneven picture marked by excessive reimbursement of expenses, the improper use and even abuse of expenses. While it is worrying that the media are far less interested in our debates than in our expenses, it is essentially right that they should attack these anomalies.
If we are to clean up our act, there has to be an end to the situation in which the amount refunded for travel expenses is far greater than the actual costs incurred. Competition in air travel has meant that in many cases it is considerably cheaper to fly than to buy a full-fare rail ticket. Over shorter distances, certainly those served by fast rail links, Members of the European Parliament should set an example by using the train, not the plane. Clearly, the expenses paid must reflect that. Expenses for the use of one's own vehicle must be based on the objectively calculated total cost of a good and safe car, such as an official car.
Mr President, we have been suggesting for years on our side that the expenses paid should on no account be greater than the actual cost incurred. The rapporteur's proposals now offer a cohesive framework for achieving all this. We shall support his proposals, together with those amendments which seek to reimburse costs in a thrifty and realistic way. We shall not support amendments which seek to add new bells and whistles to the system.
The monthly salary is an altogether different matter. The rule is that each Member of the European Parliament gets the same as members of his own national parliament. As a Dutchman, I find it rather suspect that my national parliament has broken the link between the salaries paid to Dutch MEPs and those paid to its own members. The Netherlands short-changes us to the tune of some ECU 1 000 a month. This probably means that it is breaking the terms of the Treaty.
A standardised salary is not our top priority in view of the national office we hold, even though the salary differentials between Member States which the rapporteur has highlighted are enormous and hard to justify. I imagine that in countries paying very low salaries, membership of the national parliament is not seen as a full-time job. But a Member of the European Parliament who takes his responsibilities seriously has a more than full-time job. I would guess that there is not one country which comes close to 45 weeks of meetings a year. So I do not think that combining membership of the European Parliament with another political office is compatible with the scale and scope of our work here.
To sum up, I would commend to the House the set of amendments tabled by the Group of Independents for a Europe of Nations. Should these not be approved, we shall vote as a next best solution for amendments which aim for thrift and follow the line taken by the rapporteur, who has made an honourable attempt to get us out of this hornet's nest.

Anastassopoulos
Mr President, after so many years we have come as far as this evening's debate on the Rothley report, in the sincere hope that we are approaching the beginning of the end.
A common statute for Members of the European Parliament must finally be established. Some of us have not ceased fighting hard for that over the years. The reasons are very simple: the common Statute would put an end to the provocative inequalities that discriminate between Members. The basic principle of equal pay for equal work has been and is still being violated in the European Parliament's own house, and our efforts to restore a certain balance have created other problems and exposed us to perfidious and sometimes malicious attacks. The need for solutions free from serious drawbacks has constantly become more urgent.
With that rationale, the Bureau of the European Parliament, at the time of Egon Klepsch and with as rapporteurs the then President of the College of Quaestors, the Belgian socialist Ernst Glynn and your present speaker, asked the Council to establish a common statute and proposed to equate MEPs with European judges, as happens in several Member States of the European Union. The Council, however, rejected our proposal and since then the problem has remained outstanding. Last year it was necessary, on the initiative of the current President Mr Gil-Robles, to add a new provision to the Treaty of Amsterdam currently being ratified, to restate and encourage reconsideration of the problem.
Following the arguments of the David Martin working group, the report by Mr Willi Rothley attempts to propose solutions. Our esteemed German colleague has taken a lot of trouble to come up with some entirely new proposals, and it is also true that he has worked under tremendous time pressure so that we would be able to table a first draft at the Vienna summit. But I believe that despite this pressure, he should show still greater flexibility in the search for solutions that will be more widely acceptable. Where such serious issues are concerned, I am not alone in thinking that we should not submit proposals based on opportunistic majorities of just a few votes, and I hope that in the voting tomorrow that phenomenon will be rejected.
With the Council's agreement, the common Statute ought to be established soon, but even at this late stage there are some things which must be made clear once and for all. Some of us have fought for years for this common statute, but it was never our aim to sacrifice everything in order to achieve a common statute at any price. There is a limit beyond which there can be no obligation on our part, no discount and no compromise. It is a matter of protecting our dignity, which is not open to debate or negotiation, and the Council must understand that. No malicious attack by the media, which some people are trying to orchestrate, must divert us from that principle. We must not claim equality with category B2 Community officials, agreeable though they may be in other respects. And I hope Mr Rothley will forgive us for disagreeing with his way of thinking and preferring the rationale of the amendment by the European People's Party. The Council too should not be misled about this for any reasons, on any pretexts or by any excuses. We have fought for reforms a great deal in the European Parliament and have promoted important ones in recent years, not because we give way to the pressure of often perfidious attacks by the media, but because we believe in the need for radical reforms.
I believe that as a democratic body, it is our duty to show particular sensitivity towards any criticism offered in good faith. Likewise, however, we must disregard attacks motivated by anti-European sentiments which aspire to discredit the European Parliament and the European Union's other institutional bodies. No attempt to terrorise us must be allowed to divert us from our course, and we cannot conceal the fact that we particularly regret that a few of our colleagues have contributed to those attacks, courting popularity by denouncing their fellow parliamentarians and putting themselves forward as the only incorruptible ones, to ensure their re-election.
Mr President, we want the common Statute, but not a demeaning one which will offend our dignity. And we are prepared to continue our fight unwaveringly on that basis.

Sjöstedt
Mr President, we are elected as Members of Parliament for constituencies in our respective countries whose voters we represent. I therefore do not see any need to replace national rules relating to our terms of employment with a common statute.
The usual argument for this proposal is that we should have the same conditions, for example as regards salary. Under the terms of the proposal, our conditions would continue to be different. However, many of us would receive a large pay rise, which would be totally unjustified. There is no good reason why we should be paid more than members of our national parliaments.
The proposal that we should have a special, very low EU tax is even more unwarranted. Like other high income earners, we should pay tax where we live. I trust that anyone who votes for the proposal on an EU tax will not oppose tax dumping on other occasions. After all, what is this proposal if not an excuse for us, a highly privileged group, to give ourselves still more perks?

