Approval of the Minutes
President
The Minutes of yesterday's sitting have been distributed.
Are there any comments?

Janssen van Raay
Mr President, the Dutch taxation authorities tax not only Parliament's contribution to voluntary pensions but also the actual pensions payable. I am grateful to Mrs Fontaine for her spontaneous protest at this, and to Mr Rothley for putting down an amendment aimed at ending this anomalous state of affairs in the Netherlands. Unfortunately a number of our Dutch people have indicated through their representative that they are happy with the system. That is what I wanted recorded in the Minutes yesterday, and I am glad to see that it has been done.

Evans
Mr President, I would just like to say that I was here yesterday but for some inexplicable reason my name does not appear on the list. I would be glad if that could be put right.

President
We shall check that and include your name.

Thors
Mr President, the same thing happened to me yesterday. My name is not on the attendance register either. I must have been so focused on the Rothley report and the work of the Committee on Legal Affairs and Citizens' Rights that I forgot to sign. Please could my name be added.

President
That will be checked and corrected.
(The Minutes were approved)

van Dam
Mr President, we have been looking forward to getting the diaries for 1999 and am pleased we were able to collect them yesterday. One of the important dates for 1999 is that of the elections to this House. As you know, there has been a wide-ranging debate in Parliament about the days on which these elections should be held. So I am very disappointed to see it stated incorrectly in this diary that just three countries of the European Union will be voting not on Sunday the thirteenth but earlier, and that my own country, the Netherlands, is not listed with these.
It is quite wrong that the elections are to be held on Sunday. One of the good traditions we have in the Netherlands is that these elections are held during the week, and it is a mistake that the Netherlands is not down as voting on 10 June. I should like to ask how you propose to correct this misunderstanding and prevent the turnout from being even lower.

President
I believe you should put this question to the Dutch authorities. As you are well aware, the date of the elections is not determined by entries in Parliament's agenda but by the authorities in each Member State. The elections must take place within a set time period that may only be altered following a Council decision and Parliament has no power in this respect. The particular date set for elections in the Netherlands must have been decided by the authorities in that country, on the grounds, presumably, of the principle of subsidiarity. In no way is Parliament responsible for the dates of the elections nor may it change them.

Blokland
That is not the point, Mr President. The elections will indeed be held in the Netherlands on 10 June. That is not the problem. It is the diary which is wrong. That needs to be corrected. That is what Mr van Dam is asking.

President
A check will be carried out to establish if an error has been made on our part in the agenda. Rest assured, however, that elections in the Netherlands will not be held in accordance with our agenda but in accordance with the arrangements made by the Dutch authorities.

Decision on urgent procedure
Proposal for a Council Regulation amending Council Regulation (EC) No 355/94 of 14 February 1994 (COM(98)0473 - C4-0516/98-98/0251(CNS))

President. I call Mr von Wogau to give the opinion of the Committee on Economic and Monetary Affairs and Industrial Policy, which is the committee responsible.

von Wogau
Mr President, this is an issue which we have had to deal with before. This problem referred to by the Commission has existed since January of this year. But we did not receive the documents until September. I cannot therefore understand why the Commission has now twice in succession lodged a request for urgent procedure when it had plenty of time before. Mr Langen is currently preparing a report which we will vote on at the November meeting and present to the House in December. I therefore propose that we reject the request for urgent procedure.

President
I put the request for urgent procedure to the vote.
(Parliament rejected the request for urgent procedure)

Court of Auditors annual report
President
The next item is the presentation of the annual report of the Court of Auditors.
I should like to welcome the President of the Court, Mr Friedmann, who once again has been kind enough to come and present this report to the House.
Mr Friedmann, you have the floor.

Friedmann
Mr President, ladies and gentlemen, on behalf of the Members of the European Court of Auditors, may I thank you for allowing me to present the results of our work over the past year at this early hour of the morning. We will surely agree that money is not everything, but the way in which money is used is an indication of whether a policy is successful or not.
You will probably have noticed that this year's annual report is much slimmer than in previous years. This is not because we have done any less work, quite the contrary. In the past year, we have presented 25 special reports. Our aim is in fact also to make your own work easier by spreading these annual reports over the year, so that you too can spread your work accordingly. I readily admit that there is still room for improvement, but there is good will for this on our part.
On the revenue side in the past year, the Community has continued to lose billions from both customs duties and value added tax. In the case of customs duties, this is partly due to the fact there is still insufficient cooperation between national customs authorities. The possibilities of modern information technology are not being adequately exploited. Every Member State has its own risk analysis methods, which produce different results. The Member States' lack of interest in pursuing this more vigorously is all the more surprising when one considers that uncollected customs revenue has to be offset in the budget by higher contributions from the Member States. I would therefore appeal to the Member States to attach greater importance to collecting customs duties correctly, in their own interest.
In the case of value added tax, as I said, huge amounts are being lost. Model calculations have shown that in the years 1991 to 1993 - on a basis of nine Member States - the amount underpaid on average every year was ECU 70 billion. It is true that this is happening in the Member States, but it has a direct impact on the European Union. We still have the unsatisfactory situation that the country of destination principle applies in the single market, whereby the goods are outside the tax system from the place of origin until they reach their destination, which of course offers tempting opportunities for irregularities.
On the expenditure side, following the structure of the budget, we have once again concentrated our efforts on agricultural and structural policy. On the agricultural policy, we have presented a number of special reports, for example on the BSE disease in cows, and on the closure of accounts. In the annual report itself, we tackle the question of durum wheat, amongst other things. Why? Because this is a cereal which is particularly heavily subsidised. For durum wheat, not only is the normal aid per hectare paid, but an additional aid which is only justifiable in political terms. Had the same criteria that apply to other cereals been applied to durum wheat, more than ECU 3 billion in subsidies could have been saved over a four-year period.
We dealt in a special report with the exports of New Zealand dairy products to the United Kingdom. Certain quotas of New Zealand milk and cheese may, in fact, be exported from New Zealand to the United Kingdom on preferential terms, provided that it meets certain criteria, including in particular a specified fat content. As we established, the import conditions were not always complied with, leading to a reduction of Community revenue by some ECU 410 million. Much of this revenue can no longer be claimed, but around ECU 110 million is still recoverable, and we have called on the Commission to pursue the matter.
So much for that area of the agricultural policy. As you know, the Court is strongly committed to environmental policy. It was recently awarded the 'Europäisches Naturerbe ' prize for its work in this area. In a special report, we point out that among the 40 000 sewage plants in operation in the EU, some of which have received EU assistance, there are some serious shortcomings. A third of the plants in Belgium and as many as half of those in Italy are in need of repair. Above all, we established that a good many sewage plants were not even put into service initially, because the operators did not have the money to cover the operating costs or lacked the technical know-how. This is something that must be considered, since between now and the year 2005, a further 40 000 plants are to be constructed.
We also took a critical look at the support for renewable energy sources under the JOULE-Thermie programme. Amongst other things, we established that the Commission had used more than 50 % of the staff posts earmarked for the programme in other areas of expenditure. At the same time, we discovered cases where Commission staff involved in management decisions were exposed to major conflicts of interest, in particular because these staff had previously worked elsewhere, something which must be looked at in connection with the placing of orders.
We all know that, time and again, the European Union is faced with new challenges. This is often a difficult task for the Commission, when it is called upon to respond rapidly to heavy demands imposed upon it at short notice. Humanitarian aid is one example of this, to which we devoted a special report which appeared in March last year. In 1991, it was decided that, for the period 1992 to 1997, some ECU 4 billion would be made available for this purpose. More than ECU 3 billion has already been spent. The aid has indeed reached the people in need of it. The problem lies in the Commission's central unit for managing humanitarian aid, known as ECHO.
In our special report last year, we had already pointed out that the staff policy regarding outside personnel in particular in this department was not transparent. We asked for further information in writing from the Commission. This information was not satisfactory. You are all only too well aware of the debate which then flared up under the catchword 'U-boats'. It is not only with ECHO that there are problems with external staff, however, but also with the PHARE, TACIS and MED programmes, where some of the operating appropriations may be used for programme support, i.e. for outside experts.
The figure - known as the 'Liikanen facility' after my neighbour here, Commissioner Liikanen - is 2 % for PHARE, 3.5 % for TACIS and 3 % for MED. Our initial inquiries have shown that these figures were exceeded by more than twice as much. I would ask Parliament to give some critical attention to this matter, so that proper order is restored.
As you know, the PHARE and TACIS activities also include nuclear safety. In the last week, we have adopted a special report on this which has now been published. In this report, we have established some significant things. It should first be pointed out that, since 1990, the Community has provided some ECU 850 million for nuclear safety in Central and Eastern Europe. To this aid provided by the European Union must be added the further aid which the international community has made available, in particular through the G7 and G24. And in addition there are the loans granted by the EBRD in London.
What complaints do we have? Of the ECU 850 million made available, only ECU 300 million has been spent so far. This is an indication that this policy is not being pursued with the necessary determination and rigour. We criticise the fact that the G7 and G24 activities are being inadequately coordinated by the Commission. The Commission points out that it is not exclusively responsible for this, but it must nevertheless be clear that it has to coordinate these activities.
We are critical of the fact that the Commission has no definite policy on the decommissioning of older nuclear power plants and the disposal of radioactive waste. I think this is a very important point. Another criticism is that, of the money provided for technical assistance, about one third, in other words ECU 200 million, was spent directly, i.e. without any open tendering.
With the best will in the world, it was not possible at the end of last year to form a definite judgement on how the Commission's efforts to improve nuclear safety in Central and Eastern Europe should be assessed. I would appeal urgently to you, as political decision-makers - but also to the Commission and the Council - to devote appropriate attention to this extremely important task, which is ticking away like a time bomb.
We are now constantly being asked what progress we are making in uncovering fraud involving European funds. On this point, I would like to take the precaution of defining our position for you once again. We in the Court of Auditors are required to consider whether the principles of legality, regularity and sound financial management are being met. This means that we are not a criminal investigation department, nor a police force. However, we do pay particular attention to areas of risk which we select using specific criteria. In other words, we see our task above all as preventing fraud, helping to ensure that it does not occur, and developing ideas which make fraud unattractive in the first place.
If we do encounter actual cases of fraud or irregularities in carrying out our normal auditing tasks, we naturally work together with the national criminal investigation authorities - as well as UCLAF - so that matters take their proper course. In the field of tourism, for example, we are working with the criminal investigation departments of several countries, and in the case I have just mentioned, the 'New Zealand Dairy Report', we are cooperating with the British authorities, that goes without saying. We also audit UCLAF, since UCLAF is also a department of the Commission. A few weeks ago, we presented a report on it which met with an appropriate response from you, for which I should like to thank the House.
Amongst other things, we criticise the fact that the UCLAF databases are incomplete and therefore not fully usable. It is not clear who actually has access to these databases, and that is of course a question of security. Half the UCLAF employees are on short-term contracts, so that when people have settled in they leave again and important knowledge is lost.
Because the databases are not fully usable, it is sometimes not possible to recover sums which the Community should be able to recover. It is also not clear what powers UCLAF has within the Commission itself, given that it has no powers in other institutions. This needs to be clarified by the Commission.
We have taken careful note that a debate has started here in the House on the subject of OLAF. Your aim here is to extend and develop the powers of UCLAF. You have also looked at the question of whether a separate institution should be created. We have followed all this very carefully, especially since you base some of your arguments on our own report. We in the Court of Auditors believe - and here we agree with you - that the Community institutions can of course develop their administration and their organisation further. That is in accordance with the Treaties and does not infringe the rights of the Member States, and to that extent we in the Court can imagine that the independence of UCLAF could well be increased if it were to be given a position of independence in the form of OLAF roughly similar to that of the Financial Controller at the Commission. But that is your decision! We are of course ready to work with any unit that is created by the legislative authority.
As you know, the Court of Auditors is repeatedly asked to provide opinions on proposed measures. Any institution can ask us to produce a report, especially on measures which affect the budget. The latest comprehensive opinion of this kind dealt with Agenda 2000. We were asked for such an opinion by the Council. In this, of course, we also address the agricultural policy as it is envisaged for the future by the Commission.
As you know, the Commission is proposing to reduce the guarantee prices for beef by 30 %, for cereals by 20 % and for milk by 10 %. My impression is that the Commission drew up these plans at a time when the full extent of the crises in Asia, Russia and Latin America had still not been recognised. In the meantime, it has become clear that, because of the crises in these regions, purchasing power for European agricultural products has fallen. To prevent surplus stocks being created and the associated export refunds and storage costs, it would be more sensible to cut the guarantee prices more sharply than the Commission has proposed, but as a counter-move to place greater emphasis on direct aid.
As you know, the Commission is proposing to reduce direct aid above ECU 100 000 by 20 % and above ECU 200 000 by 25 %.
We would ask whether, in view of the fact that 80 % of the direct aid is paid to 20 % of the agricultural holdings, it would not be more sensible to put a cap on direct aid over ECU 100 000, for example, as we have indicated.
The Commission has assumed that no direct aid is to be paid to the new Member States which are to join the Union. We in the Court of Auditors take the view that this appears unrealistic, and have therefore proposed that, as a precaution, direct aid for the future Member States should be included in the calculations. This would mean that ECU 3.3 billion would have to be entered in the budget annually in connection with the future Member States.
With regard to structural aid, we are largely in agreement with the Commission. We think it is right that Community structural assistance should be implemented in more concentrated form. We think it right that a 10 % reserve should be created for the countries that perform particularly well. We also think it is right, and this is a very important point, that appropriations should automatically lapse if they do not give rise to payments within a specified time. We believe this to be very significant; it means that the Commission's approach on structural aid - and, I would add, perhaps also with a view to creating more jobs - to a large extent coincides with our judgement. I would also like to confirm that the relationship between commitments and payments has become very good and sensible. However, that is not the real problem with structural aid. The problem is as follows: it was decided at the Edinburgh summit to spend some ECU 175 billion on structural aid under the various Funds. Of this amount, however, only ECU 85 billion has been spent so far, in other words more than ECU 90 billion is still waiting to be disbursed. To this can be added another ECU 5 billion from the previous programming period, and it is an illusion to think that this sum of ECU 95 billion might still be spent in the two remaining years of this programming period. These payments will have to be made in the years that follow.
Let me briefly mention to you the widening and deepening of our cooperation with national audit institutions. This is more than just a formal process, because it ensures that the arguments of the Member States which are audited are included with more emphasis in our reports. A few days ago, the heads of the institutions of all 15 EU Member States visited us to coordinate this work, and at the beginning of the year a conference took place in Warsaw with the heads of the East European audit institutions, under the chairmanship of the Polish audit institution and the European Court of Auditors. As a result, I can tell you that the structures for cooperation between the East European audit institutions are now similar to those we have within the EU. This is important because they will be our future colleagues in Central and Eastern Europe, and because these East European audit institutions will increasingly have the right to audit European Union resources on the spot.
In conclusion, may I offer our thanks for the excellent cooperation we have had with Parliament. On behalf of the Court, I would like to thank, in particular, the Committee on Budgetary Control under its active, wise and intelligent chairman Mrs Diemut Theato, together with the rapporteur responsible for us, Mr Brinkhorst. Finally, I would like to thank all of you who have listened to me here at this early hour of the morning.
(Applause) Let me add one further point. This year too, we are also presenting a statement of assurance for the general budget and the European Development Funds. Contrary to the practice of previous years, we have not quantified the irregularities which we established; we are thus presenting a qualified statement of assurance rather than a quantified one. We want to avoid quoting percentages that might lead to misinterpretation. In general, I can say that this year's statement of assurance for the general budget essentially draws the same conclusions as it has done in previous years.
This means that, apart from the continuing problems with the recording of fixed assets, debts and liquid assets, the Court believes that the accounts for the 1997 financial year reliably reflect the Community's revenue and expenditure for the year and the financial situation at the end of the year. The transactions underlying the revenue are, taken as a whole, legal and regular. In the case of customs duties and agricultural levies, however, no assurance can be given as to whether all taxable imports have actually been declared and have generated the corresponding revenue. In the Court's opinion, the transactions underlying the commitments are also, taken as a whole, legal and regular, although some commitments were effected either without budgetary authorisation or without a legal base. As regards the transactions underlying the payments, however, the Court is again, as in previous years, unable to given any positive assurance, as they are affected by too many irregularities.
The statement of assurance for the Sixth and Seventh European Development Funds for the year 1997, on the other hand, is, on the whole, essentially positive, and that also includes the transactions underlying the payments.

President
Thank you very much for that additional comment, Mr Friedmann.
Mrs Wemheuer has the floor.

Wemheuer
Mr President, President Friedmann, you know that staffing policy was one of the five points which caused the European Parliament to postpone the discharge for 1996. I mention this because staffing policy is referred to in almost all of your reports. One extreme example is the case of ECHO, which involved falsification of contracts. I say that it is an extreme case, but issues such as mini-budgets, exceeding the limit of the Liikanen facility, which you have just mentioned, and combinations of interests arise again and again, and the same applies to transferring too much authority to external personnel, with all the consequences that follow both in financial and political terms. In the report on nuclear safety you wrote that such measures even undermine the credibility and authority of the Commission. It is therefore a very broad area.
However, I believe it is not merely a question of staffing policy, but that it also has financial repercussions. I therefore have two questions. Firstly, to allow us to assess the situation, could you summarise for us from all the special reports what your opinion is of the Commission's staffing policy? Secondly, can we expect a report on this specific issue, or can we call upon you to provide this?

Theato
Mr President, President Friedmann, firstly I would like to reciprocate to you and to the Court of Auditors the thanks that you extended to the Committee on Budgetary Control and to Parliament as a whole for the work we have achieved together.
We have worked together very closely, increasingly so over the years, in fact, and I believe this is very useful in investigating good financial and budgetary management and in intervening where necessary, where something is not working properly. This is not done in order to cause or to publicise scandals but to develop preventive measures, as you emphasised strongly. Wherever there are subsidies, there is unfortunately also the risk of fraud, if indeed it is not inherent.
I come now to the report presented by the Court of Auditors for 1997. This sets in motion the discharge procedure which we will now begin. It is remarkable in two respects; the first is that we have not yet concluded the discharge procedure for 1996 and are already beginning another one. We must be careful not to confuse the two, but of course it cannot be denied that there are certain points that are common to both.
The second point that is worthy of note is that you have presented a significantly higher number of individual reports or special reports this year for 1997, and also retrospectively for 1996. You highlighted the fact that the annual report had simply become too long, which meant that all the information came at once and at a time when everything had to be processed, so of course something always slipped through the net. We must now adjust our method of working in accordance with this, as we could almost take up a whole year of debates before the House dealing with these Court of Auditors reports. However, as this is simply not possible we have decided to summarise them to some extent. But I strongly support what Mrs Wemheuer has just said on this matter. In her comments she raised the issue of how we are to approach staffing policy. This question is addressed to the Commission but also to the budgetary authority. How are we to allocate staff and approve posts in future? You also mentioned this in your report.
I am also particularly grateful to you for having very clearly highlighted the issue of own resources. In view of the loss of revenue, partly from customs duties, as we established in our committee of inquiry into fraud in the transit system, we must ask how much is lost due to a lack of coordination in our work. We are still examining this whole question, and I would ask you to continue to give it your attention.
I have a further question concerning the annual report. We would like this report to be published earlier, as you know. Will you be able to work towards presenting it in October in future?
I would like to say a final word to Mr Liikanen. I listened very carefully yesterday to what you said on the subject of the MED programmes. Unfortunately, I have to say that I did not find it terribly enlightening or very promising as far as the 1996 discharge is concerned. We will have a great deal more to discuss on this issue.

Brinkhorst
Mr President, as always, it is a great pleasure to listen to President Friedmann's presentation of the accounts - this time for 1997.
Over the coming months we will have an opportunity of discussing in greater depth all the detailed points and, quite clearly, it is important to note that a number of improvements have taken place.
In the few minutes available, I wish to concentrate on a very central point which should be emphasized more in the future. President Friedmann rightly states that enormous responsibility lies with the Member States both for resources and for expenditure. One hundred per cent of resources come from the Member States. He stated just now that 40 years on the Community Member States' customs authorities still do not cooperate. He states also that on the issue of VAT, 70 billion - nearly the total amount of the budget of the Community - is not collected by the Member States. That means that 80 % of expenditure is also spent by the Member States. The various cases he mentions - durum wheat, New Zealand butter, environment policy - all relate to lack of action in that area.
I am very happy to hear him say that cooperation with the national courts of auditors has improved. But I would like to make more specific points. Could the Court of Auditors enter into specific agreements with the national courts of auditors so that they perform tasks on behalf of the European Community budget, too? I know that there are all kinds of constitutional problems - sensitivity, national pride, and what have you - but if the figures he indicates even approximate reality, it is intolerable that the Community is still a lame duck as far as the Member States are concerned. The general public's perception is that the Community is squandering money, that the European Union does not do its duty, whether it is on nuclear safety, the environment or agriculture. But, in fact, a large amount of responsibility lies with the Member States. I call on the President here and Commissioner Liikanen to make it clearer to the outside world that only if Member States are ready to overcome old-fashioned ideas about national sovereignty can we really have significant improvement in terms of the environment, nuclear safety and fraud. This is the central point. I would like the President to elaborate on this specific point because it will be relevant for the whole of next year when we discuss this specific declaration of assurance.

Pasty
Mr President, I was very interested in the section of the Court's report relating to own resources, because this debate is at the heart of the political problems that are going to be mentioned and that are already being mentioned within the European Council on the future financing of the Union. The findings are incredible: the Court of Auditors shows that, since the last audit, the amount of revenue lost has doubled to ECU 70 billion.
That is an overall assessment. However, we would be extremely interested to know, Mr President of the Court, if the Court can tell us whether or not this sum of ECU 70 billion is spread evenly and fairly between the various Member States. In other words, are certain Member States more at fault than others in terms of the collection of the own resources of the European Union? If this is the case - as I happen to believe it is - I imagine that this fact would certainly be politically very difficult to demonstrate. Nevertheless, it would be very useful for Members when assessing the discussions that are going to take place within the Council, particularly if certain countries put forward the concept of net balance.

Müller
Mr President, ladies and gentlemen, my thanks for the presentation of the Court of Auditors report. I was particularly interested in the chapter on foreign policy. As you know, in deciding to postpone the discharge for 1996 we paid particular attention to the PHARE, TACIS and MEDA programmes. I have now read the new Court of Auditors report for 1997, bearing in mind our criticism from 1996, 1995 and also 1994, because I wanted to know whether there is any improvement in how our money is managed in the area of foreign policy.
The new report for 1997 has confirmed my opinion that the Commission obviously still finds it difficult - and I am saying this from a completely neutral point of view - to take action on the problems it discovers in the large PHARE, TACIS and MEDA programmes, action that would enable us to say that things really will be better next year. I would therefore like to ask the Commission: why should Parliament believe that the assurances that next year will bring an improvement really will come true?

Dell'Alba
Mr President, Mr Friedmann should not be surprised if the House is hardly full to bursting, and also if there are spaces in the press gallery: it is because, once again, we have read much more of this report in the newspapers over the past few days than we have heard here from the horse's mouth today. The first remark I would make, therefore, is that the Court of Auditors - from where leaked information often gives a partial picture of its reports - should pay more attention to this aspect, which is important if it is true that reports should be produced to the public here in this forum.
Mr Friedmann, you quite rightly referred several times to the question of staffing and to ECHO, and you have good cause to do so. Parliament has discussed and approved your report on ECHO, and indeed we approved a document of yours at the beginning of this year. If we are correctly informed, although you state in your report that the Commission does not grant sufficient resources, it is the world's leading donor. I believe that your report refers to external staff as one tangible problem. Well, all I would say - and I hope you will agree, because your neighbour can certainly pass you the latest figures - is that we are not talking here about ECHO submarines; what we, and perhaps the Court too, should be considering is an entire fleet of U-boats.

Fabre-Aubrespy
Mr President, Mr President of the Court of Auditors, the annual report for the 1997 financial year mentions the existence of an audit concerning a sample of 100 information and communication projects implemented by the Commission. A special report, Report No 23, is in the pipeline. We are looking forward to receiving it, but the Court does, however, make several comments regarding the budgetary heading B3-300. On one page, and one page only, it makes a number of criticisms about the lack of specific objectives and the lack of an appropriate system to monitor and assess the impact of the objectives involved.
It notes that certain projects that have benefited from financial support from the Community budget have no demonstrable link with information policy activities. Indeed, for many years, our group has constantly condemned the lack of transparency, consistency and democracy in what the European Union calls its 'information policy'.
That is why I would like to ask the following question: what type of precise recommendation does the Court intend to make to the Commission so that it puts an end to the ideological drifts that are characteristic of headings B3-300 and B3-306? And more precisely, what exactly does the Court mean when it refers to 'equal treatment of final beneficiaries' and 'a policy and financial planning framework in order to define the overall objectives of information policy'? These are the very terms used in the report that suggest that changes are needed to put an end to these problems.

Le Gallou
Mr President, the European Court of Auditors points out that in terms of external actions, the European Union has become one of the largest donors in the world with a total of ECU 6 billion, or almost FRF 40 billion. But your report, Mr Friedman, highlights serious shortcomings, particularly in public procurement procedures, the quality of contractors and, finally, the follow-up procedures for the actions.
This being the case, do you not think that there is a serious risk, particularly in certain countries such as those of the former Soviet Union, that Community aid, rather than helping the people, only in fact serves to increase corruption and the power of the mafias? Would it not therefore be wise to reduce this type of aid, which can do more harm than good, and wait for proper control procedures that guarantee that Community aid is used effectively and honestly?

Tomlinson, the Lord
Mr President, I welcome Mr Friedmann and thank him and the Court of Auditors for their report.
Would he agree with me if I suggested to him that the rather alarmist headlines of £3 billion fraud are not borne out by the annual report and the accompanying special reports? I am sure he will understand if I concentrate the rest of my remarks on the revenue side of the budget.
The first thing I would say to him - and I hope he accepts it in the spirit in which it is said - is that it is not really the Court of Auditors' responsibility to challenge the Fontainebleau Agreement on the United Kingdom budgetary rebate. Any change to the own-resources decision will require unanimity in the Council between the parties involved and the Court of Auditors will not be one of those parties.
Concerning the own-resources side of the budget, would he agree with me that it is an extremely serious picture that is painted? In traditional own-resources we see evidence of the difficulty of collection and the propensity to fraud. But when we look at the very valuable analysis that has been done on VAT collection in the Member States, we see this alarming figure of a gap between the theoretical VAT yield and the actual collection running at ECU 70 000m a year. That not only has an effect on Member States but also on the GNP and VAT based receipts.
Finally, it is reasonable to say - and I hope Mr Friedmann agrees with me - that there should be no substantial increase in own resources until all income is collected and until we can be reassured that all revenue is not only legal but is properly, efficiently and effectively spent.

Garriga Polledo
Mr President, I should like to thank Mr Friedmann and the other members of the Court of Auditors present in the gallery for being here today. I believe that the procedure for granting discharge for 1996, which has not yet been granted by Parliament, is excellent proof of the importance of the Court of Auditors' reports in this area. In any case, this discharge will result in important methods and tools becoming available to Parliament in terms of the financial control of other institutions, notably the Commission. In particular, these will involve the ability to request documents and other relevant information.
Mr President of the Court of Auditors, I should like to comment on the section on Structural Funds and put some questions to you in that connection. The Court has consistently criticised the large number of administrative irregularities in structural expenditure. You point out that there is very little coordination between the Member States and the Court you so ably preside.
You hope to receive from the Member States in 1998 the first reports on the implementation of the regulation unifying the Member States' provisions for financial control in operations cofinanced by the Structural Funds. Have you received these reports yet? And if so, what is your assessment of them?
You have also presented very detailed conclusions as to the number and nature of substantive errors in the Structural Funds. However, this seems to contradict your statements on the lack of coordination on the part of Member States. I would repeat the argument I have put forward in previous years: in my view, it is impossible to produce a reliable estimate if you do not have a well-established coordination procedure involving the national control institutions. I would therefore like to ask: has progress been made? Is this coordination currently taking place?
Finally, Mr President of the Court of Auditors, I should like to point out that the majority of Structural Funds are actually allocated during this last part of the programming period. This does not seem to me to be clear from your remarks, and could perhaps lead to confusion amongst some of the more naive Members of the House.

Rosado Fernandes
Mr President of the Court of Auditors, the Edinburgh Council decided upon a multi-annual programming of expenditure until the financial perspective expires at the end of 1999.
According to the Court's audit, ECU 70 billion have not yet been spent. Why is there this delay? Is it mismanagement by the Commission? Or is it that the Member States are implementing, through Structural Fund expenditure, the policy known, in French, as the policy of the juste retour ? Which Member States could be picked out as the bad pupils? In my view, the Edinburgh Agreement should be honoured since maintaining the structural actions allowed by those Funds is the key to balance in southern Europe. To end with, I have one more question: can those ECU 70 billion still be used or not?

Bloch von Blottnitz
Mr President, we should be happy that only ECU 300 million were spent of the total ECU 850 million of PHARE and TACIS funds made available for nuclear safety, because 80 % of the money was scandalously spent on safety studies of dubious value, simply on paperwork. On top of that, it stayed in Western hands without any proper methodology, evaluation or consultation, and without the eastern European countries being informed of the results of the studies. What this amounts to is simply money down the drain, and we have not even achieved the slightest improvement in safety as a result. That is the true scandal, and here I would like to hear from the Commission how it intends to put a stop to such situations in future.
Secondly, I would like to give an example of how money is wasted. For the purpose of a rather dubious investigation a study costing ECU 170 000 was undertaken to preserve the Siberian tiger. The study was carried out in Italy, filed away and forgotten about, and it was concluded that the tiger would simply die out. So that was the end of that. Something else could have been done with this money. This is how the Commission wastes money on studies which do not lead to any action bring taken. I would therefore like to know what will be done in the near future with the ECU 550 million that we have left for nuclear safety, and whether we will continue to have studies of dubious value without any action being taken as a result.

Paisley
Mr President, it is surely amazing that the president of the Court of Auditors has to report on the loss of millions by the Commission. The Commission, while allowing this to happen, adopts an entirely different attitude to the pig producers of Northern Ireland. The devastated pig producers there have had to have a financially-assisted scheme to remove unwanted animals from their farms.
Now the Commission says that the farmers must repay this money which prevented cruelty to animals. The Commission allows millions to be lost but has no consideration for those in the most desperate circumstances. I would put on record today the call of those of us in this House who are from Northern Ireland to stop increasing the desperation of our pig producers. Already some of have become so desperate that they have been driven to suicide.

Blak
Mr President, when I received the Court of Auditors' annual report yesterday, I read it with great interest. As a Dane, I was naturally interested in what it had to say about Denmark. I have read the report countless times overnight, but I cannot find anything about Denmark in it. Of course, I am glad that we are doing things properly in our country. It is always good to be able to take that as a starting-point.
I noted that there have been a number of special reports, and I would like to say that one of them which really made an impression on me is the one which has featured in the press for the last fortnight and deals with safety in nuclear power plants. I would like to ask Mr Friedmann, and also Mr Liikanen and the Commission, not just to focus on nuclear power plants in the eastern countries. We should perhaps also be looking at the situation in Murmansk, where there are several hundred submarines which have been scrapped but still have active reactors, and where a number of reactors have been dumped in the Barents Sea. I really do think that we need to have a special report on this area, and I think that instead of going on talking about these things and employing expensive consultants and a good deal more besides, we should employ people ourselves and send them out there to start the necessary process. That naturally requires there to be cooperation with the Member States. I know that is difficult, but we must do something about this. The greatest time bomb that we have is the nuclear power plants and the submarines which are lying around. All the other small-scale fraud which is happening round about should also be addressed, but it must not be our top priority.

Kellett-Bowman
Mr President, I want to congratulate Mr Friedmann and the Court on their best-seller report again this year. When he presented it last night to the Budgetary Control Committee the room was full - people were perched on windows and tables and even sitting on the floor. Of course the media were there looking for the 'f' word but fraud is scrupulously not mentioned in the report.
I was disappointed particularly by the phrase that 'substantive errors affecting transaction underlying payments' was in the same range as in previous years.
I take some encouragement from the postscript to President Friedmann's speech this morning where he said that there was some improvement. That is what we are looking for - improvement.
In paragraph 1.18 there is a quotation from the transit report where we called for the Community customs services to work together as if they were one. The gaps between them provide this figure of about 70 billion lost to the Member States in a year, 35 to 40 times the amount which is actually defrauded from the EC budget. I wish finance ministers would take note of this.
I am interested in Chapter 6 on administration. Thank you for the various reports we have had from the agencies. You mentioned specifically Turin and the fact that ECU 380m from PHARE and TACIS spent by that agency is not included in their accounts. One hopes that it is hidden somewhere in the Commission accounts.
As for the schools, I would point out that the fact that four of the schools have more external pupils than Community pupils poses a problem. I wonder if we should transfer some of the cash to overcrowded schools in other places.

Bösch
Madam President, President Friedmann, ladies and gentlemen, on the subject of UCLAF, you consider the creation of an additional institution to combat fraud to be problematic, as you said last week at our interparliamentary conference and again yesterday. However, we have heard that this is precisely what is currently being prepared by the Commission. A proposal for a regulation on the basis of Article 235 of the EC Treaty on creating an external assessment agency, as it is called, is evidently in the process of being drafted by the Commission. The Commission is giving the false impression that in doing so it is complying with Parliament's request to create an OLAF, an office for fraud prevention. I would like to make it clear that this is not the case, Commissioner Liikanen.
What Parliament called for with a large majority at the beginning of October was not an additional institution. Instead, we want the current UCLAF to be replaced by an office of fraud prevention with full operational independence, but not one that is a satellite organisation somewhere outside the institutions of the EU. An external solution is not valid as long as we do not have a European public prosecution authority. No, OLAF should remain within the Commission and all other institutions of the Union should be involved in it. I would now like to ask you, President Friedmann, whether it could be of interest to the Court of Auditors to be involved in an office of this kind and to contribute its experience. Has the Court of Auditors formed an opinion on this yet?

Krehl
Madam President, I would like to discuss the planning and implementation of actions in the field of external aid. The scale of Community activities in this area has in recent years increased continuously in both political and financial terms. Moreover, neither the extent nor the importance of these activities will decrease in the coming years. Following the ratification of the Amsterdam Treaty, in fact, the opposite is to be expected. The content of the Court of Auditors' annual report is therefore all the more worrying as it has found considerable shortcomings in all phases of preparation, implementation and assessment of the actions by the Commission.
The cost/benefit outcome currently falls far short of its potential, and it is not clear whether restructuring measures within the Commission, for example the creation of a common service for all external aid and ECHO, can solve all these management problems. Unfortunately, as we have already seen, while the creation of a separate common service results in improvement of management capacities, it also distances political and economic services from the implementation of policies.
The question I would like to ask the Court of Auditors is the following: is the Court of Auditors of the opinion that the creation of the common service RELEX will result in significant improvements or is it necessary, particularly in view of the future tasks of the Union in this area, to think of completely new solutions?

Friedmann
Madam President, thank you very much for the many very interesting questions. Mrs Wemheuer - and this also fits in with what Mrs Krehl has just said - you expressed criticism about staffing policy. On the one hand, it is astonishing that the administrative costs of the European Union represent in total approximately 5 % of the budget, including personnel expenditure. But this does not say much as European Union policy must be implemented by the administrations of the Member States. As you know, Mrs Wemheuer, we referred some time ago to fact that the mini-budgets used at the time were to be heavily criticised. Parliament kindly took control and resolved the matter by granting the Commission a generous number of posts for permanent staff. In the meantime, however, it has emerged that, despite this, more of the operational budget is once again being spent on a decentralised staffing policy and in particular on employing external consultants and experts. This was why I criticised these Liikanen facilities whose limit is being exceeded. In this respect I share your concern about the Commission's staffing policy. I will discuss with the members of the Court whether and to what extent we could examine this in a special report and how it would fit into our schedule.
Mrs Theato, thank you for your comments. I appreciate that you wish to receive the annual report earlier. The actual problem is the time needed for the contradictory procedure, though the period agreed does not even take account of the summer recess. We must enter into intensive talks with the Commission, as we discussed yesterday in the Committee on Budgetary Control, in order to clarify to what extent this period can be reduced and the Financial Regulation amended accordingly.
Mr Brinkhorst, it is clear why you place importance on cooperation with the national courts of auditors. We have developed a particular procedure whereby we write a sectoral letter when our auditors come back from the Member States; this means that the relevant auditing sector writes to the Member State and to the relevant national court of auditors in order to inform them of the results. The Member State can then reply to us, usually via the national court of auditors, and if we do not reply to this within two months it means that we are in agreement with the Member State's reply. Therefore, if each party meets its deadline the arguments of the country being audited are taken into account in our annual report and in the special reports.
Mr Pasty, like several of your colleagues, you referred to the ECU 70 billion that have been lost in VAT revenue. This figure of 70 billion refers to the model calculations based on nine Member States and is the annual average over four years. We calculated it by adding up the VAT actually paid and comparing this figure with the sum of the Member States' total gross national product. This gives an indication of the sum not paid. We can also account for this in detail, but of course the Member States are the first to be affected by this loss, and obviously the Community is indirectly affected by it to a certain extent. To give you an idea of the magnitude of this I could say that the sum lost by the Member States in the form of VAT revenue is in the order of the budget of the European Union.
Mrs Müller, on the issue of foreign policy and the question of whether the situation is improving, I have to say quite honestly that we cannot give the all-clear. We always provide timely information on everything, but we cannot say that currently everything is exactly as it should be.
Mr Dell'Alba, I understand your anger regarding the newspaper reports. However, I must make two points here. Firstly, many newspaper reports simply rehash the special reports already published officially by us. Sometimes the impression is given that the annual report has been leaked, but I am not aware of any incident of this kind. However, I understand your concern, and we in the European Court of Auditors generally agree that Parliament has the right to be the first to be informed.
Mr Fabre-Aubrespy, you addressed the issue of information policy. We have referred to a few points in that area. The content of the information policy is outside our jurisdiction. We do not see it as our job to censor the information the Commission feels it has to provide, but we insist that the delegations, or whoever may be concerned, must be capable of meeting their responsibilities.
Mr Le Gallou, the question is whether we should reduce humanitarian aid if, as we say, so much money does not actually reach the people concerned. This is a political issue but in my personal opinion I would ask you to bear in mind that it is probably the very poorest who have to suffer as a result of others not being honest. That should be taken into account in this decision.
Lord Tomlinson, you stated that British press reports of fraud in the order of three billion pounds are not borne out by the content of our annual report. We deliberately mention irregularities, as you know, and I should make it clear - here we are in agreement - that the report of the European Court of Auditors is not a fraud report; rather, we check for legality, regularity and sound financial management, and the content of the report reflects this.
I understand your reference to the Fontainebleau Agreement as a UK Member of Parliament. We addressed this issue in our special report on the Community's own resources. We do not regard it as our job to tell the political powers how possible changes should be made to the contributions paid by the Member States. However, we did note that it had been arranged in Fontainebleau that should adjustments be decided on for political reasons, then expenditure policy too must be changed.
Mr Garriga Polledo, you mentioned the Structural Funds and asked whether we received reports from the Member States and how coordination with the Member States works. In fact, we exchange views continuously with the Member States, particularly in the area of structural aid. The issue of why this delay has arisen in the programming period was touched on later; one of your colleagues also mentioned it. I must say that at the beginning of the programming period a certain amount of time is always needed for work to get properly underway. We are seeing this at the moment with the new Member States, with the result that at the end of the programming period a backlog tends to build up.
However, the problem of co-financing in the Member States was doubtless partly responsible for this, as when we request co-financing the Member States are often obliged to incur additional debts. We must understand that this was not easy in the run-up to monetary union. So it is a combination of several factors that account for the delay. In my opinion, the money will have to be paid via the budget outside the programming period.
Mr Rosado Fernandes, you mentioned Edinburgh and asked why there has been a delay over the ECU 90 billion. I hope I answered this question together with that of Mr Garriga Polledo. Mrs Bloch von Blottnitz, you addressed the issue of nuclear safety. The way in which companies have awarded subcontracts is indeed a problem. Some contractors have taken the price of Western experts as the basis for the terms specified in the contracts, but in fact employed east European experts to do the work. The fees of Western experts are about fifteen times higher than those of their east European counterparts.
But you are right, and I think this is the opinion of the entire House: a nuclear safety strategy is urgently needed and should be given priority. Mr Blak, you mentioned that there is a big problem with submarines in Murmansk. As you know, this is a military issue that is not within the direct jurisdiction of the European Court of Auditors. We can only audit in connection with the EU budget - we have already discussed this in the Court of Auditors, and I will bring it up once again - but I must first remind you that these submarines in Murmansk are a military matter, with which we are not directly involved. I understand your concern, and we will discuss this again.
You also mentioned that in Denmark everything is in order. Mr Blak, I am pleased that you believe you can draw this conclusion, but the fact that we do not criticise something does not mean that everything is in order. That is obvious.
Mr Kellett-Bowman, you are right to say that the Community loses considerable customs revenue in transit traffic. You are also right to say that the European Schools have more external pupils than children of EU staff, and in view of the high deficit this is a point that needs to be clarified. We have also referred to this in the relevant special report.
Mr Bösch, your question concerning whether we would be prepared to accept OLAF being affiliated to the European Court of Auditors in some way was a very difficult one. It must be clear that the nature of the tasks involved is quite different. I repeat, and on this we are in agreement, that the European Court of Auditors is not a criminal investigation department or a police force. There is a good reason for this, as much of our auditing leads to consultation work. I also appreciate your idea that if an independent unit of this kind is to be responsible for all the institutions without becoming a new institution itself, you need an existing institution to which you can affiliate OLAF. I can only say in this discussion that the nature of the task is not the same; it is quite different. You will have to make the political decision, and the Court of Auditors will have to accept what is decided by the legislator.
In conclusion, Mrs Krehl, I believe I have already answered your question on creating a separate common service, on staffing policy and administration. Finally, I would like to thank you all very much for your keen interest.
(Applause)
Liikanen
Madam President, the work of the Court of Auditors helps us in our continuing efforts to improve our budgetary management of the Community. I should like to express my thanks to Mr Friedmann and to his colleagues in the Court of Auditors for their work. Nearly half the 24 special reports this year are devoted to the common agricultural policy or structural funds. These account for the main part of Community spending and our interests coincide on this point.
The Commission has adopted and presented several proposals which seek to improve the regularity and quality of the agricultural and structural funds. Their origins are often in the recommendations which the Court has made in its previous annual reports and the Court has also noted that in this report.
On the Declaration of Assurance, we are glad to note the Court's confirmation, that, with a few qualifications, the accounts reliably reflect the Community's revenue and expenditure and the financial situation at the end of the year. With some exceptions, the Court also found that transactions underlying revenue as well as commitment transactions for the year were legal and regular. With regard to payments, the Court was not able to provide the Declaration of Assurance. The aim of the Commission is of course to receive a positive Declaration of Assurance from the Court in all respects.
I would like to draw two conclusions from the Court's report and recommendations. Firstly, according to the Court, a majority of both formal and substantive errors occurred in the agricultural and structural programmes which are mainly managed in the Member States. We have to continue to cooperate closely with the Member States in order to improve the reliability of the Community payments. Secondly, we have to continue our efforts to make the Community rules and legislation clear and transparent.
The Commission has pursued and continues to pursue intensive cooperation and coordination with the Member States in the context of the SEM 2000 programme where a representative of the Committee on Budgetary Control and also of the Court of Auditors have participated. This led to the adoption of the first reform proposals in 1997. The Court notes that most of the substantive errors in structural funds payments are of an administrative nature caused by inadequate knowledge of the Community rules which leads to the inclusion of ineligible amounts in the Member States' declarations.
The Commission has tackled the issue through the introduction of the eligibility sheets in May 1997, as the Court says in its report. The eligibility sheets clarify what expenditure is eligible for the Community co-financing. The Commission also adopted a regulation in 1997 which establishes the minimum standards for financial control by the Member States of structural fund financing.
In the Agenda 2000 proposals, the Member States carry the main responsibility for the financial control of the structural funds assistance. When Member States detect irregularities and make the necessary financial corrections, they are allowed to re-use the released Community funds. However, when the shortcomings in the management or inspection systems cause systematic irregularities, the Commission will make the necessary corrections by deducting the aid available to the Member State in question.
Here I must say that, unfortunately, these extremely important proposals for better financial management, control and corrections are facing a lot of opposition in the Council. On this basic issue the Court of Auditors and the Commission are in agreement and we hope in the context of Agenda 2000 to establish a simple, transparent and clear legal framework for structural funds after 2000. That is the only way to create a system that is uniform throughout the Community.
In the Commission proposals on Agenda 2000, structural fund spending is focused more sharply and concentrates on the regions in greatest need. A further shift in agricultural spending from price support to direct income aid is also proposed. Both proposals would imply a more efficient use of the scarce budgetary resources. There are still two other major reforms in the pipeline. The first is a communication for an overhaul of the financial regulation, presented in July 1998. The Court of Auditors asked for this a year or two ago and we hope that we can go forward so that the Commission can make the major proposal.
The second major reform under discussion in the Commission is the shift to an activity-based budgeting seeking to enhance cost-consciousness and presenting operational expenditure in the same global context. I hope that we will be able to take the first steps in this process before the budget for 2000. It will not be easy, because that is the year in which the budgetary authority will be elected, and a new Commission appointed. But we want to take the first steps then.
Significant progress is being made on Community subsidies. The recent Commission communication imposes clear minimum rules for the publicity and collective decision-making on all Community subsidies. It is the result of many parliamentary initiatives. The new Commission rules come into effect for the implementation of the 1999 budget. They will provide a basis for informing and discussing with the actual and potential beneficiaries. There will be a general seminar for NGOs on that issue next week in Brussels.
Reforms take time, but some are starting to bear fruit. 1997 was the second time the new procedures for the clearance of accounts in EAGGF Guarantee Section were applied. In 1997 the error rate which the Court detected in agricultural guarantee payments was broadly consistent with the final corrections imposed by the Commission. That is mentioned in the report and it means that in that sector there was no financial impact on the budget.
The external programmes have been broadly discussed. Today the Commission's external programmes are very wide. External aid comes from 75 budget lines with 87 legal bases. There are nine different committees. We have about 10 000 contracts a year and about 3 000 public tenders. We still have 47 different procedures. There is an urgent need for standardisation, harmonisation, simplification and transparency. For that reason a new body was established in September this year to manage all external aid programmes.
This new body - the External Relations Common Service - will be responsible for the financial management of the programmes and its major task, as I said, is to create standardised, homogenous, simple and transparent systems for dealing with the Community's external aid. We are going through a very difficult transitional period but I am convinced that we will start to see the results next year.
As to staff policy, Mr Friedmann has made a number of comments here. The question of what should be done by the public authorities and what can be contracted out is a vital one. In the Commission's communication last summer, we emphasised that the authorising officer and financial control responsibilities must be public sector responsibilities, but short-term tasks can be contracted out, especially when special expertise is needed for the period of the programme. I hope we can come back to last summer's communication.
Secondly, we are now in discussions with the Committee on Budgets and the rapporteur on the mini-budget. We have given oral reports so far on the issue and we give all the detailed information budget line by budget line where we find there is a need for external staff. I hope that all this can be clarified before the end of November before the second reading of the budget so that either there is a budget commentary in the B part where you can use external staff from the operational budget or you transfer this part of the administrative expenditure to Part A or we abolish the idea completely. So this clarification is extremely important and once it is established for the 1999 budget there will be no possibility of taking measures which are not totally in line with the budgetary authority.
Finally, the question of resources. We are always under heavy pressure in our work. Whether we can solve all the problems through new resources is a question which must be posed. I would say that in the external programmes we must, as the Court said, have a clearer idea of how to run them: simple projects, limit the number of procedures, standardize types of contracts and so on. This gives us more of a chance of running them properly.
Secondly, when systems are simpler, decentralisation to delegations comes as a logical consequence. But I am sure that we will still have needs, especially on the financial management side. We are discussing this matter and are conducting a screening exercise throughout the Commission.
One remark I wish to make at the moment is that usually when we have a problem we think the best way to solve it is to increase the number of controllers and inspectors. I am not of that school. It is more important to have simple, clear rules and responsible managers and strong management. You need controllers but strong, responsible management is the key.
I must say that the report correctly describes the nature of the reforms we are making, and changes can be seen in agriculture. For the structural funds, I hope that the eligibility sheets which were accepted last year will have an impact on the implementation of the budget for 1998. But the major simplification which is in Agenda 2000 is still required before we can feel relaxed and everybody in the Union can run the Community programmes according to the rules and interpret these rules in the same way.
In the external programmes, I must say that decentralisation of the activities will help us a lot. Of course, the great attention of the budgetary authority on the problems we have had has increased the Commission's awareness of the issue. I am slightly afraid of only one matter: we have had so many problems that officials will draw the wrong conclusion, lose their nerve and will not dare to take a risk when they sign the contracts. That is the worst possible result. I hope that we will go for decentralisation, head in the direction of more responsibility for delegations and officials and create clear rules so that they know what is what and not revert to the system where we need 15 signatures so that everybody is covered by somebody else.
I am fully aware that there is still a need to continue to develop and improve our methods and tools. The main reforms which this Commission has adopted are summarised in the document 'Reform of financial management since 1995, which was presented last week. The Commission proposals under Agenda 2000 are an important part of our response to the challenges of the future. Better value for money from every euro spent by the Community is our overriding objective. These are demanding objectives which call for major efforts. The report of the Court of Auditors, although not always pleasant reading I must admit, is still vital for us too. So are the reports of the Committee on Budgetary Control.
In reply to Mrs Bloch von Blottnitz on the nuclear programmes: now that the report of the Court of Auditors and the Commission reply have been published, I hope that everybody can see that the two documents create a good balance on the issue.
I wish to make one comment on the studies. The decision of the European Bank for Reconstruction is that they do not lend money for modernisation of nuclear plant unless a study is conducted. So a study of all these plants is needed before any action can be taken. I have talked to some experts on the issue, who say that it is extremely important because western and former Soviet experts work together in the same plant to analyse the situation. Of course local experts must be used as much as possible because that approach is cheaper. However, the problem is that western standards and priorities on safety points are different. It is very important for the beneficiary countries to start to familiarise themselves with the standards we lay down for security.
We must remember that the whole reconstruction and modernisation of Soviet-type nuclear plants is an extremely expensive project: it will cost at least 50 billion euros. We have now spent between 7 and 8 hundred million euros on the programmes, which is a very small part of the total. Achieving full modernisation and reconstruction requires a huge effort on the part of the beneficiary countries and the international donor communities. We are not there yet, but we must not give up.
Finally, the nuclear programmes in Ukraine, Russia and other countries are being run under extremely difficult circumstances. Just think of the international aid programmes in Russia recently, and what happened with the IMF aid which was meant to support the Russian currency. I wonder what the real outcome was.
Secondly, the Commission now has the question of the food aid programme to Russia. We all know that such programmes are extremely difficult to monitor. For that reason we must try to adopt an approach where we inform the budgetary authority of all our problems and if we take decisions we take them in full knowledge of all the possible consequences and risks, so that in four years' time when my successor reads the Court of Auditors' report he will know that we knew the risks. We will come back to this Russian problem some other time.
Once again, thank you very much, Mr President, for a good debate.

