
President.
   I declare resumed the session of the European Parliament adjourned on Thursday, 20 November 2003. 
President.
   I should like to inform the House that at the beginning of tomorrow's sitting, the President of Parliament would like to pay a personal tribute to the Spanish servicemen who were killed in Iraq last weekend.(1) 

President.
   A corrigendum to the agenda of the sittings of 3 and 4 December, containing the proposals for changes made by the Groups, has been distributed. Are there any comments? 
Dell'Alba (NI ).
    Mr President, yesterday, the European press published the report on anti-Semitism commissioned by the European Monitoring Centre on Racist and Xenophobic Phenomena. This is a report whose existence was, until yesterday, denied by the Monitoring Centre itself and the Commission. Three weeks or so ago, we had the Eurobarometer, and now we have the extremely disturbing report on anti-Semitism, whose existence had been concealed. I would ask you to avail yourself of your rights and demand an explanation from the Commission during the current part-session, or to ensure that a debate can be launched on the matter during the next part-session in December. 
President.
   That will be a matter for the next part-session.
An additional change to the agenda of Thursday 4 December has been proposed: the inclusion in the vote of the report by Mr MacCormick (A5-0421/2003) on the request submitted by Giuseppe Gargani for the defence of his parliamentary immunity and privileges which was adopted under Rule 110a. 
Swoboda (PSE ).
   – Mr President, the corrigendum to the agenda was originally meant to include the MacCormick report on the immunity of Mr Gargani, but the Secretaries-General agreed yesterday that we first, of course, had to have the opportunity of examining it. We cannot now retrospectively alter the agenda without the groups also having the opportunity to discuss it. I would therefore ask that it should not by some means be retrospectively put on the agenda, but that the groups should have the opportunity to talk the issue through, and I believe that other Members of this House feel the same way. 
MacCormick (Verts/ALE ),
   . Mr President, I am a little uneasy about the proposal that my report on the immunity of Mr Gargani be brought forward. The Secretary-General of my Group stated that she would have liked to have had the opportunity to discuss that report, along with other reports, at our group meeting before the part-session. We understood the report was being deferred until the second December sitting in Strasbourg, and so we did not have the opportunity to discuss it.
Furthermore, I learned that there was a defect in paragraph 2 of the report as it was adopted by the Committee on Legal Affairs and the Internal Market, but I have not seen any of the adjustments to it. As I am the rapporteur, I would have liked to have seen such adjustments. On these grounds, with the greatest respect and with regret to my colleague, Mr Gargani, I ask that this matter be deferred until the next Strasbourg sitting. 
President.
   That is a very sensible suggestion. There is no dispute regarding the principle of this report, and it would thus be a shame if we ended up having a procedural dispute on it. I suggest that we postpone it until the December Strasbourg sitting.
(1)
Tannock (PPE-DE ).
    Mr President, I seek your advice as to what redress I have against an inflammatory press release which has caused hate emails to be sent to my office. Richard Howitt MEP claimed in a press release that I had directly accused the Turkish Prime Minister of supporting militant Islamist groups, following the atrocious bombing in Turkey last week. In fact, I made reference to media reports of a former Turkish Government's alleged provision of covert support to Islamist groups in their fight against the Kurdish PKK, and made no reference to the current Prime Minister, Mr Erdogan.
Furthermore, Mr Howitt claimed I disregarded the plight of Turkish civilian victims. My use of the word 'atrocious' shows this is patently untrue. I regret any misunderstanding and extend all my sympathies to those who have suffered, irrespective of race or religion.
The Member, in his role as Labour's European Affairs spokesman, should have understood the sensitivities in this case. I would be grateful for a correction from Mr Howitt, as otherwise legitimate debate on accelerated EU membership for Turkey will be stifled. 
Howitt (PSE ).
    Mr President, I am pleased that Mr Tannock has expressed his regret at the offence caused by the remarks he made last week at a meeting of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy. Indeed, I also regret his receiving hate mail, as he described.
Mr Tannock was very clear in his remarks that he did not regard Turkey as a victim of the terrorist attacks and that the victims were 'British and Jewish' - not Turks. Not simply did Mr Tannock go on to criticise the Turkish Prime Minister directly, but I believe his remarks could be regarded as offensive to Muslims and in general to the Turkish victims of the attack, irrespective of their religion. I am pleased that my statement has caused him to retract those original remarks. 

President.
   The next item is the joint debate on Council and Commission statements on the preparation of the European Council (Brussels, 12 13 December 2003), including the Social Summit, and on the progress report on the Intergovernmental Conference. 
Antonione,
   .  Mr President, Mr President of the Commission, ladies and gentlemen, I would like to begin by expressing my gratitude to the European Parliament for allowing me this opportunity to illustrate the principal issues that will be discussed during the forthcoming European Council in Brussels on 12 and 13 December. This Summit, which will mark the end of the Italian six-month Presidency, is an exceptionally important event for us, not only in terms of the importance of the matters to be dealt with, but also because the decisions adopted there will set the course for the future work of the Union on a number of matters of great importance on the European agenda.
The European Summit, as you know, will also have to leave sufficient room for the work of the Intergovernmental Conference, as the Heads of State or Government, accompanied by their respective Foreign Ministers, meet for the final phase. Given the importance of the matter, I would like to begin my speech with an update on the progress of the IGC, and then return to the preparations for the forthcoming European Summit.
Just a few weeks off the end of the six-month Italian Presidency I am pleased to report on the developments following the Naples Conclave.
Firstly, I would like to confirm that the overall stance of the Italian Presidency remains that which my government has often expressed before this House and in the context of the IGC. In accordance with that stance, the comprehensive proposal presented reflects our intention to respect the constituent legacy of the Convention, confining ourselves to proposing clarifications or alterations to the Convention’s draft in light of the comments made by the Member States, the European Parliament and the Commission. I believe I can safely say that many of the Presidency’s proposals have been welcomed with broad appreciation, which has allowed us to bring the positions of Member States closer together with due regard for the overall balance of the Convention’s draft. In addition to the substantial progress made on a number of specific issues, it has become clear that some persisting divergences on specific provisions will be resolved when an agreement on the Union’s future institutional framework is achieved. Indeed this is the area in which the greatest disagreement remains, above all as regards the calculation of the qualified majority in the Council and the composition of the Commission.
Detailed analysis of the results of the Conclave reveals the progress achieved on the following points in our proposal package: the insertion of a reference to equality between men and women and to the protection of persons belonging to minority groups in the provision on the Union’s values; the reaffirmation of the primacy of European Union law; the need to make the acts of the European Council subject to jurisdictional control insofar as the European Council is defined in the Constitutional Treaty as a Union institution. Points of convergence have been recorded in the extremely sensitive area of justice and home affairs too, where, in the introduction of qualified-majority voting, the specific features of certain national legal systems will have to be taken into account and safeguard mechanisms considered. The various proposals drawn up by the Presidency on the specific policies of the third part of the draft Constitutional Treaty have been the subject of in-depth discussion. Differing positions persist in many cases between the Member States on the basis of well-known points of divergence. Nevertheless, it is quite clear that various criticisms made in this regard will melt away at the point when agreement is reached on the major themes of the constitutional negotiations.
The following are issues that will require further debate: the persisting divergence between the countries intending not to make concessions as regards abandoning unanimity voting in matters such as foreign policy, taxation and social security and the Member States that consider the phasing-in of qualified-majority voting in those areas a key element of the future Constitutional Treaty; the manifold, and often divergent, requests of Member States for changes to the provisions concerning the budget, the multiannual financial framework, own resources and economic governance. Here, the Presidency is seeking to preserve, to the greatest extent possible, the interinstitutional balance and voting rules proposed by the Convention. The idea of a simplified revision procedure for Part III, Title III of the Constitutional Treaty continues to meet with resistance while greater convergence seems to have emerged on the ‘passerelle clause’ on the basis of formulas that involve national parliaments too. The Presidency intends to propose further discussions on all these matters in the course of the final meetings of the IGC.
The Conclave has, moreover, led to significant progress in the definition of the ESDP in the future Constitutional Treaty. Indeed, it has been possible to achieve a new draft of Article I-40, part 7 on the mutual assistance clause, a description of structured cooperation in Article III-213 and, most importantly, the presentation of a Protocol containing the criteria for participation in such cooperation. This group of texts will be examined anew at the IGC ministerial meeting of 8 December. Nevertheless, the exchange of views that took place during the Conclave has revealed the fact that there is convergence on an increasing number of points in this sensitive area.
The debate on the institutional framework of the future Union has confirmed that this remains the most sensitive subject in the entire negotiations. The Conclave was useful for overcoming some points of divergence and, most importantly, for fostering calmer, more constructive dialogue. The salient elements of the discussion can be summarised as follows. The request by some Member States to raise the minimum threshold of national representatives to the European Parliament was received positively, on the condition that the total number of seats does not increase. On the matter of the presidency of the Council formations, convergence was recorded along the lines recommended by the Convention, even though some Member States still have doubts regarding joint presidencies, to which they would prefer elected leaders. On this matter, the Italian Presidency reserved the right to reflect on further changes. The possible solution is to have three Member States holding the Presidency for 18 months. The procedures for implementing these solutions could be the subject of a European Council decision rather than being regulated by a special protocol. The reactions to the Presidency’s proposal on an EU Minister for Foreign Affairs – aimed at clarifying several specific aspects of the functioning of the ‘double hat’ formula with due regard for the spirit of the Convention’s draft – have confirmed that the arrangement we have chosen is the only feasible one. Indeed, our proposals seek to overcome the criticisms of both those who fear that this new institutional figure may become the Council’s ‘Trojan horse’ in the Commission, weakening the Commission’s powers in matters of foreign policy, and the criticisms of those Member States which would like to free the Minister from the constraints of the Commission’s collegiality by emphasising the Minister’s role as Council representative. The middle road we suggested appears to be the only one which can ensure that a compromise will be reached in the end, although it does leave two major issues still to be resolved: the persistent opposition of some countries to giving the Minister for Foreign Affairs presidency of the General Affairs and External Relations Council, and the call from other Member States not to give the new institutional figure the title ‘Minister’ but the more modest title ‘Representative’, which is a clear retreat - and not just a symbolic retreat - from the provisions of the Convention’s draft. The lengthy debate on the composition of the Commission after 2009 saw the renewed proposal of positions and arguments already known. In the course of the negotiations, there will have to be reconciliation between those who advocate a streamlined, agile, efficient Commission unhampered by intergovernmental constraints and those who favour a Commission which is representative of all cultures and national viewpoints, and thus composed of one Commissioner with full voting rights for each Member State. The proposals on the table will have to be examined in a long-term perspective with a view to the institutional needs of a Union that, in 10 to 15 years’ time, is likely to be even larger and will, therefore, have to be endowed with decision-making abilities that are adequate and easy for the citizens to understand. The debate on the issue of the calculation of the qualified majority in the Council has made the range of positions in the field even clearer and more distinct: some States ardently defend the Nice system; others consider the transition to double-majority voting indispensable. Of these, a number of countries would prefer a totally symmetrical double majority, in other words, 50% or 60% both of the Member States and of the Union population. In the face of positions which still differ widely, we will need clear thinking and farsightedness. To this end, to reiterate what I said before, I would underline the need for the various proposals to be examined with a view to the long term after 2009.
The IGC ministerial meeting of 8 December 2003 and the bilateral meetings which the Presidency will be stepping up in the coming weeks will therefore have to concentrate, first and foremost, on the institutional issues in order to make the best possible preparation for the final Conference meeting at the level of Heads of State or Government scheduled to open on 12 December 2003.
The success or failure of the constitutional negotiations will very likely determine the progress of the process of integration for the coming years as well as Europe’s ability to play an authoritative role on the world stage at a time of major political and economic challenges. For this reason, and considering the importance of what is at stake, the approach to the constitutional negotiations will have to be characterised by ample flexibility on the part of all the actors called upon to lay the foundations of the Union for the twenty-first century. With due regard for the principle of equal dignity of all Member States – also recognised at the Naples Conclaveand rightly so – it is necessary that we abandon all particularist behaviour and stop thinking in terms of ‘fair exchange’, where each individual concession is made in an attempt to gain something of equal value. This approach is contrary to the very concept of European integration and, if systematically applied, would jeopardise the principles underpinning the Union. Although fairness is an essential condition for any constitutional agreement, no one can now halt the current developments in the process of integration. Anyone who wishes to do so will have to stand accountable before the European partners, before their citizens and before the history of the integration process. Political systems are developed through dialogue and the actions of men and women, and those same men and women are fully accountable for what is said and done. From this point on, we must be aware that the adoption of the new Constitution will be ‘a success for all or a failure for the Union’. There is now, no longer, any substantial difference between national and European interests.
Mr President, ladies and gentlemen, I would now like to focus, albeit briefly, on the issues that will be addressed by the European Council.
As far as the economic issues are concerned, in particular the objective of boosting sustainable economic growth, the European Council will mark the culmination of the long period of work that started with the Thessaloniki European Council and was further developed by the Heads of State or Government at the most recent Summit in October. Indeed, the December European Council will be called upon to approve definitively the Growth Initiative, already endorsed by the Ecofin Council of 25 November, adopting specific decisions that will be able to make a substantial contribution to improving the competitiveness of the European economic system and to the full development of the Union’s potential for growth by promoting higher levels of investment in physical capital and the development of human capital. The principal objective in this context will be to create – including through the identification of a series of projects on which work can begin in the short space of two to three years – a political catalyst that will make it possible to increase sharply the pace of infrastructure creation and the implementation of advanced research projects in order to facilitate the deployment of essential resources from both the European Investment Bank and the private sector.
From a different and more general standpoint, but still in the context of consolidating the cohesion of the internal market and boosting growth, the Italian Presidency also nurtures strong hopes that the European Council will accept the political agreement achieved by the Transport Council on the Commission’s proposal regarding the review of the TENs – which, as you will remember, provides the basic structure for the initiatives for the completion of the infrastructure network of the enlarged Europe – in consideration, not least, of the recent decisions on the increase in EU subsidies from 10% to 20% for projects on cross-border stretches.
Moving on to issues related to the Lisbon agenda, with particular reference to points concerning structural reforms, to which the European Council next spring will need to devote its energies, I would point out that the Member States of the Union, whose efforts have been unceasing in this area, will now be presented with a major opportunity for open dialogue during the extraordinary meeting of the Trilateral Social Council, which will provide a highly significant opportunity to renew the commitment of the European Union to the implementation of the European Employment Strategy. The Social Summit will be the occasion to begin an initial analysis of the results of the work carried out by the employment task force headed by Wim Kok, and to discuss the Growth Initiative, with particular regard to its effects on employment. On these bases, the participants in the Social Summit will be able to develop the debate on the links between employment growth and productivity increases highlighted by Mr Kok’s task force, evaluating, in particular, the impact – not least in terms of employment - of policies seeking to improve the competitiveness of the economic system through the enhancement of human capital and the flexibility of European socio-economic systems. The outcome of this Summit – on which Mr Berlusconi will be reporting to the European Council - will also, of course, feed into the discussion at the Council itself.
The European Council will also be a good opportunity to take stock of the situation as regards a number of important issues connected with the creation of a common area of freedom, security and justice, with particular reference to European strategies on immigration, in the light of the recommendations that emerged from the recent Brussels and Thessaloniki Summits held in October and June respectively.
The Heads of State or Government will need, first and foremost, to take note of the agreements reached at the Justice and Home Affairs Council of 27 and 28 November on the main elements of a European Border Management Agency, a programme of measures specifically devoted to immigration by sea, and the insertion of biometric data in visas and residence permits. These initiatives have already been examined at the October Summit, and will now be rapidly implemented and, in some cases, finalised through the formal adoption of the relevant legislative provisions. In this regard, I wish to underline, in particular, that the European Parliament, too, will be required to express its opinion on the regulations for the Agency and on biometric data.
I am afraid that the news on the subject of asylum is not so good. In spite of the great effort made by the Italian Presidency, which has led to substantial progress in these difficult negotiations, it has not been possible to reach agreement on the directive on minimum standards for asylum procedures nor to break the deadlock that had already developed by the end of the Greek Presidency on the other directive on refugee status and subsidiary protection. The European Council can only reiterate the political importance of this matter and invite the Council to reach an agreement at least before 1 May 2004, the fifth anniversary of the entry into force of the Treaty of Amsterdam.
In the framework of the Union’s migratory policy, the European Council will certainly discuss the key issue of the reception and integration of legal immigrants as well, and especially the importance of encouraging inter-faith dialogue as an element of social cohesion, a subject to which the Italian Presidency devoted a Conference of Home Affairs Ministers on 30 and 31 October 2003. Migratory policy cannot, however, be effective without genuine, effective cooperation with the third countries of origin or transit of migratory flows, cooperation that needs to be developed in a constructive spirit of partnership. In this connection, I feel I should mention the positive interinstitutional agreement between Parliament, Council and Commission, which should be formalised in the next few days, on the creation of a financial and technical assistance programme for third countries on the subject of asylum, and the introduction of a mechanism for monitoring and evaluating these countries in the fight against illegal immigration, requested by the Thessaloniki European Council.
Lastly, in the area of judicial cooperation in criminal matters, the European Council will express its satisfaction at the agreement reached following the Italian Presidency’s tenacious brokerage of the framework decision on combating drug trafficking, an issue that is of particular concern to European public opinion.
Mr President, ladies and gentlemen, the forthcoming European Council in Brussels takes place just a few months before the entry into force of the Accession Treaty. The Heads of State or Government will be required to provide important directions for the completion of the enlargement process, especially in the light of the reports presented by the Commission on 5 November 2003. As you know, on 17 November 2003, the Council expressed its opinion on the Commission’s monitoring reports on the accession countries’ state of readiness. The Foreign Ministers, in particular, expressed their satisfaction at the high degree of alignment achieved by these countries in the different areas of the ,and we therefore expect the Heads of State or Government to endorse these positive opinions. The enlargement that will be taking place in 2004 can therefore be increasingly viewed as a complete success, confirming that the decisions taken by the Heads of State or Government at Copenhagen last December were the right ones. Of course, as was to be expected in view of the immense effort required of the accession countries, there are areas of the where the preparatory process is not yet complete, with respect to which we need to urge our future partners to make the necessary endeavours.
The Commission’s recent strategy document shows without a doubt that Bulgaria and Romania have made considerable progress towards their entry into the Union. They are now ready to take the decisive steps that precede accession. The European Council therefore has a responsibility to facilitate these steps by mapping out in sufficient detail the road that they need to follow. This also applies to the timetable, especially the timeframe for the conclusion of the accession negotiations, the signing of the Treaty and, finally, entry into the Union. Of course, the completion of these steps depends, first and foremost, on the efforts made by the Bulgarian and Romanian governments. Precisely in order to facilitate these efforts, however, it will be necessary, in the Presidency’s view, for the Heads of State or Government to provide clear directions on the next legs of the journey, confirming, therefore, the deadlines: 2004 for the conclusion of the negotiations, 2005 for the signing of the Accession Treaties and 2007 for accession to the European Union. The European Council will also have to provide guidance on the timeframe for drawing up the financial framework for the accession of Bulgaria and Romania, in particular by acting promptly on the willingness already displayed by the Commission to present it before the end of January 2004, following the same resource-allocation criteria that were adopted for the accession countries.
Mr President, ladies and gentlemen, I feel that each one of us in this room has reason to welcome the considerable efforts made by Turkey in the area of institutional reform, and the additional progress it has made in respecting the Copenhagen political criteria. These positive developments therefore deserve full recognition in the conclusions of the European Council. We must not fail to provide Turkey with suggestions and encouragement to continue in this direction, nor must we fail to highlight those areas in which Ankara needs to make a particularly sustained effort. In the medium term, our goal is still to ensure that Turkey is sufficiently ready for the decision that the European Council will be adopting in a year’s time.
Lastly, as regards Cyprus, the Presidency feels that the Heads of State or Government must reiterate the appeal already addressed to the parties to achieve an agreed solution by the accession date, while pointing out at the same time that a solution to the Cyprus question would be a considerable step towards the achievement of Turkey’s desire to become part of the European Union.
As always, the European Council will devote due attention to the Union’s external relations and to the principal international issues. I will not expand on this point as we are awaiting the latest developments on the ground, particularly where crisis areas are concerned. I believe, moreover, that we will not be able to avoid dealing with matters such as the Middle East peace process, the situation in Iraq and developments in the critical dialogue with Iran.
The European Council will also bring to a close the debate on the European Security Strategy launched last June, with the adoption of an excellent document setting out the Union’s security problems and how to address them, with the aim of both giving governments guidance on making practical decisions and increasing public awareness and public support for the greater security undertaking which is now necessary throughout the European Union.
The Heads of State or Government will also be called upon to examine the report on progress in the development of the ESDP with a view to giving the next presidency a detailed mandate on the matter. Acquiring greater capacity remains our primary commitment. For this reason as well, the European Council will particularly welcome the decision to create a European agency dedicated specifically to promoting the development and acquisition of new military capacity.
To conclude, Mr President, ladies and gentlemen, I would like to mention that the forthcoming European Council will also be required to adopt the first Multiannual Strategic Programme, which will be the basis for the Council’s work over the next three years.
President.
   It is my pleasure to welcome to the distinguished visitors' gallery the former Prime Minister of South Korea, Mr Nam, and his Deputy Prime Minister, Mr Lee. They are here to participate in the European Parliament North-East Asia Forum meeting which takes place on 4 and 5 December 2003. You are both most welcome to this House.
Prodi,
   .  Mr President, Mr Antonione, ladies and gentlemen, the forthcoming European Council in Brussels will be the last in a highly eventful year. Indeed, almost every week brings with it developments and decisions that will have a major impact on our future. Last week was no exception.
Before turning to the debate on the Constitution, I should like to focus briefly on another topical issue for the European Union. The forthcoming European Council will be preceded – as Mr Antonione said – by an extraordinary Tripartite Social Summit, to be attended by the Heads of State of the troika and representatives of the social partners and the Commission. Indeed, it is vital to involve the social partners at this stage of the constitutional process and it is essential that we listen to their points of view. The involvement of trades union and employers is the best guarantee of success for any initiative promoting employment.
The meeting will address two issues which are at the heart of the Lisbon Strategy: our Growth Initiative and the European Employment Strategy. The key moment will be the presentation of the task force’s report on employment by Mr Wim Kok. The report describes how we can respond to the major changes taking place in the economy and the labour market. Its main points include the need for firms and workers to become more adaptable, for more investment in human capital and, lastly, for new social dynamics to sustain reforms and speed up their implementation. The Commission will take account of the task force’s report and recommendations when it drafts the Joint Employment Report for presentation to the Spring Council next year.
Mr President, I shall now turn to the central theme of my speech, the Intergovernmental Conference, which is entering its final stages and of which Mr Antonione has already given an extremely balanced, commendable overview. The stakes will be high at the European Council in Brussels on 12 and 13 December. In the decisions taken we will see the fruit of the new Convention method, proposed by the European Parliament and the Commission and approved by the Heads of State or Government at the Laeken European Council in December 2001. Any return to the method of intergovernmental bargaining we witnessed in the early hours of the Nice summit would represent a political failure for the European Union. Public opinion would no longer accept it. The key task for the Intergovernmental Conference is now to decide how the enlarged Union can achieve its goals and increase its decision-making capacity.
The European Union is faced with three major challenges. Firstly, it needs strong policies and better European coordination aimed at economic growth, job-creation and social protection. Then we have to give a common response to the international challenges related to security, freedom and justice. Thirdly, we must join forces in order to shoulder our global responsibilities and promote our values and interests.
Article 3 of the draft Constitution solemnly sets out the Union’s objectives along these lines. The Convention did not, of course, produce a perfect Constitution to address these tasks. All the same, the result matches the proposals contained in the Laeken Declaration, maybe even exceeding expectations. The Intergovernmental Conference has clearly so far been more occupied with internal disputes between Member States than with creating the right instruments to respond to Europe’s needs and problems.
It is certainly disappointing that there was no progress whatsoever on adoption of a procedure making amendment of the policy part of the Constitution possible. The Commission will support all the Presidency’s efforts to achieve this objective. Considering the new challenges that we will face, the Constitution cannot and must not become a constraint on future action. The only significant progress made so far on the work of the Convention has been the definition of structured cooperation in the field of defence. For all other issues, there is still a danger that the Intergovernmental Conference might take steps backwards towards the intergovernmental method. This is also true of European cooperation on criminal law, at precisely a time when all the leaders are aware of the threat of international crime and terrorism.
Furthermore, some want to undermine the credibility of the Minister for Foreign Affairs – as Mr Antonione made clear – while paying lip service to the need for Europe to become stronger and play a leading role on the world stage. Some ministers maintain that more intergovernmentalism would strengthen economic policy coordination, while what is really needed is a greater European ability to put economic governance at the service of the growth strategy.
Some countries would even like to reintroduce the right of veto in areas where the Convention has already abolished it, in trade policy for instance. Clearly, therefore, there are only two options: a divided Europe that is only a spectator on the world political stage or a united Europe contributing to peace, growth and sustainable development.
With a choice between these two opposing options, Europe is in danger of being relegated to the sidelines in world affairs, surrounded by other powerful actors. In its current form, the draft Constitution gives a united Europe the means to act more effectively. Nothing less, but nothing more. It does not create a political project for the future. Hence, the key question facing national leaders at the Intergovernmental Conference summit is not whether to commit themselves to an ambitious European political project. The key question is whether, in the future, they will find the collective ability to adopt the necessary instruments which any European project will need.
The Convention preserved and improved the balance of powers between the various European Union institutions. A strong Commission is indispensable for impartial application of the Union’s rules and so the Commission’s powers in key areas such as state-aid control should not be watered down at the last minute. Our goal of becoming a genuine Union of states and peoples finds expression in the double-majority system proposed for Council decision-making. Democratic legitimacy has been reinforced by strengthening the role of the European Parliament in legislative, political and budgetary matters, and the Court of Justice's role in upholding the rule of law has, in part, been strengthened. One thing is certain, ladies and gentlemen: the Commission will hold out against any attempt to weaken the powers of the European Parliament, especially in budgetary matters, right to the end of the Intergovernmental Conference.
How can the European Parliament and the Commission be expected to explain and promote to the citizens a Constitution which Parliament itself would have rejected? There is no explanation that would stand up.
For its own part, the Commission welcomes the Presidency’s acknowledgement that making a distinction between Commissioners with and without voting powers is too complex and, above all, will not work. There is a simple solution which preserves the equality of all Commissioners: a Commission made up of one Commissioner per Member State, with a more decentralised decision-making structure, and a system of checks and balances to ensure total collegiality. This is the solution that the Commission wants to see in the Constitution.
Lastly, the double-majority voting system proposed by the Convention  50% of the Member States representing 60% of the population - is simple and fair. Any change should be aimed at facilitating the College’s decision-making process. Of course, the Commission’s preference remains a system based on 50% of the Member States representing at least 50% of the population. Under no circumstances should the Intergovernmental Conference decide on a voting system that would make decision-making in the Council even more difficult than under the Nice system.
There is simply no justification for a Constitution ‘worse than Nice’. Moreover, in Brussels, we must, at all costs, avoid the kind of last-minute bartering that would serve only to undermine the credibility of the Constitution before we have even had a chance to present it. Remember that the first referendum on the Constitution will be held a mere six months after the conclusion of the Intergovernmental Conference.
Mr President, ladies and gentlemen, before winding up – and without entering into a debate that will take place in this House at a later date – I should like to make a few brief comments on last week’s Ecofin Council meeting.
My assessment is based on both the substance of the decision and the procedure. As regards the substance, the Council reached overall agreement on deficit reduction plans, which, moreover, are in line with those proposed by the two countries concerned. The Council therefore accepted the commitments given by Germany and France that they would consolidate their 2005 budgets. From a procedural standpoint, on the other hand, the affair has more serious implications because the Council has opted for an entirely intergovernmental course of action instead of that mapped out by the institutional procedures. Here, I must repeat my basic criticism: we should not take short cuts whenever the rules of the Pact and the Treaty, rules that were agreed unanimously, become demanding or inconvenient. The usefulness and value of the Treaty and the Pact depend on the certainty of the rules to which we all – Commission, Parliament, Council and Member States – must adhere.
This is such a serious matter that I do not wish to gloss over it. My hope is, however, that, as has so often happened in the history of the Union, a serious crisis will give rise to the most innovative and lasting solutions. I therefore believe we should look ahead, fixing our eyes on two objectives: one for the immediate term and one for the future. In the immediate term, I am sure that the Member States will see the Council's final declaration as an indication of a greater, more resolute undertaking in the area of growth and stability, and that they will realise that the rules have to be applied systematically. For our part, we shall continue to discharge our duty by applying the Treaty and the rules of the Pact. It is our responsibility, particularly in this phase, to ensure absolute equality of treatment for all Member States. Furthermore, budgetary discipline and stability are essential to Economic and Monetary Union. In any case, the affair also teaches us a lesson for the future. You will all remember the critical remarks I made a year ago. I did not mean to condemn the Pact; my remarks were intended to be a strong appeal for the Pact to become a better thought-out instrument for coordinating budgetary policies at European level. Now that the single currency is a practical reality, the markets and all the citizens need to be able to rely on proper economic governance, for which we need a genuine economic policy. We have to embark on a new phase of consolidating and managing our achievements and fitting them to the new situation, but always in a disciplined manner and, above all, always treating everybody equally. We must restore the credibility of our instruments of economic governance and of the rule of law now that we are in the midst of a debate on our new Constitution.
As early as a year ago, the Commission took an initial step in this direction by presenting specific proposals for strengthening and coordinating economic policies and interpreting the Pact in a way that would make it both more flexible and more rigorous. This line of action proposed by the Commission was approved by the European Council. Moreover, our contribution to the Convention already contained a section on strengthening and coordinating European economic policy, and parts of our proposals were taken up by the Intergovernmental Conference. These tentative steps forward cannot be called into question now.
Ecofin’s decisions, however, show that the real problem still to be resolved is the genuine weakness of our present system of European economic governance. The real challenge facing us is how to solve this problem. The Commission will now take careful stock of the situation and prepare a forward-looking initiativeto take on that challenge. Indeed, in my view, it is not enough to revise the rules for implementing the Pact. We must have an in-depth debate on fiscal policy in the wider framework of the general monitoring and coordination of economic policy. Above all, we need to link budgetary policy more closely to the more general objective of boosting growth potential without jeopardising the long-term sustainability of public finances. To this end, we should be more proactive in using the broad economic policy guidelines and the Stability and Growth Pact together as instruments to coordinate economic policies in a way that will secure the smooth functioning of Economic and Monetary Union and ensure that we achieve the Lisbon objectives. We need, therefore, to strike a new balance between these two instruments in order to preserve budgetary discipline while, at the same time, stimulating growth.
Mr President, ladies and gentlemen, in the few days left before the Brussels European Council, we must act with determination and optimism if we are to achieve the major goals we have set ourselves. If we do that, the Constitution now taking shape will clarify our basic objectives, define the European Union’s area of action more precisely and make the working of our institutions simpler and more transparent. I am confident that we shall pass on to future generations a Union that is not only larger and more influential but also more coherent, more democratic and closer to the European citizens. We must not settle for less at this great, historic time.
Brok (PPE-DE ).
   – Mr President, Mr President-in-Office of the Council, Mr President of the Commission, let me start by thanking the Italian Presidency of the Council for having so far kept its promise to stick as closely as possible to the Convention’s draft. On behalf of my group, I would encourage them to keep to this rule. It must be apparent to us that what has happened with the Stability Pact has lost us credibility in some areas, with an effect on the relations between smaller and larger states in these negotiations and, as regards two states, it has certainly not led them to adopt a more conciliatory negotiating position.
Perhaps I may start by saying something that I think is important, namely that these negotiations must not interfere with the stability and strength of the European Central Bank, and that the attempts in various quarters to do so must be nipped in the bud. It must be clear to us that there has been a great deal of progress in many areas, to which Mr Antonione has referred. I am particularly pleased that Naples has seen such progress in the area of security policy with regard to structural cooperation and the mutual assistance clause, including the protocol, to such an extent that it can indeed be described as a breakthrough. The Convention, I believe, always took the view that the door should be left open so that other countries could join, and that this should not be seen in opposition to trans-Atlantic relationships.
I just hope that the Foreign Minister can gain acceptance in the same way, and I think it extraordinarily important from the point of view of the Commission and of Parliament that the Foreign Minister should be a full member of the Commission, with all that follows from that, although there is no doubting that he will have particular duties of loyalty to the Council, and the clarification that the Italian Presidency of the Council has provided in this regard is also important. I also think it crucially important that he should also chair the Council of Foreign Ministers – indeed, it makes no sense for him not to, and only then will the whole edifice make sense. I am not sure that I can take seriously the idea that it is the foreign ministers, of all people, who find the title of ‘Foreign Minister’ problematic. I do not quite understand what is so problematic about it.
If I am reading Naples the right way, it also seems to be important that the President of the European Council should not have the power to intervene in the General Council and in what it does. I hope that the negotiations will leave this unchanged. This is part of the institutional balance – President of the Commission, General Council and European Council – and we have accepted the idea of a President of the European Council only if he has no influence over the rest of what the Council does and over the lawmaking process. I believe that this will prove resistant to the attempts about which we have heard.
I have to say that there are two points that leave me profoundly saddened. Trying to solve the problem of voting procedures in the Council by setting a fixed date, in 2009, when it has to go back to taking decisions unanimously, is an escape route. It is one that has never worked yet, and if we want the Council to function, it must be enabled to take decisions by dual majority, as proposed by the Convention, and I hope that this will not be too readily abandoned in the course of negotiations over the next ten days. We took a critical line on Nice because it did not provide the capacity to act that enlargement demanded. This of all points must not be the cause of the negotiations’ failure.
The second point I would like to address is this: if Parliament is to lose out as a result of changes to budgetary law, then I regard that as the breaking point. If – as the Ecofin ministers tell us – the intention is that Parliament’s budgetary rights should revert to being what they were before the Inter-Institutional Agreement, or even pre-1978, then that is not acceptable. What we have is a finely-tuned balance, including the fact that the Council alone has the last word when it comes to own resources. In this context, this is a balance, one that is destroyed if any point of it is changed. Although I have gone over time, I would like to say that approval of the Budget is Parliament’s prerogative. No parliament can agree to a constitution that violates this prerogative.
Barón Crespo (PSE ).
    Mr President, let me start by making a point relating to method, since the President of the Commission – quite rightly, in my opinion – has touched on the Stability Pact, which is the next item for debate. The President-in-Office of the Council informs me that Minister Tremonti will deal with this subject, not him. We will have to tell both of them what we think about this budgetary and economic issue.
Let us start at the beginning, however. On the subject of the Social Summit, which will be covered in greater detail by other Members, I would like to start by saying that I hope the Summit will not just be a bolt-on extra. The Lisbon Strategy has shown us what happens to good intentions in the absence of commitments. We feel it is incredibly important at this time that we should devote ourselves to devising proactive policies for our most valuable asset: human resources. We therefore support Wim Kok’s proposals and hope that the Council will draft policies which are more than just a list of good intentions.
Moving on to the outcome of the ministerial meeting in Naples – which apparently, although there was no black smoke issuing from Vesuvius, was marked by a storm that darkened the end of the meeting – I would like to state, in clear opposition to the position adopted by the Italian Government, that we still want to see an agreement on 13 December. We want the Italian Presidency to be a success. I have to admit that the Italian Presidency has maintained a constructive approach, often going much further than most governments.
Moving on to the issues under discussion today, I would like to draw the Council and the Italian Presidency’s attention to the responsibilities of this Intergovernmental Conference, which is being held after the Union has opened its doors to democracy. Those doors were opened, but have been shut again. We cannot now accept last-minute deals and haggling that are not only against Parliament, but also against democracy and transparency.
Consequently, we in the PSE Group do not consider the question of the Legislative Council settled. In the name of dignity and in order to maintain the ordinary legislative process, the Intergovernmental Conference ought to reconsider the matter.