Lindholm
Mr President, according to the Treaty, the EU is an association of 15 independent states. Members of the European Parliament represent voters in their own Member State, and no other. It therefore goes without saying that salaries should be determined by individual Member States in accordance with national rules, and that tax should be paid where one lives, even if one is a Member of Parliament.
However, the significance of this report lies in the institutional changes that would take place as a result of the Statute, and which would mean that the ties between Members of the European Parliament and their electorates and national parliaments would be weakened and that we would end up rather like satellites. Surely the dissatisfaction among Members over salaries is just a simple matter of envy? None of us is on the breadline yet! This dissatisfaction has now become a pretext for introducing a statute that will mean a high salary, taxation and pension, all of them regulated by the EU.
As for travel allowances and the criticism levelled against them, this problem would have been resolved long ago had Parliament's Bureau so desired.

Mosiek-Urbahn
Mr President, ladies and gentlemen, the rapporteur set about his task with the intention of solving a problem, not with the intention of getting rid of a problem. In September, he submitted a working paper to the Committee on Legal Affairs and Citizens' Rights containing a list of the subjects that should be discussed in an external study he was proposing which would evaluate the tasks undertaken by the Members of the European Parliament. Moreover, the results of the study were to be on the table in three months, after the conclusion and ratification of the Treaty. Three months have not yet passed since the working paper was presented. Although there is no study on the table, we are planning to adopt a complete Members' statute already, with no means of knowing whether the Amsterdam Treaty - without which, of course, the Statute would have no legal basis - will have entered into force before the end of the present parliamentary term in May.
Several times in the course of this debate, I have protested against this type of summary procedure, but to no avail. I shall go along with this, but I cannot escape the feeling, or indeed the conviction, that we are shelving the problem instead of solving it. Maximum transparency for all arrangements relating to the Statute - that is our foremost principle, as Mr Fabre-Aubrespy has already said. The time of day, or rather night, that has been chosen for the discussion of this report in the European Parliament, a time when the public are automatically excluded, as it were, speaks volumes. Is this our idea of transparency, or is this birth supposed to take place in secret? In this respect too, I have to conclude that we do not really want to solve the problem but only to rid ourselves of it.
For all that, I recognise unreservedly that a common European statute will be of immense value in lending weight to the European Parliament. It is a very clear step towards closer integration. Above all, it strengthens the democratic legitimacy of the European Parliament. Nevertheless, it is important that such a statute should be adopted by an emphatic majority. We should be seeking an absolute majority, because it would be illogical for us to make do with a smaller majority while requiring an absolute majority for any amendment, however insignificant, to the Rules of Procedure.
I do not entirely understand why the rapporteur responded so vehemently to the proposal by some Members that our remuneration should be based on a judge's salary. In my view there is more cunning in the proposal to use the average salary. It is certainly the line of least resistance, but above all it is a cunning ploy. To me, however, the most important thing at the end of the day is that we should have an appropriate solution that we can explain to everyone - to ourselves and to the general public. Let me offer my sincere thanks to the rapporteur for his endeavour in pursuit of this goal. His efforts deserve our gratitude.

Palacio Vallelersundi
Mr President, as we consider any report or legal act, we must bear in mind that this House represents the citizens of Europe, and also that we are a legislative body. As representatives of the citizens of Europe, we have a duty to our constituents. As legislators, we are called upon to create an appropriate legal act, one that is legally sound and wellconceived.
The first of these considerations is particularly pertinent in this case. It is abundantly clear that public opinion wishes the European Parliament to adopt a common statute for its Members. Such a statute must be based on the principle of equality of all Members, and must put an end to all arrangements which are the legacy of institutionalised inequalities.
Mr President, the courage and single-mindedness displayed by the rapporteur as he dealt with this issue deserves special mention. He did not hide behind the legal framework, the huge raft of rights and duties enshrined in a statute. Instead, he came right out into the open, and tackled the central issue fearlessly and resolutely.
I am bound to say that I have engaged in a good deal of debate with the rapporteur, but he has consistently displayed a constructive attitude, even though we have not reached agreement on certain issues. I should like my admiration for him and for the courage he has shown to go on record.
Turning first to the legal aspects, it has been mentioned that the Treaty of Amsterdam has not come into effect. True, but that need not prevent us from undertaking the necessary preparatory work to enable the procedure to be concluded according to plan and in cooperation with the Council, once the Treaty of Amsterdam does come into effect. I have every confidence that it will. If I were not so sure, I would be querying this report and many others as a matter of priority.
Secondly, it has been claimed that the transitional arrangements create transitional inequality - to quote Mr Rothley. It is envisaged that Members will be able to choose different arrangements during the coming legislature. As legislators, however, we should be well aware that any significant legislative change entails transitional arrangements which may be quite different from what will finally be put in place. This is true of any of our legal systems and also, of course, of the Community system. There are therefore no grounds for criticising Mr Rothley's approach on this point. One might or might not agree with him, but such arrangements are common practice in any major legislative reform like this one.
As regards the average salary, I supported this idea from the start, for the very good reason that, as I stated at the time and reiterate today, I can think of no better approach. On this point I disagree with some colleagues who believe it would be better to establish a comparison with high-ranking civil servants. I do not agree.
As for the legal aspects, I differ considerably from the rapporteur on technical details. I wish him luck as he negotiates with the Council on these matters. I feel that there is scope for improvement on the legal aspects of certain issues, and I hope this will be achieved through the amendments.
Mr President, I should like to conclude as I began, by expressing my admiration for the rapporteur and my gratitude for the work he has undertaken.

Maij-Weggen
Mr President, after all the fuss over the expenses and salaries of Members of the European Parliament, tomorrow looks like being a good day. What has been impossible for years - the same salary for all MEPs irrespective of nationality, plus a rigorous system for refunding expenses which is proof against abuse - looks like happening at last after 20 years. That is a good thing, because this disparity in earnings and the abuse of expenses has well and truly poisoned the atmosphere in and around Parliament.
I must pay tribute here to Mr Rothley, who has done a fine job in bringing the complex task of producing a uniform statute to completion. I must also echo Mrs Green in her compliments to Mr Gil-Robles and former President Hänsch. It is they who got this thing moving, no one else, and though some may think it was other MEPs who did so, they were the ones, and they too deserve our congratulations.
Nevertheless, I have to highlight a few points on behalf of the Dutch CDA delegation, because we wish to mark out one or two lines of thought in our group in what will be a free vote. We are in favour of the proposal for a uniform salary, based on an average of current national salaries. We find that principle more important than the old suggestion of a certain percentage of the salary of a judge at the European Court. So we support Mr Rothley there.
We agree with the option of allowing the old system to continue for five years in the case of Members who have been in it for years. We think that is a reasonable way of dealing with the old system. And we think it is a good thing that the voluntary supplementary pension is being phased out. Whether that happens in 1999 or 2004 is a personal choice. But it is good that it should not continue for longer than it needs to.
As regards taxation, we are in favour of levying European taxes on a European system and national taxes on national systems.
Lastly, on the subject of travel expenses we have always favoured a rigorous system for repayment of travel and subsistence costs. We are glad that this is at last being sorted out.
Tomorrow is an important day, and I sincerely hope that the Rothley report will be approved by a large majority, so that we can at last draw a line under these sordid discussions.