President
Thank you, Mr Liikanen.
The debate is closed.

Employment in the Union
President
The next item is the report (A4-0417/98) by Mr Wim van Velzen, on behalf of the Committee on Employment and Social Affairs, on the Commission communication: Proposal for guidelines for Member States' employment policies 1999 (COM(98)0574 - C4-0587/98).

van Velzen, Wim
Madam President, looking at what has happened a year on from when the first guidelines were drawn up, I think we can rightly speak of a quiet revolution. Initial opposition to an active labour market policy and the near-total belief in EMU and the jobs it would create have actually disappeared. There is not one Member State which has failed to take on board the guidelines agreed in Luxembourg. That is an extremely good thing. But things could be even better. If we look at the evaluation carried out by the Commission, and it is a first-class evaluation, you will see that the Member States' approach to the guidelines has been one of picking and choosing and that often the choice they have made has been unbalanced, placing too much emphasis on employment and entrepreneurship.
At the same time, however, it might be said that those guidelines which were the most precisely, most exactly formulated have also produced the best results, and that is an argument for continuing with the strategy. But I do have a problem with the proposals put forward by the European Commission. I do not think they keep the process in a sharp enough focus. By sharp focus, I mean ensuring that quantified objectives are as far as possible based on benchmarking. That is the best way of keeping the Member States' minds on the job. I have no sympathy at all for those Member States which say 'we already have so much to do; let us cut down a bit, let us not have any new objectives'. The work we are adding is all work which they have to do in the normal course of events. We are just trying to target it at European level towards common goals which we have previously defined.
The current process, developed in Luxembourg, focuses strongly on people already out of work - quite properly, as things stood at the time. I think it is now time to look also at how, whilst helping the unemployed, we can stop more and more unemployed people from joining them. How can we get more attention paid to prevention? This, in my view, will have enormous implications for education. Hence my request for an additional objective for those who are now employed but who need further training to make sure they stay abreast of new developments.
Another problem which I myself feel is not taken into account enough in the objectives is participation in the work process. There are large groups for whom it remains difficult to break into the labour market, even in my own country of the Netherlands, which is reckoned to be successful. In the Netherlands you find older people over 55, you find migrants and still women too who have trouble finding work. It is no different in other countries of the Union.
That is just employment policy, not unimportant - far from it - but it is just one side of the coin. The other side is this: what are we doing on the economic front? What are we doing about economic coordination? What are we doing to deepen the process begun with EMU? What use are we making of these opportunities? I think the moment for making a start has long since passed. But given the fact that we are now debating this report, I think we must urge the Council to produce, as quickly as possible, a framework in which economic coordination can really take shape. Other speakers will cover this in more depth.
At this point, I would mention an aspect touched on earlier by the Commission, namely the fact that there is a large measure of under-investment in Europe. Where are the Commission's plans, its proposals for tackling that problem? Where are the opportunities for broadening the financial initiatives taken at Member State level? In my country - as I said just now - we seem to have been successful. A decision has been taken there to cut back the programme for giving school children more computer-oriented education, due to shortage of funds, and now there are one or two pioneering schools which will get computers whilst all the rest will have to wait years before they get them. A laughable investment failure! So in an area where we ought to be investing in the future, one of the European countries with the best record is unable to come up with the cash. I think that should prompt the Council to reflect about what we can do to give Member States more room for manoeuvre. I am not coming down in favour of one proposal rather than the other. It is a package of proposals, and I think we have to choose very carefully here.
Lastly, I am very surprised by the PPE Group's amendments I have seen, admittedly very late, because we have very little time. They have retabled all the amendments they had originally tabled in the Social Affairs Committee. May I remind you that the PPE coordinator volunteered the information during the part-session that I had done an excellent job by incorporating their proposals into my report, that there was still just one difference of opinion remaining which concerned investment policy, but that otherwise he was very happy. Now all the amendments are being put down again unseen, even those which are already in my report. I find that incomprehensible. I hope I can reach a more satisfactory resolution of this with the PPE Group, because I think it is putting our future cooperation in jeopardy.

Gasòliba I Böhm
Madam President, ladies and gentlemen, in two minutes it is hard to summarise the opinion I drafted for the Committee on Economic and Monetary Affairs and Industrial Policy, and which was unanimously approved. The basic idea was that the creation of jobs, a higher rate of employment for Europe, will only become a solid, stable and lasting reality if it is based on a truly competitive economy and on what we term a globalised or internationalised economy. Unfortunately, the European Union is not yet in a position to cope with the level of competition demanded by an open economy.
We therefore wish to emphasise the importance of a series of issues raised over recent years. These include the need to eliminate barriers and systems of protection that still exist in key areas of our economy and the need to increase our level of knowledge. We must also improve our level of education, particularly in the areas of vocational and technical training. In addition, an effort should be made to remove the current obstacles to the creation of new jobs, particularly those involving taxation. The possibility of modifying VAT, value added tax, must be considered, with a view to reducing it in the so-called labour-intensive sectors, the sectors with the largest workforce. I should also mention the need to provide new and improved guidance in terms of allowing better access to finance, especially for small and medium-sized enterprises, so as to promote a better business environment.

Torres Marques
Madam President, first of all I would like to congratulate Mr van Velzen on his excellent report, especially this final version. We in the Committee on Women's Rights believe that it was extremely important that the Heads of State or Government should have decided that at least two of the new concepts included in the Amsterdam Treaty, employment and mainstreaming, should be immediately adopted, even before all the countries have ratified the Treaty. In other words, the principle of equal opportunities for men and women is to be included in all sectoral policies.
These are two policies that seem so important that we could not wait for the slow process of ratification to be completed. The citizens of Europe, both men and women, would not have understood that. The methodology adopted at the Luxembourg Employment Summit of November 1997 would seem to be the most appropriate. Given the situation of employment and unemployment and the state of equal opportunities, which vary from country to country and within countries from region to region, the solution reached respects the principle of subsidiarity and means that each country should put forward its own proposals, albeit integrated into four common pillars, subdivided into a total of 19 guidelines. This solution is highly innovative and bodes well for plans to be made over the coming years.
It is obvious that in the first employment plan for 1998, not all countries have attached the same importance to the four pillars nor found solutions for all of the guidelines. But it is of importance that in such a short period of time, between November 1997 and April 1998, those plans should have been presented at all. Each of the Member States is obliged to think about and try to resolve, with quantitative goals, the problem of unemployment, and that seems very positive. On the other hand, these first national employment plans suggest that the responses found for the four pillars on the whole lack balance. While all the Member States are putting forward measures for the first two pillars - employability and entrepreneurship -, which are somehow centred on the ability to take individual initiatives, they tend to have less ideas on the other two pillars - adaptability and equal opportunities - where actions depend more on governments than on firms.
As far as the Commission's proposals for 1999 are concerned, we consider the following to be signs of progress:
redefining the fourth pillar as the pillar for equal opportunities between women and men; -strengthening the guideline on reconciling work and family life; -integrating the principle of equal opportunities for men and women in all the pillars.The overwhelming majority of the proposals made by the Committee on Women's Rights have been directly integrated into Mr van Velzen's final report or slipped into less central areas, such as strengthening mainstreaming in the first three pillars and positive actions in the fourth pillar, reconciling family and work life, introducing an individualised tax policy, working out gender-based statistics and setting quantified and budgeted objectives.
Another important point is that at all future summits of the Heads of State or Government, monitoring these national employment plans will be the subject of a compulsory analysis, enabling all concerned - governments, parliaments, both sides of industry and non-governmental organisations taking an interest in this process - to follow these matters attentively and regularly. They are vital for the European social model that we want to build.

Randzio-Plath
Madam President, ladies and gentlemen, Mr van Velzen's excellent report, which the PSE Group supports, is rightly based on lasting, sustainable strategies to combat mass unemployment, but also on innovative adjustment of the employment guidelines. Of particular importance are the structural elements for the promotion of structural reform of the labour market, the need to bring about a better balance among the four pillars of the employment guidelines and the emphasis on gender mainstreaming. At the same time, however, the totally inadequate employment recovery must be regarded as a challenge for the Union and the Member States to achieve a better and more balanced policy mix and to improve coordination of economic, financial and employment policies.
As we are now only a few weeks away from the beginning of monetary union it is high time to integrate guidelines for economic policy and for employment so that the accent can deliberately be put on effectiveness in creating employment as a condition for policy coordination, in good time for the national budget debates. The European Parliament must at long last be involved in an interinstitutional agreement on this issue.
The parties to the collective agreement are also called upon, in view of monetary union, to begin to harmonise productivity-based wage agreements in order to avoid the risk of wage dumping that would adversely affect the Community.
Once again, calls are being made for a review of the basic elements of economic policy and for proper coordination of economic policy. The European Union cannot afford to sit back, despite the Commission's favourable autumn forecast. Even the lack of currency fluctuation that has been caused by the prospect of the euro should not induce us to sit back. Today we are already seeing the effects of the crisis in South-East Asia on European jobs. The chemical, engineering and electronics sectors are already hit by reduced orders and falling prices. This is affecting European jobs.
Supply-side measures alone are not sufficient. Demand must also be stimulated by increasing the purchasing power of consumers and fostering greater trust in the future of the European Union. In this respect, the van Velzen report is right to emphasise changing the system by means of implementing tax reforms and reducing taxation on labour. But we also need a reform of wage structures that takes productivity into account, as well as stimulation of investment as an important means of stabilising the European economy.
As current investment levels are much too low - public investment is currently barely 2 % of GDP - growth and employment cannot be achieved. Structural change in the labour market must be supported by a new prospect of growth. Alliances for work could successfully accompany this process. We still lack Europe-wide modernisation offensives with investment plans in the areas of communications, transport, the environment, energy conservation, research, development, innovation and training. Here we must speedily draw up an indicative list that allows a combination of public and private investment. In the spirit of the Maastricht Treaty the EU Ministers for Finance are called upon to separate this kind of investment from the general government deficit, as long as the EU is still caught between mass unemployment and the Stability Pact.

Hernández Mollar
Madam President, by this stage I think all the main debates concerning the employment situation in Europe have now come through the worst. We already have European guidelines - the Treaty of Amsterdam includes a chapter specifically on employment - and we also have a European strategy that has inspired national employment action plans.
I feel Mr van Velzen's report bears all the hallmarks of a rushed and interim document, but I must stress that I do not in any way wish to blame him for that. The Commission's report reached us late, as it almost always does, and it too was wanting, as the Commission itself is not able to conduct rigorous and serious investigations at present. What is true, however, is that some Member States of the European Union are applying principles that are producing excellent results where job creation is concerned. This has been the case in my country, Spain. The results, ladies and gentlemen, speak for themselves: unemployment has been reduced by 4 %, over 800 000 jobs have been created and a meaningful social dialogue is in place that is leading to a radical reform of the labour market and greater stability of employment. Government and unions have recently reached agreement on important issues such as part-time work and the introduction of a new concept: 'supplementary time'. This will allow greater flexibility in the management of working time and will replace overtime. I believe it would be very interesting to evaluate this new formula.
In addition, I would like to refer briefly to two key issues in any employment policy. The first is the relationship that ought to exist between training and employment. A first job depends very much on that essential link between the institutions offering education and training and the requirements of the labour market. There are too many instances of failure at school, inadequate training and graduate unemployment in Europe. Even worse, there is considerable underemployment which means human resources are not being exploited to the full.
The second issue I would like to raise seems important to me, but is not mentioned in the report. It concerns the strong resistance to geographical mobility within the Union and between regions of the Member States, both on the part of those seeking their first job and the unemployed. This situation has as much to do with income policies as with language problems and the shortage of affordable housing for these people. As a result of the lack of mobility and of migratory flows between regions, unemployment becomes structural and prices and costs are destabilised, with the consequent negative impact on the competitiveness of businesses.

Boogerd-Quaak
Madam President, ladies and gentlemen, my thanks to Mr van Velzen for having incorporated paragraph 9 into his report. This concerns the evaluation of the venture capital we provide through the Investment Bank. We have been looking this morning at the report of the Court of Auditors, and it transpires that this provision of venture capital is not exactly satisfactory. The criteria are too general, there is no cohesive policy and the use of interest margins is unclear. But above all, and I would stress this, the Commission has no role other than that of information exchange.
I think that where we ourselves are at issue, in a report in which we are primarily asking the Member States to do certain things, we should have our own house in order. So I seriously urge the Commission to produce an evaluation on this point very soon for the Committee on Employment and Social Affairs. If it is not forthcoming, I shall ask questions in the committee myself. Many speakers have already said as much, ladies and gentlemen, and the advent of Economic and Monetary Union requires measures to be taken in a number of policy areas. This report indicates that the Member States are beginning to take them, through the reform of tax and social security systems and all manner of measures to stimulate the labour market. There is one point I should like to make here: slowly but surely, power and influence are shifting from national to European level. This goes unnoticed by the man in the street. Of course we have to be in favour of most of the measures in the van Velzen report. We cannot live with an employment rate of 60.5 %, for example. But it is high time these measures were subjected to democratic debate in the Member States; we must not think, as is sometimes suggested in this House, that all this is a matter for the Member States and that the European Parliament does not need to be involved and that there is no feedback either from the process, from Europe to the European citizen. With the elections almost upon us, it is an absolute must, and I am thus asking the Commission whether a little more might not be done to keep us informed on this matter.

Kaklamanis
Madam President, I wish to congratulate Mr Wim van Velzen on his report. Unfortunately, however, this fine report addresses appeals and wishes both to the Council of Ministers and to the Commission, and the question, Mr van Velzen, is whether the Council and the Commission have ears to hear what you are saying. I would remind you that in Amsterdam no substantive decision was taken regarding unemployment. In Luxembourg the ball was tossed into the court of the Member States. I would also remind you that the Maastricht criteria on economic and monetary union deliberately do not include the criterion of unemployment. I would remind you that both in the 1998 budget and in the budget for 1999 we will be voting on in a month's time, expenditure to combat unemployment for social Europe, for people with special needs and for the third age is either static or even lower, and all this at a time when, as you say in your report, full-time jobs are continually becoming fewer and only part-time jobs are being created. Consequently, incomes are down in a Europe in which costs are going up, and that is why the proportion of nouveaux pauvres has climbed above 15 %. I am sorry to see that this is taking place with the approval of Parliament, which on 2 May 1998 put social Europe into the hands of bankers and EMU.

Ojala
Madam President, the European left in all its diverse forms now has the chance to show that it is really serious when it comes to increasing employment. Of the fifteen Member States, the left is in government in one form or another in thirteen. My impression is that European voters are looking to the left for protection against the forces of money and uncontrolled market trends. Is it at all possible for the left to respond to the wishes of the voters? The different formulas left-wing governments have come up with are very much at odds with one another. While Britain continues to rely on the market to create jobs, in France and Italy there is a drive to shorten working hours and raise public spending to increase employment. Furthermore, the conditions agreed previously by the EU countries on economic and monetary union are slowing down progress.
We now need to create a programme for economic revival and employment based on four vital elements. The first of these is the lowering of interest rates, to prevent Europe from falling into the abyss. Unfortunately, the European Central Bank, which is ruled by the economic dogma of the last couple of decades, does not seem ready to lower interest rates so that production and employment might increase. Secondly, taxation has to be changed to encourage people to work. The current tax system favours ownership, investments and lazy money too much, and penalises work. Thirdly, we have to increase investment, especially in the area of transport and communications. It is also time we stopped regarding public services as a harmful extravagance and admitted they are immensely important in creating jobs and the infrastructure we vitally need. Fourthly, we must embark on action to shorten working time generally. The ways and means may vary from country to country and from region to region, but the objective must be a common one.

Schörling
Mr President, we are all keen for the Member States to cooperate with one another, coordinating their strategies for creating sustainable employment. It is important that the employment guidelines are actually implemented under national action programmes. Member States may occasionally need a nudge to remind them to abide by the recommendations - although we have to accept that there are considerable differences in the way countries handle these matters. Discussion is of the essence, and it will take time before everything is adopted and in place.
Mr van Velzen is clearly an impatient man! He wants action, but his zeal possibly gets the better of him at times. One of his proposals is for economic and financial policy coordination - a very far-reaching enterprise indeed.
Most of his suggestions are very good, nonetheless. I particularly like his ideas on reducing working hours in a flexible way. And he rightly sets his proposal in the context of the fight against unemployment. My group has, however, tabled an amendment calling for a slightly more radical approach to cutting working hours in Europe, and I would recommend that colleagues vote for this.

Maes
Mr President, the level of unemployment in the Union has remained far too high despite the favourable economic trends of recent years, primarily amongst the categories of the poorly educated and the long-term unemployed, and these include a great many women. Not only in Europe but worldwide, the pressure of world unemployment is increasing. I would point above all to the millions of young people in the third world who are unemployed. The effects of that are felt throughout Europe, and it is a factor in social dislocation and poverty. Problems with asylum seekers are just one part of the result. Stimulating employment must thus be recognised as a prime objective in the Member States, the Union and in international organisations as well. In view of the slow-down in economic growth we are experiencing, it is doubtless all the more important.
The van Velzen report illustrates this especially clearly, and I am grateful to the rapporteur. The achievements of the European Union in the field of employment are meagre, so the report tells us. Differences between and within Member States remain enormous, despite the Structural Funds. Evaluation of the national action plans shows up positive points, it is true, but many gaps and weaknesses too. In my country, for example, there is the failure to reduce labour costs. These shortcomings also apply to the four pillars. Europe's leaders have concluded too late, regrettably, that a better balance is needed between a Europe of monetary union and a policy of employment. We echo Mr van Velzen in wanting quantified objectives, training and participation. We also believe above all that the choice of a European investment programme is a good choice. We shall vote for the resolution but there is too much in it, Mr President, and we think that ultimately we may not be able to see the wood for the trees. Unless Europe makes jobs a priority, there will no future for its children and thus no future for Europe itself.

Angelilli
Mr President, ladies and gentlemen, the van Velzen report paints a clear picture of the economic situation in Europe over the past year: on the one hand, cautious optimism due to the welcome prospect of the European single currency and to slight but appreciable economic growth; on the other, a climate of distrust and instability due to all the international financial crises - in Asia, Eastern Europe and Latin America - the repercussions of which have had an adverse effect on the European market. And then there is unemployment, still the most urgent social problem facing our continent, above all for young people and women.
Broadly speaking, therefore, we can endorse the report's approach to relaunching effective employment policies in the Member States. I would stress in particular the importance of vocational training, which must be improved and adapted to the requirements of the labour market. There is a major contradiction inherent in vocational training: it is true that the funds available are inadequate, but it is also true that a good deal of money is badly invested in poor-quality courses with a minimal impact on employment. The Member States should be called on, in more general terms, to overhaul their educational systems thoroughly. Italy's Audit Office recently bemoaned the fact that a substantial percentage of graduates have difficulty in finding jobs owing to the mediocrity of the education system, in particular the universities, where the practical and applied aspects of the theoretical instruction are all too often overlooked.
My second point relates to women. They are the greatest victims of discrimination in the world of work, partly because of their family responsibilities and, where necessary, their role as carers for the elderly and the disabled.
This House has already drawn the Commission's attention on numerous occasions to the fact that, unless proper social assistance is available for working women, especially single mothers, the right to work is nothing but a figment of the imagination.
Finally, I should like to turn to another proposal made in the report, namely a more flexible distribution of working time. Where economic conditions permit, it is indeed desirable to reduce weekly working time and above all to introduce part-time work in order to create new jobs. But let us not forget, in accordance with the fundamental principles of subsidiarity and participation, that any reduction in working time must be agreed between the social partners, in other words not by handing down legislation which would merely be a source of pointless and harmful inflexibility.

Damião
Mr President, the van Velzen report is excellent and very balanced. The rapporteur wanted to reach a consensus catering for various different European social situations in the current economic situation. Concerns over investment, support for small firms, assistance for companies that employ large numbers of people, working conditions, the gradual reduction in maximum working hours and improving the management thereof, wages, social protection, training leading to genuine qualifications and appropriate education systems all give a social meaning to the terms of adaptability and employability, which, without that guidance, would be cynical objectives, concerned only with economics, as I would like the Commission to remember.
Unemployment is not inevitable but I would not wish on other countries in the European Union the solution applied in large areas of Portugal, where all three generations have to work in order to scrape together the minimum wage paid in Spain, half the minimum wage in Belgium, and a quarter the minimum wage in Germany, albeit with almost full employment. It is a world where, when people lose their jobs, especially women, they lose 50 % to 100 % of their income and in order to survive, they rely on strong family support, weak national solidarity and your solidarity, thanks to the European Union's cohesion.
I support this report because it takes a significant step towards fleshing out the concept of employability. But we do not wish on countries experiencing high levels of unemployment a solution that only weakens citizenship and undermines the European social model.

Mann, Thomas
Mr President, the situation four years ago was as follows: at the summit in Essen we agreed a broad strategy to combat unemployment more effectively at European level by strictly observing the principle of subsidiarity. The situation one year ago was that we agreed guidelines at the Luxembourg Employment Summit to guarantee a high level of employment. The situation today is that we are publicly assessing what has and has not been achieved in the National Action Plans. There are gaps in particular in terms of training; not enough training is provided, not enough older workers are involved in training, training courses are not sufficiently adapted to new technologies and education systems often fail to provide practical experience, team work and knowledge of other countries. Employability, the first pillar of the NAPs, is therefore difficult to achieve.
Much too little importance is placed on the fourth pillar: equal opportunities. Commissioner, where child care is not provided, in the form of creches, nursery schools and day care centres, it is mainly women who are denied access to a career. But there are also encouraging developments: more and more Member States, for example Germany, are managing to adapt to changed employment structures. Conditions for entrepreneurship are being improved and passive employment policies are finally being replaced by active policies. We must now institutionalise dialogue between the Ecofin Council, the ECB, those responsible for social policy, the social partners, the Council, the Commission and the European Parliament in order to better coordinate economic and monetary policy, including the indispensable Stability Pact, with employment policy.
The forthcoming summit in Vienna should set the right course instead of arousing false hopes such as the supposedly comprehensive investment programme worth billions that the Member States will not in any case finance. With a realistic approach there is a good chance that even those affected by unemployment and exclusion will feel that Europe is overcoming obstacles and inaction, is capable of coordination and can provide important impetus and new ideas.

Theonas
Mr President, current rates of development are not absorbing the high level of unemployment. In 1997 economic development in the European Union was 2.7 % and it is expected to be about 2.8 % in 1998, while salaries increased by just 1 % in real terms, despite which the unemployment indexes have not improved. Full-time jobs are becoming fewer and only part-time jobs are increasing. The spectre of poverty and social exclusion is already affecting or directly threatening millions of the Union's citizens. To be honest, how much optimism do these facts justify? In our opinion, employment policy has been shown to be unreliable and a factor which exacerbates the crisis. That is the conclusion which the Union's citizens reach. But while that is the situation, the Commission's statement gives priority to the competitiveness of trade and industry, to the stability pact, to monetary stability, to the promotion of part-time employment and informal forms of work, and to employability - a concept which transfers the burden of responsibility for finding work from the state and its policy onto working people.
Mr President, working people disapprove of this policy. They see no future in it, and their only recourse is to intensify their struggle to overthrow it. We will stand by them in that.

Sainjon
Mr President, since we are talking about a social Europe, I would firstly like to congratulate Mr van Velzen and - just this once - the Commission for the action taken on the consultation of employees. After Vilvoorde and, more recently, Levi's, there is an urgent need to give employees greater rights when it comes to informing and consulting them about companies' investment strategies and any decision to relocate. This culture of information - I would even go so far as to say joint management - is a step in the right direction.
However, I must say, more generally, that the Commission's social action programme lacks ambition and grand design. Obviously, reference is rightly made to reducing VAT for labour-intensive services, lowering costs for SMEs, flexibility, training, etc. But I would like to know what is being done about the commitments made at the Luxembourg Employment Summit in November 1997. It is politically vital for us to have a major project that is able to channel our efforts. To be honest, what we need is a new welfare state which promotes employment and lifelong learning for every citizen of the European Union. In other words, we must ensure that every woman and man from Lisbon to Berlin, from London to Rome, has the same hope if they lose their jobs.
I myself dream of banishing the word unemployment from our vocabulary and this is more than just rhetorical. What this means in practical terms is that from now on during each redundancy or period of inactivity, a compulsory period of paid training should automatically begin, one that more than just fills a gap. We must translate the wishes of the Luxembourg Employment Summit in November 1997, where the 15 Member States decided that it was a priority to ensure that no young person was out of work or without training for more than six months, and no adult for more than a year.
We must bring this idea to life by going even further and proposing that throughout their lives people should alternate between working and training by moving from one to the other without any unwanted breaks, that is, without any periods of unemployment.
This would be a really major project that would allow Europe to get back in touch with its past, when it used to initiate social progress. It could be financed through the FRF 2 300 billion devoted every year in Europe to combating unemployment and through the European Structural Funds, which would better serve this objective if less fragmented.

Raschhofer
Mr President, the latest statistics show a fall in unemployment. On closer study, however, we see that unemployment has fallen to a lesser degree than the economy has grown in the same period. The fact that 23 million European citizens are living at subsistence level also gives cause for thought, as does the fact that the present report warns of low-pay and low-quality jobs and demands that monetary stability be maintained. The Luxembourg Summit's guidelines for a successful employment policy are ambitious. No one will seriously oppose alternatives to taxation on labour or measures to improve the climate for investment or education and training. But these formulas are not new, after all. Precisely these measures were discussed at the Essen Summit in the context of the White Paper on employment.
However, it is sobering that the NAPs for employment are so unspecific about these measures. Many National Action Plans do not fix any concrete aims or financial resources, or else they are inadequate. What is needed are appropriate indicators, specification of budgetary funds and laying down of priorities and the deadlines for achieving them. And how are we to evaluate honestly the progress and results of employment policy? I have to say that I hear the message but I do not believe it if the Member States fail to realise the objectives.

Van Lancker
Mr President, I should like to agree with those honourable Members who have said that the process begun in Luxembourg is a good thing but that Vienna will of course have to move things forward emphatically. I should like to focus on one aspect, Commissioner, which is extremely important to me. It is time Member States restored the link between more work and more equal opportunities for women. In the van Velzen report we firmly advocate a halving of the gender gap. This requires a particular commitment on the part of Member States for all the guidelines, and it also represents a commitment to positive action. Let me give you a few examples: it looks at the fact that more women are unemployed and for longer, and it is good, Commissioner, that the Member States have opted for action to prevent long-term unemployment. But that means too that women must get at least their fair share of any benefit from such measures. It means too that Member States must not be allowed, as they now do, to ignore long-term unemployment, where women are over-represented. No, the two things have to go together and complement each other.
Secondly, we also want a clear commitment to more training opportunities for people currently in work. I think it is disgraceful that women working part-time are quite simply excluded from the opportunities offered under most of the training programmes laid on by employers.
Thirdly, it presupposes extra attention in wage bargaining for the unacceptable differential of 20 to 30 % which still persists between male and female earnings. The result of this would have to be that any increases agreed in wage negotiations were now applied primarily to women's earnings, which are undervalued. It also presupposes that Member States will not remain obsessed with part-time work, but will talk about more family-friendly forms of work sharing and shorter working hours such as a four-day week, for example. We should like to see the Commission coming up with a further proposal to tighten the existing directive on working time.
Lastly, Mr President, the preparation of concrete objectives has already proved its worth. We must intensify this process for all guidelines, and my group would like to make an important request for the Commission to address with urgency the question of benchmarks for the efficacy of social protection. We must ensure that more work also means better quality work and thus an adequate level of social protection.

García-Margallo y Marfil (PPE).
Mr President, I should like to express more than the conventional expressions of gratitude to the rapporteur, and also to put forward four ideas that would, in my view, enrich the report.
Firstly, I regret the lack of any reference to the coordination of economic policies with monetary policy, that is to say, of the Economy and Finance Council with the European Central Bank. Recent publications, particularly Krugmann's work, are beginning to call into question whether it is logical and coherent to continue giving priority to price stability now that we have reached all-time low levels where job creation is concerned. Although I agree with Carlos Gasòliba that economic stability is a prerequisite for job creation, I also believe that greater coordination is needed and that the European Central Bank should focus more on this objective.
Secondly, I think it is unfortunate that when comparing - benchmarking - job creation in Europe and in the United States, the experience gained by this Parliament was not drawn upon. Apart from some ideas reiterated in this House by a number of speakers - flexibility and the liberalisation of certain markets, particularly the service market and the labour market -, the report emphasised that one of the main reasons why the United States takes the lead where job creation is concerned is that it is far more committed to research and development. Also, private initiative plays a much greater part in that joint effort and there is an option of encouraging R&D through tax incentives rather than direct aid, thus linking projects to making a profit.
Thirdly, with regard to the tax burden, there is reference to VAT on labour-intensive services. It seems to me that the time has come to ask ourselves whether it makes sense to maintain a value added tax such as the one devised in 1967 when there was a shortage of labour in Europe, and jobs remained unfilled. It might well be appropriate to consider whether it is still reasonable to allow immediate deduction of the tax on investment goods thus encouraging the replacement of workers by capital goods.
My concluding remark is that I agree with the references to trans-European networks, but it is time to move on and say how we intend to finance them: from surplus reserves, issuing loans or in some other way.

González Álvarez
Mr President, as documented in Mr van Velzen's report, it seems to have been established that there is no direct connection between economic prosperity and job creation. Jobs have been created, but not enough of them. Social conditions in Europe have also failed to improve: 15 % of workers live below the poverty line.
The much-heralded monetary union, the 'euro-umbrella' meant to protect Europe from the economic and financial ups and downs of the outside world does not seem likely to prevent some of their effects reaching our continent. We therefore feel that certain aspects of Mr van Velzen's report deserve to be highlighted.
Firstly, there is a reference to the obsession with the concept of stability, the strict stability plan that has to be complied with. We believe that such an obsession should be done away with. What is of crucial importance now is the creation of employment if we also want the economy to do well. This stability plan is more concerned with monetary stability than with the stability of employment.
In conclusion, Mr President, I should like to stress the importance of two of the four pillars of the employment strategy: adaptability and equal opportunities.
With regard to adaptability, the social partners must be involved when dealing with the working day and the reduction of overtime, amongst other issues.
As for equal opportunities, we have repeatedly pointed out that women lag far behind men where access to work and salaries are concerned. This fourth pillar has turned out to be very weak in all the Member States' strategies. We must therefore encourage the creation of services to facilitate access to work for women and also their return to work following a career break.

Formentini
Mr President, allow me to begin by congratulating the rapporteur, Mr van Velzen, who has managed to home in on the fundamental issues concerning this key aspect of the economy - employment. He has done so at a time of uncertainty: there can be no doubt that the situation is now radically different from that described in the conclusions reached by the national governments in November 1997, both within the Community - which has since embarked on stage three of economic and monetary union and created the stability pact, with everything which that implies - and in the rest of the world, where there is no denying the serious changes that have taken place in the recent past. A recession is undoubtedly under way, affecting at least 40 % of the world's population, as the rapporteur himself has stated; so far, the storms have spared Europe and North America, but there are no guarantees as to the future.
All in all, the growth rate in Europe is not keeping pace with the need for employment growth, and there is ground to be made up. We are convinced that the problem of unemployment cannot be solved through acts and decrees on employment: jobs cannot be created by decree; they are created by promoting economic growth. So efforts are required all round in order that such growth is stimulated by means of appropriate policies, above all fiscal ones, and through adequate support for economic development.
Investment must therefore be as productive as possible, concentrated in areas where it can be used to best effect. Investment of a purely social nature would be ineffectual. I hope that this will be the approach adopted at the forthcoming Vienna summit, which Europe as a whole will be observing with keen interest.

Cabezón Alonso
Mr van Velzen has indeed produced an excellent report, Mr President. It contains sound proposals, is in touch with reality, unpretentious and contains several innovative ideas. If I had to highlight one aspect of it, I would highlight the section devoted to the preventive approach. I hope and trust that this report will receive all possible support from Parliament.
The European Union's millions of unemployed do not render this debate pointless - quite the contrary. In any case, thanks to this and other debates, employment is developing, albeit slowly, into a common policy that must be linked to economic policy, as coordination is essential.
Unemployment leads to forms of exclusion, precariousness hampers personal development, and the lack of personal expectations places available labour in a feudal position in relation to whoever can provide a job.
The authorities have the duty of ensuring that the principles of equality and solidarity are maintained where opportunities and income are concerned. However, they must also promote active policies and foster the basic conditions to relieve unemployment, the greatest concern of our societies. As stated in the report, the authorities must adopt economic policies that will strengthen or promote growth resulting from investment, generate consumer confidence and maintain domestic consumer demand.
A much more determined effort by the authorities is called for to develop active policies on the labour market, and they should be prepared to take risks in dealing with the present situation. We shall continue to defend proposals providing both flexibility and security against the preservation of the concept of deregulation, which tends to be used as the key argument.

Todini
Mr President, my compliments naturally go to the rapporteur, Mr van Velzen. His report tells us that, according to the data available, unemployment has actually fallen this year; however, we should not raise our hopes unduly, because the situation in Europe is only marginally positive. What is more, if we analyse the real situation in each individual Member State, we find wide divergences between the 15 countries. In Italy, for example, unemployment is still running at around 12 %.
What remedies have we come up with? A reduction in labour costs, naturally, and of course increased entrepreneurship, above all among SMEs. The importance of vocational training and qualifications has already been mentioned, so I shall not dwell on that point. I would merely stress one idea which is contained in the report and which I consider extremely important, namely that of reducing VAT on labour-intensive services. This proposal was put forward by the Council on 21 October 1997, and it could usefully be put back on the agenda. By the same token, an initiative could be taken by the European Investment Bank - which has expressed its readiness to do this - to finance projects at rates below the market rate, provided of course that such projects really are effective in generating employment.
Furthermore, why not propose a review of the Central Bank's key role? This new body, which came into being so as to keep down inflation within the 15 Member States, could and should have another important aim, namely to keep unemployment under control. Such a role is played in the United States by the Federal Reserve; its European counterpart should also undertake the vital task of keeping down unemployment. I believe that it is worth underlining the social relevance of the institutions which are being established.

Ribeiro
Mr President, the Commission's report is on employment in Europe in 1998. It is on the question of employment and not on the problem and the statistics of unemployment.
Mr van Velzen, in particular, in the explanatory statement accompanying the motion for a resolution, has got close to and dealt well with this finer point of detail. In other words, we must make sure that we refer to the quality of employment, without calling into question the seriousness of the unemployment figures and the alarm that this causes. Some of the rapporteur's comments on the climate of economic recovery seem outdated because they no longer reflect the real situation. That is not his fault but the result of how the situation has developed.
I would like to make one more comment, given the little time I have, about something that is not really that negative in itself, that is, the fact that the Commission has used the terminology of pillars in its report on employment. We would highlight the ambiguity, in particular, of the first pillar, that of employability, a concept that seems to hold the unemployed responsible for the very existence of unemployment because they are poorly qualified. This seems to take away the blame for unemployment from a social system that not only creates unemployment but also exploits it.

Pronk
Mr President, I too must thank the rapporteur very warmly for all his hard work and for the report he has put together for us in so short a time.
It is not really possible to work in these conditions. Perhaps that explains his attack on our amendments. We were of course not happy with some parts of the report. We also abstained in the committee meeting. Consequently we felt obliged to retable the amendments on the points in question. That does not mean of course that all the compromises reached are lost. But we were in the extremely awkward position of having to make amendments on the basis of a report which did not yet exist. It just means we shall have to find another solution in future, though I appreciate that the rapporteur himself cannot do anything about it.
As regards the subject itself: happily unemployment is slightly down for the first time, but that does not mean of course that this will continue to be the case in future. There are a few dark clouds on the horizon. So we must continue with the strategy we have started. I should say really that this strategy has been far more successful than anyone could have expected beforehand. There was a good deal of cynicism about this strategy, but it appears to work. It really seems to be leading to change in the Member States. Perhaps not enough change, but at least some.
A number of things are now threatening, some of which are actually in Mr van Velzen's report. Paragraph 7 and the broad investment programme is something which we cannot accept, because it would take us back to the whole discussion on the overall strategy. We previously rejected this kind of broad investment programme, firstly because there is no money and, secondly, because it does not work at European level. It is hard for us to agree to it now, even if we do have eleven prime ministers in the European Union with a socialist background. It does not automatically mean that we are going to cough up.
The second point I wanted to raise is the question of taxes. I think it quite proper that the rapporteur should ask for that to be addressed. It is a great shame that the debate on this, specifically variations in the rate of VAT, went totally awry in the Council and that governments which were supposedly in favour and are doing nothing else about it, and the one or two governments which were against, appear to be getting their own way. I think it is a great pity. I hope the European Parliament will manage to get the matter raised again.
These are the main points. We may be able to back this provided we do not radically change it all of a sudden, and provided enough of our amendments are adopted.

Alavanos
Mr President, it may well be that globally in the European Union there is a downturn in unemployment, though I do not know if it can be said that someone whose temperature has fallen from 41º to 40.5º can be said to be getting better. What I would like to quote as experience from my own country is that the phenomenon of unemployment is increasing, especially among young people and women, and this alongside and in parallel with Greece's desperate effort to meet the criteria for inclusion in economic and monetary union. From that standpoint I think we are getting to the heart of how to address the problem of unemployment today. A few years ago we had the White Paper on Growth, Competitiveness and Employment. I do not know what its results were, perhaps there were some, but nothing came of all our discussions here and from the mobilisation in the European Parliament and in general. Today, however, I think that if we want to see some results from the positive ideas expressed by Mr van Velzen and from the efforts of Commissioner Flynn and the Commission to develop an overall unemployment strategy based on certain pillars, the course established by Maastricht will have to be changed. A change in the sense that social criteria and unemployment are included in progress towards EMU, investments are not counted among public deficits, and the European Central Bank at least follows the path pursued by the Federal Reserve in the United States.

Chanterie
Mr President, first of all I think the strategy launched in Luxembourg is producing good results and will provide an impetus for structural changes in the European labour market. It is our expectation that the guidelines will be adjusted and tightened in Vienna so that the Member States have to give more specific commitments with quantified sums of expenditure. We expect the European Commission to improve its proposals accordingly.
Secondly, there is no denying that the number of jobs rose by 750 000 in 1997 thanks to economic growth, economic growth which is now threatened by financial crises elsewhere in the world. Hence the need to underpin economic growth by a broad European programme of investment. There has been enough talking about the TENs. It is time now for clear decisions to be taken.
Thirdly, I agree with those honourable Members who advocated a stronger presence in the jobs market for women, the over-fifties and the handicapped. Last of all, Mr President, it is a matter of great urgency to bring labour costs down.

Hatzidakis
Mr President, though Europe's economy has in recent years been developing at relatively satisfactory rates - for example, in 1997 growth amounted to 2.7 % - we are not seeing a corresponding fall in unemployment. Unemployment has fallen, but by a small, an exceptionally small amount and in some countries it is at the same level or even increasing slightly, as in my own country. This means that growth on its own does not create as many jobs as we need. We also need structural measures in the labour market, and it is to this that we should turn our attention.
Given that the problem of unemployment is a pan-European phenomenon, there must certainly be coordination between the policies of Member States to address the issue globally and effectively. The solution to the unemployment problem and the promotion of employment must become a truly European concern. It is important, however, that any such coordination should proceed along appropriate lines, because otherwise we could all be coordinated, all have the same policy, and end up by increasing unemployment. So here I should like to say - though this will provoke an allergic reaction in some colleagues - that we should look at what is happening in America and Japan. We do not have to ape the American or Japanese models, but let us look to see why they have lower unemployment and try to learn some lessons, just as we can learn something from some countries in the European Union where unemployment is already exceptionally low. I believe, then, that in this context there should be greater flexibility in the labour market, measures such as modernisation of the taxation and legal systems for employment, tax and other incentives for company investment, especially in the case of SMEs, completion of the internal market and easier movement of working people, flexible working hours, reduction of non-salary costs, the promotion of active employment policies and not just emphasis on the unemployment fund, and finally, utilisation of resources and potentials for education and higher education via the European Social Fund, which I feel could be much more effective than it currently is.

Flynn
I thank you, Mr van Velzen, for your report. It is a stimulating document, containing a thorough examination of the key problems of the European Union labour market, and it certainly it has a number of very good and interesting proposals for future action.
A year ago I presented to Parliament the first set of employment guidelines. I am very pleased to inform you that we have achieved very considerable progress and success since then. All the Member States have lived up to the political commitments they made at Luxembourg last year. The Commission, in its draft joint report for 1998, has duly reflected this progress by making national employment policies more structured and transparent, for instance by reporting on concrete funding for the NEPs and on monitoring and evaluation structures. This progress is clearly in line with the proposals in Mr van Velzen's report.
In particular I am pleased to see that the messages of prevention and activation as guiding principles for employment policy have penetrated the thinking of the national authorities and the social partners. Such principles have begun to be translated into concrete action, which the Member States have already started on this year. I recognise and welcome this progress.
You all know that early intervention to prevent youth and long-term unemployment and the move from a curative to a preventative approach lie at the very heart of the strategy. This is the key point Mr van Velzen has been making - that we have to have a preventative approach.
Concrete action has also been taken, for instance in reducing the number of young people leaving training and educational systems without adequate qualifications. This point is made very forcefully by Mr van Velzen and by Mr Thomas Mann and I agree wholeheartedly. You will notice, Mr van Velzen, that in our recommendation for the 1999 guidelines, life-long learning is a key issue for consideration at Vienna. What we are saying in the new guidelines is that we want to increase the number getting access to the labour market, in particular older workers. Not enough attention has been paid to that point and the report supports us on that.
I should just draw your attention to a remark in the employment rates report, that high employment rates depend on educational attainment. That must be a key feature in the development of these policies by the Member States.
We are talking about improving the environment for enterprise, encouraging and assisting business start-ups, coordination between the relevant authorities in the Member States, making the social partners more aware of their potential contribution, developing the adaptability pillar, introducing tax reforms to reduce the tax burden on labour, promoting greater awareness of the avoidance of gender segregation and facilitating access to the labour market for all. Here I would refer Mrs Van Lancker's comments on women in the labour market. In fact the employment rates report deals with this very point. I would just like to draw to your attention, Mrs Van Lancker, that equality is now a key element in our strategy. You will notice that we are not just talking about mainstreaming, we are talking about a horizontal issue and not just relying on the fourth pillar in support of your point. Your comments and those of the House have been taken fully into consideration.
The draft joint report identifies these encouraging developments, but that is just the beginning and there is a long way to go. We need to involve the social partners more fully at all levels and to foster and develop a strong partnership approach at local level, promoting employment entrepreneurship and local economic development, especially in the services sector. I agree entirely with what Mrs Ojala said about the services sector. You will notice that in the employment rates report, where we draw the comparison between what happens in the United States and what happens in the European Union, the key issue is that we have not developed the services sector as they have done in the United States. In the European Union 39.2 % are employed in the services sector, in the United States it is 54 %. That is a big difference.
We need to work out new options for lowering taxation on labour compatible with the overall macroeconomic strategy for stable growth and raising employment in the EMU, to devise and implement more concrete action to develop equal opportunities in our labour markets for women, disabled people and immigrants.
Your report, Mr van Velzen, puts forward a wide range of suggestions for further developing the strategy. I think that is going to happen. The momentum is there. I am pleased to tell you that many of your proposals and ideas have already been taken on board in our proposal for 1999. You will see that reflected in the outcome of the Vienna Summit.
In its proposal for employment guidelines for 1999 the Commission has sought to consolidate the political momentum that has been gained this year. You yourself said, Mr van Velzen, that there is a quiet revolution. I would like to think that it was not so quiet. But the momentum is there, the Member States have taken on the commitment and I believe that it is going to be very much strengthened after Vienna.
In the interests of consistency and continuity, there are very few adjustments of substance in the 1999 proposal. It preserves the four pillar structure and the three Europe-wide operational targets. Nevertheless it incorporates the orientations of the European Council at Cardiff and it draws from the assessment of the 1998 joint employment report and the employment rates report for 1998. Some substantive additions and, in some cases, new guidelines aim at putting particular emphasis in 1999 on active measures: developing life-long learning, making the labour market more open to all, fully exploiting the jobs potential of the services sector and better reconciling work and family life.
The Commission has also identified a number of horizontal issues. They include gender mainstreaming, the information society, undeclared work, the role of the structural funds, especially the social fund, local development and the need for improving common indicators and quantitative targets. Moving in this direction requires realism and ambition. Common targets require comparable statistics at European level and concrete action to improve the current state of such statistics will be proposed by the Commission in a specific report to the Vienna Summit.
This year's revision of the guidelines is, however, a good opportunity to further develop this dimension of the strategy. The Commission has proposed a new target to be set individually by the Member States for increasing the number of workers benefiting from life-long learning. Furthermore, the Member States are invited to set concrete targets for other guidelines according to their national priorities and possibilities.
Mrs Boogerd-Quaak and Mrs Todini referred to the Community financing initiatives for the EIB and the EIF. I should just like to say that the EIB Edinburgh facility of the ECU 5b in loans to general infrastructure projects is ongoing. The Copenhagen SME facility is in place and the facility has been fully taken up. The growth and environment pilot project is in place for loans of perhaps ECU 1.6b. The EIF is authorised to commit up to 20 % of its own funds. The EIB's Amsterdam special action programme of ECU 1b to finance special action is also under way. We would be happy to discuss these at any time in the future.
The 1999 joint employment report will for the first time attempt an evaluation of the impact of the NEPs. It will be a test for all of us. It is going to give the people of our Member States a tangible demonstration that we have moved from ideas to action and concrete results. So the quiet revolution, Mr Van Velzen, is taking on quite a political momentum. The strategy is there, we have targets, a timescale and a convergence policy. We need better implementation, but I think we will be successful.

van Velzen, Wim
To start with, Commissioner, what a lucky fellow I am that everything I propose is already being planned by the Commission. But that is not the point I wish to make. You have heard a lot of speakers complaining here at the way in which we were obliged to prepare and amend this report. The reason for that is the ridiculously short time which the European Parliament was given. I would welcome the Commissioner's reaction to the suggestion which I make on this in paragraph 30 of my report. How does he think we can solve the problem in future?

