

President.
   The next item is the joint debate on the following reports;
– A6-0323/2005 by Mr Becsey, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive amending Directive 77/388/EEC on the common system of value added tax, with regard to the length of time during which the minimum standard rate is to be applied (COM(2005)0136 – C6-0113/2005 – 2005/0051(CNS)),
– A6-0324/2005 by Mr Becsey, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council directive laying down detailed rules for the refund of value added tax, provided for in Directive 77/388/EEC, to taxable persons not established in the territory of the country but established in another Member State (COM(2004)0728 – C6-0251/2005 – 2005/0807(CNS)) and
– the oral question to the Commission by Mrs Berès, on behalf of the Committee on Economic and Monetary Affairs, on the expiry of Directive 1999/85/EC as regards the possibility of applying on an experimental basis a reduced VAT rate on labour-intensive services (O-0106/2005 – B6-0342/2005). 
Zsolt László Becsey (PPE-DE ),
   . We are debating two issues, and I shall start with the minimum standard VAT rate. We are debating an issue of extreme legal and political sensitivity. According to the Commission’s report, an extension of the current temporary regime based on the Sixth VAT Directive – which expires on 31 December 2005 – would be justified. What I mean is that we could set the minimum standard rate only, at the current level of 15%, and extend this regime, still with a temporary effect, to 2010. The Committee on Economic and Monetary Affairs of our Parliament has debated this proposal, and basically agrees with the approach of the Commission. Accordingly, we too agree with the proposal and with its time frame, namely with the extension to 2010. We also accepted the necessity of having to debate this issue with extraordinary speed, before the last ECOFIN session on 6 December, to enable the Council to have the opinion of Parliament and make a decision in view of it. Based on the debate of the Committee, we amend the original proposal tabled by the Committee in respect of one issue, namely that apart from the minimum standard we would also like to set the maximum rate at 25%, which would be the highest rate currently used in Member States; this would avoid any of the Member States having to resort to legislation amendments or budget course corrections in the very short term. However, by adopting this course of action, the majority of our Parliament indicates that we believe in the necessity of preventing divergence of standard VAT rates. However, our Parliament has also adopted another significant position on this issue, which does not affect the current prompt decision of prolongation, but it is important to us. We would actually like to avoid a situation similar to the current one, where we are pressed for time both in respect of the extension of the minimum standard VAT rate and the intensive employment regime expiring at the end of the year, which has been implemented with the involvement of several Member States who have all gained valuable positive experience in the process. Therefore we ask the Commission to prepare a study by the beginning of 2007, to enable Parliament to start a debate in 2007-2008 in good time, without any rush, concerning the direction and depth of the VAT policy to be implemented by Member States, and the European Union regulation required in this respect.
In our request proposal prepared with the participation of all parliamentary factions, we ask the Commission to evaluate the current standard implicit – that is, converted to one rate – VAT level differentials and their budgetary implications, particularly in respect of the differentiations seen in Member States joining the EU during the last enlargement, which are unable to apply the individual reduced rates, and can only effect transition to the special areas not included in the Sixth VAT Directive (that is, not included in Annex K or Annex H) until 2007. Based on the material to be prepared by the Commission, we will be able to define our parliamentary position on the issue of VAT charged at source or charged to the consumer, and then examine whether or not, in the spirit of subsidiarity, we need to set a minimum and a maximum rate at Community level, and if the answer is yes, whether we should use the normal standard or implicit – that is, the actual converted – rate for these VAT rates. Another further issue to be debated by Parliament in the following years in light of the efficiency of the Stability and Growth Pact is the extent of freedom to be granted to Member States for the possible reduction of VAT rates, and whether the standard rates or the individual exemptions from standard rates are most likely to distort the market (if they distort it at all). At the same time, we could also examine the issue of whether the priority given to consumption tax – at the expense of direct taxes, and mainly taxes affecting the workforce – can actually assist Member States in achieving the Lisbon employment targets. These would be the issues of the next debate, for which sufficient time should be allowed. I am convinced that a good background report prepared by the Committee may assist Parliament with this issue, and we will be able to accept a considered position even before 2010, but at this point we still propose extension, with the amendment that we must also set the maximum rate, at 25%.