Florio
Mr President, ladies and gentlemen, as many colleagues have said, the lack of a Members' statute has been noticeable for at least 20 years, so a proposal for one is most welcome. Yet in my opinion, although I acknowledge Mr Rothley's deep commitment, the draft is unsatisfactory because it confuses the question of an MEP's status - a vast and complex topic, involving rights and obligations - with that of his emoluments. This is a very narrow approach, which I believe is unprecedented in the statutes of parliamentarians around the world. What is more, despite focusing solely on economic problems in the main, the draft sets out to solve these by taking an average of the allowances currently fixed by the individual national governments.
Personally, I believe that it would be fairer to link MEPs' allowances to those of another Community regime, and at the same time for us in this House, together with the other institutions, to advocate an across-the-board reduction in all Community salaries, which are too high in objective terms. But on this issue, raised by myself and other colleagues back in 1995, nothing has been done and nothing is likely to be done.
Let me finally make one other point: the proposed reform leaves intact the existing - and controversial - voluntary fund for Members' supplementary pensions, financed mainly from the public purse but managed privately in a haphazard way, to put it mildly. I criticised this disgraceful state of affairs in 1995 when I realised how the fund operated, and withdrew from it along with other colleagues. I now regret that this opportunity has not been grasped to abolish the fund or to stipulate that Members wishing to belong to it must finance it entirely from their own pockets.

President
Thank you, Mr Florio.
Before I close the debate, Mr Fabre-Aubrespy has asked to raise a point of order.

Fabre-Aubrespy
Mr President, I will speak for just one minute, pursuant to Rules 19 and 22 of the Rules of Procedure, which also define your duties as President of the sitting and the duties of the Bureau.
During this debate, I have heard officials being called into question and Mr Anastassopoulos, the Vice-President, with whom I have discussed this issue - which is why I am saying it in public - mentioned the possibility of bringing the system for reimbursing Members into line with that for officials, and said that this was detrimental to Parliament's dignity.
I must say that I was shocked by this statement and I must ask you, in my capacity as a Member of the Bureau which is responsible for the administrative organisation of Parliament's work, to reassure our officials of the esteem in which their Members hold them. There are countries where ministers and heads of state have salaries defined in relation to their civil servants' salaries. I am not in favour of this system, but I find that to say that bringing Members' salaries into line with officials' salaries would harm Parliament's dignity is an insult to these officials, who help us and who serve everyone's interests.

President
Thank you, Mr Fabre-Aubrespy. What you have said will be recorded in the Verbatim Report of Proceedings and also in the Minutes.
The debate is closed.
The vote will take place tomorrow at 9 a.m.

External representation of Euro
President
The next item is the report (A4-0439/98) by Mr Herman, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the proposal for a Council Decision on the representation and position taking of the Community at international level in the context of economic and monetary union (COM(98)0637 - C4-0638/98).
I give the floor to the rapporteur, Mr Herman.

Herman
Mr President, ladies and gentlemen, who should represent the euro externally? It would seem that this controversial question that Parliament has already raised on several occasions has just been answered with a compromise reached yesterday, without waiting for Parliament's opinion.
Who should speak for the euro? It should, of course, be the President of the European Central Bank, as there will only be one monetary policy and, this being the case, we may ask what role the governors of national banks can still play in any sort of international body as they no longer have any say in this matter. But the union we have is an economic and monetary one. Who, therefore, will represent the economic side of monetary union? Who is in the best position to do so? According to the Council, the President of the Council is in the best position as it is the Council that must ensure that economic policies are coordinated.
Let us challenge this statement. If we were entirely dependent on the Council for ensuring economic coordination, there would never be any economic coordination. The ministers who sit in the Council of Ministers defend their national policy first and foremost. That is their role, they are elected to do so, they are paid to do so and none of them has any reason to defend the common interest. It is not their job. What is more, the Council is an intermittent institution. The President of the Council is appointed every six months, and there are major differences between successive presidencies. A President barely has the time to get to know the matters in hand before having to give way to his successor, who must also begin the learning process from scratch. When the Union is represented by the Council in difficult negotiations, the result is disastrous, as we can see by looking back at past experiences. When the Commission is not leading the talks - as we saw in Geneva and have seen elsewhere - the outcome is deplorable because, in the Council, an agreement is often reached according to the lowest common denominator.
Also, the President of the Council often finds it difficult to split his duties as President and as a national leader. I will only give one example. Mr Oskar Lafontaine will be the next President of the ECOFIN Council. Mr Lafontaine is now well-known the world over for the relatively inopportune and untimely statements he has made on a range of issues, which do not reflect the common position in any way. I do not wish to accuse Mr Lafontaine of being schizophrenic, but when he goes to Washington to speak for the Community, the language he uses will inevitably be different from that which he uses as Minister of Finance in Germany. This will not increase the credit, or in any case the credibility, of monetary union in the eyes of the world's major financiers and finance ministers.
This is why I believe that the Council's position is not the best on this occasion, based as it is on restricted formal arguments. I believe that it would have been of more use to make the Commission the representative of the common interest, as that is its permanent and institutional role. What is more, this would provide continuity in the issues being dealt with. Therefore, I am most disappointed that these common sense arguments - which also conform with the spirit of the Treaty - have not been acknowledged and that we are heading towards a compromise where the Commission will play a minor technical assistance role as an observer. It will be there to provide information for ministers who speak for the Community and nothing more.
I regret this decision. I hope that reality will win through and that continuity and the severity of international life will show that we will only obtain the best results by increasing the Commission's powers in this field.