On the subject of the Commission’s composition, I would like to say that, in principle, the majority in my group feels a flexible solution is required. We are not in favour of having one Commissioner per Member State, but whatever happens, we have to remember that we are thinking in terms of transition periods, when actually the Commission needs to be a responsible executive body for Europe.
We have noted the Italian Presidency’s proposal regarding qualified majority voting, which is based on a double majority of citizens and States as in Article 1 of the Constitution. There is room for fine-tuning, but what we must not do is go further, to the triple majority established at the Nice Summit, because this approach definitely does not work.
We welcome the progress made on structured cooperation on defence under the Common Foreign and Security Policy and we support the Italian Presidency’s proposal on extending the use of qualified majority voting.
We are very disappointed with the current third pillar proposals, particularly those relating to judicial cooperation, criminal and civil matters, and the role of the European Public Prosecutor. There is a very clear regression on these points compared with the draft Constitution.
I would like to conclude, Mr President, by commenting on the Council’s all-out attack on Parliament, despite the fact that it has no authority to do so. Let us be clear: Ecofin does not have authority over the powers of this House. I would say that this is an offensive move on the part of the Council and also of their advisors, the , as they are called in Italian, since Coreper is the next level down from the Council, and it is in Coreper that the papers are prepared for the Council, as the Ministers are not usually experts in this field.
Let me say that this kind of proposal is wholly unacceptable to us. There is a clear demarcation line that must not be crossed. In fact, I would go further: there has been a harmonious balance of power between Parliament and the Council since 1975 and we are not going to take these changes lying down. If the Council dismantles the budget system, we will respond in kind, and we will see who is willing to go furthest. We are not just going to sit still and bemoan our lot. We have powers, and we shall defend them to the bitter end.
Watson (ELDR ).
    Mr President, all eyes are on efforts to agree a Constitutional Treaty before the year is out. The irony of our leaders making new rules for the European Union only days after breaking the Stability Pact will not be lost on our citizens. At the same time, we look to the European Council to shoulder its responsibility, to stand up for the rights of European citizens who continue to be held in Guantanamo Bay.
In Naples, our Foreign Ministers managed to move closer to agreement only by moving further away from the Convention text. My group regrets that the tide of reform will not now rise to the high water mark set by the Convention.
The Convention's extension of codecision to budgetary powers would have made the European Union more accountable and transparent. No viable parliamentary democracy can exist without the power of the purse. The obduracy of finance ministers on this matter is a battle pitting raw politics against the principle of reform. I welcome the remarks of the President of the Commission. We must not cede on this point.
We also have to resolve the issue of voting weights so that the efficiency and accountability gains promised by the Convention are not entirely lost.
To us, what really killed the Stability Pact was certain countries confusing their power to break the law with the right to do so. In Guantanamo Bay, the United States has fallen victim to the same confusion.
America was founded on the principle that the free are governed by laws, not men. Countries have borders, but principles do not. There is no line on a map beyond which such values no longer hold. The prison at Guantanamo Bay squanders a precious American legacy and surrenders vital high ground.
For two years the 660 men and boys in Camp Delta have been denied the rights of prisoners of war or of civilian criminals. They have been charged with no crimes. The military commissions that will judge them will grant no right of appeal and no access to an effective defence. Dostoyevsky once wrote: 'You can only know the nature of a civilisation by visiting its prisons'. Of all the tests that a civilisation can be handed, the responsible use of power over the powerless is the greatest. Sadly, the standards of detention and justice at Guantanamo Bay are unworthy of a country with America's proud history of civil liberties.
While I welcome the news that some detainees may shortly be repatriated, winning a reprieve from this disgrace for a few Australians and a few Europeans renders more stark the injustice committed to those who will be left behind. Europe must press for every man and boy in Guantanamo Bay to be either immediately charged, face justice in their home country or be released, regardless of nationality. President-in-Office, I hope that will be high on your agenda.
I call upon this House to demand of the European Council an unequivocal statement of Europe's dismay, and I call upon our President to convey that message. I call upon the European Union’s leaders to ensure that bilateral deals do not silence Europe on the greater principles at stake. The Liberal Group adds its support to calls for the European Parliament and for the Council to submit an Amicus Brief to the US Supreme Court on behalf of the detainees.
Two of our greatest enemies in the fight against terror are the fear that makes us cheapen our freedoms and the power that makes us cynical of them. If you at the Council can find the will to do justice to our enemy, then we will already have won.
Frahm (GUE/NGL ).
    Mr President, the wonderful speech that Mr Watson has just given is a hard act to follow. I fully agree with the comments that my fellow Member made about the detainees in Guantanamo Bay, and my group will also be appealing to the Presidency to stand firm on this matter at the next Council meeting.
I should also like to call for the Council meeting to express its support for the Geneva Initiative for peace in the Middle East, under which a number of courageous Palestinians and Israelis have now signed an agreement that may succeed in breaking down walls. It may be our hope for peace in the region.
Returning to the European Convention and the Intergovernmental Conference, when the Convention chose to draw up a whole treaty, that is what it was: a choice. Laeken, of course, primarily called for answers to a number of different problems, and, since the Convention nevertheless chose to draw up a single, unified treaty, I also think that it has been party to risking the method of working somewhat. Perhaps the Convention has raised the European banner so high that its feet do not touch the ground. It is to be hoped not, but I should like to say that the product of this – the European Constitution – has several weaknesses and also several strengths. Above all, however, it baffles me how we can sit in this House in a parliamentary assembly – an elected assembly – discussing a constitution which will possibly not be put to the vote, on which our citizens are not permitted to take a position, and to which European citizens are not given the opportunity to give their assent or dissent.
A number of Member States are to hold referendums, but the mere idea of introducing something resembling a constitution without consulting the citizens is too far removed from my understanding of democracy, at any rate, for words. After all, democracy is more than just democratic institutions, although that is part of it. Democracy is also more than just free, democratic elections between multiple candidates and multiple parties, although that is part of it. Democracy also comprises the possibility for dialogue with the citizens in the process. Citizens should not just cast their vote and go home. They must also be consulted in the case of important events, such as the drafting of a European constitution.
I hope that the outcome of the Intergovernmental Conference will be such that it can be accepted by those citizens who are able to vote on it. That will, however, be quite some task, for example on the subject of economic policy. We have just had a little talk about EMU, and this will also be discussed a little later in connection with the Stability and Growth Pact, but the policies behind the Stability and Growth Pact have of course been incorporated into the draft Constitution, and, at the same time, as was said during the Danish referendum, we are now seeing how the small countries have to comply with the rules whilst the large ones are let off. We do not care for this policy, and I also hope, therefore, that the Council meeting will find a solution to this problem, so that Germany is able to solve its economic problems and we do not just have to follow rigid requirements. 
Cohn-Bendit (Verts/ALE ).
   – Mr President, Mr President of the Commission, Mr President-in-Office, the Intergovernmental Conference is not going well. In my view, the result expected in Brussels at this stage appears to be dreadful. I believe that one of the great capacities of politicians who want to say ‘yes’ is having the courage, when it comes down to it, to say ‘no’ or to refuse to sign. I feel that it is only right that the Presidency, the Commission and everyone involved should try to reach agreement in Brussels. However, if reaching agreement in Brussels means replaying the palaver of the last night in Nice, the Intergovernmental Conference must not end in Brussels. There must be no repeat of Nice! You have heard of ‘Dying for Danzig’; now, the Poles have brought us ‘Dying for Poland’. Mr Prodi said: ‘We are going to die for the budget’. I say: ‘I do not want to die for Brussels’. No one is obliged to die and no one is obliged to sign if it is a poor Intergovernmental Conference. That is the situation.
I know that the governments usually laugh because this Parliament does not have to say ‘yes’. I know that they say that in the end Parliament will be won over. In fact, even the majority in this Parliament, against a minority, was won over in Nice and said ‘yes’ to Nice, while we said that Nice would make enlargement impossible or that it would be impossible for Europe to function.
You, ladies and gentlemen and Mr President-in-Office, can tell them that they will have to see to it that this Constitution is ratified, whether it be by Parliament or through a referendum. Tell them, too, that if the vast majority of us, the Members of the European Parliament, do not agree with what they have signed, we are capable of swinging the referenda towards the ‘no’ vote. We can still be a nuisance even if you do not allow us to make the decision with you. If you do not receive the support of the most European of Europeans, in other words, of this Parliament, you will not receive the support of the people of Europe. You must get that into your head. Therefore, if you revise the Convention’s draft Constitution, if you do not want to talk about the legislative council any more, if you do not want to talk about institutional equality with regard to the budget and to Parliament’s right, if you are unwilling to come up with the double majority, if you want to call into question the definition of the content of Europe as defined in the first part of the Convention’s text, the most European of Europeans will fight against this text.
So I say to you that you must not sign, for if you do not reach agreement you must continue to talk. You must talk to the Poles. You must talk to the Spanish. You must talk to my grandmother and to my grandfather and to anyone else. As far as I am concerned, signing before doing this would be a crime against Europe. That is what we will say to the people, and we will try to persuade our governments not to sign in Brussels if the result is not satisfactory and to leave it to the Irish Presidency or the Luxembourg Presidency to finish the job. The fact is that it is never too late to finish but it is sometimes too early. That is what I am afraid of and that is why I say to you that you must trust in Europe and must not sacrifice it to a signature of which you will be ashamed, just as you have been ashamed of Nice. That, after all, is why you launched the Convention.
Collins (UEN ).
    Mr President, I believe it is fair to say that the meeting of the European Union Foreign Ministers in Naples last weekend was a very productive one. I say this because now the European Union governments are discussing what I would describe as the bottom-line issues relating to areas of concern with regard to the likely provisions of the new European Union Treaty.
The Italian Government needs to be commended for accelerating the pace of these negotiations, and the holding of this recent meeting in Naples was a very timely one. EU leaders are now meeting next week, on 12 December 2003, to see whether they can hammer out the final agreement which will govern the future of the European Union. I believe, in the light of the spirit of cooperation and determination that prevails at this moment, that an agreement can be reached at the forthcoming meeting of the heads of the European Union governments.
That is not to say that there are not problems or areas of dispute. I have always believed it is very important that there is equality of representation with regard to the future composition of the European Commission. Equally, there are different concerns from the perspectives of different Member State governments within the Union. It is clear that the likely direction of the decision-making process within the Parliament and within the European Council is going to be based on codecision and majority voting procedures.
I believe that the citizens of Europe are demanding to know the exact responsibilities of the new political portfolios that are being created within the European Union. They want to know exactly what the roles of a likely European Union Foreign Minister, and a possible President of the European Council, will be. It is important that clarification be given to these questions and that there is no duplication of roles. This would blur what the European Union should be doing at this time.
Furthermore, there is still a concern within Europe with regard to a few sensitive national concerns. I very strongly take the view that taxation issues should remain the preserve of the individual Member State governments. I do not believe that the European Union should be given powers to raise taxes by means of a procedure of qualified majority voting.
Equally, I believe that the qualified majority voting procedure should not apply to decisions concerning the operation of legal systems within the European Union. This would be an incorrect step because of the different criminal legal systems operating in Europe.
I have no doubt that over the next ten days there will be further intensification of dialogue between all contracting parties in an effort to broker an agreement for a new European Union Treaty. The goodwill is there to reach an agreement at the forthcoming European Council. While the Italian Government's timetable is certainly ambitious, it can be achieved under the right circumstances. I wish it every success in doing so. 
Bonde (EDD ).
    Mr President, this is probably the last time we shall be meeting before the summit on 12–13 December, and I should like to warn against the Constitution that is now on its way.
The Laeken Declaration set the task of bringing the EU closer to its citizens. Now, a large number of new decisions is to be transferred from the national parliaments to officials behind closed doors in Brussels. More decisions are to be transferred from open parliaments to semi-secret Council working parties than decisions in the Council are to be made open. Overall openness will diminish. Legislative power is essentially being turned into executive power. In essence, the electorate is having its influence curtailed. The democratic deficit will increase, although the task was to reduce it. The federalists in this House are clapping their hands with glee, as they themselves will obtain more influence. Instead, they should be opposing the fact that national parliaments are ceding much more power than the European Parliament is gaining. The electorate and the elected representatives will be the losers. Lobbyists and officials will gain legislative power if the present draft is adopted.
The Heads of State or Government will be given the right to appoint those who will hold power in the EU. The President of the EU, the EU Minister for Foreign Affairs, the President of the Commission and his/her vice-president will all be appointed by an alliance of 17 out of 25 Heads of State or Government. Eight countries can be outvoted and their wishes disregarded. Out of those 17, ten will probably be able to continue as leaders in their own countries. The seven who do not hold on to power back home can then share jobs in Brussels. When politicians lose the confidence of the people in their own country, they can have their rejected policies embalmed for five years. The monopoly on making legislative proposals will rest with people who can no longer be elected. The Commissioners are not elected and are not answerable to the electorate. The Commission can only be unseated with a two-thirds majority, and doing so will at most create a crisis.
The European Parliament itself is undergoing a crisis, with ever falling voter turnout and an inability to make the Commissioners comply with a bookkeeping law applying to every book-seller in the EU, for example. Effective means against fraud do, however, exist, namely openness and democracy. Let the Commissioners be appointed by, and be answerable to, the national parliaments. Thus, no Commissioner will get away with saying ‘I am not responsible; I did not know what was happening’.
Build Europe from the bottom up and not from the top down. 

Pannella (NI ).
   – Mr President, Mr President-in-Office of the Council, Mr President of the Commission, I am going to read some statements made after Naples. Mr Fischer said: ‘I am leaving Naples more concerned than when I arrived’. Commissioner de Palacio said: ‘It is clear that only a minority of States support the Giscard d’Estaing project. Mr Villepin said: ‘I will not accept watered-down compromises’.
The President-in-Office of the Council himself has stated that Austria, Estonia, Denmark and, to a certain extent, Spain, Poland and the United Kingdom would, if they had to choose, currently opt for Nice rather than the new system. No comment. This is the picture.
In his excellent speech, which we all applauded with pleasure, Mr Cohn-Bendit stated that he did not want to die for Denmark, Europe or America nor from any illness. Bravo. Nor do I. However, this policy, Mr President-in-Office of the Council, this lack of policy on the part of our, or your, Europe, is condemning tens of thousands of people to death in the Middle East and jeopardising the region’s fate and future.
In my opinion, and I support the appeal made also by the former President, Mr Cossiga, on this matter – on the issue of war and peace – pacifists, the only thing you can say is that we must withdraw our troops. Bravo. You are no different from the people in 1939.
It is now necessary, and this is our specific proposal as radical members of the Bonino List, in compliance with international law and the rules of war, that experts be consulted as a matter of urgency. We must act quickly to legalise the situation and, therefore, the UN, Europe, the Arab League, and, I believe, even the United States, must call for an official peace process.
The error committed in Italy by the Allies, who even at that time were liberators, is being repeated in the Middle East. On 8 September 1943, when the Italian army disintegrated overnight like Saddam Hussein’s army, Italy could have been liberated in two months. Instead, it took them months and months. It took them six months just to set up the Republic of Salò.
There will be no territorial Republic of Salò, but we are clearly witnessing the clandestine reform of the Iraqi army, not least in that it remains unpaid.
Consequently, Mr President-in-Office of the Council, in my view, Italy, and now Europe, must take the initiative of convening a special Council meeting for the purpose of proposing a peace process to the UN, the United States and the international community. In accordance with the rules of international war, Saddam Hussein is to be characterised as a clandestine fighter so that – as happened for instance in Cassibile in Italy – haggling can subsequently take place not over Saddam Hussein’s immunity, but over his exile and impunity.
This is a genuine political initiative. It can bring together France, Germany and even neo-conservatives in the US. Italy and Europe are once again shuddering as they did in the case of the former Yugoslavia. The image of Srebrenica symbolises our failure to act.
I therefore appeal to you: let us live forever, as Mr Cohn-Bendit wants. Indeed, let us ward off illness, but let us not continue to condemn to death entire populations of the world in the name of freedom and legality.
Méndez de Vigo (PPE-DE ).
    Mr President, this debate is becoming very emotional, but my comments are not in that vein.
I think the Intergovernmental Conference is turning out as could have been expected. I am not at all surprised by the developments in the Conference. I would like to say to the President-in-Office of the Council that I think that the Italian Presidency is doing well in some areas. I think good progress is being made on certain subjects, such as the social clause. This was something we did not succeed on in the Convention. I think it would be a positive step if your Presidency succeeded in putting this on the agenda, and we could then see how many Socialist governments support the idea.
I also think that there are other matters on which you will manage to obtain reasonable agreements – the question of a European Public Prosecutor, for example. If your proposal entailed a European Public Prosecutor who would deal with matters affecting the Union’s financial interests, I think this House could accept it, provided that the Public Prosecutor was appointed using the ordinary legislative procedure rather than by a unanimous decision. You have a consensus proposal here which, I think, will allow us to move forward.
There are, however, some other issues where the Italian Presidency has not sought to find a compromise solution, and I do not understand their reasoning. Take the question of double majority, for example. I do not see why the Italian Presidency has refused to come up with any alternative proposal to the Convention text when they have done so in several other cases.
Time is marching on. I believe there is only one more ministerial meeting scheduled before the definitive Council meeting, and I am not sure we will achieve a result that will be acceptable to all parties. Obviously, in political terms, this is not really the best time to be addressing the subject, since the breakdown of the Stability Pact seems to suggest that there are two different standards in use in the European Union – and I would appreciate it if you would pass these comments on to Mr Tremonti – which is not really helping to create a climate conducive to obtaining a consensus.
Unlike a previous speaker, however, I do feel that we have to complete our work by 13 December. I do not think that having more time to consult our grandparents – to use the words of my fellow Member, who is not here at the moment – will lead to a better result. I do not think it will work. In my view, the situation is cut and dried: we are all familiar with the solutions that have been put forward, we know what alternatives are available, and I think we now have to give a political signal by approving the Constitution on 13 December. That is the political signal we need to give.
I think enlargement is another reason why we need to do so. Enlargement is the big gamble for Europe and for this Parliament, and has to go hand-in-hand with the political recasting embodied by the Constitution. It would be very hard to explain if enlargement were completed on 1 May 2004 but for some reason there was no Constitution.
I therefore urge you to persevere, and call on the national governments to demonstrate pride in the European Constitution, to forget national interests and consider that what we need at the present time is a Constitution for a Union of both States and citizens, which will allow us to work together in the exciting period the coming years represent.
So, keep up the good work, President-in-Office of the Council. Keep on trying to reach agreement. Keep on working towards completion on 13 December.
Hänsch (PSE ).
   – Mr President, ladies and gentlemen, at the very outset, I would like to give the Italian Council Presidency credit for its intensive efforts, in the Intergovernmental Conference negotiations, to keep as close as possible to what the Convention produced and also to offer solutions that go beyond that. Let me give two examples: the explicit reference to equal opportunities for women and men as being among the values of the European Union was not of the Convention’s doing. That you should propose it, and that it should be accepted, amounts to progress, and that is something we should make clear. Your proposal that decisions in specific areas of the Common Foreign and Security Policy should, subject to certain conditions, be reached by qualified majority voting, goes beyond what the Convention came up with, and that is something I explicitly underline in order to make clear the extraordinarily positive role you play in this.
I do, however, have to tell Mr Brok, who is now no longer present, that what you have proposed with regard to the European Central Bank does not interfere with the Bank’s independence. It goes no further than what we want for other areas, that being that decisions on specific technical issues should be capable of being taken by a simplified procedure, and that means that if the Heads of Government want to change something, they have to do so unanimously. Unanimity remains in place; the only thing is that, if we want to sort out technical issues, we do not have to set the whole process of revising the Treaties and the Constitution in motion. Mr President-in-Office of the Council, I believe that we all see this as a quite crucial point, and I would ask the Council Presidency to see it in that light too.
As regards Parliament’s budgetary rights, both in medium-term financial planning and in the annual Budget, we cannot and will not accept less than what we have already. Such a thing cannot be acceptable to a democratically elected parliament, and we will resist it with all the means at our disposal.
I might add that I welcome the unambiguous stance taken up by the Commission on this point. We may well not always be on the same side, but, in this instance, Mr President of the Commission, we are glad of your support, for our allies are thin on the ground where this is concerned. I am glad that you are numbered among them, as also is the Presidency of the Council.
There is one final point that I would like to address. I, too, have my criticisms of Naples. Like Mr Fischer, the German Foreign Minister, I came away from Naples more depressed than I was when I went there. My worry is that we are leaving open many issues that will then be squeezed into the package for the Heads of State or Government, and that we will then end up with a repeat of this ‘night of Nice’ and its compromise, not merely on the lowest common denominator, but with a collection of compromises, completely unrelated and mutually contradictory. The danger of a repeat performance of Nice in Brussels on 13 December has become greater since Naples. My fear is that we will then end up with this peculiar ‘rendezvous clause’. For over ten years, ever since Maastricht, Mr President-in-Office of the Council, that really has been the customary flight response of the Heads of State or Government. At Maastricht, we said that we needed the political unification of Europe. We postponed it, deciding that we would do it later. Then we had Amsterdam, and then its celebrated leftovers. They were then deferred until Nice, where you could not sort it out, and so we passed it on to the Convention. Now the Convention has come up with a proposal. Please, I beg you, Mr President-in-Office, do not do the same thing again! The situation is getting no better. If there are more leftovers from any decision taken on 13 December, then the European public as a whole will see that as a failure on the part of the European Union’s Heads of State or Government. Mr President-in-Office, I urge you to prevent such a failure. They will be judged not only on their ability to achieve a result, but also to propagate a solution – and so will you.
Duff (ELDR ).
    President, this Friday, 5 December 2003, the parliamentary members of the Convention will meet up again to consider the progress of the Intergovernmental Conference, to speak with Mr Frattini and Mr Giscard d’Estaing, and to make joint proposals to the IGC.
The main thrust of our deliberations will be to support the work of the Italian presidency in defending the work of the Convention, but I fully agree with Mr Hänsch that we will fight the notion of clauses on key elements of the package. Procrastination will not make tricky decisions simpler to solve: the time to act decisively is now. Nor will we approve proposals to inflate the size and distort the shape of the Commission - or indeed this Parliament - to avoid concessions to the self-esteem of Member States. Such ploys do not contribute to the efficiency and effectiveness of those authorities, and to ignore the settled will of this Parliament is certain to jeopardise the prospects of the new settlement being brought into force. It will sour the political atmosphere and wound the democratic legitimacy of the Union.
The Presidents of the Council and of the Commission should be absolutely clear that the IGC cannot take our consent for granted.
Korakas (GUE/NGL ).
    Mr President, of course the workers, the peoples of our countries, do not expect the Council summit to talk to them about the reality they experience on a daily basis as the result of the policy of the centre right or centre left governments of the European Union. They experience on the ground the increase in unemployment, shrinking incomes, the campaign against and even the abolition of the eight-hour day and their other rights as a result of the famous Lisbon agenda, the application of which is to be assessed by the Council. They know that all this is being promoted in the name of competitiveness and productivity, with the sole objective of increasing the profits of big business in the European Union. This is also the more general objective of the constant reduction in labour costs, even where we have increased rates of growth, such as in Greece, where the workers are the most productive and the worst paid in the European Union.
As with all the other issues which will be discussed, such as the Intergovernmental Conference and the European Constitution, which institutionalises capitalism, the further militarisation and autocracy of the European Union, the strengthening of repressive anti-labour mechanisms, the – as far as the peoples are concerned, negative – enlargement with ten new countries and immigration and asylum policy, the sole aim of the Council summit is to safeguard and increase the profits and the power of big business in the European Union. The continuing occupation of Iraq is also resulting solely in increased profits and is continuing to claim victims among the Iraqi people, as well as among the conquerors and their allies as a result of the justified resistance of the Iraqi people.
So the European Council in Brussels will not only not change these political orientations, but will also take measures to reinforce and legally safeguard them. In my opinion, the only way to change this situation is develop resistance and counterattack by the peoples, which fortunately are burgeoning constantly. We shall do everything within our power to strengthen this prospect. 
Voggenhuber (Verts/ALE ).
   – Mr President, ladies and gentlemen, let me start by associating myself with Mr Watson’s determined protest against the grave and ongoing violations of human rights in the USA’s prison camps.
Let me now turn to the Intergovernmental Conference. I ask myself why in fact the governments summoned a Convention, when, even without one, they could still have had the age-old spectacle of the nations haggling over their interests. While the governments are turning the Convention draft inside out, we in this House have gone back to drafting resolutions, repeating ourselves, protesting against the eternal sameness of things, but to no avail, with neither a response nor even a serious debate to show for it. The question we should be asking ourselves is what we should be doing. The governments think they know what our response is going to be; we gave it to them after the partial failure of Amsterdam. It was, ‘this is better than nothing.’ Then, after Nice, where the failure was complete, we gave it to them again: ‘this is better than nothing.’ Now I have come to believe that a bad constitution is not better than nothing. We should make it plain to the governments that it is not they who are the masters of the treaties, but the parliaments and the people they represent, and that it is these who can bring this constitution down.
We are then told in tones full of emotion that the dignity of every single Member State must be safeguarded. What about Europe’s dignity? Nobody said a word about that. I cannot imagine that the dignity of any single Member State demands that the principles of the separation of the powers and of the public nature of lawmaking be violated, or that the legislative council – the Convention’s big idea for greater democracy – be done away with. I cannot imagine that the dignity of a Member State demands that the undoubted legitimacy of dual majority be traded for the lottery of Nice. I cannot imagine that the dignity of a Member State means that more laws have to be passed in Council, or that more offences against parliamentarianism and the public nature of lawmaking are called for. That has nothing whatever to do with national dignity, which does not require an attack on Parliament’s budgetary rights.
In the last debate, and in the corridors and behind the scenes, I have heard people calling for compromise. To hear Mr Méndez de Vigo speak about it, you would think it was about this House renouncing its loyalty to the Convention and setting out on the treacherous ice of compromise. We are offered compromises only when we are in retreat. We are offered negotiations only when democracy and the rights of Parliament are disputed. Nobody seems to me to be offering to negotiate concerning our demands over and above the Intergovernmental Conference. This time, we should make it plain that a bad constitution is not better than nothing.
Ribeiro e Castro (UEN ).
    Presidents, ladies and gentlemen, like Mr Cohn-Bendit, I also take the view that there is no hurry, because the Nice declaration, which started the entire process, scheduled the Intergovernmental Conference for 2004 and I believe that a good and long-lasting agreement which takes a long time to reach is better than a bad agreement reached quickly. I must, however, acknowledge the merits of the Italian Presidency and the progress that appears to have been started in Naples. Naples represents a very positive step in the development of the Intergovernmental Conference, on which I heartily congratulate the Italian Presidency, and which has given rise to positive expectations in many areas. It would be extremely damaging now to disappoint these expectations. Progress was also made on enshrining the rule of one Commissioner per Member State with full and equal status. The limits imposed on the powers of the President of the European Council is to be welcomed, as is the creation of a diversified and versatile system for the rotating presidencies of the various formations of the Council, replacing the unnecessary elimination of the rotating presidency system. I welcome the rejection of the so-called ‘simplified’ methods of revising the Treaties, which would constitute an abuse of the traditional model of international and constitutional law.
Having said this, however, some points still present cause for concern and on these I would appeal to the common sense of Europe’s leaders and to the imagination of the Italian Presidency. Firstly, the principle of the primacy of Community law must be clarified and in a way that does not destroy the very principle of national sovereignty. Secondly, the transparency and openness of the legislative workings of the Council must be guaranteed, since the prospect of our having a legislative Council appears, unfortunately, to have been abandoned. Thirdly, there must be considerable caution and limitations imposed on the passerelleclauses: these must not be seen as a means of re-establishing so-called simplified methods – which are also irregular, in my opinion – of revising the Treaties. Next, there is no need to use this too ‘forward-looking’ vocabulary, including ‘minister’ or the word ‘constitution’ itself. A solution must also be found to the issue of recognising the heritage of Christianity, of the Judaeo-Christian religion, together with other components of Europe’s historical and spiritual inheritance, and the secular nature of the institutions must be confirmed. One would have to be extremely intolerant and prejudiced not to accept the proposal of the Italian Presidency. I wish to say a few words on the issue of qualified majority voting, which Spain and Poland appear to see as an obstacle: we are in favour of parity (60% plus 60%). Spain must understand that it is the largest of the medium-sized countries and not the smallest of the large countries. Europe needs more medium-sized countries, not more countries obsessed with the idea that they are large. This is extremely important for the development of Europe’s common interest. 
Tajani (PPE-DE ).
   – Mr President, the comments made by the President-in-Office of the Council, Mr Antonione, concerning the progress made at the Intergovernmental Conference give us great hopes of the final outcome of the proceedings in terms not only of adherence to the timetable but, above all, in terms of content. There has been no backsliding over the text adopted by the Convention, and the Italian Presidency’s resolve not to brook any compromise merely for the sake of having the Treaty signed has therefore paid off.
Mr President, Parliament, which, this week, has the task of encouraging the Member States to reach an agreement that will, at last, give Europe its first constitutional charter, cannot but agree with the position adopted by the Presidency. President Cox has rightly insisted on the need to act effectively with due haste. We fully support his comments and share his sentiments completely, but we do not identify with the comments of those pessimists who appear to want to throw in the towel at the sight of any difficulty.
I therefore support, President Antonione, your comments in favour of abandoning national particularism. Europe cannot miss this extraordinary opportunity. I am certain that no State will want to be held accountable for shattering a dream. Finally, as a member of the Group of the European People’s Party (Christian Democrats) and European Democrats, I call on the Intergovernmental Conference once again to insert in the preamble an explicit reference to Europe’s Judaeo-Christian roots.
Lastly, Mr Watson, a word on the Guantanamo question: you speak Italian well, you understand it very well and I hope you read it too, because, according to the reports I have read in the Italian press, it appears that, on more than one occasion, the Presidency of the Council has called on the US authorities to respect human rights in Guantanamo as well. 
Swoboda (PSE ).
   – Mr President, foreign policy discussions at the Brussels Summit will take place in two contexts – that of the constitutional debate and that of concrete foreign policy problems. Taking the constitutional debate first, I would like to wholeheartedly endorse what President Prodi had to say. We have to become actors on the international stage rather than spectators. And, as this is not just about the content – although it certainly is that too – but also about the name, I would also like to speak in support of Mr Antonione, who stated plainly that this is – and must be – about a foreign minister. We are not talking here about a High Representative or an ambassador, but about a European foreign minister, not supplanting the national foreign ministers, but supplementing them and organising their work more effectively.
Secondly, while I am on the subject of foreign policy, let me say that we have a problem, and – if I may discuss it briefly with Mr Antonione, let me say that the problem is the Middle East. In recent days, we have seen an agreement reached – known as the Geneva accord – which is a private agreement by two people and many others from Israel and Palestine, and the Council wants to consider this matter actually only one and a half weeks after the event. Never before though has a private agreement been given such prominence by the media, never before has an agreement called forth such high hopes, and never before has an agreement been so perfectly in line with European foreign policy, so I hope that the Council will indeed turn its attention to this Geneva initiative and will indicate our support for it even more strongly than Secretary of State Colin Powell – thank God! – has done, because, although it could be a European initiative, it is even more valuable by reason of its originating from the region itself, from men and women who know what continued suffering would be like, and without whom there would be no accord.
If it is Europe that has to be the base for the decisive campaign against terrorism, that has to do with the fact that terrorism will spread – as it has done in recent weeks – for as long as the problem in the Middle East is no closer to a solution – a solution which, it must be conceded, can be arrived at only step by step. With this in mind, we profoundly regret the terrorist attacks in Istanbul. Like New York, Istanbul is not only a city of many ethnicities, it is positively symbolic of how they can cooperate, and terrorism of course militates against such association and relationships across ethnic lines. I also think we have to give Turkey solidarity and support, but that does not mean that terrorism brings with it some sort of bonus, and, like the Commission and the President-in-Office of the Council, I am very much in favour of us proceeding exactly as we have done before, with criteria that are objective and subject to scrutiny. Terrorism must not be allowed to affect Turkey’s position either for the worse or for the better.
In closing, I would like to mention something to which many other Members have referred. I rarely concern myself with budgetary matters, but, whatever our nationality or whatever the social or political grouping to which we belong, all of us in this House are aware of the importance of every parliament’s rights when it comes to drawing up budgets, and I just want to support you, Mr President-in-Office of the Council. This House’s position is clear. We are not just drawing up a resolution. One may ask, as Stalin once asked the Vatican, ‘where are your armies?’, but how is a European constitution to be brought into being on the back of referendums and by national parliaments if it meets with massive resistance from this House? This is what I ask you to accept: no curtailments, at any rate not of the rights of this House, Europe’s freely elected and democratic institution.
Van den Bos (ELDR ).
   – Mr President, Europe still rates opportunism more highly than it does formal agreements. Large countries can apparently get away with more than small ones. French and German flouting of the rules of the Stability Pact has delivered a serious blow to the confidence of the Dutch people in the European Union. The man on the street wonders why he should support a new treaty if it is uncertain that it will be observed. It is important that discussion of the Stability Pact should not be avoided, particularly in the light of the referendums about the Constitution.
The referendum will be more about context than about the text of the treaty. It will be a yardstick for confidence. We set great store by the Convention's proposals concerning the voting procedure in the Council and Parliament's full budgetary rights. As far as we are concerned, however, the Member States may retain their fully-fledged Commissioners.
If legitimacy is to be enhanced, then they must be directly elected by the European Parliament, without any nominations by the European Council. However, only when in Europe, agreements are more important than political opportunism will public confidence have a real chance of growing. 
MacCormick (Verts/ALE ).
    Mr President, I should like to address a theme raised by the President-in-Office of the Council which nobody else has yet spoken about but which, for more than one person in this House, is of great moment and significance.
The President-in-Office mentioned that the question is being raised as to whether the minimum number of MEPs per state is too low. Is it wrong to retain a relatively low basic membership in a new and enlarging Union? Let us pause and reflect upon this.
At the moment, in Britain which is composed of three nations, England, Scotland and Wales Wales is currently represented in this House by five Members. After the new Constitution comes into effect, if it does, the number of Members representing Wales in this House will drop to four. Malta will have five. I do not object at all to Malta having five Members: it is a fine thing for small countries to have proper representation. As a Scot, how could I think otherwise?
We must not forget, however, that the principle of degressive proportionality has a deep justification. Degressive proportionality says that every state in this Union must be represented in this House by a sufficient number of MEPs so as fully to express the political diversity of that state. Rightly, therefore, even the 400 000 citizens of Malta should have at least five Members, but perhaps no more. If you insist, rightly, on keeping a maximum ceiling of membership, the upshot of increasing yet further the degressive proportionality threshold above five will be to cut the representation of significant parts of existing Member States.
In the debates we had about the competences of the Union, Mr Lamassoure reminded the House of the importance of partner regions, countries like Flanders, Galicia, Euskadi and, indeed, Scotland. These are significant parts in the Union. If you cut their representation you deny them the degressive proportionality on which you rightly insist for countries such as Malta or Cyprus. Do not do that.
This is not a trivial point. At the Convention, as a Member representing Scotland, I tried many times to alert colleagues to the significance of entrenching certain aspects of the common fisheries policy that are unacceptable to us. I was not heeded. The upshot of that is that it will be impossible for me, as a strong supporter of this idea of a European Constitution, to persuade my political colleagues in Scotland to back ratification of the text because I now know that on that point it will not be changed. My appeal was neglected. Had I been representing a larger force I might have been heard. What a pity! Do not neglect degressive proportionality for the of the states of the Union in insisting on it for the states. 
Tannock (PPE-DE ).
    Mr President, the British Conservatives i.e. the European Democrats do not support the idea that the proposed European Union constitution as discussed currently at the IGC in Rome is merely a tidying-up exercise. We believe it significantly alters the balance of power between Member States and the European Union institutions.
We believe it is one more stage in the process of setting up a federal super-state with its flag, currency, army and now constitution, rather than a simplifying treaty basing itself on a unique supranational creation between sovereign Member States. We are concerned at the new, high-profile role of the Council President and the proposed Foreign Minister and EU legal personality, which will enhance the perception that the EU is a state and will shortly be demanding membership of the UN Security Council.