Flynn
Mr President, we are stuck in a very tight time frame to deal with all of this. Obviously, it is going to have to be considered further when the Treaty is ratified. I cannot really say at this time how we are going to fit all of this in.
When you consider the reports coming next year in June - preparation for the Joint Annual Report, the Joint Employment Report - and meeting all the deadlines including the consultation report under the Treaty with Parliament later on, I cannot see yet how we are going to fit it in. Some new arrangement is going to have to be entered into between the institutions to enable us to meet the time-scale so that we can be ready for the December summit each year. We will have to consider how it is going to be done.

President. -
The debate is closed.
The vote will be taken tomorrow at 11.30 p.m.

Social action programme 1998-2000
President
The next item is the report (A4-0381/98) by Mr Hughes, on behalf of the Committee on Employment and Social Affairs, on the Communication from the Commission: Social action programme 1998-2000 (COM(98)0259 - C4-0343/9)

Hughes
Mr President, I would like to thank the Commissioner for his cooperation and that of his services for the way in which Members of this Parliament, and more specifically the members of the Committee on Employment and Social Affairs, have been given an opportunity to help shape the content of this new social action programme.
The explanatory statement in my report sets out the timetable and describes how the coordinators of the committee were able on a number of occasions through late 1997 and early 1998 to meet representatives of the Commissioner's cabinet and officials of DG V to discuss the content of the programme and assist me in drawing up a working document setting out what we thought should be included.
The exercise is a good model for collaboration between our two institutions and it is not surprising that it has led to the production of a Commission communication with which I am broadly satisfied. The degree of similarity between the communication and our working document is detailed in the annex to the report.
There are, however, a few points of difference - matters either missing from the communication or, in our opinion, inadequately covered. Three in my view are of particular importance.
The first concerns civil dialogue. We called for a communication on the future of civil dialogue as an ongoing process but the communication gives the impression that it will continue to consist of little more than the biannual social policy forums.
The second concerns our call for a framework instrument on social protection to make use of the new possibilities under Article 137(3) of the Amsterdam Treaty. We feel that action in this area is highly fragmented - at best piecemeal. That call is not adequately answered.
The third concerns the need to start preparatory work on an anti-discrimination action programme based on Article 13 of the Amsterdam Treaty and a new social inclusion programme based on Article 137(2) so that proposals can be put forward immediately following the ratification of the Amsterdam Treaty next spring. This is not specifically covered in the Commission's communication and what references there are seem to be too specifically related to labour market integration.
I said in my explanatory statement that if the Commissioner can give us assurances on these points I would recommend acceptance of the social action programme. It seems to me that work inside the Commission has progressed on these points, especially as regards civil dialogue and anticipated programmes on discrimination and social exclusion and I hope that the Commissioner can give us these assurances.
Beyond these major concerns there are a number of specific items, more in the nature of unfinished business, which I hope the Commission will be willing to take on board. Some follow on from earlier commitments from the Commission, such as the proposal on home working, one on sexual harassment, another on the need for the completion of the legislative framework for equal treatment between men and women in social security schemes. Others concern the need to review existing provisions, such as the need to assess the impact of the code of practice on equal pay for work of equal value and the need to amend Directive 86/613 and to produce the overdue evaluation report on the directive on health and safety of pregnant women at work.
Finally, in the health and safety field, I know that the Commission is committed to constantly reviewing risks and putting forward proposals where appropriate. We are pleased to see the commitment to act on repetitive strain injury but we also feel that there is now sufficient evidence for the Commission to act on stress at work. One Union - the GMB - is sufficiently concerned about staffing reductions in the health and safety unit to have sent a draft directive on RSI which I will hand to you after the debate.
In conclusion, I am pleased with the Commission's communication. In drafting the working document earlier this year I was looking for an action programme which would present a more holistic and political view than the simple check-lists of the past, one that would take account of the new possibilities from Amsterdam and the role to be played by social dialogue; and one which would centre on the new employment guidelines and employment strategy while still continuing to concern itself with issues and groups not necessarily linked to the labour market. The communication does these things. If the Commissioner can give me the assurances that I have sought on the few points I have raised I will be delighted to recommend its acceptance to the House.

President. -
The debate is suspended and will be resumed at 3 p.m.

VOTES
Schmid
Mr President, I would like to briefly draw your attention and that of the House to the fact that the date change proposed by Amendment No 7 applies not only to Article 1(3) but also to Article 1(2). It is the same date in both cases. This is only logical.
(The President declared the common position approved as amended)

Amadeo
Mr President, I merely wish to make three remarks concerning the votes on the amendments.
With regard to Amendments Nos 29 and 30, these have been resubmitted because the expression 'sperimentazione non interventistica ' in the Italian version is incomprehensible, and the addition of 'observational studies' enables research to be conducted in centres which carry out research for purposes other than the registration of medicinal products.
Secondly, Amendment No 14 makes the wording of Article 7(2) incompatible with Article 7(3). Amendment No 31 corrects this inconsistency without altering the spirit of Amendment No 14; I would therefore suggest voting on No 31 before No 14.
Finally, should Amendment No 35 be adopted, it will cause No 17 to fall. However, I believe that it should be considered before Amendment No 16, in that it would also cause the last paragraph of No 16 to fall, where it says 'the sponsor shall notify the competent authorities at the time of taking those measures'.

Liese
Mr President, my request is for the different language versions of Amendments Nos 1 and 10 to be brought into line. In committee we used the German text for the vote, and there I asked that the English version be aligned with it. Now, however, the original German version of the amendments has also been changed for presentation to the House. It is very important that we clarify that what we are voting on is what was adopted in committee in the original German version. The German term in question is 'gesetzlicher Vertreter '. It must be very clear that for individuals who are incapable of giving their informed consent, approval is given by their legal representative. If this is not clear in the English translation, the English version can be brought into line by saying 'legally responsible person', but nothing other than 'der gesetzliche Vertreter ' can be written in the German version, as this was used for the vote in committee.

Valverde López
Mr President, as we are currently dealing with general remarks and so as not to interrupt the vote later, I should like to point out, with respect to Amendment No 7, that there is a discrepancy between some of the translations. When the term ' Doctor' is used in a general sense, colloquially, it ought to be understood to mean a medical doctor. There are of course also Doctors of Architecture, Chemistry, Engineering and so on.

Breyer
Mr President, as we decided in principle in Amendment No 28, which we adopted by a large majority, that research may only be carried out on persons incapable of giving informed consent if it is guaranteed that this is for his or her direct benefit, I request that we ask the Commission before the final vote what its opinion is on this amendment. I believe it will also be decisive for later votes, not only for the Commission and the Council but also for Parliament.

President
Mrs Breyer, your comment is somewhat unorthodox because such statements are the province of the rapporteur, not of other Members. I would not like to follow it up, though it will be noted in the Minutes.
After the approval of the Commission proposal
Amadeo
Mr President, I merely wished to say thank you and to appeal to the Commission to show sensitivity. The overwhelming majority of this House has made certain requests, and I believe that such pressure must be taken into account.
(Parliament adopted the legislative resolution)

Fabra Vallés
Mr President, I should like to clarify two points in connection with Amendments Nos 1 and 2. Both of these relate to the reinsertion of text that was part of my document prior to the vote in committee. There is a significant difference between the two amendments, however. Amendment No 1 involves reinserting material that I myself deleted following a compromise reached with Mrs Wemheuer, the Socialist spokesperson. I would therefore ask the House to support this compromise, and recommend that they vote against the amendment.
Amendment No 2 also involves the reinsertion of text into the report. In this case, however, the text concerned was deleted following the adoption of an amendment to delete it. So in this instance, the rapporteur's position is to recommend a free vote.

Fabre-Aubrespy
Mr President, I would like to make a general comment to point out to you, since I am aware of how fond you are of procedural motions, that two groups have requested split votes on this text: the first has asked for 13 split votes, and the second has asked for 23 split votes. I would like to make it clear that the request does not come from our group. So you see that all the groups can make use of the rights they are granted by the Rules of Procedure.
As regards what our rapporteur, Mr Fabra Vallés, has just said, I would point out that Amendment No 1 is an addition to the compromise text. It does not therefore contradict the compromise text that has been adopted in committee. Moreover, as regards Amendment No 2, it seems to me that, in the German version of the text, the verb 'prévient ' is not translated correctly. It appears that the German version uses the term 'stellt ', from the verb 'stellen ', when it should be 'warnt ', from the verb 'warnen '. I think that we should correct this version in line with the French text.

President
Thank you, Mr Fabre-Aubrespy. I would like to say that it was never my intention to suggest that your group is the only one to request split votes. Other groups ask for them as well. It sometimes happens that a slip of the tongue can give a false impression.

Dell'Alba
Mr President, I have two minor comments. Firstly, you say that the Conference of Presidents has decided that this report cannot refer to Article 206, which means that the reference must be deleted from the motion for a resolution. Otherwise what would happen is that, although we are not voting by absolute majority as required under Article 206, the reference would still be made. Since Article 188c of the Treaty deals with precisely these matters, it should be included in the report.
Secondly, I wish to highlight a linguistic problem in recital T. The French expression 'ladite enquête administrative ' has been translated into Italian as 'la cosiddetta indagine amministrativa ', whereby 'ladite ' has become 'soi-disant '. I would ask that the Italian version be corrected.

President
Mr Dell'Alba, I have noted your comment.
We will continue with the votes, and to avoid upsetting Mr Fabre-Aubrespy I will mention that this time, most of the separate votes were requested by the Socialist Group.
(Parliament adopted the resolution)

Evans
Mr President, if I could just ask you, on a point of order, whether it is within the rules or against the rules for Members to conduct lengthy telephone conversations on their mobile phones. Mr McMillan-Scott is doing so and I would like to draw that to your attention.

President
Mr Evans, you are quite right. Other colleagues of mine and I too have repeatedly requested from this platform that when voting is in progress, telephone conversations should not be taking place on mobile phones. I do not know how urgent that telephone call was for Mr McMillan-Scott, but in cases of urgent need Members can leave the Chamber so that they are not on the phone while voting is in progress.
(Parliament adopted the resolution)

Fabre-Aubrespy
Mr President, our group voted against the report by Mr Fabra Vallés. Yesterday, I said how well this report illustrated the scandal that we all know about surrounding the affair of the MED programmes and I gave the reasons why we agreed with the content of the report. However, I did say that we needed to make some changes, as we said earlier, to bring it back into line with the text proposed by the rapporteur.
We have known since last spring exactly what this scandal involves. On two occasions, Parliament called on the Commission to forward the entire file to the national judicial authorities so that they could decide themselves whether or not the matter did indeed come under their jurisdiction. As yet, the Commission has only forwarded part of the file. In so doing, it leads us to suspect that it wants to cover up certain unlawful practices because some of its officials could be involved in them.
What is more, the Commission is required, in accordance with Article 206 of the Treaty, to do all in its power to follow up on the comments that accompany the discharge procedure, and that is what is at issue now. Is the majority in Parliament going to take the next logical step after its repeated condemnations of this affair, or is it just going to accept that it has been wasting its efforts? When we read that plans are now being made to initiate proceedings and that our Amendment No 1 is being rejected, which merely warned the Commission once again that we were going to refuse to grant discharge if it did not respond to our requests, we certainly get the impression that Parliament is going to give in again.
Along with my colleagues, I must welcome the fact that 102 Members voted against this report, probably for the same reasons we did. In the Committee on Budgetary Control, I was the only one to vote against. These 102 Members have shown through their vote the role they hope to make Parliament play.
Pirker report (A4-0390/98)
Palm
This report proposes that Europol should have direct access to the customs information system. A federal police force, lacking any democratic accountability, has no attractions for me and I certainly cannot endorse granting it powers of this kind. For more detailed arguments, please refer to my explanation of vote on report A-0396/98.

Theorin and Wibe
This report proposes that Europol should have direct access to the customs information system. A federal police force, lacking any democratic accountability, has no attractions for us and we certainly cannot endorse granting it powers of this kind.
Schmid recommendation (A4-0377/98)
Andersson and Lööw
We thank Mr Schmid for producing such a thorough and pertinent report. Regulating Internet use is a sensitive matter, and it is necessary to proceed with extreme caution. The Internet facilitates global contact between individuals. Ideally, the flow of information should be unhindered and free from regulation. This report calls for a necessary degree of self-regulation, primarily in order to pre-empt exploitation of the Internet for criminal purposes, such as the dissemination of child pornography.
The rapporteur's proposals complement the Commission's initial text. We particularly welcome the calls for European quality labelling and the approximation of substantive provisions in criminal law. Common definitions should prevent child pornography rings, for example, from exploiting differences in legislation in pursuit of their vile and degrading activities.

Blak and Kirsten Jensen
The Danish Social Democrats have today voted in favour of an EU action plan to promote self-regulation, develop filtering and classification systems and encourage information activities and support measures. We are very much in favour of providing financial support for moves to restrict violence and pornography on the Internet. However, we have voted against a common European quality label awarded by the Commission. It is not the Commission's role to decide on the morality of material. We have also voted against harmonisation of civil and criminal law in the Member States. Legal practice in the Member States reflects the different national cultures and traditions in terms of what should be censored and how it should be punished. It is important to distinguish between what is illegal and what is offensive or damaging to morals.
We need to have European cooperation to combat illegal material such as child pornography. In this area, we should extend the competence of Europol as soon as possible, so that we can combat international networks which produce, sell and distribute pornography of this kind.

Blokland
My reaction to the common position of the Council was one of ambivalence.
On the one hand, I am glad that efforts are being made to counter 'pollution' of the Internet as effectively as possible. Cooperation between the Member States is altogether essential here.
On the other hand, I remain very critical of the artificial, not to say spurious distinction generally made between 'illegal' and 'harmful' material. Child pornography is illegal, whilst adult pornography is merely harmful to children. But the appalling and abhorrent extent of sexual abuse against women and children ought to make us take a more realistic view of things.
I voted for the amendment to develop a European 'quality-site label'. If we first have self-regulation on the part of service providers and personal responsibility on the part of Internet users, everything should be done to facilitate this.
I did not support the proposed amendment to have legal questions ruled on at Community level. After all, the law varies from Member State to Member State in respect of the limits placed on freedom of expression. I think it would be a waste of energy trying to persuade the Council to change its mind on this.

Buffetaut
The development of the Internet has rapidly presented us with a difficult problem: how can we prevent this new means of communication from being used for unlawful purposes such as prostitution, paedophilia and the dissemination of theories or doctrines that do not respect human dignity, without establishing a system of censorship?
The only realistic method was to take action with the Internet providers. The Community action plan is based around this idea, particularly through codes of conduct developed by self-regulatory bodies.
In this respect, the European Parliament had proposed, at first reading, the creation of a European quality label for suppliers of Internet services complying with these rules. The Commission did not adopt this idea and that is unfortunate. We therefore welcomed the fact that this amendment was tabled again.
Finally, since the legal questions raised by the content or use of the Internet are difficult, the Council has reserved the possibility of issuing an invitation to tender in order to assess these difficulties. Parliament wishes to go further and to make this initiative compulsory so that these studies can begin immediately. The Council's position seems to be more sensible, and we should only undertake these studies if there truly is a need to do so.
In conclusion, I would like to say that the same applies to the Internet as to all means of communication: it is the reflection of a civilisation, of a general state of mind. It is in some ways the mirror of our society, its tensions, its contradictions, its hedonism and its amorality, but also its creativity and the need to break the personal solitude and misery that the materialism and individualism of our time so often bring with them.
If the images we receive over the Internet are not always pleasant, we should ask ourselves why.

Seillier
The Internet is the same as all the tools invented by man: it can be used for both good and bad purposes. The report by Mr Schmid relates to an action plan to promote safer use of the Internet. But in what way would it be safer? Let us come out and say it: from a moral viewpoint, since other reports have dealt with the protection of consumers' interests as regards electronic commerce. It is a matter of protecting particularly young people who use the Internet from pornography, disguised offers of prostitution and the risks of traffic in human beings. What is more, these risks are very real, with all due respect to our colleagues who protested at the censorship in the action plan.
In any case, it would appear to be essential to promote self-regulation by those involved in the profession through the adoption of charters and codes of good conduct. We must also encourage research to improve the techniques that allow us to identify the chain of responsibilities in order to place the liability for illegal content on those who create or distribute it, for no-one must be able to say: 'I am only an access provider'.
Moreover, we must remember once again that we should class all pornography as illegal, not only child pornography. Whether it involves adults or children, it is just as shocking to consider the human body as a sexual object to be exploited.
Amadeo report (A4-0407/98)
Flemming
Mr President, I abstained from the vote on the Amadeo report although I consider the report itself to be a very good one. I did this to protest against the fact that in particular the Group of the Party of European Socialists rejected Amendment No 36. The amendment is worded in such a way as to allow a type of disciplinary committee of the professional representation or a committee of the national professional representation to be convened in the event of a breach by the doctor conducting the trial. I believe that, where a problem arises, it is the right of doctors, who do so much for all of us, to have a professional representative that can be informed, make a case for and stand by the doctors. I regret this attitude of hostility towards doctors that is shown by the Group of the Party of European Socialists and I wished to protest against this by abstaining from the vote.

Blokland
'In Europe there is a diversity of cultural traditions. Equally, there is diversity in religious beliefs.' That is what the European Commission says in its proposal for a directive on the introduction of good clinical practice. This pronouncement was an important starting-point for me in deciding where I stood on the clinical trials directive.
Decisions on whether or not clinical trials are ethical are the province of the Member States, precisely because of this cultural and religious diversity. This is an important issue, and decisions on whether or not to authorise clinical trials cannot be taken just like that. Ethics committees can never carry as much authority as national governments.
Moreover, each Member State has developed its own system for allowing or not allowing trials. The industry is familiar with them. They are afraid that a European directive will create a lack of clarity and thus an additional link in the chain of decision- making on clinical testing. In this way we are making the European market less attractive.
These considerations prompted me, following the adoption of Amendments Nos 13, 14 and 15, to vote against the report.

Bonde, Lis Jensen and Sandbæk
We have today voted against the Amadeo report on the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use. We believe that the Member States themselves should be able to decide how to organise their health systems, and that there should be no harmonisation of health policy at EU level. We therefore cannot support the undermining of the Member States' competence in this area through an EU directive, or the undermining of national systems which work perfectly well because of a desire to lay down standards by law at EU level. We cannot vote in favour of a proposal which would mean increased bureaucracy and higher costs for existing national systems which already efficiently handle applications for the authorisation of trials of medicinal products for human use. However, we have decided to vote in favour of those amendments which deal solely with the protection of trial subjects and their rights.
The report is far too vague about the procedures associated with applying to begin a clinical trial, and we do not think it is justifiable that the new ethics committees are exclusively able to authorise trials, without consulting the national authorities. The time limits set out in the report for communicating authorisations are unreasonably short, and mean that it is not possible to carry out a thorough assessment of the applications as is required. We therefore cannot support the proposal that clinical trials of medicinal products can be begun if authorisation has not been given by the expiry of the time limit. It is unacceptable to us that clinical trials of medicinal products for human use can be started under any circumstances without being directly authorised by the Member States, but simply once the authorities have been notified.
The proposal will cause a reduction in the level of health protection in those cases where the Member States are obliged to give authorisation for trials on the basis of the time limits in the directive, even if the national authorities have still not completed a more thorough assessment of the application. We shall always oppose EU rules in the health sector which produce a lower level of health protection in the Member States in this way. As is quite rightly pointed out in the Commission's proposal for a directive, ethical principles reflect the culture, traditions and expectations of our peoples, and we also think that the Commission should respect these. We will not play a part in enabling the EU to harmonise national ethical judgements.

Lindqvist (ELDR)
There is no justification for the Commission's proposal for authorisation to be given before clinical trials may commence. A straightforward application procedure should suffice.
Schmid report (A4-0396/98)
Andersson and Lööw
We are grateful to the rapporteur for producing a good and thorough text. Given the transfrontier dimension of fraud and counterfeiting, there is a clear need for the countries of the Union to cooperate in combating such crime - especially when it comes to protecting the euro against counterfeiters. The report offers some imaginative suggestions as to how the Commission's proposal might be rendered more precise. As regards the role of Europol, we can support the relevant amendments for the specific purpose they are designed to serve: namely to combat fraud and the counterfeiting of means of payment.

Caudron
Given the emergence of electronic commerce that is developing on the Internet, the report by our colleague Gerhard Schmid has come at just the right time to warn us of the risks of fraud that we can already see growing.
I believe that the text should enable us to limit the amount of fraud, even if it cannot put a stop to all attempted fraud on its own.
Moreover, it is vital for the Member States to coordinate their judicial policies, for this type of crime will undoubtedly tend to develop on the global network. As it has done already. In this respect, we must speed up the talks we are holding with our partners in the framework of the WTO.
It is not unreasonable to think that countries that are very conciliatory towards certain networks involved in serious crime might kindly welcome these new types of criminals. To fight them effectively, the international community must not only mobilise itself but must also have the means available to ensure that a minimum standard is applied in every country.
It is indeed necessary to coordinate all those involved in these new means of payment, but we must also encourage the use of encryption in payment transactions. Equally, the use of credit cards at home can be made secure though the use of an individual terminal. The first trials in this respect seem encouraging.
But there is a great deal yet to be done and time is moving on.

Gahrton, Holm and Schörling
We are not in favour of economic and monetary union and would rather it never came about. EMU signals a major political step in the direction of a 'Greater Europe'. Eleven out of the 15 Member States are more or less sure to go ahead, however, and we accept that the consequences will have to be dealt with as best as possible.
This report deals with protecting the euro against counterfeiting, and we appreciate the need to introduce an effective system for pre-empting the forging of bank notes. Close cooperation between the national police authorities will be essential - and with Interpol, since the euro will also be circulating outside the eleven participating countries. We therefore see the logic of supporting this report, despite our fundamental disapproval of EMU as a political project.

Lindqvist (ELDR), Seppänen, Sjöstedt and Svensson (GUE/NGL), Bonde, Lis Jensen and Sandbæk (I-EDN)
We are unable to support this report. We are opposed to harmonisation in the legal sector and see this report as the beginning of cooperation in the area of criminal law. Amongst other things, we are concerned at the proposal for a common European definition of what constitute criminal offences. The current differences in definitions are a reflection of differences in culture and legal traditions, and they should be maintained.
We are also deeply concerned at the part of the proposal which relates to the Member States exchanging information on people who have been convicted of breaking the law in this area. The Commission document on which the report is based contains many sensible elements which respect the Member States' sovereignty in this area of criminal law. Unfortunately, this does not alter the fact that other parts of it may provide a basis for EU cooperation on criminal law being developed in the longer term, and we are opposed to this form of cooperation.

Palm
I shall begin with part A.I of the report. Parliament's Amendment No 4 to the first subparagraph of Article 3(1) states that 'Each Member State may, in so far as such offences are committed within the same family, make their prosecution subject to a complaint lodged by the injured party' - ' offences' meaning fraud in this instance.
Something slightly duplicitous is going on here. The text admittedly leaves Member States free to decide what action to take, thereby safeguarding the intergovernmental cooperation principle. I do wonder, nonetheless, why the issue has been raised at all. The very existence of such a provision implies that it is necessary to have the relevant legislation in place, and this is quite wrong in my view. I cannot support the use of legal procedures of this kind.
A decision requiring the injured party to lodge a complaint before prosecution proceedings are instigated would have a particularly negative impact on women. Women are reluctant to report rape or abuse by spouses or partners, and will be just as reticent about reporting fraud. Men will be free to use women's already subordinate position in order to exploit them. This is no way to promote equality. Where irregularities occur, complaints must be able to be lodged by third parties.
I shall now move on to part A.III of the report, which contains a paragraph stating that the European Parliament would welcome the establishing and maintaining of a database containing technical information on the counterfeiting of euro notes and coins. Europol is cited as one of the bodies which should have access to such data. I know that the Europol Convention has been ratified and is now in force, but that should not stop us from trying to reverse events. I want to see Europol abolished. We can then set about improving cooperation within Interpol. Police cooperation, of whatever kind, should be subject to democratic scrutiny. Developments in the direction of federal police organisations at EU level must be stopped.
The Europol Convention is another step along the road towards a European state - with a clear Soviet-style imprint. Article 10(1) of the Convention calls for the setting-up of what might be termed a 'could-be-wanted' list, to be used during preliminary inquiries. This might include the names of all sorts of people, ranging from witnesses, potential witnesses, victims of crime and potential victims of crime to individuals who may be able to supply information on crimes under investigation. It will be quite possible to record sensitive data on political views, skin colour, sexual orientation and religious beliefs - in flagrant violation of the personal integrity of our citizens. Legal uncertainty will be set to take over from legal certainty. What is more, Europol officers cannot be prosecuted, even if they commit serious criminal offences. There is no parliamentary scrutiny over Europol, nor are the administrative authorities accountable to the courts. The sole requirement is that a progress report should be delivered annually to the European Parliament.
I do not want to see the advent of a 'stateless' European police force, exempt from democratic supervision. I cannot, therefore, vote in favour of allowing any such police body access to the kind of registers referred to here. It would be inconceivable for me do so.
Cederschiöld report (A4-0376/98)
Posselt
Mr President, on behalf of the German delegation in the Group of the European People's Party, but also on behalf of the Austrian and some other delegations - for example, the Luxembourgish delegation - I would like to say that some of us voted against the Cederschiöld report and some abstained from the vote because it is our opinion that this report was rendered unacceptable by the adoption of the socialists' amendment on the introduction of voting rights for foreigners. The text contravenes our own constitution and the Treaties because we are exceeding our authority here, and it contravenes the constitutions of a number of Member States, such as Germany, that expressly prohibit it; it is a pity that this does such a disservice to the serious concerns expressed by Mrs Cederschiöld in her excellent report. We therefore felt obliged to vote against this report although we fully agree with the report's concerns. But we must reject the text of the amendment, which certainly does not belong in the report, as totally unacceptable. It is our opinion that it is basically unlawful because it is inconsistent with the legal system of the European Union and of a number of Member States.

Andersson and Lööw
The need for joint action to combat and prevent organised crime cannot be overstated, and we welcome the Council's initiative in this field. The report from the committee responsible brings some useful improvements to the original text.
The purpose of our explanation of vote is to express some reticence with regard to the rapporteur's paragraph 6. We find the wording somewhat infelicitous, since it would be inappropriate to seek to infringe the media's inalienable right to make independent judgements as to editorial content.

Berthu
The report by Mrs Cederschiöld on crime prevention is full of good intentions, and we can but say that it is unfortunate that the European Union is not paying more heed to them. It says, for example, that we need 'a strengthening of a sense of community' through the promotion of 'families, kindergartens, schools, churches and leisure associations'. We also need to encourage 'the absorption of laws and values in the family socialisation process' and, finally, we need to maintain a feeling of belonging to a neighbourhood so as to form a 'sense of local area', which will encourage citizens to feel responsible for what happens in their common area.
All these intentions are excellent, and we can only regret the fact that the European Union is doing the contrary by trying to destabilise all communities, from the nation, through standardisation and integration, to the family, by fighting against discrimination on grounds of 'sexual orientation'. Similarly, we do not see how it could be possible to promote a sense of belonging to a local neighbourhood at a time when the European Union is advocating mobility on an international scale as the greatest of virtues and when it is establishing, moreover, all the policies that will mean that this is absolutely necessary in the future.
However, we cannot support the section of the Cederschiöld report relating to immigrants, which has been made even worse by an amendment. It says that the European Parliament wishes to guarantee them 'the introduction of voting rights at communal level after a certain period of legal residence', according to the same conditions as apply for citizens of the European Union. We can see here a glimpse of the old idea promoted by certain federalist camps that nationals of third countries should have at least some of the rights of European citizens. We believe that those who wish to vote in a country, at whatever level, must apply for nationality of that country. They must share the destiny of a country - that is, hold its nationality - if they want to be involved in its decisions.

Blak and Kirsten Jensen
The Danish Social Democrats have voted in favour of this report on the prevention of organised crime. We have voted in favour of calling on the Member States to develop national programmes in the areas of job creation, health, education and social policy, and of improving the European cooperation which already exists in this sector. However, we believe that this report is somewhat superfluous. It is not particularly ambitious, and it is time that we proceeded instead with a practical and binding form of cooperation which really is capable of preventing organised crime.

Hager
In principle I support all measures to combat organised crime, both repressive and preventive measures. The current scale of organised crime makes all conceivable initiatives necessary. Nevertheless, in my opinion the report goes beyond the stated aim, which is to draft guidelines and measures for the prevention of organised crime. In several points in paragraph 7, for example, measures to prevent organised crime are confused with measures to prevent small-scale crime.
Apart from the fact that in my opinion it is not the task of the European Union to make such detailed statements on these issues, I also reject some points because of their content (the introduction of voting rights at local level for foreigners, giving priority to crime prevention projects in the context of the reform of the Structural Funds, attaching increased importance to alternative forms of reaction). Despite this, I voted in favour of the report in the final vote because in my view the positive aspects outweigh the negative, and I would simply like to make it clear that this approval does not apply to all points.

Jensen, Lis
We cannot support the Cederschiöld report, even thoughwe fully sympathise with its view that combating crime does not just involve tackling the crime which currently exists, but also social prevention, for example. In this context, we can only deplore the adverse social effects of the EMU policy on large sections of the EU's population, while the convergence demands made on national budgets by EMU will indeed make it difficult for the Member States to carry through many of the sound proposals contained in the Cederschiöld report. We are voting in favour of all the report's good advice to the Member States, but we are strongly opposed to all those elements which point to EU harmonisation of this sector, whether now or in the future.

Palm
This is a good report overall. Mrs Cederschiöld manages to come to grips with many of the problems connected with organised crime, but two important elements are missing.
My first caveat is that no real account is given of the huge social problems underlying criminal behaviour. What we need is an analysis of the way in which greater divisions in society and mass unemployment are generating organised crime.
The second shortcoming is a consequence of the first. Flawed premises lead to faulty conclusions, as we find on occasion in this report. Special reference is made to the importance of 'civil society' and the role of the individual in reducing organised crime. I have no faith in such an approach. Welfare and equality are the prerequisites for cutting crime.

Theorin and Wibe
There are many good suggestions and interesting ideas in this report. The rapporteur fails nonetheless to mention the prime causes of both organised and non-organised crime: poverty, destitution, large income discrepancies and, of course, unemployment.
In paragraph 7, she expresses the view that we can combat organised crime by encouraging 'voluntary service for social policy objectives and the communication of values through private socialisation' - by setting up kindergartens and schools, for example. Such things are always possible, but it would be far preferable to build up a strong public sector, financed by taxation and capable of offering the fundamental facilities of society to everyone.

President
That concludes Voting Time.
(The sitting was suspended at 1.10 p.m. and resumed at 3 p.m.)

Social action programme 1998-2000 (continuation)
President
The next item is the continuation of the debate on the report by Mr Hughes on the communication from the Commission on the social action programme 1998-2000.

Mann, Thomas
Mr President, a model for political action in Europe is the market economy, or at least the social market economy. An element of the work of unification is cohesion, both economic and social. And the single market, which as a result of the euro will become the home market, will only be complete when this social dimension is in place. The Commission's Social Action Programme therefore has an important status even in principle, and not only for unemployed, excluded, disabled and disadvantaged persons. It creates the general conditions for new fields of responsibility in social policy, particularly in employment.
For this reason it is particularly regrettable that it is only a medium-term strategy until 2000. The opportunity to make a longer-term arrangement until 2006 was missed, but this is what we need in view of EU enlargement and the rapidly changing age structure. Equal opportunities is one of the four pillars of the NAPs. The Commission mentions it only randomly, however, instead of devoting a chapter to it. Mainstreaming is not given sufficient attention either. It deserves more than lip-service and is too significant to be restricted to employment and social protection. Gender mainstreaming is relevant to health and safety at work, demography, new work organisation and other areas.
We thank Stephen Hughes, the rapporteur for the Committee on Employment and Social Affairs, for his excellent report. He has also accepted some of the demands of the Committee on Women's Rights, such as the directive on equal treatment between women and men in social security schemes, the social protection statute for assisting spouses and the evaluation reports on the health and safety of pregnant women and on equal pay for work of equal value. We were able to integrate other issues into the report on Leonardo and the report on the European Structural Funds.
We call upon the Commission to take the initiative in the following areas: child care in the Member States, improved access for women to education, and the provision of new information on the situation of women in the applicant countries, both on the labour market and in society.

Weiler
Mr President, ladies and gentlemen, on behalf of my group I would firstly like to thank Stephen Hughes for his report, which is a good and balanced one, as we have come to expect from him. The Commission communication, however, contains an assortment of good ideas that have been put into practice but only very modest plans for the future. The large discrepancy between Annex I and Annex II is perhaps symptomatic of this. The debate about the new Social Action Programme is taking place in the context of the Amsterdam Treaty; this means that the new instruments - the employment chapter, the Protocol on Social Policy, Article 13 on anti-discrimination and the instrument of social dialogue - should in future ensure a new quality for Europe's social policy.
However, when I consider the Commission plans I am very sceptical. They contain too many non-binding measures instead of new proposals to expand European legislation. The consequences of European monetary union, of the euro and of enlargement to the east, on which our committee has often asked for information, are not mentioned. Coordination of the guidelines and economic policy is imprecise and non-binding. Two of the three main areas are also absolutely inadequate. We consider the participation of workers to be relevant to the subject of the world of work in relation to modernisation, but at the moment it seems that the debate on information and consultation of workers has disappeared in the Bermuda Triangle of the Council.
The second area is that of exclusion. Citizens have lost a great deal of faith in us due to the irresponsible behaviour of the Council of Ministers in this area, and incidentally the poverty reports demanded by Parliament are not mentioned.
The third area is that of jobs and mobility, and here I must in fact praise the Commission. Many points have already been discussed this morning in the context of the van Velzen report. However, the courageous decision made by the Commission on the issue of free movement was the right one. If you continue in this way, including in other legislation, you will be able to count on the support of our committee and my group.

Pronk
Mr President, I too must thank Mr Hughes very sincerely for all the work he has put into this actually quite slim report. I think we have a new process here. He has said as much himself this morning, a new process in our cooperation with the Commission, namely that we look first at what an action programme of this kind might contain and then pass it over to the Commission, which then shapes it into an action programme of its own or at least adopts it as one element of its own programme.
I think it has worked well. And I do not think there are too many problems. We have one amendment concerning a relatively minor detail. So there are no differences of opinion as far as the main substance of the report is concerned. I agree really with Mrs Weiler that the Commission's proposals are somewhat on the lean side, that there is not all that much to them.
This brings us really to the only major difference we have with the European Commission, namely the time frame we have for this action programme. The time frame, which is above all limited to what is covered by the current mandate of the Commission, is too short. We cannot know exactly when the Amsterdam Treaty will come into force. We know the Amsterdam Treaty creates many new opportunities precisely in the very sensitive and important area of social and employment policy. That has not really been taken into account.
What makes no sense, and what I want to ask the Commissioner, is this: how can it be that the Commission has very far-reaching plans with regard to Agenda 2000, so far-reaching that it is virtually impossible for the Council to agree them, but that in this relatively simple, straightforward area it refuses to go beyond its own mandate? I think these things are very hard to reconcile, because social policy will be important not only within the European Union of today, but also in our dealings with the new states which will be joining the European Union early in the next millennium. And unless we have our house in order, unless we have clearly established what constitutes the acquis communautaire , we shall have a lot of problems. Those problems could be greater than the problems in all the other areas which we cover in such breadth. So this is a missed opportunity. I would actually have been far happier if the Commission had gone along with what we suggested, namely working to a longer time scale. Then we could take the Amsterdam Treaty fully on board, and if we did that we should advance a little further in the social field and show the public some results from our social and employment policy, not just what has been achieved already, but what is likely to be achieved soon.

Lindqvist (ELDR).
Mr President, let me begin by stressing how important it is that jobs and employment policy are now to receive the treatment they deserve at EU level. European cooperation has too long been dominated by competition, the market, trade policy and so on.
There is, however, a problem. Perhaps I will not have my whole group behind me in what I am about to say, but I am not convinced that EMU is the way forward on jobs. An abiding anti-inflationary strategy - in the current climate of low inflation throughout most of Europe - could in fact cause more problems than it solves on the employment front. I feel that we should be looking for alternative ways of improving the unemployment situation, focusing on an interplay between economic and employment policy.
The social dialogue, social policy cooperation and the action programme are important instruments for highlighting political issues and analysing problems. We need all this in order to understand the causes of exclusion, poverty, unemployment, discrimination and globalisation. If we are to preserve socially viable societies, the big questions must be looked at from a long-term perspective.
My position possibly differs somewhat from the general committee view in this respect. I would tend more towards supporting the Commission's approach. Many of us in my group feel that these are matters to be dealt with primarily by the individual Member States. Decisions on the rights of individuals belong within the realm of domestic policy. Furthermore, I believe that partnership, mutual support, positive incentives and setting a good example count for just as much as Europe-wide legislation. Provided all these elements are handled properly, equally good results can be achieved.

Hermange
Mr President, I would firstly like to congratulate the chairman of our committee on this important report and echo his support for the Commission communication on this new social action programme that presents significant new areas for intervention. I would like to say that I agree with and I thank the rapporteur for proposing the inclusion of a bill of rights at the next revision of the Treaties, as requested by many associations as well as our fellow citizens. I can tell you that the President of France at least is very much in favour of this as part of refocusing the Treaties and the necessary changes to the institutional set-up of the Union for enlargement.
I would also like to emphasise how important we feel it is to promote every aspect of the social dialogue and European civil dialogue. This is the way to make those taking part in social dialogue more representative, particularly the SMEs which account for more than 66 % of all jobs in France today.
I would like to emphasise another aspect of participation. I am referring here, Commissioner, to participation in the profits and results of companies, particularly in its most perfect form, that is, employee share ownership. This is not mentioned in the social action programme despite the fact that its development seems to me to be an important element in modernising labour relations. That is why I am calling on the Commission to encourage the development of this form of participation, which is both beneficial to the competitiveness of companies and fulfilling for employees.
Those are the few comments I wanted to make on behalf of the UPE Group on this important report.

Schörling
Mr President, I too would like to thank our committee chairman for all the work he has put into this report. He has my support in his criticism of the fact that the action plan will cover only three years and not run the full five to 2006, as originally envisaged. Forward planning and a long-term perspective are essential here.
I am also a little disappointed that the civil dialogue, which we well and truly need, was deemed to be dispensable. The Commission appears content with the European social policy forums held every other year, although these are far from adequate. It is a great pity that neither home working nor the general issue of equal opportunities are included in the action plan. An amendment from my group seeks to remedy this.
I do not share the rapporteur's disappointment over the Commission's proposal for greater resort to 'soft law'. This is an acceptable way forward, preferably in combination with commitment to the civil dialogue.

Jensen, Lis
Mr President, when I read the Commission's Social Action Programme 1998-2000 and the Hughes report on it, an expression which is often used in Denmark came to mind: this is the thin end of the wedge. And why was that? Well, the fact is that when someone says 'A' in the European Union, it is not long before the whole alphabet has been used. This is also clearly illustrated by this report, as when the rapporteur states that there is a need for an action programme which is 'more explicitly a political document rather than simply a list of intended actions'. And when a concept like 'the European social model' is used from time to time, then in my view we have taken far too many steps in the wrong direction. Because what is the European social model? It does not exist in reality, although it certainly does in the imaginations of most of the Members of Parliament. That does nothing to make it any more real, however. There is a huge gulf between fantasy and reality in this system, and everyone should face that fact before the next step is taken. Think of the people out there in the Member States who cannot identify with the fantasy world of the EU, and who in many ways have hardly any idea of what is going on down here.
There are great differences between north and south in the EU, and these are both cultural and economic. For example, there is a major difference in terms of women's participation in the labour market and as regards the provision of care for children and the elderly. There is a different basis for social policy in the individual countries. In some, it is largely geared to families and private schemes, whereas in others it is based on the public sector. In Denmark and the rest of Scandinavia, the dominant principle is that of solidarity - and continues to be, I have to say. But we are seeing in Denmark too how things are changing towards a more personal system, in which it is up to individuals to save and take out insurance for themselves. This is a new and not particularly welcome trend, in my opinion. It is also one which has not just taken place because the majority of the population want it, but also because Denmark is a member of the EU and is therefore trying to approximate Danish social policy to the concept referred to as the European social model. This is a foolish and mistaken development, and one which is dangerous for democracy in our individual countries.
It is stated in the Commission's proposal and in the report that the introduction of the European social model is important in relation to the internal market and EMU. I refuse to accept a social principle which is based on the principles of the internal market, where it is reasons of competition which determine what kind of social policy is pursued. That does not imply any particular kind of solidarity. And in conclusion, I would say that it must continue to be the individual Member States that decide for themselves what kind of social policy they wish to pursue in their countries.

McMahon
Mr President, I wish to join with the others in congratulating the rapporteur. I also welcome Commissioner Flynn, who has been unstinting in his efforts to encourage a very close dialogue between the Committee on Employment and Social Affairs and the Commission in this area.
Turning to the Hughes report and to the future of the social action programme, I should like to make a few brief comments. At a time of unprecedented political change in Europe, we should not only consolidate but also strengthen the social dimension and update it for the next century. We face three tremendous challenges in the European Union at the moment: the advent of economic and monetary union, enlargement and the policy to combat large-scale unemployment. When we add this to the demographic trends within the European Union, global economic change and technological innovation, we can see that we are facing considerable challenges. I agree with Bartho Pronk and Barbara Weiler that it is regrettable the Commission has only really planned for an action programme up to the year 2000, which is just over 18 months away. We need something longer term, particularly as the Amsterdam Treaty - which has not yet been ratified in all the Member States - will have greater powers in the social area than any previous Treaty.
The social action programme should form the heart of Europe's social policy agenda. Like everyone else, I welcome the Commission's emphasis on employment creation but this is not only a panacea for the European Union. We need to strive to develop policies to help people who are unemployed, excluded or less fortunate.

Mendonça
Mr President, ladies and gentlemen, the Hughes report that we are debating today, welcoming the Commission's new social action programme, makes such major changes that it virtually transforms the subject into a debate on the European social policy in its broadest sense. Creating a genuine European welfare society, with an improved quality of life and strong social cohesion, calls for the drafting and subsequent implementation, in practical and objective terms, of a political document reflecting the new status of a European Union social and employment policy, something that has already been acknowledged.
Regrettably, instead of covering a longer period, 1998-2006, the timetable has been limited to 1998-2000, hampering the issues of employment and other social matters in Community policy. The European Union's new economic framework, resulting from the completion of the Single Market and the new monetary policy, which is about to come into effect, makes interaction between economic policy and social policy all the more important and accentuates the need to consolidate relations between EMU, the Single Market, the cohesion policy and effective social and employment policies.
The new social action programme, as a strong component of a European social policy, should be taken on board by all the European institutions, by the Member States and by the social partners, stressing the importance of more objective and decisive ways of bringing about civil dialogue in the future.
The report emphasises the need to strengthen the existing legislative framework, particularly in the areas of labour organisation, workers' individual and collective rights and social measures aimed at regulating a free market economy. However, we should not neglect legal arrangements for tackling serious problems lingering as a consequence of demographic trends, racism, poverty and social exclusion, for example. This report has our support since, in our view, it should lead on to new and far-reaching discussions about the future of European social policy.

Hautala
Mr President, my colleague, Mr Hughes, has produced an excellent report. We in the Green Group would like to make one or two changes touching on the issue of equality between women and men. I believe that it would be a good thing if the report were to emphasise that the issue of equality should be incorporated in all social policy, with particular emphasis on mainstreaming. We would also like Parliament to remind everyone of the importance of childcare, without which equality between women and men will make no progress whatsoever. We know that Mr Flynn has made enormous efforts here, and we would like Parliament to support him in this.
Finally, we should remember that we are in the middle of the enlargement process and we have to be concerned when we see how badly applicant countries perform in the area of equality between women and men. We would like this to be emphasised in the enlargement negotiations.

Blak
Mr President, when you look at a report, it is important to realise that you have to read what it actually says. My Danish colleague from the movement of permanent discontent evidently had some difficulty with that. However, I would like to begin by congratulating Mr Hughes on what is a very fine report. It focuses on the challenges that we are facing in labour market policy over the coming years. The new social action programme is different from the previous action programmes in that it does not contain any specific proposals for directives on such things as the working environment and social protection. I think it is a pity that the action programme does not include some more specific proposals on the working environment. We do still need to improve matters there. On the whole, the new programme is an excellent basis for the EU's social and labour market policy in the next few years. There are some shortcomings, for example the fact that the Commission does not mention home workers. I am therefore pleased that we are calling on the Commission to take action in this area. We should ensure that the seven million people in the Community who work at home are not treated in an inferior way to the rest of the labour market. We should also be calling on the Commission to ensure that the existing directives also cover home workers.
The section dealing with employment could also have been a little more ambitious. We should not just shift jobs around between the Member States. That will not bring many people into work. Some Member States have unfortunately used the trick of enticing businesses to their country with offers of tax exemptions and low corporation tax. The Commission should therefore act to set a minimum rate for corporation tax. Work is currently being done on drawing up a code of conduct for business taxation. That is not enough. We must have binding rules in this sector. So there is a need for a more ambitious and binding form of cooperation on social and labour market policy for the future.