Porto
Mr President, since the Maastricht Treaty was so vague, this definition is all the more important since it has enabled the European Union to be properly represented internationally. Fernand Herman's report is a worthwhile contribution on this issue.
Of course, our strategy in relation to the IMF needs to be considered at a later stage. Under the terms of its statutes there can clearly only be national representations, but that makes it vital for the EU to have a monitoring role at least. However, in the future thought should be given to whether certain changes need to be made to these statutes. When it comes to IMF intervention in budget policy, which would continue to be decided by the Member States, we must not overlook the fact that the scale of our involvement is much larger.
Apart from institutional doubts, we should nonetheless welcome the fact that we are sure about the policy to be pursued, ensuring the euro's credibility and stability by means of flexible policies and avoiding shocks with the very negative consequences that they would have. Let us hope, therefore, that recent changes of government, in particular in Germany - mentioned a little while ago by Mr Herman himself - do not lead to any change on this score. They might be tempted in all innocence and in the hope that it would be popular - but that popularity would be short-lived.

Gallagher
Mr President, the introduction of the euro will have a major impact not only for EU citizens but also on the international monetary and financial system. The introduction of the euro will give the European Community a monetary presence that corresponds to its economic and commercial influence in the world economy. I regret that certain members of the new German Government are pursuing political headlines on tax issues and have given Eurosceptics a field day when sure-footedness and consensus are required at this vital time.
It is essential that the Community speak with one voice internationally where issues relating to EMU are discussed and decided. It is too serious an issue for distracting and divisive solo runs on taxation issues which are clearly in the domain of unanimity and national governments. There must be one voice and one position. The proposal for a Council decision provides that for issues relating to EMU the Community shall be represented at international level by the Council and the European Central Bank with the participation of the Commission. Each of these institutions has its own specific competitiveness. The changes brought about by the introduction of the euro will affect position-taking and representation at international level.
We can support the proposal for a Council decision but my group does not believe that it is sensible. We support a role for the Commission in line with Mr Herman's proposals. The dawn of the euro is almost upon us and it is vital that we speak with one voice and that there should be continuity at international level as recommended by Mr Herman.

Randzio-Plath
Mr President, I wish to endorse the rapporteur's position most emphatically, because our group also feels strongly about this matter and not least because the report reflects the spirit and the substance of our endeavours to ensure that this European Union is properly represented. From that point of view, it is absolutely right that the European Union should be represented on international financial bodies not only by the European Central Bank and not only by the Council in the form of the eleven participating states, but also by the European Commission. The task of the European Commission is to serve as the engine of integration and the guardian of the Treaties. For that reason, the same arrangement must apply within the global financial system as in the global trading system. The Commission must play its special prominent role.
That is what makes yesterday's decision by the Council of Finance Ministers so extremely regrettable. It does not pave the way for future decisions, because there is no guarantee that the European Union - even when it only comprises the participants in monetary union - will speak with one voice. That, however, must be our objective. We in the European Union have paid dearly for our failure to speak with one voice during the rounds of world trade negotiations. When it comes to the international financial system, a united front is absolutely imperative. The cause of democracy and integration would certainly be best served if we were to adopt the proposal made by the rapporteur, Mr Herman, and accord the European Commission its due place as a representative, and not as a subsidiary representative, of the European Union as well as of the euro area.

Paisley
Mr President, last night I sat in the House of Commons and I listened to the Chief Secretary of the Government of the United Kingdom and Northern Ireland. He said very plainly that his government would resist any attempt to take away the veto on taxation. We have heard the spokesmen of France and Germany this week make it clear that they want the veto to go and we are now on a collision course. This cannot help our economy, especially as it comes under more and more pressure. What has happened in the Far East could happen elsewhere tomorrow, even in the United States of America and in Europe. Today we are on a collision course. Let me make it clear that I have always believed that the future for this Union is in the cooperation of sovereign nation states and not in the incorporation of nation states into a single international superstate.

Metten
Mr President, twelve months ago the euro-11 was set up as an informal grouping which was answerable to no one, it is true, but was not required to take any formal decisions either. We now find that the presidency of the euro-11 is to speak for Euroland in bodies like the G7 and IMF, and on visits to individual countries. Not only does this give a casual but powerful boost to the two-speed concept which the integration of Schengen into the Amsterdam Treaty is supposed to eliminate, but more importantly we see an intergovernmental model being introduced into what is the most far-reaching Community measure to date under the first pillar. In the second pillar, we are desperately seeking to give the Union's foreign policy a single face and a single voice at last with Mr or Mrs CFSP. At the same time, we are entrusting the external representation of economic and monetary union not to the Commission, the guardian of the Treaties and the executive arm, but to a Council presidency - changing every six months - of the euro-11, a body which does not officially exist and is accountable to no one.
Something is fundamentally wrong here, ladies and gentlemen. EMU is coming off the rails here before it has even started. This is the price we are paying for the fact that too many decisions in Europe today are left to the narrow scrutiny of the finance ministers, under the prompting of the even narrower circles of the Monetary Committee. A single Euroland needs a single representation. But Henry Kissinger's call for just one European telephone number will not be met with a presidency which changes every six months. In practice, the Americans will telephone either the chairman of the Economic and Financial Committee, who does not change every six months, or one of the permanent members of the G7, although they will not know who that member is speaking for. If Euroland takes itself seriously in its commitment to acting responsibly, the number to ring should be that of European Commission. European coordination should happen as soon as possible, so that Europe really can speak with one voice.
The Commission should refuse to go along with the current proposals of ECOFIN, whereby the Commission might give a helping hand to the presidency of the euro-11. It should withdraw its proposal too. No one can represent the European Union in the present-day G7. It would be better to disband it and start again from scratch with a G3.