We are opposed to the passerelle clauses which jeopardise our veto rights over taxation, social security and, most worryingly, CFSP, which includes security and defence. Theoretically, it becomes possible for a new British Government to be out-voted over the deployment of its own troops already committed by a previous administration.
We have also seen concessions over a separate planning headquarters for autonomous EU operations, which will play into the hands of isolationist US strands who will be happy to see Europeans go it alone as they question the need to keep the US tied into NATO, an organisation which in my view has served us well for so long.
We reject the Charter of Fundamental Rights - with its vague rights to jobs, health and social security - becoming legally binding. It is a recipe for the activism of the Luxembourg-based European Court of Justice in its agenda to enforce the social market economy and undermine the Thatcherite economic reforms of the 1980s which made my country a magnet for foreign direct investment.
Lastly, we are adamant that such major constitutional changes require a full public debate in all the Member States. With particular reference to my country, I call upon Prime Minister Blair to allow the British people a say through a referendum on the outcome of the Intergovernmental Conference. 
Titley (PSE ).
    Mr President, could I issue you with a special invitation? If, over the Christmas holidays, you are in the wonderful city of Bolton, please come and join me in a visit to my local pub because you will surprised to discover that most people there are not talking about qualified majority voting, the Common Foreign and Security Policy and the Intergovernmental Conference. They are talking about other issues.
I mention that point not to denigrate the discussions on the Constitution, which are important but, rather, to emphasise that the endless institutional debate that we have does not bring us closer to the electorate because it does not address the issues which voters regard as very important. Since I became a Member in 1989 we seem to have had endless institutional debate. We must stop that institutional debate, because it is vital for the political legitimacy of the EU that we come to an agreement in this IGC quickly but, more importantly, that we come to an agreement that will stick.
I agree with Mr Hänsch that we cannot carry on endlessly with one IGC dealing with the leftovers of another IGC. When we get an agreement that sticks, we can then start to focus properly on the sorts of issues which concern the citizens of a Europe of 25 Member States. We need to start making practical progress.
Let us not take it for granted that enlargement is on course to happen smoothly. We must make sure that candidate countries fulfil the requirements set out by the Commission in its latest annual report. We must ensure that the accession of these countries to the European Economic Area something people forget about - goes very smoothly, because that has not been the case until now. We must not lose sight of Romania and Bulgaria, or their objective of joining in 2007. We must continue our work on Turkey and, as Mr Swoboda says, show greater solidarity with that country, particularly at this time.
We must also look at other issues concerning our citizens: more and better jobs. We must revitalise the Lisbon process and ensure that we have an active social policy that gets people into work. As Wim Kok's report has shown, there are too many people excluded from the labour market and we are building a wall between those who have a job and those who do not have a job. We must do much more with respect to that. In particular, Member States must stop dragging their feet. It is the Member States who are dragging their feet on Lisbon and on the European arrest warrant. Crime is important to our citizens and we need more Member States to actually ratify that.
Member States are also largely responsible for the fact that the European Court of Auditors, in its a yearly reports, tells us that it cannot trace all the accounts because of the way Member States spend the money. We need to demand much more of Member States.
On security policy, I welcome the progress being made but let us ensure that we focus on capability rather than institutional structures because we will only be judged by how capable we are.
If I could ask for a Christmas present given that I still believe in Father Christmas I should like to see IGC conclusions which are agreed upon, which are upheld and which leave no leftovers. I would like us to focus on delivery for our citizens, because that is what the European Union will be judged on. 
President.
   Thank you for your kind invitation, Mr Titley. 
Ludford (ELDR ).
    Mr President, the President-in-Office of Council said that the European Union will not fail to give a welcome to legal migrants. This looks hypocritical since the Council agreed a very restrictive text on family reunion rights. Indeed it is so mean, that the Committee on Legal Affairs and the Internal Market advises that the European Parliament should seek the annulment of this text in the European Court on grounds of a breach of the family rights provisions of the European Convention on Human Rights. I welcome that.
The Council has been left in no doubt as to the strength of feeling in this House about the internment without due process of Guantanamo Bay prisoners. As co-rapporteur on this topic, I am helping to prepare a submission from this Parliament to the Supreme Court, but only the Council can make representations on behalf of the EU as a whole. It has already signed a legal cooperation agreement with the US, so the Americans cannot dispute the Council's legal status.
It would be outrageous if governments such as the UK Government doing bilateral deals frustrated a Council initiative. Even if we get Europeans back from Guantanamo Bay, we must speak up for the rest of the 650 detainees. As we are showing on steel tariffs, if the EU punches its weight, the US takes notice. 
Nogueira Román (Verts/ALE ).
    Mr President, as a citizen of the Spanish state, I wish to tell this Parliament that the views of the majority of my fellow citizens are by no means represented by the positions that the Spanish Prime Minister, José Maria Aznar, is trying to impose. These call for the implementation of the voting system set out in Nice precisely the opposite of the one approved by the Commission, which involves a double majority of States and citizens. In his attempt to keep this arbitrary power of veto, which was won at serious cost to the Spanish representation in this Parliament, Mr Aznar will be representing himself alone and will be confirming his status as the most unhelpful and intransigent political leader in Europe. José Maria Aznar is trying fraudulently to hijack the draft European Constitution to block the progress of the national governments of Galicia, the Basque Country and Catalonia in the context of a multinational State, attempting to have things included in the draft that, if accepted, would prevent the future reunification of Ireland, because it would change the borders of the United Kingdom and of Ireland and would also prevent Gibraltar being handed back to the Spanish State.
I will conclude by recalling that yesterday fifteen more immigrants perished off the coasts of the Spanish State and I believe that we should bear this fact in mind in order to implement the political measures necessary to prevent any repetition of such events. 
Hatzidakis (PPE-DE ).
    Mr President, I trust that the outcome of the Intergovernmental Conference will not satisfy us even less than the outcome of the Convention satisfied us. I should like to make two or three brief comments about this.
First, the final arrangements for defence and foreign policy are very important. I welcome any progress achieved. I should like it to be more substantial, especially as regards the unified assistance clause but, in all events, it is good for us to show that we learned from the war in Iraq.
Secondly, all the Member States should be represented in the Commission. In Greece, in particular, it would make a very bad impression if the smaller countries were not represented.
Thirdly, it is better for us to have no agreement in December if the agreement is not going to be satisfactory.
Having said which, a few brief comments about the sector which particularly concerns me in the Group of the European People’s Party (Christian Democrats) and European Democrats, transport.
Mr Prodi, there is the development initiative to incorporate the programme on priority trans-European networks, Quick Start, which is to be discussed. The impression has been given that Parliament is being bypassed and that the decision will be taken solely by the European Council at the Commission’s proposal. Apart from the fact that this is wrong, it is also contrary to Community law and Parliament is not prepared to accept it. We are joint legislators as far as the trans-European networks are concerned and we shall claim our rights until the end.
Having said which, there is the question of substance. We can draw green and red lines on the map and say, ‘There you are, new roads and railways!’, but the trans-European networks must be funded. So there must be the political will on the part both of the Member States and the European Commission, so that, with the public and private sectors working together, we can proceed as quickly as possible in this direction. 
Schulz (PSE ).
   – Mr President, ladies and gentlemen, I will start by asking you to forgive me for arriving late. Life penalises those who arrive too late, unlike the Vice-President, Mr Dimitrakopoulos, who has been a bit lenient in still giving me the opportunity to speak, for which I am very grateful. Speaking on behalf of my group, but also of the German Social Democrats in particular, I want to thank our own government and the Italian Presidency of the Council. Mr Antonione, my expression of gratitude to the Italian Presidency of the Council may perhaps be rather surprising, but it is very emphatic, as I get the impression that the Italian Presidency of the Council is making a respectable effort when it comes to defending the outcome of the Convention and to keep in check a number of foolish courses of action that are evidently dominating the Intergovernmental Conference. I know that my own government, that of the Federal Republic of Germany is currently, in the Intergovernmental Conference, making valiant attempts to talk certain Member States’ governments out of their belief that they do not have to take on board any of the progressive things that the Convention has decided on for Europe and to lead them into the way of compromise.
For this, we Members of the European Parliament must be especially grateful, for anything else would gravely endanger the European Union both as it is today and as it will be. I want to pick out two points that we regard as positively essential in their significance. The first has to do with this House’s budgetary rights. It would appear to be the case that a number of finance ministers have persuaded their governmental colleagues – but not, it is to be hoped, the Heads of Government – to limit unanimity on the Financial Perspective and to change over to mere consultation rather than approval, thereby both restricting a right of the European Parliament and also qualifying Parliament’s right to give final approval in the Budget procedure – which is actually the most powerful right that this House possesses in the Budget procedure – by making it a right shared between the Council and Parliament. It would appear that some are determined, as part of the constitution-framing process, to have this core right of the European Parliament in their sights. The only thing one can say to this is that if you want to give Europe a constitution, you cannot be serious in attacking in this way the right to approve the Budget, which is the prerogative of the future main legislative authority, namely the European Parliament. So let me tell you that those who would take an axe to our budgetary rights are taking an axe to the constitution in its entirety, so we in this House would be well advised to send an unambiguous signal to the Intergovernmental Conference to the effect that this is something that Parliament takes very seriously indeed.
This leads me to mention a second point. We believe that we have to compromise on the distribution of votes and on the composition of the Commission, and that both sides can and must live with those compromises. It is quite clear to me that the smaller Member States fear that they will be outnumbered. Their fears may or may not be justified; it is not for me to pass judgment on that. Whatever compromise eventually emerges, this House must not lose sight of the fact that, in the next Parliament, there will be 732 MEPs, and that is quite a lot to start with. It is quite possible that, between 2007 and 2009, the number of MEPs in this House will increase to 800. Against the eventuality of further attempts to inflate the number of MEPs, I can tell you that we do not want to become a sort of Chinese People’s Congress; we want to be a working parliament. To this issue too, I ask the Council, its Italian Presidency – which, I know, is trying to get sense to prevail – and the Intergovernmental Conference, to actually find a solution that will enable this Parliament to keep on working. I arrived late and I have spoken for too long, so thank you, Mr President, for everything.
President.
   I am sure that all colleagues will be glad that you finally made it and were able to speak. 
Malmström (ELDR ).
    Mr President, when the Convention was set up, it was a unique historic decision, based on the idea that – in broadly based dialogue with the people – elected representatives, governments and EU institutions should, in an open and thoughtful way, prepare the EU for enlargement and the future. In spite of many sceptics, the Convention proved to be a great success. A proposal for a European Constitution was put forward that, although deficient in a number of ways, is, in very general terms, a very good compromise. I think that Altiero Spinelli must have been smiling from beyond the grave when the proposal was put forward in June 2003.
What is going on now is embarrassing. It is as if the Convention had never been held, and the Council were back in the old Nice routine with all the hullabaloo and horse trading going on behind closed doors. Do you never learn?
The EU faces huge tasks. It must grow, reform itself and engage in deeper cooperation. Moreover, it has major problems of legitimacy. The row about the Stability and Growth Pact has scarcely improved the EU’s reputation. People deserve better than a watered-down compromise seasoned with national interests. They deserve a democratic, dynamic and energetic EU. They deserve to be taken seriously through having the work done by their representatives in the Convention respected. I therefore wish to appeal to the Italian Presidency: do not disappoint them. 

 Ladies and gentlemen in the gallery, I understand your enthusiasm but the gallery does not take part in the sitting. I would therefore ask you please to be quiet. 
Stenzel (PPE-DE ).
   – Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, this is Parliament’s last opportunity to express its mind in the form of a resolution before the Intergovernmental Conference on a new European constitutional treaty, which we hope will complete its work before the end of December. That the Convention’s draft was important as a foundation is not in dispute, but nor is there any dispute about the need for various points in it to be improved. One hopes that all the politicians want to bring the work to completion and to find a compromise with which all parties can live, including on the composition of the Commission, with each Member State having one Commissioner who is entitled to vote. Public opinion in the EU is one reason why we should not create Commissioners of unequal weight.
Something else to be welcomed is the European Court of Justice’s monitoring of the decisions of the EU Council, which will make for judicial control and transparency. There is also a need to reinforce the Stability and Growth Pact, not only to make it more solid and substantial, but also to improve its flexibility, for there must be no repetition of what has just happened with Germany and France – bad examples must not be allowed to catch on.
In security and defence policy, a commitment to mutual assistance along the lines of Article 51 of the UN Charter should have a permanent place as a self-evident act of solidarity in a shared Europe. Issues of the weighting of votes in the Council should not be over-valued; after all, in the European Union’s political practice, it is usual to arrive at a consensus and a compromise in which ‘small or large’ is not the determinative issue. The dual majorities – 15 States, 60% of the population – appear sensible, and I agree with those Members who say that Parliament’s original budgetary rights are important and must not be curtailed. 
Van den Berg (PSE ).
   – Mr President, I am concerned about the ungodly practices of our governments, who have first concluded a deal with the European Parliament and the national parliaments – known as the positively rated draft Constitution – and then proceed to carry on as they please, with business as usual, and repeat the very practices that caused Nice to fail.
Citizens stand to gain a great deal by this draft Constitution. The Constitution offers us more democracy and enables us to achieve more concrete results in areas that matter in Europe. Neither I, nor the citizen, lie awake at night thinking about the trifling details which everyone seems to get het up about. One vote more or less, every Member State having its own Commissioner – or even two for the big boys – or a puppet on a string at the helm of the European Council. These are not the core issues. I go along with the idea of each country having its own Commissioner. What matters is that Europe is able to catch criminals who completely ignore national borders, that we speak with one voice in foreign policy and that there are enough good jobs for everyone.
The Heads of Government should finally stop whinging and accept that what we have seen come out of the Convention is – subject to a few minor practical changes – the best solution for all of us and for an enlarged and deepened Europe. They should not pretend that citizens consider their bickering about power and people as important. That is for the little boys who compare their brawn in the playground, but not for the citizens. The public want to see results, and we can obtain those results with the new Constitution. More rights for Parliament and more codecision in the fields of justice and home affairs, agriculture and budget. Many of my fellow-MEPs have already said that if the Finance Ministers get their own way, Parliament’s rights will revert back to what they were before 1975. That is wholly unacceptable. We would then cross a line which we would certainly advise against approaching. That will have an effect on all referendums here in Europe.
We now have to act on behalf of our citizens as a matter of urgency. Accordingly, information is required in good time, otherwise the citizens will not be able to make their views known in the many referendums that will be held about the Constitution. Europe needs the Constitution, because on 1 May, ten new countries will be joining, and they should not join without any clear rules. Such an historic reunification should not founder because Heads of Government behave in a wholly unacceptable manner, throwing their weight around and refusing to accept an adult outcome.
: either you agree to the present proposal as Heads of Government or you are opposed to it. But beware: less democracy and fewer rights for Parliament means that Parliament will be obstructive. The governments should not think that the deal can be thwarted only from their end. They should also realise that they cannot let things get that far. That would be a God-awful shame, irrespective of the fact whether God is incorporated in the Constitution or not!
On St Nicholas Day, which is nearly upon us, we in the Netherlands always give presents to each other. The Heads of Government should also push out the boat this year, and give us a Constitution that is worthy of the European citizens. 
Cushnahan (PPE-DE ).
    Mr President, in the run-up to the meeting of the Foreign Ministers in Naples, pessimism about the likely outcome was evident. Credit must therefore be accorded to the Italian presidency for the significant progress that it made on very sensitive issues.
In particular, I welcome the agreement that was reached on structured cooperation on defence and the positive signals emerging relating to the creation of an EU Foreign Minister and one Commissioner with full voting rights per Member State, and also the budgetary powers of Parliament.
Despite this progress, much work needs to be done. To have an effective influence on the world stage, we must end our paralysis in Common Foreign and Security Policy decision-making. The presidency's proposals for the use of qualified majority voting, and acting on the proposal for an EU Minister for Foreign Affairs, represent a step in the right direction. However, I would like to see progress in a number of other areas:
The proposal that there should be a full-time President of the European Council has the potential to undermine both the role of both the President of the Commission and the Foreign Minister. Up to now, the only permanent presidency in existence was that of the Commission.
As the President of the Council will have responsibilities in the field of CFSP, this could conflict with the role of Foreign Minister and could cause confusion as to who authoritatively speaks for the EU in this field. It would be more sensible to refer to this post as 'Chair' of the European Council and not 'President'.
In congratulating the presidency on the progress made to date, I would also like to issue a warning. The draft Constitution represents a bottom line compromise. Agreement at the Intergovernmental Conference is therefore not solely a matter for Member State governments. If the outcome of the IGC is to be ratified successfully it must also secure the consent of other institutions such as the European Parliament, the European Commission and members of national parliaments. The Italian presidency would ignore this reality at its peril. 
Corbett (PSE ).
    Mr President, it is quite clear from discussions that everyone wants to finish in December. The problem is that everyone wants to make their concessions at the last possible minute - and preferably not at all. So there is a danger that despite a general willingness to conclude at the December European Council, we end up, as in Nice, with it going on long into the night with last-minute deals cobbled together. There is a danger that no agreement will be reached at all.
At the moment, Member States to a degree are still posturing. They are taking rigid and firm positions even though they know they will have to compromise if they want to succeed in December: therein lies the biggest danger facing the Intergovernmental Conference.
I am convinced that a reasonable, acceptable deal can be found on the bulk of the points, but there is one that seems to be extraordinarily difficult: the system of voting in the Council. The Convention wrestled with the age-old problem of whether we want equality of states or equality of citizens. It came up with the novel and balanced solution of the double majority, with one vote every state counts equally, and with the other vote states are weighted according to their population: absolute equality of citizens. What could be fairer?
Poland, Spain and some other countries, however, are insisting on returning to the opaque Nice formula, which is neither very fair nor very logical. I regret this, and I hope that they will shift their position. I know too from discussions - notably with Polish colleagues - how difficult the national context in Poland is and how this has regrettably become a , notably for opposition parties - Poland has a minority government. But how can we compromise, how can we find a way out between two radically different solutions?
Speaking purely personally, and off the top of my head, may I invite the Italian presidency to look at what happened in the early 1990s, before enlargement to Sweden, Finland and Austria? There was then a big row in the Council about adapting the qualified majority system, then it was about the threshold: what threshold is needed to obtain a qualified majority and what is a blocking minority? At the time, one state - regrettably and shamefully my own, the United Kingdom - refused to change the system. It wanted to keep the same blocking minority in an enlarged Union, which would have made decision-taking even more difficult. There was deadlock.
What happened, in your own country Mr President? At Ioannina, a compromise was reached the so-called 'Ioannina compromise' whereby the Union switched to the new system, but a declaration was adopted saying that in the future, states that were in the minority, but which would not have been outvoted under the old system could, if they wished, then object to the decision and insist that discussions continue. In practice, that clause was never used but it enabled face to be saved at the time, it enabled the transition to the new system and perhaps something along those lines is the only way forward on this very difficult point of the double majority.
Perhaps we should switch to the new system, but with a declaration allowing states perhaps for a transitional period to invoke the old system if they found themselves in the minority. I am sure they would not do this very often, but it would allow them now to save face and go home with an acceptable solution. 
Jarzembowski (PPE-DE ).
   – Mr President, Mr President-in-Office of the Council, Mr President of the Commission, although we are talking about the constitution as a means of making the European Union transparent, comprehensible and more democratic, I see a danger in that the same Council that is to make a decision on the constitution is, when it comes to a decision on the Trans-European Networks, breaking the law as it currently stands and trampling Parliament’s rights underfoot. Mr President-in-Office of the Council, the present Treaties state that decisions on the Trans-European Networks, including the priority list – perhaps the President-in-Office of the Council would be so kind as to listen to me, and the honourable gentleman could perhaps move to one side – according to the present Treaties, the revision of the Trans-European Networks is subject to codecision by the Council and Parliament and is not within the decision-making competence of the European Council. The European Council exists to set down policy guidelines. If, though, the Brussels European Council, in the course of revising the Trans-European Networks were to make decisions on the list of actual priority transport projects that had the effect that practically all the funds for the next few years were spent, then that would be a flagrant violation of Parliament’s right to share equally with the Council in decisions concerning the Trans-European Networks and their revision. I therefore appeal to the representatives of the Council to take care that the European Summit does not trample upon those rights that the present Parliament already possesses. I also appeal to the President of the Commission: it would be devastating if you, Mr President of the Commission, having made such a clear statement on democratic and parliamentary rights, were, at the Council, to so tangibly to ally yourself with a Council which defines the priority projects in such a way that the European Parliament’s rights of codecision are practically nullified.
Let us see to it that this European Council does not take back the rights of codecision on Trans-European Networks that Parliament already possesses. We want more rights; we want a democratic and more transparent Europe. I hope, Mr President-in-Office, that you can provide us with them. 
Hughes (PSE ).
    Mr President, I very much support the joint resolution which my group has signed up to in relation to the Summit and the Social Forum. The important thing is that once again it seeks to strike the essential balance that was established at Lisbon: the balanced policy mix combining economic, social and employment policies in an overall framework of sustainable development. I hope governments will not succumb to the temptation to try in any way to skew that policy mix at the forthcoming summit.
There is one element in the resolution that causes me some concern: the second part of paragraph 10. My Group will request a separate vote on that point and many will be voting against it.
Why would that be? Are we in favour of needless, additional regulation? No. The first part of paragraph 10 which we support makes that absolutely clear. It is equally true, however, that certain sections of this House, and local employers' organisations outside it, are increasingly calling for ever more stringent, narrowly-drawn business impact assessments as a way of blocking the Commission’s right of initiative on much-needed proposals. We cannot allow those calls for cost-benefit impact assessments to be used in that way.
We on this side of the House support the idea of true and honest cost-benefit assessments that take account of all the costs and benefits. For example, in a debate on the revision of the working time directive last week in the Committee on Employment and Social Affairs, the point was made very forcibly by Liberal Members that we need a full business impact assessment. I make the point in reply that what we need is a true cost-benefit assessment that takes account of all the costs and benefits.
What, for example, is the cost of a long-hours culture in terms of damage to family life, damage to children and marital dysfunction? A cost must be imputed to those things as well in such a calculation. We therefore urgently need to bring forward revisions of that sort.
In relation to paragraph 9 of the resolution, which refers to opening up the market in postal and passenger services, it is important that a true cost-benefit assessment is applied there too.
Finally, I would like to point out that in fact the Treaties are very clear. In the area of employment and social legislation, there is already a very clear requirement built into the Treaty: 'such directives shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation, and development of small and medium sized undertakings'. The Commission already applies those tests to every piece of legislation it brings forward in the employment and social field. That is right and proper. It is good that it takes place already, but we should not try to narrow it in order to needlessly block much-needed social and employment proposals that will help maintain that overall policy balance established at Lisbon.
Karas (PPE-DE ).
   – Mr President, Mr President of the Commission, Mr President-in-Office of the Council, ladies and gentlemen, the reason why I rise to speak on this point is that the experience of the last few weeks in connection with the handling of the Stability and Growth Pact, that is to say of European law, have made clear how important it is that the Intergovernmental Conference should still include price stability in the list of the EU’s objectives in the European constitution.
Another reason why I have asked for the floor is that the experience of recent days and weeks has shown how important it is that the Protocol of the Stability and Growth Pact should, like other protocols, be appended to the constitution as an annex. And I have asked to speak also because I believe that the experience of the last few weeks also clearly shows us that the debate on the constitution has been, in part, nationalised, and that we must take care that the nationalisation of a European project does not jeopardise this great project through national referendum. If there is to be a referendum, then let there be one consultation of the European people, with one Europe-wide result and dual majority of votes and countries.
We have talked about how the Constitution must make Europe more transparent and more democratic and bring it closer to the people, which is what it is meant to do. So I appeal to the President of the Council to see to it that the Commission is strengthened, that this House’s rights of codecision are extended, that Parliament retains sovereignty over the Budget, and nothing is done to aid and abet the attempt by the finance ministers, in their letter to the President of the Council, to force the Commission and Parliament to keep silent about their rights. The Europe we need is Community-oriented rather than intergovernmental. The Constitution is the outward expression of strengthened Community institutions, and I ask you to counteract all the attempts made by groupings within the Council to hand back Europe to the nation states.
De Rossa (PSE ).
    Mr President, I really am very upset that in the Intergovernmental Conference, we have what I would regard as a lamentable failure of political leadership - a retreat into national chauvinism - at a time when we need a democratic, effective, power-sharing Europe. This is not what we are going to get out of the IGC if things continue as they are.
The Convention, of which I was a member, painstakingly constructed a blueprint for the kind of Europe I have just outlined. Neutralising that text in the areas of common foreign and security policy, defence cooperation and social policy, stripping out qualified majority voting in relation to these areas and, worst of all, stripping this Parliament of its budgetary prerogatives, is a recipe for defeat. It is a recipe for defeat for the outcome of the IGC, but it is also a recipe for the defeat of Europe. Such a defeat would be a victory for the eurosceptics. It would be a victory for the lamentable fearmongering that we constantly hear in this House from Mr Bonde, with his simplistic, opportunistic clichés.
I would appeal to the IGC to listen to this Parliament, to the Convention and the 200 parliamentarians - from all sides of the political spectrum, both in government and in opposition right across Europe who produced the Convention document.
Finally, President Prodi, I ask you to read today's , which carries an interview with you on the occasion of your visit to Ireland yesterday. The headline reads: ' "States that reject the Treaty may have to leave the EU" says Prodi'. That is an appalling message to give to the people of Ireland, who had to vote twice on the Nice Treaty. It is disrespectful of the rights of the citizens of Europe and for the dignity of the people of Europe. If it is not accurately reported, then you should immediately correct it. If it is accurately reported then you must make it clear that it is your personal view and not the view of the Commission.
In Ireland, such statements quite simply polarise the debate about whether we defend the nation or build Europe. So you must correct this if it is an incorrect reflection of your views in that interview. 
Antonione,
   – Mr President, ladies and gentlemen, I believe we have overrun on the time allowed and, therefore, in order not to eat any further into the time for the next debate, I will attempt to be extremely brief.
To start with, and in view of the fact that Mr Watson and others who wanted to discuss the Guantanamo issue are present, I should like to offer some comments for reflection.
As regards the Italian Presidency, and thus the European Union, I must say that we have made known to the US authorities at every possible opportunity – on the most recent occasion directly to Colin Powell during the meeting held in Brussels – the concerns of the European Union and of the general public regarding this matter which undoubtedly provides us with food for thought and is a cause of concern. I must also point out that, at the joint press conference, certain journalists put the question to Colin Powell too, who gave a public undertaking to provide a response and to examine the matter, that is to provide a response to the specific concerns raised. Therefore, I must reiterate that attention has been given to this matter and will certainly continue to be in the future.
On the other hand, as regards the discussion concerning the work of the Intergovernmental Conference, I take this opportunity, which will be the last opportunity for me as representative of the current Presidency of the European Union to address Parliament, to thank the House, to thank all of you for the contribution you have made to the work and the endeavours of the Italian Presidency, a fundamental contribution, containing, of course, a great deal of criticism and many suggestions, but also, I acknowledge, many appreciative comments, which always give much pleasure and help to lighten the sometimes heavy burdens of an overfull schedule we have to bear on some occasions.
As I have said, we do this in the knowledge that the outcome, if positive, will be so not only for the Italian Presidency but for all of us because the spirit which guides us is a spirit consistent with the European spirit. Should we fail, it will undoubtedly be a failure for all of us. I am still optimistic and must say that, in the light of the debate held in Naples and today’s meeting, I believe that we can look to 12 and 13 December with confidence based on the fact that there are signs that some sort of positive solution can be achieved.
As regards individual points, it is difficult for me to go into detail now, but I should like to take up some general points: first, I confirm that we will seek to maintain the greatest possible consistency with the Convention’s text, which, for us, is the reference point. As you know, all levels took part in the Convention: national parliamentarians, European parliamentarians, members of governments, representatives of civil society. The result is clearly a very important document that we are seeking to improve upon but which, as far as we are concerned, is the guiding point of reference for obtaining the final outcome. We will not accept watered-down compromises and we will avoid any horse-trading, as it has been called in the last hour.
It is normal for negotiations to take place. I should not like to undervalue such negotiations because the interests that each country represents are undoubtedly worthy and important interests. The negotiations may be intense, but I believe that the spirit which guides us and which I have seen in all those who have participated first in the work of the Convention and subsequently in the Intergovernmental Conference is indicative of the fact that everyone is hoping for a major result, a worthy outcome. Further, as regards protecting the prerogatives of the European Parliament and of national parliaments in general, I can confirm that the Italian Presidency considers this to be essential, and even more so when a Treaty having constitutional validity is being constructed because, if there is no connection with the primary democratic source which is bound to Parliament, we will undoubtedly end up doing something which is not positive.
I would like to thank you once again for your contribution, and I hope that Mr Berlusconi, who will be in the House with Mr Frattini to report on the work of the Intergovernmental Conference the week after the Conference ends, will be able to bring you good news and that you will be able, at that time, to voice your appreciation or criticism so that everyone can subsequently, as the wish has been expressed, come together to celebrate a result that we all hope will be extremely positive.
Prodi,
   . – My thanks to the Italian Presidency and to Mr Antonione, who, in my opinion, has explained in a perfectly balanced, commendable way the arguments and positions that we must uphold at the major meeting in Brussels. Suffice it to say that I wish him every success in defending these arguments and also call on him not to dismiss any of the issues which have been set to one side for the moment. I refer, for example, to the matter of the Legislative Council. This is one of the issues which has suddenly disappeared from sight despite the fact that so much energy and thought was given to it in the institutional framework. The problem is that when part of this framework is changed the whole framework is affected as a result.
I will reply briefly to Mr De Rossa. I am not in the habit of withdrawing my statements because I usually consider them at length before making them. To the journalist of the Irish Times, who made great play of taking these statements out of context, I said that if a country says ‘no, no, no, no’, and I said ‘no’ four times, it must be recognised that it is not right for that country to be able to paralyse the Union permanently. I think this is a position which is universally shared. I added that the instruments do not exist at the moment but the problem cannot be avoided in future. It is pointless for us to hide it. I said the instruments do not exist but the problem does. The problem, I added, is not a current problem, but there is no escaping this question.
I believe it is important for the Commission President to raise these matters – even if they are not a current problem – since they constitute a problem which concerns all of us. There is no point in continually running away from problems because, if we do so, we will never succeed in resolving them.
President. –
   To conclude the debate, I have received 6 motions for resolutions on preparations for the European Council and 7 motions for resolutions on the work of the Intergovernmental Conference in accordance with Rule 37(1) of the Rules of Procedure.
The vote will take place tomorrow.
Berthu (NI ),
    – Following the IGC meeting in Naples, it is clear that there is relentless pressure from the European institutions to impose the Convention’s draft Constitution and, thus, a central and supranational power to run the enlarged Europe. In our opinion, the correct solution would be the opposite of this: accepting the idea of a differentiated Europe, ensuring greater respect for national sovereignty and clearly organising the process of variable geometry.
In other words, the countries, such as Spain or Poland, that are being accused today of slowing the progress of the IGC with regard to the Convention by defending their national interests are in actual fact defending the general interest of Europe, which is to keep free nations and national democracies alive.
With regard to the two major topics of debate that will be discussed once again at the next Council in Brussels – the composition of the Commission and the qualified majority in the Council – we reiterate our unchanging proposal: the key aspect is to recognise a national right of popular opposition, which each population could exercise formally against a European decision. This innovation, which would give control back to the national democracies and help to compensate for the democratic deficit, would also put all of the discussions on the Commission and the Council into perspective. 
Figueiredo (GUE/NGL ),
   . The way in which the IGC is developing is increasingly worrying because there it shows a clear trend towards maintaining key aspects approved by the Convention but which we dispute. These include enshrining and deepening the economic and social model of neoliberal capitalism, extending the militarisation of the European Union and institutionally consecrating the Union as a political and military bloc and also promoting the federalist institutional approach.
Indicative of this trend is the compromise reached between France, Germany and the United Kingdom, under the auspices of the USA, on the militarisation of the European Union, cementing its institutional bases as a more or less autonomous pillar of NATO. Although some differences remain on institutional issues, compromises are being reached on the idea of a cabinet, with blackmail over Community funds increasingly forcing the small and medium-sized countries to accept a submissive position. This leaves the fight being maintained by Spain and Poland, who are seeking to have the same weighting in the decision-making process as the other ‘large countries’.
The ‘primacy’ of the so-called ‘European constitution’ and of Community law over the laws and Constitutions of each country is also reiterated, which is equally unacceptable.
It will fall to the peoples of the EU Member States and to the progressive forces within those States to combat this draft, which has been designed to benefit Europe’s economic and financial groups and the ambitions of the elites that, in each country, unashamedly serve these interests. 
President. –
   The next item is the debate on the Council and Commission statements on the Stability and Growth Pact. 
Tremonti,
   . – Mr President, ladies and gentlemen, thank you for inviting me to discuss with you at this sitting the economic Stability and Growth Pact.
Allow me to begin by going over the events which led up to the Eurogroup and Ecofin meeting of 24 and 25 November.
During the first half of 2003, at the Commission’s proposal, the Council sent two recommendations in respect of excessive deficits to Germany and France on 21 January and 3 June respectively, calling for the deficits to be reduced below the reference threshold of 3% by the end of 2004. It should be noted that the recommendations were adopted on the basis of assumed progressive economic growth during the year brought about by the elimination of negative factors due to the end of the war in Iraq.
In subsequent months, however, it became clear that the actual progress of the European economy was different, being more negative than expected. Economic growth, lower than that forecast by approximately one percentage point, led to a greater increase in public deficits than expected. The upshot of this was that it was impossible for Germany and France to reduce their deficits below 3% in 2004, as initially requested.
In the second half of 2003, between October and November, the Commission fully and formally acknowledged this new situation and accordingly proposed two new recommendations seeking to defer the deficit reduction to below 3% until 2005. Essentially, it is reasonable to assume that, had it been known at the start of 2003 that the progress of the Euro area economy would not be positive, the recommendations would have stipulated 2005 at the outset as the year during which the deficits had to be brought back into line.
On this basis, both Germany and France took measures to incorporate the substance of the recommendations. As regards Germany, the recommendations have been directly incorporated into the budgetary legislation: for 2004 provision has been made for a structural adjustment of 0.6% of GDP and for 2005 an adjustment of 0.5%, that is to say 1.1% of GDP in total, which is close to that initially requested by the Commission, without prejudice to the reduction below 3% in 2005. As regards France, the recommendations were incorporated first into the budgetary legislation and subsequently by means of other measures: for 2004 provision has been made for an adjustment of 0.8% of GDP and for 2005 an adjustment of 0.6%, that is to say 1.4% of GDP in total, which is close to that requested by the Commission, without prejudice to the reduction below 3% in 2005.
Furthermore, France and Germany have given undertakings to channel any effects of greater growth into deficit reduction, as requested by the Commission. In addition to this, it should be borne in mind that, in 2003, France and Germany set in motion an intense programme of welfare state reforms, which had a decisive, positive impact on the sustainability of public finances. Within the context of the political economy, this is an issue of more than minor importance surrounding the discussion of the Pact which has taken place over the course of this year.
In essence, first in the work carried out during October and November, subsequently within the Eurogroup and, lastly, within Ecofin, a broad consensus has been achieved on the substance of the recommendations formulated by the Commission and on the substance of the adjustments introduced by France and Germany.
Let us move on to procedural matters. The Commission proposed the two recommendations pursuant to Article 104(9) on the basis that Germany and France had persistently failed to put into practice the Council’s recommendations. Germany and France, whilst accepting the substance of the recommendations, for political reasons requested a different format, that is to say that a second series of recommendations be reformulated pursuant to Article 104(7). The Council’s Legal Service, when consulted on the matter, said that the Commission could also have taken – and I emphasise the word ‘also’ – this second route. The Commission excluded it. At this point a deadlock developed: there was a risk that the most important thing, namely the substance, would be lost for reasons of form. In order to overcome the deadlock without exacerbating matters, the Eurogroup, on the basis of a broad consensus, incorporated the substance of the recommendations into draft conclusions. The validity of this procedure was again confirmed by the Council’s Legal Service. Subsequently, when Ecofin started its work, the Commission explicitly registered its disagreement, calling for an express vote on the second series of recommendations for Germany and France. The necessary majority was not obtained. It should be noted that the vote of the Ecofin Council on the Commission’s recommendations is explicitly provided for by the rules currently in force and is therefore perfectly compatible with such rules. After the failure to approve the Commission’s recommendations, the Council voted on the conclusions drawn up earlier in the Eurogroup. The conclusions were approved and the discussion resulted in the unanimous adoption of the Council statement.