Hatzidakis
Mr President, the new social action programme for 1998-2000 proposed by the Commission is securely based on the guidelines for employment as agreed at the European Councils of Amsterdam and Luxembourg. However, the proposals could certainly have been more daring. For example, there should be more active participation by working people in the decision-making process in companies, and the rights of their representatives should be amplified. But a special approach is also needed for small and medium-sized enterprises, which takes account of their special features and needs. The Commission also ought to clarify the way in which it means to exploit the potential offered by the new legal base in the area of social protection. In addition, preparatory work should begin straight away on action programmes against social discrimination and to promote social access, and I wish to stress in particular the care we must devote to people with special needs. We must make sure that in directives concerning public contracts it will be compulsory to conform with current social legislation. Finally, I cannot but agree with the rapporteur that the Commission should have chosen the period 1998-2006 and not the very brief span of 1998-2000 which it ultimately selected, since the former would have reinforced the basic role of employment and social affairs in the Union's policy.

Papakyriazis
Mr President, Commissioner, let me begin by saying that I regard this present debate on the excellent report by Mr Hughes as a very important symbolic debate. The rapporteur and Chairman of the Committee on Employment and Social Affairs sets out in his explanatory statement the entire history of this contact and cooperation with the Commission, and the entire history of its development following the progress in Amsterdam and at the special conference in Luxembourg. We in the European Union are today facing a new reality which finally accepts and recognises that employment and social policy are the first priority in Europe, and I think the social action programme which the Commission has proposed, Commissioner, is an important step forward. It is indeed a policy document of great weight for the European Union. I think this must be followed up, and I stress that the emphasis placed on dialogue with the civil society in various forums is extremely important, though more important still is social dialogue with the social partners, which is of course not just a fashion which has had its day.
Last Saturday a very important event took place in Athens at which Mr Delors was present, and he repeated that what Europe needs is precisely to highlight the value of social justice and solidarity. I believe that for us too, this ought to form the basis which gives the European Union, our Europe, fresh impetus and brings our vision to fruition.

Schiedermeier
Mr President, I would like to comment further on the van Velzen report in the light of this morning's debate. Employment continues to be first and foremost a task for the Member States. Guidelines and coordination are useful and good, and I too hope that they will allow us to promote and develop employment. But we must be careful not to do as we did this morning and talk as though we alone at EU level are capable of solving the problem of unemployment. By doing so we are merely giving the relevant national politicians the opportunity to pass the buck to the EU or the European Central Bank if national labour market policy fails. Incidentally, calling the Stability Pact into question has the effect of threatening employment rather than promoting it.
I call upon the Commission to give greater prominence to updating minimum social standards in the Social Action Programme 1998-2000. A fundamental aim of European social policy is to develop a European framework of social legislation that guarantees a common basis of binding and enforceable minimum social standards, which does not demand too much of weaker states and does not prevent more developed economies from maintaining or improving their social standards. At least, this is what I have been told, Commissioner.
However, those countries which are weaker in economic terms have made progress since minimum standards were established, which is why I would repeat that the further development of minimum social standards must be seriously taken in hand. Existing gaps, such as the inclusion of homeworking, teleworking and contract workers, and the reinforcement of information, consultation and participation procedures, must be dealt with by introducing new directives. These gaps must be closed.
I would also like to comment on the social dialogue. I support Mr Peter's demand that the social dialogue must be placed on a broader basis of organisations, and despite your optimism, Commissioner, the results of the social dialogue have so far been disappointing. In my opinion there is a great deal to be done, and if need be we must put the situation right by means of directives.

Flynn
Mr President, I should like to thank Mr Hughes for his report and all those who stayed and contributed to the debate. I look on the report as being very supportive of the Commission Social Action Programme. As Mr Hughes says, the programme reflects very valuable prior input from himself and his colleagues. This has been very favourably reported upon by many who contributed. For the record I should like to say that, from the Commission's perspective, the constructive way we have worked together to develop this programme was quite exemplary and has brought us a long way in the development of the relationship between the Commission and Parliament.
The Social Action Programme 1998-2000 adopted by the Commission on 29 April provides a strategic overview of how we see the key priorities for the future development of European social policy. Indeed, European citizens want a very strong, dynamic and forward-looking social policy and this programme provides a framework within which all of that can be achieved. The programme responds to the very significant potential of the new Amsterdam Treaty in the social field.
The programme places employment - as Mr Hughes quite rightly says - at the very centre of social policy, drawing out the complementarity between the new European employment strategy and the broader social policy agenda. Employment is the principal means by which we can deal with many social problems and sustain the core values of the European social model. Social protection systems - work regulation, health and safety provisions - are productive factors helping to improve economic performance as well as ensuring a fair sharing of the benefits of that performance.
We have already gone a long way in implementing the provisions of the Amsterdam Treaty in the field of employment. Although much remains to be done to meet the expectations of our citizens, there are signs that our employment strategy is proving to be a success story. Within a very short time Member States have engaged in a process to make their employment strategy systematic, consistent and quite transparent. There is the opportunity for the Heads of State to move further at the Vienna Council and thereafter in their internal budget decisions.
While employment is central to our vision the programme goes beyond the labour market. It sets out a balanced, ambitious and forward-looking vision of social policy as an essential element of the next challenging phase of European integration. I am more than happy to make a commitment here to come back to report regularly on the implementation of the programme and to maintain the collaborative approach we have followed so far which has proved so useful in the development of the whole of European social policy. The Commission is already preparing for the implementation of the other provisions of the Amsterdam Treaty as soon as it is ratified. I will be looking for Parliament's support to develop this new and exciting part of the agenda.
I should like to say a few words about the debate held in the Council on 27 October on the social action programme. It was quite encouraging and I took note of several messages which came from the Council at that meeting. Firstly, there was explicit support for our approach as set out and reconfirmation that employment is Europe's top priority. Enlargement was very strongly signalled as a key issue. I believe that Member States would like social policy to have more emphasis in our enlargement discussions and I expect that will be the case. I can report that the spirit of Amsterdam is very much alive. I was particularly heartened by the encouragement to table proposals in the area of anti-discrimination under Article 13. There was a strong message from the Social Affairs Council as to the necessity of strengthening social dialogue. I will not hide from you that social dialogue has a long way to go. We have made some progress but it has been rather limited and I am going to have to work on that a little harder with the social partners.
I will now reply to some points which seem to be causing concern. Some Members asked why, so far as the programme is concerned, the time span is not longer. Let us be clear. There will certainly be a need for a new social action programme post-2000. But by then we will be a lot clearer on many of the major issues we are talking about, for example developments in globalisation, in particular the social impact of economic and monetary union. The potential that exists from the new Treaty will be clearer to us then. We will have advanced a little in the negotiations on enlargement and we will be better able to focus on the key issues there.
There will be the impact of the employment strategy. We will have progressed further in the whole evaluation of the national action plans and then we will be in a better position to get a longer term view for the next programme. As honourable Members have said, social policy is changing and there will be a new focus particularly when the Treaty is ratified. The strategy with regard to employment will be advanced as well. Mrs Schörling put it very well when she said that we are taking the first steps in order to take further steps. It is a good way of looking at the whole matter.
There is a lot to do and I would suggest that the House is going to be extremely busy between now and the end of this Commission and this Parliament in dealing both with the legislative programmes that are now coming on-stream and also the non-legislative actions. Social policy is an ongoing process and our evaluation will help us to develop it better as time goes on.
Mr Hughes made it contingent on his support that certain matters would be replied to so I will make a few further remarks. On the civil dialogue we did not get what we had hoped for from the Treaty. However, we will be publishing the outcome from the Social Forum quite soon. We have a budget line to do all this in 1999 so we are going to continue to develop it. On preparatory actions for Articles 13 and 137, you will be pleased to hear that work is well under way. In fact, we issued a call for tenders to prepare for Article 137 in September so we are moving ahead nicely there. On health and safety staffing, we now have the agency in Bilbao and I am trying to divide up the work in a more even-handed way so that we will continue to get the best results possible.
Remarks were made by Mr Hughes on social protection and the framework of investment. Our plan contains three elements. In a matter of weeks we will publish a review of the 1992 recommendation on minimum income support schemes within the social welfare systems and next year we will publish a new communication on the future of social protection. We had two previous texts there in 1995 and 1997 but it is important that we do it again. As we set out in the Action Programme we want to use Article 137 to develop a framework for national policies, including social protection systems to work against social exclusion.
The issue of sexual harassment was also raised.
I agree that the question of sexual harassment is a real problem. I will soon be able to give you two studies concerning sexual harassment and its prevalence in organisations in all of the surveyed countries in the European Union. It is my assessment that the majority of the Member States are, at the moment, not interested in legislation. As you know, the social partners could not come to an agreement on the matter either, so I am in a bit of a dilemma there. I would like to ask your indulgence to reflect further upon this. Perhaps after the two studies have been published we can talk about it again.
Insofar as stress, as a health and safety matter to be examined is concerned, there is no problem. It is already explicitly mentioned on page 9 of the mid-term report on Community programmes concerning safety, hygiene and health at work.
As far as home workers are concerned I should like to tell the House that the Commission will be adopting a communication on modernising the organisation of work. We hope to do that on 25 November. This is a framework document that will give the social partners and others an opportunity to comment on how we should now proceed with all of the organisation of work issues. I can tell you, Mr Hughes, that home working will be included in that matter.
You also mentioned the question about a directive on equal treatment and social security in 1998. Our programme has a commitment to do that in 1999 and work is in progress which is well advanced now. We have not discussed it yet at Commission-level, but it is quite well advanced. Regarding the question of implementation of the pregnant workers directive, the report is presently being drafted on that particular issue. It may be adopted by the end of the year.
I should like to say to Mrs Hautala that there will be a communication by the end of December, if possible, but certainly sometime before the middle of January, on the question of the external aspects of social policy. That will include enlargement.
We have an awful lot of work to do between now and the end of next year. Certainly, in my opinion, social policy has moved on quite dramatically. We will be extremely busy with legislation, where a number of points are pending, and on non-legislative matters, together with the whole employment strategy. I ask for your support for the plan.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Social dialogue
President
The next item is the report (A4-0392/98) by Mr Peter, on behalf of the Committee on Employment and Social Affairs, on the communication from the Commission: Adapting and promoting the social dialogue at Community level.

Peter
Mr President, allow me firstly to raise a technical point. My attention has been drawn to the fact that in recital D of the Swedish version of this report there is a translation error which distorts the meaning. I would ask you to have this checked.
Mr President, ladies and gentlemen, the goal of coherence of economic and social development is enshrined in the Treaties. The Commission's clear remit to promote social dialogue, the European Social Charter, the Agreement on Social Policy which has now been incorporated into the Amsterdam Treaty, the employment chapter in this Treaty and not least the effects of imminent monetary union give the social dialogue greater significance than ever before.
It is consensus rather than conflict that remains at the heart of the social dialogue. Where the social partners have completely different interests, a major factor in determining their ability to reach agreement will be whether they carry equal weight. It is essential that the individual organisations prove that they are representative, but clear criteria must be set for establishing this and these must be continuously updated. The organisations are autonomous, which means that they are free to decide with whom, in the given representative framework, they wish to sit at the table, negotiate, perhaps reach agreement. They also decide, within the given framework, what they want to regulate. Out of respect for the autonomy of the organisations the public authorities and political bodies must not directly interfere in the composition of the social partners.
The Committee on Employment and Social Affairs supports all the basic elements of the proposals drawn up by the Commission to increase the efficiency of structured European social dialogue, as presented in the Communication of 20 May 1998 on adapting and promoting the social dialogue at Community level. The amendments approved by the committee do not stand in the way of this.
I have a few more points to make on this topic. The social dialogue is doubtless part of what we call the European social model. In order to really do justice to this claim, it is crucial - and this is a point I would like to emphasise again - that the Commission should identify with it completely. This means that there can be no arbitrary restriction of the traditional jurisdiction of the Social Affairs Commissioner, for example, or of certain of the other Commissioners! Regardless of jurisdiction, the social dialogue must be conducted seriously at the relevant level for all social issues.
In future not only the employment guidelines but also the economic policy guidelines of the EU are to be discussed in the Standing Committee on Employment. The results of the consultations are to be forwarded to the relevant Councils in time to be included in their consultations and decision-making. This may seem obvious but from past experience it should not be taken for granted.
In the context of accession measures for the central and eastern European countries we must ensure that these countries have in place appropriate structures for the social dialogue by the time of accession. I can only recommend to Parliament that it make its approval of accession conditional upon this.
Because legislation comes into effect in the EU by means of a Council decision resulting from the social dialogue process, the fact that the European Parliament is not involved creates the problem of a lack of democratic legitimation for such legislation.
Not least because of the rules which will in future become effective in all Member States and the duty of the Commission to present all social legislative initiatives to the social partners so that they can decide whether they wish to negotiate on the issue, Parliament must now insist on being placed on an equal footing with the Council in this procedure. As the Commission has now stated that it is prepared to participate in interinstitutional negotiations, whether or not this actually happens will depend on the Council. If Parliament continues to be excluded completely from this legislative procedure, while the Council has the last word, this will be a cardinal error that cannot be compensated for by extending the codecision procedure elsewhere.

Ghilardotti
Mr President, the European integration process, particularly after economic and monetary union, must bear the hallmark of greater commitment to sustainable growth and development and to social policy and employment; indeed, this is the thrust of the reports presented this morning and this afternoon.
Europe's social partners have a crucial role to play in this process, a role which is expressly recognised in the Treaty. The Member States must take account of basic social rights in all their actions, and one of their aims is to promote social dialogue. The new chapter of the Treaty devoted to employment, which was inserted at Amsterdam, also refers explicitly to consultation of the social partners. What is more, under the Treaty the social partners may negotiate European-level framework agreements on relevant social policy issues falling within their competence. Thus, because of the steadily increasing significance of the social dialogue, I should like to touch on three matters which crop up in the Commission's communication and are also referred to in Mr Peter's report.
Firstly, the problem of representation and the representativeness of the organisations concerned. This is a problem that is beginning to arise in the Member States too, so in my opinion there is all the more cause to raise it at European level. In this context, the study launched by the Commission - which we hope will soon be completed - will undoubtedly be most helpful in consolidating the European social dialogue, and will go a long way to avoiding the sort of disputes that have occurred in the past, some of which have even ended up in court.
The second matter is sectoral dialogue. The development of social and sectoral dialogue can be crucial in terms of predicting and managing industrial change in the Community, paving the way for further progress and improving quantitative and qualitative results.
My final point relates to the role of the European Parliament. Although I appreciate the Commission's willingness to keep Parliament informed, under the legislative procedure laid down in the Protocol, I believe that an interinstitutional agreement should be concluded in the near future with a view to involving Parliament - the only institution directly elected by the citizens - in the legislative procedure provided for in the Agreement on Social Policy.

Glase
Mr President, ladies and gentlemen, the social dialogue procedure is still a relatively new arrival in the European Union. After two successful test runs involving the guidelines on parental leave and on part-time working, we now have a Commission communication that is considered to be a revision and a new direction. The Commission has not provided anything new. The rapporteur, Mr Peter, whom I should like to thank warmly for his collaboration, has put a great deal of effort into his report. Nevertheless, it cannot be overlooked that the trade unions had the lead role in this extremely important text. There need not be anything wrong with this if negotiations remain balanced and fair.
It is difficult to understand why the Commission should give increased support to only one side: that of employees' representatives. The ETUC certainly does not require any coaching or particular support in its work. The financial support provided by the Commission for the ETUC should also be adequate.
I would now like to address a key issue. The current round of social dialogue takes the form of tripartite negotiations, and many who cannot take part directly in the negotiations object to this. The Commission has not been able to come up with any satisfactory proposals. The Christian trade unions are still waiting in the wings, as are many representatives of small sectors and areas of employment. Even if 80 % of UNICE's members are from SMEs, UEAPME, as a direct and individual SME representative at EU level, has so far been forced to adopt a completely unacceptable position in the social dialogue.
Our group has protested against this again and again, and has asked that UEAPME be included. UNICE and UEAPME are now concluding a contractual agreement that should allow SME representatives to participate directly in negotiations within the context of the social dialogue. I deliberately say 'should', as we will have to wait and see how it works and whether the UEAPME representatives consider themselves to have been accepted.
This would solve one problem to a certain degree, even if it is only a stopgap, but other parties continue to be excluded from the negotiations. We now urgently need the study of representativeness that the Commission announced in 1996, and then we will have to take another long, hard look at the participants in the social dialogue. At that point, at the very latest, the position of the European Parliament as the only democratically legitimate body of the European Union will have to re-examined, since our role in the social dialogue is also unsatisfactory. We therefore continue to have two major problems facing us in the context of the social dialogue that are only too familiar to us.
Our group is determined to continue to work towards a solution to both these problems. We owe it to the small organisations.

Lindqvist (ELDR).
Mr President, what we are mainly dealing with here is how to structure the social dialogue as it operates between the two sides of industry. The end result of such a process is a collective agreement of some kind - an instrument often better suited to resolving issues than legislation. We have used this model of negotiation in Scandinavia for a long time now and would be happy to see it adopted at European level. All the same, policy-makers should beware of seeing the passing of laws as an inevitable consequence of entering into a social dialogue and promoting collective agreements. Legislation may follow, but that should not be the main purpose of the exercise.
The role of national authorities and the EU institutions is to further cooperation between autonomous and independent negotiating partners, as the rapporteur rightly says in paragraph 8. It will be up to the public bodies to act as mediators and facilitators, fostering contacts between the parties and stimulating discussion. Many openings exist; there is no need to reach for the legislative option every time.
I have three further points, Mr President. If the necessary connection between the employment guidelines and the economic policy guidelines is to be made, the Standing Committee on Employment would be well advised to discuss them in parallel.
Secondly, the social dialogue will need special consolidation in Central and Eastern Europe, since the parties have not had the same scope for cooperation as has existed in labour relations elsewhere.
Lastly, let us not forget that the local and regional authorities are major employers too. We will have to find a better way of incorporating them - as a matter of course - into the process of dialogue and cooperation. In that way, they will constitute a strong employment presence at local level.

Crowley
Mr President, I too would like to congratulate the rapporteur on his report and also to pay tribute to Commissioner Flynn for his involvement in this whole area.
With any model of social dialogue and social partnership, rights are devolved to the social partners to negotiate, consult and come up with framework agreements which should be implemented on a European basis. Alongside the rights there are obligations. A very important aspect, perhaps sometimes overlooked by this Parliament, is the obligation to come to the table with a real negotiating position and not just take a stance for the cameras. In particular, it is necessary to broaden the partnership to include those sectors that are at present excluded, in particular the SME sector.
We should also look at questions like the disability sector, the education sector and the importance of life-long learning and education and training with regard to employment and other social exclusion problems which we discussed this morning, when we were speaking about the Van Velzen report and the Commission's response. Maybe we should now examine how we can bring more people into the social dialogue. One way that we could do this, perhaps on a trial basis, is with a third type of organisation which also incorporates the Economic and Social Committee. This would be more representative and could be used as a clearing house for some of the minor details and proposals.
I am concerned about the role of Parliament in this whole process. Sometimes we in Parliament feel that we are presented with a fait accompli agreed by the social partners, and that this is political blackmail - we cannot oppose it because the social partners have agreed it. Therefore some role must be found for Parliament in the interactions between the social partners.
However, bearing those points in mind, I would commend this report to the House and my group will be supporting the position of the rapporteur.

Schörling
Mr President, under Article 118b of the Single European Act, the Commission is required to 'develop relations between management and labour at European level'. Yet the local and regional authorities - who together constitute one of Europe's largest employers - are being sidelined from this process.
Local and regional employers in the EU are extremely annoyed at not being seen as fully- fledged partners in the cross-sectoral social dialogue. CEMR, the body representing hundreds of thousands of municipalities and regions around Europe, was set up back in 1951. It is somewhat bizarre that an organisation representing the employers of over 14 million people full-time - and up to 30 million, if part-time workers are included - should be left out in this way.
The members of CEMR are very active in labour relations nationally and often enjoy negotiating powers. They have behind them a long tradition of negotiating practice, after years of successful participation in social dialogue at national level. It therefore makes sense in my view to envisage taking CEMR on board as a full and equal partner.

Andersson
Mr President, let me begin by thanking the rapporteur for producing such a fine and eloquent text. In future, the social dialogue will play an ever-increasing part in shaping EU policy. One of the main reasons for this is that the new treaty includes a specific reference to social and employment issues.
I wish to concentrate on three points. Mrs Schörling was talking about the important question of fair representation. Just how are we going to enhance representation? Is it a matter for politicians, or should the parties directly concerned be left to work things out for themselves? In line with Swedish tradition, my belief is that it is up to management and labour to ensure that they are properly represented. The workers' side - including public sector employees - has managed to get its act together. The employers will now have to see to it that they follow suit.
Whilst I can appreciate the desire to reduce the membership of the Standing Committee on Employment, I do feel that something may be lost if that happens. We must not lose sight of the need for outreach from the Standing Committee to the Member States. A Brussels-only phenomenon is not what we want at all. I would therefore urge people to take heed of paragraph 13 in Mr Peter's report.
Thirdly, I should like to raise the matter of the Standing Committee's remit. Employment policy cannot be seen in isolation, as separate from economic policy. It is essential for the Standing Committee on Employment to encompass macroeconomic issues and take part in drawing up economic policy guidelines. Lastly, I agree with what has already been said on Parliament's role in this process.

Thyssen
Mr President, a few days ago the presidents of UNICE and UEAPME declared that, respecting each other's autonomy, they would be recognising one another as interlocutors in future European negotiations and would be stepping up their cooperation in that context. UNICE acknowledges meanwhile that UEAPME is the body most representative of the specific interests of SMEs in Europe, and is thus giving it a place at the negotiating table.
If this agreement is finalised on 4 December by the decision-making bodies of the two organisations, a major step will have been taken towards achieving something which the PPE Group called for at the time of the Maastricht Treaty, namely full participation in European social dialogue by a partner speaking specifically for SMEs.
We are in favour of social dialogue, Mr President, but as a democratically elected body we cannot but approve of growing autonomy for the social partners, provided these are sufficiently representative - that word again. This presupposes, amongst other things, that these partners together will cover enough of the ground to ensure that different interests are given sufficient consideration in negotiations. This agreement represents a particularly significant step in that direction. I would ask the Commission to honour the agreement in setting the long-awaited representativeness criteria. We could put it this way, Mr President. An engagement has been announced which will increase the representativeness and legitimacy of the social dialogue. Anyone who now puts a spoke in the wheel and stops the wedding from going ahead or stops the couple from living together will bear an enormously heavy burden of responsibility.
SMEs are important creators of jobs. They must have the chance - by virtue of having their own social partner at the European negotiating table - to take part in the negotiations and in that way to give expression and shape to their desire to be a responsible player.

Malone
Mr President, Ireland's version of the social dialogue, which we call social partnership, is well established and has played a major part in the economic success which our country has achieved over recent years.
Our version of social partnership is in many ways ahead of the social dialogue. The traditional social partners - the unions and the employers - are certainly central to the process, but they have been joined by others: farmers, women, people with disabilities, the unemployed and other marginalised groups. I would like to see that broadened to include those representing the development area.
The benefits of the change from an adversarial to a consensual approach are very clear to everybody. But there have been difficulties for many in Ireland, as the Ryanair dispute earlier this year clearly showed. While we have managed to reach consensus on issues such as pay and taxation, the question of employee consultation within firms has not yet been adequately explored. It is for this reason that I really welcome last week's decision by the Commission. Commissioner Flynn is to be congratulated for coming forward with a draft directive on worker consultation in firms with more than 50 employees. I see the Commissioner is rightly satisfied. This is another success and I hope to do the report.
I am convinced that the Ryanair dispute in Ireland would have been solved long ago if this directive had been in place. Ireland fits somewhere between the continental European social model and the Anglo-Saxon model. Worker consultation and information is a key part of the former but relatively unknown in the latter. But it is strange that many companies in Ireland which do not negotiate with trade unions representing their own workers at local level do not seem to have great difficulty dealing with unions at the national or European levels.
I therefore call on all employers to be consistent in their approach to social dialogue and to take a positive view of the new directive. Increased worker participation helps to achieve a happier, more highly motivated and more productive workforce. Is this not what employers want?

Menrad
Mr President, I congratulate Mr Peter on his report, which is of a very high quality. If agreements by the European social partners acquire legal force in the European Union in the area of work by making them generally binding through a Council decision, the SMEs will be among those most affected as they employ the majority of workers in Europe.
The report by the Committee on Employment and Social Affairs is right to call for increased involvement of the SMEs in shaping the European social dialogue, which is an issue of great concern to the Group of the European People's Party, as is clear from our Amendment No 9.
The social dialogue is necessary at both European and national levels. It is also successful at company level. This is illustrated by the success story of the European Works Council and the positive development of the discussion on the European Company. Or so I am told, Commissioner. In both cases the remedy has been negotiations by the social partners to establish ways in which the workers can participate.
A conference organised by the Austrian Presidency took place in Vienna last week on the European social model and the social dialogue. Comparisons were made with other models, for example with the market economy pure and simple, as in the emergent industrial nations of South-East Asia. But as they have neglected the social dimension many of the Asian tigers have in economic terms become tame, lame domestic cats. The effective answer to globalisation is the European model, the social market economy based on social partnership and social dialogue. The Group of the European People's Party will therefore be voting in favour of the Peter report.

Flynn
Mr President, I wish to begin by thanking Mr Peter for his report, which has been very helpful.
I would remind you that in 1996 the Commission initiated a major consultation exercise on the future of the social dialogue through the consultative communication. At that time Parliament drew up a comprehensive resolution on the document and I was here in Strasbourg to discuss it with you in the summer of 1997.
The Commission has worked very hard to take on board your comments in drafting this second communication. The new Amsterdam Treaty provides the means for a renewed commitment of the social partners to modernise and strengthen the social dimension of Europe. To do this the social dialogue must be helped. It has to be helped to play its full role within the framework of supportive and efficient information, consultation and negotiation procedures.
As you said in the 1997 resolution, there are some key issues that we had to tackle and there are three of them. Firstly, the need to reform the Standing Committee on Employment: considering the new focus on employment and the unwieldiness of the current structure, it has not worked well and has to be reformed. Secondly, the importance of creating a more coherent and efficient framework within which the sectoral dialogue could develop and, finally, the question of representativeness.
The Commission's communication on adapting and promoting the social dialogue at Community level was adopted on 20 May this year. It addresses these three issues and sets out to strengthen the social dialogue at the European level and to make it more adaptable so that we can link the work of the social partners much more closely with the development and the implementation of all our European Union policies.
I begin with the question of representativeness, because it was raised by a number of Members - Mrs Ghilardotti, Mrs Glase, Mrs Schörling and Mrs Thyssen - and I am grateful for their concern. It is clear that the institutions have to fully respect the autonomy of the social partners during their negotiations. It is the social partners which, in this context, are responsible for ensuring sufficient representativeness. However, as regards consultations, the institutions have to take their responsibilities to ensure the best possible representativeness. It must be remembered that the Court of First Instance recently supported this approach in a landmark judgment.
We take the principle of the autonomy of the partners very seriously indeed. In view of the European Parliament's call on the Commission to reform the Standing Committee on Employment, as a matter of urgency, the Commission adopted a parallel to the communication: a proposal to the Council to reform the current structure. What we want to do there is to give each presidency the choice of either calling a troika of Heads of State or Government or a council to meet with the social partners within the framework of the Standing Committee on Employment. The social partner delegations to these meetings should be restricted in their number but always include the main social partner organisations. In short, the Commission suggests to the Council creating a single, transparent and representative forum for high-level dialogue on employment. So the ball is really in the Council's court, to ensure that the real dialogue on employment is not restricted just to a core group of social partners.
With regard to the other consultation procedures, the communication introduced a liaison forum, involving quarterly consultations with all recognised European social partners on policy matters. The first of these forums has already taken place and has proved to be a very useful exercise indeed. Furthermore, at the sectoral level, new, flexible, sectoral committees will replace the many existing and cumbersome structures. This decision caused some initial fears of a reduction in support for the sectoral dialogue. Many of you have been in contact with me personally to query the practicalities of this new structure. I will emphasise again here that this is not a reduction but rather a new start for the sectoral dialogue, where all the sectors wanting to make a meaningful joint contribution at European level can take part on equal terms. There will no longer be a restriction of formalised support to activities where there is exclusive Community competence. So the need to discuss industrial restructuring in employment matters is present today in all sectors of activity.
Just a few words about the Peter report. Mr Peter and the Social Affairs Committee have once again managed to strike a fair balance between the different interests that are involved. This is a very good report. I would simply like to reiterate the importance of respecting the autonomy of the social partners. I would therefore question whether it is politically or, indeed legally, feasible to involve any form of consultative committees in the negotiations between the partners or to involve any national organisations directly at European level.
As for the key point of the communication, I find the report is very supportive indeed and this is true of reform of the Standing Committee on Employment, the new sectoral dialogue committees, the representativeness question and the importance of developing a social dialogue with the applicant countries. This should not come as a surprise because, as I have already stated, the position taken on these issues in the communication takes into account to a large extent the position of the European Parliament. So the whole exercise serves, in my opinion, as an example of very good cooperation and understanding between our institutions.
Mr Crowley raised the question of the involvement of the European Parliament in the decision-making process leading to the adoption of legislation based on European agreements. I wish to say to him that the Commission worked for the involvement of Parliament in this very respect during the IGC. As emphasised in our draft report, this standpoint is clearly reiterated in our communication, and I know there are ongoing contacts between Parliament, the Council and the Commission in order to resolve this particular issue. You know where I stand and where my support is on that point.
I wish to say to Mrs Thyssen that UNICE is in dialogue with UEAPME about the representativeness issue. We understand that great progress is being made, and certainly I support that. I would say to Mr Lindqvist, on the question of enlargement, that on all my visits to the applicant countries I have sought out the social partners to talk with them. There are real problems there. Through PHARE, we are trying to help the development of the dialogue there. We look at the state of the social dialogue in all the screening exercises on each of the applicants. But it is a very keen point and we will return to it certainly.
Finally, I wish to say to Mrs Schörling that local government is part of CEEP, and I understand they are contemplating a sectoral dialogue. If that is the case, I would greatly support it.
I thank Mr Peter. It has been a very useful debate, and I look forward to the continuation and the enhancement of the social dialogue. Mrs Malone, what happened last week on information and consultation was an enormous step forward. We look forward to debating that issue in the House at a later date.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

New Transatlantic Marketplace
President
The next item is the report (A4-0387/98) by Mrs Mann, on behalf of the Committee on External Economic Relations, on the Commission communication on the 'New Transatlantic Marketplace' (COM(98)0125 - C4-0271/98).

Mann, Erika
Mr President, Commissioner Brittan, ladies and gentlemen, I would like to address a few fundamental points before I discuss the report. Today's debate will be dominated by the Americans' threat to impose sanctions in the form of duties on products from Member States of the European Union, in particular from France and the UK, in order to undermine the present regulation on the banana market before 1 January 1999 and to stir up trouble among the Member States. It is particularly ironic that the General Affairs Council made its decision on adopting the Action Plan for the Transatlantic Economic Partnership on 9 November 1998, at almost the same time as the Americans decided to impose unilateral sanctions on the European Union.
This step by the Americans threatens the credibility of the whole WTO dispute settlement procedure. The Americans are within their rights not to agree with the new banana market regulation. They are within their rights to believe that this regulation is not consistent with WTO rules. But they are not within their rights to decide this themselves. However attractive such wild west behaviour may seem at national level, it provokes severe counter-reactions. Increasing nervousness on the part of the Americans is nevertheless understandable and can be explained largely by their current trade deficit, which is relatively large. So we should adopt a calmer stance in future.
We are doing well to consolidate and expand the political and economic basis between us. The banana dispute will not be our last trade dispute; the next ones, on hormones and steel, are already on the horizon. We must accept these realities. Since 1989 and 1990 our relations have been undergoing a sea-change. The conditions which we formerly took for granted have changed and we have become global competitors. Economic and trade policy determine more than ever the political actions of the two world powers. However, we should not forget that we compete on a solid basis of friendship. Nor should we forget that adapting and strengthening economic relations guarantees jobs on both sides of the Atlantic. The huge merger of Daimler and Chrysler is only a foretaste of what we can expect in the near future.
The present report on the Action Plan 'Transatlantic Economic Partnership' expressly supports the initiative of the Commission and the Council. You will all remember that during the last summit between the European Union and the United States in London, the Council, particularly France, withheld its approval and presented a new plan that was less ambitious. The result of the process was then the Transatlantic Economic Partnership rather than the Transatlantic Marketplace. The Council feared that the Commission's proposal to call for a framework agreement with a general negotiating mandate would result in an uncontrolled transfer of national decision-making powers and scope. A framework agreement would have had the advantage for the European Parliament of allowing it to be formally consulted. Now we are merely informed.
The Action Plan for the Transatlantic Economic Partnership proposes firstly the coordination of multilateral activities and secondly the coordination of a bilateral agenda for the following areas: first, removal of technical barriers; second, intensification of the role of labour in services; third, increased market access for EU and US companies in government procurement; fourth, better protection for intellectual property; fifth, strengthened dialogue and the creation of social cooperation structures in the areas of food, plant and animal health and biotechnology, and the creation of an environmental group. I believe that this is a good report and we should support it.
However, the creation of an organisational framework should also be part of this report. Many of the issues that are the subject of negotiations relate to what are regarded as new, sensitive areas, such as biotechnology. This organisational framework should also define the forms of institutional cooperation between the institutions and procedures involved, and in many cases open the door to agreements, along the lines of mutual recognition, on certification and testing procedures. To allow this to work in areas that are very sensitive for the consumer, it is essential that the process be absolutely transparent, and that the industries, experts, occupational groups and consumers concerned be kept fully informed and consulted.
We must build up an institutional process of trust so that we can ensure the broad approval of the public. Certainly, I do not share the fear of some Members of the House and of the consumer associations that we are ignoring the general public. We have become institutional experts, in a manner of speaking, so it is not amateurs that are taking action at European level, either in the Commission, the Council or Parliament. We are perfectly capable of managing this process very well.

Cushnahan
Mr President, the relationship between the European Union and the United States is a very important one. We share many common values and interests and, while trade and investment links between us represent the world's largest economic partnership, it would be wrong to restrict discussions to simply trade and economic matters.
I regret the fact that the more ambitious plans suggested by Sir Leon Brittan under the heading of the new transatlantic marketplace met with such strong opposition in the Council and were therefore not discussed with the US authorities. Consequently, the obstructive stance of the Council resulted in the more restricted proposals contained in the transatlantic economic partnership.
When the European Parliament discussed the Souchet report in January of this year we expressed the desire for a more comprehensive level of cooperation. Paragraph 3 of the Souchet resolution pointed to the need for greater dialogue in relation to justice and home affairs. Paragraph 5 called for greater cooperation regarding the management of crisis situations and the use of peace-keeping forces.
The opinion that I have produced on behalf of the Foreign Affairs Committee attempts to restore the wishes of Parliament and, I hope, of Sir Leon Brittan himself, to ensure that security and defence relations become an important part of the EU-US dialogue.
An EU-US summit will be held shortly and it is important that we are able to examine the state of our respective relationships and resolve any problems, including those in the field of security and defence which are underlined by the current crisis in the Gulf.
I congratulate the rapporteur on her report and I thank her for including in it the specific proposal contained in the Foreign Affairs Committee opinion on this important issue.

Peijs
draftsman of the opinion of the Committee on Economic and Monetary Affairs and Industrial Policy. (NL) Mr President, the Committee on Economic and Monetary Affairs and Industrial Policy has given broad support to the transatlantic economic partnership and Mrs Mann's excellent report on it. Without in any way playing down the importance of multilateral talks, I think it is good that the two biggest players in the world market should be talking about eliminating barriers to free trade. Together, the two trading blocs can provide the combined impetus for launching the debate which is needed if a multilateral agreement is ultimately to be concluded. Of course, that must not mean that the EU and the USA together form a power bloc so that other countries are faced with a fait accompli within the WTO. But the ideal of regional trading blocs is consistent with the ideals of the WTO.
Apart from long-standing issues which are obviously harder to resolve, there are two newer issues causing me some concern in the current trade relations between the EU and USA. Firstly there is the metric-only directive. In the meantime, Commissioner Bangemann has promised at the Internal Market Council that he will bring forward a proposal quickly, though he does not say how quickly, to defer the requirement that products should be labelled using the metric system only. That proposal ought really to have been made months ago. I have pressed the Commissioner for it on several occasions. Europe is all about helping business and industry to play a more powerful role, not about hampering it.
The Economic Affairs Committee proposed in an amendment that conclusion of the transatlantic economic partnership should be conditional on the USA going over to the metric system. We gave careful thought to this. We were sorry that the REX Committee watered down our amendment to the point where it was neither fish nor fowl. I hope that Mr Bangemann gets the message. There has to be an end to the burden placed on European business and industry by American recalcitrance. I think that Mr Bangemann and Sir Leon Brittan must put pressure on the USA.
My second concern is about anti-dumping measures in the EU and the USA. Mrs Mann devotes just one paragraph to this in her report, and the European steel industry complains that it receives unreasonably harsh treatment. Even the US Congress says in a major report that the ratio last year was 35 anti-dumping cases on the American side compared with just two on the European side.

Boogerd-Quaak
Mr President, these relations are also extremely important as far as jobs are concerned. On behalf of the Committee on Employment and Social Affairs, I would make the point that 59 % of EU investment goes to the USA, and the figure in the other direction is 44 %, so to both parties that is very important in terms of jobs. In an increasingly global world economy, however, there is more to it than trade relations alone. We also have a responsibility to work together to tackle important issues of the kind which can lead to a new declaration by the International Labour Organisation on fundamental labour standards such as freedom of association, the right to collective bargaining, non-discrimination, the abolition of forced labour and of child labour. Both parties can play a part here in the forthcoming WTO negotiations. But there are more things of relevance to the social and employment dimension. Let me quote a few of them. Take European works councils, for example: numerous companies in Europe with parent companies in the USA come under the directive on European works councils, and there needs to be a proper exchange of information here between US and European firms and governments. Another issue is that of pension funds. Europe is a long way behind when it comes to the provision of investment loans. Here too we need to work together, take notice of each other and talk to one another.
Lastly, Mr President, agriculture is a not insignificant obstacle in transatlantic negotiations. In my view, things can get better here if not only the EU authorities but the US authorities too take greater account of social and employment issues in rural areas. Optimum competition does not always have the best outcome for all parties in the world. A balanced approach is needed here. As my very last point, I should like to say that our education and training programmes ought also to include provision for exchanges with America..

Brittan
First of all I should like to congratulate Mrs Mann on her admirable report and also on the way in which she has put the banana contest in its proper perspective. I will come to that at a later stage, but I entirely agree with her that we must not allow it to completely distort our consideration of relations between the European Union and the United States, which relate to wider issues. Some of those have already been referred to by the previous speakers.
I am grateful to Mr Cushnahan for his kind remarks about the scaling down of the new transatlantic marketplace proposals. They were more ambitious. I do not apologise for that. Nonetheless they have certainly informed the transatlantic economic partnership. But important as the transatlantic economic partnership is, Mrs Peijs is quite right to say that the multilateral aspect of that should not allow us to give the impression of ganging up against the rest of the world. We are cooperating to try and make faster progress in the multilateral talks, not seeking to impose a diktat, still less a fait accompli.
Mrs Boogerd-Quaak is right in saying that the discussions that we have with the United States have to include matters relating to social and employment questions, just as Mr Cushnahan is right in saying that there is a very important security and defence component in our relationship, even though that has to be pursued outside the transatlantic economic partnership.
Nonetheless, the transatlantic economic partnership is the most recent feature of the relationship, deriving from the new transatlantic marketplace and now, as Mrs Mann reminded us, endorsed by the Council last week in the form of an action plan. Negotiating directives have been approved for the Commission to start bilateral negotiations on a series of agreements relating to technical barriers to trade in goods, services, public procurement and intellectual property.
It is a major initiative to consolidate and enhance transatlantic relations, including both multilateral and bilateral elements. Bilaterally the core element is the tackling of trade issues such as regulatory barriers, which are the main current obstacle to transatlantic business while preserving a high level of protection for health, safety, consumers and the environment. If we can achieve a degree of progress in dealing with these barriers, that promises great new economic opportunities for European firms and consumers. If we can stimulate further multilateral liberalisation then I believe we will be able to make great headway in the new millennium and save a great deal of time.
The European Parliament has played a key role in this process, first with its call in January this year for a new impulse in transatlantic relations and afterwards through its involvement in the evolution of the transatlantic economic partnership. I am very glad that we have been able to work together. This will need to continue, not only in the face of the threat represented by the banana dispute but also in dealing with, for example, the unjust and inaccurate allegations that have recently been made about the European Union not doing its share in taking the strain of additional Asian exports.
So I welcome the very operational report of Mrs Mann and thank her for the support that she and Parliament have given to the development of the relationship.
I can give you some preliminary reactions to the report. We fully share your desire to see positive results in the areas of MRAs, food safety, government procurement, intellectual property, compliance with international rules in the liberalisation process and many other areas. I welcome the European Parliament's desire to enhance its involvement in the work to be done on the transatlantic economic partnership.
Unfortunately all this has been overshadowed in recent days not only by the position of the United States on Asian exports but most of all by the recent controversy over bananas. The position is really quite simple. The WTO ruled against certain aspects of our regime and gave us until 1 January next year to comply with the ruling. We have taken action to comply fully with it and a revised regime which we believe to be entirely consistent with WTO rules will take effect on 1 January.
The US is entitled to disagree with us about the compatibility of our new regime with the WTO rules. It has the right to challenge this if it wishes, but only according to the procedures established by the WTO which are readily available to deal with precisely this sort of disagreement. No WTO member has the right unilaterally to judge the compliance of another, nor to be judge and jury in its own cause. In resorting to unilateral action the United States is setting itself above the law and resorting to the principle of 'might is right'.
This threatens to damage the system which we both helped to create. It will seriously undermine the confidence of WTO members in that system. Therefore, we have publicly called on the United States to desist from unilateral action and seek to resolve our differences according to the lawful multilateral channels which are readily available and are the sole means that a law-abiding country should choose.
We are ready to cooperate with the United States to deal with our differences within the WTO rules and procedures but we will not do so under the threat of illegal unilateral action. Unless the United States desists from that we will have no alternative but to go to the WTO and begin proceedings against the United States for its unlawful action.
I regret that this issue has overshadowed - at least in the headlines - the broader and more important work we have been doing. It is, indeed, as Mrs Mann has rightly said, ironic that this should be the case. I look to the European Parliament to be robust in the defence of European interests where they are under attack but also to take the broader view of what we need to do for the future.

Karamanou
Mr President, Commissioner, ladies and gentlemen, it seems that the issue of trade and economic relations between the European Union and the USA is one which usually inspires very heated debates and, I would say, intense passions. That happens because so far we have been unable to form relations of mutual trust and open, sincere communication, despite the prolonged talks and negotiations, despite the planning of an ambitious programme and despite the honest efforts both by the Commission and by our rapporteur, our esteemed colleague Mrs Erika Mann, whom I congratulate on her report.
From what you have said, Commissioner, it is clear that we are still facing a very difficult interlocutor who is also burdened by activities which have shown that the United States, to promote its own exclusive interests, does not hesitate to violate international rules, and this to the cost of the poorest and weakest countries. The truth of what I am saying is demonstrated by the fact that problems are still outstanding related to extraterritorial American legislation, while competition against the Union is constantly becoming keener. So in view of the forthcoming transatlantic summit conference, the European Parliament must today send out some very clear messages, such as these:
First, the bipartite approach is acceptable to the extent that it does not impede multipartite negotiations at WTO level and does not create obstacles to access by third countries to markets in the Union and the USA.
Second, respect must be ensured for the rules of international law, and a definitive solution must be found for the dispute concerning extraterritorial laws.
Third, any commitments undertaken must be compatible with the acquis communautaire , especially with the CAP and the trade agreements we have concluded, particularly those with our traditional partners. They must also be compatible with the commitments undertaken by the Union under the Lomé Convention and in the context of the enlargement procedure with central and eastern European countries.
Fourth, cooperation must include and emphasise social issues, such as securing the rights of working people and safeguarding collective bargaining, the abolition of child labour and forced labour, job creation, and the mutual recognition of qualifications.
Fifth, any agreement must be compatible with the high standards that prevail in Europe concerning health and safety, consumer protection, and the protection of the natural and human environment.
Sixth, cooperation must lead to the establishment of rules on the operation of credit institutions in all countries and control of the international movement of capital. I say this bearing in mind the present economic and money-market crisis.
Finally, the European Parliament must be kept constantly informed about the negotiations, most particularly about matters that relate to co-decision procedures. As our rapporteur Mrs Mann said, there must be transparency and full information.

Kittelmann
Mr President, the Group of the European People's Party welcomes Mrs Mann's report and congratulates her on her very useful arguments presented here over 43 pages, though they have been overshadowed by current events.
The USA's relations with the European Union are a high priority for all of us, and in future, despite all the conflicts caused in our bilateral relations both by ourselves and particularly by the USA, we will continue to place great importance on the fact that we are dependent upon one another.
Bananas, hormones, steel, the US trade deficit, all these things make us nervous. What increasingly concerns me about our relations with the USA is the fact that it is always the parliamentarians who put their governments under pressure and that administrations are often too cowardly to observe WTO rules because they always have to give in to domestic policy. It is precisely this that should make us, as Members of the European Parliament, intensify our own contacts with Congress, and not rely on the Commission, which always seems to be told: we cannot do anything, it is the members of Congress who do that.
The Helms-Burton and d'Amato Acts, which violate the principles of international law, were also the work of members of Congress. Thankfully d'Amato cannot be voted in again, so that leaves one less to be considered. I say this because it must be clear that, as Sir Leon said, it must be the WTO requirements that determine our rules. The WTO sets the standard for free competition, and in free competition we compete with each other.
Competition will become increasingly fierce, borders will become increasingly fluid, technology and in particular investment will become an area over which we Members of Parliament no longer have an overall view. We do not always see the source of the conflicts in question. This is all the more reason for us to support the Commission so that it does not debate for too long or look for compromises, but can often take a tough stance.
The USA often accuses us of being only paper tigers or lightweights because when it is being tough our reaction is not tough enough. We must move more quickly in future with the new measures. As Parliament we can perhaps take a tougher stance than the Commission does.
We are also accused of not really being affected by the growth of the Asian markets while the USA suffers as it has to take in all the cheap products. We face the same the problems, although it has to be said that one or two aspects of our trade policy are also rather doubtful, and this has nothing to do with the USA. We must monitor this and not simply say for the sake of national interests that one form of protectionism is good and the other bad. None of the 15 Member States would bear scrutiny here!
In conclusion, I believe that an appreciation of mutual-interest politics is always advantageous if we advocate the interests that are important for our European economy strongly and consistently. I would encourage us to intervene again in the current discussion about the USA's violation of the principles of international law. This report has given us a good opportunity to do so.