de Silguy
Mr President, ladies and gentlemen, I should like to thank the House for having included this item on the agenda. It comes at just the right time, that is to say just after the Council's decision and - this may well come as a surprise - I would personally like to thank the European Parliament for making such a valuable contribution and supporting the Commission's proposal. This was an important factor in the success of yesterday's meeting of the Council of Ministers for Economic and Financial Affairs. I will come back to that in a moment but the fact still remains that the Commission is grateful to you.
The agreement reached yesterday is a satisfactory one. It is a political agreement, and it incorporates the basic principles of the Commission proposal on the Community's external representation of the euro, which will be tripartite in nature. Before going into detail on the content and form of this agreement, let me remind you of the objective. The objective and what is at stake is important as the euro must be given a voice so the Community can be present in the international monetary arena to defend its interests, to participate in managing and preventing crises and, on a more general level, to adapt the international monetary system. The euro will provide Europe with true monetary existence. Europe will also have a presence in the international arena which will better reflect its weight in economic matters.
Let us discuss the form of the agreement. Firstly, it is a good agreement and to those who have expressed reservations I would say that, in this case, it is better to leave well alone. This is a transitional agreement, a realistic agreement, and it has been reached before 31 December, in other words before the birth of the euro, something which seemed far from likely even just a few days ago. I believe there are two aspects which must be emphasised. The first aspect is defining a common position for the Union. Before each international meeting, a common position for the Union will be defined by means of coordination between the Member States, under the guidance of the President of the Euro 11, as is the usual practice. This coordination can take place very rapidly as the Commission has been asked to install a videoconference system linking the Commission, the Central Bank and the finance ministers.
I would add that these decisions, the positions adopted by the Council, will be prepared by the Economic and Financial Affairs Committee. In other words, they will be based on input, or possibly a proposal, from the Commission and this will happen before every major international meeting. Therefore, we will be guaranteed a common position of the European Union, of the euro zone, for any meeting and any deadline.
The second issue is that of representation of the Community. The form of representation that has been defined will allow Europe to speak with a single voice, whilst respecting the competences of the institutions concerned. There is an economic side and a monetary side. It is only natural that this voice, in order to be heard, should use several vocal cords, in accordance with the will of the Heads of State and Government as expressed at the Luxembourg European Council last December. Yesterday's agreement lays down a role for the Council, a role for the Central Bank and a role for the Commission. This is a tripartite representation, as your rapporteur stressed. The three parts cannot be separated and they are vital if economic and monetary union and the euro are to operate smoothly.
To be a little more specific and to dispel certain misunderstandings - which were probably caused by press comments made yesterday - allow me, as someone who participated in the negotiations from start to finish, tell you exactly what specific decisions were taken in three cases, by way of example. Firstly, in formal institutions such as the G7 or G10, it was decided, in accordance with the Commission's proposal, that the Council will be represented by the President of the Euro 11, the President of the European Central Bank and the relevant Member of the Commission. These three form the Community delegation. As for the Commission, it is not simply playing a minor role. Nowhere in the agreement will you find terms outlining the technical assistance role which it is claimed the Commission has been given. The Commission is there to provide help, as is perfectly normal, to provide support and to play a useful and efficient role. And I should like to reassure the rapporteur that you can count on the Commission to be ready and willing to fulfil this role.
In order to ensure continuity in the representation of the euro and in view of the rotating presidencies, a minister from a G7 Member State will support the President of the Euro 11.
As regards formal international institutions, I will take the case of the IMF and look beyond the current provisions, which already give the Commission observer status in the Interim Committee. This agreement provides for the ECB to have observer status in the Interim Committee and in the Executive Board. It also provides for the relevant member of the Executive Director's Office holding the Presidency of the Euro 11, assisted by a Commission representative, to express common positions in the Executive Board. This means, in a very real sense, that the Commission will have access to all the necessary information to allow it to fulfil its role, particularly as regards multilateral supervision.
Lastly, as regards bilateral missions, the arrangements for missions in third countries will be defined by the Presidency of the Euro 11 or by the ECOFIN Council on a case-by-case basis, which I think is simply common sense.
On the basis of the Commission proposal, these arrangements will be translated into a decision under Article 109(4), once approved by the Heads of State and Government, and will be discussed with the third countries involved. I would like to inform you here that the President of the Commission, Jacques Santer, has already announced that because there is to be a Euro-American summit on 18 December, it will fall to him and the President of the Council, Chancellor Klima, to discuss this with the Americans.
In conclusion, I believe we must stress the importance of this agreement and its transitional nature. To my great regret there are only eleven of us in the euro, not fifteen. To my great regret, it is not possible to change the statutes of the International Monetary Fund in a few weeks. Yet this agreement is still a positive one, even if it is only transitional, and it is nonetheless an agreement which will allow us to launch EMU in full on 1 January under the best possible conditions. And I can assure you that as far as the Commission is concerned, it will keep you closely informed of developments in discussions, as always, and of the development of the international aspects of the euro.

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

Monetary and financial crisis
President
The next item is the report (A4-0441/98) by Mrs Randzio-Plath, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the world monetary and financial crises and their effects on the economy of the European Union.
I give the floor to the rapporteur, Mrs Randzio-Plath.