The contents of the statement may be summarised as follows: stability and growth are the fundamental objectives of European economic policy. The Pact constitutes an essential means of implementing that policy. The Pact has been called ‘stupid’. We have shown the opposite, we have shown that the Pact can be interpreted in a flexible, discerning manner. The Pact can be implemented by adapting budgetary discipline in an even more rational manner to positive or negative economic cycles and by encouraging structural reforms aimed at developing growth potential. In these terms, the letter and the spirit of the Pact are not dead; quite the opposite, we have worked in the past, are working now and will continue to work within the framework of the Pact and with the Commission’s support in a cooperative and consensual manner.
In conclusion, we have thus far talked a lot about procedure and said little about the economy. In the growth strategy, as has been said, it is necessary for the Pact to take into account economic cycles and structural reforms: this is necessary, but it is not sufficient. Six months ago, at the start of this six-month presidency, we presented an Action Plan for Growth to this House. The support given to this Plan by Parliament was decisive and now the Plan must be implemented. Other, new development initiatives must follow. The Commission, the governments and the markets have a role to play in the growth strategy, but the European Parliament must also play a role as a decisive driving force: indeed, economic policy is either a policy or it is not. 

Solbes Mira,
     Mr President, over the last few months we have seen various developments in the application of the Stability and Growth Pact which have created a serious institutional crisis. These events are clear proof that we need to strengthen economic governance in the Union.
The difficulties stem from the fact that Germany and France are experiencing serious tax problems which can be summarised as follows: excessive deficits, not only due to cyclical factors; the high deficits could prove harmful in the longer term because they threaten the sustainability of public financing by triggering increased debt levels; in addition, there are negative repercussions for potential growth due to the change in economic prospects.
Against this backdrop and with a view to both countries reducing their deficits, applying the rules laid down in the Treaty, the Council first sent a series of recommendations to Germany and France at the start of the year asking them to adopt measures designed to correct the excessive deficit levels by the end of 2004 at the latest.
In the second half of this year, however, it became clear that the measures adopted by the two countries would not be enough to correct the high deficits in 2004. The Commission therefore implemented the procedures laid down in the Treaty, submitting new recommendations which take the current situation into account.
As you know, a small number of Member States rejected the Commission’s proposals in the Council, and in an unprecedented move, a majority agreement was reached outside the scope of the Treaty.
This agreement, formulated as ‘Council conclusions’, has very wide-reaching implications which go far beyond the simple application of the Pact in France and Germany. The Commission deeply regrets that the Council has followed neither the spirit nor the letter of the Treaty and the Stability and Growth Pact, both of which were unanimously approved. We feel that a rules-based system is the only way to ensure that commitments are respected and to guarantee equal treatment for all Member States.
We have to understand that the Council’s decisions will make it harder to apply the Treaty rigorously. Proceedings for other countries will be affected. It will now be very difficult for the Council to adopt formal decisions in line with the procedure for excessive deficits, including the possibility of sending preventative warnings.
The value of the reports on the stability and convergence programmes could be diminished if the Council does not accept a system of rigorous multilateral monitoring.
It could become harder to apply the convergence criteria strictly in the new Member States, given that the euro-zone countries have been allowed to maintain deficits of over 3% for several years running and the procedures laid down in the Treaty and the Pact have not been applied.
The political agreement established in the Council entails using intergovernmental agreements to manage our currency and establishes a dangerous precedent for the future. The Court of Justice will probably have to clarify whether Member States’ governments have the power to create new procedures which effectively replace existing Community structures established in the Treaty for certain aspects of economic policy.
We must, however, bear in mind the fact that the Council declaration made at the end of the Ecofin Council shows that the Member States understand the need for a growth and stability agreement and also the importance of applying the standards in the same way across the board.
Whatever happens, the Commission will continue to apply the Treaty and the provisions of the Pact. This will allow all Member States to be treated equally and will guarantee healthy public finances in Europe. The Commission will ensure that the procedures are applied appropriately and fairly.
At the same time, we need to strengthen the economic governance of the Union with a view to ensuring that the single market and single currency work well together.
We think that the decisions taken by Ecofin prove that the real problem is the weakness of the current system of economic governance at European level. The Commission intends to tackle this problem and will draw up a programme for better economic governance in the Union after careful thought.
We will not, however, be starting our deliberations from zero. Instead, we will continue along the path taken by the Commission in the past. In line with the Communication of November 2002 on strengthening the coordination of budgetary policies, it seems we need to assess how to combine better discipline and flexibility to ensure greater compliance with the rules. We think that, among other things, greater emphasis should be placed on sustainability and on debt, so as to allow for the particularities of each individual country and to increase symmetry over the course of the whole cycle, in particular by being very strict in boom years.
In this way, the Commission will carry out the multilateral monitoring in a more effective way, using all available means to publicise its opinions on economic and budgetary policy.
We have to look at the budgetary discussions within the wider context of current low growth potential in the European economy. We therefore need to pay more attention to the quality of public finances without compromising long-term stability and sustainability.
This means placing the debate on budgetary policy higher on the agenda within the context of coordinating economic policies, with a more prominent role for the economic policy guidelines and the implementation of those guidelines to ensure that the Economic and Monetary Union works well and that the Lisbon objectives are achieved.
Parliament’s active involvement will be essential to this process.
Poettering (PPE-DE ).
   – Mr President, Mr President-in-Office of the Council, Commissioner Solbes, ladies and gentlemen, the decisions taken by the Ecofin Council on 25 November 2003 meant that it was not a good day for Europe. It was not a good day for European law. It was not a good day for the European Monetary Union. It was not a good day for relations between the smaller countries and the larger ones, and it was not a good day for the forthcoming enlargement. Those who, in the nineties, put the case for the Stability and Growth Pact now bear responsibility for the damage done to it, as do those who helped do the damage.
We, in our group, are fundamentally convinced that we cannot be opportunistic in the way we use European law. So long as there is European regulation, so long as there is European law, it must be adhered to rather than bent. We do not believe that the Stability and Growth Pact is dead; it would be wrong to say that it were, for that would enable all those who break it to evade responsibility, both now and in the future. The Stability and Growth Pact has, however, been seriously damaged. Speaking very generally, what we need in politics is trust; Europe’s currency, this young European currency, needs a very special kind of trust, and that trust has been damaged.
To you, Commissioner Solbes, I would like to express our group’s gratitude and appreciation for the way you fought right up to the end. You may well not have got a majority for what you wanted, but we are convinced that you are right. Losing can sometimes be an honourable thing, but you have won your case.
We also give our backing to the European Central Bank, and we wish its President, Mr Trichet, every success in continuing in future to be effective in contending for the stability of the European currency. We have now heard one finance minister in particular coming out with preposterous arguments to justify why this deficit is necessary right now in order for us to achieve growth. This argument is utterly false. Today’s debts are tomorrow’s taxes. What we owe today we will take away from people tomorrow.
Those who run up excessive debts today are behaving exactly like those who are today despoiling our environment, for today’s younger generation and generations yet to come will have to pay the price for it. We therefore demand sustainability not only of a moderate finance and budget policy, but also in environment policy, and these things all belong together. Debts lead to higher interest rates, and these lead to higher inflation. We therefore end up without the money for low-interest loans enabling business and small enterprises to invest, and then no jobs are created for lack of finance at reasonable rates. At the end of the day it will be those on low incomes, it will be what we always used to call the man in the street, who will end up picking up the bill, and so a policy of running up debt is, in essence, anti-social, because it affects most those who have least. Such a policy also damages relations between the countries within the European Union. We have seen how Portugal and Ireland were required to adopt stability measures – quite rightly, as it turned out – and if these countries do it and other countries do it, but some think that they are big enough not to have to take these steps, then the ones who adhere to the criteria end up paying the bill for those who do not. That is why the policy is wrong.
I would appreciate it if you were to listen; I ask you to hear me out. 

I would like you to listen to my speech, or prove that you understand my language. 

 I really do ask that of you. Today, in my own country – and I am not now speaking as a German, although I am from the largest country in the European Union – many people no longer have any confidence in the ability of the European Council of Ministers to defend the stability of Europe’s currency. We want Europe’s currency to have a future; if it ends up failing, that will mark the failure of the whole project of European integration.
I am a very frequent visitor to the candidate countries and often speak with our counterparts in their parliaments and governments. In Estonia, Latvia, Lithuania, Poland, in the Czech Republic, in Slovakia, in Hungary, in Slovenia – the situation is different in Malta and Cyprus – they are asking us how it can be demanded of them, the Central Europeans who want to join the European Union, that they should pursue a policy of moderation in their budgets and work hard at reform when certain countries in the European Union give them such a bad example. That is a bad, indeed a terrible sign, not only in terms of economic policy but also more generally speaking, and my advice is that we, together, get back on the path of virtue, for it is not acceptable for some larger countries to do things that are not permitted to the smaller ones. This also has to do with European psychology and with the dignity of states, and so there must be no repetition of what happened on 25 November. I hope this is the last time that our group will be obliged to criticise this sort of action in such forthright terms.
Barón Crespo (PSE ).
    Mr President, on behalf of the Group of the Party of European Socialists, I would like to express our deep concern about the current crisis relating to the Stability and Growth Pact.
Mr Tremonti, as a respected legal expert, you must acknowledge that the rules cannot be ignored in this way. When the question of form is raised, we are told we need to talk about policy. Fine, let us talk about policy, but first of all, if there is a structure, if there are rules, they have to be respected. One of the gravest problems right now is that Ecofin as a whole does not have a Community culture. It did not demonstrate any sense of Community when it acted as it did in the meeting on the Stability Pact, nor when it proposed the amendments which disturb the balance of powers between the Council and Parliament, despite having no authority to make such proposals. Consequently, I think that Ecofin’s first task should be to read the Treaties and respect them.
There are three fundamental issues at stake at the moment. Firstly, the present and the future of the Stability and Growth Pact.
The Stability and Growth Pact was created before monetary union took place. Now that we have monetary union, we ought to revise the Pact to include the new elements. What cannot be allowed, as we have been saying for months, is for the Pact to have been breached in 2000 and a bad precedent established. What we are discussing here, although this is not a conference of forensic experts, is whether or not the Stability Pact is dead. The problem is which countries will the Pact apply to now? What about Portugal? What is happening with Ireland? Are they any different? It is therefore very important to get the Stability and Growth Pact back on the rails and to enable the Commission to make constructive proposals. The real issue is not whether the Pact is dead or not, but the fact that it is not being respected or applied, which is a much more serious matter at this time.
The second question – and here I agree with Minister Tremonti who raised it with support from Parliament and with whom we successfully revived the Delors plan – is why the European economy is not a driving force even though it has the potential to be one. This is why we have been in favour of the action plan from the outset. However, in the current situation, that motor is not even starting, and that in turn is increasingly battering public confidence.
I think that, aside from the need to update the Stability and Growth Pact, we also need to think about a point raised by Commissioner Solbes: economic governance.
We are not calling for the Stability and Growth Pact to be included in the Constitution, but we must remember that in the Convention working group chaired by my colleague Mr Hänsch, all the economic representatives were playing very defensively – much like the Italian football team – and seeking to block any progress on economic governance in the Union. This is extremely serious.
Why is it so serious? Because at the moment we do not have any stronger instruments. Compare our situation with that of the United States: we have a central bank which only looks at inflation, and a Stability and Growth Pact which is not being respected and which does not take that element of economic governance into account. Minister Tremonti talked about factoring in economic cycles. In the United States, before making a proposal to Congress, the Federal Reserve is actually required to take into account inflation, employment and economic activity. These are factors which need to be taken seriously and now is the time to raise these issues. Now is also the time to ensure that the Stability and Growth Pact will have a future. For this reason, Mr President, I think we have a responsibility to respect the Treaties and to make sure that Ecofin follows the same rules as everyone else.
Watson (ELDR ).
    Mr President, the obituaries for the Stability Pact have been written before and then held back as the patient lurched on, if only on life support. What we witnessed last week was finance ministers giving the last rites to rules which were intended to guarantee the long-term stability of our currency and economy.
Of course, the guilty parties deny all responsibility, or claim 'the Pact is dead, long live the Pact'. But the truth is that the eurozone's two leading economies have sent a message to all the small countries in the eurozone, and to the acceding countries, which reads 'do as we say, not as we do'. And I should like to point out to Mr Tremonti that the Italian presidency has failed in its duty by acting as an associate in the endeavours of the countries concerned to flout the Pact, rather than ensuring that the rules were respected.
We will pay a heavy price for the cavalier disregard of finance ministers for the rules of the Stability Pact. We will pay a price in terms of damage to the trust between Member States, in terms of lost credibility in the eyes of our citizens, and, in the long run, in terms of higher interest rates, lower growth and currency instability.
Unless our leaders agree on a revised and workable framework for fiscal stability, and inscribe this in our basic law, then we are left with nothing but a broken gentlemen's agreement. Countries which gave up their currencies on the understanding that they would not be expected to pay for the debts of their neighbours have a right to demand more than that.
That is why my Group welcomes the stand taken by Commissioner Solbes and the Commission's intentions to make proposals to reshape the rules. If you kill off the Pact in its existing form, you have a responsibility to commit yourself to an agreed interpretation of a set of rules to prevent a borrowing free-for-all.
Liberal Democrats believe that a well-run economy and a stable currency require taxes and spending to be in balance over the course of the business cycle. The problem is not the 3% deficit limit; the problem is the failure of countries to consolidate their budgets in terms of growth.
My surprise at hearing the leader of the Socialist Group in this House agree with us is matched only by my delight at his conversion. The revised rules should provide sticks and carrots to ensure that we take advantage of periods of economic growth to run budgets in balance or in surplus and reduce national debt. Countries which operate a responsible policy in the good times could benefit from more flexibility in bad times to let borrowing take the strain.
These rules should provide for early action against countries which do not control their deficits in periods of growth, to force them to take corrective measures. A new target for the underlying budget balance could be added, and government expenditure on investment should also be taken into account. The European Commission should have greater authority to police these new rules, since national governments have shown that they cannot be trusted to do so.
This has been a bad week for the rule of law in the European Union. My Group hopes that at the summit in Brussels our leaders will recognise their responsibility to salvage, from the wreckage of the Stability Pact, some credibility for Europe's fiscal policy .
Herzog (GUE/NGL ).
   – Mr President, we very much welcome the political debate that is beginning on the Stability Pact. Mr Prodi gave the word and it was re-launched by the Ecofin Council. The Commission is very wrong to put adherence to the rules side by side with political judgment. The law is flexible when the realities so require and it is then the duty of politicians to interpret it. This Pact, which is currently being tested by the realities, signed in 1997, at which time, the Commission, the Central Bank and many states heralded an era of sustainable growth. Having first denied that there was a recession, they then declared that it would be brief and that the economy would soon recover. Those who were so wrong should not dole out lessons. Today, the improvement in the situation is fragile. It must not be compromised, particularly as we are at risk from the fall in the dollar and serious American imbalances. Some governments make a show of virtue in contrast to the large states that are deemed to be guilty. However, the behaviour of these critics often appears to be opportunistic. In fact, on many occasions their inflation rates are above the average – which reduces their debts – they play at fiscal dumping in order to attract capital and they forget about the Structural Funds, of which some of them are major beneficiaries. There are therefore several good reasons for flexibility in the Pact. It does not take account of the cycle, it maintains divisions, it seeks to impose penalties without offering encouragement, and it is incapable of responding to the nagging problem of the very poor potential for growth in Europe.
As a result, it would not be an exaggeration if the Commission were still to be portrayed as the guardian of procedures. We need a political actor in Brussels. There is no such thing as a European economic policy and we want to create one. This is a matter of urgency. The Pact is not dead, as proved by the commitments made by France and Germany for 2005. However, if the economic recovery were not confirmed or were poor, it would be extremely difficult to fulfil these commitments. I say again: the reform is essential. To this end, the method is as important as the substance. All of the quarrels among institutions and among states highlight a blatant lack of democratic capacity and legitimacy. The assessment by peers of the discipline and quality of the national budgetary policy is undoubtedly necessary, but it is not enough, as was mentioned previously. Solidarity and greater participation are required to build an economic policy. In this respect, I believe that the interactive dialogue between the national parliaments and the European Parliament, as well as the consultation of civil societies, are vital elements.
As far as content is concerned, we need both rules and acts. We do not reject the principle of a pact for rules that seek to combine stability and growth. However, we have strict ideas as regards the substance. We need rules that encourage timely action and improve the quality of expenditure and revenue. How can we claim to legitimise a budget discipline when the Union shamelessly cultivates fiscal competitiveness? France and Germany are right to call for the tax harmonisation that a number of other states refuse to allow them. These rules must guarantee too the capacity to finance projects considered to be in the general interest.
We also need acts. There will be no successful reform of the Pact if we do not build, as a complement, a European budgetary policy, with a genuine budget to help finance the objectives of sustainable development and cohesion agreed at the Lisbon and Gothenburg summits. Is it not unfair to prevent at least the countries in the euro zone from having a joint capacity for budgetary action when they share a single monetary policy, but are deprived of a second major economic policy lever? Unfortunately, there is the risk that the IGC may not open these doors and that the reform of the Pact may be too limited. You can therefore expect an increase in tensions, to which our debates today are only a prelude.
Lipietz (Verts/ALE ).
   – Mr President, Commissioner, Mr President-in-Office of the Council, the Stability Pact is dead. It could be regretted that it was destroyed by the European Council, in relation to the specific difficulties of two large countries, thus violating the credibility of the institutions based on a system of rules accepted by all. However, as far as its form is concerned, this Pact has always been the subject of an intergovernmental agreement rather than control by our Parliament, the only representative of the sovereignty of the people of Europe. What ‘intergovernmentality’ has done, Mr Karas, is ruin it.
Federalists and Greens will not lament the death of this Pact – a Pact that President Prodi himself yesterday described as stupid – particularly as since the Amsterdam summit we had criticised its content.
It was indeed stupid, doubly so in fact. In the current situation, it aggravates the recessions by penalising the countries that are seeking to support the actual demand on the Union’s internal market, especially in the large countries with a particular responsibility from this point of view. Instead, it would be better to penalise the countries that have deficits in periods of growth.
From a structural point of view, a genuine Stability Pact should shelter future investments and in particular the enormous investments required to respect the Kyoto criteria.
There is no time left to dither now. A new, intelligent pact must be adopted. Only a pact of this nature will merit inclusion in the third part of the Constitution. Indeed, only an intelligent Constitution will merit the approval and respect of the citizens of Europe. The pact must be contra-cyclic and, at the same time, must not hinder the countries in difficulty. On the contrary, it must penalise the countries that abuse their facilities and in this way, through a sort of climatic golden rule, shelter future investments from the current situation. 
Bigliardo (UEN ).
    Mr President, ladies and gentlemen, I listened carefully to the speeches by Mr Poettering and Mr Baron Crespo, two Members that I regard highly, and noticed how we sometimes discuss this issue too much from the perspective of our own countries and too much from the perspective of our own political parties. It is no coincidence that the Commission position is in line with that of the Group of the European People’s Party (Christian Democrats) and European Democrats.
On the contrary, I believe that we should make the effort to be imaginative as regards this sensitive and complex issue.
Europe has its rules – and the Pact is a rule – but, at the moment, we do not need rules any more. I believe that Europe needs to be imaginative, courageous and dynamic and I do not feel that these issues can be tackled without understanding that, in this House, the Italian Presidency and Mr Tremonti are not to be supported for what they have said but rather a Presidency is to be supported for what it does, for taking note of serious issues affecting major countries of this Community.
Furthermore, for the third year running, we – and I am a rapporteur on European public finances – have had to note that the European economy is stagnating. I also seem to understand from other Members’ speeches that European politics has some problems, and we were talking about this in committee yesterday with Commissioner Solbes as well. Therefore, why not make an effort to move from stability to growth, at last? I believe that this is to be done by people who, rather than being the guardians of rules, want to be politicians, which is what Plato once meant when he talked about the politician and his supremacy. From this point of view, it seems to me that we are doing exactly what is needed. 
Blokland (EDD ).
   – Mr President, why should we conclude a new treaty in Europe if we refuse to adhere to existing agreements? And if we refuse to adhere to the Stability Pact in times when it does not suit us, why do we not simply admit to this? And why do we not start working on agreements to which we want to adhere?
In my country at least, many people are asking these questions. Their confidence has been dealt a serious blow. Why are all countries equal, but certain large countries more equal than others? The justifiably devastating comments in the media speak volumes. All of this undermines confidence in politics, and that reflects badly on us. Why, Mr Tremonti, have you not elected to play your role as independent chairman on the side of the Stability and Growth Pact, as proposed by the Commission? Do you realise what the role of chairman entails?
I am also reminded of this by certain clauses of the report of the Euro Group and Ecofin Council's meeting. In that report, Commissioner Solbes indicates that the Commission has given France and Germany recommendations with comparable content, which means that these countries are on an equal footing. He notes that we have reached a critical moment in time. The wrong decisions can seriously damage the procedure. Decisions can create an important precedent and affect interest rates. This issue concerns the equal treatment of large and small Member States. Commissioner Solbes goes on to say that if the Commission's recommendations are not followed, there is a considerable risk of France and Germany remaining above the 3% mark even in 2005. The Commission has already been extremely flexible. The recommendations currently before us really are as far as we are prepared to go. Commissioner Solbes also indicates that, pursuant to Article 104(7) of the EC Treaty, returning to an excessive deficit is not an option, because sanctions would never follow otherwise. Moreover, the Treaty and the Pact do not distinguish between cooperative and uncooperative countries. As the Guardian of the Treaty, the Commission has no choice but to follow the route it has now proposed. 
Berthu (NI ).
   – Mr President, the Ecofin Council of 25 November did not violate the Treaty when it suspended the sanction procedure for excessive deficits against France and Germany. Rather, it correctly interpreted Article 104, which allows the Council a political margin for manoeuvre throughout the procedure by giving it the choice of whether or not to proceed.
It was the regulations of the Stability Pact that in 1997 hardened these rules by doing away with the Council’s margin for manoeuvre. However, in doing so, they did not comply with the Treaty. I would be curious to know what the Court of Justice would think about it if it looked into the matter.
As far as France is concerned, it violated its Constitution in 1997 when, in spite of our warnings, it adopted a stupid Stability Pact that is now coming back to haunt it and that it is forced to violate in turn, creating a conflict with its partners.
That is a good example of a bad manoeuvre. I hope that we are not going to make another blunder by approving the draft European Constitution, whose philosophy is exactly that of the Stability Pact: centralisation and rigidity. 
Salafranca Sánchez-Neyra (PPE-DE ).
    Mr President, since this Parliament is usually so critical of the Commission, I would like firstly to congratulate it and the Commissioner responsible for economic and monetary affairs, Mr Solbes, for the integrity and the dignity with which they have defended the powers conferred on them by the Treaty, as guardian of the Treaties.
I do not wish to blame the Italian Presidency, but, Mr Tremonti, the decision by Ecofin is a real botch job. Because the European Union, Mr President, is a community of values and a community of law, and legal rules – the rules of the Stability and Growth Pact are legal rules – only mean something if there is an obligation to comply with them, and that compliance must be demanded equally from the small and the large countries.
Europe cannot be built upon the law of the largest. We cannot, Mr President, apply the rules of the Stability and Growth Pact to Portugal to the letter and then exonerate other larger countries.
It is one thing to be flexible and apply the rules in accordance with the circumstances, but it is another matter altogether to try to change the rules when the game has already begun, when the result is not favourable or when it does not suit us; and that attitude, Mr President, will have consequences, because a market which is not able to respect its own rules creates insecurity and a lack of confidence in the credibility of the single currency and, as the Chairman of our political group, Mr Poettering, said, today's deficit is tomorrow's debt and the taxes of the day after tomorrow. And what is worse, this decision comes at a very bad time, precisely on the eve of the work of the Intergovernmental Conference which is going to discuss the European Constitution. And I wonder with what moral authority certain Member States criticise others for exercising their legitimate rights within the context of qualified majority voting, when they are blatantly defending their national interests in violation of the spirit and the letter of the Treaties, as the Commission has acknowledged.
I would therefore congratulate the Commission, Mr President, on the integrity it has demonstrated in the defence of its role as guardian of the Treaties and I would ask whether, for the sake of coherence, the Commission intends to bring a case before the Court of Justice against the Council of Ministers for violation of the Treaties.
Goebbels (PSE ).
   – Mr President, the Ecofin Council’s failure to take a decision on the German and French deficits leaves a bitter taste in the mouth. It is never wise to by-pass freely accepted rules. It is a dreadful move to give the public the impression that in the Union some states are more equal than others, that the Federal Republic of Germany and France have the right to special treatment because they are Europe’s driving force.
As far as Socialists are concerned, stability is a public good that must be defended. However, there will be no stability without growth. For years, the Socialist Group has called for an intelligent revision of the Pact, which places all its emphasis on stability and none on growth. The Pact is too rigid. It is the prisoner of criteria which, although freely accepted, do not take account of the realities of the economic cycles. I agree with Mr Tremonti on this point.
Firstly, there is the ‘one size fits all’ approach. Some states operate with a public debt of around 60% while others have debt of over 100% of their gross domestic product. The Pact does not take these substantial differences into account. Then there are sanctions that are impossible to impose. Asking a state in an economic recession to make deposits or to pay large fines is like trying to cure someone of anaemia by bleeding them.
Faced with the German and French deficits, the Commission wanted to ensure that the rules were respected. It could do nothing else. Yet now that the rules have been smashed, the Commission cannot continue to brandish the Tables of the Law. When the real country moves ahead of the legal country, the procedures must be adapted. In any event, the economic policy cannot be limited to mere observation of the procedures. This is where I also agree with Mr Tremonti. For the same reasons, my group is opposed to an appeal before the European Court of Justice. We are dealing here with a political problem that requires a political solution. We do not need to resort to the government of judges.
As some of the Pact’s key provisions were clearly made obsolete by the political precedent imposed by the Ecofin Council, the Pact must be improved. It is unthinkable that if Portugal, Greece or Luxembourg had excessive budget deficits tomorrow, the Commission could put forward proposals going beyond those that were accepted by the Ecofin Council for Germany and France. The absolute rule of equal treatment of the Member States quite simply prohibits this.
President Prodi has just highlighted the fact that following a serious crisis innovative solutions are needed. I therefore call on Commissioner Solbes who, after having preached virtue, must now preach intelligence. After having valiantly defended the principles, now the Commission alone has the freedom to propose a Stability and Growth Pact that is both rigorous and more flexible. It must be more rigorous in requiring states to maintain a balanced budget when growth exceeds 3% for example. It must be more rigorous in requiring states to reduce their debt when growth exceeds 3%. It must be more flexible, however, in times when the situation is not as positive, in particular by enabling states to deduct investment expenditure from the calculation of the budget deficit in accordance with the British golden rule. According to the Commission, 1% of investment expenditure generates additional growth of 0.6% of GDP. For example, the United States currently invests 3% of its GDP while Europe only invests a meagre 1%.
If we look at economic growth on both sides of the Atlantic, we see a dogmatic Europe and a pragmatic America. I am not calling here for American-style deficits …
Huhne (ELDR ).
    Mr President, I should like to make some constructive points about how to get out of the present mess. The first is that there must be a sense of shared responsibility. Remember that the problem for both Germany and France began because of the budget relaxations, the tax cuts and public spending increases introduced between 1999 and 2002. In each country that budget easing amounted to more than 1.5% of GDP. If it had not happened, both countries would today be within the 3% limit. Yet no institution, neither the Commission nor the European Central Bank, nor any Member of this House, warned those governments against such easing. The system failed and we are all duty-bound to put it right.
This is important, too, because the Stability and Growth Pact is not a judicial procedure, but a political procedure that relies on the support of the finance ministers for recommendations and, ultimately, sanctions. Ministers and the Commission must have a common understanding of how the Pact should be applied. There should be a clear code of conduct on the interpretation of the Pact so that it can be credible for the future. There must be a reinforcement of discipline in the good years and, in the short term, there must be an agreement on the size and speed of the adjustments necessary for the countries in breach to move back to balance.
The Pact itself recognises that it will not always be possible to remedy excessive deficits immediately if there are special circumstances. Those special circumstances should now be defined to include the risk of a further prolongation of the recession in Germany and in France which, together, represent half of the euro area. It is not in anyone's interest to prolong the recession, nor is it in anyone's interest to undermine the credibility of the Pact. The law must be respected. With goodwill and imagination this circle can be squared. We urge the Commission and the finance ministers to do so.
Figueiredo (GUE/NGL ).
    Mr President, first of all, I welcome the fact that we are holding this debate, which I requested in September, before the recent decision of the European Union’s Finance Ministers not to apply penalties to France and Germany for having breached the provisions of the Stability Pact. In the end, they actually proved that we were right to condemn the irrationality of the criteria for nominal convergence, which have led to the well-known and disastrous consequences of economic recession, rising unemployment and poverty levels that Portugal is currently experiencing.
We have already said here on more than one occasion that this Stability Pact is useless. In the debate of October last year we confirmed our agreement with President Romano Prodi and Commissioner Lamy’s observations to the effect that this pact is stupid, like all rigid decisions, and that it is a crude instrument for economic governance, which must be replaced by something more intelligent, since the 3% rule is positively medieval. Unfortunately, these gentlemen were not consistent with their observations and failed to present a proposal for the pact’s revision. They were afraid of launching the excessive deficit procedure against France and Germany, as they had done against Portugal. And then the inevitable happened: Germany and France did not accept the Commission’s proposal. Of course, the Commission said it would continue to apply the Treaty and that it reserves the right to look at the consequences of the Council conclusions and to decide on any action it might take. Does anyone believe, however, that the Commission will do anything to France and Germany if the governments of those countries do not agree? As we all know, it will not. The question that remains is: why keep a Pact that is meaningless?
We know that the text approved by Ecofin only imposes rules previously announced by the German and French governments, thereby accepting that these countries have failed to meet the Maastricht criteria for three consecutive years. There is furthermore no doubt that if they need more time, they could stretch this to four or five years … It is now clear who controls the Stability Pact, who wields power and strength in the European Union even before the new Constitutional Treaty has entered into force. It should be noted that it was Germany that demanded the Stability Pact, with these unacceptable criteria for nominal convergence. As we now see, however, it did so in order to enforce compliance on others. Well might Commissioner Solbes Mira state that the Council’s decision respects neither the rules nor the spirit of the Stability Pact. Will he now resign, his authority having been undermined in this way? France was, of course, more realistic, stating that the Council has another way of implementing the Stability Pact, thereby justifying its non-compliance, whilst advocating changes through what it called the ‘enriching’ of the Stability Pact. This is an approach that others have also advocated here. Some, indeed, have said that the Pact is not dead; it is merely frozen until the rich and powerful countries decide it can be defrosted because their problems have been solved. We know that the Governing Council of the European Central Bank also supported adopting the Commission’s proposals. Will the Governing Council also resign for allowing itself to be ignored by the Council?
We, who have always been opposed to this Stability Pact have long called for it to be suspended, in order to revise its stupid criteria for nominal convergence, which fail to take account of the real situation in each country and of their different levels of socio-economic development and which confuse productive expenditure with non-productive expenditure when calculating the budget deficit. One thing is certain, however: the hypocrisy of those people – and they exist in Portugal too – who use the argument of the Stability Pact to justify anti-social policies, now becomes even more striking.
Let us bury this Pact! Let us seek alternative policies that give priority to employment, to high-quality public services, to sustainable development and to the well-being of the people! 
Pannella (NI ).
    Mr President, President-in-Office of the Council, Commissioner Solbes, at the point that we have reached and having 114 seconds available, it would be stupid and distasteful to pretend to analyse, in this ‘voting machine’, the Tremonti report and what has happened. The only thing that we can say to you is that, as far as we are concerned, Mr Tremonti, the situation in Parliament is clear. The communist Members and the left-wing statist social democrat Members back you, they hold you in esteem and they share your way of thinking, and against you are those who represent the stronghold of Mr Berlusconi and all his allies in Europe: the Group of the European People’s Party (Christian Democrats) and European Democrats and their satellites.
Let us just say at this juncture that you have taught us a lesson in the Italian spirit that you represent. Breaking the rules is the art of this Italian ruling class; breaking them according to the rule of emergencies. Pacts can be respected when those who do not respect them can decide that there are cases of when they do not have to be respected. We know that you are also a legendary Member of Parliament, even if you were such as a journalist. At the beginning of the nineties you wrote wonderful things about debt forgiveness, about deficit spending. For me – a liberal – a little less so since you even brought ethics into it; you said that debt forgiveness and the way the old ruling classes behaved were not very ethical.
I congratulate you because I believe that you are now a pass-master at playing the old ruling class with such a great technical ability, if I may say so, to talk utter rubbish. 
Karas (PPE-DE ).
   – Mr President, Commissioner, ladies and gentlemen, the President-in-Office of the Council has twice had to preside over an Ecofin Council, which twice in the space of four weeks committed a serious foul against the European Community project; the first instance was your letter to Mr Berlusconi in the aftermath of an Ecofin Council meeting, in which you heaped criticism upon the Convention’s proposals to the Intergovernmental Conference, and the second came last week. That cannot be allowed to go uncontradicted, and we cannot simply move on to the next item of business. Whether one looks at it from the point of view of democratic politics, of economic policy, monetary policy, in legal terms or from the European angle, the way you have gone about things is harmful, unacceptable and deserving of condemnation.
Today, Commissioner Solbes told us that the Council has not kept to the spirit of the Treaty. On Monday, Mr Trichet, the President of the ECB, told the Committee on Economic and Monetary Affairs that the European Central Bank attaches great importance to the Stability and Growth Pact remaining unchanged whatever happens, for it has proved its worth in terms of economic and monetary policy. He called on the Council, the Commission, Parliament and the Member States to take their own responsibilities seriously. It is in particular Germany and France whom I urge to refrain from blaming the EU in general, and the Stability Pact in particular, for their domestic difficulties. Apportioning blame makes no proper contribution to achieving jointly-agreed objectives. The European Union is made up of all of us. Germany and France overstepped the mark in the way they interpreted the rules, and what was a Community matter they made merely intergovernmental. By a political decision, they set the rules aside, but the Community is not an alternative to politics. The finance ministers have impaired its credibility, shattered confidence and given rise to other problems. That is not acceptable.
Trentin (PSE ).
    Mr President, President-in-Office of the Council, ladies and gentlemen, in Ecofin’s deliberations, the intergovernmental method prevailed over the Community method with a purely laxist decision being taken to suspend the procedure, without, that is, placing precise conditions on the extension granted to the Federal Republic of Germany and France to achieve a balanced budget. This is very serious.
This is a weighty precedent, which could benefit other countries in future and which, as Mr Prodi said, is detrimental to effective coordination, to the governance of economic and social policies on the basis of transparent, binding objectives, not just in terms of stability but also, and especially at this time, in terms of growth.
This incident, however, only serves to highlight the shortcomings and contradictions that remain in the management of the Stability and Growth Pact, with the European Parliament still being excluded from any codecision procedure. This incident highlights the shortcomings in the actual wording of the Stability Pact, which is much more restrictive and mechanical than the text of the Treaty, not least as regards problems of flexibility. This means that the Union institutions, starting with the Commission, have to take two completely incompatible approaches in managing the two missions that the Union has given itself in the field of economic, social and environmental policy. I am referring to the Lisbon and Gothenburg strategies, the latter still without binding objectives, and to the Stability and Growth Pact.