Plooij-van Gorsel
Mr President, Commissioner, ladies and gentlemen, I warmly compliment Mrs Mann on her excellent report. The transatlantic economic partnership which has now been agreed can put an end to the succession of trade disputes we have seen in recent years. Remember the biotechnology bananas and all the rest of it. The agreement may serve as an example to the rest of the world. The European Union and the United States are the two biggest trading blocs in the world and each others' main trading partners as well. Bilateral agreement between two leading trading blocs will enable the Union and the USA to develop a transferable trading model consistent with the multilateral framework of trade, and in particular with the rules of the WTO.
My group deplores the fact that the Council has given a negotiating mandate to the Commission and already adopted an action plan without waiting to hear the European Parliament's position. I agree with Mrs Mann and Mr Kittelmann.
A new transatlantic economic partnership has major implications for private citizens and businesses in terms of jobs and prosperity. Democratic scrutiny is absolutely vital here, because only that will guarantee the requisite public acceptance. So my group also welcomes Mrs Mann's suggestion that a joint parliamentary committee should be set up, because we have seen time after time that solutions to disputes reached at civil servant or government level are regularly torpedoed again by the US Congress. Structural dialogue between parliamentary delegations and Members of Parliament may perhaps put an end to this. I would thus urge the Commission and the Council once again to stop talking to the Americans on their own and to involve Parliament to a far greater extent; they must not keep adopting plans without first waiting to hear what Parliament thinks.

van Bladel
Mr President, Commissioner, ever since the initiative of the transatlantic agenda, our relations with America have been visible. But I see that they are not sufficiently tangible, and this action plan may improve things here. Regrettably the action plan has come into being without the European Parliament being consulted in any way, and so I too support Mrs Mann's suggestion for a joint parliamentary committee linking the US Congress and our Parliament as the final democratic counterbalance in the new relationship.
I must compliment Mrs Mann anyway on the form and content of her report. The new partnership may prevent bilateral trade disputes from ending in threats of sanctions, as happened over the EU's policy on bananas. But there are one or two things which are not covered. To my mind, too little attention is paid to the audiovisual imbalance. The USA does well out of the European market in this respect, but makes no concessions at all itself. We as the EU, with so many wonderful cultures, just cannot swallow that. Certainly not!
Furthermore, I hope that future political and economic dialogue will address the question of anti-dumping measures. Mrs Peijs has talked about that. My group is very anxious too to preserve the acquis communautaire and especially the services of general interest which have a considerable influence on our social and economic cohesion. These aspects must not be neglected.
Lastly, Mr President, the partnership will be good for jobs. As Mrs Mann says, we shall have Daimler Benz and Chrysler on both sides of the Atlantic. I hope, though, that this initiative will stimulate not just commerce pure and simple, but above all the values and cultures which exist in the relationship between the USA and Europe.

Herzog
Mr President, Commissioner, ladies and gentlemen, a transatlantic relationship that is of mutual benefit and positive for everyone else in the world is a fundamental political issue. Three conditions must be met: we must work to make trade more compatible with sustainable development and social welfare; we must respect multilateral solidarity and commitments; and we must guarantee real democratic control.
By rejecting the MAI and transatlantic free trade projects, several European countries have highlighted the importance of these requirements and signalled their disapproval of a certain way of conducting external relations. We need a more autonomous and unified European Union and we would ask our American partners to show more loyalty towards the commitments they have made. The United States is renewing commercial tensions and is not respecting the London commitment on extraterritorial laws. We must remind them that the enormous deficit in the United States' balance of payments is inseparable from the privilege they have of financing their growth through other countries.
The European Parliament is therefore faced with a contradiction: the renewal of aggressive commercial behaviour on the part of the Americans, and concern, on our part, for the development of dialogue. It is under these conditions that we will undoubtedly be forced to take other political initiatives. For the time being, we are taking note of the Transatlantic Economic Partnership and the Action Plan. We welcome the fact that it is not simply a resumption of the NTM project, which project was particularly dangerous because of its aim of guaranteeing free trade in services and because it favoured bilateral settlements, at the risk of stifling multilateral progress.
We are also pleased that some of the provisions included in the Draft Action Plan have been removed by the Council, particularly a bilateral standstill agreement that would have suspended the development of Community rules. We are pleased, too, that the Council is resuming its supervisory role by placing bilateral negotiations under its mandate.
We would finally like to stress the need to develop a new political doctrine for the Union in terms of both the content of the negotiations and democratic control. We want to discuss the future WTO negotiations with the Americans, but has the impact of the Uruguay Round been felt? Do we know what we want to say on the new issues of society and regulation? Within the partnership, we must not prepare the basis of an agreement between two giants - the United States and Europe - before the next millennium. Dialogue must only be exploratory and we have other friends to talk to.
As regards bilateral negotiations, we would like to look at them on a case-by-case basis. We must defend employment and our industries, and this would mean strengthening their solidarity before the negotiations start.
Finally, I would like to emphasise the fact that our institutional procedures are showing a political and democratic deficit. We call on the Council and the Commission to inform and consult the European Parliament both before and during the dialogue and negotiation process. Consultation of the civil society, which today is inexistent, must be organised, and it is up to the European Parliament itself to play a key role here in guiding firms, unions, associations and public opinion.

Kreissl-Dörfler
Mr President, in order to prevent any misunderstandings right from the beginning, I must say that a good relationship with the USA is very important to us. But not in the way you see it, Sir Leon. Your first priority is the removal of so-called barriers to trade, and this includes political decision-making powers. Your plans for the NTM were rejected by the Council in the spring, and now a slimmed-down version of the TEP is on the table, practically a disguised MAI.
But why should we applaud something that was rigged in advance? The negotiating mandate for the TEP was given long ago. Yet we in the committee were only able to see it when the vote had already taken place. That is absurd. But some of its content is even more absurd. It does not contain anything about setting up joint programmes for sustainable development in the world economy, nor does it say anything about commitment to a better quality of life, about using fewer natural resources, or about strengthening the multilateral system. On the contrary, Charline Barschifsky stated on 28 July what the important issues are for the USA: the rights of US industry, the enforcement of US patent laws, crushing European protection laws in the field of biotechnology, the business interests of American banana producers, Helms-Burton, hormonized meat and genetically-modified food on European tables.
You, Sir Leon Brittan, wish to sacrifice all European and national standards on the altar of free trade, in accordance with your neoliberal philosophy. Instead of constantly hatching new projects you should do your homework. You gave in on the issue of Helms-Burton instead of enforcing WTO rules. As a result, the Americans have taken legal proceedings against European firms in 5 911 cases. Now the US does not care about the WTO and is threatening a full-scale attack on European products if the EU does not given in to US interests in the banana dispute. We have been waiting for a reply from you since September on ECHELON, the unspeakable EU/US secret service dossier. The Greens certainly do not want to see more and more national and European consumer protection laws, for which we have fought so hard, being violated by dubious trade agreements in the name of free trade. We can only approve the report if our amendments are adopted.

Sainjon
Mr President, I would naturally like to congratulate Mrs Mann on her report, which I believe to be balanced on the whole. This new partnership is obviously preferable to any notion of a single market between the European Union and the US, which was rightly rejected by the Council last April. The Action Plan proposed today by the Commission to establish this dialogue provides a framework for the negotiations in the months ahead.
In my opinion, it is, for example, essential to establish a common strategy between the European Union and the United States with a view to laying down minimum social standards within both the WTO and the ILO. It may be beneficial to have discussions on services or electronic commerce provided that this does not undermine countries' cultural interests, and I am naturally thinking here of the audiovisual sector. The creation of a global economic area in the field of electronic commerce is, to my mind, completely premature, particularly when we know that the US is the market leader in terms of the Internet.
This framework must therefore clearly establish the boundaries of the debate in terms of social, environmental and cultural issues. It is true that similar action plans exist and serve as a basis for discussion between the Union and other countries, such as Canada, New Zealand and Japan. But there is a fundamental difference between those countries and the United States: with them we do not negotiate with a gun at our heads. In fact, the US is once again threatening to impose 100 % customs duties on us, jeopardising the very existence of some of our companies. And surprise, surprise, the products concerned come from countries in the Union that produce bananas.
So after the famous Helms-Burton legislation, the United States is again beginning to use gunboat diplomacy, and we cannot accept that. We do not underestimate the role of the American multinationals behind the Clinton administration. I am thinking here of Chiquita in the case of bananas, but also of the American oil companies that are encouraging the bombing of Iraq.
That is why I believe that this notion of partnership must be suspended, and I call on the Commission to draw up a list of retaliatory measures aimed at certain American companies. We must stop being naive! If the Americans want to complain, then let them, but let them do it before the WTO. And let us hope this time that the body responsible for settling disputes gives a clear ruling on the banana issue. In the meantime, my group believes that the report by Mrs Mann, good as it may be, should be referred back to committee.

Souchet
Mr President, recent developments that have taken place have tended to temper somewhat the optimism surrounding the report by Mrs Mann on the future of transatlantic economic relations. The rapporteur herself has just admitted this. In this respect, the entirely unacceptable threats of trade retaliation illegally made by Congress towards a number of our countries, outside the WTO dispute settlement procedure on the banana issue, show that our partners have an uncontrollable propensity for unilateralism. And this is true even though everyone knows that the economic survival of entire regions of the European Union, particularly in the French overseas territories, depends on a solution to the banana conflict.
Moreover, on 21 October, Congress introduced a new provision that clearly has an extraterritorial effect, by adopting a corresponding amendment to Article 211 of the Finance Act, aimed at banning all transactions involving a well-known confiscated brand. This provision, which aims to block the commercial development of the Pernod-Ricard company on the American market, is further proof that the United States, far from renouncing unilateralism, is, on the contrary, forging ahead with sanctions that have an extraterritorial effect.
This violation, which is taking place scarcely six months after the signing of the London agreement, makes us seriously question the credibility of the commitments that have been negotiated by the Commission with our American partners. This is all the more worrying since, in addition, Congress does not seem willing to vote for the derogations provided for by the London agreement, which itself still does not completely settle the question of American laws with extraterritorial effect. If we add to this use of unilateral instruments (which cannot fail to affect the implementation of the TEP), the lack of progress in the negotiations on government procurement and intellectual property (areas that are essential for Europe), the divergent positions on the future multilateral trade negotiations, and the stonewalling attitude that was maintained by the United States at the Buenos Aires Conference, it appears that the current situation is very worrying and requires a great deal of determination on our part.
This determination can be easily seen in the Council, which has ensured, in particular, that the audiovisual sector is excluded and the status quo for services clearly rejected within the framework of the TEP. We hope that the Commission will also display such determination. Perhaps the Council has some concerns in this respect, since it thought it necessary to formally state that the Commission could not give a definite decision on the Union's position in the future multilateral trade negotiations, particularly in the audiovisual sector, without the Council's approval.
It is unfortunate that in the recitals the rapporteur limits herself to deploring the institutional imbalance and does not mention these different and important concerns that may weigh heavily on the development of trade relations with the United States and on the implementation of the Transatlantic Economic Partnership if they are not tackled with enough determination by Europe.

Martinez
Mr President, the debate about the United States and Europe is an old one. Today, Commissioner, we are returning to it in a context that has three aspects: the United States' trade deficit, which we have all discussed; the negotiations in the World Trade Organisation, which are multilateral and that is why we cannot understand this bilateral move, unless we recall the unpleasant memories of Blair House and your colleague, Franz Andriessen, at the beginning of the 1990s; and finally, of course, the American tradition of the big stick policy, with its attacks on Iraq, imperialism in the audiovisual sector, and selfishness in Rio. This all means that we may well have doubts about the sincerity of the United States. Everyone has mentioned - including Mr Sainjon and other speakers - the banana issue, the unilateral 100 % customs duties, the Helms-Burton legislation, Libya, Iran, Pernod-Ricard, etc.
This leads me to put two questions to you, Commissioner. Firstly, I would like you to tell me about the strategy, the principle and the philosophy involved. Are the world trade negotiations necessary for the wealth of nations? We signed the GATT in 1994. Has that led to increased wealth in Japan, Brazil, Korea or Thailand? Has unemployment fallen? Conversely, we rejected the MAI, the Multilateral Agreement on Investment. Who suffered because of that? No-one did. The truth is that world trade, despite the myth, only plays a residual role. Let us look at the beef and veal market, for example. It does not even represent 10 % of our production. And if we had another policy besides Article 104c of the Maastricht Treaty, another policy besides austerity and rationing, we would have an internal demand that would do away with all this rubbish about having to find external markets.
Secondly, I would like to know how we can have an independent trade policy when we do not have an independent foreign policy, when we do not have an independent military policy and when we behave as we have done in Iraq, the country of the Code of Hammurabi, the country of Babylonia? I was with Mr Tariq Aziz three weeks ago and he asked the following question: 'I am offering Europe the best oilfields in southern Iraq. Why will Europe not accept them?' Mr Sainjon gave you the answer: when we have a global market, we should not hold bilateral negotiations. We are a parliament: we are not traders, we are not a chamber of commerce, we are representatives of the people.

Barón Crespo
Mr President, I take the floor to make clear my support for Mrs Mann's report. As debate is focusing mainly on the background to this report rather than on its content, I should like to say that it might initially appear that, in principle, we are offering an olive branch whilst our friends in the United States are digging up the battle axe. I do not in fact believe that this is the case, because we could have applied many of the arguments we now use in connection with United States imperialism to each other in Europe in the past.
Nevertheless, I do believe we must send two clear messages to our friends and allies in the United States: firstly, that the association known as the Transatlantic Economic Partnership essentially implies a shared responsibility on the world stage, at global level, and therefore at multilateral not just at bilateral level; and secondly, that we are not concerned solely with trade at this moment. We are indeed concerned with trade, but also, and especially at the moment, we wish to emphasise the notion of shared responsibility for the world as a whole. In particular, we are concerned with the financial situation, bearing in mind that our discussion is taking place on the eve of the introduction of the euro.
I feel this is the first message we should send, and I for one have never been in favour of adopting a defensive position as a matter of course. I am convinced that we Europeans put forward very good reasons and arguments when we state that a market and a relationship have to be civilised and bilateral, and that they cannot be controlled solely by one party, in the kind of atmosphere portrayed - if I may be permitted a reference to the cinema - in 'High Noon', where the Sheriff wields absolute power. I believe that we are and must continue to be partners on equal terms.
My second concern is that we must make it quite clear to our friends in the United States that we do not share the unilateral vision of managed trade they uphold and that is particularly evident not only in Act 301 and 'Super 301', but also in extraterritorial legislation such as the Helms-Burton Act and the D'Amato Act. In addition, it underlies several other measures that contravene the regulations of the World Trade Organisation.
In my opinion, this report reflects our philosophy. However, we obviously need to do more. In the first instance, we need, for example, to coordinate the Commission, the Council and Parliament, given that they are not presently coordinated. In addition to being absent, the Council takes decisions without consulting Parliament. I think we need to prove that we can act as one, like the United States. If we do, I am sure we will be listened to.

Pomés Ruiz
Mr President, I should firstly like to thank Mrs Mann for her report, which we support. I should also like to express my appreciation to the Commissioner for his efforts towards developing the best possible transatlantic relations.
Unfortunately, what seemed at first to be a good idea - the Transatlantic Agenda - turned into something of a damp squib after April, when the Council took a number of decisions we perhaps did not all support. I agree entirely with Mr Enrique Barón who has just said that we ought to get on well, as well as we can. Commissioner, you said that might is not necessarily right. It remains to be seen who will have most might, once the euro is in place, the European Union's institutions have developed and the 11 countries - soon to be more - are working together. In any case, power must be vested in the bodies, and we need to learn to use them to resolve conflicts.
As the Committee on Economic and Monetary Affairs and Industrial Policy has stated, the existing obstacles must be removed, and here, we are certainly not in a very happy position. The situation concerning Asian exports and the banana dispute are not exactly encouraging examples. Nevertheless, we have to ensure that, within the framework of the WTO, we can reach multilateral agreements that are compatible with the acquis communautaire , the CAP, the Lomé Convention, and the association and enlargement agreements.
Commissioner, Parliament will support you, in the hope that we can establish a relationship on equal terms with our friends in the United States, insofar as the provisions of the law allow. It is quite clear, though, that Parliament will have to be more involved. As Parliament can express its support for your claims, you will be in a stronger negotiating position and so will we. It is not acceptable that our companies should still be experiencing difficulties in the area of government procurement in the United States, and there is a long list of other problems I do not think it appropriate to elaborate on here and now.
We support the report, trust that deadlines for achieving the objectives are set and that we will find the way of enjoying the best possible relationship with our friends in the United States.

Teverson
Mr President, I want to concentrate on one area only. I have read few reports - even from the Commission - that have been stuffed so full of three and four-letter acronyms. The one that is missing is GMOs. If there is one area where US and European public opinion contrasts most it is here. In the European Union consumers are particularly resistant to genetically modified food and the governments of Luxembourg and Austria are moving against current European policy. On the other hand, in America crops which have been genetically modified are increasing and the proportion of maize now grown under GM conditions is quite large.
Then there is this brave attempt to remove trade barriers between these two major trading blocs. My question to the Commissioner is: In such a market place as he proposes, how do we protect European citizens' preferences in public health and environmental areas, as illustrated by the GMO issue?

Donnay
Mr President, the relations that link the United States and the European Union are very special. We form the most important trade relationship in the world. Therefore, the project for a new Transatlantic Economic Partnership carries great hopes for our respective economies and reasserts the objectives of Euro-American multilateral cooperation.
The global economy requires us to participate in this regular dialogue, but recent events lead me to fear that this enhanced partnership, which we have achieved after months of work and negotiations, might be at risk if one of the partners does not apply the principles on which it is founded.
The threats made by the United States of unilateral sanctions against European products, such as bananas and meat, are of some concern for the future, to say the least. A solution will have to be found to this dispute within the framework of the WTO, that is, through the multilateral legal channel.
In any case, the application of unilateral sanctions against European products on the part of the United States would be unacceptable and would seriously damage the trust and cooperation that characterise our relationship.
I agree with the rapporteur and I would like to pay tribute here to her excellent work and to insist that as far as possible Parliament be involved in and informed of the development of transatlantic relations. In addition, I fully agree with the proposal to create a US-Europe interparliamentary group.

Seppänen
Mr President, the French left-wing government overturned the MAI agreement in the OECD, which it considered a threat to national sovereignty in social issues and matters relating to working life and the environment. My thanks to France. In a new combination of letters of the alphabet, TEP, the Transatlantic Economic Partnership, poses the same problems as the MAI. The TEP is a slimmed-down version of the MAI, Mr Kreissl-Dörfler said, and he is right. We are hanging flesh on the same skeleton.
Free trade, which is the freedom of markets rather than people, is often an attack on the structures set up in a nation to protect its people and its environment. They were created with good intentions. Market forces have no social or ecological responsibility. For example, the views of consumers in Europe on the one hand, and the USA on the other, on health foods are fundamentally different. We do not want to eat hormone-treated meat. We do not want to eat poison-resistant, genetically-modified soya, maize or potatoes, nor any other new American foods. One problem in particular is the agreement on the reciprocal approval of products: approved one place, approved everywhere.

Lannoye
Mr President, I would like to make a few comments. I would firstly like to say that I am surprised that the United States is using retaliatory measures towards the European Union. In the case of bananas, it is quite obvious. I am amazed that we are surprised because, in fact, it is not the first time. The United States has been playing this type of game for a very long time and, without getting involved here in kneejerk anti-American reactions, we should nevertheless remember the serious case of the Helms-Burton Act in which the European Union adopted an extremely timid attitude. We even withdrew our complaint to the World Trade Organisation - in accordance with who knows what regulation and what principle - but this demonstrated two things: intransigence on the one hand, and weakness on the other. It therefore seems to me to be time to put an end to this imbalance, particularly since - and I would like to mention this point - the United States has just showed itself up once again through its intransigence in Buenos Aires where it totally ruined a conference that was absolutely essential for the future of the planet.
My second comment relates to the involvement of the European Parliament in the process we are discussing today. Are we going to continue to allow ourselves to be treated like this over the months ahead? As far as I am concerned, I do not think we should run after a moving target. We firstly had the MAI, and I believe that we managed, along with others, to avert the danger. There is the New Transatlantic Marketplace, which has been rejected by the Council, and we are now being offered the Transatlantic Economic Partnership. When I look at what that project contains, I do not have the same positive outlook as some of my colleagues. I think that it basically involves stepping up and extending bilateral cooperation with the United States, even if we add to it the multilateral dimension. And it involves making general use of the principle of mutual recognition, particularly in areas such as biotechnology, food quality, the environment and social protection, which seems to me to be extremely dangerous. If Parliament accepts the idea of not intervening from the outset in this type of debate, I think that it is making a fool of itself and bringing discredit upon itself in the face of public opinion.

van Dam
Mr President, improved trade relations with the USA are a welcome development. Given the increasing trend towards globalisation, it is useful to have a good relationship with trading partners whose interests are similar to ours. The position of the individual Member States is fairly weak within a multilateral trading system, certainly since the advent of the World Trade Organisation. So this is a job for the European Union, especially when it comes to looking for like-minded trading partners. But I have a few cautionary comments to make on the new transatlantic marketplace.
Earlier this year, Parliament approved a resolution on the environmental, health and consumer protection aspects of world trade. Those aspects are extremely important for the transatlantic marketplace. The Commission's communication does not take sufficient account of them. I agree with the rapporteur, Mrs Mann, when she insists that there can be no tampering with European legislation in this area.
Another word of caution on the new transatlantic partnership concerns the place of the European Union in multilateral bodies and agreements. The Union's position in these must remain independent of the USA, especially in debate with and about the developing world. I am not talking here of the so-called 'banana preferences' referred to in Amendment No 4. I am concerned to ensure that this new transatlantic marketplace should not hamper the European Union in its worldwide pursuit of sustainable development and a fair distribution of prosperity. Nor must the new transatlantic marketplace lead to a widening of the gap between north and south. The same goes for other initiatives for cooperation by developed nations, for example the multilateral agreement on investment.
Lastly, I would like consideration to be given to the cultural issues on the transatlantic agenda. There are important differences in approach here between the European Union and the USA. The Member States of the European Union, for example, have a different system for protecting intellectual property. On the question of whether or not a royalty should be paid for books made available on the Internet, we cannot allow the Americans to dictate to us. Europe's cultural identity must not be left to the mercy of the free market.

Blot
Mr President, the report by our colleague remains very quiet about the serious imbalance that characterises the economic and trade relations between the European Union and the United States.
However, the draftsmen of the opinions - whose opinions are annexed to the report - all mentioned this imbalance, in other words, the United States' unilateral domination of Europe. This domination is not a fabrication. It was the subject of a theory a good few years ago by Professor François Perroux of the Collège de France in Paris.
The Committee on Foreign Affairs, Security and Defence Policy is, in fact, totally silent on this point, yet it is perhaps in the area of defence and arms that Europe is subject, in the most serious way possible, to American leadership, even going so far as accepting the gunboat diplomacy the United States currently applies towards European countries like Yugoslavia.
For its part, the Committee on Economic and Monetary Affairs and Industrial Policy pointed out, very appropriately, that the discussions with the United States on the transatlantic marketplace should have respected the acquis communautaire , particularly in the agriculture sector, the association agreements and the Lomé Convention, which is far from being the case.
The Committee on Legal Affairs and Citizens' Rights pointed out that the problem raised by the unilateral Helms-Burton and d'Amato-Kennedy Acts was still not settled. The Committee on Employment and Social Affairs fears the loss of agricultural jobs in Europe with these transatlantic negotiations. The Committee on the Environment, Public Health and Consumer Protection, in paragraph 4 of its opinion, fears discrimination against European industry. The Committee on Culture, Youth, Education and the Media states in paragraph 7 that European television programmes only account for 2 % of the American market while American productions totally dominate this sector in Europe. This really is unilateral trade where Europeans are playing the role of the 'submissive colony'.
Finally, the American federal states do not always feel bound by the agreements signed in Washington. We have seen several examples of this, particularly in the case of the market for electrical engineering a few years ago.
With these few comments, we can see clearly that Europe is scarcely more than a satellite of the United States, and the real objective of this report should have been to discuss that issue. The transatlantic negotiations should aim to restore equality. But there is no question of that. The project for a transatlantic marketplace, as it stands, will give a little more encouragement to the colonisation of Europe by the American economic powers. We must reject this.

Kinnock, Glenys (PSE).
Mr President, this is an excellent report but I have to say that I do regret its juxtaposition to the deep concern many of us have expressed here today about the threat to our banana regime.
Commissioner Brittan, I heard you say last Friday on the BBC that the ongoing dispute with the United States is actually not about bananas but about trade rules and the obligation to comply with them. I have to say - and I know you are aware of this - that the poor farmers in the Caribbean are not going to be impressed by what they might see as a rather technocratic approach. They are bewildered and frightened by what they see as a relentless onslaught on the banana regime by the United States. If they are to grow another crop, as has been suggested, then - as you have said yourself - they are likely to resort to growing drugs.
Therefore the principles here are very important indeed. As you rightly said earlier, sabre-rattling by the United States and the threat of sanctions against the European Union is something that we deeply regret, especially since there is no threat whatsoever to the United States' own economy.
There are a number of questions that we need to ask. Is this dispute likely to be about rules; is it about hormones in beef; is it about the Democrats' pay-off to Chiquita bananas? The Caribbean bananas which enter the European market account for only 7 % of the EU's market in bananas and also, if this wrangle is about Article 13 of WTO, there are other North-South arrangements that do not sit that happily with Article 13. I hope the United States recognises that as well.
This is, I hope, the very last act in this banana drama that has been going on for many years. It needs to be shown up for what it is. I hope that the European Union will stand firm and say that there is a moral issue here, an issue of obligation and responsibility to our traditional suppliers in the Caribbean in particular. I hope that you will continue to make the case for real justice for the people of the Caribbean in the face of what is perceived by all of us here as the completely unacceptable attitude of the United States towards the European Union.

Valdivielso de Cué
Mr President, I have no intention of repeating the general statements made by previous speakers on the quality of the report. It covers all the key issues and I therefore congratulate Mrs Mann. Nevertheless, we regret the lack of mechanisms to prevent the United States from taking unilateral action in contravention of World Trade Organisation arrangements and to the detriment of bilateral relations. I do not want to talk about bananas. What had to be said has already been said by the other Members.
No mechanisms are included to provide for concerted action in connection with third countries, such as China or Japan. Issues as important as the protection of databases, the protection of patents and intellectual property were omitted from the negotiations. I regret too that the liberalisation of international telecommunications, product responsibility, the harmonisation of customs issues and the standardisation and simplification of information required for business were not dealt with either.

Amadeo
Mr President, we are convinced that transatlantic relations can be seen as an opportunity for Europe, especially in respect of difficulties still outstanding. Some of these problems are sizeable - we need only think of the barriers to trade and investment. Above all else, rules and regulations are what constitute the greatest difficulty and have given rise to a number of bilateral conflicts over the years.
All things considered, the new transatlantic marketplace could serve to safeguard consumer interests, given the stated aim of eliminating by 2010 all existing tariffs on industrial goods, thanks to new agreements negotiated on the basis of mutual recognition, the so-called MRAs. These, in our opinion, should reproduce the levels of consumer protection, safeguards and environmental safety currently guaranteed by EU rules within the Community.

Porto
Mr President, first of all I should like to say that I will always be the first to defend close links with the United States: we are talking about the world's two main blocs and they both have special responsibilities. We believe that, apart from the bilateral links uniting us, we should endeavour to strengthen multilateral arrangements, provided that we bear in mind the interests of smaller countries as well as the United States and Europe.
Of course, we must refer to the backward step taken over the banana issue. A mountain has been made out of a molehill. As far as bananas are concerned, what is at stake are bananas from Madeira - as a Portuguese Member I have to speak about them - but also from the Canary Islands and certain ACP countries. What is at stake are potential social problems for people with no alternative way of earning a living. Unless we lend a little support to banana production, I do not see what alternatives we might offer.
I would like to add that this is not a typical issue and I hope that no others crop up. This is also feared, as it happens, by the rapporteur, Mrs Erika Mann, whom I congratulate. I hope that this problem has been sorted out and that cooperation can be strengthened between the United States and Europe. I think that would benefit not just the two blocs but also the rest of the world.

Elles
I would like to support the excellent report of the rapporteur, Mrs Mann, and the courageous proposal put forward by our Commissioner here today, for three reasons.
Firstly, the TEP is going to give us a possibility of finding a framework to discuss multilateral issues with the United States. All those involved in multilateral negotiations know that, unless the European Union and the United States are prepared effectively, negotiations such as the World Trade groundwork which we expect in the millennium round will not happen. That is the first reason.
Secondly, in terms of a bilateral relationship, looking into the longer term, we are wanting to see a broader partnership. It is not US colonialization of European decisions, it is a partnership based on broader economic aspects which will include monetary affairs and some security aspects when the Amsterdam Treaty is signed.
The last point is that this will not operate, as our rapporteur has said, unless we have parliamentary dialogue - a legislative dialogue - because the problems which we have had on Cuba, the problems which we have on bananas, come from the US Congress and therefore you need a parliamentary dialogue based on equality, balance and substance to be able to make this important initiative succeed.

Salafranca Sánchez-Neyra
Mr President, I too wish to congratulate Mrs Mann on her full and thorough report. I would also like to thank Commissioner Brittan for the clarity and determination he showed in his statement last week and in what he said to the House this afternoon.
Unfortunately, our friends and partners in the United States only understand firm and aggressive language. It really is remarkable that last week, as the Council of the European Union was adopting the action plan paving the way for the Transatlantic Economic Partnership, our friends in the United States should spring a whole range of unilateral measures on us, in blatant disregard of the rules of the game and in clear violation of the obligations entered into within the World Trade Organisation.
Unfortunately too, experience has shown that the United States only takes the European Union seriously when we take clear, strong and determined action. This is the case, for instance, when the European Union asks the World Trade Organisation to set up a panel to deal with extraterritorial legislation, as was the case for the Helms-Burton Act. However, we are not respected if we allow matters to run on.
I believe that, as Mr Brittan put it so well this afternoon, the United States, flaunting its obvious irresponsibility, has placed itself above the law. It has replaced, or rather, hopes to replace, the rule of law with the rule of force.
I feel that the European Union as a whole has displayed abundant prudence, caution and goodwill when handling transatlantic relations. Therefore, Mr President, I believe the time has come for the Commission to respond in kind now that we have the ability to suspend the negotiations until reason and good sense prevail.

President
Thank you, Mr Salafranca.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Question Time (Commission)
President
The next item is questions to the Commission (B4-0705/98).

President
Question No 42 by Ursula Stenzel (H-1048/98)
Subject: ECB
European Monetary Union, in which a politically independent central bank council committed to the objective of monetary stability within the euro area will determine future policy, will be launched on 1 January 1999.
The statements by the new Federal German Government that monetary policy should make a greater contribution to overall economic development and should also seek to generate growth and jobs are a cause for concern, since it is precisely the restriction of its remit to monetary policy which justifies the independence of the ECB.
What view does the Commission take of these recent developments? In this connection, how should the Commission proposal that a stricter distinction be drawn between consumer and investment spending when assessing excessive national budget deficits be interpreted? I give the floor to Mr Flynn to answer Mrs Stenzel's question.

Flynn
In its capacity as guardian of the Treaties, the Commission would point out that Article 107 of the Treaty guarantees the independence of the ECB and of the national central banks when carrying out the tasks and duties conferred upon them by the Treaty and by the Statute of the ESCB. The Commission would recall here that the primary objective of the ESCB is to maintain price stability. Article 105 of the Treaty adds that without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community as laid down in Article 2.
These objectives are concerned, among other things, with promoting sustainable and non-inflationary growth and a high level of employment and social protection. There is no need for the Commission to present a new proposal. In accordance with the Treaty it has always paid attention to the specific share of investment expenditure in general government deficits, as witness its recommendation of 25 March 1998 concerning qualification of the Member States for participation in the third stage of economic and monetary union.
The Commission would, however, point out that sustainable growth is not possible without a reduction in public deficits, that the reduction in public deficits is not incompatible with a sustained level of investment and that the golden rule - namely, that the public deficit should be smaller than the volume of public investment - is a principle of sound fiscal conduct. In this connection, I can inform you that the Commission is preparing a report on the economic, fiscal and investment strategy for the Vienna European Council which will follow the Pörtschach European Council.

Posselt
Mr President, Commissioner, I would simply like to ask whether you have heard about the statement made by Mr Strauss-Kahn and Mr Lafontaine at the latest German-French summit, which raised the issue of suspending the Stability Pact in a few years. What is the Commission's opinion on this issue, and what indeed is its view of the independence of the European Central Bank? Are additional security measures necessary here?

Flynn
I do not have the exact details concerning the matter you referred to. Perhaps it might be better if my colleague, Commissioner de Silguy, answered the matter in writing. I would just say that the Commission would be happy with a debate between the ECB and finance ministers. That is quite understandable because independence does not necessarily mean isolation. I will be quite happy to convey your point of view to Commissioner de Silguy.

President
Question No 43 by Robert Evans (H-1023/98)
Subject: Reciprocity for pensioners' concessions in the EU
Would the Commission agree that pensioners travelling to other European Union countries should expect to be able to benefit from concessions, with particular regard to travel and cultural activities from which pensioners who are nationals of the state they are visiting are able to benefit from?
One of my constituents recently visited Italy. On seeing that entry to a monument was free for pensioners, he asked for that concession. He was shocked to hear from the staff that the concession applied only to Italian pensioners.
A recognised card for the over-sixties would help to avoid this problem and ensure that pensioners received the concessions to which they are entitled across the EU.
Could the Commission inform me if there has been any progress following the adoption of the Commission Recommendation of 10 May 1989 (89/350/EEC ) on this subject? I give the floor to Mr Flynn to answer Mr Evans' question.

Flynn
The Commission agrees with the honourable Member's view that it is desirable that pensioners travelling to other European Union countres should be facilitated in claiming discretionary concessions available to pensioners from the state which they are visiting. Regrettably, the Commission knows that in practice such discretionary concessions are not always freely accessible to nationals from the state other than the one which is offering the concessions.
The Court of Justice has examined several complaints of discrimination against nationals of other Member States as recipients of services, for example, to reduced or free entry to museums and other public buildings and reductions in transport fares. The Court, basing itself on Article 6 concerning discrimination on grounds of nationality and Article 59 on freedom to provide services, has consistently condemned discriminatory practices.
The Commission will continue to be vigilant in upholding respect for basic principles of Community law and will, wherever appropriate, have recourse to the Court of Justice. Furthermore, for almost ten years, the Commission has been negotiating with Member States on the introduction of a European Union-wide over-60s card as called for in the Commission's recommendation of 10 May 1989.
The implementation of this recommendation has been hindered by practical difficulties in a number of Member States. In order to take the matter forward, the Commission supported a first feasibility study on this issue during the European Year for Older People in 1993. The Commission launched a second feasibility study in 1995 aimed at updating and deepening the first one. The final report on this study has been received and copies have been given to the members of the European Parliament Intergroup on Ageing. The report has also been presented to the NGO members of the liaison group for older people. The conclusions and recommendations of the report still have to be examined and discussed further with the representatives of the Member State governments.

Evans
While there is some cause for optimism in the Commissioner's response, there are also some worries. This is an important question about building a Europe for the people and when people are refused reductions because they are not residents of a particular Member State this is very damaging to the whole image of Europe. The Commissioner referred to the Commission recommendation of ten years ago but it is taking a long time. This is something that ought to be supported and which we should all want to come to fruition.
I am also looking at a similar venture, namely a European youth card. As there is nothing to suggest that in ten years' time we will not still be looking at the question of an over-60s card, can the Commissioner give me any cause for optimism on a European students' card? At the moment we seem to be backtracking as much as moving forward.

Flynn
Mr Evans, I would not be too optimistic. I certainly would not hold my breath on this issue. I have been trying for a number of years, without much success. There are two main obstacles to a card for older people. The nature, the form and the administration vary so much between Member States. The whole question of subsidiarity and proportionality raises its head every time I try to move the question forward.
Some Member States operate a card system, others do not. The conditions vary: in some Member States age alone is sufficient, in others age is combined with income or even residence. The age of application varies from 58 to 67. Many Member States have decentralised and localised administration and services for application.
The second problem is that the picture is constantly changing. There is a lot of commercialisation and privatisation, particularly in transport, and a lot of the responsibility is in the hands of private and semi-public agencies.
So it has not gone well and I am finding it extremely difficult to reach a point where we can coordinate the whole system. I would like to think it could happen but, as you say, it has proved impossible so far and I do not see any great hope for the immediate future.

Truscott
I wish to thank the Commissioner for his reply to the question by Mr Evans. I certainly hope the Commission will consider bringing forward detailed proposals for a card for the over-60s in the foreseeable future, even given the difficulties.
Would the Commissioner like to take this opportunity to condemn the ageism which is widespread throughout the European Union and is still a major problem?

Flynn
I just wish to say that the Commission has already announced its intention in the 1998 to 2000 social action programme to launch a debate on the use of the future Article 13. Article 13 provides for appropriate action to combat discrimination based on sex, racial and ethnic origin, religion, belief, disability, age and sexual orientation. So we are examining the possibility of legislation as soon as the Treaty is ratified.
I have just announced our intention under the programme to present a communication on the issues you have referred to as part of our contribution to next year's United Nations Year. We will have an opportunity to discuss the matter further at that time.

White
Mr Flynn, if you hold your breath for too long you will do yourself an injury and then you might need the health card. I do not know whether you remember that some time ago we, as a Parliament, led an initiative and I presented you with a mock-up of that health card which you assured me you would strive for. You told me that in the Republic of Ireland the introduction of the health card was being considered. Since it was mentioned by my colleague, Mr Evans, what progress has been made on the introduction of a health card? I remind you that one of the possibilities I suggested to you was that rather than go for a high-tech version we might just go for something which was a very posh E111.

Flynn
You know that I support the introduction of this card. I have spent a lot of time trying to get it organised. It has been extremely difficult because of the difficulties I have outlined to you, but we might be able to make some progress. Perhaps more action could be taken at European level to help improve the flow of information. It might also be helpful to have an update on the concession schemes that are available and try and promote the identification and exchange of best practice.
The Commission could consider supporting the development of a website on concession schemes available to older people in the Union. I do not whether you think that would be helpful but it might be a first step in breaking the log-jam.

President
Question No 44 by Bernie Malone (H-0925/98)
Subject: Cancellation of 1999 Year Against Violence Against Women
I understand that the 1999 Year Against Violence Against Women has been cancelled at the behest of the Member States.
Given that this House itself called for the declaration of 1999 as the Year Against Violence Against Women in a Resolution in 1997, can the Commissioner explain why the Commission was insufficiently prepared financially and organisationally for it to go ahead? I should like to welcome Mrs Wulf-Mathies and give her the floor to answer Mr Malone's question.

Wulf-Mathies
Mr President, Mrs Malone, Parliament was late in expressing its wish to declare a Year Against Violence Against Women, with the result that the Commission no longer had time to present a formal proposal, ensure appropriate finance and plan the activities carefully. However, in an effort to take Parliament's wishes into account, the Commission proposed a campaign on the subject of violence against women. Measures for this were begun following a preparatory meeting under the British Presidency in June 1998.
The first conference will take place from 1 to 4 December on the role of the police in fighting violence against women, in particular against immigrants. This event is partly funded by the DAPHNE programme. Another important conference, which the Commission is organising with the German Presidency, will take place next spring. One feature of the conference will be the presentation of an analysis of relevant statistics from the Member States. This report is currently being drawn up jointly by experts from all Member States and the European Women's Lobby, and will also be financed by the DAPHNE programme.
The campaign's closing conference will be organised in cooperation with the Finnish Presidency. The Commission is also planning an exhibition and several seminars, and will draw up and publish information literature that is to be used for prevention in particular. The Member States are being invited to organise events in their own countries that should be aimed at the general public and the non-governmental organisations. The Commission has also proposed launching a Eurobarometer survey on this subject in the Member States. In addition, a report is to be drawn up for the closing conference to summarise all the measures that have been taken or introduced in the Member States during the campaign. We would very much welcome the participation of the applicant countries in this campaign.
Against this I must say, however, that the implementation, type and scale of the measures will depend on the level of financial and staff resources made available by you for 1999. The Commission will therefore not be able to make a final decision on the campaign until the general budget has been passed in December 1998.

Malone
I thank the Commissioner for her reply.
I do not normally put down questions because I do not like to waste time, but I feel very strongly about this issue. I am disappointed that we have not been able to make further progress. I wonder if the fact that you did not have enough resources at your disposal has anything to do with the report that was published yesterday by the Court of Auditors, which says that a lot of work is being impeded by people being on short-term contracts. I hope that is not the case here.
Your plans are very laudable and the campaign and the points you have made are very good. But we must also take the campaign to the schools. Educational input is very important.

Wulf-Mathies
Mr President, firstly, the problem of late application was due solely to the fact that we have certain deadlines to observe if the Council is to make appropriate decisions, and for this we were simply too late. But this has nothing to do with employment contracts in the Commission. You are familiar with the Commission communication 'on a medium-term Community action programme on measures providing a Community-wide support to Member States action relating to violence against children, young persons and women'. This is a programme that is to run from 2000 to 2004, and it makes sense to accept this proposal for schools too. You know that part of this communication and of the action programme is raising public awareness. I agree with you that raising this awareness must begin as early as possible so that the public develop information and attitudes that make them reject violence against women and allow joint measures to be organised.

President
Question No 45 by Gerard Collins (H-1029/98)
Subject: EU support for computer purchases for schools
At Shanagolden Primary School in Limerick, in Ireland, a new computer room with eight computers has just been opened which will enable teachers to work with pupils, including remedial pupils, in furthering their education through the use of new technology. This only came about as a result of various fund-raising activities and the offer of an interest-free loan.
Can the Commission outline what support, if any, is available at EU level to support the purchase of computers and/or the fitting out of computer rooms in primary and secondary schools. I give the floor to Mrs Wulf-Mathies to answer Mr Collins' question.

Wulf-Mathies
Mr President, Mr Collins, the Commission is heavily involved in improving access for European schools to new information technologies. The actions that have already begun or are currently being introduced include the following: firstly, the Action Plan 'Learning in the information society', the aims of which include the networking of European schools, training for teachers and the development of strategies for developing multimedia content.
Secondly, it includes the Educational Multimedia Task Force, which brings together the educational activities of eight different Community programmes. In this context, a joint call for proposals on the subject of educational multimedia was published in December 1996, in which in particular Socrates, Leonardo da Vinci, TEN and three research programmes took part. One example of the 46 projects selected is the 'European Schoolnet' project, which involves the education ministries of the Member States. The Socrates programme is aimed at European cooperation in education and promotes cooperation in these areas, in particular within the context of open and distance learning. The proposal for Socrates II provides for a new action that is to promote the critical and responsible use of information technologies in schools and colleges.
Finally, there are numerous research and development actions under various research programmes, which serve to develop an infrastructure and the resources to use it, to create new tools such as simulations or virtual classrooms and to promote open and distance learning.
In the Community, provision of equipment for schools, in particular computers, is financed in accordance with the principle of subsidiarity from the budgets of the Member States or local authorities. Those areas which are eligible for aid from the Structural Funds receive additional funding from them, some of which has helped to finance suitable computer equipment for vocational training centres and further education institutions, including in Ireland.

President
Thank you, Mrs Wulf-Mathies. Mr Collins is satisfied with your reply.
Question No 46 by Marie-Paule Kestelijn-Sierens (H-0968/98)
Subject: Authorisation of the Drogenbos incinerator in contravention of European legislation
On 21 November 1997 the Flemish Ministry of the Environment authorised the construction of an incinerator at Drogenbos (Flemish Brabant). The construction of this incinerator contravenes, inter alia, the proximity principle, the precautionary principle, Directive 80/779/EEC on air quality limit values and guide values for sulphur dioxide and suspended particulates and Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment. Does the Commission consider the complaint lodged by the people living nearby to be justified, and if so, what steps will it take? I give the floor to Mrs Wulf-Mathies to answer Mrs Kestelijn-Sierens's question.

Wulf-Mathies
Mr President, the Commission is currently investigating several complaints relating to the Drogenbos incinerator which this question refers to. In view of these complaints, the Commission asked the Belgian Government for information at the end of August, and it is currently examining the reply from the relevant Belgian authorities. If the current investigation confirms that Community environmental law is being violated, the Commission will decide whether infringement proceedings should be instituted in accordance with Article 169.

Kestelijn-Sierens
I am grateful to the Commissioner for her reply, but I should specifically like to know when we can expect a decision from the Commission. This is an extremely important problem which needs to be addressed with the utmost urgency, since it concerns an incinerator being built in a densely populated area of one and a half million people where the maximum limits for particulates and cadmium have already been reached. I would like to press the Commission to investigate this matter with the utmost urgency. Perhaps Mrs Wulf-Mathies could tell us how long it will take for the Commission to reach a decision?

Wulf-Mathies
Mrs Kestelijn-Sierens, we are aware that this is a very sensitive issue. This is why we asked the Belgian Government for information, which we received in October. Please do not expect me to be able to tell you now how long the investigation will take. However, we are aware that this issue is a source of concern for the people from that area and they are therefore entitled to receive a reply from us as soon as possible to confirm whether environmental regulations have been violated.

President
Question No 47 by John McCartin (H-0945/98)
Subject: Local partnership companies in Ireland
Is the Commission aware of the concern of Partnership companies in Ireland (receiving funding under the Operational Programme for Local Urban and Rural Development under the sub-programme for the 'Integrated development of designated disadvantaged and other areas') that the programme will be cut short when it has only just got up and running (operational only in 1996)?
Will the Commission make a commitment, given the importance of countering disadvantage through such local community effort, to include such a programme in the new Structural Funds regulations? I give the floor to Mrs Wulf-Mathies to answer Mr McCartin's question.

Wulf-Mathies
Mr President, as we see it, the concern of partnership companies mentioned by Mr McCartin is unfounded. It is not the Commission's intention either to introduce reprogramming or to reduce funding. On the contrary, the Commission is convinced, on the strength of the information provided by the monitoring committee for the Operational Programme for Local Urban and Rural Development, that partnership companies will succeed by the end of 1999 in dividing up between the projects all the programme funds available under the TAI Programme II. This is particularly important given that it will only be possible to fully disburse the funds allocated to the individual projects in the following year.
The Commission would be in favour of the national authorities including, in their regional development plan, proposals on ways of promoting integrated development when making plans for the next programming period. It acknowledges the progress that was achieved within the current programme in promoting local socio-economic development and in compensating for disadvantages, and is open to proposals on ways of promoting local development and, in particular, combating social exclusion in future as well.

McCartin
I want to thank the Commissioner for her very full reply. One of my concerns is not actually about this year or next year but about the new programme which starts in the year 2000. This did not commence with the present structural funds programme because there was a delay in getting it off the ground, particularly in Ireland.
At the moment people are just learning what it is about, getting their programme off the ground, and now they are concerned that it might not continue after the end of 1999. Will you be making proposals for it to be continued into the next programme so that they have another six years?

Wulf-Mathies
Mr President, I understand the concern. Firstly, it is simply a question of carrying out all appropriations for commitments by the end of 1999, and this means that measures can also still be financed in the year 2000.
Secondly, the Commission is generally interested in promoting local partnerships in the next programming period as well. The only thing is that, without knowing the Irish Government's programme proposals, it would be going too far at this stage to say that they will also be part of future programmes. However, since we attach great importance, in the new proposals for structural reform, to local initiatives and, in particular, to local employment initiatives, I am assuming that continuing to promote similar measures in future as part of a programme will be an important concern for all of us.