Randzio-Plath
Mr President, ladies and gentlemen, the economic and financial crises have highlighted the need, especially for our ancient continent of Europe and for the European Union, to redesign the international economic and financial structures. The Bretton Woods institutions are more than 54 years old; they are not designed to meet the challenges of globalisation. That is why a new international financial system is needed, and the restructuring must begin with the International Monetary Fund. As an advisory and administrative body, the interim committee is an anachronism and must be replaced by a political council. This institutional reform is vitally important, because we need a political council which will take decisions, which will assume responsibility for financial decisions and which will not pass the buck to the administrative staff when things go wrong.
We want to ensure that financial decisions have political backing too. Moreover, I believe that the International Monetary Fund, the Bank for International Settlements, the World Bank and even the World Trade Organisation must cooperate more closely and coordinate their operations. What we need, in other words, is reform of these institutions, and the G7 will certainly not be untouched by these reforms either. After all, not every region of the world is represented at the G7 meetings. We have become painfully aware of the pitfalls of solving crises without the proper involvement of the affected regions in the decision-making process. For that reason, it is important to consider whether a UN Security Council for Economic Affairs would not solve the problem of worldwide representation and whether such a body could not serve to underline the fact that security today primarily means economic and social security.
At the same time, of course, there must be no underestimating the reforms required by the existing institutions. These should include changes to the way in which the International Monetary Fund operates. The existing system of imposing conditions and the stereotyped manner in which they are adapted for individual countries have done more to exacerbate crises than to contain or resolve them. Admittedly, reforming operational methods is but one side of the coin; what is especially crucial is that the International Monetary Fund should have adequate financial resources. The last set of G7 decisions points in the right direction, but I believe we have still to find the right solution in terms of the working methods and finances of the International Monetary Fund.
The rules of the International Monetary Fund must also be restructured, amended and applied more effectively to ensure that assistance can be quickly obtained and organised to deal with liquidity shortages such as those that have given rise to crises in recent months and years. There must be greater openness, so that moratoria, safeguard clauses and suspension agreements can be put in place as the foundation stones of rescheduling plans, which have invariably been devised too late in crisis situations and have essentially been inappropriate into the bargain. Alongside the monitoring of short-term capital influxes, consideration must also be given in this context to organising some sort of temporary system to control the movement of capital out of the country or countries in question.
Another important element, as far as we in the European Union are concerned, is the creation of new legal instruments so that the finance markets become more transparent and financial information becomes more freely available and more reliable. What is needed here is the globalisation of regulatory and supervisory systems in this age of increasingly deregulated and liberalised capital transactions. After all, the market economy has shown throughout the world that economic and financial relations have been unable to function smoothly in practice without a regulatory framework. That is why particular attention must be paid to short-term international movements of capital, which have plunged many countries into crisis. Comprehensive monitoring of these capital flows is essential. But it is also high time that governments themselves began to provide incentives which would help to encourage a greater volume of long-term credit commitments.
Since the Mexican crisis, there has been a 'moral hazard' problem. Private and institutional investors are running ever greater risks in the quest for maximised returns. In so doing, they rely on the fact that, if a liquidity crisis occurs, the International Monetary Fund will overcome the problem, because the adverse effects of financial crises on national economies, on business, growth, investment and employment, are so great and incalculable that they warrant the use of tax revenue to minimise the risks for private investors. It is time a framework was found within which the private sector could be made to foot its share of the crisismanagement bill.
Another point: an efficient system for the supervision and monitoring of financial activities must also be established and enforced for the flood of new financial products that are contributing to the fragility and volatility of the finance markets. We cannot prohibit derivatives, but we must see to it that they are subject to supervision and control. Besides the supervision of banks, we also need supervision of non-banking institutions. Close cooperation is required here between the International Monetary Fund, national governments and the Bank for International Settlements. What we also need are definitive, globally applicable quality standards for financial information as well as for other information systems.
There will always be financial crises. The potential for crises, however, must be reduced, because crises in today's financial markets affect the real economy. That is why we must ensure that the effects of these crises on growth, investment and employment are contained, not only in the crisis-torn countries themselves but also in the newly industrialised countries, in the developing countries and in the industrialised countries too. For that reason, political cooperation is needed in order to ensure that the European and US trade cycles remain stable and in step with each other, and there is also a need for cooperation between the European Central Bank and the US Federal Reserve. We must also ensure that stable exchange rates are maintained between the main currencies of the world. In the age of the euro, we must help to make sure that those regions with the power to create stability in the international currency markets actually exercise that power to contribute to the development of a fairer international financial system in response to the challenges of globalisation. Another important objective is a fairer global distribution of wealth. That will only become achievable when we in the European Union know that we too can contribute to this crisismanagement strategy through our European plans of action, not by intervening to sort out crises, but by helping to prevent the development of critical situations.

Metten
Mr President, I will confine myself here to what we as the European Union can do about the financial crisis. Firstly, we must remain open to exports from the countries hit by the crisis. And we can do so, because the European Union has so far actually profited from the crisis; the flight into sound capital from non-Union countries to Europe has caused interest rates on our capital markets to plummet. Because of a falling-off in demand and low raw materials prices, our inflation has sunk to an all-time low. As a result, growth in Europe is even higher than was expected in the spring. If exports from the crisis countries with their devalued currencies now increase, we cannot suddenly hit the brakes with anti-dumping levies. If these countries cannot dispose of their products in Europe, with its trade balance surplus, where can they do so?
Secondly, Europe must help to provide for scrutiny of flight capital flowing into developing countries. Enforcement of the internationally agreed prudential rules, which will probably need further tightening, is a crucial first step towards this.
Thirdly, the IMF must focus less on buying out western private banks at the expense of governments and ultimately the population in debtor countries and more on the preservation of purchasing power, production and self-help in debtor countries. If private banking is itself made to share the responsibility for preventing and combating crises, this kind of financial policy is feasible without any need to increase the IMF's resources. The shift in the IMF's thinking needed to achieve this is hardly something which the IMF's interim committee can be expected to bring about, made up as it is of conservative bankers and finance ministers. Nor do I see how upgrading the interim committee or merging the committees of the IMF and World Bank could be instrumental in bringing about this necessary change.
Fourthly, the EU must help to ensure that standard clauses are introduced into contracts whereby debt renewal incurs a penalty. If clauses like this had been in place, much of the misery we are now seeing in the debtor countries could have been avoided.
Lastly, of course a great deal has to change in a number of the debtor countries themselves. But to say all of a sudden, after the event, that this is where the fault lay is unworthy. Many of the countries affected were given excellent marks by all the international bodies and their associated experts. Conveniently forgetting that is unhealthy, and stops us from reflecting on our own mistakes, something I have found sadly lacking in our debate on the crisis so far.

Langen
Mr President, the world economy is undoubtedly caught up in a significant crisis. Nevertheless, the data for the European Union are extremely encouraging. This year's average inflation rate for the countries participating in monetary union is expected to work out at 1.5 %, their national budget deficits at 2 % and their economic growth at 3 %. It is a long time since such favourable economic statistics were last recorded. For all our discussion of the global crises, it is worth emphasising that the European Union is the bastion of stability in the world, not least because of the decision to introduce the euro, Commissioner de Silguy. These are the facts we have to discuss. We must not forget that. Mrs Randzio-Plath's report contains many useful ideas, but there are some points to which we certainly cannot subscribe. I intend to enumerate these points in the short time at my disposal, since I do not expect to be given so much additional time as the honourable Members on the other side of the House.
First of all, we do not believe that there is any benefit at all to be derived from short-term capital controls. Secondly, the establishment of a Security Council for Economic Affairs under the auspices of the United Nations is nothing but a pipe dream. Thirdly, Mrs Randzio-Plath, Amendment No 5, which you foisted on us by way of a compromise, seeks to omit investments from the calculation of the budget deficit under the stability and growth pact. There was absolutely no need for you to defer to Mr Lafontaine in that way!
Nevertheless, we do need transparency in the realm of finance. Let me briefly list the three things we need. Firstly, we need transparency at the national and international levels, because the markets could not function otherwise. Secondly, we need a multilateral monitoring system, especially in the domain of fiscal policy. Thirdly, we need reforms in the context of the national finance markets. The fluctuation margins for the yen, euro and dollar proposed by Mr Lafontaine are unhelpful, because we can only earn the right to make such demands by pursuing sound economic, fiscal and monetary policies. That is precisely the path which the European Union is following. We therefore welcome the approach proposed by the Commission.