It is these serious shortcomings, which are also present in the Commission initiative, which explain why management which is flexible but not appropriate in terms of compliance with the objectives of the Stability and Growth Pact has been adopted, without the minimal but specific conditions being established that justify the length of time set for adjusting budgets. I am referring to the Lisbon strategy, to the binding objectives of the Lisbon strategy that need to be among the conditions to be fulfilled in the implementation of the Stability Pact. 

Gasòliba i Böhm (ELDR ).
    Madam President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, of the various aspects dealt with in this debate, I would like to comment on the following: firstly, there has unquestionably been a serious crisis in the application of the bases of monetary union and the euro, which damage their credibility.
Secondly, I would take up the famous phrase that the European Union has been built on the basis of crisis and we should learn the lesson from this crisis, particularly in relation to an aspect which has already been mentioned by Commissioner Solbes, and which I fully support, which consists of having a genuine direction for economic policy, something that he has called European governance.
We have an asymmetric situation in a monetary policy which is much better defined than the economic policy. I hope that this crisis will serve to provide us with this economic governance which this Parliament has always called for, and most recently, if you will allow me to be immodest, in my report on the international role of the euro.
Markov (GUE/NGL ).
   – Madam President, Commissioner, Mr President-in-Office of the Council, ladies and gentlemen, we had a debate in Strasbourg on the Stability and Growth Pact as long ago as 21 October 2002. Even then, I made it plain that there was no argument against limiting states’ new public indebtedness, provided that this was coupled with the requirement that growth be generated and demand stimulated. Growth and an increase in demand will not, however, be achieved by cutting wages or by longer working hours, but by taking the tax burden off the low and middle income groups, through public investment, capital-widening investment by businesses and by increasing private consumption.
The decision by the eurozone finance ministers to put the Excessive Deficit Procedure against Germany and France on ice and grant these states a reprieve, allowing them until 2005 to achieve the 3% limit for new annual indebtedness is a lazy compromise, one that does not alter the false basic premise, according to which, in economically tough times, strict adherence to the 3% limit has an expansionary rather than a contractionary effect. In order to reinvigorate investment across the board, any reform of the Stability Pact must go hand in hand with more European economic, social, employment, fiscal and environmental policies. It must be possible to use loans to fund public investment, even if this does, for a period, take the deficit over the 3% limit.
Such would be, in my judgment, an honest and proper course of action, without which we would lose all credibility and the same problem would rear its head in more countries every year.
You may think otherwise, but my view is that we should correct mistakes rather than try to cover them up with new ones. 
Andria (PPE-DE ).
    Madam President, Commissioner Solbes, ladies and gentlemen, I have noted how, regarding the Stability and Growth Pact, exaggerated statements were made and hasty conclusions were drawn in some cases. I am also referring to Mr Poettering: I do not think that Mr Tremonti invited the Member States to run up debts, but rather to look more at the substance than the procedures of what has happened. Nor do I agree with Mr Watson’s speech when he talks of a watered-down Pact. The Italian Presidency has taken it out of the water in which it was drowning. Even less do I feel that I can agree with those who claim that the Pact is dead.
If, instead, we look at the facts, we have to agree that, on the contrary, the Pact is still alive and that the Italian Presidency has succeeded in saving it, even in a situation where there were very real difficulties. The Presidency has succeeded in obtaining the unanimous adoption, including, therefore, endorsement even from the most rigorous States, of conclusions which contain important commitments on respecting the Pact, budgetary discipline and implementing structural reforms. This has not been discussed in the Member States, still less in the European Parliament.
As regards the Commission recommendation, the issue is a simple one: the Commission presented recommendations which, while fully respecting the Treaty, were put to the vote in the Council. The Council rejected them since the majority required by the same Treaty was not reached. What should the Italian Presidency have done? Taken note of the rejection of the Commission recommendations without adopting any other act? Left France and Germany free to act? Rendered the whole process to date invalid? I believe that, in this case, there really should have been talk of a dead Pact and of the Council’s irresponsible behaviour.
Instead, the Italian Presidency chose the only way to save the Pact. Faced with the impossibility of adopting the Commission recommendations, it proposed to adopt the Conclusions in which France and Germany committed to updating the measures for reducing the deficit and to temporarily suspend the procedure. 
Randzio-Plath (PSE ).
   – Madam President, today is not a day for delivering eulogies, nor is it a day when we should be saying that the law – European law – has been broken. The procedures are clearly described in the Maastricht Treaty, and they are echoed in the Stability Pact. Each has its part to play – the Commission just as much as the Council of Finance Ministers. The fact that they do not absolutely have to agree in their assessments has something to do with the way in which everyone stresses the need for the Pact to be adhered to and our need for rules, without it being clear how effective a pact of this kind can be when it deals only with sanctions for when things are going badly and makes no provision for the Commission to have a role when things are going well. The Pact is defective not only in that the Commission has no role when things are going well, but also in that it highlights only the difficulties that the Member States face in times of recession. Are not, though, the effects of a three-year period of stagnation, which has shaken and battered Europe’s major national economies in particular, ultimately every bit as bad as a recession?
Today, I believe, we also have to emphasise that the Pact has, indeed, demonstrated its effectiveness and so we can set about reforming it without qualms. Any reform must involve the Commission abolishing its rigid procedures for cyclical adjustment and allowing itself to be judged using the methods chosen by the International Monetary Fund. If it did, perhaps our debates would be quite different, as we also have to bear in mind that the figures at issue between the Council of Finance Ministers and the Commission in the cases of France and Germany, even with the error rates in our statistics, relate only to a gap of 0.2%.
What we really need now, I believe, is an in-depth debate on the reform of the Stability Pact; above all else, I believe that we have to combine a genuine definition not only of monetary stability but also of financial soundness, with growth and with social stability. That, rather than austerity alone, is the challenge that Europe faces.
Nordmann (ELDR ).
   – Madam President, on 25 November the procedures were adhered to in a formal sense, but everyone is well aware that there is a deterioration in the Community spirit. There are passages in force that are admissions of weakness and the oxygen of confidence has become scarce in the European Union since that day.
We do not have sanctions, but the obligation to reduce deficits remains. Indeed, one of the Council’s conclusions highlights this. We must therefore save what may be left of the Pact today, in other words its spirit, the quest for stability and growth, using the one to achieve the other.
What has happened also raises the question of the Franco-German relationship. It is not a question of its necessity as regards moving Europe forward but its credibility in ensuring that the steps forward are accepted. The Franco-German relationship is a driving force, but this driving force must not turn into a detonator that would cause Europe to explode.
Sjöstedt (GUE/NGL ).
    Madam President, the crisis in which the Stability and Growth Pact finds itself shows very clearly the instability of the EU’s currency union. We can see how an economic crisis is very quickly also transformed into a political crisis, given the way in which the currency union is at present constructed. We can see how, in practice, there are quite different rules for large countries such as Germany and France and for small countries such as Portugal and Ireland.
This crisis is not only due to the requirements of the Stability and Growth Pact not being fulfilled. At root, there are significantly deeper problems. Germany’s and France’s problems are basically about low growth and unduly low employment. The problem is that, in practice, the EU’s currency union and Stability and Growth Pact have nothing to offer in terms of getting growth under way and creating higher employment. In that way, the crisis is in danger of deepening.
We also see clearly that different countries in the eurozone are now most likely doing well for having different policies. Countries with quite different rates of growth and inflation need different interest and exchange rates. It is no coincidence that those Western European countries that are not part of the currency union enjoy, on average, very much stronger economic development than the eurozone countries. The euro is part of the problem. It must be realised that the Stability and Growth Pact no longer works, but must be altered. It must be able to allow a more expansive economic policy in times of crisis so that it is possible to escape from the economic crisis.
A very large majority of Swedes voted against the common currency in a referendum in September. The crisis in the Stability and Growth Pact is further proof that it was a clever decision to stay out of the EU’s currency union. It is now time to go further and, in the ongoing Intergovernmental Conference, to confirm the Swedish ‘no’ in a legally binding exemption that is at least as comprehensive as the British one. 
Langen (PPE-DE ).
   – Madam President, I believe that, if you follow the debates in this House, the very substantial differences of opinion that exist here become apparent, and seldom have I heard anything more nonsensical than the statement that the Chairman of the Committee on Economic and Monetary Affairs has just given us, in which she accused the Commission of using rigid procedures as a method of cyclical adjustment. Mrs Randzio-Plath, I can only shake my head at that. If you are capable of accusing the Commission of such a thing, then which Europe, which euro zone, are you living in? We can do no other than back Commissioner Solbes to the hilt and urge him to take the Heads of State or Government to court, for such a breach of the European Stability and Growth Pact cannot be accepted without protest.
When this House is told that the Italian Presidency of the Council has managed to produce some tremendous conclusions, I ask myself whether this piece of paper is worth more than an international treaty such as the Stability and Growth Pact. Why should Germany and France see themselves as bound by this piece of paper when they could not keep to the rules? The leading German daily paper, the , spoke of Germany and France as a ‘’, as digging the European Union’s grave rather than acting as examples to its other Member States of how to do things. The Pact is flexible enough as it is. It is not the case that there has to be a 3% deficit; instead, the term used in the Pact is ‘budgetary compensation’. The difference between 0% and 3% gives the Member States EUR 250 billion in reserve to deal with difficulties caused by the economic cycle, the management of international crises and natural disasters, so the problem is in fact that Germany and France already had no room for manoeuvre left when things started to get difficult. It follows, Commissioner, that it is the reforms that you have to get to grips with rather than growth alone. That is why we are firmly opposed to the Stability and Growth Pact being altered. It has to be adhered to, and the Commission must be given more powers in its dealings with the Council.
Berès (PSE ).
   – Madam President, I am surprised that in this debate we are talking only about the Pact. The problem is not so much the Pact. The problem is that we are in a monetary union and we do not have an economic union. Some people have called the Pact stupid. I believe nonetheless that the Commission has demonstrated a certain degree of intelligence in its ability to interpret it.
I am surprised, however, that some people are talking about referring the matter to the Court of Justice and that no one has ever considered referring to the Court of Justice other violations of the Treaty committed on an ongoing basis by practically all of the members of the euro zone, when they did not consider their economic policy to be an issue of common interest, as the Treaty suggests. That is the root of the problem before us. The Stability Pact is only the rule at the end of the process that allows the points to be counted. The Stability Pact never describes how to play the game, and the game can only be a team game. The Stability Pact is called stupid or rigid. It is much less so than the competitive devaluations that prevailed before the transition to the euro. However, it is not enough on its own.
Thus, I believe that we must look at three aspects. From the point of view of the economic policies, we have the strategic tool we need to ensure new growth in Europe: the Lisbon strategy. We do not have the tool for its implementation and it is certainly not the Stability Pact that will be used to implement this strategy. This is what we must consider. Some people have proposed a strategy for major work. However, the ministers for the economy and finance have yet to decide to finance it. Everyone is talking about coordination but it only comes to the forefront when it enables France and Germany to unite against the Commission. That is not coordination, which is the coordination that should enable the maximum benefit to be derived from the euro zone.
The second aspect relates to the dialogue with the Central Bank. When the Central Bank talks, over and over again, about structural reforms, the governments do not listen to it; another form of dialogue with the governments must be found.
Finally, we must look to the work of the Convention in order to make progress in relation to the results in the IGC and consolidate the Commission’s power as regards the implementation of an economic union. 
Marinos (PPE-DE ).
    Madam President, most of what I had in mind to say has already been said and I endorse the speech made by Mr Poettering, who unfortunately has left.
I should like to focus our attention on the following: the rules we freely accept and subscribe to, big and small, weak and strong, must be respected by everyone, whether we like it or not. Woe betide if the principles and regulations of the European Union were considered to apply and that, if they were in our interest we respected them and, if we did not like them, we ignored them.
The most fundamental principle of democracy is respect for the law by everyone. If it does not satisfy us, we change it. If the Stability Pact does not satisfy, let it be abolished or amended. However, under no circumstances is it allowed for us to consider that it applies, but is not adhered to by those who do not like it, as is happening now. When it was discovered that the terms of the pact were being infringed by small Member States of the European Union, such as Portugal, they were obliged to proceed to apply harsh measures and spending cuts in order to reduce their deficit to below 3%, and none of the big Member States now in violation asked for the pact not to be applied. Now that the problem has unexpectedly hit their economy, they have discovered that the pact is anything from unsuitable or unacceptable. Dual standards.
The reaction is therefore reasonable on the part of the small countries, who see that ‘some are more equal than others’, as George Orwell said. Thus their lack of faith in the new arrangements of the draft Constitution is being reinforced, with the possible danger of it not being ratified and of the European Union finding itself in a terrible impasse. 
Katiforis (PSE ).
    Madam President, 'sticks and carrots' quoth Mr Watson: there were plenty of sticks and carrots in the Stability Pact - sticks for the workers and carrots for the managers, sticks for the unemployed and carrots for the financiers. Not only was the Stability Pact socially unfair, it was totally unworkable, and the tragedy about breaking it is not that we did not wish it to be respected, it is that it was ever set up. That was the real tragedy. If we had stuck to the Maastricht criteria with the same severity that the Stability Pact asks us to stick to the three per cent, would there be a euro today? Would there be a euro, Commissioner? I ask everybody here to put their hand on their heart and answer that question honestly, like honest people who want rules to be respected.
The second point about this is that the Commission tells us that it will continue applying the Pact. If the same case happens again, how will the Pact be applied? I hope with the same latitude that was shown to France and Germany. It would be unfair for a different standard to be applied to a small country in the future.
It has also been suggested that the deficits of today are the taxes of tomorrow. How very simple! The deficits of today can also be the investment of today, which will produce the higher income of tomorrow, from which higher taxes can easily be paid. So I suggest we stop making virtuous speeches here and go and enrol in a good course of elementary macroeconomics, which some of us here seem to need - of course, I am not including the Minister in this comment. He seems to know about it - or has learned about it - and I am grateful to him for that.
The substance of the matter is that today we need expansionary, rather than contractionary, economic policy. Just as there is inflationary stability, there can also be deflationary stability. From that point of view the demise of the Stability Pact is good for stability. 
Coelho (PPE-DE ).
    Madam President, Mr President-in-Office of the Council, Commissioner, ladies and gentlemen, I wish to start by quoting Aníbal Cavaco Silva, the Professor of Economics and former Prime Minister of my country, under whose leadership Portugal joined the euro. His words might be harsh, but they are right: ‘the Stability Pact was a stab in the back for the Franco-German axis, which changed from being a boost for a Community-based Europe to a factor for instability. The Stability Pact is now dead, at least as regards its power to impose penalties. This is an indication that the Community-based Europe has lost its direction’. I do not wish to contribute to the debate as to whether or not the Stability Pact was stupid. We saw how, in the space of a few days, those who considered it to be intelligent decided not to comply with it and those who believed it to be stupid protested when it was ignored. I admit that other indicators are needed and that mechanisms that apply to periods of growth might need to be qualitatively different to those that must be complied with in periods of recession. There is one thing I am sure of, however: we need mechanisms to discipline public finances in the interest of the euro and of Europe. What we cannot accept are the double standards of the criteria: some countries are obliged to comply with things that others are allowed to get away with. What is damaging to European unity is the feeling that the small countries are not allowed to act in ways that the large countries can. What is unacceptable is seeing those that have acted improperly making contemptuous and crude remarks about those who have honoured the commitments they have given. One example is the deplorable attitude of the French and German Finance Ministers towards the Portuguese Government’s courageous budgetary stance. What is worrying is that the backsliding on complying with the rules of the Pact could lead to an increase in interest rates, as Mr Solbes admitted. This is a worrying scenario for highly indebted families and individuals.
Madam President, our aim should be to strengthen the instruments for European integration, not to weaken them, especially in the context of the debate on the new Constitutional Treaty and on the completion of enlargement. 
Radwan (PPE-DE ).
   – Madam President, ladies and gentlemen, we are currently devoting a great deal of effort, and attaching a great deal of weight, to discussion of a new constitutional treaty, whereby we provide ourselves with a new legal framework for the future, at the same time as we do this, the larger countries demonstrate their indifference to the law as it stands. I hope you will not mind if a Bavarian like myself draws a parallel. At the time of the Austrian elections, when the coalition came into being, we accused this law-abiding country of illegality and sought to use all our powers to get our own way, and the same is happening now. The larger countries are demonstrating that European law is of no interest to them.
I cannot do other than encourage the Commission to subject what has happened to critical scrutiny, including by their lawyers, because the Council has not only rejected the Commission proposal – as it was entitled to do – but has also disregarded the Commission and simply set new parameters. This is not something that the Council is competent to do and so I cannot do other than offer the Commission encouragement.
Of course, the way the big boys play the game within the European Union has a seriously prejudicial effect on the accession countries, who, as we are aware, will, all ten of them, followed by another two, be signing up to the euro, and all the while we have had one debate after another about the need to keep to the criteria. On what arguments will the Commission or the Council rely in future when telling these countries that they have to stick to the criteria? We ourselves do not, so we can expect that they will do likewise.
The only thing I can actually do is give the Commission my backing. This is where the Commission must proceed with rigour and consistency, and let me issue a warning against negotiating a new Pact; the current situation in Europe being what it is, any new Pact would not be worthy of the name, but would end up as a hotchpotch of wishful thinking and aspirations towards flexibility that bear no relation whatever to what the economy demands. Europe is paying the price for Germany’s failure to do its homework over the past few years, and, at the end of the day, what we are aiming for is to keep the European single currency as a guarantee of economic stability. Thank you. 
Konrad (PPE-DE ).
   – Madam President, ladies and gentlemen, the European Union is a community founded upon law; the law and its pre-eminence are what this European Union is about. Acting in the name of Germany, the German finance minister has just trodden this law underfoot by joining with France in doing serious damage to the Stability Pact. In so doing, Germany not only broke the law but also destroyed trust, not only at home, but also among its neighbours in Europe and without doubt also in the countries seeking to join the European Union.
Rules can be changed, but not by breaking them. At best, this amounts to rule by might rather than right, and hence to the antithesis of what holds the EU together. This malevolent spirit of national egoism and Franco-German high-handedness will dog Europe for a long time yet. Berlin shrank back in fear from cutting EUR 6 billion from total expenditure of EUR 1 000 billion. Such an amount is in no way crucial to the success of a recovery – not that there are any indications of one. The EU’s foundations have been tampered with, and a long-planned alliance has been forged against the European Commission. That, in essence, is the strategic position, the strategy underlying this course of action, the strategic heart of the Berlin-Paris soft-currency axis.
Who, then, will blame the smaller states and the Eurosceptics if they again become more suspicious? Nor will anyone be so keen to rely again on the Commission to protect them. It was a black day for Europe when this damage was done to the Stability Pact, resulting in a crisis of confidence and a political crisis within the European Union. 
Tremonti,
     Madam President, the Presidency has been criticised for not being neutral. The Italian Presidency, and I am quoting Commissioner Solbes, made a great effort to find a solution, but it is also true that it did not vote in favour of the Commission recommendations. The way a person votes is a strange way of defining neutrality.
The Presidency’s position has been totally impartial. It has nothing to gain and I believe that the whole of this debate should be carried out at European level, without following the conventions of domestic politics. I feel I can say this as the representative of a government which considers the Commission to be important - as guardian - but considers the financial market to be equally as important.
I am sorry to see that the group chairman, Mr Poettering, is not in the Chamber. If I am not mistaken, the chairman gave the example of two countries that have shifted their position: Ireland and Portugal. I am sorry to see that Ireland and Portugal, together with France and Germany, and Belgium, Greece and Luxembourg as well, voted in favour of the Commission’s conclusions.
Although he is not present today, I believe that a remark must be made on the position assumed by Mr Junker, who I do not believe thinks differently from the European Union, in the Eurogroup and then in Ecofin. The debate about ‘large’ and ‘small’ countries does not hold water. What we are talking about is a political process.
Frankly, I do not believe that the Commission has a political monopoly and I do not believe that rules are the same thing as sanctions. Monopolies are not a good thing for the economy, nor are they a good thing legally speaking. Rules can be interpreted in different ways: the Council’s Legal Service interpreted them in one way and the Council interpreted them in another way. The rules provide, not least, for a vote.
That is not all, though: sanctions are not the whole picture but a part of it and there is more to the rules than just sanctions. In essence, the Council decision can be welcomed in so far as the measures recommended to France and Germany are essentially the same as those proposed by Mr Prodi to the Commission. The substance is the same. The difference does not lie in the procedure: whether the procedure and the sanctions amount to the same thing or whether the procedure can be construed in a different way, the requirement of essential compliance with the Commission’s recommendations remains the same.
I believe that sanctions are essential, but that they are most useful if they do not have to be enforced. Sanctions work well if they do not have to work. Sanctions work well if they serve to bring about extension, prevention and adjustment. This was the case and this is absolutely clear. I do not believe that enforcing the sanctions was our objective; I believe that our objective was to ensure that the rules were respected and this was the case. I do not believe that we would have reached the point of enforcing sanctions, even for a small country. I would never have voted in favour of sanctions on a small country that had, like two large countries, complied with the Commission demands. The sanctions are one part of the rules; they are not all of the rules. The main part of the rules is something else and providing for sanctions is important. Seeing the sanctions work by extending the process is the essential thing. There was total compliance.
I concluded my speech saying that substance is more important than form, or rather that both are important, but that, up until now, there has been too much focus on one aspect of the procedure, as if it were made up of sanctions alone, and this is not the case. Moreover, there has been no talk about substance. The substance is very simple, and this came out of the debate with political force and intelligence. We are going though a difficult stage in Europe, in which we see a striking correlation between the extent of the problems and the governance capacity. The extent of the problems: two wars in two years, the breakdown of the geopolitical balance in the world, the collapse of the financial markets, unregulated competition created by China, the effects caused – perhaps more than predicted – by the changeover in some countries, local and sectoral crises.
All this in the face of limited governance capacity. The old Nation States no longer have the instruments for national governance and Europe does not yet have European governance. We do not have wide margins for budgetary policies because there is the Stability and Growth Pact and it is not being challenged. We do not have margins for interest rate policies, which are impartially decided using the constitutional reasoning of the European Central Bank. We cannot establish exchange rate policies because these are decided elsewhere.
In 2000, the European economy was doing well, the budgets were in order, the value of the euro was down against the dollar. In 2003, the economy is not doing particularly well, the budgets are not particularly in order and the value of the euro is up against the dollar. I believe that Isaac Newton would have some difficulty in understanding the cause and effect link between these two phenomena.
We need European governance. I believe that the Constitutional Treaty provides a basis for the development of European governance: I believe that, in the growth plan proposed by the Presidency but which has now become a European plan Europe has found a beneficial common undertaking in the form of a common economic policy: the first since the euro.
In 2003, Europe began an extremely intensive cycle of structural reforms. A cycle orchestrated by European reasoning and in a European spirit of structural reforms of the labour market and the welfare state. Reforms extended from Finland, Holland and Germany to Austria, France and Italy. Europe is being renewed, investing in its future and changing growth expectations through a cycle of structural measures and essential structural reforms. I believe that these are the things that we should be discussing. 
Solbes Mira,
   . Madam President, I would like to make three very quick comments. Firstly, for your information, the Commission never proposed sanctions. The Commission proposed greater flexibility by granting an additional year to fulfil the 3%.
Secondly, the Commission will continue to make all the necessary effort to fulfil its responsibilities in terms of budgetary vigilance. We know that complying with the Pact in the current context will raise certain problems, certain difficulties, but we are going to do so while guaranteeing absolutely equal treatment for all Member States.
Thirdly – as I pointed out in my initial speech – the Commission carefully considered all these issues, what this means for the future economic governance of the Union, and we will prepare an initiative to improve it within the framework of the current Treaty. 
President.
   Thank you, Commissioner Solbes Mira.
The debate is closed.
Maaten (ELDR ),
   . – The Queen of the Councils of Ministers, the Ecofin, has come tumbling off her pedestal with a loud thud. In the Brussels glasshouse, this debate about the finer details of the Stability Pact is still going on, whilst normal citizens, at least in my country, the Netherlands, have for a long time been debating something else. Why do the rules we agree on apply to some countries and not to others? What about the rules we will agree on in the new constitutional treaty, on which all Dutch people are allowed to vote in a referendum? In order to gain any credibility, this constitutional treaty will need to contain tough procedures to enforce monetary rules. I am in favour of a much stronger role for the Commission. Countries that are themselves in breach of the rules should be excluded from voting on the assessment of other countries that infringe the same rules. The French and German Governments have opened Pandora's box. This may well serve a short-term interest, but they have lost all credibility as the axis of European cooperation. As such, they carry a heavy responsibility. 
Sylla (GUE/NGL ).
   – I would like to talk about the Geneva Accord and tell you that, like Jimmy Carter and Nelson Mandela, both former Presidents and winners of the Nobel Peace Prize, the European Parliament must welcome and support the initiative launched by Yossi Beilin and Yasser Abbed Rabbo, who proposed a peace plan between Israelis and Palestinians on Monday, 1 December in Geneva. I believe that this is a courageous and symbolic act that highlights and reflects the hope of the vast majority of Israelis and Palestinians of living in a world of peace and mutual solidarity.
As Kofi Annan said, this plan does not take the place of the UN proposals. Similarly, it is not for us to provide an exhaustive, line-by-line commentary on everything that it proposes. The key element has been retained, namely the creation of a Palestinian state and the rejection of all forms of violence, especially suicide attacks.
We must support a strong signal at a time when certain people in both camps are virulently opposed to this peace plan. They must be provided with a genuine lesson in peace and forced to move beyond hate in order to live together. I regret that the Council is not present. The urgency is all the more evident as the Iraqi crisis is only serving to amplify the problem.
I think that it is time to offer a generation of Palestinians and Israelis a genuine future, and a generation across the world the capacity the politicians have of ensuring that they can all live together with greater success. 
Bowe (PSE ).
    Madam President, I rise to ask you if you will join with me in expressing your concern to the Turkish judicial authorities about the delays in bringing to trial those persons involved in the affray that took place in Galatasaray, Turkey on the occasion of a football match with Leeds United in April 2000. This terrible event led to the murders of my constituents Christopher Loftus and Kevin Speight.
A local man, Ali Umit Demir, has now been convicted of these murders. However, he has appealed against the original sentence, and now, along with others involved in the original affray, is awaiting the start of a retrial. The preliminary retrial hearing has now been delayed twice, once in July and again in September of this year. The third date for the hearing has now been arranged for 11 December 2003.
While I am very grateful for the interest, concern and assistance shown in this matter by the Turkish ambassador to the EU, Mr Oguz Demiralp, I would welcome the support of the President of Parliament in sending a letter to the Turkish judicial authorities seeking assurances that the legal proceedings will go ahead with no further delay. I am sure the President understands the distress the families of the murdered men are experiencing, caused by the lengthy and drawn-out proceedings for the retrial, which have only added to their original grief over this matter. 
Ribeiro e Castro (UEN ).
    Madam President, as I am sure my fellow Members are aware, as a result of the various initiatives launched this year in Parliament, that on 1 December we were due to receive Mr Oswaldo Payá, to whom we awarded the Sakharov prize last year. Unfortunately, the Cuban authorities did not allow him to come. He sent a message to Parliament, which he asked me to read out. I read the message out, in its entirety, at the meeting of the Committee of Foreign Affairs, Human Rights, Common Security and Defence Policy. I will not repeat it here; I simply wish to have the matter recorded in plenary. This is a powerful and stirring message, in which he recounts the difficulties facing democrats in Cuba, but also talks about the ongoing determination of the Varela Project (I would draw the attention of all my fellow Members to this fact) and condemns the fact that he was prevented from coming here. He condemns the situation in the concentration camps and the situation of the detainees, which are precisely the issues on which we would like to hear him and to be able to discuss with him. He also calls on the European Union to provide moral support for cooperation, which we will certainly not refuse him, and states that the European Union must hold constructive dialogue with all of Cuban society. I would therefore ask Parliament’s president and the Conference of Presidents to consider this matter again, since our invitation of 13 November was thwarted and it is extremely important that we achieve the release of Oswaldo Payá so that he can come and tell us what is happening in his country. 
Ludford (ELDR ).
    Madam President, I want to raise the case of a British man on death row in Ohio in the United States. Kenny Richey was convicted 16 years ago of arson and the murder of a two-year old girl who died in the fire. But new forensic evidence presented six years ago may well establish his innocence. However, he remains on death row and could be given an execution date any time. This is because US law provides that no new evidence can be introduced after a certain stage.
The prosecutor has said: 'Even though this new evidence may establish Mr Richey's innocence, the Ohio and United States Constitution nonetheless allows him to be executed because the prosecution did not know that the scientific testimony offered at the trial was false and unreliable.' So they know his conviction is unsafe, but he could still be executed. That accounts for why Amnesty International has called it one of the most compelling cases of innocence human rights campaigners have ever seen.
Madam President, I will be circulating an e-mail petition and would urge all colleagues to support it, either to have the case reviewed in the light of the new evidence, or, as a last resort, to appeal for clemency. 
Doyle (PPE-DE ).
    Madam President, under our Constitution, the Irish ratification process requires a referendum on all Treaty revisions. Today, headlines, reports and editorials in a serious daily newspaper, the, stated that Mr Prodi believed that any state voting against the constitutional treaty now in its final stages of negotiation should logically leave the EU. He did say they might get a second chance it might not be the first time they voted against it. My appeal here, however, is that what could be perceived to be an ultimatum accept or leave the Union is most unhelpful in the run-in to a ratification process that is going to be difficult enough anyway, not just in Ireland, but in many Member States.
Mr Prodi is also reported as saying that any future amendments or revisions of the Treaty should be by parliament or government rather than by popular referendum.
Could I ask that Mr Prodi be given the opportunity to come and explain in more detail his views on these very sensitive issues, because interference or ill-judged comment at this stage will not be helpful if we want to get the present constitutional treaty through in the 15 Member States, let alone in the 25. Sometimes it is better to say less than more in these issues. 
Gargani (PPE-DE ).
    Madam President, I feel that it is my duty to speak about an issue that regards the dramatic legal event in Italy affecting the current life senator, Giulio Andreotti. He is a public figure who is well known at European level, a figure who is at the forefront of Community affairs.
I waited for the Court of Cassation’s verdict before speaking on this issue. Even more urgently, I waited for the reasons given a few days ago by the Court of Cassation, in which it not only acquitted senator Andreotti of a torment which had lasted years and of preposterous accusations of no less than murder, but, in the reasons that I have just mentioned, it criticised the absurd action taken by the Court of Appeal in condemning him: personal theories which could not be backed by any evidence.
I therefore believe that the ordeal of this man, a life senator, one of the public figures to have made a significant contribution to the development of democracy in the country and one of the fathers of Europe, should be firmly highlighted, and that it must be made clear that a part of the Italian justice system, which is clearly ineffectual if not subversive, enforced this situation which has disturbed both Italy and Europe for 10 years.
I therefore urge you, Madam President, and I am sure that I am not just interpreting the will of the Group of the European People’s Party (Christian democrats) and European Democrats, but also the opinion of the European Parliament as a whole, to give Senator Andreotti formal recognition for the clarity, the far-sightedness and the great democratic uprightness that distinguishes this valuable and useful European figure. 
Doyle (PPE-DE ).
    Madam President, as there is time remaining, allow me to bring to the attention of Commissioner Fischler an issue relating to his decoupling proposals and the area required to be farmed once decoupled.
If farmers have to farm 100% of the area they farmed during the reference years 2000 to 2002 in order to draw down the decoupled or area-based payment, it will put huge pressure on the price of rented land or Conacre as we say in Ireland both in Ireland and in other countries. I wonder if Mr Fischler is in a position to consider that farmers should must farm 80% or more of their land? If not, we will put a false floor under rented land and active farmers will not be able to afford it. Farmers who want to fill out the 100% of their base-year area are going to have to take that land. A distortion is being introduced into the market as a result of this requirement, and I would urge Mr Fischler to do all he can to ensure that the land is in the hands of the best farmers to farm it. That is one of the principles of decoupling. 
President.
   This item has been dealt with.

President.
   The next item is the joint debate on the following reports on behalf of the Committee on Constitutional Affairs:
- A5-0402/2003 by Mr Van den Berg, on European governance (COM(2002) 704 COM(2002) 705 COM(2002) 713 C5-0200/2003 2003/2085(INI)); and
- A5-0401/2003 by Mr MacCormick, on the communication from the Commission: a framework for contracts and tripartite agreements between the Community, the States and the regional and local authorities (COM(2002) 709 C5-0202/2003 2003/2088(INI)). 
Van den Berg (PSE ),
   . – Mr President, Commissioner, Europe must do better on behalf of its citizens. That means dealing successfully with more cross-border problems, and in a more democratic manner. Order should be restored to our European home, at which citizens from across the EU are casting quite sceptical glances.
Over the past year, we had a Convention which resulted in a Constitution, at least in draft form. That is, in itself, very good news for the European citizens, as we have mentioned before.
There are other ways of restoring order to our European home, though. The report I am presenting to you this evening on behalf of our Commission is also about better, more democratic and more transparent governance. Even without adapting the European treaties, we can implement substantial reforms. Enhancing European governance is one of the Prodi Commission's key strategic objectives for the period 2000-2004. In 2001, we issued the White Paper on European Governance, on which we in this House gave our opinion. Two years later, we are doing the same thing again, only this time it is about progress in respect of the same White Paper.
Some important achievements have been made. For example, in April 2002, the Commission started simplifying legislation, which was reduced by no fewer than 35 000 pages. This is an important contribution to the simplification of European governance. In addition, the Commission has published plans in the field of consultation of regional and local authorities, of organisations in the civil society and for consultation with experts. I should like to return to some of these subjects, but what matters now is for all of these plans to be implemented. Not merely lip service, but concrete action!
The Commission can do a great deal more in order to actively bring Europe closer to the citizen. I have, in this report, made various proposals to this effect. The first, and most important, proposal is, in my opinion, that all legislative proposals should be subject to a so-called citizens' criterion. This means that for every law that the Commission lays down, it should think about their social, ecological and economic impact on everyday life of the citizens for whom these are established. That is the only way of ensuring that we come down from our ivory tower and that we no longer issue laws in a vacuum or from the top down. I would call on my fellow MEPs and the Commission to support this initiative.
Parallel to this, I should like to place special emphasis on the Commission’s use of experts at an early stage in the legislative process. First of all, I have to say that experts are extremely useful. Secondly, I have to note that there is an enormous jungle and also a proliferation of expert groups, both on a permanent and on an ad-hoc basis. There are 850 groups of experts and another 500 or more sub-groups. Nobody, not even the Commission, quite knows exactly who is involved in these. Parliament has already urged the Commission to publish clear lists specifying which experts can be consulted on which topics. In that way, Parliament and the Council, and I even think the Commission, gain a clear insight into who exactly examines these legislative proposals and into the fundamental policy choices that are made during the policy-forming process. When those lists become available, this will benefit us all. I would call on the Commission finally to do something about these lists after three years of promises, for we want a parliamentary democracy and not a democracy of experts.
Another important point that I have mentioned is Global Governance. Multilateralism and a broad concept of safety, which include peace and security, but also the fight against poverty and sustainable development, have always been at the heart of foreign policy. It is time for the European Union, the UN’s largest economic superpower, to commit itself to spreading its values at world level during the reform of multilateral institutions. However, we want the EU to speak with one voice in this respect, starting, if possible, with one seat in the Security Council.
Finally, turning to the consultation of organisations, I have quite specifically underlined the need for local and regional authorities to be among the bodies consulted. 'Europe begins in the regions'. After all, it is the regions where policy is to be implemented and where many of Europe's funds are spent. The regions are also the places with which citizens identify, sometimes even more so than with their own capitals, certainly when regions transcend borders. That is why it is important for regional authorities to have their own voice and to be given this in the legislative process. The Commission has grasped this well and is showing itself willing to do something about this. We would now like to see this translated into action.
On the same subject, Mr MacCormick has drafted a very important report on tripartite contracts and agreements. These contracts with Member States and regional authorities can be a very useful instrument, enabling Europe to start to bring the region nearer and give it actual shape. European governance thus becomes more efficient and moves closer to the citizen. We warmly support the gist of Mr MacCormick's report.