President
Question No 48 by Konstantinos Hatzidakis (H-0973/98)
Subject: Defective work in implementation of Greek Community Support Framework
According to information which has come to light in Greece, a great many of the projects jointly funded from the Community budget under the Second Community Support Framework for Greece, particularly road-building, have been carried out in a slipshod manner and, in general, do not meet Community specifications.
This information came to light following the publication of a report by the expert quality control consultant appointed by the Greek Government. The report notes that for all categories of road-building projects subjected to checks, between 26 % and 95 % of the work was defective. This is a particularly serious matter both in terms of the high percentage of defective work and the fact that such work is largely responsible for the high number of accidents and deaths on the roads in Greece.
Given that these projects are carried out with Community funding, will the Commission say whether it considers such a high percentage of defects to be normal in comparison with the situation in other Member States? Where does responsibility for this situation lie and what does the Commission intend to do to put an end to this unacceptable state of affairs? I give the floor to Mrs Wulf-Mathies to answer Mr Hatzidakis's question.

Wulf-Mathies
Mr President, Mr Hatzidakis, according to existing Community law, responsibility for carrying out projects cofinanced by the Structural Funds lies exclusively with the Member States. In other words, according to existing law, the Member States must guarantee the required quality. Monitoring of these projects is therefore subject to national legislation. When the Community Support Framework for Greece was approved for 1994 to 1999, the Greek Government assured the Commission that it would take measures to put right the serious deficiencies occurring in the past in connection with the execution of public works. This was particularly important for the Commission given the significant increase in the number of new projects.
One of the measures included the appointment of an independent special adviser for quality control for projects cofinanced by the Community. In fact, the first quarterly report of this body known as ESPEL establishes that there is still a problem of quality. However, despite spot checks carried out on the projects, it is still not possible to submit applications for certain projects. Therefore, the Joint Permanent Committee, whose members also include representatives of the Commission, made the proposal, accepted by the Greek authorities, to have the projects monitored systematically and thoroughly by a quality control officer from 1 July 1998, and no longer simply by spot checks.
The results of this second ESPEL inspection are to be presented in two days, that is, on 19 November, at the next meeting of the Community Support Framework Audit Board. Only then will it be possible to identify the quality defects for each specific project, to determine who is responsible and, above all, to proceed at the same time according to three groupings. The first of these involves projects with secondary defects that are to be put right by the companies, and the second involves projects with considerable defects that do not affect the safety of transport, for instance, but result in high maintenance costs; these additional costs are to be settled by means of payments to the companies concerned. The third category is for projects with serious defects that cannot be repaired, and the companies must put these right at their own expense.
The Commission has no information that would allow it to make a comparative assessment of quality problems in the individual Member States. However, the Commission is in favour of increasing independent quality control in Greece, and it is in close contact with the Greek authorities. It shall examine the results of the second ESPEL inspection and shall follow closely further developments to repair project defects with those responsible.

Hatzidakis
Mr President, I do not know what to begin with because the subject is far too big to be covered in just one minute. Commissioner, whilst you know that all of us MEPs stand up for our regions and for the correct implementation of the Second Community Support Framework, trying to get more money for the forthcoming Santer package, there is unfair treatment here and we denounce that. It is a scandal. I have the published figures for the second quarter from the report by the Special Quality Control Council, which show that projects not conforming to specifications are found in a very high proportion: concrete materials of poor quality 77 %, substrate material of poor quality 91 %, foundation materials of poor quality 95 %, and so on. It is a scandal, Commissioner, and frankly I would have expected a clearer answer. To a written question I submitted to you a while ago about the Patras-Athens-Thessaloniki project, you answered that the work had not been put right even though you had asked for that to be done, and that the delay was worrying. So I want you to tell me what action you intend to take with the Greek Government, and tell me also, since you say you have comparative figures, what is happening elsewhere. Are there such major problems of the order of 95 % in other countries? Sincerely, I ask you for a more specific answer because this is an issue of the first priority for my country.

Wulf-Mathies
Mr President, Mr Hatzidakis, I do not have any figures from other Member States, but of course you know that for years we have been busy hurrying along improvements to the tendering procedures for public procurement. And you also know that the reform of public procurement has necessitated legislative changes that must now also be brought through Parliament by a democratic procedure. Therefore, all of this has lasted much longer than what was acceptable to us as well. However, we are now well on the way to obtaining really secure data. It would be good if, together - you given your responsibility as a Member of Parliament, and we given our responsibility as the Commission -, we now waited for the meeting of the monitoring committee where we could assess the last relevant inspection.

Trakatellis
Mr President, Commissioner, I would first like to hear from you which exactly are the projects we are discussing, who are the contractors, and who are those responsible in the various services of the Greek State for monitoring these projects. It is impossible for us to find out specific details. Secondly, please tell me what procedures have been set in motion for penal sanctions on the grounds of negligence, because in a written answer you gave me, you said that penalties would be imposed but I have heard of no such procedure taking place. Do you know anything about that? Thirdly, if those instances of negligence, which are very major, happen to be real, will the return of the funds be demanded? In other words, is it possible that my country will have to return money to the European Union and the Commission?

Wulf-Mathies
Mr President, I should gladly like to try that. I have just pointed out that we have now started a very specific inspection, the results of which are to be discussed on 19 November in the monitoring committee. Please appreciate that I do not wish to prejudge the meeting of the monitoring committee here today. However, I have made it clear what the consequences are if defects can definitely be proved. First and foremost, these are not things which the Commission demands from companies, but which the Member State is obliged to demand, because responsibility for the inspection lies with the Member State. We cannot govern within the Member State, nor do we wish to.
There is not only the principle of subsidiarity, but also the need to separate the powers. However, it is clear that the necessary consequences will be discussed in the joint committees, and this is the case for both the monitoring committee, in which the Commission is also represented, and for this Joint Committee, which was set up because we realised that the system of pubic procurement is not working adequately. Due to our discussion in Parliament today, I will also gladly instruct our representative in the monitoring committee not only to be very careful when finding out which problems have actually occurred, but also to make sure that they result in appropriate financial consequences for companies, and naturally consequences under criminal law, where this proves necessary or is indicated. But I have to know the facts first before I start quoting criminal law here.
In this respect, I now consider this discussion to be a further impetus for the representatives of the Commission to take appropriate action at the meeting of the monitoring committee on 19 November.

President
Question No 49 by Glenys Kinnock (H-0980/98)
Subject: Timetable for Structural Fund negotiations
Will the Commission give a breakdown of the timetable for the remaining negotiations concerning the Structural Fund Regulations and the likely period of programme negotiations between the Commission and Member States for Objective 1 and Objective 2? I give the floor to Mrs Wulf-Mathies to answer Mrs Kinnock's question.

Wulf-Mathies
Mr President, I should like to point out to Mrs Kinnock that the timetable for the negotiations on structural intervention in the new programming period depends of course mainly on when the new Structural Fund Regulations are adopted. The Cardiff European Council has declared in this connection that political agreement on the whole package is to be achieved by March 1999 at the latest. The Commission was pleased to note that the German Government intends to keep to the Cardiff timetable during its Presidency of the Council, as stated by the German Chancellor, Mr Schröder, in his inaugural speech on 10 October. If this is the case, Parliament could agree, in particular, to the proposal for a Structural Fund Regulation with general terms and conditions by the end of the current legislative period. The regulation could then be finally adopted in May 1999.
According to the Commission's proposal, the list of Objective 1 areas is to be drawn up immediately after the regulation has been adopted. If we take into account the period of time that is necessary for drawing up the regional development plans and negotiating the Community support frameworks, the Commission's decisions on the distribution of the funds under Objective 1 could therefore be issued in the first quarter of the year 2000.
The list of eligible areas for Objective 2 could be adopted by the Commission in the third quarter of 1999, because the consultation process is longer in this area due to the flexibility that was introduced.
In the third quarter of the year 2000, the Commission could draw up the plans for the Objective 2 programme and issue the decisions on the distribution of the funds. However, this depends on the regulations being adopted by Parliament within the legislative period, that is, in May, and on all the follow-up decisions being promptly taken as well, because things have yet to be put in concrete terms thereafter. I think it is therefore truly important that Parliament and the Council give a clear signal that they also intend to keep to this timetable. I hope very much that Parliament at least will do this tomorrow at the first reading on the reform of the Structural Funds. You may rest assured that the Commission has the greatest interest in urging all those concerned to fulfil their specific obligations now, so that the areas which need our assistance do not suffer as a result of the present standstill in the decision-making process.

Kinnock, Glenys (PSE).
I thank the Commissioner for a very comprehensive answer. Could the Commissioner say what formula the Commission will be using to allocate Structural Fund resources to the Objective 1 areas for the period 2000 to 2006? In the interests of transparency - and far be it from me to suggest that the Commission would not always want to be transparent on these issues - would the Commission do us the favour of publishing the formula it intends to adopt?

Wulf-Mathies
I should gladly like to do that, because we do in fact agree on the principle of transparency. We should like to make it clear that the basis of calculation and the indicators are transparent and can be understood by everyone. We are therefore currently in the process of preparing a paper which will be made available to the Council and of course to the appropriate committee.

Lindqvist (ELDR).
I have two supplementary questions, the first of them on Objective 6 areas. I am keen to discover how much headway has been made with regard to Sweden and Finland. The matter was raised during the accession negotiations in 1992. The criteria agreed upon then still hold good, and I wonder whether they will apply unchanged with the transfer to Objective 1.
In the run-up to the elections to the European Parliament, it would also be useful to iron out any uncertainties as to what is going to happen in the various Member States with regard to the Structural Funds. Both MEPs and the public at large would benefit from clear information from the Commission on this point.

Wulf-Mathies
You know that, should there be delays, it is not because of the Commission, and I still hope that we will also manage through a joint effort to bring the discussions on the Structural Funds to a close in May, that is, before you begin the election campaign. The Commission already submitted its proposals in March this year, and in this respect, more concrete results could have been achieved had they been wanted. However, it is now up to the Council, and I hope that the Council will ultimately remain loyal to the decisions it made in Cardiff.
As far as Objective 6 is concerned, the principles applying to Finland and Sweden, which were laid down in their treaties of accession, are being retained; the one exception is a region in Finland which is going to be a genuine Objective 1 area, and which will be improved in accordance with this status. However, as was already said, this is the Commission's proposal, and the Council and Parliament still have to agree to it.

President
Question No 50 by Reinhard Rack (H-1011/98)
Subject: Future substance of the Community's Interreg initiative
The details of the future framework conditions for the new objectives 1, 2 and 3 are now beginning to emerge very clearly. The same is not true of the Community initiatives. In particular I should like to know what priorities the future Interreg initiative will contain, whether one of these will be the promotion of the regions at the EU's external borders - which the European Parliament has called for by a large majority - and what type of measures the Commission considers to be worth supporting in the context of promoting the regions bordering on the countries of Central and Eastern Europe? I give the floor to Mrs Wulf-Mathies to answer Mr Rack's question.

Wulf-Mathies
Mr President, I should like to point out to Mr Rack that the Commission has proposed continuing and reinforcing the Community's Interreg initiative. It believes that in future this should comprise three forms of cooperation.
Firstly, cooperation between neighbouring border regions with a view to developing integrated cross-border economic and social areas, as well as close cross-border cooperation in all other areas. Secondly, transnational cooperation between regional and national authorities with a view to promoting the economic integration of peripheral regions, and closer European integration, as well as deepening cooperation in regional development. Thirdly, interregional cooperation with a view to exchanging practical knowledge and proven methods, as well as promoting the transfer of know-how between the regions in question.
As you know, only measures within the Member States can be financed under Interreg. However, Interreg measures in the regions bordering on the applicant countries are linked to the PHARE cross-border measures, under which cross-border cooperation is financed in the PHARE countries. This includes a large number of measures in areas such as economic cooperation, environmental protection, infrastructure, policies for small and medium-sized enterprises, tourism, and so on.
The Commission has embarked upon reform of the PHARE-CBC regulation. The aim of this reform is to make cross-border cooperation more efficient, and to reinforce the cross-border nature of measures by means of common structures and common programmes. As regards the nature of the measures taken, the PHARE-CBC arrangements are to be brought into line with Interreg procedures in order to facilitate genuine cross-border cooperation and, if you so wish, to make the PHARE-CBC instrument a pre-accession Interreg instrument, so that together we can also learn how to cooperate across borders.

Rack
Commissioner, what you have just summarised in your answer shows that we have already come a very long way particularly on this important matter, and above all, that we have gone in the right direction for the regions, but also particularly for you as the Commissioner responsible. The question which is always asked in this connection, of course, is the question of how much. Interreg was previously one of 15 Community initiatives, and funds were therefore not abundant, at least in the previous support period. How does the situation look for the next support period, as far as you can tell?

Wulf-Mathies
Mr President, Mr Rack, the funds are being extended in any case because, as you know, Interreg will no longer be one of 13 initiatives in future, but one of three, according to the Commission's proposal. I can only ask Parliament to now also oppose a whittling away of Community initiatives. In addition, the Commission has always believed that Interreg should be the most important of these three, and this could mean that around 50 % of the funds for Community initiatives - that is, from the Community initiatives' total 5 % slice of the cake - should be given to Interreg.
However, this relies firstly on the Member States accepting the 5 % figure. This is still being disputed in the Council at present. Secondly, it requires that we resist all attempts to add further initiatives, because it is clear that the funds would then automatically have to be made available for more initiatives, with the result that Interreg would then also suffer financially.

President
Ladies and gentlemen, with that question by Mr Rack, we have come to the end of the time set aside for questions to Mrs Wulf-Mathies. I should like to thank her for attending.
Since we have no more time for questions to Mrs Wulf-Mathies, Question No 51 by Mr Schröder will receive a written answer.

President
Question No 52 by José Salafranca Sánchez-Neyra (H-0923/98)
Subject: US-Cuba relations
Is the Commission aware of the letter of 3 August sent by Mrs Albright, United States Secretary of State, to Mr Helms, Chairman of the US Senate's Foreign Affairs Committee, which was published by newspapers and other media?
Does the Commission intend to respond to this letter or take a stance on this matter?
Does the Commission consider that the interpretation placed on the terms of the declarations of 18 May by the US Secretary of State is in keeping with the spirit of the remarks made to the European Parliament's Committee on Foreign Affairs in May by the Commissioner responsible?
Does the Commission agree that this agreement represents an extraordinary reaffirmation of the principles underlying the Liberty Act? I should like to welcome Sir Leon and give him the floor to answer Mr Salafranca's question.

Brittan, Sir Leon
The Commission is aware of the letter from Secretary Albright to Senator Helms regarding the understanding on investment disciplines. We discussed it with Secretary Albright during the ministerial meeting in Vienna in September and the Commission informed her that there were several parts of the letter which the Commission would not have written. The Commission does not believe that it is desirable or useful to focus on differences in the presentation of the understanding on investment disciplines. The text of the understanding itself is detailed and explicit. It is a text which we will respect and implement when a title for waiver of the Helms-Burton Act is granted.

Salafranca Sánchez-Neyra
Commissioner, I would be grateful for further clarification on two points.
The day after the General Affairs Council at which the terms of the Transatlantic Summit's declaration on extraterritorial legislation, and more specifically, the Helms-Burton Act, were noted, you appeared before this Parliament's Committee on Foreign Affairs, Security and Defence Policy. On that occasion you stated that if the United States did not fulfill its part of the agreements - I refer in particular to the amendment of Title IV -, the agreements would lapse. Were this to prove the case, you did not rule out the possibility of again initiating proceedings in some way before the bodies of the World Trade Organisation.
The question I should like to put to you, Commissioner, is as follows: what, in the Commission's opinion, is a reasonable period of time to allow the United States to amend Title IV of the Act? Is President Clinton's term of office a reasonable period? Or what about the present Commission's term of office? Or perhaps the term of office of the next President of the United States is the appropriate period of time? What exactly do you have in mind?
Moving on to my second point, Commissioner, I would like you to confirm that you did have the opportunity of meeting with the Chairman of the Congressional Foreign Affairs Committee, Senator Gilman, and also with Congressman Bob Menéndez during your latest visit to Washington. Also, I would like you to state whether or not it is true that you - or the European Commission - were asked to put in writing your position with regard to the content of Mrs Albright's letter to Senator Helms. Finally, Commissioner, I would like to know whether you are in receipt of any communication from the United States' Congress on this matter, requesting the Commission to state its position on the content of the letter in question.

Brittan, Sir Leon.
The position is, that we will not carry out our part of the agreement if the United States does not carry out its part. We have not set a deadline. I had a number of meetings with Congressional leaders including Mr Gilman during a recent visit to the United States in which I put our position and the United States seemed more prepared to understand it. Above all, the reasons we have not concerned ourselves to set a deadline is that, for the moment, under the agreement, the United States is taking no action against any European company under either Title 3 or Title 4 and has indicated that not only does Total get a waiver agreement but anybody else who invests in Iran on comparable terms will similarly get a waiver. They are not implementing their law and we are not subject to it.

Newens
Although the Commissioner has told us, the United States, is not at present implementing the Helms-Burton law in certain respects, is he aware of the fact that many European businessmen have been intimidated into refusing to take the risk of incurring liability under Title 3 and Title 4 of the bill and, if they have had relations with the United States, have preferred to limit relations with Cuba or not have any at all.
In these circumstances, will there not come a time when, although no deadline has been set, further action will have to be taken to protect European businessmen from the effects of this situation.

Brittan, Sir Leon.
They seem to be pretty well protected by the understanding that we have because they are apparently piling into Cuba.

President
Question No 53 by Jonas Sjöstedt (H-0976/98)
Subject: Negotiations on the MAI
The OECD negotiations on the Multilateral Agreement on Investment (MAI) resumed some time ago. The draft agreement which was negotiated during the spring has been sharply criticised by the European Parliament and others. What changes does the Commission wish to see made to the agreement that was negotiated in spring? I give the floor to Sir Leon to answer Mr Sjöstedt's question.

Brittan, Sir Leon
This is, of course, a complicated question. Since it was tabled I made a Commission statement in the plenary session of 20 October. That remains an accurate statement of the current position, and I would refer to it.

Sjöstedt
I should like to extend sincere thanks to the Commission for that answer, which was brief and to the point. My question is no longer entirely relevant in any case. It was in fact put down before the good news reached us that the French Government was withdrawing from the MAI negotiations.
It now looks probable that new negotiations will be started up within the framework of the World Trade Organisation. I wonder if the Commission believes that the draft agreement produced at OECD level would constitute a sound basis for these WTO negotiations. Or would it be preferable to begin again from scratch, given that the situation has now changed?

Brittan, Sir Leon.
As I explained in the debate, the position is that we favoured an agreement in the OECD. The negotiations have not been terminated but, being frank about it, I indicated that the prospects were not good. If we had had an agreement in the OECD, or if we have one, that seems to me to be a good prelude to negotiation in the WTO, which has not yet been agreed but which we have argued in favour of. If there is no agreement in the OECD, I still think that the right thing to do is to commence negotiation in the WTO. So that is the course we would favour, irrespective of what happens in the OECD.

President
Question No 54 by Richard Howitt (H-1031/98)
Subject: The World Trade Organisation and the Multilateral Agreement on Investment
Given the recent actions of the French Government, will the European Commission now support the removal of talks on the Multilateral Agreement on Investment (MAI) from the OECD to the World Trade Organisation (WTO)? Will the Commissioner ensure that equal weight is given to responsibilities of investors under such an agreement as to rights vis-à-vis nation states? I give the floor to Sir Leon to answer Mr Howitt's question.

Brittan, Sir Leon
As I said in the debate I referred to in answer to the previous question, I have always believed that the WTO is the best place in the long term to create a predictable framework of investment rules. I am glad we have made some progress in starting down that road at the WTO ministerial meeting in Singapore. It is important that at the meeting next autumn we should continue to press the case for negotiation and ultimate agreement on investment in the WTO. Meanwhile, there have been the negotiations on the MAI in the framework of the OECD. We have participated in those negotiations but the chances of bringing them to a successful conclusion do not look promising at the moment. So we need to consider what would be the best way forward now in order to deal with the situation and get negotiations going in the WTO in any event.

Howitt
Could I ask the President-in-Office to comment on the second part of my question, in particular the need to incorporate binding regulatory standards, especially in the areas of labour, the environment, investment incentives and restrictive business practices in any new multilateral agreement on investment, alongside rights for investors. I am very pleased that the British Government, as reported on 13 November in the Guardian , has said that Ministers have decided the way forward is to include labour standards and environmental concerns from the outset. I hope that the Commission will take that view in its relations with the WTO.
I should also like to ask the Commissioner if he will ensure that as far as the WTO is concerned, there is full consultation with civil society and NGOs and that labour issues are taken into account?

Brittan, Sir Leon.
There has not been an agreement that there should be a negotiation in the WTO. I very much hope that we will get that but there is strong resistance from a number of developing countries. So it would be altogether premature to talk about the nature of our negotiating mandate for a negotiation that does not currently exist. The short answer is that there is none at the moment but there will have to be one in due course. As for consultation with civil society, that is enormously important. The Commission organised a very large meeting with representatives from a very large number of NGOs, as well as others concerned, yesterday in Brussels on the whole range of WTO negotiations.

President
As Mr Barton is not present, Question No 55 lapses.
Question No 56 by David Bowe (H-1034/98)
Subject: Steel
What action has the Commission taken in response to the recent court case in the Ohio State Court in the USA which was directly aimed at preventing foreign steel from entering that particular state, an action that appears to be in contravention of US and international law? I give the floor to Sir Leon to answer Mr Bowe's question.

Brittan, Sir Leon
On 27 October an Ohio- based steel producer filed an action in the Ohio State Court alleging unfair competition from low-priced steel imports into the state. The action was meant to seek restrictions on imports into the state by a number of trading companies as well as Russian and Japanese steel producers. This is a highly unusual move by the US steel industry which had already begun to lodge a serious of anti-dumping and anti-subsidy complaints at the federal level in response to the crisis in South-East Asia and Russia.
On 17 November 1998, however, the Ohio State Court where the case was pending dismissed the action brought by the Ohio corporation. Apparently the judge decided that the plaintiff was not entitled to relief under state law. The Commission is monitoring the further progress of the case as there may well be an attempt to seek relief before a federal court.

Bowe
I thank the Commissioner for that reply which I found very interesting. I would also bring to his attention some more recent events. In the steel industry journal The Metal Bulletin of 12 November it said that US steel company executives and trade union representatives met a few days ago with President Clinton in order to push their case for exceptional protection against steel imports. While the report goes on to say that no decision has yet been taken, the companies are pressing for a change to the injury standard of the so-called 201 market safeguard rule which would make it easier for the Americans to shut down their market to imports but stay within WTO rules.
If the American Government gives in to this type of pressure, what is the European Union - and the Commission in particular - going to do to protect its steel companies?

Brittan, Sir Leon.
It would be unwise to speculate on what we would do in a certain speculative event but I can tell you one thing. We would certainly wish to ensure that the United States acted in accordance with WTO rules. As far as Europe is concerned, EUROFER has been to see me and has indicated that it will be putting forward a complaint alleging that there has been dumping and possibly other unlawful trading activities in the steel industry. If we receive that complaint we will obviously give it very serious attention. But the proper procedure would have to be gone through and I could not begin to anticipate what the outcome would be.

President
Question No 57 by Graham Watson (H-1035/98)
Subject: China-Taiwan relations
What discussions has the Commission had recently with the Chinese authorities concerning its relations with Taiwan? I give the floor to Sir Leon to answer Mr Watson's question.

Brittan, Sir Leon
The latest contact that we had with the Chinese on the subject of Taiwan was in July 1998 when the Commission's Deputy Director-General in DG I, Mr Gérard Depayre, explained to an envoy from the Chinese mission to the EU the content and purpose of our bilateral WTO market access agreement which I signed - the record of the negotiations - with the Taiwanese Minister Wang in Brussels on 23 July. Since then there has been no official contact with the Chinese authorities on the question of Taiwan.
We do not recognise Taiwan as a separate sovereign nation but rather as a separate customs territory with which we have had increasingly intense economic and commercial links. We attach great importance to our economic and commercial links with both China and Taiwan so we must be available to discuss these relations as and when necessary.

Watson
Please allow me to declare an interest. I went with a group of other Members of this House from different countries and different political groups to Taiwan last week at the invitation of their Ministry of Foreign Affairs to observe their election campaign. I led a similar group there in 1995. Taiwan is a free and open democracy. They have made tremendous strides towards democracy. It is the world's 14th largest trading nation. As a result of being a free and open democracy with a transparent economy they have come well out of the financial turmoil.
Would you not agree, Commissioner, that Taiwan is a beacon for democracy in the region and that the isolation of Taiwan is increasingly anomalous? Will the Commission support Taiwan's early entry into the WTO and greater links between the European Union and the Republic of China?

Brittan, Sir Leon.
Mr Watson knows the official position of the Commission and indeed Member States with regard to Taiwan. Our links with Taiwan are very strong. They are economic and commercial though. In those circumstances I do not think it would be appropriate for me to comment on political developments in Taiwan.
But I would say, with regard to the other points that have been made, we are negotiating in good faith and rather successfully with Taiwan on its admission to the WTO. We have made very good progress on the market access question. There are other aspects that still have to be considered. We will negotiate with Taiwan on those other aspects without delay and seek to reach a mutually acceptable agreement.
More generally, as far as the economic and commercial links with Taiwan are concerned, I entirely agree with what has been said. It is a territory that has been extremely successful economically, even in the context of the current problems in Asia. There is enormous further potential for the development of economic and commercial links with the European Union.

President
Question No 58 by Paul Rübig (H-0924/98)
Subject: Directives on the recognition of diplomas and discrimination against consultant engineering firms
The first and second directives on the recognition of diplomas govern entitlement to exercise a profession, or rather the evidence entitling a person to pursue a regulated profession in an EU Member State. The term 'diploma', however, includes not only school leaving certificates and university degree certificates but also a number of training and examination certificates such as, for example, those required in Austria as proof of qualifications for a licence to exercise a regulated profession.
However, some Member States, Italy for instance, interpret the directive very restrictively, only recognising, for the purposes of granting licences to consultant engineering firms, degrees from universities and higher education establishments. This practice has even led to the prosecution of Austrian citizens for illegal exercise of the profession of engineer. How does the Commission intend to react to this possible discrimination against consultant engineering firms with regard to the exercise of their profession within the internal market? I should like to welcome Mr Monti and give him the floor to answer Mr Rübig's question.

Monti
As the honourable Member has pointed out, within the meaning of Directives 89/48/EEC and 92/51/EEC the term 'diploma' may include not only school leaving certificates and university degrees, but also a number of training and examination certificates. The directives relating to the general system of recognition of diplomas make no provision for coordination of training nor for automatic recognition of vocational qualifications. Each Member State is free to stipulate what qualifications are required to exercise an occupation or profession within its own borders. Thus Italy is entitled to permit only graduates from universities and higher education establishments to practise as consultant engineers.
Practitioners from other Member States must be treated in the same way as Italian citizens. Infringement of the rules in force in the individual Member States may lead to the opening of legal proceedings, provided that any sentences are proportionate to the seriousness of the violation.
Austrian citizens wishing to practise as consultant engineers in Italy must submit an application to this effect to the competent authorities. Should it emerge that there is a significant difference between the qualifications laid down by law in Italy and those required of Austrian citizens to practise that profession, the Italian authorities may invite the Austrian citizen to opt for an equalisation measure such as, for example, a training period or an aptitude test. If, as appears to be the case, the Austrian practitioners possess only lower-level diplomas such as those provided for in Directive 92/51/EEC, the Italian authorities may require an equalisation measure to be applied in all cases. It will be clear from what I have said that the general position of the Italian authorities does not conflict with the provisions of Community law. I might add that, here as in other spheres, should any specific individual cases prove problematic, the Commission is prepared to examine them and check on their compliance with Community law.

Rübig
Mr President, it appears in practice that an engineer in Austria may provide a service which meets market requirements, and that when he provides the same service in Italy or in another Member State, it is then no longer admissible. How do you intend to deal in future with these problems which constitute obstacles for the internal market?

Monti
Here the relevant distinction is the one introduced at the Fontainebleau summit back in 1984. Indeed, ever since the Fontainebleau summit the vertical sectoral approach - that is, specific directives - for specific jobs and occupations has been replaced by a horizontal approach, in other words the general system based on semi-automatic recognition of qualifications without prior harmonisation of education and training systems.
Generally speaking, the Commission is not in favour of proposing new specific directives. In these cases, therefore, the host country is entitled to restrict the exercise of a certain occupation to holders of university and higher education degrees, and then - as I said - a citizen from another Member State may opt either for an aptitude test or a training period. The alternative to this system would be highly detailed regulatory provisions: these are appropriate for certain jobs and occupations but not for others.

President
Question No 59 by Antonios Trakatellis (H-0940/98)
Subject: Decision on complaint concerning the Thessaloniki underground railway and implementation of Community legislation on public contracts
Almost four years since the Thessaloniki underground rail project was incorporated in the section of the 2nd CSF for Greece (1994-1999) entitled 'Improvement in living conditions', and almost two years since a complaint was made to the Commission that the project was in breach of Community legislation on public contracts, the only progress has been the transfer of ECU 26 million of the ECU 60.7 m of the Community's total contribution. According to the Commission's announcement in July, it had taken a decision on the complaint, on the authorization of Commissioner Monti.
Will the Commission, therefore, say whether it has taken a final decision on the complaint, what that decision is and whether it may be overturned in the light of new information? If that is so, how can the Commission ensure a swift review of the case when it took 18 months to make any statement on the complaint?
In view of the fact that the Greek Ministry for Public Works has announced that the contract has been signed, can work commence without further complication due to controversy over the contract? Did examination of the complaint reveal any shortcoming in the implementation of Community directives on public contracts in relation to this project and, if so, how will the Commission ensure that the law is upheld in the future? I give the floor to Mr Monti to answer Mr Trakatellis's question.

Monti
The Commission wishes to inform the honourable Member that it has dropped the case concerning the Thessaloniki underground railway, by Decision H/98/3262 of 27 August 1998, given that it did not come across any breach of the principle of equal treatment. The competent authorities in Greece were informed in a letter dated 18 September 1998. Before arriving at the decision to drop the case, the Commission requested and obtained from the Greek authorities a guarantee that future calls for tender, in particular ones relating to contracts of a similar scale, will be drawn up and implemented with the greatest care, so as to avoid difficulties and delays of the kind which have occurred in the tender procedure for the Thessaloniki underground railway.
The Commission would point out that, as always, should any new facts come into its possession relating to an infringement of Community legislation, it could decide to open a new procedure to verify the legality of the situation. However, the facts of which we are aware thus far do not justify such action. If valid reasons for reopening proceedings were to arise in the future, which - I repeat - is not the case at present, the Commission would certainly require considerably less time to assess the new facts, because the substance of the matter has already been investigated in depth.
Finally, as concerns the state of advancement of the project itself, the Commission considers that all further developments must be the sole responsibility of the competent authorities in Greece.

Trakatellis
Commissioner, thank you very much for your answer. Firstly, I would like you to tell me this, please: you have already said that when new figures emerge clearly from the agreement signed between the Greek state and the contractor, we will be able to make an approach to the Commission with those new figures. I would therefore like to ask you: if an approach is made, can the work begin and can payments be made, or do we first have to wait for the Commission's decision and only then begin the work? Secondly, given that there has been an exchange of correspondence between you, Mr Monti, and the Greek Government, for the sake of more complete parliamentary monitoring and greater transparency I would like a copy at least of your own letter to the Greek Government. Finally, time marches on inexorably, Commissioner, towards the end of the Second Community Support Framework. Will it be possible for the work to begin and for payments to be made before then?

Monti
I would add in reply to Mr Trakatellis that - as I have said - if new and different facts arise in relation to a case, it is always possible to reopen proceedings. I would stress that, in this case, none of the information which has so far come to light justifies such action. Therefore, as far as the Commission is concerned, this case has been dropped in the same way as all others are dropped: the relevant proceedings have been closed. New and different facts would be required in order for it to be reopened, but that is not the situation at present.

Hatzidakis
Commissioner, you said that you have shelved the matter until you receive new figures, but that at the same time you have told the Greek authorities that in future they should handle things differently from the way in which they dealt with the Thessaloniki metro contract. So the conclusion I draw is that the procedures followed had certain deficiencies. Politically, therefore, the procedures were not transparent. Legally, however - since I am a lawyer - you may indeed have shelved the matter, but the comment that in future such practices should be avoided means that the practice followed was incorrect, that it lacked transparency, that it infringed Community regulations, in other words that someone could go to court solely on the basis of what you have just told us, and blow the contract to pieces. The question, therefore, is: will the project go ahead? What do you think of the syllogism I have stated, because you cannot both grant approval and say that in future the Greek Government must avoid such practices. You must do one or the other.

Monti
Our approach in the matter under discussion was to assess whether or not Community legislation on public contracts had been breached. In examining the complaint, the Commission found that the voluminous contract documentation contained provisions on the specific conditions demanded which were open to differing interpretations by bidders. Nevertheless, in view of the complexity of the procedure and of the contract documentation, the Commission finally concluded that the awarding authority could not be said to have deliberately operated a tender procedure which was not genuinely competitive. It was not possible in this context to prove that a clear infringement of the principle of equal treatment had taken place; that would have meant opening the appropriate proceedings. As far as the future is concerned, I can say that the guarantees sought by the Commission take the form of the experience acquired by the Greek administration and its advisers in designing and completing projects of this type; these guarantees are backed by a firm undertaking regarding their future conduct. Naturally we shall continue to remain vigilant.

President
Question No 60 by Sören Wibe (H-0951/98)
Subject: Parallel imports into the EEA
One of the effects of a judgment delivered by the European Court of Justice in summer 1998 is to prevent parallel imports of branded clothing from countries outside the EEA. Sweden has protested in the Council against this ruling, as it affects Swedish consumers and retailers. Sales of parallel imports in Sweden are worth SKr 30 bn a year. Naturally enough, then, parallel imports have a very significant effect on Swedish consumers' personal finances.
The Commission has now resumed a study of the pros and cons of parallel imports (which according to Svenska Dagbladet of 29 September 1998 had been shelved), the findings of which are to be presented to the Council.
When will the study be ready? What will happen in the meantime? Does the Commission not think it would be better to defend consumers' interests rather than those of general agents? I give the floor to Mr Monti to answer Mr Wibe's question.

Monti
In its judgment of 16 July 1998 in the Silhouette case, the Court of Justice upheld the principle that the holders of trade marks in the Community have the right, on the basis of those trade marks, to object to parallel imports into the European Union of products originally placed on the market elsewhere. This bears out the Commission's interpretation of the 1989 directive on trade marks. Consequently, importers and retailers may not import branded products into the Community without the consent of the holder of the relevant trade mark. This also means that the Member States must apply the current Community rules on trade marks in accordance with the interpretation given by the Court of Justice in its recent judgment.
I am aware of the reactions provoked by this judgment in a limited number of countries, and particularly in Sweden. Concern has been expressed that consumers are being deprived of the opportunity, thanks to parallel imports, of buying branded products at cheaper prices. These concerns are, however, only partially justified.
I would stress that the protection of intellectual property rights is crucially important in developing innovation in Europe. European producers invest vast quantities of money and know-how to create new high-quality products, build up the prestige of their brands and organise their distribution networks. It should be noted here that, although parallel imports enable consumers to benefit from lower prices in the short term, in the longer term reduced profits might discourage the holders of trade marks from investing in their brands or from competing actively with other brands, which would be disadvantageous for the entire sector.
Let us be absolutely clear about one thing: parallel imports within the Community and also, more broadly, within the EEA are a key element of the single market, and the current discussions concerning the exhaustion of the right conferred by a trade mark do not revolve around this fundamental element, but relate only to parallel imports from outside the Community.
I would point out, finally, that in order to gain a complete picture of the situation, a study is being undertaken of the economic consequences of the exhaustion of the right conferred by a trade mark in the Community; it is to be completed in the early part of 1999. This study will consider the various aspects of trade mark protection and the possible consequences of a change in the exhaustion system, in particular as concerns product availability, after-sales service, advice to consumers, investment in new products, price competition and employment.

Wibe
I have a very brief supplementary question, which I shall preface by saying that I disagree with the Commissioner on parallel imports. This ruling is tantamount to a ban on retail activity. I fail to see the economic rationale from anyone's point of view, including that of the manufacturers.
My question is as follows. If parallel imports to various Swedish retailers continue, does the Commission intend to instigate legal proceedings against Sweden?

Monti
Given the situation which has been corroborated by the judgment of the European Court of Justice, the holders of trade marks are at liberty to demand the appropriate legal action. This does not affect the Commission; the Commission must see to it that trade mark holders are in a position to exercise this right.

Malone
I am very pleased to see the Commissioner here. I did not think you would be in Strasbourg today because you did not attend the Duty-Free Intergroup. We had to cancel it, even though you had earlier said that you would attend.
I took the floor to say that it is a shame that we cannot now deal with the two items on duty-free that are on the agenda and that some of us have come here to deal with. We get very little opportunity to speak to the Commissioner. We are trying very hard to change his mind on this issue with a very important report going to the ECOFIN ministers, which has just been completed by the Commission. I would like to cross-examine the Commissioner on this report, on the implications of duty-free for jobs.

President
Mrs Malone, Mr Monti, this is not within the scope of the question under consideration. Also, the time allowed has elapsed. Nevertheless, Commissioner, you may take the floor if you wish.

Monti
I believe that this is a very important matter - and I have had occasion to speak on it both here in the plenary and in various parliamentary committees - but it is wholly unrelated to the question asked by Mr Wibe. I would therefore not wish to comment any further, Mr President.

President
Thank you, Mr Monti. Mr Gallagher has also asked for the floor to put a supplementary question further to Mr Wibe's question. I would ask you both to confine yourselves, please, to the context of the question put by Mr Wibe.

Gallagher
I appreciate the time constraints, but I should like to take this opportunity while Commissioner Monti is in the House. He has on numerous occasions in the past referred to structural funds as an instrument to be used to overcome the consequences of the abolition of duty-free.
I would say to the Commissioner that I have to hand a copy of the Commission's working document on the proposals. There is absolutely nothing new in this. I believe I am being reasonable and fair in saying this document is window-dressing. There is nothing more in it than has been available in the past. This is no reflection on the Chair or the Commissioner. Perhaps the Commissioner would give a number of us who have had questions tabled this evening the opportunity to meet him during the next week or so. This is nothing more than window-dressing and it will not address the issues.

President
Thank you, Mr Gallagher. I did not ask you to stop speaking because that is not my practice, but I did warn you that the issue had been discussed for longer than anticipated and that the time allocated has been exceeded. Mr Monti may take the floor if he wishes. He is indicating that he does not wish to do so.
Since the time allowed for Question Time to the Commission has now come to an end, Questions Nos 61 to 119 will receive written answers.
That concludes Question Time to the Commission.
(The sitting was suspended at 7.20 p.m. and resumed at 9 p.m.)

Budget lines for human rights
President
The next item is the Commission statement on the implementation in 1998 of budget lines for human rights and democracy under Chapter B7-70 'European initiative for democracy and the protection of human rights'.
I give the floor to Mr van den Broek.

van den Broek
Madam President, thank you for this chance to share our collective concern here with Parliament over some worrying reports which are circulating about the way in which human rights policy is being implemented at the moment. I think it is a very good idea to clarify one or two things and then to agree on a few points which may be useful to all the parties concerned in safeguarding this policy on human rights which is very dear to Parliament's heart, but certainly no less dear to the Commission's heart - and that also goes of course for all the organisations which work to protect and promote the upholding of human rights.
Perhaps I can begin by trying to outline the current state of affairs and then deal with questions and comments of the kind made, for example, in a letter from the vice-chairman of the Foreign Affairs Committee, Mr Mendiluce, to the President of Parliament, Mr Gil-Robles. When we talk about human rights policy, at least that part of it for which I have direct responsibility, we are talking about part of an ECU 97.4 million budget, that is to say a part which totals ECU 44 to 45 million and is administered by Directorate-General IA. It comes under budget chapter B7-7. We are talking about democracy projects, the fostering of democratic development in Eastern Europe, including the new independent states of the former Soviet Union. We are talking about more general human rights issues, but also of support for victims of torture. We are talking of support for a number of international criminal courts - for example the tribunals for former Yugoslavia and Rwanda. We are talking about the monitoring of elections. Total spending on these projects is ECU 44.7 million.
Up to the end of May, we had important and valuable outside assistance in managing these funds from the European Human Rights Foundation, with which you are very familiar. This Foundation was involved in assessing project proposals, had a great deal of contact with applicants in the course of that work, and handled the post-completion evaluation work and the financial settlement for many of these projects. The fact that this assistance has ceased is undoubtedly one of the main reasons for the concern which has arisen over management of the budget lines for human rights.
Before I go into the situation which has arisen following the loss of this outside assistance and answer the question of how, in these circumstances, adequate management can be assured, I first want to tell you where things stand at present concerning the implementation of this budget line. To date some 315 applications - project proposals - for aid under the 1998 budget have been received in total. All these 315 proposals have been assessed. So far, the Commission has given its approval for ECU 19.1 million out of that ECU 44 million. This is for some 35 projects, whilst preparations for decisions to be taken in the Commission are largely complete in respect of ECU 18 million, that is to say for about 41 projects. So we really expect the Commission to have taken a decision within the next three weeks on 76 projects to a total value of some ECU 37 million - I am still talking about 1998. Out of the total sum of 44.7 million, that leaves about five to six million which have already been earmarked for civil society projects in Kosovo. The quickest and most effective way of implementing that will be by transferring the sum to the budget line for reconstruction in former Yugoslavia.
Those submitting project proposals which cannot be accepted will be notified as speedily as possible. I should stress that acceptance of a project proposal is based solely on considerations such as quality, and of course the priority which the project merits. These are criteria which have been applied in earlier years to project assessment, and in other years too only some, a third to a quarter of all applications, were approved. In other words, over the years there have always been more applications for aid than the budget could fund. In itself that is hardly surprising.
Of course it only makes sense for the Commission to approve these projects if there is also proper follow-up to them, in the form of awarding contracts, implementing the projects and completing the financial settlements. There is no denying the fact that the loss of the outside assistance which I referred to before was painful. I have the following things to say concerning that loss.
At the end of 1997, it was decided for reasons of transparency and to encourage fair competition that outside assistance should be obtained by means of an open procedure, that is to say public tendering. The aim was to charge the costs of this outside assistance to part B of the budget, to operating appropriations. But before the tendering procedure could be taken further, all new commitments for the budget lines for human rights were frozen as a result of the famous Court judgment which was delivered in May of this year. Then came our consultation and the interinstitutional agreement of late July which was concluded for the remainder of this budget year, and which thus made it possible for us to enter into new commitments. So this was how things got moving again following the Court judgment.
When it came to a new contract of assistance based on the call for tenders, a complication then arose over whether or not the Commission could draw on outside assistance and fund it from part B of the budget. Honourable Members who sit on the Committee on Budgets will recall the discussion on this matter.
In view of the nature of the aid required to implement the budget lines for human rights and then assistance both to beneficiaries - i.e. the NGOs - and to the Commission, that is to say the debate over a joint technical assistance office, it was not possible to draw on the operating appropriations. The budget remarks for 1998 made no provision for that, and for the same reason it was not possible to draw on part A of the budget line. So the tendering procedure ground to a halt, and with it the chance of obtaining outside assistance.
So where do we go from here? Given that the regulation proposed by the Commission as a legal base for expenditure on human rights policy has not yet been approved - it is still under discussion by the Council and Parliament - it looks to begin with as if we shall need another interinstitutional agreement in 1999, and fairly quickly. Otherwise we shall have no legal base for 1999.
But we shall also have to ask the budgetary authorities to add some remarks on the budget lines for human rights which will enable us to draw on outside assistance in carrying out these projects. Again, it is assistance not only for beneficiaries, but also for the Commission. The Commission will make that request before the second reading of the budget.
These possibilities, namely the interinstitutional agreement on the one hand, plus the question of budget remarks allowing outside assistance on the other, may provide a solution in the shorter term. If the appropriate budget remarks are secured for this outside assistance, the Commission can explore all possible ways of obtaining the requisite outside assistance in the short term and perhaps through direct contracts. By the end of next year, that should give a greater assurance to all those involved that human rights projects will be properly selected and implemented.
1999 could then be used for carefully considered decisions on how our human rights policy should be organised in the year 2000 and beyond, because in the meantime we may gain more of an idea, for example as to the areas of implementation in which the new joint service might take part, and at the same time we can study how human rights policy can best fit in to the reorganisation which the Commission is preparing for the field of external relations and which will take effect from the year 2000.
When we talk about how human rights policy is to be organised in future, there are also possible variants such as the setting-up of a human rights agency. But I would prefer to discuss the alternatives with you at a later date, because we feel that for the moment our first priority must be to secure the situation for the rest of this year and for 1999 through an interinstitutional agreement and remarks in the budget.
That is what I wanted to say to Parliament in the first instance, adding a heartfelt cry of my own that obviously there will time and again be tensions between, on the one hand, the justified plea of Parliament and the human rights organisations too that we should not only provide an opportunity for large-scale projects, but also give smaller organisations and those truly working to develop civil society from the grass roots up a chance in our programmes and, on the other hand, the constant pressure which is understandably exerted on us by the Committee on Budgets, by virtue of their responsibilities, to keep the Commission's use of outside assistance to a minimum. Because that is the debate which has been directed at us in recent months.
I will end by saying this: give us the tools if we are to do the job. We cannot keep helping the smaller organisations, which automatically means a lot of projects and thus a fair degree of fragmentation which is sometimes unavoidable, and at the same time be deprived of outside help in implementing these projects. I repeat: we are in something of a transitional stage as far as the joint service is concerned, because at present I have no means of knowing exactly how much work the joint service will be taking off our hands. This joint service was set up to achieve a certain economy of scale in the implementation of all manner of aid projects. I think that what we are putting to you now is the best solution possible and the best guarantee possible for the period from now until the end of next year.

Dankert
Madam President, the problem is really threefold: the problems over the legal base which have come down to us from the Council, the question of minibudgets where Parliament has always insisted that agreements entered into should be kept, and finally the somewhat unclear policy and management priorities which we see in the Commission itself. If you look at the reports of the Court of Auditors, DG IA is hardly a model of sound management. We cannot do much about the legal base for the time being. I quite agree with Commissioner van den Broek that we must wait until things have been sorted out by regulations, and that means that the legislators must do their job first before we have any long-term solution. The question of minibudgets will remain controversial, but there is one aspect of these which needs to be pointed out, although the Commissioner did not do so. We increasingly get into difficulties with the Council over the minibudgets, because they are likely to mean cuts in the operating budget. Of course the administrative load is quite heavy with small-scale projects of this kind; in other words, cutting the operating budget becomes very attractive. So I think we have to look for solutions other than simple outside assistance, which has to be paid for at the expense of policy.
And in my view not out of the operating budget, Madam President - I grant the Commissioner that we may not manage to find the right answer here in the short term. I think the long-term policy which the Commissioner responsible for budgets has launched within the Commission offers better possibilities, but just now I think that is too difficult.
These are the problems which are facing us, but what we need are solutions. In the longer term, and I agree with the Commissioner here, ad hoc solutions are no longer acceptable. We must look for a structure within which we can work to longer deadlines. I am quite sure that we cannot achieve it in 1999, but I think 1999 has to be the basis for further developments. I am so against ad hoc solutions because they lead to the kind of endless discussions we are seeing now over ECHO or MEDA and that is not good, either for us, for the Commission or the European Union. So long-term stability is what we need.
Madam President, this means that I think the Commission will this year need to find a few extra staff in DG IA to deal with the remaining problems, because I do not know, in all honesty, whether the civil society project in Kosovo is feasible this year. I think the situation there is still rather too unstable to allow larger-scale projects to be implemented. So I think priority should be given to human rights problems on a rather broader base. I wonder too if it might not be possible within the current machinery to make greater use of delegation. The Court of Auditors' report repeatedly tells us that we do not really decentralise enough. This Commissioner knows full well that in the Netherlands, in the area of development cooperation, ambassadors have little stashes of money which they can spend, subject to certain conditions. I think that kind of mechanism should be created to help small projects of this kind. That would help us. And then we have the proposal for a budget remark. It is something of a nuisance to have to add a new remark at the second reading of the budget, but I think that if we can reach an interinstitutional agreement on it, that will solve our problems for 1999, once again with all my reservations about the minibudgets which will automatically follow on from that. But again, Madam President, the only solution is a long-term solution, and I look to the Commission for a proposal on that in the very near future.