Goedbloed
Mr President, the international financial crisis shocked the world, and many people claim to have been taken by surprise. We have identified a number of the causes of it, and Mrs Randzio-Plath has highlighted them in her report. Mr Metten says that we must not complain after the event, but we were forced to realise at the hearing of financial experts that there are gaps in our information system. The IMF has no early knowledge of a number of figures, because the figures are unreliable and because it is clear that different countries apply different standards of measurement. Countries in Asia which have seen very fast growth and which were very important to Europe and America succumbed all of a sudden to Asian flu.
Asia has been sick, but Europe will start sniffling if we are not careful and Europe has done relatively well with the euro. Those countries which sadly are not yet joining the euro still have a problem. Transparency, good controls and standardised rules will be essential. So we Liberals think it is important to apply the same standards, but that it is no use having a sort of security council for the economy or a decision-making power within the IMF. That would just mean more talking shops, and I would have thought we had enough talk shows on television already. We need action. We need unambiguity. We need clarity. The market too can have a share in this. The market too can take risks here.
If we follow a sound economic policy, review the situation properly and take account of cultural differences - because there are plenty of those in Asia - then the right thing for Europe to do, and Europe must see that it does this, may be to play a role and help ensure that stability is restored as fast as possible. Stability will open the way for more jobs to be created and for more growth in these countries, and in Europe as well.

Wolf
Mr President, may I say to Mr Langen that I do not believe the old way of thinking will take us very far. There is now a real need for a new way of thinking. It is dangerous when Europe and the Europeans like you, Mr Langen, believe we are on one of the Islands of the Blessed here and take a Pharisaic delight in having been spared the effects of the crises. What is really important is that Europe should use its favourable position to play an active part in ensuring that others can once more set their feet on dry land. To that end, we need stabilised exchange rates, supervision, transparency, control and ultimately a social and ecological reconstruction of the key international economic institutions.
Mrs Randzio-Plath is absolutely right: we also need a basic political consensus on this matter. It must be developed within the United Nations, difficult though that may be to achieve and hard as it may be to imagine after 20 years of neo-liberal policies. But in the world of finance in particular, Mr Langen, the dialectics of power will always apply. The mighty, through their arrogance, invariably sow the seeds of their own downfall.

President
Thank you twice over, Mr Wolf, firstly for your speech and secondly for keeping so precisely to your speaking time, which was just one minute.

Langen
Mr President, may I point out to you that the honourable Member from the Liberal Group, Mr Goedbloed, has just delivered his maiden speech. You, who are normally such a communicative President, forgot to mention that. Could you please acknowledge it now? After all, it is already 11.20 p.m.

President
Thank you, Mr Langen. I am always grateful for helpful comments from the House, and I am glad you drew my attention to this point. I had not realised this was Mr Goedbloed's maiden speech, as it was so accomplished. I might be excused, perhaps, because he spoke as if he were an old hand in the House. Judging by your speech, Mr Goedbloed, I am quite sure that you have much to contribute to this Parliament in the future.
Mrs Randzio-Plath, do you wish to raise a point of order? Please do not open a further debate at this point.

Randzio-Plath
Mr President, since my colleague from the Group of the European People's Party made a comment about a German politician, I should like to put on record the fact that my Amendment No 5 is in line with the position of this House on the principles of economic policy, a position which, I might add, was adopted last year by the European Parliament in plenary sitting.

President
Thank you, Mrs Randzio-Plath. At this hour of the night, one can be generous with points of order. However, we are not going to embark on a new debate, and Mr Lukas now has the floor for one minute.

Lukas
Mr President, what a pity that the honourable Member had to make his maiden speech at midnight before an empty Chamber. But it is an even greater pity that such an important and excellent report could not have been discussed before now. I consider it excellent, even though I cannot endorse everything it says. It would naturally be ludicrous to try to deal in the space of one minute with all the points on which we differ. I should merely like to say how deeply I regret the fact - and this is not a digression from the subject - that the report does not devote a single word to the problems of child labour and child abuse. The way in which these two problems have become so serious and so widespread in our time is also a result of the globalisation process. The Asian crisis has had an enormous impact on these abuses. Child-sex tourism in particular is thriving as a result of the falling exchange rates. I believe we can speak of a globalisation of perversion. The European Union ought to speak out on that aspect of the crisis too.

Secchi
Mr President, I shall dispense with diagnoses, already conducted in great detail, and move straight on to three points concerning the prognosis of what is to be done. Firstly, it seems perfectly clear to me that there are two somewhat conflicting views: some stress the need for more controls and dirigisme ; others think it more important to make the market function better. This latter argument strikes me as the more convincing one, not least because the recent financial events have revealed the need to step up prudential supervision, to improve transparency and the flow of information, and thus to lay down rules which are more in keeping with the new operating environment. On the other hand, the idea of managing to control capital flows, both directly and indirectly, could not only turn out to be pure wishful thinking but also lead to a highly inefficient allocation of resources.
Secondly, on the subject of volatility, I would stress that this problem is bound to persist and creates a need above all for the appropriate instruments to eliminate the risks resulting from it, rather than for inefficient control measures which cannot possibly function, given the volumes and operating methods that are typical of financial markets nowadays. We shall soon see this within the next few weeks, in respect of the euro/dollar exchange rate. Nor, I am sure, does anyone think the conditions still exist today to return to something resembling the old Bretton Woods system, which we all remember so well.
I would just say a word on my third point: let us show more concern - as the rapporteur quite rightly does in her text - for the weakest links in the chain, namely for economies such as those of Latin America, and Brazil in particular, which - only partly through their own fault - are experiencing hard times, although not totally desperate ones. They require full support from us, for their sakes and likewise for our own.