Finally, I should like to emphasise here that it is the responsibility of all institutions to achieve credible, transparent and democratic governance. It is not simply the responsibility of the Commission, but of all Institutions. This is why, in this report, we call for an interinstitutional agreement in the area of consultation, to be binding upon all institutions.
The reforms contained in the White Paper on Governance are of major importance for Europe and for its citizens. What matters now is for us to roll up our sleeves and get down to business. I thank you for the slightly extended speaking time. 
MacCormick (Verts/ALE ),
   . Mr President, my report is on the proposal for tripartite contracts and agreements between the European authorities and the Member States, and local and regional authorities. This is, one might think, rather a mouthful for what is essentially a simple idea.
The point is, as the Committee on the Environment, Public Health and Consumer Policy pointed out in its opinion on this matter, much of the implementation of important aspects of European policy environmental policy, regional policy and other policies, including transport is carried out in Member States at a level of government below that of the centralised state government. And yet there is a danger of inadequate connection between the Commission, at the centre, and local and regional government. Any steps that can be taken to improve these connections are greatly to be welcomed and much to be encouraged. The Commission's proposal on tripartite contracts and agreements is a proposal for precisely such an improvement, and therefore my Group strongly welcomes it. The Committee on Constitutional Affairs, the Committee on Legal Affairs and the Internal Market, and the Environment Committee also welcome it and wish to carry it forward.
One of the first pilot arrangements in terms of a tripartite agreement was among cities. It was based on the idea of a sustainable city for example Birmingham, Stockholm and other cities in the Union. It was about trying to figure out ways to make sustainability make sense. One of the interesting facts I discovered in reading a report on that pilot project was that the city of Birmingham could write to the central government in London and go for weeks or months without receiving a reply. Central governments in Member States are often very bad at maintaining adequate contact with local and city authorities and with city regions.
If we are going to make progress in implementing policies in Europe, it is obvious that we must make sure there is interaction between central government, local government and government at the European level. It is important to stress and I address in particular my friend and opponent Mr Bradbourn on this point that this suggestion for tripartite contracts and agreements is not only a suggestion about regional government of which I know Mr Bradbourn disapproves it is also a suggestion about local government, of which I rather think he and his party strongly approve. We must ensure that there is real contact and connectivity and that we get things moving.
Sometimes in this House we use the word 'region' in a very misleading sense. For example, Scotland, the constituency which I represent, is for some purposes called a region. But most of the inhabitants of Scotland think it is a nation within a multinational state. And Scotland itself has extremely varied regions. Only yesterday I was visiting the South of Scotland Partnership, who were discussing some of the particular problems facing the rural south of Scotland, which is very different linguistically, culturally, socially and agriculturally from central Scotland and from highland Scotland. They raised with me the problem of the town - the old borough. Nowadays it is very difficult to sustain small towns. Cities and regions have great identity but towns, in our local government system, have lost that. The sustainable city is currently being trialled as a pilot project. What about the sustainable town?
We must look at governance in Europe at many levels: the region, the locality, and entities which are lower than the locality in terms of current governmental structures. All these things matter. The report adopted by the Constitutional Affairs Committee needs to be amended, not in such a way as to break the spirit of what was agreed in that Committee, but in a way that completes that spirit by building in some of the points agreed on by the Environment Committee, all of the points agreed on by the Legal Affairs Committee, and some of the things which have emerged from the pilot projects under way.
I strongly commend the report in its amended form to the House, and I very much hope that it will be carried in the vote tomorrow. 
Fischler,
   . – Mr President, ladies and gentlemen, the Commission welcomes the two reports by Mr van den Berg and Sir Neil MacCormick. The Commission is grateful for Parliament’s support for its initiatives seeking to produce better regulation, by for example arranging impact assessments, setting minimum requirements for the consultation of stakeholders, laying down guidelines for the collection and use of expertise and simplifying Community legislation. Next week the Commission will table its annual report entitled ‘Better Lawmaking 2003’, which will for the first time provide an overview of all of the work currently underway to improve regulation and policy-making in the EU. With the same intention, Parliament, the Council and the Commission recently concluded the 2003 Interinstitutional Agreement on Better Lawmaking. This is a major step in the right direction and ensures that the competences of all of the institutions will be fully respected in our future work to achieve better regulation.
Today, however, I should like to focus on the two key issues that have been raised by Mr van den Berg, namely the consultation of stakeholders or interested parties and the advice that experts should contribute. What are the principles and minimum standards for the consultation of interested parties? Our first task is to provide a coherent and transparent framework for the consultation of these groups. Here the Commission fully shares the European Parliament’s opinion that consultation cannot be a substitute for parliamentary democracy and emphasises that the aim of having minimum requirements for consultation is to give stakeholders a voice, but not a vote. In other words, this is not about deciding, but about being heard. The representatives of the people of Europe will still have to decide. Neither will these measures impact on the institutional role of the two advisory bodies, the EESC and the CoR.
The general principles and minimum requirements for consultation set out by the Commission could also serve as a basis for a further interinstitutional agreement. The Commission also agrees with Parliament that the consultation process must not be allowed to slow down the legislative process and stresses that the minimum eight-week consultation period for public consultations strikes a good balance between the need for efficient decision-making and gaining the necessary input from external parties. To make the consultation process more transparent, the Commission has published a formal and structured list of advisory bodies. This information can be retrieved from the database of advisory bodies.
Establishing guidelines for the collection and use of expertise is a further important Commission measure to improve the way in which initiatives are prepared. As we have underlined in the White Paper, European governance standards for the collection and use of expertise need to be improved. The guidelines, which apply to any Commission services calling on and using expert advice, seek precisely to guarantee that high standards and tried and tested practices form an integrated part of the working culture of all of the Commission services.
Careful preparation, however, is not the only way in which the Commission needs to improve the quality of its work; it must also make this process more transparent. For this reason, next week the Commission will be adopting a new standard explanatory memorandum for all of its proposals, which will make it necessary to explain the reasoning and facts underlying each one. This decision also covers expert knowledge and the consultation of interested parties.
I should now like to turn to Sir Neil MacCormick’s report on tripartite contracts and agreements. The approach adopted in this report is in tune with the Commission proposal and is as ambitious as it is sensible. It is ambitious, because it seeks to enhance the status of local and regional authorities and to give them increased responsibility for implementing Community regulations and measures, something which is being advocated increasingly vociferously. This should bring the Union’s regions closer to each other. The conclusion of tripartite contracts or agreements may be an interesting development when implementing particular Community policies. At the same time, however, it is also a sensible approach, because we do not question the need to proceed step by step. The Commission had the same idea in mind when it adopted the communication on tripartite contracts and agreements last December, as it had promised to do in the White Paper on European Governance. There too we proposed first to have a trial period. This phase has already begun. In environment policy, work is already underway in three European cities on an initiative to conclude a tripartite agreement.
Tripartite agreements might also soon be concluded as part of measures to implement the Sustainability Pacts initiative. In regional policy, the Commission is convinced that greater decentralisation is needed. Tripartite contracts between the Commission, the Member State and the region might possibly form part of a new system to implement the Structural Funds. In addition, this would also transfer even more responsibility to the regions and those involved in regional development.
We must, however, exercise a degree of caution. Firstly, as the rapporteur has requested, we must take stock of the pilot phase and evaluate the results. Secondly, we need to consider what legal, political or institutional stumbling blocks might in certain cases lie in the way of using such agreements. In regional policy in particular, I should therefore like to draw a distinction between two phases: the phase of determining the development strategy, where greater involvement on the part of authorities below the State level is desirable – provided that it is compatible with the constitutional system of the Member State concerned – and then the implementation phase. Here we need to consider what impact these new contracts might have on applying the rules on the use of budgetary resources and on the obligations that the Commission has to discharge as the guardian of the treaties. In addition, we need to check to what extent there is a danger of the Commission having to take on extra administrative and monitoring tasks.
Finally, I should like to assure the rapporteur that, in accordance with his wishes, the Commission fully intends to involve Parliament in the implementation and evaluation of future tripartite agreements. 
Medina Ortega (PSE ),
   . Mr President, I would like firstly to thank Mr van den Berg for the wonderful report he has presented and I would also like to thank him for having taken up the ideas which, on behalf of the Committee on Legal Affairs, I have presented in my opinion report on the central idea that in modern societies civil society is expressed by means of the vote and by means of representative bodies elected by the citizens. This is the central idea which the rapporteur has taken up very well in his main report.
Secondly, I believe that significant progress has been made in recent months with the conclusion of an interinstitutional agreement, between Parliament, the Council and the Commission, on the improvement of Community legislation. I believe this is an issue on which we will continue to work, as the Commissioner himself, Mr Fischler, has said.
It seems to me essential, however, to point out that there is a mistaken idea that the reduction of Community legislation reduces the total amount of legislation. Nothing could be more wrong, because every time we adopt a Community rule we are simplifying the legislation by replacing 15 pieces of national legislation. And it is not that I am in favour of adopting Community rules just for the sake of it, but, at the moment, we are dealing with a genuine legislative jungle. Only very positive action by the European Union can put an end to the national legislative jungle which prevents the proper functioning of the European institutions and the European market, the internal market, which is one of our objectives.
I am not, therefore, one of those people who call on the Commission to legislate less or who propose less legislation. I would ask it to legislate more when it is necessary, because if it does not fulfil its legislative function we will continue with this jungle which, furthermore, can only increase. With 25 Member States each Community rule represents a genuine legislative simplification and the way ahead does not involve a reduction in the Community acquis but in strengthening it and consolidating it.
In any event, I would like to congratulate the rapporteur, Mr van den Berg. I hope that tomorrow we can approve this report without any great difficulty.
Bodrato (PPE-DE ).
    Mr President, ladies and gentlemen, my speech concerns the MacCormick report, which deals with European governance and – as the rapporteur rightly mentioned – Europe united in diversity.
The Commission communication on which this debate is based, and to which Commissioner Fischler made a timely reference earlier, proposes tripartite contracts and agreements committing the Community, the States and regional and local authorities. It proposes this in order to make Community rules adaptable to situations that are characterised by significant environmental and demographic diversities as well as to the political diversities of the Union, from transport policy to regional, territorial policies and so on. This is an important decision, although it must be noted that it will start an experimental phase in which we must take stock in order to learn the necessary lessons, which will partially be procedural ones but which – as has already been said – will also concern the best management of Community regional policies. We know that, in any case, these are agreements bound by an obligation of compatibility with the Treaties regulating the life of the European Union and adjustments that must not hinder the functioning of the internal market.
Basically, the principle to which the Commission refers in this communication, which is accurately interpreted in the MacCormick report, is that of flexibility. This principle entails respecting the various constitutional systems of the States of the Union, but it recognises that in some States there are constitutional systems that assign huge responsibilities to regional and local authorities, which must not be reduced despite the fact that, in such cases, the need for greater democratic participation must not cause imbalances that would run counter to the guidelines produced by the constituent Convention.
Tripartite contracts cannot, however, derogate from the provisions of secondary law applicable throughout the territory of the European Union because – as I mentioned earlier – it is only in this way that they remain coherent with the guidelines of the constituent Convention. We need to improve the implementation of Community policy. It is, therefore, important that the tripartite agreements and contracts define clear objectives based on the need to give due consideration to diversity throughout the territory of the European Union, although, on the basis of these experiences, it will then be possible to look again at a policy for the management of Community policies that goes beyond the issue of diversity and tackles the more general issue of democracy in greater depth without, however, compromising – and I believe that this must be emphasised – the uniform enforcement of Community law across the entire European area. 
Ortuondo Larrea (Verts/ALE ).
    Mr President, we are debating the regulatory framework for future contracts and tripartite agreements between the Community, the States and regional and local authorities.
I would like to stress how necessary it is for the intra-State administrations to collaborate, increasing subsidiarity, in order to achieve the objectives which we have set in the majority of programmes and projects stemming from the European cohesion and environmental policies, and also in order to guarantee sustainability.
I am thinking of the FIFG funds and programmes for the fisheries sector, or LEADER + for agriculture for the target regions of FEDER or the URBAN and Interreg projects, amongst others, in which the participation and responsibility of the territorial bodies is so essential.
I am also convinced, however, that the fact that a significant proportion of the important Community resources which are budgeted for are not used – the so-called RALs – is due to the fact that the regional and local autonomous governments, which execute the majority of projects, have not so far been able to participate in the early phase, either in the drawing up of policies, or in the adoption of strategies, or in the identification of legal obligations prior to drawing up of the respective European programmes. It is time to put things right, to come down from Mount Olympus and to share decision-making with the other institutions which are closer to the reality on the ground and the reality of the citizens. 
Bradbourn (PPE-DE ).
    Mr President, I rise to speak specifically and directly in response to Sir Neil MacCormick's report on tripartite contracts. I hope I will be able to respond to a number of the points he made in his opening remarks.
In the light of current events in the UK, this report centres on an extremely important issue. The UK Deputy Prime Minister a hapless fellow if ever there was one is trying to foist regional governance upon our own electorate. This unwanted and completely unnecessary tier of politicians is symbolic of the UK's recent shift towards regionalisation. I have no doubt this move is directly related to the President of the Commission's call for the development of a 'Europe of the regions'. This report, and the Commission proposal that lies behind it, certainly echo this call. By drawing up contracts directly with the regions, the Commission can enter into legally-binding agreements with local and regional bodies on regional and other policy issues such as the environment.
If these proposals go ahead, one can imagine all manner of projects and policies which could be foisted on the UK by the back door. This move clearly represents a slippery slope towards a system where the prerogatives of national governments are diminished and those of the regions are enhanced. It appears to me that the Commission is attempting progressively to break down the United Kingdom and the rest of Europe into bite-sized chunks, aided and abetted, in this case, by our own government.
British Conservatives are opposed to any measure which would bolster such a development. I shall certainly vote against this report tomorrow in plenary. Quite simply, we cannot accept a situation where the Commission foists upon us any changes to the UK's government structures. If we accept that the EU can deal directly in any way with the regions, we are compromising national integrity, and the nation as the prime building-block of the EU. This report represents an unacceptable interference in the governance of individual countries, and I reject the approach entirely. 
Paasilinna (PSE ).
   – Mr President, ladies and gentlemen, I would like to thank the rapporteur for his excellent work. I want to stress the vital importance of an ever more transparent administrative culture in the European Union if we are to gain the approval of its citizens. Obscurity leads to complete darkness, as we know. It is essential to simplify legislation. The public must be able to understand how this whole place works, and it is absolutely necessary to replace mind-boggling legal texts with something that is more streamlined, and I am in favour of that. It is unnecessary to regulate the details, as has been mentioned here. That is our disease.
I would nevertheless like to make one additional amendment, which is already contained in this report. The Union supports the one-stop shop principle in all areas. According to this, people can always obtain the information and forms they need at one and the same point. As yet, however, the different institutions of the Union do not share a common website where the public could follow the progress of legislation. Discussions by Parliament, the Commission and the Council on legal issues and other projects should be accessible at one website address. The institutions at least need a common portal, like a one-stop shop, where all the necessary links can be found.
The Commission and Parliament have become more transparent, but the Council has not. The Council is to have more power, which means more obscurity. This issue has to be addressed. 
Fischler,
   . – Mr President, ladies and gentlemen, I can be brief. Firstly, I should like to thank you for your constructive contributions to this debate on the two reports. Secondly, I should like to address a few of the points that have been raised. I think – as Mr Medina Ortega rightly pointed out – that the main way in which European legislative initiatives will be simplified is that in the future it will be possible to consolidate 25 different legal acts into one single one. I do not believe that this can be stressed enough, particularly given that the institutions of the European Union are, as we know, constantly being accused of being somewhat legislation-happy. The reality is rather different. You are probably aware that we did actually look into this a few years ago and it turned out that the Member States introduce more new pieces of legislation every year than the Community has introduced since its inception. This is a clear indication that you are right to make this assertion. Nevertheless, this does not absolve us from our obligation also to organise our European laws properly: organise their preparation, but also how they are structured, so that they meet the appropriate standards of transparency and clarity.
Above all, however, it will be important to identify what these days we often refer to as ‘European added value’, because any legislative initiatives with no such added value should have a large question mark over them. This is an important point, particularly in the light of the new European constitution, which specifically states that legislation should be subject to such a test.
As far as tripartite contracts are concerned, I certainly do believe that it is sensible to conclude such tripartite contracts, and I do not agree with Mr Bradbourn, who thinks that they would ride roughshod over national interests. For a start, one of the three parties to these contracts will be the Member State. Without the agreement of the Member State such a contract does not even come into being. I therefore do not understand your fears at all. I would tend to see this the other way round. I regard it as important, particularly for example in structural policy or in my own area, rural development policy, for us to make greater use of the bottom-up approach and to allow that to become a reality, because this gives the people on the ground a better idea of who is responsible for their problems. That is how you should look at it, and that is why we have also taken the precaution of first having a trial period and then an evaluation. That is as it were the icing on the cake. Having said this, I should like to thank you once more for giving such a favourable response to these reports.
President.
   The joint debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0393/2003) by Mr Bösch, on behalf of the Committee on Budgetary Control, on the Commission report on the assessment of the activities of the European Anti-Fraud Office (OLAF) (COM(2003) 154 2002/2237(INI)) 
Bösch (PSE ),
   . – Mr President, allow me to begin with a brief flashback. Five years ago almost to the day, on 2 December 1998, this House held a heated debate here in Brussels with the former President of the Commission, Jacques Santer. With hindsight, this debate marked the beginning of the end of the former Commission. The issue then, as it is now, was combating fraud and the conclusions that the Commission needed to draw from several serious cases. At the time, the President of the Commission decided to head for a confrontation with Parliament. Against the declared will of this House, he wanted to move most of the responsibility for fighting fraud out of the Commission and into an external agency, on the grounds that this was the only way to guarantee the independence of investigations. We rejected this very firmly, because no one was able to tell us where this agency was supposed to derive its authority from and how the effectiveness of its work was supposed to be ensured.
This fantasy of an external agency has resurfaced in recent months in connection with the debate on the Eurostat case, thankfully, it seems, at least only in the minds of a handful of senior officials in the Commission. The signals that we received from the President of the Commission, Mr Prodi, in Strasbourg in November pointed in another, more constructive direction. Today, a good five months before the Members of this House bid one another a final farewell and head for the campaign trail, it is a question of identifying what is feasible and tackling this together, so that on such a decisive issue as protecting the Union’s financial interests we do not have to go before our electorate empty-handed.
I now turn to the individual points. My report makes it very clear that our prime concern is that OLAF is underperforming, something that was brought to light very dramatically by the Eurostat case. This is not the time to apportion blame, but if we note that of the 300 staff in OLAF fewer than 15, even on a generous count, are at present working on internal investigations in the institutions, then something has gone seriously wrong. If that is the case then this office is, to put it inelegantly, completely off the mark. A quick and radical change of course is required here. OLAF needs to focus its investigations on those areas in which the relevant bodies in the Member States either cannot or do not wish to intervene, that is on investigations within the institutions and on the expenditure that is managed directly by the Commission.
My second point is respect for the fundamental rights of those involved in investigations. The OLAF Regulation is absolutely clear on this. I quote: ‘These investigations must be conducted … with full respect for human rights and fundamental freedoms, in particular the principle of fairness, for the right of persons involved to express their views on the facts concerning them and for the principle that the conclusions of an investigation may be based solely on elements which have evidential value.’ We take it from the reports and opinions of the OLAF Supervisory Committee, but also from the Ombudsman’s reports, that this is where the greatest danger currently lies. In this respect, the regulation is quite simply being ignored by the Office’s investigators. I only have to remind you of the most recent example, the reprimand issued by the Ombudsman last week against OLAF in connection with the libelling of a journalist in public statements made by the Office. If the fundamental freedoms of those concerned are not respected then at the end of the day the results of the investigations are also worthless, and I fear that, as a result, OLAF still has some nasty surprises in store in connection with Eurostat. What is lacking is an effective and above all preventive monitoring mechanism to enforce the provisions of the regulation. This is an area where we need to take countermeasures by amending the regulation itself. We do not wish to touch the Director’s decision-making powers, but we need a stronger counterbalance.
This counterbalance is the OLAF Supervisory Committee, but on three conditions: firstly, that the amendment concerned explicitly confers upon it the power to ensure that the fundamental freedoms and rights of those involved in investigations are respected; secondly, that it receives the additional resources to enable it to carry out this task, and thirdly, last but not least, that it has greater independence from the Director of OLAF, not only by increasing the number of staff in the Committee’s secretariat, but also by removing it from the organisational framework of both OLAF and the Commission. Targeting resources on investigative activities and stepping up the monitoring of these investigative activities are the key points that now need to be addressed where OLAF is concerned.
Ladies and gentlemen, I believe that we have done our work well in the committee. We are fulfilling our responsibilities to our electorate and to the Union’s taxpayers. I therefore commend this report to the House.
Schreyer,
   . – Mr President, Mr Bösch, ladies and gentlemen, OLAF, the European Anti-Fraud Office, was, as you mentioned, established in 1999. This office became the focus for most of the Commission’s work to fight against fraud and OLAF was given the task and the right to carry out investigations in any of the European institutions if fraud was suspected. OLAF was entrusted with extensive responsibilities and, as the latest OLAF activity report shows, it has already notched up clear successes in many areas. OLAF carries out its administrative investigations, whether internal or external, completely independently, even though the office is established within the Commission.
This dual status has raised both problems and questions, as can be seen from the report that we are debating today. At issue in today’s debate is the Bösch report on the Commission’s so-called Article 15 report. This sounds very technical, but it is a tremendously important debate, because it is about the future of OLAF, which, let us not forget, is still a very young office.
The Commission would like to thank the rapporteur, Mr Bösch, for his hard work. The evaluation of OLAF’s activities over the last three years, which is the subject of the report, has been largely eclipsed by the Eurostat affair. Nevertheless, the findings and analyses in the report are essentially still valid, even though the views of the rapporteur, Mr Bösch, differ from our own in many respects. It is true, however, that the Eurostat affair did highlight existing shortcomings, in particular the question of communication between OLAF and the Commission, and OLAF’s legal framework, which was adopted in record time in 1999, needs to be adjusted accordingly. This does not mean, however – and here the Commission agrees with the rapporteur – that we need to go back to square one. At the present time, this would not appear to be either proper or realistic. In any case, greater changes are in the offing for OLAF, at the latest once we achieve our aim of setting up a European financial prosecution service. The Commission is continuing to lobby very vigorously for the European financial prosecution service to be enshrined in the new constitution, and we then propose to table a White Paper.
I now turn to your report. In it, the Committee on Budgetary Control criticises various aspects of OLAF’s work, in particular its investigative activities and its priorities. Although I understand the rapporteur’s displeasure, I do not think that the criticism is entirely fair on all counts. OLAF has a difficult transitional period behind it. It would be wrong to view and assess OLAF through the Eurostat lens alone and not to include other essential work in the evaluation, whether it be in customs or cooperating with the enlargement countries to fight fraud – a very important field – or in the legislative area.
Despite the criticism from the Committee on Budgetary Control, I do not think that Parliament’s and the Commission’s positions are actually all that far apart. What we all want is a proportionate reform of OLAF, that can be dealt with if possible in this parliamentary session. This is a starting point for us to work together.
On 18 November, President Prodi outlined the essential features of the proposed improvements in the Committee on Budgetary Control and I take it from your speech, Mr Bösch, that you too would agree with their general thrust. The Commission and the Committee on Budgetary Control agree that OLAF should concentrate more on its core activities. I should, however, also like to scotch the rumours that could be heard after the President of the Commission had made his speech, namely that if Commission officials were suspected of fraud the Commission wanted to take control of the internal investigations away from OLAF. Let me be quite clear: this is not true. Instead, we need to consider whether tasks that are not closely related to OLAF’s specific area of expertise should be moved back to the sectoral directorates-general. This might apply, in my opinion, to clearance of accounts in agricultural policy for example. In addition, however, the boundaries between OLAF and other entities with investigative powers, in particular IDOC, need to be more clearly defined. Moreover, it should also be stated clearly in the regulation itself that it is the Director of OLAF who decides whether or not to open an investigation, that it is the discretionary principle that applies. This too will contribute to ensuring that the office concentrates on its true priorities.
The information flow between OLAF and the institutions needs to be improved considerably. The Eurostat affair exposed the existing weaknesses in the channels of communication. Even when investigations are ongoing, the Commission must be able to take precautionary measures to protect the Community’s financial interests, obviously without jeopardising OLAF’s investigations. The draft memorandum of understanding between the Commission and OLAF is, in our view, an important and opportune step forward. However, in the interests of legal security and clarity the OLAF Regulation should also be clarified accordingly and we will obviously also discuss where such clarifications should be introduced and what form they should take.
An important and completely undisputed point is also strengthening the rights of defence of those who are involved in investigations. The OLAF Manual already contains a whole series of detailed internal rules about this. The main principles underlying the rights of the people concerned, such as their right to inspect files and to be given a hearing, should however be spelt out in the regulation itself.
In his speech of 18 November, President Prodi mentioned enhancing the role of the Supervisory Committee or creating an interinstitutional forum as possible ways of improving OLAF’s governance. The Commission has not yet concluded its reflections on this. However, I can say that on the whole strengthening the Supervisory Committee, as proposed by the Committee on Budgetary Control, is something with which we can agree, particularly when it comes to examining complaints. The Supervisory Committee itself has of course made an interesting proposal on this in its opinion.
The Commission cannot, however, accept the rapporteur’s proposal to make the secretariat of the Supervisory Committee part of the European Parliament’s secretariat. The proposal raises fundamental questions of interinstitutional balance and also legal issues. The question of where the secretariat should be located needs to be given thorough consideration.
Neither can the Commission support the other proposals on OLAF’s budgetary status or on the control mechanism within the Commission, because they would call into question key aspects of the reform of our financial management. I might also remind you that, following the intensive work of Parliament and the Council, the new Financial Regulation only entered into force on 1 January of this year. We first need to gain experience with this new legislation. In any case, it is too early to make significant changes.
It is now a question of acting swiftly – the Commission fully agrees with you here – and of tabling a legislative proposal that has a real chance of being dealt with in this Parliament. Unfortunately, it will not be possible to do so before the end of this year, as the Committee on Budgetary Control suggests in its report, and I would ask for your understanding in the light of the complex and sensitive nature of the subject. However, the Commission is confident that it will be able to table a legislative proposal very quickly at the beginning of next year. We should work on this together. We will take account of your report and the opinions of the Supervisory Committee in our work and considerations. The Commission is prepared to cooperate extensively with Parliament and, in the interests of effective fraud prevention in the European Union, our joint overriding objective should be to create a solid and workable basis for OLAF’s future work. 
Stauner (PPE-DE ).
   – Mr President, work on the Bösch report was obviously overshadowed by the Eurostat affair. In its efforts to shed light on the Eurostat affair – its secret bank accounts, mis-management and nepotism – the Committee on Budgetary Control also uncovered significant shortcomings within OLAF. In this case, OLAF’s main failing was to work too slowly. In so doing it missed the opportunity to recover a considerable proportion of the at least EUR 8 million that had been embezzled. I believe, however, that the report adequately reflects the various criticisms of OLAF’s work. One thing must surely be clear to all of us, and it is clear: the real guilty party in this more than dramatic case of fraud is not OLAF but the Commission. They hushed it up and issued denials for so long that they had no choice but to continue doing so. And the Commissioners responsible, including the President of the Commission, are still refusing to accept the political, as well as the actual, responsibility for this embezzlement. On top of this, the Commission tabled its report – this Article 15 report – more than one year late. That is not very respectful of the law either, Commissioner.
In our view, Eurostat showed above all how necessary it is to have an anti-fraud office, if the Prodian zero tolerance of fraud is not to mutate into full tolerance of fraud. We want an independent OLAF and we continue to need a strong OLAF Supervisory Committee, made up of external experts. An independent OLAF is still far from being a reality, because unfortunately the Commission repeatedly manages to exert influence because of its links to OLAF in terms of organisation and staffing. The Commission’s attempt to take internal investigations away from OLAF, which only recently came to light, is a perfect example.
Commissioner, that was not a rumour, as you have just claimed; a meeting really did take place. If your top officials did not inform you of it then I can give you sight of the minutes of that meeting. The Commission has an inexhaustible wealth of ideas in this respect, with which it now even appears to want to honour the OLAF Supervisory Committee. So far it has tended to be seen as a nuisance, but now, so we hear from the Commission, representatives of the Commission, Parliament and the Council are to be involved to make it more democratic. This would, however, only serve to undermine OLAF’s independence further and we will certainly not be accompanying you down this precarious route, Commissioner. OLAF’s work will also continue to be difficult. We are aware of this. That is why, alongside strong, unswayable managers, we also need clear framework conditions. There is still a long way to go before we have a European financial prosecution service, but I hope that there will be no turning back. I am not able to support most of the amendments tabled by the Liberals and Greens, with two exceptions, but we can go along with most of the PSE’s amendments and I would ask for your support for our ten amendments. 
Casaca (PSE ).
    Mr President, Commissioner, rapporteur, as we are reminded in Mr Bösch’s meticulous and exhaustive report, OLAF’s current director took office three and a half years ago. This body has grown so much that it now has 364 members of staff. The time for expectations, transitions and adjustment is, therefore, over. The time has definitely come for a balance sheet, for an evaluation and for accountability. The audit that has been planned for OLAF is crucial, as is moving from the current ‘Supervisory Committee’, which is simply a figurehead, to a monitoring, evaluation and decision-making body with ultimate authority. Our Committee on Budgetary Control has always viewed OLAF as a working instrument for a European Prosecution Service, an institution made increasingly necessary by the growth and sophistication of transnational European crime. The outcome of the current Intergovernmental Conference will consequently be crucial. We must ask ourselves whether, until OLAF is given the status of a European Prosecution Service, it makes sense to continue investing in police action that this organisation cannot legally pursue and instead employ auditing methods that are used in all financial crime-fighting and which no financial investigation body can do without.
Clearly contributing to OLAF’s poor performance in the recent Eurostat case was a lack of understanding of basic concepts of communication and information, and an imbalance between the interests in play. Another contributing factor was the lack of auditors, whose skills must always be at the heart of combating financial fraud or irregularities. This is a time for rigour, strictness, hard work, professionalism, balance, reason and common sense and this is precisely what we hope to see OLAF achieve. 
Sørensen (ELDR ).
    Mr President, recent events, which have very much pushed OLAF into the limelight, have lent this assessment great importance and relevance. I should like to emphasise that the Group of the European Liberal, Democrat and Reform Party supports a strong, independent OLAF.
Briefly, I am also of the opinion that reform of OLAF is needed – reform that should focus on the following matters: the whole issue of OLAF’s independence and the fact that OLAF must prioritise its tasks to a greater extent and concentrate its resources on its core task, which is to clear up cases involving fraud and irregularities. The time taken to deal with cases must be reduced, and the channels of communication between the Commission and the Commissioners responsible must be improved. In the interests of the division of responsibilities and of the possibility of cutting losses, it is crucial that the Director-General and Commissioner responsible are notified as soon – and in as much detail – as possible.
Mr Bösch has done sterling work in this House in relation to OLAF over a long period. Nevertheless, in our opinion, this report does not quite measure up to our aims. I do not think that it is Parliament’s business to determine OLAF’s internal organisation and staff policy. Nor do I think that it is right to bring the OLAF Supervisory Committee under the European Parliament. It must be fully independent of all the institutions. Nor do I think that it is necessarily a particularly good idea to give us a special legal officer for the rights of the individual. The tasks in this field should and will be performed by the European Ombudsman. Finally, I also think that it is important that this report be about OLAF. Other things should be dealt with separately. An example is the proposal regarding the Commission’s accountant in paragraph 16.
Finally, I should like to express my regret once again that our committee has not had a proper opportunity to debate extensive amendments to the original text of this report, and I should like to call for Parliament to support the amendments proposed by the ELDR Group, so that we, too, can support, or vote in favour of, the final report during the final vote. 
Blak (GUE/NGL ).
    Mr President, I should like to give Mr Bösch the highest praise for a splendid report, which is both penetrating and thorough, and I should like to say to Mrs Schreyer, who is my favourite Commissioner: you should ask someone else to write your speeches instead of coming out with the nonsense we have heard this evening. It is unacceptable.
There has been a great deal of criticism of OLAF of late, and rightly so, but OLAF must not be made a scapegoat for the Eurostat case, for example. The Commission must not use OLAF as a dustbin for all the cases it does not feel like dealing with itself. Even if a case has been forwarded to OLAF, that does not release the Commission from its obligation to act. OLAF must be fully independent, and we must admit that we were wrong to set OLAF up as an administrative part of the Commission. The secretariat of the Supervisory Committee must be fully independent of the Commission. The staff working for OLAF must be independent of all the institutions, and it is important that staff are not allowed to apply for posts in the Commission afterwards, because we have of course seen examples of cases being shelved because people had to go back to the Commission.
I telephoned OLAF about Eurostat in the spring of 2002, after Dorte Schmidt-Brown had contacted me for the first time. OLAF told me that it had neither the time, the inclination nor the staff to look over the Eurostat case. In their words, Dorte Schmidt-Brown was a hysterical woman who should try to relax a little. It was not until Parliament became vociferous on the subject that the investigations picked up speed. It is very worrying that OLAF only prioritises investigations that have the interest of Parliament or the press, and it is also very worrying that OLAF does not take whistle-blowers seriously. I hope that we do not see any more of this kind of case. It is absolutely crucial that we are able to rely on OLAF’s objectivity, and that people work quickly and effectively in the future, but I should also say that OLAF is not known for being the sharpest tool in the box. 
Rühle (Verts/ALE ).
   – Mr President, ladies and gentlemen, we too would like to thank the rapporteur for his comprehensive work. On this occasion, unfortunately, we are unable to support him on all points, and we regret that there was not enough time left for a discussion of the individual amendments before the vote in committee. We identify two main problems with the amendments. Firstly, we are in favour of strengthening the Supervisory Committee, but we are also against the Supervisory Committee then being allocated to the European Parliament. If a Supervisory Committee is to be genuinely independent in its evaluations, it should be independent of Parliament as well.
At the moment, we can perceive another tendency in the current debate about the Supervisory Committee. It is extremely regrettable that there is still no European Public Prosecutor at present and that we will probably have to wait some time for this. However, we should not now make the mistake of trying to achieve a transitional solution which pushes the Supervisory Committee vicariously into this role, as this would not be the appropriate role. What we need, in the long term, is judicial control of OLAF, but this can only be provided by the European Public Prosecutor, not by a substitute committee.
We take an equally critical view of another problem. We see that Parliament is increasingly seeking to involve itself in OLAF’s internal affairs, and we do not think this is right. We take the view that OLAF must be – and must remain – genuinely independent, but this does not mean that its independence from the Commission is necessarily strengthened if this House gets involved in micromanaging OLAF at the same time. That is quite wrong, in our view. Genuine independence also means administrative independence.
Overall, I think we need a thorough rethink of the amendments. I hope that we can achieve a compromise that a majority in the committee can support. I would also, however, like to make one thing clear to Mrs Stauner. We will not support most of your amendments, for we think it wrong that they should contain an implicit vote of no confidence in OLAF and apportion blame – also in a one-sided way – as regards the Commission’s role in the Eurostat affair. This is something we will not go along with. 
Camre (UEN ).
    Mr President, first of all, I should like to thank Mr Bösch for a splendid, extremely thorough report, the conclusions of which we can support, on the whole. It could of course be said that the advisability of Parliament giving such detailed rules for the reform of OLAF is doubtful, but, as the Commission has been unable to create a functioning monitoring body, Parliament must of course attend to it. It is we who must be answerable to citizens in the last instance for the way in which their money is managed. In the past, we had UCLAF, but that did not function perfectly. Then OLAF came along, and obviously we are now seeing that that has not improved matters as desired.
I agree with the criticism, in itself, that several of my fellow Members have made regarding the causes of OLAF’s inability to function. In the late seventies, there was a joke in my country stemming from the fact that there was a main post office that did not function properly. We were discussing what to do if a nuclear power station were built. There was a problem with the waste, and the joke was that the solution was to package the waste up and send it to the main post office, where it would go round and round in an eternal cycle until the radiation had diminished. The Commission has actually used OLAF in a similar way. Things have gone on far too long, have lain unattended for too long, and it is incomprehensible to us, especially in relation to the Eurostat case, that OLAF’s management was able to say to the Committee on Budgetary Control, in deadly earnest, that cases have been kept secret from the Commission so as not to burden the Commission with the unpleasant knowledge of what has happened. This gives a very amateurish impression. In fact, it could of course be life-threatening to the Commission not to be informed.