Lenz
Madam President, Commissioner, I do not wish to blame you for this evening's empty house, as this is entirely down to ourselves. But the failure of human rights policies to work is something for which both Commission and Parliament must take the blame. That is what we wish to discuss this evening, and I cannot really endorse the comments made by Mr Dankert. In my view this is not just a budgetary problem.
I would also like to broaden the context a little, as I was involved in the discussion on all of this in the Committee on Foreign Affairs, Security and Defence Policy. You failed to make it sufficiently clear that the entire discussion over the last few days and weeks has centred on the issue of the 1998 human rights policy. You talked a little about its execution, but you were not able to tell us much about the budget for 1999.
We have proposed a budget in which we have again had to accept some minor defects. It affects, of course, not only the human rights budget lines but also Bosnia, Kosovo, Latin America, MEDA, the Middle East and more.
Our point though is a different one. For two years now, we have been looking to have a dialogue with the Commission on various resolutions in order to find new structures, but we did not manage to achieve this. This explains why the letter was written, which was actually supposed to have gone to the President of the Commission. But the dialogue did not take place. Together with yourself at first, we tried to invite the President, Commissioner Liikanen, and even the Secretary-General. But these visits never took place, which accounts for part of our annoyance.
Even the instruments created hitherto have not worked as we had actually imagined they would. People have been saying that for a year now. We are constantly told that the programmes require greater transparency, and Mr Liikanen said this again this morning. Of course this also applies to the democracy programmes. But when we hear (and you have not entirely denied this) that the macro-projects just go to large organisations - the OSCE, the Council of Europe, and so on - then our view is that there should be interinstitutional agreements to clarify the role played by the European Union and the European Parliament with their resources.
The second point is that we really cannot be glad about your shifting the micro-projects to EU delegations, without central monitoring from Brussels to include the NGOs. We cannot be glad about your shutting out the agency that previously helped you, no matter what the reasons behind it and regardless of your explanations. They are clients that help us to spread the European Union ideas of human rights and democracy far and wide. Most importantly of course, six months before an election they could really stab us in the back if we were to reclaim one of the most humane features of the European Union in a reorganisation. I admit that all this is very difficult but perhaps we should discuss it together at some point. When I consider that the result might be something like the course for the Masters degree in Human Rights, and that at one of its summit meetings the Council might set up a European Human Rights Monitoring Agency, a body which we really do not want as it would make it impossible for us to see where resources are going, then my urgent recommendation is that we meet here once again to have a better dialogue.

Bertens
Madam President, Commissioner, you have already answered a number of questions which I shall nevertheless put to you again directly. The Liberal Group is asking for a clear statement on how human rights policy is being implemented, either from you or from the Commission. It would seem, Commissioner, that fine words are obscuring a far harsher reality - the reality of inability, impotence and perhaps bureaucracy. How can it be that the Commission supposedly has hardly any officials to implement more than 1 000 projects, and how can we reconcile what you have said with the fact that 200 projects have not been implemented? Why has the Commission not drawn on the technical assistance which the European Human Rights Foundation could provide? From reports reaching us in recent months, it has become clear that chaos and poor monitoring of projects continue to be the order of the day, with no adequate measures being taken in the wake of what I have to say are administrative irregularities. We are talking about human rights, about people, and we are talking about people not on the other side of the world, but on the other side of society. I do not think the Commission has any right at all to gamble with their fate. Not that it means to, but that is what is happening.
I would also like the Commission to tell us why money is being spent via the 'big' funds, the Council of Europe and the United Nations. I do not think we have drawn up our budget just to see development funds channelled into small projects through the Council of Europe. The process of constant reorganisation within the Commission is damaging the Union's human rights policy and has damaged it in the past. The Commission has not yet altogether thrown away the Union's good name on human rights but it is putting it in jeopardy, and we owe that good name to the work the Commission has done in the past.
The priority for the Liberal Group is microprojects so that as wide a public as possible can be reached, and it is also essential of course that the funds should be soundly managed. I wish you a great deal of luck and staying power, Commissioner.

Janssen van Raay
Madam President, Mrs van Bladel cannot be here because of a meeting on human rights, and she has asked me at all events to be here before the actual reports on legal matters come up for discussion. But I have her authority to say just one thing, and that is in response to what Commissioner van den Broek said a moment ago. I refer to the tension which exists between our inclination to favour small-scale projects, because these have a more direct influence on human rights in countries where this is needed, and the scrutiny exercised by the Commission. A new case has just arisen in the Netherlands - I will not say which it is, you will be getting a question from me on the matter raised in the NRC on the misuse of funds in South Africa and so on, and I shall not go into it now - but it is most important, and here I totally agree with Mr Bertens, that you really do have the necessary know-how and powers of scrutiny to ensure that small projects are monitored properly. I wish you every success, and I thank you for your attention.

Müller
Madam President, Commissioner, with the coming 50th anniversary of the UN Charter of Human Rights, I think it is quite shameful for this House to be engaged this month in a discussion on what is so bad about the management of DGIA. As you began your comments with the statement that rumours were circulating, I would like to point out that you are also responsible for giving rise to some of them. Five or six weeks ago, I wrote to you personally to tell you of my worries on this subject. To this day, unfortunately, I have received no reply. I am having to answer telephone calls such as the one today from a colleague in the Belgrade organisation 'Women in Black', which reached agreement with the Commission upon a project in 1997, carried it out, wrote the final report, and has been waiting for the final payment to be made since the beginning of 1998. This is because no one in the Commission has been able to read the final report, declare the work to be in order, and say that the organisation should receive the final payment because it has managed the project according to the rules.
Please tell me, what should I say to these people on the telephone? Should I say that there are some rumours in circulation, but that in general everything is going terrifically well in the Commission? Or should I say that things are not that great? We both know exactly what the truth is. It is out of the question for us to take this issue of mini-budgets and legal bases, and fight it out at the expense of the NGOs in this sensitive area.
Mr van den Broek, pressure from the Committee on Budgets would make no difference at all to the mini-budgets. This has to do with the correct application of the Financial Regulation, which stipulates that money from Part A should not be used for Part B and vice versa. You cannot say that the Committee on Budgets is applying pressure. The Commission has known since 1991 that mini-budgets were not authorised and it has used them anyway.
I very much agree with you that a solution should now be found to this particular issue. I was glad to hear you say therefore that in the 1999 budgetary procedure, together with the Commission and Council, we are going to find a solution for next year, and I hope for this year too, as you indicated. At any rate, what makes the rumours so offensive is that behind all this lurks an unspoken policy change by the Commission. That is why you must tell us whether you agree with Mr Burghardt, when he wrote on 22 October this year that in 1998 and 1999 priority will be given to payments to the OSCE and the Council of Europe, and so on. If that is the new Commission policy on human rights, then we might as well give up, and then a new debate on the true meaning of the construction of civil society and the defence of democracy and human rights both inside and outside the European Union will begin.

Dell'Alba
Madam President, this is clearly a case of a Commission manoeuvre backfiring. Chapter 7 was 'invented' by Parliament and we are proud of it. Every year more money and more resources are requested. Every year, for example, I table an amendment asking for more officials for the internal management of this item, but this amendment is never adopted by the Committee on Budgets.
The Commission has tried to argue over a system which basically worked until it was unfortunately realised that outside bodies were acting to accelerate the contracts. The Commission's manoeuvre has backfired and we are the first to have said that such a system cannot work. The lack of additional officials is clearly the Commission's fault. However, I believe that we too should examine our consciences to see how many of these additional items, which you have secretly removed without our approval, could have been spared if communications had been better and if our priorities had been better structured by using the essential resources provided by the admirable Part A of the budget.

Soulier
Madam President, it is clear that everyone is concerned about an apparently badly structured case and an organisation which was satisfactory in practical terms and also in terms of finance and accounting given the thanks it received from the Court of Auditors. So we now find ourselves in a very delicate situation where appropriations might not be committed. It is clear that the European Union represents the very essence of democracy in the world. This is because, after the horrors which our continent has experienced and in which many of our countries have unfortunately participated to a certain extent, we want to tell the world that this will never happen again. Rather, we want to stress that we are the home of human rights and we can therefore give others assistance.
Yet we are deprived of the tools we need and the appropriations that are going to be used by others. This situation must be resolved as quickly as possible because it is clear that elsewhere in the world, as we chose to assume a global duty in this area, the poor and the disadvantaged, those who are persecuted, exiled or wrongly prosecuted, whether individuals or communities, cannot wait for us to agree on regulations. They cannot accept the excuse that our procedures are unsuitable and that they must therefore wait until the year 2000 for us to sort ourselves out.
Everyone must make an effort and, even though we should respect certain rules and we should have legal bases, we must be able to act quickly. This has been proven by Hurricane Mitch, which has ravaged Central America and brought the international community to life. Why could we not do this ourselves? You have made the admirable suggestion of setting up a monitoring centre, or rather an agency, together with other solutions, but the fundamental point is that we must act quickly. Commissioner, it would be good if you could do this.

Schroedter
Commissioner, it is not clear from your comments whether the money which is to be committed this year is really going to be of benefit to the small human rights projects run by NGOs. I suspect that due to the shortage of personnel in the Commission, you have decided to simply hand this year's money over in large chunks to the international organisations. However, in my view this contradicts the budgetary purpose of these resources, which is to build up and strengthen the grass roots organisations of democracy in the beneficiary countries. I would be very glad if you could dispel my suspicion.
I would also like to ask what problems you had with external support. And how would you assess these problems within the Commission in the light of the Court of Auditors report, which specifically praises this type of cooperation as the only way for smaller organisations to obtain access to this money at all? I have to be completely honest and say that I think these questions must be answered because otherwise the European Parliament is going to have draw its own conclusions.

McMillan-Scott
Madam President, on the point about the interinstitutional agreement, I should like to ask the Commissioner by whose authority the interinstitutional agreement by which there was an advisory committee, established between Parliament, the Commission, the Council of Europe and the G24, was unilaterally abrogated on 9 January this year. I used to represent Parliament on that committee, and there were officials from Parliament too. We were told it was now ended. Since that time none of the programmes under democracy have gone forward. It is important to know that the Commission decided then to take all these matters in-house. Further, why, in response to a number of questions here, the contract in the tender brochure, properly entered into, which was won by the Human Rights Foundation, was never enacted. The result of that is that the democracy programmes, which we all support here, and the human rights programmes, are now dying.

van den Broek
To take the last question first, Mr McMillan-Scott is aware that there are no longer two deadlines per year for submitting applications for aid, as was formerly the case, but that applications may now be submitted all through the year. Consequently there was no point in continuing the procedure whereby a review of them was conducted twice a year. Let me begin, Madam President, by clearing up another seemingly persistent misconception, namely that although policy in that direction has changed compared with last year, we are now focusing all our attention on the big organisations, OSCE or the Council of Europe. I can tell you that if we look at last year, the proportion of our spending which went to those organisations was about ten per cent. I should add, and I have not heard anyone make the point here tonight, that these projects are also human rights projects and civil society projects organised with the Council of Europe for the Baltic states, and in Albania too, and we all know what is going on there, and in Ukraine. In other words, it will not do to regard those projects as less worthy and put all our energy into small projects. The emphasis is still on small projects, but with all the difficulties inherent in them. I would ask you to understand here that it was less difficult for us to deal with these small projects while we were indeed able to count on outside help - help not only for the beneficiaries, the NGOs, but also for the Commission itself, which cannot manage and implement hundreds, sometimes thousands of contracts using its permanent staff alone. So for the benefit of Mrs Müller I would say yes, I do indeed recall your letter, which I believe recommended that we should conclude direct contracts with the European Human Rights Foundation. Mrs Müller also knows that last year we got bogged down over this tendering procedure as regards the Foundation due to the restricted interpretation given to our freedom to use outside assistance, the whole discussion about disputes, and so on. In other words, it is one thing or the other, Madam President, either we agree that the Commission cannot handle these kinds of projects, and smaller projects, without outside assistance, or we say no, you cannot have that outside assistance. It is up to you to decide what Parliament wants, but I have no option but to put the emphasis on larger-scale projects, which I am not doing at the moment. So above all let us agree on where we stand.
Madam President, I think what we are in fact proposing now is that we make sure for the immediate future that we have an interinstitutional agreement, so that in any event a legal base is created pending adoption, formal acceptance of the new regulation. That, as we know, is currently being debated by the Council and Parliament, and with all the amendments which have been put down it looks as if it may take some time before this regulation is adopted. So we need an interinstitutional agreement in order to be able to continue the legal base. Secondly, and no doubt in this case equally importantly, we must at all events have a budget remark which, as I said in the first instance, will allow us to secure the outside assistance we need for 1999, possibly by the conclusion of direct contracts. I see no other way of restoring the good reputation we had previously established. And it certainly is not true that we have too few staff working on this, Mr Bertens, I too read those newspaper reports, about two hundred projects still floating around somewhere and still not yet assessed. That is not correct either. We have reached the stage where we can say for 1998 that within a few weeks' time we shall not only have assessed all the projects but also, as far as the Commission is concerned, we shall have accepted and approved them. But of course that still leaves us with the whole business of contracts, implementation, payment and evaluation. The Commission cannot do all that itself without outside assistance. If I am raising my voice here, it is because we feel very strongly about this. Human rights policy is something of huge importance to the European Commission, as it is important to the Union as a whole. We have very specific contacts on that with a large number of organisations which are active in this field. We are very much concerned, for example, with a region like Eastern Europe where the whole process of developing a civil society is naturally part of the efforts to foster an effective process of integration. But it is not fair to hold us solely responsible for one or two hiccups last year: the first time when the Court judgment meant that we could not create a legal base; the second time when a very restrictive interpretation was given of the freedom to use outside assistance, because of all the debate concerning disputes and the like. It distresses me greatly, Madam President, to be told by the Court of Auditors year after year that our aid projects, PHARE and TACIS to name but two, can never be implemented with our existing staffing levels and then to be accused in a Court of Auditors' report this year of making too much use of outside assistance, with as a result the whole debate which has now taken place in Parliament. It prompts me to ask, what am I supposed to do? How can I in fact implement these projects if I cannot increase my staff, and I ask the question again. Because once these projects are completed, the question is whether or not those people are still needed. So some degree of flexibility has to be maintained. We have to try to find a solution to this, and I shall certainly play a part in assessing the ideas put forward for the longer term concerning agencies and suchlike.
That concludes what I have to say, Madam President, and I must thank the House for its altogether constructive comments. I hope that in the short term, budget remarks will in any event provide a solution for next year. That will mean that the NGOs and those who benefit from their work do not suffer, and it will give us a little more time to consider together how best to proceed in the longer term. I would just say to Mrs Lenz that I suggested earlier in the Committee on Foreign Affairs, Security and Defence Policy, where I am a very faithful visitor, that I might come once or twice a year to exchange views with you on human rights strategy as such. Not management and operational matters, the place for that is a debate such as the one we have had this evening, but to trace the broad lines and hear what Parliament thinks. I have no problem at all with that, but first we must see to it that we get the ship under way again. I think that is the main priority.

President
Thank you, Mr van den Broek.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Patents
President
The next item is the report (A4-0384/98) by Mr Añoveros Trias de Bes, on behalf of the Committee on Legal Affairs and Citizens' Rights, on the Commission Green Paper on promoting innovation through patents (COM(97)0314 - C4-0342/97).

Añoveros Trias de Bes
Madam President, Commissioner, the Green Paper we have before us has three main aims: to provide an overview of the protection afforded by patents, to examine the need for further Community action and to consider the form and substance of any such action.
Commissioner, of all the methods available to protect innovation, a patent is one of the most important. From your point of view, however, the present system has three serious shortcomings. It is complex - national patents exist alongside Community patents -, it is costly, and it does not offer uniform protection in all the Member States.
Taking all this into account, the Green Paper queries the extent to which the parties concerned would be prepared to make use of a system of a Community patent based on a regulation, on the basis of Article 235 of the Treaty. This arrangement would replace intergovernmental agreements such as the 1975 Luxembourg Convention or the agreement signed in 1989, which have not come into force. A regulation of this type would enable users to benefit from an accessible and legally secure system, at a reasonable cost.
Further technical issues with a bearing on the future of a Community patent are raised: harmonisation, the impact of the information society and electronic commerce, to name but a few. Some of the other issues referred to in the Green Paper are employees' inventions, the use of patent agents and the recognition of professional qualifications.
Finally, the Green Paper raises the issue of the best way of modifying the system of fees within the patent system, to ensure it is appropriate for the service provided but does not deter the protection of innovation.
The proposal for a resolution adopted by the Committee on Legal Affairs proposes harmonising this legislation within the European Union in order to consolidate the internal market, which is particularly important in advance of enlargement. The Luxembourg Convention and the 1989 Agreement do not provide unitary protection for patents within the European Union. Such a Community patent will have no option but to coexist with national patent systems. Further, we need to ensure that a Community patent can be converted into a European patent and devise a system whereby, conversely, a European patent can become a Community patent. The European Patent Office should be the technical operator of the patent, in cooperation with national authorities.
In the opinion of the Committee on Legal Affairs, a Member State must not abandon its national language since a patent is a means of providing information concerning the state of the technology and legal certainty. We therefore support the principle of linguistic equality, Commissioner, and would draw your attention to our recommendation for a procedure providing for such equality and a range of languages, on condition that this does not result in undue cost.
As regards jurisdiction, national courts must be competent both in cases of infringement action and patent revocation, as is the case in the system used in trademark law. In our view, there should be two national courts to ensure more flexibility, greater ease and lower costs, especially for SMEs. The body of appeal should be the European Communities' Court of First Instance.
We feel that the issue of employees' inventions should be settled by the Member States themselves.
In our view, the mutual recognition of industrial property agents should also be considered.
In conclusion, Madam President, Commissioner, the Committee on Legal Affairs and Citizens' Rights calls on the Commissioner to establish a working group with the task of preparing one or more models for insurance to cover legal expenses in the field of patents. The working party should, for instance, study the way in which the scheme is funded, insurance cover, the level of premiums and a control authority.

Gasòliba I Böhm
Madam President, ladies and gentlemen, I must first congratulate the Commission and particularly Commissioner Monti, who was responsible for this Green Paper on the Community patent, together with Mr Añoveros Trias de Bes, rapporteur for the Committee on Legal Affairs, on the excellent work carried out on such an important issue. Clearly, this issue is significant not only as regards legal protection, but also from an economic point of view.
The Green Paper is subtitled: 'promoting innovation through patents'. The number of patents granted is often one of the measures used when analysing the importance of innovation and attempting to quantify it in the various areas. We have evidently been found wanting at European Community level: there is not sufficient harmonisation, as no genuine European patent exists. Mr Añoveros Trias de Bes has already remarked that we are still operating within the framework of the 1973 Munich Convention on the European Patent, and that neither the 1975 Luxembourg Convention on the Community Patent or the 1989 Agreement have been implemented.
The Committee on Economic Affairs has considered this matter and unanimously approved a series of recommendations. I have proposed these as amendments. Essentially, they have three main aims.
Firstly, they aim to facilitate the introduction of the Community patent through fees at Community level.
Secondly, they aim to facilitate the transition from the present patents at Member State level to the proposed Community patent.
Thirdly, they aim to explore the possibility of patenting computer or software programmes as is already the case in Japan and in the United States. We have raised this issue repeatedly in many contexts, in connection with utility models or other aspects of protection and inventions.

Thors
Madam President, spending Tuesday evening discussing patents is not everyone's idea of fun. Yet my group colleague, Mr Gasòliba I Böhm, was right to point out how important the subject is both for individual countries and for the Union as a whole. If we are to foster innovation and remain competitive, we need a system that works. There is also a regional policy dimension, in that citizens around the Union are entitled to a level playing field. I trust that a system will be devised that enables the European Patent Office to fulfil its mission, which is ultimately to spread knowledge.
As Mr Añoveros Trias de Bes says, the Committee on Legal Affairs and Citizens' Rights has come out in favour of equal treatment of languages and advocates decent and fair service for all companies. I hope that the Commission will take up these proposals, and that the European patent will promote the spreading of information, benefit technology and guarantee legal certainty. If the committee's ideas are taken up, I am confident that this will be the case.
It would be good if the Commission could accept the creative suggestions we put forward in recital E and paragraph 2, where we call for effective cooperation between the European Patent Office and the national authorities. I did mention to the Commissioner on another occasion that new technology would make a decentralised approach possible, and I hope that this option will be pursued.
May I also express my gratitude to the rapporteur for the excellent degree of cooperation. I do not make a habit of saying thank you, but Mr Añoveros has done such a good job that I cannot resist. What is more, my Nordic soul glows at the mention of the EEA in the text of the resolution. All too often we forget that the directives which we adopt will, in many instances, apply in Norway and Iceland too.

Heinisch
Madam President, ladies and gentlemen, I should first like to thank the Commission for taking the initiative to produce this Green Paper. If we want to ensure that Europe is competitive, we have to work on innovation. Sponsoring research is one element of a policy supportive of innovation. At the same time, however, it is of crucial importance to guarantee effective legal protection of industrial property throughout the EU. In this context, it is also particularly important for all the options for reshaping European patent law to be explored, a process which the Commission has initiated with its Green Paper.
A key point, to which I - speaking on behalf of the Committee on Research - attach particular importance is improving patent protection for computer software. Pursuant to Article 52(2) of the European Patent Convention and the corresponding national patent laws in the European Union, computer programs are excluded from patent protection. If we do not want to lose our competitive edge in the field of computer software technology, we need to change this legal situation. We should, therefore, delete computer programs from the provisions of Article 52(2) of the European Patent Convention. In addition, the respective national provisions should be harmonised by means of a European directive. By introducing these new arrangements, we could avoid falling behind the United States and Japan, where there is already extensive patent protection for computer software.
New rules also need to be introduced on the language regime. The rapporteur's preferred solution here is also the one I have supported in my opinion for the Research Committee. A translation of the full patent specification would only be required if there were a dispute over the rights created by the patent. This would mean that the average translation costs could be reduced from their previous DEM 22 500 to DEM 4 000. Once again, my thanks go to the rapporteur.

Rübig
Madam President, ladies and gentlemen, patent policy is a very important instrument in economic policy, and licensing policy is directly derived from patent policy. Research and development can thus lead to new products being created, and there was once a very good quotation on the subject: 'today's research and development policy is tomorrow's social policy'.
A good patent policy is a particularly effective way of supporting research policy. We need to be aware that, on the one hand, there are the small-scale inventors who, once they have invented something, face the problem of developing the idea into a marketable commodity. Without a patent, it would be easy for a large company to appropriate this idea and exploit it. We know of many researchers, inventors working on their own, who have spent years, if not decades, working on particular ideas. On the other hand, many multinational companies have large research establishments which have billions pumped into them, and ultimately, of course, this investment has to pay off.
That is why I am in favour of harmonising national provisions, because it is important, for both small and large companies, to identify the basic conditions which will make a single procedure possible. We know that inventiveness is important. If the Japanese display a very low level of invention, and we in Europe a very high one, then there will be many patents in Japan, and not in Europe, and this will affect the balance of licences accordingly. That is why I very much welcome the Commission proposal, precisely because international policy on patents and licences is an extremely important instrument for Europe.

Janssen van Raay
Madam President, you can deduct my time from the three minutes I had on the Ferri report. I am not Mrs Schaffner who was down to speak, and nor am I Mrs van Bladel. But on behalf of my group, I have to say that we are particularly grateful both to Mr Añoveros and to the Commissioner for this project, which is so important to Europe because in terms of the simplicity and safeguards we are seeking here, it is far more accessible than large-scale projects which encounter far more problems, and Commissioner Monti knows that. So I hope that the small project, which is far more important than large projects for strengthening the competitiveness of Europe's small businesses, will come into effect and be implemented quickly, and once again my warmest thanks to both gentlemen for their contribution here.

Monti
Mr President, the patent system plays a crucial role in promoting innovation, growth and employment in the Community. In order to play this role to the full, the European patent system needs to be thoroughly overhauled and updated. It has two very obvious weaknesses, especially if compared with the systems in North America and Japan: it is costly and it is incomplete.
As is clear from the report by Mr Añoveros Trias de Bes - whom I congratulate on the quality of his work - there is a direct link between the competitiveness of companies and the free movement of goods and services within the single market. A coherent and effective Community system of patent protection is a vital element in this context.
The Commission's Green Paper has been successful in generating a very broad-based debate on this issue, in which those concerned have participated enthusiastically. The overall message emerging from these discussions is that the effectiveness of the patent system should be boosted by fully incorporating the practical needs of users. Moreover, as is rightly highlighted in the motion for a resolution under discussion today, the system must be restructured prior to the enlargement of the European Union. In particular, a clear and unanimous consensus has emerged that the right approach to reforming the system is the introduction of a unitary Community patent, preferably through a Community regulation, as was done in 1994 for the Community trade mark.
I would recall here that, in late January 1998, the Commission held a meeting of experts from the Member States, an overwhelming majority of whom expressed a willingness to engage in legal and technical discussions linked to the design of the Community patent. The Economic and Social Committee, for its part, was virtually unanimous in adopting a highly positive opinion on the whole range of proposals aired in the Green Paper, including the introduction of the Community patent. I am pleased to note that the proposals put forward by Mr Añoveros go along similar lines: these proposals are extremely cogent and well-balanced, and I can assure you that they will be studied in detail by the Commission as it makes the legal preparations for introducing the Community patent. I would also say, with regard to the system of insurance to cover the costs of legal proceedings connected with patents, that the Commission will investigate the best ways of promoting this system across the Community and will involve the European Parliament in this task.
To conclude, the Commission is now thoroughly convinced that the patent system must be modified as soon as possible. This modification must be based, on the one hand, on legislation to establish a Community right to patent protection and, on the other, on the updating and harmonisation of national rules on certain specific points, including the patentability of inventions relating to computer programmes, as mentioned by various speakers. In addition, this new framework could perhaps include Community action to support efforts made by national patent offices to promote innovation.
I believe that the system must be developed within a Community context and not, as originally intended, through an international convention. Such an approach will inevitably strengthen the Union's hand when it comes to negotiating international agreements, and the role of the European Patent Office as technical operator of the Community patent will be guaranteed. The Commission will shortly be preparing a communication on the follow-up to be given to the Green Paper; this communication will conduct a thorough review of the consultations and announce the specific measures which the Commission intends to present in this important sector in the near future. The European Parliament will obviously be involved in this new stage of our work, but I already wish to thank Members for the constructive way in which they have participated so far.

President
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Supplementary pensions
President
The next item is the report (A4-0400/98) by Mr Ferri, on behalf of the Committee on Legal Affairs and Citizens' Rights, on the Green Paper on supplementary pensions in the single market (COM(97)0283 - C4-0392/97-00/0595(COS)).

Ferri
Madam President, what is to become of Europe's pensioners? The Commission's very well-structured Green Paper addresses this question - and it does so in a responsible fashion, as do we in the European Parliament, in these times of widespread crisis when the two most crucial and worrying issues of all are the economic future of pensioners and jobs for young people. Hence the need for this initiative taken by the Commission, which I should like to thank, and in particular Mr Monti himself. The Commission took the initiative, with active support from Parliament, of holding public hearings with the leading experts from various European countries; these, I believe, have shed light on a whole range of aspects.
The first point to make is that we are all convinced that the first pillar - state social security - must remain the cornerstone, the foundation of the system. But it is not sufficient: cracks are appearing, and it cannot guarantee our economic future. That is why, together with life assurance which is well established and well regulated, pension funds are coming under the spotlight. A Community framework is however lacking: the Commission attempted to create one in 1991, but the proposal was subsequently withdrawn; there was an interpretative note from the Commission, if I remember rightly, which was then overturned by the Court of Justice; and now here we are again making a fresh attempt. We are calling on the Commission, given that it made such a good start, to draw up a directive taking due account of the various aspects which we have sought to highlight.
One key point in the background is of course the sustainability of the euro, which in fact changes the frame of reference for pension funds and for supplementary pension schemes in general; in many senses, it certainly facilitates investment and cross-border mobility of workers. I must say here that another directive, a very recent one, has tackled at a most opportune moment the problem of acquired rights, also an important aspect of this afternoon's report. In addition, the report sets out to cover various general aspects: taxation, in other words fiscal harmonisation to eliminate the undoubted risk of double taxation, which at present jeopardises the future of anyone working for a multinational who is transferred or even temporarily seconded and runs the risk of being taxed twice over, including from a pension point of view. Another aspect is fund management, with administrative managers and investment managers: this is another very sensitive point which we have investigated jointly with workers and under their supervision, ensuring equal representation of men and women; this aspect has been stressed repeatedly here, in opinions from the Committees on Social Affairs and Women's Rights which we have taken on board. Then of course there are organisational aspects: a Pension Forum has been proposed, and could I believe be useful for the purposes of wider comparisons; the so-called European passport; and a stock exchange for SMEs, which will have the task of making investments that are vital and very sensitive, but at the same time very advantageous and very stimulating.
All of this has still to be achieved, through capitalisation and the 'prudent man' principle. This point is an important and interesting one. I attended a congress on pension funds in Munich, where this concept of the 'prudent man' was discussed at length. I took the liberty of putting forward a framework, a sort of chart with various pointers. Naturally, the 'prudent man' is difficult to define, but in this most sensitive of sectors his hands must not be tied, because he must obviously manage his affairs in the light of the particular historical and economic context in which he is operating. We were nevertheless able to agree in the Legal Affairs Committee on a few little rules, which I believe are of some interest and comply with freedom of establishment, freedom to make cross-border investment, and so on and so forth. So, all in all, I would once again thank Mr Monti - for his sensitivity and attentiveness - and all who have participated in this work. This package - explained in more detail in the text - should constitute a significant turning-point in our economic system and also in the fundamental rights of our citizens.

Boogerd-Quaak
Madam President, Commissioner, first I must congratulate the Commission on the fact that thanks to the Green Paper a full picture has been provided of supplementary pensions and the whole question of pensions, and it is important that pensions should be considered at European level. If the demographic trend continues as it is at present, there will in future be just two employed people funding every pensioner, rather than the four we have at present. The reason for that is partly that most pension schemes in the European Union are funded by the pay-as-you-go system. So we urgently need to seek other solutions, because otherwise it may be disastrous when the euro comes in. I have said this on previous occasions here, and I think we must give it very serious thought.
Apart from that, I think it is very difficult to tell Member States which system they should choose. But we can use benchmark studies, of the kind which the Committee on Employment and Social Affairs recommends, at least to identify the best practices in the Member States and put these before the various Member States.
The Committee on Employment and Social Affairs also thinks it important that pension systems should be gender-neutral, and that the investment returns on pension funds should be improved. That after all may lead to lower indirect wage costs, enabling more jobs to be created in Europe.
The same goes for the pension providers' prudential rules. If these can be put in place quickly, I think it will mean a better investment yield on pension funds. These are things which will also be good for jobs in Europe.
Madam President, Commissioner, I think we need to look at pensions again here as a broader-based issue. I would urge the Commissioner to address the whole question of pensions again, including basic pensions.

Lulling
Madam President, in my opinion the essential merit of this Green Paper is that the Commission clearly specifies that, in accordance with the principle of subsidiarity, it is for the Member States to decide on the role of the first, second and third pillars which form the basis of pension schemes for employees and the self-employed in the Member States.
I believe that the Community framework needed to ensure the development of a genuine single market for pension funds must be limited to removing the obstacles to the free choice of pension funds, to the free movement of persons and to the freedom to provide services.
I must stress that the prudential supervision rules currently in force in some Member States are too disproportionate to guarantee the security of funds and they prevent fund managers from determining the best capital investment strategy.
With regard to pension fund investment policy, the rules should prescribe the diversification of investment portfolios. Taxation is clearly a potential brake on the free movement of persons and on the freedom to provide services. I believe that tax treatment in the European Union must be harmonised, providing for tax exemption or deductibility when rights are constituted, and that beneficiaries should be taxed in accordance with Member States' income tax rules.
Having said this, as draftsman of the opinion of the Committee on Women's Rights, I must insist on equal treatment for men and women in supplementary pension schemes. I know that the life expectancy of women is generally longer than that of men, but gender-based actuarial calculations cannot cause the principle of equal contributions and equal benefits for beneficiaries of both sexes to be questioned.
I must also take this opportunity to stress the urgent need for the revision of the directives on equal treatment for men and women in statutory and occupational social security schemes so that we can lay the foundations for the individualisation of pension rights, fix flexible retirement ages for men and women, regulate the rights of survivors and those of divorced spouses during the splitting of pension rights acquired during marriage and, finally, ensure independent social security for spouses assisting self-employed partners in the craft sector, trade, agriculture and the professions.
Mr Monti, I hope that you will inform your colleague, Commissioner Flynn, of these requests.

Falconer
Madam President, I would like to thank the rapporteur for producing this report because it is a very important one. I would also like to thank the Commission for bringing forward the documentation, although I may have a few critical comments to make as I go on.
One of the most enriching experiences I have had in the European Parliament is a look at the structures which have governed Europe economically since 1945. That has led to huge economic benefits for the people of mainland Europe. The codecision and the codetermination policy which meant that communities, workers and people involved in the businesses worked together to build up Europe after 1945 was not repeated in the United Kingdom. In the United Kingdom we adopted the Anglo-American type structure. In the 1950s we saw the growth of pension and insurance funds in the UK. The figure now stands at something like £1.3 trillion, which converts into something like ECU 1.6 trillion, a huge amount of money by any standards. And yet we have watched since 1979, when Mrs Thatcher removed exchange controls in the United Kingdom, an investment drain and a portfolio investment drain from the United Kingdom to other parts of the world: from 6 % to 31 % out of the EEC, which the Commission now admits is the actual figure.
There is no effective control on these funds by the contributors. They are set to one side as fund managers make use of the huge financial weapon afforded to them in takeovers, mergers and increases in the wages of the fat cats in the City of London.
In any casual glance at the National Association of Pension Funds in my country you would have to search long and hard to find a workers' representative, and yet there are many representatives from the City of London. Compare this with Holland, Germany, Sweden, Belgium and the other countries where cooperation, codecision and consultation are the order of the day. Yet the Commission, in its White Paper, made no reference whatsoever to the possible involvement of the contributors.
I hope and trust that when the Commission brings forward the directive which I understand it is considering, there will be a clear assurance that the contributors towards these huge funds will be involved.
The Socialist Group will support the European market model of codecision and codetermination. We reject short-termism and we expect financial and economic returns for our citizens.
For a number of years now I have studied the advancement of political democracy. One of the people that I looked to for inspiration was Tom Paine, who took part in two revolutions, one in America and one in France, and strove for political democracy. I believe it is time now for us to move forward in order to give the citizens of Europe an economic democracy. I believe, with the Socialists, that democracy is best served by the European social market model.

Kuckelkorn
Madam President, the Committee on Legal Affairs and Citizens' Rights has incorporated the principal amendments proposed by the Committee on Economic and Monetary Affairs and Industrial Policy in its report, and has thus made appropriate comments on the Green Paper. Five points need to be emphasised, which the Commission should respect when drafting further Community legislation on the basis of the Green Paper.
Firstly: reforms to the scope and structure of the first pillar - that is, statutory pension schemes on the pay-as-you-go model - can only take place at national level, and must thus remain the responsibility of national bodies. In my opinion, the Community is not competent to deal with contracts between the generations formed at national level.
Secondly: supplementary pension schemes in the internal market are also characterised by a multitude of schemes and pension funds. Community legislation should not discriminate against pension funds, either in terms of prudential supervision provisions or in terms of tax conditions.
Thirdly: restrictions on investment can only be eased if standard prudential supervision rules guarantee the possibility of controls, the joint involvement - on an equal footing - of those entitled to pensions, and insolvency insurance.
Fourthly: basic tax conditions for supplementary pension schemes need to be harmonised and improved across the internal market, so as to better exploit the potential of the internal market in pension schemes and to make it more competitive. The principle of downstream taxation of pension entitlements should apply throughout the Community.
Fifthly: a high degree of convergence needs to be achieved within the Community on transferring and preserving pension entitlements and on vesting periods.
I should like to thank the rapporteur, but also the Committee on Legal Affairs and Citizens' Rights, for endorsing the proposals made by the Committee on Economic and Monetary Affairs and Industrial Policy to modify the Green Paper.

Rübig
Madam President, ladies and gentlemen, we are talking about the future, and the future is very important for everyone. Babies born today will probably live to be 100 years old! We know that one of our most important objectives for the future is to remain in good health until we reach old age. That means that, even today, we need to consider how we can maintain the level of social security for the elderly. Today we have the principle of the contract between generations, with the result that young people provide what the elderly consume, and we need to complement this, in an appropriate way, with the principle of saving.
It is a question of finding a sensible way to bring public pension schemes into line with private and company ones. If we can produce basic conditions for an internal pensions market in Europe, then we too will be able to look towards the future with hope.

Boogerd-Quaak
Madam President, I had not realised I would be getting one minute more, but I shall use it primarily to raise the question of freedom of movement for workers. At present fewer than two per cent of all workers in Europe are employed in another Member State. The main reason for that is social security, and pensions too play a major part. I think we might find the answer to this by exploring further the possibility of a European pension passport, for example.
The directive we have at present is a step in the right direction, but if we are looking at greater flexibility in the labour market, we could have a far more work-friendly system of pensions simply by legislating to allow people to take their pension or their pension provider with them when they change jobs or move to a different country. I think it is possible to enact legislation at European level to safeguard the value of pensions and beneficiaries' entitlements. Pension funds of the kind operating in my country, for example, are rather too reluctant in this respect. I would ask the Commissioner to take this a little further.

Janssen van Raay
Madam President, pension schemes are based on three pillars. Firstly basic schemes, government ones - in our country the AOW or Working Incapacity Act, then supplementary pension schemes, social partners with full worker codetermination, and the third pillar, voluntary supplementary pension schemes. I wish Commissioner Monti luck in this mission, which is a 'mission practically impossible'. I must stress that there has been great alarm in the Netherlands at some things which the Italian Prime Minister has said. Other speakers and Mr Ferri too have already made the point that if there is any meddling with the fixed value of the euro - and rightly or wrongly we in the Netherlands have understood what Commissioner Monti and Mr Ferri have said to mean that the fixed value of the euro might be tinkered with for political reasons - that would meet with fierce opposition from those on fixed pensions. I would urge Commissioner Monti to allay the fears which have arisen in the Netherlands and to reassure those concerned about his inherently excellent Green Paper. My thanks to the rapporteur for the first-class job he has done.

Elmalan
Madam President, the Commission's Green Paper uses the pretexts of the ageing population and the fall in the number of workers to open the door to pensions funds for supplementary pensions. This is wrong as this approach totally eliminates any dynamic for a process of job creation and reduction in retirement ages. Even before the consultations on the Green Paper had finished, Commissioner Monti approved a Community directive aimed at defining a liberal system for pension funds in the European Union. This directive guarantees, for pension funds, the freedom of investment and the freedom to provide management services.
This approach runs the risk of creating a system based on private insurance which would gradually replace social security. Health and retirement would no longer be rights but would become goods subject to the laws of the market. The basic aim of the pension fund strategy is to channel savings towards the financial markets. The French MEPs in my group are totally against pension funds. This system of capitalisation is particularly dangerous and deeply unfair as it benefits the rich, who have the ability to save, and leaves the poorest with a starvation pension.
This is why we cannot accept the Ferri report prepared by the Committee on Legal Affairs and Citizens' Rights, given that this report conforms to the approach taken in the Commission's proposals. Rather, we must defend the pay-as-you-go system which is alone in guaranteeing the rights of employees and which allows the latter to claim a pension in a context of national solidarity between workers and pensioners, between generations and between the nation and its workers. In order to find new resources and to increase the purchasing power of pensions which often lag behind the cost of living, as evidenced by the recent demonstrations by pensioners in France, we propose to apply a levy on financial products at the same rate as that applied to wages.

Monti
Mr President, the Green Paper on supplementary pensions in the single market had two main aims: firstly, to launch the widest possible debate on ways of ensuring the financial sustainability of pension schemes in the Member States. Lengthening life expectancy and falling birth rates are likely to pose a threat to schemes based solely on the pay-as-you-go model. Most of these schemes were established at a time when there were four or five workers for every pensioner. In 2015 this ratio will be in the order of two to one, or even more unfavourable in certain Member States. The Member States must face up to these changes and organise their pension schemes in such a way as to safeguard the income levels of elderly persons, whilst keeping public spending under control.
As regards the second aim of the Green Paper, we must strive at EU level to ensure that supplementary pension schemes, based on capitalisation, can benefit fully from the advantages of the single market. The current situation is quite different: it has to be said that in many cases, pension funds face severe restrictions in respect of investments. As the Green Paper points out, some of these restrictions - some, not all - are not justified by prudential considerations and limit the return on funds, causing pension costs to rise.
These restrictions are hampering the integration of capital markets in the Union, to the detriment of growth and employment. Pension funds are not free to use any authorised manager established in the Union, and this limits the advantages deriving from healthy and effective competition at EU level. Occupational mobility is hampered by the frequent absence of mutual recognition of taxation systems and of transferability of supplementary pension rights.
Finally, and in particular, because of the lack of coordination of taxation systems, life insurance companies and pension funds are not free to offer their services throughout the Union. This situation is all the more unsatisfactory, considering the way that supplementary pension schemes are flourishing in the EU. Pension fund assets in the Member States already constitute 25 % of EU GDP, and a growing number of countries are relying on these bodies to tackle demographic and budgetary changes.
In addition, more and more people now wish to work in different EU Member States, and they must enjoy the freedom to do so without running the risk of losing their supplementary pension rights. The Commission has received almost a hundred responses to the Green Paper, from the Member States, the Economic and Social Committee, and financial and social circles. A large majority of them stress how urgent it is to create a Community legal framework for supplementary pension schemes, which will allow them to develop throughout the single market. In this way they will contribute fully to consolidating social protection and safeguarding pensioners' incomes, taking account of the need for equal treatment of women and men - I am addressing Mrs Lulling in particular here; it is indeed vital that women should not be penalised.
I am very pleased to note that Mr Ferri's excellent report likewise concludes that it is necessary as a matter of urgency to create a Community legal framework governing supplementary pension schemes, and asks the Commission to propose a directive on pension fund management and better coordination of taxation systems.
This same conclusion was reached in the context of the action plan on financial services, proposed by the Commission on 28 October. The Commission is quite determined to act along these lines, and will need active support from Parliament. Broadly speaking, the Commission very much welcomes Mr Ferri's report and the ideas contained in the opinions from the other parliamentary committees. Their work has added considerably to the consultations launched by the Green Paper, and will be extremely useful in our future work.
At the beginning of next year the Commission is to publish a communication drawing political conclusions from these consultations. Thereafter we intend to propose a directive to ensure that pension funds can benefit, under conditions of optimal security, from the freedom of investment and to provide services, which are laid down in the Treaty.
Finally, the Commission will cooperate closely with the Member States in an attempt to abolish the main fiscal barriers to the creation of an internal market in supplementary pensions.
Allow me to conclude with a comment on the remark made by Mr Janssen van Raay. There is no doubt that supplementary pension funds are a vital instrument in looking after future generations in Europe, not least to guarantee a sustainable financial equilibrium in the long term. Turning now to Mrs Elmalan, I would say that the Member States will clearly retain every right to determine what role the different pillars of pension schemes ought to have. It is true that the Commission's proposed approach to the role of supplementary pension systems is a substantial liberalisation of their assets and management, subject to specific prudential rules. If we are keen to boost employment in Europe, as Mrs Elmalan undoubtedly is, we are duty-bound to acknowledge that a single market for pension funds will - for the same level of risk - make it possible to obtain a higher yield on pension fund assets, and hence to reduce both social contributions - for the same pension entitlement - and non-wage labour costs. All of this naturally plays an important role in employment policy.
I therefore believe that few issues are as central to Europe's economic and social system as this one is in several respects, and I thank Parliament once again for its most valuable contribution.

Falconer
Mr President, just briefly, when Mr Monti spoke about his Green Paper there was no mention of how the contributors to these funds, i.e. people who put their money in, are to be involved in the decision-making process. Could he give us some assurance that any of these communications or directives will include that which is enshrined, i.e. the European market conditions of co-determination and co-decision?

Monti
Mr President, I wish to respond briefly to Mr Falconer by indicating that the possible involvement of contributors in the management of supplementary pension schemes and pension funds is, of course, important and falls within the competence of the Member States rather than within the competence of the Community.
I also wish to point out the distinction between a firm producing goods and services in which, at least in some Member States, there are forms of involvement of workers employed in it and a financial intermediary in a broad sense, like a supplementary pension scheme. It is not the norm in financial intermediaries to have involvement of the counterparts in the management. To me the best guarantee for contributors is that an appropriate prudential regulation is set out and implemented in practice.

President
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Vehicles with more than 8 seats
President
The next item is the second report (A4-0424/98) by Mr Murphy, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the proposal for a European Parliament and Council Directive relating to special provisions for vehicles used for the carriage of passengers comprising more than eight seats in addition to the driver's seat and amending Council Directive 70/156/EEC (COM(97)0276 - C4-0545/97-97/0176(COD)).

Murphy
Mr President, given the reputation, at least in Britain, of buses being late and given the fact that this particular report is coming back to us a second time, having been delayed since April of this year, it is probably apt that we are starting a little bit late on the debate this evening. That said, I would like to place on record my thanks to the staff of the Committee on Economic and Monetary Affairs and Industrial Policy of this House, in particular the interpreters and translators who have quite a task in dealing with this particular report. They have done an admirable job. I would also like to thank my fellow members of the Economic Committee, in particular Mr Rübig who is here with us this evening, for their assistance in getting us to this stage.
A friend of mine told me about somebody she met at a bus-stop in my home town of Wolverhampton, a young mother with a child in a buggy. A bus pulled up for her but she did not get on, she let it go. My friend asked her why she did she not get on the bus. She said she could not get on to that particular bus but there would be a low-floor bus along in a little while. At one level that describes what we are trying to do this evening: to make sure people can get on and off buses. But at another level we are quite clearly trying to put in place a further important piece of the completion of the single market. Buses and coaches are important products of the automotive industry and we need to have certain acceptable standards so that they can freely move around the single market place.
I hope that the Commission will accept that although the proposal we have come forward with is a radical one it is nevertheless workable. I recall being here having a short exchange with Commissioner Bangemann in April, about the derogations in the Commission's original proposal about taking certain vehicles outside the scope of the directive. He challenged me as to why that should be the case. I told him that my proposals would have removed those derogations because to all intents and purposes Members of this House accept that most vehicles are safe and ought to be granted type-approval, not just in their national markets, but also in the European market. We have come back to that proposal in this report.
A key area, certainly for this side of the House, is accessibility and the provisions for accessibility. To achieve that the Economic Committee has put in certain definitions of what a passenger is. We have also put in certain technical standards which we would expect a technical working party to look at as mandatory, for example: the height of the first step, particular specifications for boarding aids, wheelchair accessibility on vehicles and the safety of passengers inside the vehicles. Allied to that, the committee has also protected the ability of national preferences and regional variations to continue, whilst at the same time accepting that certain standards of accessibility are required.
A further area that the committee has taken on board is the whole issue of driver safety. If we are to have safe vehicles for the citizens of the European Union to use then we need to make sure that the drivers are comfortable and free from any risk. Therefore we are calling on the Commission to come forward with a proposal six months after the introduction of the directive looking specifically at driver safety.
I accept that the report which the Economic Committee is putting before you this evening is something of a challenge to the Commission and something of a new approach. Nevertheless I believe it merits serious consideration by the Commission. I would challenge the Commission to accept what the Economic Committee is trying to do: to balance out the needs of the citizen; to balance out our obligation to complete the single market, but at the same time to bring forward a report which is useable and sensible and deals with what is needed and not perhaps what civil servants might want to see.
I accept it as a radical challenge, something which the Commission may not have dealt with before, but I believe that if the Commission is willing to take this new approach on board then we will get closer to completing that single market, we will respect national and regional variations where buses and coaches are concerned, and the sort of story I started off with this evening, of a young mother not being able to get on a vehicle in my home town may never happen again.