Mendes Bota
Mr President, at the end of 1996 the Wall Street Dow Jones index hit the 6400 barrier. It then went from record to record and last June peaked at 9337 points. Then everything collapsed: there was a domino effect around all of the world's exchanges without exception and widespread panic in the financial markets, with a number of different countries on the verge of economic collapse. That led the IMF, the OECD and the European Union hastily to revise downwards their forecasts of miraculous economic growth announced for 1998 and 1999.
Apparently, the world financial crisis took everyone by surprise. Doctors of economics, financial analysts, business journalists, political decision-makers who were all, until four months ago, singing the praises of the global financial market were all caught up in a monumental fiasco because of their lack of foresight. But Japan had been sliding for some time. The Russian economy had long been as sick as its president and European banks had poured 48 billion dollars into a country no longer in control of its own currency. For a long time the so-called emerging economies had been burying themselves up to their necks in debt. Years of certainty suddenly all seemed to be called into question. Already yesterday's apostles of ultra-liberalism are casting doubt on the ability of markets to self-regulate or claiming that there can be no growth without full freedom of capital movement. This backto-business or return to greater state interventionism as well as intervention by international financial organisations is quite evident in this report and in this resolution. Suddenly the dictionary used in financial circles has been taken over by terms such as control, transparency, reform, public investment, guarantees, risk, coordination, codes, conduct, ethics, safeguard, supervision, balance, plans and action. In other words, the ruling classes have finally realised that the globalisation of markets without political and legal frameworks and concern for the social dimension of its consequences poses a threat to international stability.

de Silguy
Mr President, ladies and gentlemen, I should like to congratulate Mrs RandzioPlath on her report, which asks us to give serious consideration to a grave problem, that of the effect of financial crises. This is a problem worthy of our attention. Therefore, we congratulate your on your initiative, and we are taking due note of your recommendations. I must point out that the Commission is not inactive in this area and is well aware that the Union has a specific role to play, particularly as regards the arrival of the euro and its development.
I should like to consider three important questions raised by your rapporteur. Firstly, what are the solutions to the current crisis? We must not go back on the free movement of capital, as Mr Langen underlined. I believe this is a wise judgement. Experience has shown that all attempts to control the movement of capital do not work and are counterproductive. In fact, capital flows out but does not flow back in. Developing countries need capital in order to develop. But freedom comes with its own demands including, as you highlighted, for the private sector. There are three demands: transparency, monitoring and vigilance.
On the subject of transparency, we are a long way from achieving full transparency. Some investment funds are currently in a position to invest several hundred billion euros, without being under any obligation to declare their operations to the supervisory authorities, nor even to their shareholders. I believe that such a lack of transparency is dangerous, and recent events have demonstrated this. It is also shocking, as monetary authorities are under constant pressure to determine public authorities' levels of exchange reserves much more accurately and rapidly. We therefore need to examine ways of putting an end to such imbalances in transparency.
As for monitoring, we must also develop our supervision instruments. The famous Cook ratio was a considerable step forward in financial history and probably averted many crises, but I believe that it has now reached its limits, particularly as it only applies to banks. We must therefore develop a way to monitor off balance-sheet business more efficiently, and we must develop stricter accounting practices. I am thinking of the scale of bad debt brought to light by the fact- finding operation currently underway in Asia.
Lastly, the third element is vigilance. We need to increase our capacity for collective prevention. We know that today, for example, we need to develop the multilateral supervision of macroeconomic policies, particularly as regards exchange rates and short term capital flows. On this point let me say that - unusually perhaps - I do not agree with the rapporteur's idea of creating an Economic Security Council under the aegis of the United Nations. Why? Because we actually already have a body within the United Nations called the IMF, and the issue now seems to me to be how to develop the structure of the International Monetary Fund to make it better prepared to prevent and even to contain crises. In view of this and in view of what you call 'political accountability' - if I have understood correctly - I think that the possible transformation of the IMF Interim Committee into a true decision-making global body, with its role extended to include supervision, as President Chirac recently suggested, is an idea worth further consideration.
The second question is what Europe's role should be. It is twofold. Europe must firstly set an example and contribute to discussions. But if the real challenges are on a worldwide rather than a continental scale, Europe can play an important part in adapting the international monetary and financial system. Europe has already made a number of contributions here, and I will quickly give you a few examples. There is the recent communication on financial services presented by Mario Monti, 'Building a Framework for Action', which, as of June 1999, should lead to measures and timetables for limiting financial instability in several fields. There is also the creation of the Forum of European Securities Commissions (FESCO), under the auspices of the Commission, and the banking supervision committee within the European System of Central Banks. All these measures constitute a real step forward. There is a particular need to establish a rapid and safe exchange of information between supervisory authorities and the competent monetary authorities. As regards accounting practices, the Commission supports the work of the International Accounting Standard and will review with the Member States the rules which apply to the capital of financial establishments, taking account of the work of the Basle Committee. On a commercial level, I would remind you that the Commission was the first to call for the launch of a new series of multilateral negotiations - the 'Millennium Round' - and to ensure that these negotiations would be applied to financial services. That will do for a brief list of examples.
As for contributing to discussions, the Commission played an active part in the debates and, in particular, in the recent initiatives of the G7. It is the source of the communication which was adopted yesterday by the ECOFIN Council for the European Council on strengthening the international financial system. This communication stresses the central role which the Union should now play in the new architecture of the international financial system, and the strengthening of economic and financial cooperation with emerging and developing countries.
This brings me on to prevention. The private sector should be involved in resolving crises and should take its share of responsibility. However, Europe's real contribution to the international debate is directly linked to the quality of its external representation, but as we discussed this earlier I will not go back over it now.
In view of the time, I will not go into the third and last matter now. I thought it would be raised in the debate, but I do hope we will have a chance to address it at a later date, since you have included it in your report. It concerns whether we need to draw up a European plan for stimulating investment. I will simply say that, this morning, acting on my proposal, the Commission adopted an interesting communication on this matter which, whilst of course pointing out the budget policy line, raises a number of possibilities that Europe could implement. I hope that we will have an opportunity to discuss this in more detail in the coming weeks.
As you can see, the Commission generally shares your views and I can assure you that it will closely follow developments in these areas in its recommendations on the convergence and stability programmes. But I would like to end by reassuring the House that the Commission is carrying out its full responsibilities in the current debate on the new architecture of the international monetary system. The introduction of the euro also gives us an incentive to play a more active role in this field. I believe that the decisions which were taken yesterday on external representation will give us the instrument we need to put our ideas into practice.

President
Thank you, Mr de Silguy.
The debate is closed.
The vote will take place tomorrow at 9 a.m.
Before wishing you a well-deserved and refreshing rest, let me say that tomorrow's sitting on Thursday, 3 December 1998 will begin at 9 a.m.
(The sitting was closed at 11.45 p.m.)