We do not really believe that it would be very helpful to put new committees above the existing Supervisory Committee, nor do we have much faith in the idea of a European Public Prosecutor. Indeed, what is important is to bring about a sea change in our approach towards dealing with the EU’s economy as a whole. 
Van Dam (EDD ).
   – Mr President, Commissioner, this debate should have taken place last year. The rapporteur cannot be blamed for this, as he drafted a sound report in the shortest possible time.
When the Commission took office, it announced once again that it would apply itself fully to tackling fraud and irregularities in the EU Institutions, justifiably so, for there are billions of euros involved. The Commission continues to perform in a wholly unsatisfactory manner now that it has submitted this progress report to Parliament more than a year late. The fraudulent practices surrounding the Eurostat affair illustrated that OLAF should no longer, administratively speaking, fall within the Commission's remit. The bureau must be given as much independence as possible and be made accountable to Parliament.
I firmly hold the Commissioner to the promise that she made a moment ago to present her proposal to Parliament within two months. Otherwise, her credibility will really torpedo. 
Theato (PPE-DE ).
   – Mr President, Commissioner, ladies and gentlemen, Mr Bösch’s report is a critical but also a very constructive one, and I congratulate him on his intensive work. Of course, we could have voted on its outcomes and possible implementation at an earlier stage if the Commission had submitted its evaluation of OLAF’s three years of work on time, as envisaged in the Regulation, instead of over nine months late. Some of the mismanagement and irregularities could then have been addressed more effectively than is possible now, at the end of the parliamentary term and the Commission’s term in office. Eurostat is a case in point.
We know the background to OLAF’s establishment: an interim structure was all that could be achieved because a Treaty amendment was not envisaged at that stage. As a result, OLAF was in a paradoxical position from the outset. In its work, it is independent – we insist on that – but it is subordinate to the Commission administration in organisational terms. Nonetheless, delays, cumbersome processes and inadequate application of the OLAF Regulation by both parties – the Commission and OLAF – have regrettably characterised this agency to date. Let me cite just a few examples: its protracted recruitment process, its excessively long investigations, its failure to inform the Supervisory Committee as required, and above all the poor training and the failure to adequately respect the defence rights of the individuals under investigation. I take the Supervisory Committee’s clear statement on this latter point especially seriously, as it directly highlights the need to create a European Public Prosecutor to protect the Union’s financial interests. This House has called for such an appointment for a very long time and the Commission has now added its voice to these calls in the Convention and at the Intergovernmental Conference. I am grateful to President Prodi for now having addressed this issue in his action plan. The fundamental rights of the individual can only be guaranteed within a judicial framework based on the rule of law. Until this objective is achieved, I fully support strengthening the Supervisory Committee, both as regards the Secretariat – we need to discuss its allocation to the European Parliament budget – and also, and especially, the appointment of highly qualified, independent persons as members of the Supervisory Committee. In sum, what we need is not a new regulation but a number of amendments, as the report makes clear. We need a strong OLAF. I ask the Commission to take our demands seriously so that we can move closer to a zero tolerance policy.
Andria (PPE-DE ).
    Mr President, Commissioner, ladies and gentlemen, first of all, I would like to congratulate Mr Bösch on the report and express my appreciation of the firm stance he took towards those directly and politically responsible for the fraud who have been charged. A plea to Commissioner Schreyer: I urge you not to try to play down the Eurostat case which remains one of the most alarming and awkward episodes that the European Parliament has ever faced. The enormous economic damage caused has not and may never be quantified.
Let us move onto the report. If what Mr Bösch wrote in the report were to be implemented, then we would live very peacefully in Europe. Financial interests would hardly be protected; legality would be the key element in all European issues. If, however, the established principles, which are summarised in Recital G, which state, and I quote, that ‘the Commission committed itself to a ‘zero tolerance’ policy with regard to fraud and irregularities’, are not translated in practice, then everything that is written will not make the immense effort poured by the rapporteur into his report worthwhile and no specific objective will be achieved. Now, given what has come to light on Eurostat, would it not have been more appropriate to put an amendment tabled by myself to the vote in committee – although, I am glad to say, Mr Bösch explained this issue – which reads, and I quote: ‘Can only condemn all the cases in which OLAF has been unable to conclude its investigations within the allotted 9-month time limit, in particular the Eurostat case, which has been suspended for over three years and in respect of which a timely investigation could have broken a chain of events which has now been exposed as anything but straightforward and of which certain elements are under investigation by the judicial authorities’? This amendment will be put to the vote and, I hope, adopted tomorrow in this Chamber.
At the same time I do not want what I have said about OLAF to be misinterpreted, for it cannot become a scapegoat for fraud perpetrated by others. This is why OLAF must be able to continue to receive its funding, which must be sufficient to strengthen the staff, in particular the investigation officials. I completely agree with the rapporteur in Article 33(1), when he calls on OLAF to inform the European Parliament in detail if an investigation takes longer than the prescribed nine months.
Coming back to the Eurostat case, which disturbs and irritates many of us, I feel I can say that I certainly agree that our positions should be cautious, but, at the same time, we cannot accept an arrangement, which would mean that it would be seen as counterproductive to place the European Institutions in jeopardy over this case. We should be discussing and debating something else: in the Eurostat affair, were the contracts concluded properly or did fraud come to light?
If, as would seem the case from reading the reports, many contracts were concluded without lawful signatories, if there were conflicts of interest that led to certain, illegal economic benefits, if documents were systematically lost that should have been subject to control and news published outside that was intended solely to facilitate negotiations, if more than 50% of contracts were concluded with a single bid, then, clearly, damage running into millions of euro has been done to the European Community and this aspect must override everything else, including the preservation of the European institutions. 
Schreyer,
   .  Mr President, honourable Members, with your permission, I would like to respond briefly to a number of points. There is certainly no doubt that the Eurostat affair is not merely about gross misconduct at Eurostat – and I refrain from using the term ‘fraud’ simply because the matter is still under judicial investigation and I do not want to be accused of making prejudicial comments. Mistakes were also made in the Commission, and OLAF should have carried out the investigations more swiftly. This is why Mr Prodi has also devised an action plan which, on the one hand, contains comprehensive measures regarding Eurostat and, on the other hand, addresses the issue of communication between the departments and the Commissioners, as well as measures relating to OLAF. Let me say again to Mrs Stauner: the measures relating to OLAF do not include shifting the internal investigations into Commission officials back to the Commission. On the contrary – and let me quote from Mr Prodi’s speech – the aim is strengthening OLAF’s operational independence by refocusing its activities. Therefore there might be a case for reassigning to Commission departments certain horizontal tasks that are unrelated to investigations. I think you know as well as I do that OLAF’s core tasks – in other words, what was reinforced and, in part, newly established in 1999 – are indeed the internal investigations, the rights to conduct internal investigations, and the duties to do so. I entirely agree with Mr Bösch that more capacities must be established in these areas. At the same time, however, it is also true – as the Eurostat case itself has shown – that sometimes an external investigation becomes an internal investigation because the external investigation suddenly raises the question: Why did these mistakes with the competition process occur? Why are these specific contracts always concluded here?
Let me reiterate one point: the drafting of the action plan which Mr Prodi has outlined to the Committee on Budgetary Control is well under way and the text to amend the law of the Regulation will be with you at the start of January, I hope, or at any rate promptly in January. I see many similar approaches on the issue of the amendment of the Regulation. Mrs Theato has just mentioned them again. As the President of the Commission has pledged, we will work very closely on these points with the Committee on Budgetary Control, also in advance of the drafting process. 
Bösch (PSE ),
   . – Mr President, the Commission should perhaps finally decide whether it is satisfied with OLAF’s work or not. I almost have the impression that we are criticising OLAF out of the blue, yet I had the feeling that President Prodi has been taking OLAF apart with his criticisms while we have been defending it, since so many Members of this House, speaking in today’s debate, have stated that Eurostat is not an OLAF matter, it is a Commission matter. The Commission must finally adopt its own identifiable line here. Otherwise, I am very pleased that it is happy with everything to do with OLAF. In that case, though, I really do not want to hear any more, not from the President of the Commission, about the obvious shortcomings, in terms of quality, which have arisen in connection with Eurostat. That does not mean that we have not moved from our position, and I think there are still a number of misunderstandings as regards the independence of the Supervisory Committee. The Supervisory Committee must, like OLAF’s Director-General, be appointed on an interinstitutional basis; today, it is part of the Commission, and not – lest any myths arise – in a vacuum. We think that there must be a separation, and that includes a physical and financial separation. It is unacceptable that the staffing of the Supervisory Committee, which exercises a monitoring function, should be the ultimate responsibility of a body which is the subject of that monitoring. We have adopted a firm position here and I hope that this House will endorse this position tomorrow. 
Blak (GUE/NGL ).
    Mr President, the message for Mrs Schreyer this evening is crystal clear: she should say to Mr Prodi that we have no need of his action plans. They are only there to gain time, to sweep the whole matter under the carpet. We cannot tolerate this. 
President.
   The debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0407/2003) by Mrs Miguélez Ramos, on behalf of the Committee on Fisheries, on the proposal for a Council regulation amending Council Regulation (EC) No 2561/2001 aiming to promote the conversion of fishing vessels and of fishermen that were, up to 1999, dependent on the fishing agreement with Morocco (COM(2003) 437 C5-0357/2003 2003/0157(CNS)). 
Fischler,
   .  Mr President, ladies and gentlemen, I would like to begin by thanking you, Mrs Miguélez Ramos, very warmly for your excellent report and for supporting our proposal. The Commission has proposed making various changes to the system to promote conversion of fishing vessels and fishermen that were, up to 1999, dependent on the fishing agreement with Morocco. We propose the following amendments: compensation will now also be paid to every fisherman who has lost his job because the ship on which he worked has now joined another fishery, for example through a joint enterprise. This will extend the group of beneficiaries, so we must, therefore, also extend the deadlines by one year so that all new beneficiaries are able to apply for assistance and to give the authorities in Spain and Portugal enough time to make a decision.
I am also willing to accept Amendments Nos 2 and 3. However, I cannot accept the amendment tabled by Mr Varela Suanzes-Carpegna as it calls for an amendment to Article 12 of the Regulation, which governs structural support in the fisheries sector, as regards socio-economic measures. We cannot amend this Regulation at the present time. 
Miguélez Ramos (PSE ),
   . Mr President, on 30 November 1999 the Fisheries Agreement between the Community and Morocco expired, bringing the activities of four thousand three hundred fishermen and four hundred vessels to an end. Since then, the aid to the people affected entered into force, in accordance with Regulation (EC) No 2792/1999, payable under the FIFG. This aid was extended to 31 December 2001, but it was then necessary to implement a policy of converting the fleet, which to a large extent could not be relocated to other fishing grounds. We therefore approved, and on the basis of national plans, Regulation (EC) No 2561/2001, for the socio-economic diversification of these areas affected by the cessation of activities.
In regions particularly affected, such as el Morrazo, Barbate, Algeciras or Lanzarote, fishing activity was drastically reduced or quite simply disappeared, with repercussions for many other sectors linked to this activity and to local production as a whole.
In order to fund these actions the Solidarity Fund was used, as you know, to the tune of EUR 197 million in total. The Regulation also provided for derogating measures and exceptions to the legislation defining the methods and conditions for interventions aimed at structuring within the fisheries sector. Nevertheless, the exceptional nature of the measure led the Council to approve a limited period for it, which has not been sufficient to deal with many of the people affected.
The rigidities of the Regulation have also contributed to this and now, by means of this modification promoted by the European Parliament, they are going to be eliminated. That is why I am so pleased that Mr Fischler should say that the Commission will accept these modifications and the amendments I propose in my report, because the two of us – Mr Fischler and we, the European Parliament – want the fishermen affected to receive equal treatment, so that they may receive the aid for their conversion, regardless of the fate of the vessel on which they work, because the linking of the fisherman to the fate of the ship has been one of the great difficulties.
In certain cases, the vessels were able to be relocated to other fishing grounds, fishing less than they fished in Moroccan grounds and, therefore, losing income. These vessels had to reduce their crews. Nevertheless, the Regulation did not cover these fishermen because it linked the fate of the vessel to that of the fishermen, preventing them from receiving the global premium for their conversion.
Therefore, and so that this Regulation – as both the Commission and the European Parliament want – can in practice deal with the greatest possible number of people affected, we must eliminate the provisions according to which the individual global premiums can only be granted to a vessel or to fishermen who fished in a vessel whose fishing activities have ceased for good. And the modification we are now debating, as the Commissioner has said, also means extending by twelve months the deadline for eligibility of the expenditure, which will now be 31 December 2004, and the last date for submission to the Commission of the request for payment of the balance, which will now be 30 June 2005.
This is what the representatives of the people affected by the closure of the fishing ground asked us in the Committee on Fisheries, including the Loitamar Cooperative, on the Morrazo peninsula (Galicia), consisting of almost 60 workers who previously fished in Morocco waters, but who have still not been able to fully implement their business project. Now, with the greater time margin they are being allowed, they will be able to do so, and all the members of this cooperative will be able – as required by the Regulation – to begin to work in order to be able to receive this individual aid.
This was also requested of us by the Government of Andalusia, which, together with Galicia, the Canaries and the Algarve, is one of the regions which has suffered most profoundly from this failure to renew the Fisheries Agreement with Morocco.
I must say to you, ladies and gentlemen, that this modification, as I propose it, has no financial repercussions, but merely seeks to ensure that the financial resources allocated can be duly disbursed, thereby fulfilling the objective intended by the legislator when the Regulation we are now revising was approved.
Varela Suanzes-Carpegna (PPE-DE ).
    Mr President, Commissioner, ladies and gentlemen, I would firstly like to congratulate our rapporteur, Mrs Miguélez, on her report on a just cause – as others have said – which we have all supported for a very long time, including the Spanish Government, as the Commissioner is aware.
I wished to take advantage of this modification of the Regulation on aid for the conversion of the fleet which fished in Morocco to point out that what was done then must not be the exception, but the rule. In other words, when Community fleets need to be converted, either due to a failure to renew international fisheries agreements, or due to a drastic reduction in catches owing to recovery plans – and our British colleagues are well aware of this, particularly the Scottish Members, in relation to cod – the European Commission should automatically provide for additional measures to compensate these fleets and deal with the new situation.
We should not therefore make partial modifications to the general Regulation on FIFG structural aid whenever a situation such as this occurs, but rather there should be a permanent general framework in order to provide aid whenever it happens, either as a result of species recovery plans in Community waters or in external waters when they affect our fleet, the Community fleet.
This has been the case recently with the Community halibut fleet in NAFO waters, where the Commission proposed a recovery plan for halibut which was accepted and which involves dropping from 42 000 tonnes this year, 2003, to 16 000 tonnes in 2007, a reduction of 62%. And since it appears here that nothing has happened, I say that the Commission must be obliged to do something in order not to jeopardise the future of this fleet. And it must take appropriate action by adopting extraordinary measures such as relocation to other fishing grounds, the promotion of experimental campaigns and the granting of other socio-economic aid which we have been asking for in order to compensate for the situation which has been created.
Our intention in presenting this amendment which, Commissioner, is not a ‘Varela’ amendment but an amendment tabled by the Committee on Fisheries, is to resolve these problems and any future problems. If our Parliament approves it tomorrow, my request to you, Commissioner, is that the Commission should consider this since the sector in question is calling for it. It is asking you to do something. The European Parliament wishes to help you and be your ally and an ally of the sector and therefore ensure in this way that the European Commission takes action.
This is my opinion and I hope, Mr Fischler, that you will consider what has been said before taking the initiative you have announced.
I would like to end – since I will not have time later – by congratulating Chairman Stevenson, rapporteur for the report on Mozambique, which we are going to deal with next, because it is a wonderful report which deserves our support. 
Lage (PSE ).
    Mr President, Commissioner, ladies and gentlemen, the failure to renew the fisheries agreement with Morocco dealt a harsh blow to the external strategy for fisheries policy and has had tragic consequences for certain fishing areas, especially in Andalusia and, on a smaller scale, in Portugal’s Algarve region. The Commission and Parliament have, it must be said, managed to adopt a plan to support the activities affected, albeit with a few weaknesses and shortcomings, which are now being corrected.
We therefore welcome this Commission proposal, which has come about as the result of Parliamentary pressure as well as requests from the two countries directly affected, Portugal and Spain. It must be said that this proposal would perhaps not have been needed if the Commission had listened to Parliament when Regulation 2561/2001 was discussed. Even then, the potential problems of implementing this regulation had already been clearly identified.
We support the Miguélez Ramos report, and have nothing but praise for the rapporteur’s work and for the initiatives she has produced, which are doubtless behind the corrections that are being made to the proposal. We must ensure equal treatment for all fishermen and we must ensure that the regulation covers the greatest number possible of people working in this sector. The provisions preventing already scheduled aid being granted within more reasonable deadlines must, therefore, be removed. We support the rapporteur’s amendments, which are so clearly justified that they need no further comment. It is right that financial compensation should also be given to fishermen who are unemployed as a result of other decisions and not just because their vessels have been scrapped, including fishermen who have decided to devote themselves to other types of fishing, for example, or those who have already switched to other types of fishing.
I wish to make one last comment, Mr President, which concerns the need, in future, to provide emergency measures for situations of vulnerability when agreements with third countries might lead to situations of collapse and harm fishing activities. I genuinely believe that we need a global strategy so that we do not only respond to these situations as and when they arise. 
Fischler,
   .  Mr President, honourable Members, I am very grateful to you and to everyone who has contributed to this debate. I fully agree with the rapporteur that it is positive and important to undertake the adjustment for this very specific case of the Spanish and Portuguese fleet in connection with the Morocco Agreement, or the expiry of the Morocco Agreement. However, I still believe that we should not have recourse to knee-jerk legislation of any kind. While I do understand the issue raised by Mr Varela Suanzes-Carpegna here, I think that this is something we should examine during the midterm review of the structural measure. A midterm review is envisaged in any case, and I believe that is the right moment to discuss all the elements and experiences that we have gathered during implementation in the first half of the implementing period. 
President.
   The debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0406/2003) by Mr Stevenson, on behalf of the Committee on Fisheries, on the proposal for a Council regulation on the conclusion of the Fisheries Agreement between the European Community and the Republic of Mozambique (COM(2003) 419 C5-0354/2003 2003/0154(CNS)). 
Fischler,
   .  Mr President, honourable Members, I can continue where I left off. This concerns the Fisheries Agreement and the renewal of the Protocol to the Fisheries Agreement between the European Union and Mozambique. First of all, I would like to thank Mr Stevenson for his report and also for supporting the Commission’s proposal to conclude this Protocol. With the aid of this Agreement, the Community’s fishing vessels can resume their fishing activities in Mozambique’s waters. The new Agreement also expands the set of agreements on tuna fishing concluded by the Community in this major region. Moreover, we have succeeded in establishing a highly innovative partnership agreement, for Mozambique will earmark the entire amount of the financial compensation to funding marine surveillance, research, training and various other measures designed to develop Mozambique’s fisheries and improve its capacities for fisheries management.
As regards the other amendments proposed here, let me say that Amendments Nos 1 and 2 do not seem necessary from our perspective, as we already supply Parliament with this information under the relevant framework agreement between you and the Commission. Amendment No 3 – this is really an old story – concerns the renewal of a Protocol. As long as it relates to a renewal of the Protocol, no separate negotiating mandate is required, as it falls within the scope of the existing negotiating guidelines. For that reason, I must reject this Amendment. 
Stevenson (PPE-DE ),
   . Mr President, this new agreement between the European Community and Mozambique was initialled on 21 October 2002. The agreement is for three years, and the protocol setting out the fishing opportunities, the financial compensation and the technical annex form an integral part of the agreement and enters into force on 1 January 2004. The main fisheries connected to this agreement are, of course, deepwater shrimp and tuna.
As the Commissioner knows, we have had considerable controversy in the past concerning some of these international third-country agreements. Indeed, last year we worked very closely with the Commission to produce a template: the Senegal agreement. I make no apologies here for moving from the east coast of Africa to the west coast: the Senegal agreement broke new ground in introducing innovative new ways of dealing with third-country agreements, which we have continued to put in place ever since.
In the case of Senegal, we insisted that 60% of the financial compensation should be for fishing opportunities and 40% should be for conservation and development. We insisted that half of the crews on the EU vessels should be Senegalese, that a considerable quantity of the catch should be processed in the fish processing plants in Senegal and that VMS monitoring be fitted in all vessels involved. In every respect, this was seen as a good package that delivered the development and conservation values, provided a sustainable fishery, continued to provide jobs for EU fishermen, and continued to supply the EU with high-quality fish. In the EU we are only 60% self-sufficient in fishery products; there is a rising consumer demand for more fish, and fish stocks are falling in the Community's waters.
It is important that through the Senegal agreement, and the subsequent agreements we have achieved since then, we are trying to continue with this pattern in order to continue to provide these kinds of sustainable fisheries agreements. If we abandon these agreements, we would have a free-for-all. There would be a situation where countries like Senegal, Mauritania, and, in this case, Mozambique, would feel free to enter into contracts with the Koreans, the Japanese or the Russians, and there would then be no element of conservation, no development element, no care for the local indigenous fishermen or their welfare. In these circumstances, if we act via the EU, we have a better opportunity for monitoring the way these agreements work.
In the case of the Mozambique agreement, we are asking the Commission to report to the Council and to the European Parliament on the application and implementation of the agreement one year before it ends. If we find that these conditions have not been adhered to, then we will not mandate the Commission to enter into further agreements with Mozambique.
In this case, we have a report of an abundance of deepwater shrimp and tuna in this area. We are going to give fishing opportunities for ten vessels fishing for 1000 tonnes per year of deepwater shrimp - and an additional 535 tonne by-catch - 35 freezer tuna seiners and 14 surface longliners fishing for 8000 tonnes of tuna. The financial package is EUR 4 090 000 per annum. In this case it is not a question of 60% for fishing opportunities and 40% for development; all of it is going towards conservation and development - EUR 1.5 million for monitoring marine fisheries, EUR 1 million for institutional development, EUR 1 million for research, EUR 430 000 for training, EUR 100 000 for quality control and EUR 60 000 to help Mozambique participate in international meetings.
This is a very good package and I commend it to the House. I am grateful to the Commission for producing it, we are now working in a new spirit of partnership in these third-country agreements and we should continue to do so.
Dührkop Dührkop (PSE ),
   . Mr President, I would firstly like to thank the rapporteur, Mr Stevenson, for having included the amendments of the Committee on Budgets in his report, and I believe we should all be pleased because this protocol will allow Community ships to return to the waters of Mozambique, in which they fished until 1993, when Mozambique condemned the then existing Agreement.
Although Mr Stevenson has already spoken briefly on the budget, I would like to insist that the financial record sheet for the Council's proposal effectively provides for compensation for 2004, 2005 and 2006 in commitment appropriations of EUR 12 270 000, which is exclusively dedicated as Commissioner Fischler and the rapporteur, Mr Stevenson, have said – to what we call specific measures, which the Committee on Budgets also welcomes. Furthermore, it is laid down that there may be a maximum of EUR 15 870 000, when the annual budget is established.
Apart from this, the Committee on Budgets is in favour of this Protocol with the Republic of Mozambique, which provides for new fishing opportunities for the Community fleet in the Indian Ocean.
Mr Fischler, the Committee on Budgets, however, regrets – as on so many occasions – that the Commission has waited until the end of July 2003 to communicate its initial proposal, despite the fact that the Protocol was signed in October 2002. 
McAvan (PSE ),
   . Mr President, the main concern of the Committee on Development and Cooperation in relation to this agreement is to make sure that its impact is in keeping with the wider development goals of the Union. We are very keen to ensure that development policy is not ghettoised into one little bit of the Commission, and that its objectives are mainstreamed right across EU policies when we are dealing with the developing world.
What does this mean in concrete terms in relation to this agreement? It means we want to see real benefits for the local communities and assurances that this agreement will not have negative impacts on the local populations that depend on fisheries. We want the Commission to maximise local employment opportunities arising from the agreement, looking at access for fishermen to the tuna fishing business. We are keen to see women be given a role in the marketing and processing of fisheries products.
Stock management issues are also important. We want the Commission to make sure that the agreement takes full account of the sustainable management of fisheries resources, particularly with regard to tuna stocks. The emphasis should be on decentralised production using low-cost, sustainable farming methods.
Like Mr Stevenson we welcome the Commission's proposals to allocate the financial compensation to measures which promote institutional development, marine surveillance, research, training and quality control. This is a good step in the right direction because it is important that the money also goes into furthering our development goals.
Finally, I agree with all those who are saying that it is extremely important that the Parliament be kept informed of the implementation of this agreement. We need regular assessments on what is happening on the ground before we can agree to any renewal of the agreement. 
Piscarreta (PPE-DE ).
    Mr President, Commissioner, ladies and gentlemen, in order to overcome the problem of its scant fish stocks, the European Union has, amongst other measures, concluded agreements with third countries with a view to using these countries’ territorial waters in exchange for financial compensation. In 2002, the European Union signed an agreement of this nature with Mozambique, which was seen by many as the perfect agreement, because it managed to combine cooperation and mutual interest: in the next three years the Community fleet will be able to fish in Mozambican territorial waters in return for financial compensation of around EUR four million. This balanced agreement is in actual fact ideal. Firstly, because it covers species which have abundant stocks in Mozambique; shrimp and tuna. Secondly, it seeks to develop local fisheries by training Mozambican crews. Thirdly, Community compensation has been earmarked for tangible objectives in the fisheries sector. The fourth and last point is that the agreement’s implementation will be monitored, with particular attention being paid to the sanitation aspects of catches.
I agree with the requirement laid down by the European Parliament, through its rapporteur, Mr Stevenson, to receive an annual report on the agreement’s application and on the implementation of its measures, which will enable this institution closely to monitor this agreement – of strategic importance for the European Union’s common fisheries policy – thereby keeping up to date in preparation for any negotiations, when it comes to renewing the agreement.
I wish to conclude by expressing my complete satisfaction at the signing of this agreement, which is so well balanced. I am truly convinced that, unlike the previous agreement, Mozambique will have no reason to be unhappy with this text. 
Miguélez Ramos (PSE ).
    Mr President, it is me again. International fisheries agreements with third countries have always been one of the key elements of Community fisheries policy. Half of our fisheries products, consumed fresh or used for processing, originate from waters outside the Community in which third countries exercise the right to exclusive use of resources.
In economic terms, the European Union is an enormous market of more than 370 million inhabitants, an expanding market with a deficit in fisheries products. This situation determines the European Union's commercial policy in the field of fisheries. Given its volume, the Community market is the world’s main market for sea products.
The Socialist Group therefore supports the conclusion of this agreement between the Community and Mozambique and congratulates the rapporteur, Mr Stevenson, who has produced a wonderful report.
We have absolutely no doubt that this agreement will contribute to strengthening mutually beneficial relations with that Republic. It will not only contribute to the supply of the Community market but it will also mean - as Mr Piscarreta said – aid for the development of Mozambique’s fisheries sector, all within the framework of sustainable development.
Ladies and gentlemen, we believe that strengthening commercial relations between the European Union and Mozambique, is not simply demagoguery, but might actually help to improve the lives of the Mozambican people. Surely it is good development aid policy for the so-called first world to buy from the developing countries their most valuable products, whether they are diamonds or prawns, and that the fruits of these sales should promote fundamental strategic sectors such as local agriculture.
The Socialist Group therefore supports the amendments of the rapporteur, Mr Stevenson, and those of the Committee on Budgets. We agree with the wishes of the Committee on Development and Cooperation, although we regret that we cannot support its proposals, since they have not been presented in the form of amendments to the legislative text, as is always required in these cases.
President.
   Mrs Miguélez, you began your speech by saying ‘it is me again’. The fact that you have spoken more than once in one evening simply demonstrates that you are very hard-working. You know that the Presidency is always very happy to hear you. 
Lage (PSE ).
    Mr President, I too wish to welcome the return of the Community fishing vessels to Mozambican waters. As a Portuguese citizen, I make this statement without any colonialist nostalgia or any harking back to those times, but I feel that the fact that Community boats are returning to Mozambican waters is also a sign of the democratic maturity that Mozambique has achieved and the normalisation of diplomatic relations that have been established between that country and the European Union.
In fact, as has already been said, this agreement brings mutual advantages and really represents the culmination of a process of drafting fisheries agreements with third countries that the Commission and Parliament have been working on for some time now. This agreement was concluded as the result both of discussions and of a wealth of experience, which should in future be applied to cases similar to that of Mozambique. In this regard, the President of the Commission has called this a model agreement, and I share this view. This could provide a model for future agreements with third countries, poor countries, underdeveloped countries for whom the type of scheme and system contained in this agreement provides the best way of protecting their interests, of supporting their fisheries in a manner that is ecologically, scientifically and economically advantageous. I must therefore congratulate the Commission on having achieved such positive results in its diplomatic relations with Mozambique, and the Chairman of the Committee on Fisheries on the excellent report he has produced. 
President.
   The debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0362/2003) by Mr Cashman, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the adoption of measures concerning the repatriation of mortal remains (2003/2032(INI)) 
Cashman (PSE ),
   . Mr President, I should like to begin by thanking the members of the Committee on Citizen's Freedoms and Rights, Justice and Home Affairs for their unanimous support on this very important report.
To provide a context, at present there is no EU-wide provision uniformly governing the repatriation of mortal remains from one Member State to another. In the absence of any such provisions, cross-border transportation of mortal remains is governed by two instruments of international law, but primarily the Strasbourg agreement concluded in 1973. The world, methods and technology have changed much since then. It is also interesting to note that only some Member States have actually acceded to this Strasbourg agreement, which, in many respects, is obsolete.
On account of the above-mentioned agreements, the death of a Community citizen in a Member State other than his country of origin results in much more complex procedures, a longer period of time before burial or cremation takes place, and higher costs than if the death had occurred in the deceased person's country of origin.
We encourage people to live, work and settle in states other than their own national Member State. Currently, over 5 million people reside outside their national Member State; add to this the millions of EU citizens who holiday throughout the European Union every year, and we are looking at a growing number of people who die abroad. Their relatives are faced with appalling bureaucracy through which they have to wade.
The Commission has recently stated once again that EU citizens should be able to move between Member States on terms similar to those applicable to nationals of a Member State, and that additional administrative or legal obligations should be kept to the bare minimum required by the fact that the person in question is a non-national.
As things stand at present, it is still far from true that a Community citizen who dies in a Member State other than his own is treated in the same way as a national who dies in his home country. This has been pointed out to the Commission and the Council on numerous occasions by many Members of the European Parliament. We are presented with the ludicrous situation that we are supposed to be a Europe without internal borders, yet as soon as somebody dies, when there is a great need for understanding and sympathy, we erect the borders merely because the body needs to be transported from one country to another. That means that a zinc coffin is required, at enormous expense.
A family from Coventry in the UK had to repatriate their son who was tragically killed on his first night on holiday in Spain. They were given no help. They were given a mass of bureaucracy – in a foreign language – through which they had to wade. They were given no translation, no help from the consular services and had to meet the cost of over GBP 3000 for a zinc coffin alone. We are presented with a ludicrous situation in which the repatriation of a corpse from Salzburg to Freilassing – a distance of ten kilometres – requires a zinc coffin, but the transfer of a body from Ivalo to Helsinki – a distance of 1120 kilometres – requires no such coffin.
It is quite clear that we need a uniform approach to this situation. We are currently 15 Member States, soon to be 25. We are encouraging people to live in other countries, to embrace other cultures; yet when they die, suddenly, the border is erected and the bureaucracy comes into play. It is very simple: in 1973, we were worried about the deterioration of corpses during transit. Embalming is now common, technology has moved on. We have to say to the reluctant Commission that this issue will not go away. All of us here are protected – we have organisations, trade unions and institutions that will return our bodies to where our families want them to be. But imagine for a moment the plight of a mother, Dolores Shambley, dealing with the death of her son, Kris Shambley – barely 20 in 1998. Dolores Shambley is a woman with very little money, who was given very little assistance.
This is a fundamental right. If we are really interested in upholding the rights of our citizens, I urge the Commission to bring forward proposals and accept the principle of free movement. I believe that the right to move freely only ends when the body is interred. There has been a reluctance within the Commission to accept this own-initiative report. Be brave. Be courageous. Accept the challenge. The goodwill is there. I now want the political initiative.
Bolkestein,
   . Mr President, may I first of all thank Mr Cashman for his detailed and precise report on this very sensitive and important issue. This report sets out very clearly the problems regarding the repatriation of mortal remains that exist within the Union today. I know how strongly many Members feel about this issue. Many Members of this House have personally intervened to assist families of constituents who have faced these difficulties when trying to repatriate the mortal remains of their loved ones. I therefore appreciate the particular importance that must be attached to this issue. The Commission agrees with Mr Cashman that these problems will multiply as EU citizens increasingly use their rights to work and reside in other Member States.
Although the Commission fully recognises the importance of this issue and the urgent need to deal with it, I must admit that it has been somewhat hesitant, as the report has clearly pointed out, in determining precisely what to do about this. The Commission has signalled, in response to a number of questions by Members of Parliament, that it does not believe, at this stage, that specific harmonisation is required. I wish to stress today, however, that this does not imply that we cannot move to resolve these problems.
In the coming weeks, I shall be asking my colleagues to adopt a directive on services in the internal market, and I believe that directive will help resolve a number of the problems raised by Mr Cashman's report insofar as they reflect restrictions on the exercise and provision of cross-border funeral services. In particular, it will simplify administrative procedures and abolish authorisation requirements that are not consistent with the principle of proportionality. I also hope to be able to deal with the specific problem related to zinc coffins insofar as a coffin is obviously an essential element of the funeral director's services.
There will remain problems caused by different national requirements such as those on death certificates and autopsies. On those issues the Commission doubts that it is legally possible to apply the principle of the free movement of people to contest restrictions on the transfer of mortal remains. It also believes that harmonisation on these issues would be likely to be contested on the grounds of subsidiarity.
I wish to thank Mr Cashman once again for this report and I should like to reassure this House that the Commission will seek to resolve as many of the problems raised in it as possible, but I cannot guarantee that we shall solve all the problems, given the uncertain legal situation regarding the free movement of people. In resolving the restrictions to the provision of funeral services the Commission will do its utmost to make Member States aware of the very important problems raised in this report regarding differing provisions on autopsies and death certificates. In particular, we shall indicate that national legislation in this field should respect fundamental rights, and in particular the dignity of people. 
Oreja Arburúa (PPE-DE ).
    Mr President, it is not easy to speak following Mr Cashman’s speech, and I would firstly like to congratulate him on having had the idea of producing this own-initiative report, on the way he has drawn it up and on achieving the unanimous support of his committee.
I would also like to congratulate the Commission on announcing that it is going to propose a services directive and simplify some of the procedures necessary for free movement – in this case of mortal remains and we eagerly await the presentation of this proposal by the Commission.
I believe this issue is of particular importance. It is said that societies are measured in terms of their respect for their elderly people, and even more in terms of their respect for their mortal remains. I believe it is our obligation to make as much progress as possible in simplifying as far as we possibly can the procedures necessary – which affect the families so much for the free movement of mortal remains within the Union in the event that death takes place far from their places of origin.
Furthermore, I believe that Mr Cashman – if you will allow me a little humour on such a serious issue is showing his great qualities as a politician, because he is showing concern for people who are never again going to be able to vote for him.
I believe that the fact that certain countries of the European Union have not signed the Strasbourg Agreement, as the rapporteur has quite rightly said, obliges us even more as the European Union – in view of the imminent entry of ten new countries – to establish certain rules in order to simplify as far as possible the procedures necessary for the free movement of mortal remains within the European Union. 
Titford (EDD ).