Rübig
Mr President, ladies and gentlemen, Mr Murphy's very good report is much more far-reaching that the title of the dossier suggests. This is no longer just about vehicles used for the carriage of passengers comprising more than eight seats. In presenting these amendments by the Committee on Economic and Monetary Affairs and Industrial Policy, we are signalling the beginning of a new era in technical legislation.
Until now, proposals have been settled down to the last detail. I should simply like to show you the proposals here, so that you can see what huge proportions the technical legislation - just for buses with more than eight seats - has assumed. The legislator then has to decide whether the height of the step for boarding a bus should be 240, 260 or 280 mm. This, however, can and should no longer be the task of this House and its Members. We are more responsible for laying down the political guidelines and basic principles. A bus has to be safe, stable and accessible to people with reduced mobility. Any more detailed provisions must be agreed - on the basis of these principles - by those whom they actually affect: manufacturers, operators and users, especially elderly and disabled people. In this regard, I should particularly like to thank Mr Murphy for placing special emphasis on this aspect.
That is why we are proposing that a permanent working party be set up to perform these tasks. It should firstly, for practical reasons, rely heavily on the regulations which already exist in the context of the UN Economic Commission for Europe. Secondly, European standardisation bodies will be involved, and they have accumulated a wealth of experience with this type of legislation.
Until agreement is reached on the individual issues, however, an alternative way of guaranteeing the free movement of goods and the proper functioning of the internal market will have to be found. That is why the subsidiary principle of mutual recognition applies. Once a bus is authorised for use in one Member State, it can be authorised for use throughout Europe. That also ensures that the arrangements are sufficiently flexible and geared towards customers. The demands placed on a bus in Sicily are completely different from those placed on a bus in the north of Finland, or in a large city such as London, or in a small town such as Oberplattling in Bavaria. I believe that we need to give the market this freedom, so that customers can say what they want, and so that manufacturers - once they have learnt this - can offer what their customers wish to have.

Carlsson
Mr President, the Murphy report is not simply another piece of legislative work. In my opinion, it signals a breakthrough in terms of the kind of legislation we should be adopting and how we should see the EU's regulatory remit. Evidence has now been produced of Parliament's faith in the market and those who operate within it. And, as elected representatives, we have broken new ground.
I refused to take part in the first round of voting in committee last spring. The all-embracing proposal for a directive contained mathematical formulae and levels of detail that I could not understand myself, let alone explain to my electorate. The committee was confronted, in addition, with 135 amendments. The PPE Group abstained at the first vote in plenary and managed to get the report referred back to committee. We owe special thanks to Mr von Wogau, who is a political stalwart, always ready to take on ambitious reports and opinions. He, with our support, rightly questioned the wisdom of such extensive and detailed proposals. It was high time that this happened.
I should also like to thank Mr Murphy for his insight and understanding. As the person responsible within Parliament for the SLIM project, he presumably realises that we need to do more than simply talk. Through our actions, we have to demonstrate our wish to simplify regulatory activity and produce better, and less all-embracing solutions. My thanks also go to Mr Rübig, who not only asked questions, but played a constructive role in this whole discussion.
Let us hope that industry - which frequently calls for less, but better regulation - does not feel put out by the radical nature of the changes we have made. There are those who would probably have benefited from a very detailed proposal - the sort of people who take one view in general discussions and another when it comes to action which affects them in particular. I look forward to seeing the Commission overcome its annoyance at Parliament's pruning of its painstakingly drafted proposal. There is much to be learnt from the Murphy report.
The European Parliament has now thrown down the gauntlet to the Council and Commission. It is now up to them to demonstrate who can best meet the challenge of simplifying and improving EU procedures - fighting for a common framework, whilst trusting in the subsidiarity principle and letting the market have its say in working out standards and resolving details. Parliament has put down a marker this week, making it clear that we want a less detailed, but better functioning EU. We are acting on a mandate from the citizens of Europe, at a time when they are rightly questioning an institutional set-up which has in many ways become unwieldy, obsessed with regulations and bureaucracy.

Monti
Mr President, I wish first and foremost to thank Mr Murphy for his thorough examination of the proposal for a directive on buses and coaches. As you know, this proposal fits into the Community system of type-approval for motor vehicles, governed by framework Directive 70/156/EEC. It completes the technical harmonisation of this category of vehicles, thereby creating a single market for all types of vehicle. The proposal follows the detailed approach traditionally used in the motor vehicle sector, both within the Community and internationally.
The revision of the 1958 agreement of the United Nations Economic Commission for Europe, to which the European Union only acceded in March 1998, has led to a number of international regulations on the fitting-out of urban and interurban buses. The Commission's proposal is based on these regulations, introducing certain improvements adopted after consultation of all the experts in the field and taking account of all the economic and social implications of public transport. In this context, we appreciate the rigour demonstrated by Mr Murphy in his first draft opinion, which contained over a hundred amendments, only some of which were found acceptable. The drastic reduction to twelve amendments, carried out in Mr Murphy's second report, might appear to be an excellent achievement, in that the report now stays on a more political level and is less oriented towards technical detail. However, the remaining twelve amendments are a long way from the Commission's proposal and strike us as unacceptable for the following reasons.
First of all, the proposed test does not fully fit either into the traditional, detailed approach taken in regulations in the automotive sector or into the new approach centring on essential requirements. In actual fact the rapporteur's amendments appear to be guided by the new approach, in that the technical specifications set out in the Annexes are removed. And yet they provide for recourse to working groups and a regulatory committee, the type of committee which embodies the traditional approach.
Secondly, the report provides for the establishment of a new group, the technical working party, to comprise representatives of operators, manufacturers, standardisation bodies and consumer groups, among them representatives of the disabled. This technical working party is modelled on the traditional-style regulatory committee. Entrusting it with the task of assisting the Commission services, by drawing up the detailed technical specifications, would add to confusion over responsibilities and further delay the adoption of the harmonised technical specifications.
Thirdly, I would point out in addition that the Commission's proposal strikes a balance - which was not easy to achieve - between the interests of industry, Community transport policy, bus user safety requirements and 'Community social policy' considerations, especially in respect of mobility-handicapped persons.
Fourthly and lastly, let us not forget that this directive completes the overall system of type-approval for this category of vehicle. It would therefore be inappropriate, above all during the final phase of completing the single market in vehicles, to alter the method of harmonising national provisions.
For these reasons, the Commission is obliged to reject the twelve amendments proposed. We do of course wish to complete the Community regulatory system in conjunction with the European Parliament, with the legislator in the context of codecision. It is our intention to carry forward this task with the assistance of the rapporteur and of Parliament in a constructive manner, in such a way as to satisfy everyone concerned.

President
Thank you, Mr Monti.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Aerospace industry
President
The next item is the report (A4-0362/98) by Mr Hoppenstedt, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the Commission communication on the European aerospace industry: meeting the global challenge (COM(97)0466 - C4-0547/97).

Hoppenstedt
Mr President, ladies and gentlemen, for a few years now the Union has been devoting considerable attention to European aerospace policy, as can easily be seen from numerous communications issued by the Commission. The present report, however, does not merely deal with one of the many aspects of this strategic domain, but also analyses the current situation in its entirety, and on that basis devises a coherent European policy for the future.
The importance of the European aerospace industry as one of the paramount factors in our economic future is now generally accepted in Europe. But this economic potential can only be used to the full if the present fragmented European aerospace industry is restructured to strengthen its competitiveness in the world market, a necessity arising from the increasingly complex nature of the aerospace products that are now in demand.
This becomes all the more important if we consider the significance of the aerospace industry as a source of employment which provided more than 377 000 direct jobs in 1997. The fact that the European aerospace industry has been affected in recent years by stiffer competition, cuts in public funding and the meteoric pace of technological development does not make the restructuring process any easier. Alarm bells started ringing in earnest within the European industry last July with the merger of Boeing and McDonnell Douglas. This American example of restructuring clearly shows the direction in which the European aerospace industry should also be heading.
Within only five years, three gigantic groups have emerged in the United States through mergers and takeovers. In an almost faultless blend of technological and economic potential, these groups have brought all areas of military and civilian aerospace activity as well as defence technology under one roof. This enables them to spread their risks as widely as possible, to strengthen their immunity to cyclical fluctuations and to ensure that, in both technological and business terms, the whole is far greater than the sum of its parts.
But even though, with a patchwork of policies based on national interests, the European aerospace industry has undoubtedly had a very different starting position to that of the United States, for example, a great number of encouraging developments have taken place on a European scale, especially over the past year. One example is the project for a European Aerospace and Defence Company, which is surely incontrovertible evidence of a desire for restructuring within both the industry and national governments. Following a number of meetings, Daimler Benz Aerospace, Aérospatiale, Casa and British Aerospace have devised a clear plan of approach, setting out the aims, scope and operational structure of a common aerospace policy covering both the civilian and military branches of aerospace activity.
The first step in this direction will be the creation next year of the Airbus single corporate entity. Although this is a great advance, it is not the only one. For instance, 1998 promises to be a record-breaking year for the Airbus in the large-capacity aircraft market. In the first half of 1998, the Airbus consortium, with a market share approaching 50 %, secured more contracts than its direct competitor, Boeing - McDonnell Douglas, for the first time. Civil aviation is certainly the most important branch of the aerospace industry in financial terms, but a long-term European strategy must also be established in the other branches. For that reason, we must welcome and develop communications-satellite projects such as Sky Bridge, the European answer to Teledesic, and the success of the Ariane programme in the domain of carrier services; the programmes for the construction of navigation satellites and the creation of satellite navigation systems are taking us in the right direction.
In this context, it is also gratifying to note that provision has been made for this type of venture in the fifth EU framework programme of research under the broad line of action 'promoting competitive and sustainable growth' and particularly the specific programmes under the heading of 'prospects for aviation'. The framework programme also ensures the provision of a specific coordinating mechanism for activities within the various thematic programmes in the field of aerospace technology. The appraisal contained in the report spells out that Europe can only benefit in future from an unswerving commitment to progress. The developments and examples that have been described illustrate the fact that Europe possesses great inherent potential. But if that potential is to be fulfilled, the aerospace industry, with the support of the national governments and European institutions, must take up the gauntlet.

Malerba
Mr President, ladies and gentlemen, on behalf of the Committee on External Economic Relations I should like to say how much I welcome the Hoppenstedt report. I would just refer to two salient points: cooperation and dialogue between Europe and newly industrialised countries such as China; and the Commission's involvement in international negotiations on safety and on the allocation of the resources of space and the electro-magnetic spectrum.
From a somewhat broader point of view, I would say that the aerospace industry has emerged from the morass of a year or so ago, thanks to a number of agreements, but that so far it has only been partially restructured. In institutional terms and in respect of ownership arrangements, the guidelines for privatisation in France have recently been drawn up, but much still remains to be done. Mr Hoppenstedt has referred to the need for Airbus to have the status of European company, the fact that there is still no European Armaments Agency, and that the national space agencies are seeking a new role, whereas the ESA does not yet have a clear relationship with or clear mandate from the European Union and the Commission.
Two things do give me cause for satisfaction: the allocation to the aerospace sector in the fifth framework programme, which is almost double that of the fourth, and the growing consensus apparent in both political and industrial circles in Europe concerning the satellite navigation programme. These, in my opinion, are the two positive signs within the Union; otherwise, I fear that the European aerospace industry is not moving at a sufficiently fast pace for it to meet successfully a worldwide challenge which could be crucial in our progress towards the information society.

Caudron
Mr President, Commissioner de Silguy, ladies and gentlemen, Mr Hoppenstedt, everyone knows that the European aerospace industry is a prestigious jewel in the crown of our European economy, of our economic power and therefore of our political power.
Like the rapporteur, I must firstly welcome the Franco-German-UK declaration of 9 December 1997 on this subject. I firmly approve, as does Mr Hoppenstedt, of the European-level restructuring of our military and civil aerospace industry. This is a necessity which cannot now be denied.
Europe needs powerful integrated industrial groupings in this area, as in many other industrial sectors. I must at this point question the lack of desire to carry out this restructuring and to create these groupings at the right time in other European industrial sectors. This applies, for example, to the shipbuilding industry and even the textile industry to a certain extent. As someone who has observed these industrial matters for some years, I must be allowed to say this and to express my regret concerning this on behalf of the hundreds of thousands of employees in these sectors, many of whom are now unemployed.
The reason I am saying this is because there are many other sectors which are or will be affected. This is now clear and we cannot pretend or say otherwise. I must also take this opportunity to restate that Europe must stop imposing rules, constraints and limitations, in the name of triumphant liberalism, with which our international competitors do not have to contend, which means that they are at an advantage in terms of international competition.
Returning to aeronautics, like Mr Hoppenstedt, and all credit to him, I also approve the transformation of Airbus Industrie to give it more muscle. I, too, regret our weaknesses and I hope that we will find solutions in the area of communications and navigation satellites. The two final points which I must stress are the need to jointly develop the next generation of military equipment and airframes and never to forget in Europe the importance in social terms, and in terms of direct and indirect jobs, of the civil and military aeronautical industry and therefore obviously the need to introduce Euroworks councils as quickly as possible.
This is a good report whose subject gives just cause for European pride and is also, in my opinion, a lesson and an example for other European industrial sectors.

Jarzembowski
Mr President, ladies and gentlemen, may I begin by thanking my honourable friend Mr Hoppenstedt for his excellent report. He is an acknowledged expert in this area, and I believe we must recognise that. We have an enormous diversity of issues to deal with, and to have someone who can deal with a subject in such depth is of extra special importance.
Let us now turn to the substance of Mr Hoppenstedt's report. I believe that, while we must create the conditions for the development of a European aerospace industry, it is even more important that companies within the aerospace industry in Europe should get together properly, and there is still much to be done in this respect. Above all, I believe that a European aerospace company comprising several enterprises which have hitherto operated in a national framework will not tolerate government involvement in the longer term. I believe we shall have to organise this industry entirely within the private sector, and that remark is especially addressed to one particular country.
Secondly, as far as defence technology is concerned, or Wehrtechnik , as we would say in German, there is an urgent need for us to cooperate so that we do not fall behind our competitors. In this domain, of course, some very delicate questions remain unanswered, and we have to recognise that whatever is developed must be distributed in accordance with the Member States' respective market shares, irrespective of where the product has been developed. But allow me to say at the same time that, whatever we do as a joint European aerospace enterprise, although we must make our own products in order to hold our own against American competition, there is no reason why we should not cooperate with the United States too in certain segments of the market, since some of the companies that will combine to form a European aerospace and defence group will naturally have their own links with the United States and with businesses there. So the message is: establish a strong position, but cooperate with American corporations too.
Let me end with a word on the satellite navigation systems. And please listen especially carefully, Commissioner, to what I have to say on this point. I am not sure whether we in this House, you in the Commission and the governments in the Member States are fully aware of the problems associated with the global satellite navigation system. Do we really want to become dependent on the United States by jointly developing with the Americans a system that they can switch off at their own discretion? We shall have to think harder about ways in which we can assert our own European identity, for this question of global satellite navigation is not only important in terms of aerospace; it is an important factor in transport policy in general, and I believe that this is a point on which we Europeans must close ranks.

Hermange
Mr President, the aerospace industry involves 350 000 people, one million jobs and a turnover of EUR 50 billion. It is threatened, however, by the United States, which benefits from considerable aid for technological development and has been able to anticipate the consequences of international competition. In this context, the Hoppenstedt report has come at an opportune moment.
As Europe must act quickly and appropriately in order to maintain its place in the aerospace industry, our four main objectives must be: to consolidate the initial success of the launch of Ariane V; to develop a subsonic long-haul Airbus A3XX; to achieve the space and terrestrial components of the European satellite navigation systems GNS 1 and 2, and finally, in terms of research and development, to develop cheaper, lighter and more powerful satellites to meet the needs of telecommunications and Earth observation and also prevention, particularly of natural disasters.
The competition from the US must be met by a resurgence in Europe. Manufacturers must now increasingly come together. Only in this way will the European Union score new successes in the aerospace industry and reap the benefit of its skills through the development of new activities. Technological developments in the aerospace industry represent aid for employment. We must therefore pay particular attention to developing this sector.

Ainardi
Mr President, this report conforms to the Commission's approach by supporting the current restructuring in the European aeronautical industry. I will confine myself to this subject. Although Airbus has achieved enormous worldwide success, the current upheavals appear to be fraught with danger. The stated desire to confront Boeing and its might forms the basic argument justifying the aim of and the need for a major European aerospace grouping. I agree that Airbus should be given more muscle but we must realise that a ferocious battle has begun between the former associates of Airbus, who are now partners, concerning the leadership of the future grouping. This is despite an interim report having been sent a short while ago to the government.
Although we need to enter a new stage in the European aerospace industry, we should pay attention to the aim and objectives of the current restructuring. The realisation that the purpose of this restructuring is competition and improved profitability raises concern about the future of an industry which needs long-term investment without any immediate return and whose effectiveness is particularly dependent on the skills and training of its employees, and on the recognition of their qualifications. This is also an industry which has always benefited in France from government subsidy, to the dislike of some people.
I must stress that the explosion in worldwide requirements in the civil aerospace sector poses challenges of a new magnitude in terms of reducing environmental pollution and in terms of financing costs and democracy. My opinion is that the reasons behind the economic war in which we are engaging cannot meet these challenges.

Schroedter
Mr President, it seems grotesque that we should have a report before us which purports to be about competitiveness but is actually about an increasingly highly subsidised industry. Fifty per cent of the aerospace industry is about military production, which is kept alive by public money and public money alone. The report speaks of efficiency. Let me tell you that the best way of achieving efficiency and competitiveness would be to combine the restructuring of the aerospace industry with disarmament strategy and not, as is suggested here, to pursue a process of building up and renewing our military arsenals.
The Greens are particularly concerned that, in the absence of safeguards, mergers in the aerospace industry will trigger an irreversible arms spiral in Europe and that this will all happen without transparency and democratic control. Research and development funds are being misused here. In view of the changing climate, they would be far better spent on areas such as renewable sources of energy.

de Lassus Saint Geniès
Mr President, Commissioner, ladies and gentlemen, in thanking Mr Hoppenstedt for his report, I must repeat what previous speakers have pointed out, that the restructuring of the European aerospace industry is essential. The Member States and manufacturers are clearly aware of this and they are currently making progress towards a joint solution which will soon be satisfactory to all the partners.
Parliament must assist this approach by ensuring that social progress is achieved, particularly in terms of Euroworks councils, as has just been mentioned. The aerospace industry is clearly a sector of considerable strategic importance both because of the guarantees which it can give for the defence of Europe and because of the developments it allows in the use of inner and outer space at world level over the next 50 years. This is why the current restructuring must not be assessed using purely liberal or capitalist criteria. The importance of the trade agreements resulting from this type of industry will clearly have an effect on the standard of living of people in Europe. The Community's financial support for research in this sector must therefore not be reduced but should actually continue in parallel with the considerable effort being made by the government of the United States in respect of the restructuring of the American aerospace sector.
As suggested by Mr Hoppenstedt, this support must act as an incentive but under no circumstances must the aid from national and European public funds be decreased as this would dramatically reduce the scope of the restructuring undertaken. One point of particular concern is the development of the A3XX. Despite the enormous costs, large long-haul passenger aircraft are clear proof of the know-how of the aerospace industry and constitute a powerful promotional tool for a whole family of products, as the 747 has proven for Boeing over the last 20 years.
It is therefore impossible to abstain from this project. I must stress the confidence which we have in the capacity of all the manufacturers and particularly the workers, managers and design offices of Aérospatiale in Toulouse to successfully complete this magnificent project. However, we must also take advantage of this ambitious financial programme to improve the organisation and distribution of subcontracting, so that this vital industrial effort can best serve the interests of industrial development in all the European regions concerned.

Antony
Mr President, ladies and gentlemen, no-one can be more delighted by the success of our aerospace industry, and in particular the exemplary cooperation represented by Airbus and Ariane, than the National Front.
It must be emphasised once again that these initiatives owe nothing to the European institutions and everything to the willingness of the manufacturers, technical engineers and workers. We can only be delighted at the determination not to let our countries be subject to the domination and even in certain market segments to the monopoly of the American giant Boeing-McDonnell-Douglas. However, we have some concerns about the ulterior motives of the Hoppenstedt report. Under the guise of economic efficiency and the confused concept of integration, we are moving towards the simultaneous privatisation and Europeanisation of our defence industries.
Under the guise of privatisation, progress is being made both towards our national defence being controlled by the Commission in Brussels by the development of Community regulations and standardisation, and towards the weakening of our military industries by every takeover bid imaginable. It is particularly worrying that at no time have these industrial problems been linked to the higher interest and security of the Member States, nor even of a hypothetical European superstate. The aim behind the integration of the civil and military sectors is not to bring into play any synergies, dual technologies or possibilities of public subsidy for research, but is merely to let the armament industry join the common fate of the European economy in terms of competition at any price and seizure of control by Brussels.
With regard to the civil aerospace industry, the French Members must be warned against the immediate consequences of transforming the Airbus GIE into a single corporate entity. In the current context, this will be lead to the relocation of the headquarters in the Netherlands, followed by the relocation of the production units. Economies of scale and defragmentation of markets can be achieved using means other than by abandoning our companies to private capital and by Community law. The search for these means certainly should not involve the Commission. Problems of national security or strategic industries are too important to be left to the Commission. In France, we are not ready to forget the Commission's incredible actions concerning the shipyards.

Randzio-Plath
Mr President, the rapporteur has very clearly emphasised the significance of the European aerospace industry as a genuinely important factor in our economic future. I recall the parliamentary debates on other Commission communications which have repeatedly made the point that the future prospects and competitiveness of the European Union in the industrial sphere, but elsewhere too, are dependent on developments in aerospace. That, of course, does not absolve us from highlighting and re-examining the specific political issue that arises in connection with the civil and military components of this industry.
The question we really ought to be asking concerns the extent to which the aerospace market is actually organised or whether such organisation is even possible - to what extent, in other words, the subsidisation of the military sector actually leads to the emergence of good competitive products for the civilian market, as is the case in other parts of the world. If we recall that the European Union still has but a tiny share of the world market, and if we consider that in 1996 the value of aerospace exports just edged over the ECU 15 billion mark, which is equivalent to about 3 % of all EU exports, we cannot fail to realise that aerospace is so important that the European Union, for all its successes, still needs to achieve more in this sector.
Great challenges await the European aerospace industry. The merit of the Commission's communication and the Hoppenstedt report is that they really do emphasise this point, as well as indicating how fiercely the battle for supremacy is being fought in a global market, especially the market in products designed for civilian use. The United States is still far and away the major player in the global aerospace market - and I am telling you nothing new here - with a 58 % share. Moreover, the plain fact is that company structures are different in the USA. That is nothing new either, and for this reason the demands for an end to the fragmentation of the European aerospace industry that have been reiterated in today's debate can only be supported. The large number of aerospace companies in a relatively small internal market means that research, production and marketing potential is dissipated, which is not without an influence on the competitiveness of the European Union.
Unlike the American corporations, European producers are scarcely able to cover the increasingly high development and financing risks. This is one of the reasons why it is important to develop new forms of business cooperation which will ensure, among other things, that economies of scale can be made and that technological and organisational synergy can be produced between the various disciplines within the aerospace industry. It is therefore essential to make up lost ground rather than falling further behind.
What makes the situation especially critical is that the European aerospace industry possesses great fundamental employment potential and a highly skilled workforce. Aerospace is one of the top 15 industries, employing more than 370 000 people as well as sustaining thousands of jobs in component manufacturing and in other high-tech areas. That is why I should like to put it to the Commission that it is high time their industrial working parties and task force began to highlight the employment dimension far more clearly in the papers they produce on industrial policy, including the present one, to emphasise that employees' rights are part and parcel of the ongoing development of any industry and in particular to prescribe the principle of codetermination for key industries such as aerospace.

Rübig
Mr President, pardon my smiling, but it is pleasing to be able to conduct a political debate, even at this late hour. I should like to express my special thanks to Mr Hoppenstedt, who through patient determination is able to achieve progress in important areas such as the development of a global satellite navigation system, not only on this side of the Atlantic but on the other side as well.
It is important to carry this sort of technology in our own product range, so that the market does not depend on a single supplier, because the thought that we shall be able to combine this satellite navigation system with the universal mobile telecommunications system at some time in the future opens up completely new avenues. That is why I, as a member of the Committee on Budgets, should like to suggest to the Commission that a precise financial framework for the development of this system is long overdue, because when the time comes we shall need the proper hardware, software and mainframes. That will create many new jobs in Europe.

Lukas
Mr President, allow me to deal with an aspect that was not expressly mentioned in this excellent report, namely the question of component supplies. The aerospace industry awards contracts to hundreds of small and medium-sized businesses in most Member States of the European Union. If Airbus sells a large number of aircraft, that means good business for many upstream companies, which safeguards numerous jobs. For that reason alone, there is never too much we can do for European civil aviation or for the European space industry.
In order to obtain a proper grasp of the economic significance of the aerospace industry, the Commission should produce a study on the volume of component supplies. That would be an important step. Above all, the study should include the percentage of total supplies drawn from small and medium-sized businesses and the number of staff employed by the component manufacturers. It would also be interesting to catalogue the countries of origin of the supplied components, since that would enable us to determine, for example, whether the Airbus really is a pan-European aircraft.

de Silguy
Mr President, ladies and gentlemen, Mr Hoppenstedt's report contains an in-depth analysis of the situation in the European aerospace industry. It is an excellent report and on behalf of the Commission I must congratulate the rapporteur because he has also taken into account the main events that have occurred since September, that is since the approval by the Commission of its communication. I would remind you that the aim of this communication is to draw attention to the urgent need to accelerate restructuring and regrouping in the European aerospace industry. As you know, only a few aerospace companies can survive at world level in the long term given what this sector represents and given the degree of competition in the world aerospace market.
The American industry has actually already begun restructuring. In 1980 there were about 20 companies whereas there are now only four. I can reassure Mr Malerba that we are agreeable to proper cooperation between America and Europe, of which there are some good examples, such as the Snecma/General Electric deal. However, we must be partners and not subcontractors. We must therefore be as strong in the world market as the Americans in order to be able to cooperate. The situation of the European industry is clearly different, as underlined by the rapporteur, given that it remains partitioned at national level and even in terms of its products.
I believe Mrs Randzio-Plath mentioned that the European aerospace industry now has to face three main challenges, the first of which is due to the complexity of the products. The exponential growth in development costs and the financial risks exceed the resources of the European aerospace companies, even the most powerful. The second factor relates to the market. No Member State has an armaments market equivalent to the American market. The same applies to the aid for research and technological development that American companies receive from the American Government. Finally, the third element involves the fact that the European aerospace companies cannot take advantage of the same economies of scale as the American giants.
The Member States must therefore understand that the future of the European aerospace industry is linked to the interdependence of the structures existing within the European Union. Although the manufacturers must be the main protagonists in this restructuring, it is clear that the governments have a decisive role to play in this process. They must promote the creation of companies at European level by guaranteeing genuine commercial flexibility based on suitable support and training structures.
In the Commission's opinion, the success of the restructuring will depend on the level of integration of the various branches of the aerospace sector and of civil and military activities at European level. As several MEPs have rightly stressed, the first stage in this restructuring should be the transformation, which has actually already been agreed, of Airbus Industrie into a single corporate entity involving the companies participating in the GIE. Furthermore, the European aerospace companies would profit from a Common Foreign and Security Policy and Community rules on the public armaments market.
However, Mrs Ainardi, I must tell you that, in relation to 1980, the European aerospace industry is now much more oriented towards the civil side. In 1980 nearly 30 % of this industry's turnover was civil-related whereas this figure is now 60 %. Military activities therefore represent a small part of aerospace activities in Europe and are destined to shrink even more due to the growth in civil demand. Despite the difficulties caused by the problem of restructuring in the defence sector, the immediate progress to be made in the civil sector must not be delayed.
I must also mention the employment problem at this point, in answer to Mrs Randzio-Plath and Mr Caudron. The question of the level of employment in the aerospace sector is implicit in the Commission's approach which aims to increase the competitiveness of this European industry. It is clearly by encouraging competitiveness that employment will be assisted, not only in the aerospace sector but also in other sectors. It is these efforts to increase competitiveness which have allowed the loss of jobs, which started in 1990, to be halted. The number of jobs has now stabilised at about 380 000.
To conclude, I must stress to Mr Malerba and Mr de Lassus that the Commission is making new efforts in research and technological development to support this restructuring. However, the Commission is also initiating developments in air traffic and satellite navigation. You will remember that we prepared a communication on this subject in January 1998. The Commission will propose the approach to be taken with regard to satellite navigation in a new communication in the first half of 1999, together with financing proposals. Similarly, the Commission has drawn up proposals in terms of standardising and creating a single authority for aviation safety.
Finally, only integrated action by the companies involved and the Member States can provide the framework needed for the survival and development of the European aerospace industry. Mr Hoppenstedt, your report is a useful contribution to this, and for this the Commission would like to thank you.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.

Euro coins
President
The next item is the report (A4-0401/98) by Mrs Soltwedel-Schäfer, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the proposal for a Council Regulation amending Regulation (EC) No 975/98 on denominations and technical specifications of euro coins intended for circulation (COM(98)0492 - C4-0597/98-98/0270(SYN)).

Soltwedel-Schäfer
Mr President, Commissioner de Silguy, ladies and gentlemen, we are dealing today with the amendment of a regulation laying down the denominations and physical features of the euro coins to be put into circulation. Afterwards, I should like to add a few words on the subject of monetary union to my party colleague Mr Fischer in Rome. But I shall save that until the end.
The problems that had to be resolved in this report related to the number of coins to be introduced, the denominations in which they would be produced, and lastly the choice of material and the physical characteristics of the coinage. At the time of the first reading, Parliament advocated a reduction in the proposed number of denominations of coin from eight to six, and a direct correlation between the diameter of the coins and their value to make them more distinguishable for visually impaired and blind people. When the Council, unfortunately, rejected this and other proposals, including moves to prevent the use of nickel on the surface of the coins, Parliament called on the Council once again in second reading to heed the opinion of the European Blind Union and reduce the number of coins.
Once more, however, our pleas fell on deaf ears; as a result, in this draft regulation to correct a regulation that is barely six months old, we now read that slot-machine manufacturers are demanding a clear distinction between the 50 cent and 20 cent coins to avert the danger of fraudulent use of doctored 20 cent coins as 50 cent coins. The European Blind Union is not satisfied that the 50 cent and 10 cent coins are properly distinguishable, because their excessively similar physical characteristics could lead to confusion between the two.
The Committee on Economic and Monetary Affairs and Industrial Policy voted by a narrow majority against my proposing the scrapping of a denomination again in my report. Nevertheless, we shall have to produce a clear majority tomorrow on an amendment to that effect. The Committee on Economic and Monetary Affairs and Industrial Policy did, however, favour the introduction of a gold 100 euro coin, and of course the material value and production cost of this coin must not significantly exceed its monetary value, which would mean that the 100 euro coin could perhaps be equal in size to a French 20 centime coin.
I do not wish to go into any further detail, but I should certainly like to ask Mr de Silguy to think less in terms of losing face than of the fact that this gold euro coin is an inevitability. It is only a matter of time. With a view to enhancing the symbolic value of the 100 euro coin as the sign of a united Europe and a strong common currency, it should not have a national side as the other coins have, but should uniformly bear a powerful symbol of the European Union. Famous people, for instance, might feature on the coin. I think it is possible to reach agreement on that point as well.
I indicated at the outset that I should also like to deal today with the results of the Rome meeting. May I therefore comment on the position adopted by my party colleague, Joschka Fischer, the German Minister for Foreign Affairs, who today linked monetary union with the Western European Union, or so-called defence union. Now that monetary union has succeeded, as it were, and the first step has been taken, the way is considered to be clear to push for a common foreign and security policy and a stronger Western European Union. Mr Fischer is forging ahead too quickly. European monetary union is the first step. The second step is social and environmental union. That is the only way to develop a European economy. That is crucial.
Unfortunately, my colleague from the Green Party is putting the cart before the horse. He is creating a stumbling-block for us and for himself. If monetary union is overloaded, which is what is happening here, there is a danger that it will collapse. Not all the European nations that have signed up for monetary union are also members of the Western European defence union. I earnestly urge him to think about that - to think, for example, about Austria, Finland and Ireland. The question here is whether the euro should be embraced at the expense of neutrality, which is an extremely delicate and sensitive issue. Is this the new German foreign policy?
Let me stress that Ireland, Finland and Austria will never submit to such ideas. Nor do I, incidentally, as a representative of the German Greens. Anyone who plays fast and loose with the neutrality of European nations is undermining confidence in the European ideal and in monetary union. I have emphasised that point because it has taken a long time to build up this confidence, and more time is needed to consolidate it. Nobody, whether it be the Green Foreign Minister or anyone else, should jeopardise this progress by overburdening monetary union with other objectives.

Caudron
Mr President, Commissioner de Silguy, ladies and gentlemen, I must say, like the rapporteur, that I too am aware that we currently have little room for improving the euro coins.
My aim, like the report, is to highlight the case of the visually impaired, and also of many other categories of citizens. This is why I support the proposal to simply delete the 20 cent coin, which would solve some of the problems raised. I also support the proposal to change the definition of the edges of the 50 and 10 cent coins, which would solve some of the other problems.
However, these problems once again demonstrate that time and money would have been saved if the citizens and Parliament had been consulted and heard more effectively. In this respect I must again express my regret at the decisions taken which mean that too many coins and notes are having to be produced. In addition, as a result of the ridiculous decision to have national faces on euro coins, we have a situation of longer production times, higher costs and greater risks of mistakes and fraud. Simpler and more reasonable decisions would have reduced the three-year production period expected from 1 January 1999 to 1 January 2002. This period will prove to be too long and will therefore lead to mistakes, fraud and even swindles affecting the weakest members of society. The visually impaired and all other citizens could have been better served.
The rapporteur's proposals are therefore a step in the right direction and I support them. Finally, I also support the request for a gold 100 euro coin. I believe this is a good idea symbolically, economically and also emotionally. For all these reasons, I can confirm my support for the report and for the amendments which have already been approved in the main in committee.

Rübig
Mr President, ladies and gentlemen, a year ago in Parliament we set out our principles: the introduction of a gold euro and the reduction of the coinage to six denominations, possibly eliminating the 2 and 20 cent pieces. Just as we did by advocating national designs on the reverse of the coins, we can use these measures to enhance people's emotional identification with their new currency while simplifying things at a practical level.
For the period following the definitive introduction of the euro, we must also step up our efforts to study its practical implications in day-to-day transactions, or perhaps compile a study on the matter. For example, the lowest banknote, the five euro note, which is worth about 70 Austrian schillings, replaces not one but two of the most frequently used Austrian banknotes, namely the 50 schilling note and the 20 schilling note. These amounts will soon have to be paid in coins, which means that in future we shall have to carry large money bags around with us instead of wallets. Or will the development of electronic money be so far advanced by then that these problems might be avoided, or is it necessary to make a one or two euro note instead of printing 200 euro notes? Perhaps these are not the things to be discussing when the euro is just about to be introduced, but I believe there is every reason to include such matters in our future considerations.
Finally, I welcome the fact that the most recent statements do not question the independence of the European Central Bank. The Bank's independence must remain one of the cornerstones of economic union in order to ensure a prudent and above all a stable monetary policy, because that is still the only strategy capable of winning the trust of the European people.

Kestelijn-Sierens
Commissioner, ladies and gentlemen, clearly some of the proposed coins are vulnerable to fraud and hard to identify for blind people. Yet Parliament pressed in December 1997 for the number of coin denominations to be kept as small as possible and for their value to be linked to their diameter, precisely in an effort to prevent fraud and make life easier for blind people. A majority of the House, and the rapporteur has already stressed the point, thus failed to see why it should in fact be necessary to bring eight different coins into circulation, especially since electronic cash will shortly be replacing coins. As far as I know, there is not a single currency set which has so many different coins. The Council and Commission impressed upon us at the time that we needed to hurry, because production of the coins would be starting shortly. Perhaps it was thought that the design and manufacture of coins was a technical matter and that Parliament knew nothing at all about that kind of thing. Neither the Commission nor the finance ministers agreed at the time with our proposal that the 25 cent piece should be dropped. And what do we find now? Even the experts could not manage to design coins which are easily recognisable to the blind and proof against fraud. We have wasted time, not because Parliament wanted to make amendments, but because we now have to go through the whole exercise again. It does not look as if the bodies responsible are going to take any notice of our opinion this time either - I hope I am wrong, Commissioner. It does, admittedly, make sense that the Commission should take account of the views of the European association for the blind and the vending machine manufacturers. I wholeheartedly endorse Mrs Soltwedel-Schäfer's proposal, and I thank her for the way in which she has approached this matter.

Lukas
Mr President, I fully endorse the substance of the rapporteur's comments in so far as they referred to the social aspect of the coins. The Council has shown no signs of a social conscience in this matter. The introduction of the euro would be a unique opportunity to prove that the European Union is prepared to make a gesture for the benefit of those citizens whom fate has placed at a disadvantage. Many Member States are still in the Middle Ages anyway in terms of facilities for the disabled, at least by comparison with the United States. The opportunity to design these coins in such a way that those who are blind or visually impaired can easily identify their value by feeling them has sadly been squandered. This would have been a means of giving the euro a human dimension, so to speak.
I am in favour of the introduction of a gold 100-euro coin, one reason being, as the rapporteur so eloquently put it in her report, that it would enrich the new currency by lending it an emotional aspect.

Randzio-Plath
Mr President, the amendments proposed by the European Commission are to be welcomed, since they are designed to help the visually impaired, to protect consumers and to thwart counterfeiters, as the rapporteur has indicated. To be perfectly honest, however, I must say that Parliament was aware of this a year ago and came up with some very sound proposals. The Commission considered the proposals to be good, but not practicable because of the timetable and the early deadline. I therefore find it regrettable that lobbying in the course of this year has resulted in changes being made to the draft regulation after all. I thought we in the European Parliament were still supposed to be the legitimate representatives of the consumers and citizens of Europe.
I consider it right and proper that the 50 cent coin should be 0.8 grams heavier so that coin-operated machinery can distinguish more reliably between 50 cent and 20 cent coins. I consider it right and proper that the edge of the 50 cent coin should differ from that of the 10 cent coin, since it has proved difficult for people with visual impairments to distinguish between the two. For these reasons the proposal merits approval, but there seems to be no logical reason why Parliament's proposals in particular could not be implemented, given that our findings should have carried at least as much weight as those of the specialised associations. Every effort must now be made to ensure that these coins gain acceptance, not only in the financial markets and among financiers but also among the general public. Since monetary stability is so especially important to our citizens, the mints must be able to guarantee at this juncture that the currency will still be counterfeit-proof after these alterations, for I believe that was one of the arguments used against the European Parliament proposals.
I also endorse the rapporteur's view that we need a sort of stability symbol in this economic and monetary union which will grow into a community rooted in stability. What is the reason for minting a 100 euro coin in gold? I believe there is every reason. For one thing, the proposal is consistent with the decision of the European System of Central Banks to hold only 15 % of currency reserves in the form of gold. In view of the high gold reserves held by the national central banks, this proposal makes sense from both a monetary and an economic point of view, because it precludes the adverse effects on the price of gold that would result from any dissolution of gold reserves.
A gold euro coin can also help to build confidence in the stable foundations of monetary union. That is certainly an important reason. In the past, many European governments have used metal and its value to prove their commitment to stability. A euro coin made of gold can therefore continue this laudable tradition. That is why it is high time that the European finance ministers and the central banks decided in favour of the gold euro coin, because unless the resistance of the central banks is overcome, another initiative will come to naught.
If there is a surprisingly heavy demand for these coins which creates an imbalance between their market value and their nominal value - and I say this partly to calm one or two fears - production of the gold coins could be halted. That has happened with other coins, such as the French silver coin. But in that case too, the effect of the initial commitment was to stabilise the franc. The finance ministers' argument that there cannot be a 100 euro coin because there is already a 100 euro note seems a fallacious one to me. Such duplication occurs in certain monetary denominations in many countries. It is possible, after all, to ensure that banknotes and coins of the same denomination are not competing for public favour. The 100 euro coin is also an overdue successor to the 200 franc Napoleon coin which circulated throughout Europe; it will be a collector's piece, a coin of value, a symbol which may well help the euro to win over the hearts and minds of the European people.

Hoppenstedt
Mr President, everything has been said, but not by everyone and certainly not by me. For that reason, I should like to add a few words on the subject in general. I find it marvellous that Mrs Soltwedel-Schäfer has been grappling so valiantly with this report and is still doing so, even though the striking presses have long been working to produce the coins we have discussed here today. I am also gratified that all the things we had proposed in the past have now been put on the table here by the Commission, especially the proposals that affect the 11 million Europeans with impaired vision. I believe this emphasises the fact that we are canvassing for confidence in the new currency within this section of the population too. With the introduction of the euro only a few weeks away, confidence-building measures are precisely what is needed, and they are precisely what these proposals will help to achieve.
I find it really rather comforting to note that - as Mr Rübig has also spelled out here - the German Minister of Finance has come right back into the race at the final bend by endorsing the call for confidence-building measures, instead of standing on the sidelines casting doubt on the sovereignty and independence of the Central Bank with ill-considered statements.
I can only re-emphasise a point that is beyond doubt here in Parliament as elsewhere, namely that the European Central Bank must retain its independence - and it will, because there has been no indication that it will not - if it is to achieve its foremost objective of guaranteeing price stability.
Price stability, as we all know, happens to be one of the basic economic conditions that encourage investments, thereby promoting growth and employment. Let me quote Wim Duisenberg again, who told us here that stable money is the best contribution that monetary policy can make to sustained economic growth and to the long-term reduction of unemployment. I wish you all good-night!

Wibe
Mr President, I have one or two minor points to make. I understand why the rapporteur wishes to see one of the coins abandoned, but I would warn against minting a coin as big as the 100 euro in gold.
There are two reasons why I am so reticent. Firstly, such a coin would never actually function as a coin. Secondly, it would encourage counterfeiting and fraud. A 100 euro gold coin is never going to stabilise the price of gold, which is dictated by supply and demand. If the price of gold were to rise above the face value of the coins, these would find their way out of circulation. Were the price were to drop below face value, people would be encouraged to buy gold and make their own coins. It is worth remembering how much easier it is to counterfeit coins than banknotes.
Mr President, even if - contrary to all expectations - the price of gold were to match the face value, it would still be easy to counterfeit such a coin. Lead weighs much the same as gold. There is no wizardry involved in making a lead coin and then covering it with a thin layer of gold. This fraudulent exercise could be very profitable. My message to you today is that I really do not think that putting a 100 euro gold coin into circulation would be a very good idea!

de Silguy
Mr President, I will try to be as quick as possible so that I do not try everyone's patience at this late hour.
Firstly I must congratulate Mrs Soltwedel-Schäfer and thank her for supporting the Commission's proposal. I will very quickly answer the two questions posed, one on the content of the regulation and the second on the issue of the gold 100 euro coin in which interest was shown during the first debate on the Commission's proposal last November.
The reasons for and content of this proposal are as follows: we have proposed amending the basic regulation for purely technical reasons. We do not want to re-open last year's debate on the national face or on the number of coins. This proposal is in response to purely technical problems involving two coins, the 50 cent coin and the 10 cent coin. These problems have arisen since the adoption of the regulation.
Why? The answer is that the use of these coins must be made easier for the visually impaired and the blind. They have asked us to do this and there is no reason not to meet their request. They must be able to easily distinguish between the coins. Furthermore, we must ensure that identification of the coins by vending machines will be as accurate as possible. These problems arose after the mint-masters, on the basis of the regulation of 3 May, produced the much more detailed specifications needed for the production of the coins and when the first coin samples resulting from an industrial production process could be tested.
Two sets of necessary but very limited modifications are therefore proposed to solve these two technical problems. Firstly, the weight of the 50 cent coin must be increased slightly to allow easier differentiation between it and the 20 cent coin, and secondly, the definition of the edges of the 10 and 50 cent coins must be changed by replacing the coarse milling with a shaped edge with fine scallops. This will allow the coins to be more easily identified by touch. I would point out to Mrs Kestelijn-Sierens that agreement has been reached with the European Blind Union on this point. It was at their explicit request that we accepted these modifications which are purely technical and very limited and which do not bring into question the coinage system already specified and adopted. I would add that the production of coins has already started, or at least of those coins which are not affected by these modifications.
With regard to the second problem of the gold 100 euro coin, in the Commission's opinion this request cannot be considered in the context of the Regulation on denominations and technical specifications of euro coins as this requires in-depth consideration. The Commission, as the Guardian of the Treaties, must remind you that, under Article 105a (2), the regulation relates solely to the harmonisation of coins intended for circulation. A gold 100 euro coin would pose risks of confusion and fraud and there is also a risk that these coins would be collected rather than used. Mr Wibe clearly explained these risks just now, specifically with regard to the existence of a 100 euro note. The intrinsic value of a 100 euro coin could exceed its spatial value following fluctuations in the price of gold. It is considered that for easier use and to be aesthetically pleasing, a 100 euro coin would have to have a face value of EUR 300 to 400.
However, I have taken on board the concerns about the attachment of the population to the euro and the symbolic nature of the issue of this coin and we must examine this, together with all the competent authorities, regardless of the amendment of the regulation in line with Article 105a (2). Not including this coin in the regulation does not prevent the possibility of the Member States, if they so desire, issuing a gold coin whose characteristics could be harmonised by mutual agreement, on a voluntary basis. However, under the legislation in force on commemorative and collectors' coins, the legal status of such a coin would come under national law. This coin could therefore be legal tender throughout the euro zone but it might only be legal tender in the country of issue.
At my request, the Commission services have contacted the mint-masters, the European Central Bank and the Monetary Committee no later than yesterday evening, and I can confirm that there is real interest in this proposal among the mint-masters. However, there is a certain amount of reticence among the Ministries of Finance and the European Central Bank. The technical aspects involved in the issue of such a gold coin require an exhaustive study to be carried out and these aspects cannot be defined at this stage. Similarly, the time of issue would also have to be carefully chosen in order to prevent any risk of confusion during the introduction of the coins and notes intended for circulation.
To conclude, I must stress the importance attached by the Commission to your proposal and I must say that the Commission is prepared, even though this proposal does not come directly under its competence, to report to the Council and to assist as far as possible with a feasibility study by all the parties concerned, whether mint-masters, issuing authorities, Ministries of Finance, national central banks or the European Central Bank.

President
Thank you, Commissioner.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.
(The sitting was closed at 0.10 a.m.)