    I was surprised to see this report and its contents on the agenda. In my own 35 years in the funeral profession, I never encountered the problems of not being able to send home or receive mortal remains. What I have repeatedly witnessed, however, is the appalling conditions in which some bodies have been received because of the lack of proper embalming or care treatment in some countries.
Sadly, there is no attempt in this report to tackle this serious issue, despite a reference to it in the introduction to the explanatory statement, wherein it is hinted that this is the main problem. The rapporteur has informed me that the Commission would not accept amendments on this essential issue, so the chances of standard systems of embalming being introduced are zero.
This report will no doubt be adopted nevertheless without the real issue being confronted. By voting for this report, Members should be aware that they will do nothing to alleviate the stress and emotion suffered by the bereaved who frequently fall victim to the tragic catastrophes of the repatriation of mortal remains. Unfortunately and regrettably, factual errors in this report make it obvious that it has been written by a layman who has no real understanding of the problems of repatriation or indeed the funeral profession, and I therefore see that this report has not addressed the real issue. 
Coelho (PPE-DE ).
    Mr President, Commissioner, ladies and gentlemen, first of all I wish to congratulate Mr Cashman on the report he has presented, which won the unanimous support of the Committee on Citizens’ Freedoms and Rights, Justice and Home Affairs. As Mr Cashman stated, and as Commissioner Bolkestein reiterated, the fundamental logic of freedom of movement will make the need to adopt rules in these areas increasingly pressing, because the free movement of citizens within Community territory will multiply the number of cases that we are seeing today and which warrant our attention. In fact, it is incomprehensible that the death of a Community citizen in a Member State other than his or her country of origin results in much more complex procedures, a longer period of time before burial or cremation takes place, and higher costs. This clearly runs counter to the Community approach.
This being the case, measures must be adopted to simplify or even harmonise the process of repatriating the mortal remains of persons who have died so as to bring this process more into line with the Community approach which is not, of course, taken into account in the international agreements governing this field. These are the 1937 Berlin agreement and the 1973 Strasbourg agreement which, because they are quite old, are not relevant to the situation we have in Europe today and have therefore become largely obsolete. Furthermore, these agreements established a form of indirect discrimination because they apply essentially to ‘non nationals’, which contravenes the fundamental principle of non-discrimination enshrined in Community law, thereby breaching essential rules of Community law. It consequently falls to the Commission, as guardian of the Treaties, to ensure that these are compatible and to adopt the necessary measures to guaranteeing that they are complied with.
Lastly, it should be pointed out that not all Member States have ratified these agreements, which is another reason for the unacceptable disparity in the measures adopted by each of the Member States. 
Banotti (PPE-DE ).
   Mr President, first of all, I would like to congratulate Mr Cashman. His report is based on a resolution that I tabled. Following on from Mr Titford's comments, today I tried to contact an undertaker friend to see if he had anything he wished to add tonight, but it seems he is on his holidays somewhere, as it so happens.
We all accept that Mr Cashman’s excellent report is still and I do not mean to denigrate it - an aspirational report. It aspires to improving a situation that is indeed common. Every year I hear of one, two or even sometimes three cases where people experience problems in relation to the repatriation of remains. If we look at the dates of the various pieces of legislation that Mr Cashman has mentioned in his report, we see that they are all at least 30 years old.
30 years ago the world was very different. As Mr Cashman said, huge numbers of people are now moving about and spending holidays in other Member States. In two of the cases I have very recently heard about, the deceased had been killed under what were considered to be suspicious circumstances. Only this morning I had a phone call from the mother of a young man. She has been waiting 17 months to have his remains repatriated, and local courts have constantly changed their minds about the prosecution of the person believed to have been involved in the death of this young man.
So, it is not just a question of the technical matters relating to repatriation. Very often, delays also occur in relation as the report mentions - to the circumstances of the death. I have just received a copy of one of the questions the Commissioner referred to. This was an answer to a question I tabled on 11 October 2000: 'the Commission, following extensive consultations with all parties concerned, concluded that detailed harmonisation of national rules in this area, over and above those that already exist, is neither desirable nor necessary and would not be justified from the point of view of subsidiarity or proportionality'. That is a depressing answer, Commissioner, so I hope very much that, in the provision of services directive you are proposing, you will recognise that this is an important issue, and above all that in these situations we are very often discussing a deeply human tragedy. 
Cashman (PSE ),
   . Mr President, I believe it would be right to correct the record as regards Mr Titford's contribution. I would point out to him that the report is about the adoption of measures concerning the repatriation of mortal remains. It is about barriers to movement rather than the conditions of the corpse. I want the principle to be accepted.
Mr Titford could, at any time, have suggested amendments to me. Despite discussions in Strasbourg on my report, he subsequently offered no amendments. I am deeply saddened. I always deal honestly and openly with all my colleagues, but he flattered me privately and failed to act publicly. I need to correct the record in this regard. 
President.
   The debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0400/2003) by Mrs Lucas, on behalf of the Committee on the Environment, Public Health and Consumer Policy, on a European Union strategy to reduce atmospheric emissions from seagoing ships (COM(2002) 595 C5-0154/2003 2003/2064(INI)) 
Lucas (Verts/ALE ),
   . Mr President, I want to start with a word of praise for the Commission. In the first reading on sulphur levels in marine fuel, the European Parliament asked for stricter levels for sulphur in marine fuel, and as a first step towards looking at this, I am very pleased that the Commission has requested a study which has now been produced - that looks into the particular issues involved, arising from a potential price premium for 0.5% sulphur in marine fuel. So I am very pleased to see the Commission taking the Parliament's initiative so seriously, and that is a very positive point to start with.
However, it is balanced by a negative point: we are still waiting for a common position on that proposal. The European Parliament's first reading was back in June 2003, so one preliminary question I have is why has the Council not made more progress? Could the Commission enlighten us as to when we might expect that common position? I hope that we could have it by early 2004 at the latest .
Regarding the Community strategy on air pollution from seagoing ships, as I have said before, I very much welcome the publication by the Commission of this communication on a European Union strategy to reduce atmospheric emissions.
As it states, the Commission has indeed set out a broad series of objectives, actions and recommendations for reducing the emissions of air pollutants from seagoing ships over the next ten years in order to reduce their impact on the environment and on human health problems in the EU. However, many of the proposals outlined do not go far enough and in my report I seek to encourage the Commission and the Member States to go a little bit further than outlined in that Commission communication.
The Commission very usefully sets out the scale of the impact of ship emissions. It is very important that we recognise that those impacts are far from being insignificant. In my explanatory statement I underline the seriousness of these impacts that we face. For example, ship emissions contribute to critical loads of acidity being exceeded by more than 50% in most of the coastal areas along the English Channel and the North Sea, in the Baltic Sea along the coast of Germany and Poland, and also in large parts of southern Sweden and Finland. So, the kinds of impacts we are talking about here are indeed very serious.
In terms of the main atmospheric emissions that should be addressed by the Commission communication, it already mentions sulphur dioxide, nitrogen oxides, volatile organic compounds, particulates, carbon dioxide and halon - all of these are quite rightly included. However, in my report, I seek to add two further categories of emissions that should be covered by the strategy: heavy metals and polycyclic aromatics, which are essentially hydrocarbons associated with cancer. I would very much like to see the proposal being extended to cover those.
The Commission is right to state that EU regulations on emissions standards are the best way to reduce emissions from ships in EU ports, territorial waters and exclusive economic zones. But, indeed, it is also right to note that economic instruments can also be one of the best means of promoting good environmental performance providing that what they are doing there is giving incentives to go further than the regulations and actually move towards coming up with the best available technology.
Another point about the objective of the communication is that it needs to be more explicitly aimed at reducing ship emissions of greenhouse gases in particular, looking especially at the impact on global warming. In relation to that, my report also asks the Commission to study how emissions from international maritime traffic could be included in Directive 2001/81/EC on national emissions ceilings when that is reviewed.
Furthermore, my report reminds the Commission of the Sixth Environmental Action Programme, which requests that the Commission identify and undertake specific actions to reduce greenhouse gas emissions from marine shipping if no such action is agreed within the International Maritime Organisation by 2003. Since we can see that indeed no such action has been agreed within the IMO, I hope very much that the Commission will go ahead and initiate such actions without further delay.
On sulphur emissions, it is appropriate to mention the Commission's proposal on the revision of Directive 99/32/EC relating to the sulphur content of marine fuels. The Commission proposed only to reduce sulphur emissions from seagoing ships in European sea areas by about 10% compared to the emission levels in 2000. But, in order to achieve the objectives of the Sixth Environmental Action Programme, emissions need to be reduced by at least 80%. The Commission must therefore be much more ambitious as regards the limit values it has proposed and, indeed, the sea areas to be covered by such limit values. My report therefore calls on the Commission to amend its proposal on the revision of Directive 99/32/EC in accordance with the European Parliament's first reading back in June, the aim of which was to reduce sulphur emissions by 80%.
The Commission should also publish, before the end of 2004, proposals for EU-wide economic instruments aimed at reducing atmospheric emissions from ships. Finally, I would like to see the Member States, the Commission and the accession countries really putting pressure on those countries that have not yet ratified the Marpol Annex VI Agreement. Only five Member States have so far ratified that, and it seems appropriate at this moment to call for wider ratification among accession countries and others as a matter of urgency. 
Bolkestein,
   . Mr President, I would like to thank the rapporteur, Mrs Lucas, for her thorough, well-drafted report on the Commission’s ship emission strategy.
Reducing ship emissions of air pollutants and greenhouse gases is a priority for the Commission, since we know that if measures are not taken, by 2020, ships in European Union seas will emit more air pollutants than all land-based sources combined. I therefore welcome most of the proposals in the Parliament’s draft resolution and I am pleased to say that the Commission is already working to take these forward.
For example, on market-based instruments, we are examining a range of possible options. We held a useful stakeholder workshop in September 2003 to which parliamentarians were invited.
On the issue of taking international ship emissions and EU national emission ceilings into account, we aim to launch a study soon to get a better perspective on how significant ship emissions are in individual Member States compared to land-based emissions. On the use of shoreside electricity and abatement technologies for air pollutants, we aim to use the same study to examine the costs and benefits and present positive examples. We shall feed the results of this work into the Clean Air for Europe Programme in 2005, and present proposals as appropriate.
The question of ship sulphur is of course subject to codecision negotiations on the Commission’s marine fuel sulphur proposal. The proposal as drafted would deliver a significant 40% reduction in sulphur dioxide emissions targeted in asset-sensitive northern Europe.
The Council’s progress on the proposal has been slower than we would have liked, but we have used the extra time to investigate the costs and benefits of the tighter sulphur limits proposed by the European Parliament in June 2003. In response more specifically to Mrs Lucas’ points, we share her concern about the slow progress in Council and we now hope that a common position will be agreed upon under the Irish presidency early in 2004.
We have found that the 0.5% fuel sulphur limit proposed by the European Parliament would give rise to a price premium of approximately EUR 70 on every tonne of fuel. The environmental and human health benefits of the tighter sulphur limit would still outweigh the costs but the overall cost to the shipping industry would double to over EUR 2 billion. We must consider whether this is proportionate, bearing in mind the Commission’s commitment to promoting a modal shift from road to sea transport.
Lastly, in direct response to a question raised by Mrs Lucas on the issue of ship greenhouse gas emissions, I am pleased to inform her that the International Maritime Organisation is due to adopt a strategy on this issue later this week. 
Goodwill (PPE-DE ).
    Mr President, I should like to thank Caroline Lucas for her report and also pay tribute to Heidi Hautala, upon whose original report this is built and who is now back in national politics in Finland. It highlights an issue that the citizens around the European Union are not even aware of, despite the fact that what the Commissioner says is absolutely true. If present trends continue, over half the pollution produced in the EU will be out at sea.
It is true that the use of sea transport and inland waterways is the most environmentally friendly way of moving goods with the possible exception of a locomotive using electricity produced in a nuclear power station. It is important we see development of this particular type of transport. It is also true that we take the pressure off the roads. In my own country, lack of investment in roads means that one alternative could be the development of more coastal shipping, using ports, for example Scarborough and Whitby, in my region.
However, there is a downside to the improvements that we have achieved on land and in fuel quality. If you fill up your car with the latest diesel at 10 parts per million, the downside of that is that the sulphur, which has been taken out of your diesel, remains in the bunker fuel which goes to the ships, and could be 26 000 parts per million.
The Hautala report, at first reading, called for reductions to 1.5% in sensitive areas like the English Channel, the Baltic and the North Sea. It is very encouraging that the amendments that I put forward at first reading with regard to abatement technology were taken on board. P[amp]O Ferries, operating on the Dover-Calais route, have two identical ships operating, one with the abatement technology and one without. I hope the Commission will look at the initial results of those trials to see whether this technology is an alternative, more cost-effective way of achieving the aims that we want. I hope that these amendments will be taken more seriously by the Commission than some of the amendments that the Commissioner referred to, which call for even stricter levels that may not be cost-effective.
We must bear in mind that if we reduce the sulphur levels of fuel for ships, we increase the emissions at the oil refinery where these sulphur levels are reduced. It is important that we act internationally, and not unilaterally, through the International Maritime Organisation and Marpol Annex VI. It is particularly disappointing that only five Member States have ratified Marpol Annex VI. Unless there have been developments which the Commissioner could refer to, I understand that the United Kingdom - which is always critical of other countries that do not ratify agreements such as Kyoto - has not ratified Marpol Annex VI.
It is vitally important, when we look at emissions, to see where they take place. Emissions out in the middle of the Atlantic Ocean do not cause us problems on land. I am worried that some of the more ambitious suggestions in Mrs Lucas' report, for example an 80% cut, are out of proportion to the cost. But we now have a reasonably balanced report which we will be pleased to support in the vote in plenary tomorrow. 
Souchet (NI ).
   – Mr President, Commissioner, as regards the subject of the Directive, one cannot disagree with the need to reduce atmospheric emissions of sulphur caused by maritime transport, which must agree to make the same efforts as land-based transport in this respect. Granite areas are particularly vulnerable to the phenomenon of acidification caused by these sulphur emissions and must therefore receive priority treatment.
We must ensure, however, that we do not penalise our own shipowners by laying down standards that do not give sufficient consideration to the international nature of maritime transport. In this area, as in many others, the Union is only an intermediary. The relevant forum for pushing forward the regulations is in this case the IMO.
That is why we are in favour of the measures to limit the maximum sulphur content of marine fuels used in the North Sea, the English Channel and the Baltic Sea as they are in line with the ceilings laid down by the IMO/Marpol Convention. There could also be extensions in this area if defined within the IMO framework.
We do not believe, however, that the rapporteur’s additional proposals on the two other aspects of the Directive concerning the levels applicable to passenger ships and ships in ports are appropriate. They do not integrate the need to proceed gradually in these fields in order to take account of the heavy technical constraints imposed on our shipowners by these new guidelines, nor the need to develop these emission reductions within the framework of the IMO, which seems ready to act. On the contrary, they give rise to discrimination that could harm European interests. 
Bolkestein,
   . Mr President, as I said earlier, the Commission generally welcomes this report. However, there are two points which the Commission finds difficult to accept.
First, I believe that a proposal to include polyaromatic hydrocarbons and heavy metals in the ship emissions strategy is perhaps premature. The monitoring of those pollutants is not currently mandatory in the European Union and no limit values are set. This is, however, considered in a new Commission proposal on ambient air quality.
Secondly, the Commission is somewhat disappointed by the proposal that ships travelling to remote island regions should be exempt from emissions policies. In our view, clean air is a human right for all EU citizens, no matter where they live. My services recently received a letter from a woman in Crete who protested about the filthy, black smoke which ships belch out into her house in Heraklion harbour. The use of shoreside electricity in harbours, which Mrs Lucas, the rapporteur, is trying to promote, would dramatically reduce emissions of both air pollutants and noise, offering real improvements in the quality of life in port cities.
Finally, I should like to stress that the essential plank of the Commission’s strategy is to work with Member States to promote global solutions through the International Maritime Organisation - the IMO. In that respect I should like to welcome, and indeed echo, Parliament’s call for EU Member States and acceding countries to ratify, as a matter of urgency, Annex VI of the IMO’s Air Pollution Convention, Marpol, and to submit proposals to the IMO for tighter global standards.
In conclusion, I should like to say to Mr Goodwill that the Commission is very interested in his comparison between the two ferries travelling between Calais and Dover. This is a controlled experiment that should be of value to us all. 
President.
   Thank you very much, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11 a.m. 
President.
   The next item is the debate on the report (A5-0410/2003) by Mrs Randzio-Plath, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive amending Directive 77/388/EEC as regards reduced rates of value added tax (COM(2003) 397 C5-0359/2003 2003/0169(CNS)). 
Bolkestein,
   . Mr President, on 23 July 2003, the Commission presented its proposal to simplify and rationalise the current situation with regard to reduced rates of VAT. This proposal, based on Article 93 of the Treaty, is intended to harmonise legislation to the extent that such harmonisation is necessary to ensure the smooth functioning of the internal market. Therefore, the Commission could not support modifications to its proposal that represented a step backwards. Having said that, I should like to make the following comments relating to the report presented by the Committee on Economic and Monetary Affairs.
I agree with the rapporteur that it is not the time to make drastic changes. That is why the Commission did not propose any change to the level of the rates or the optional nature of reduced rates for Member States. On the other hand, it is necessary to rationalise the present situation.
The limited extension of Annex H, proposed by the Commission, is intended to reduce the discrepancies between Member States rather than increase them, in line with the objectives of the internal market. The extremely difficult discussions in the Council on this issue have highlighted the radically divergent views on the question of VAT and the use of reduced rates. That reinforces my belief that the Commission's proposal is a balanced one.
Any amendment which introduces new reduced rates in sectors where the standard rate is currently applied, such as for CDs, would be unacceptable, all the more so because the application of reduced rates could create competitive distortions. The addition to children's shoes and clothes is also unacceptable. Only three Member States are allowed to apply zero or super-reduced rates by temporary derogation. All other Member States are obliged to apply the standard rates.
The rapporteur proposes to maintain the present derogations, but suggests establishing a new annex to the sixth directive, which would include all the supplies for which only one Member State has a specific derogation, thus permitting all Member States to apply a reduced rate to such supplies. I am not convinced that this solution is feasible.
I want to stress that the Commission still favours a real phasing-out of these derogations. Politically speaking, they have always been considered transitory and due to disappear at a certain moment. Already in 1967, 1977, and again in 1992, at the time of the introduction of the internal market, the Council decided to authorise the Member States concerned to maintain these derogations. However, no absolute deadline was set by the Council. This does not mean, however, that they can remain indefinitely. That is why I am still convinced action is needed in view of the forthcoming enlargement, in order to give all Member States, both present and new, equal opportunities and to create a level playing field. I should like to remind you in this context that, for acceding countries, concrete deadlines have been laid down for all derogations. Finally, I should like to come back to you on the results of the last Ecofin meeting, which invited the Commission to extend Annex K for two further years.
I have also received a letter from your rapporteur which urges the Commission to extend the duration of Annex K for at least six years, in order have a total period of application of ten years. I should like to take this opportunity to explain why I am convinced that an extension of Annex K is not a realistic solution.
First, the Member States' and the Commission's reports have clearly shown that reduced rates are not a cost-effective way of creating employment. I have, however, already indicated to the Council that I was prepared to turn a blind eye to those Member States which, after the 1 January 2004, would continue to apply the reduced rates introduced within the framework of the experiment of reduced rates for labour-intensive services. This was to give the Council more time to find a solution based on the Commission's proposal. Such a situation could only continue for a short period of time: that is why I spoke of a period of six months.
An extension would merely postpone, once again, a solution to this problem. Moreover, it could give rise to the expectation that the experiment would become permanent. A simple extension would, moreover, exclude other Member States, and in particular the new Member States, from being able to introduce reduced rates in the sectors concerned and would therefore be an added source of discrimination.
In that context, I should like to remind Parliament that the Commission has already proposed to introduce, once and for all, housing and domestic care services into Annex H. That is part of the exercise of rationalisation of the present situation and takes into account the fact that reduced rates are already applied by a majority of Member States.
To conclude, for the reasons I have outlined, the Commission is still convinced of the merits of its proposal and I should like to invite Members to reconsider very carefully their position on this issue. 
Randzio-Plath (PSE ),
   . – Mr President, in view of the Commissioner’s comments, I would ask the House’s Bureau to consider once again whether it might be more important to allow the rapporteur to speak first, since we are part of the legislative process and the Commission is merely making a proposal. I think this is a fundamental problem relating to parliamentary democracy, and one that we must address.
As regards the matter at hand, I would like to begin with the last point. This House has lobbied in favour of a reduced rate of VAT for labour-intensive services. Regrettably, this was not adopted as mandatory by the Finance Council but was merely introduced as an option, and some Member States have put it into practice. However, it has been implemented very tentatively, so we have very little experience on which to assess the impact of this reduced rate of VAT on work and the black economy. That means that after two years, we did not even know whether this provision would be extended for a year, and we are aware that many companies were not prepared to take the risk and therefore did not participate in the experiment at all.
So let me ask you this, Commissioner. If we take a simple service industry such as hairdressing, where we can see that there has been an increase in the number of employees and self-employed persons – thousands in Spain, and hundreds in Luxembourg and Belgium – should we not take this as a sign that what has been happening is something that we really must evaluate? Moreover, do you think it is right that after such a short time and based on such poor analyses by the Member States, you are nonetheless concluding that the reduced rates of VAT really have had no impact on employment, especially given that in some sectors, the figures tell a very different story from the ones in your reports? That is why I urge you to extend this provision – if not for ten years, then for six years, not six months – for otherwise, there will be no legal certainty for the companies involved and we will also be unable to determine whether there has been any change in behaviour on the part of the clients and the businesspeople themselves.
Let me turn now to the fundamental principle underlying your proposal. I am very sympathetic to the idea of a systematic approach to reduced rates of VAT, but I must ask you this, Commissioner: the whole point is to move towards a definitive VAT system based on the principle of taxation in the country of origin, so that we can introduce this and finally establish genuine and systematic clarity. We still have a long way to go before we reach that point. Indeed, we really cannot see how any progress on the issue of VAT is to be achieved at all. Therefore as one of the MEPs concerned, the question in my mind is this, and I put it to you on behalf of my committee and on behalf of this plenary as well: Do we need rules in areas where competition is not distorted and where the functioning of the internal market is not affected? You have mentioned children’s clothing and children’s shoes, but you yourself are listing children’s car seats for a reduced rate of VAT. I really do not understand the argument any longer, Commissioner. I also think it is very important to make it clear that in the European Union, it must be permissible to promote culture using different instruments and approaches. If some Member States choose to go down the tax rate route and others prefer direct subsidies, we must be saying to ourselves that this House is committed to the principle of subsidiarity, and only to the Community principle where there are actual distortions of competition. I cannot see that in the areas identified in our report, the functioning of the internal market is in any way impeded, and I also cannot see that consumers are being invited to cross borders in order to purchase products or services or distort the market. That really is not the case. That is why I believe that we are not yet at the stage of being able to implement your ideas. I ask you, too, to show understanding for citizens who want to treat the internal market as their home market. I therefore take the view that tax legislation must take account of these citizens’ interests. I think our report offers a promising approach for compromises that serve the interests of a well-functioning EU home market. 
Lulling (PPE-DE ).
   – Mr President, the Commission has recently developed the bad habit of confronting us with proposals, among other things, on the pretext that they dismantle distortions of competition in the internal market and rationalise the VAT system. Unfortunately, they are counterproductive in the current climate. The proposal before us is a case in point. Our rapporteur, Mrs Randzio-Plath, has displayed moderation and realism in preparing her report, and I pay tribute to that. She has also demonstrated these qualities again very comprehensively in her speech.
We have generally followed her line because she wishes to make it possible for the Member States to retain their reduced rates of VAT. This applies especially to the reduced rates for labour-intensive services, such as hairdressers and others, which were introduced in 2000. It would be wrong, in the current economic climate, to trigger higher inflation by substantially increasing VAT rates. In my country, for example, this increase would entail a leap in the VAT rate from 6% to 15% for the labour-intensive services listed in Annex K. This special provision was intended to create jobs and reduce ‘black’ working. It expires at the end of the year and is not renewed in the Commission’s proposal, for according to the Commission’s report, its dual objective – which I have mentioned – has not been achieved. However, we do not share this view of things, and nor – as Mrs Randzio-Plath has explained – do the many other people whom we have consulted. It is also doubtful whether an experiment conducted over just three years can be described as a failure after such a short time. It would be premature to draw conclusions at this stage. Unfortunately, I see no good will on the part of the Commission, and our committee has incorporated most of the services listed in Annex K into the expanded Annex Ha so that the reduced rates will continue to apply if the Member State so wishes. On behalf of my group, we have tabled amendments enabling the Member States to continue the experiment at least until the new directive enters into force. If these two amendments are rejected, the provisions of Annex K – Mr President, I still have the two minutes allocated to Mr Karas, who is not here – will expire at the end of the month. The Member States would then have to increase the rates before being allowed to reduce them again in a matter of months when the new directive comes into force, when many of these services will be eligible for the reduced rates. The situation would become quite farcical.
The third amendment, which I have tabled on behalf of my group, would permit the Member States to retain the parking rates of at least 12% for a further 15 years, so that the changeover would not have to take place abruptly over night, which I think is reasonable. Despite what the Commissioner would have us believe, nor is there any need to follow his line in the interests of enlargement. I hope that the Commission will see sense and support our very reasonable proposal, and if it does not do so, I trust that the Council of Ministers will vote unanimously to do so. 
Van den Burg (PSE ).
   – Mr President, are taxes only a means of generating income for the treasury, or can they also be used to serve other purposes of government policy? This is, in actual fact, the underlying core question on which I, with others, and Commissioner Bolkestein fundamentally differ. What is more, it looks like he is increasingly on his own in his puritan rejection of the use of the instrument of reduced rates of VAT, which is still being deployed as an experiment, to promote employment. At the time of the autumn 1997 employment summit in Luxembourg, the idea of reduced rates of VAT was mooted here in this Parliament. This idea already met with resistance then from the Directorate-General dealing with tax cases and from a number of Member States. Despite this, it was decided to carry out, in a very select number of labour-intensive sectors, an experiment which would definitely not result in any cross-border distortion of competition. It was in these that the Member States were allowed to apply the reduced rates of VAT. However, it had to remain an experiment, limited in time. People could not agree beforehand on clear criteria whereby the experiment could be assessed. This evaluation was also done too late, the experiment had to be extended first, and the evaluation was left up to the Member States and badly coordinated.
In the Netherlands, the first evaluation report met with strong criticism, and a re-appraisal done at the request of parliament yielded many positive results. I do not have the time to enter into the detail of this, but I think that you are familiar with those reports. I have noted nonetheless that, eventually, you only adopted the negative tenor of those evaluations and have written the experiment off with what amounts to only the prejudices that preceded the experiment. There was wide indignation in the Netherlands about the simple termination of an experiment that had been found to be effective for hairdressers, cobblers, decorators and bicycle repairers – and this in times of recession, no less. After all, you do not need economic models in order to figure out for yourself that the re-introduction of the high rates will cost a very large number of jobs. I am delighted that this indignation is widely shared in this House as well. Moreover, the following logic is applied here: if there are no cross-border or competitively distorting effects, why would the EU prohibit Member States from applying the VAT rates that they think are sound? Why would governments and parliaments not be allowed to weigh up for themselves the goals to collect as many taxes as possible or to promote employment and make moonlighting legal? The Council of Ecofin Ministers has now also clearly and unanimously announced its wish to extend the experiment and to remove the current uncertainty for those involved. In my view, your response in this matter to ignore this request and only to promise to tolerate the illegal continuation of the experiment does not show much respect for European rules and for the way they are implemented in the Member States. 'Tolerance' – surely that can only be intended as a joke on the part of the Commission as Guardian of the Treaty?
I should therefore like to urge the Commissioner once again to make a definite, formal proposal to extend the experiment, and to do so before the end of this month, and definitely before 1 January 2004. After all, it is quite clear that there is wide support here in the European Parliament to include the experiment of Annex K in a structural insertion of these labour-intensive services in Annex H of the Directive. It is also clear, though, that this will not be done before 1 January. The sooner the structural facility becomes operational, the better. This will receive our unqualified support and as long as that is not the case, the experiment must remain in force on a formal footing. 
Blokland (EDD ).
   – Mr President, a three-year experiment for the application of reduced rates of VAT on labour-intensive services is short, too short, in my view, and certainly too short if we factor in the economic climate that has seen more downward than upward movement over the past three years. You too, Commissioner, know that in those circumstances, it is difficult to establish the longer-term effect of reduced VAT on employment.
Added to this is the fact that we are bombarding each other with various research reports that make conflicting claims about the impact on employment.
In short, it is high time that the Commission adopted the Council’s unanimous verdict and continued the experiment.
Mr Bolkestein, surely you will have to agree with me that in times of virtual economic stagnation it is unwise to increase VAT? 
Berthu (NI ).
   – Mr President, we are very much in favour of extending to all Member States the derogations granted to some as regards reduced rates of VAT, for example for restaurant services.
We are no less in favour of continuing to maintain reduced rates of VAT for labour-intensive services, which began as an experiment in 1999. In its report evaluating the experience, the Commission was sceptical, particularly with regard to the effects on employment. Finally, it proposes certain continuations, which is positive, but it includes them in a broader plan aimed at eventually doing away with the derogations, which gives rise to pointless discussions.
As elected representatives, we see the benefits of these VAT reductions on the ground. The report provided by France also emphasised this. We therefore believe that they must continue or at least, in the meantime, that the experiment must be continued for several years along the path demonstrated by the Ecofin Council of 25 November, for example for six years, as our rapporteur has just proposed. It also seems to us that in accordance with the principle of subsidiarity this subject should, without discussion, be the competence of the states alone. I will supplement these assessments in my explanation of vote. 
Villiers (PPE-DE ).
    Mr President, I should like to congratulate the rapporteur on the work she has done on this report. It is a very good one and, like the rest of my Group, I will be supporting it tomorrow. I should particularly like to thank Mrs Randzio-Plath for including a number of amendments which meet the concerns of the charity sector in the European Union and in the United Kingdom as well.
Charities face a lot of difficulties caused by the VAT system and the amendments relating to charities in the report, and indeed tabled by the PPE-DE Group, are essential in trying to mitigate those problems. There are other problems in relation to irrecoverable VAT which, sadly, we cannot solve with this report but are also very important. These issues are important to charities across the United Kingdom including places like Chipping Barnet, in my own constituency.
It is also vital that Parliament adopts the amendment to ensure that Member States can allow a reduced rate for repairs to listed buildings. That is crucial, particularly for churches in the United Kingdom, many of which are listed. In many cases, repairs to these churches are phenomenally expensive for parishioners. These churches are not just of religious significance: they also have a social and cultural purpose within the community. The burden of paying a full rate of VAT makes keeping them in repair that much more difficult, so I very much hope that Parliament and Council support reduced rates of VAT for those kinds of repairs to historical listed buildings.
It is also vital to preserve the existing zero rates in Member States. There is no reason why they should not be able to decide for themselves whether to levy the zero rates. I would strongly defend the United Kingdom's zero rates, particularly in relation to children's clothes and shoes. I see no reason why these should be abolished. They perform an important social function and my British Conservative colleagues and I steadfastly defend those zero rates and will continue to defend them. 
Bolkestein,
   . Mr President, I should first like to say something about Annex K, on which a number of speakers have voiced their opinion. This Council had established these rules, including those in the directive for evaluation - about Annex K. The Council - and not the Commission - also established that the experiment should run for three years. In fact, it lasted four years, since the Commission wanted more time to analyse the results. I want to stress that the Council stipulated what the rules should be.
The Commission has not made a proposal to continue Annex K. It does so because it is not effective. The reports that the Commission has received from most Member States - including the Netherlands and France, where opinions differ - indicate that there is no noticeable positive effect on employment. The reason is quite simple: in too few cases is the decrease in taxation passed on to the consumer.
In fact, I quote my wife, who said that she had never witnessed a reduction in hairdressers' prices. I do not know whether Mrs Lulling agrees with this, or whether she has witnessed a decrease in hairdressers' prices. My wife has not, and the reason is that the hairdressers pocket the decrease in taxation and, therefore, Annex K amounts to a subsidy for hairdressers.
I have nothing against hairdressers, but why should we subsidise them? It has no positive effect on employment, and if you want to stimulate employment, it is better to reduce the social on-costs of labour for the same amount of money. One will create 52% more employment by reducing the on-costs of labour rather than reducing VAT.
The Commission sees no reason why it should make a proposal, and that is exactly why unanimity in the Council does not work. It only works if there is a proposal, and then it is overturned. In this case, there will be no proposal and, therefore, unanimity in the Council cannot overturn what is not there. The same situation happened previously in the case of the tax-free shops at airports. There was no proposal and, therefore, there was nothing to overturn.
Mrs van den Burg said that I do not respect the rules of the European Union. I should like to know which rule I do not respect. I am scrupulous in respecting all the rules of the European Union. It is the Council which established this entire experiment and set a three-year period. The Commission made it four years. It is the Council, and not the Commission, which said this was in order to increase employment. The whole idea therefore originates from the Council. It is an experiment, and experiments are supposed to be discontinued if they do not work. This is why they are experiments. Therefore, why should the Commission propose an extension of Annex K if it has not worked?
I fail to see, Mrs van den Burg, where this Commissioner is not obeying or following the rules.
On the wider issue of reduced rates, the standard rate is the normal rate. It is around 20% in most countries. That is the standard rate. All derogations must be construed strictly and, where the internal market and distortions of the markets are concerned, one should be extremely strict.
Mrs Randzio-Plath mentioned children's shoes, which are zero-rated in the United Kingdom and Ireland. But if you look at the figures, it is clear that there again there are no noticeable benefits to the consumer. The differences between the prices in the United Kingdom and the prices on the Continent are the same whether the high rate or the low rate is applied. That proves that it is the manufacturer or the trader that is subsidised, but certainly not the end-consumer.
As regards CDs, they are by their very nature easily transportable and, therefore, if the rates differ, there is a clear inevitability of a distortion of the internal market. At the moment, no Member State applies the reduced rates to CDs and, therefore, if we did, it would again be a step backward.
That is why I now return to Annex K. I have said to the Council of Ministers that the Commission would not press charges or start infringement proceedings against those Member States that would continue to apply Annex K as if it were still in force - which it will not be. But I recognise that Member States may need a certain time to organise their affairs and that is why I said for the first six months of next year I will not start any infringement proceedings. But Annex K will no longer exist. 
Randzio-Plath (PSE ),
   . – Mr President, Commissioner, you have not provided an adequate explanation of why you are submitting this proposal at the present time. Nor have you provided an adequate explanation of why you are unwilling to allow this experiment with reduced rates of VAT for labour-intensive services to continue, even though you must realise that the analysis of the findings is inaccurate, given that the Member States’ reports are so general that they did not stand up to scientific scrutiny. The Commission is obliged to supply Parliament with a well-founded opinion, not just a general opinion containing snippets of information simply hinting that no tangible impact on reducing ‘black’ work can be identified.
Commissioner, there are economic research institutes which can undertake this study on your behalf. There are social science institutes that can do so too. This Parliament – and, indeed, you yourself – must have a sound basis for a decision, and you are well aware that a six-month period is really not long enough to carry out studies of any kind. With this in mind, I urge you to set this experiment, which no one has taken seriously, on a serious footing at last and let it run for the next six years. 
Bolkestein,
   . Mr President, in reply to the last remark by Mrs Randzio-Plath for which I thank her I would like to say that the basis for the Commission’s decisions is the reports that are produced by Member States; these reports have not been drafted by the Commission. According to the rules that were established four years ago, we rely on these reports. I do not see why Mrs Randzio-Plath needs any further evidence.
I can send her the reports if she likes, but they are the basis of the Commission’s decisions. I am not responsible for the way in which Member States draft their reports - that is their business. I use them as they come in. The Commission has looked at them and has seen that there is insufficient evidence. 
President.
   The debate is closed.
The vote will take place tomorrow at 11 a.m.