My second report concerns VAT refunds. The amendment to the Eighth Directive, tabled before us, is part of a highly significant, triple amendment package tabled by the Commission in October 2004, the effect of which has been – rightly – extended by the current Commission, and which has become famous for the single-window system, the so-called ‘one-stop-shop’. Parliament has already adopted a position on this issue, as well as on tax cooperation between Member States, in connection with two reports tabled before Parliament, and now I am pleased that at the request of the Council we are also able to express our views, even if retrospectively, on the Eighth Directive addressing VAT refunds. First of all, I would state that we fully agree with the approach of the Commission to the entire draft package, including the amendment to the Eighth Directive, as this helps enterprises collect outstanding VAT from other Member States, and it also speeds up this process by the use of electronic methods. So far, collection has only been possible if an entity was VAT registered in another Member State. Many refused to follow the extended and costly procedure, and in the majority of cases outstanding VAT has not been collected at all, because the administrative procedure would have cost more than the actual amount of outstanding VAT. The current amendment will primarily improve the situation of small and medium-sized enterprises, which had the most difficulty in sustaining the apparatus required for refunds in a cost-effective manner.
The approach of the Council allowing a period of three months for the competent authorities to assess a claim is also small-enterprise-friendly. We also support the proposal that a very stiff, one-month late penalty fee must be paid by the competent tax authority for each month after the expiry of the time limit. We did not accept the proposed amendment that would have left this to be regulated individually by Member States. Our amendment proposals have also been formulated in line with this approach of the Commission, as we have emphasised that alongside enterprise protection, the tasks of Member State tax authorities must also be stated clearly, with rectifications where required, and specific time limits for forwarding, consideration, decision making and refund. This is the content of our amendments. We also specified separately that the three-month investigation period cannot re-commence even in the event of queries, requests for additional information or any other problems – as we have understood from the Commission’s proposal – as in our opinion the full procedure cannot exceed four months even in the presence of such problems. Our proposal aims at avoiding unnecessary delays in the refund period and keeping the moneys in treasury funds. Although for legal reasons we were unable to include this in our opinion as a formal amendment proposal, I still hope that as part of the package, as part of the overall OSS package, the speed of cooperation between authorities will increase, as this helps avoid cash-flow problems for small enterprises, problems related to VAT refund entitlement and the determination of ratios, and even abuses, because fraud and the formation of fictitious companies very often arise from an attempt to reclaim fictitious export VAT.
I hope that in the course of the Council debate, the 10–40-day time limit for electronic data forwarding, given to tax authorities in the country of residence, may be shortened in respect of the upper limit of 40 days. However, the priority is to implement the package as soon as possible, and we hope that in a few years (we asked for four years in connection with the OSS) we will be able to evaluate implementation based on the Commission’s report. I am convinced that the procedure (and the screening of abuses) may be speeded up in the future by using some kind of a shared database – or by easier access to the databases of other Member States – but this will require the settling of a large number of legal, data protection and other issues, which should be looked into following the first evaluation.
Therefore, at present, the most important thing is that this constructive proposal is put into effect as soon as possible, and that our enterprises may enjoy its benefits. 
Pervenche Berès (PSE ),
   Mr President, Commissioner, ladies and gentlemen, on behalf of the Committee on Economic and Monetary Affairs, we wanted to take advantage of the two reports by our distinguished fellow Member, Mr Becsey, on the subject of VAT in order to table an oral question to this Assembly which, I hope, will be followed by the adoption of a resolution. As regards, in fact, the reduced VAT rate system in labour-intensive sectors, we are in an economic, social, political and legal situation that is unpleasant to say the least, if not downright complex.
We are today faced with a system that has been extended twice. Thereafter, a proposal by the Commission dating from 2003 was submitted to us, of which the Members of our Parliament voted almost unanimously in favour on 4 December 2003 and which has since been blocked by the Council. Very often we are told that better regulation implies Parliament’s working more quickly, but I sometimes get the impression that we should also see how things take place from the Council’s perspective.
We are here in the realm of unanimity and, while certain Member States will intervene strictly on the basis of national interests by exploiting VAT rates, they are blocking the extension of this system at the Council, a system that has proved its worth. In fact, this system enables us to sustain employment, to combat undeclared work and to organise the tax system more coherently at the level of the Member States. That is why our committee wanted to table this oral question, by means of which we fully support both the Commission’s initiative and the successive efforts of the Luxembourg and the UK Presidencies, both of which have put on the table a compromise proposal that is totally in keeping with the wishes expressed by this Parliament from 2003.
Today we have our backs to the wall: this twice-extended system will expire at the end of the year and, in nine Member States, entire sectors still do not know, at this very moment, which tax system will be applied to them as from 1 January of next year. We are today on the eve of an ECOFIN Council at which, I hope, the Ministers for Economic Affairs and Finance will hear the very loud signal this Assembly wants to send out to them through this oral question, as well as through several written statements, which have been submitted at our Parliament’s Registry and signed by a large number of Members.
The Luxembourg proposal, taken up by the UK Presidency, enables what was, until now, a simple experiment to be clarified, simplified, harmonised and brought into widespread use. For the construction sector and the home care services sector, it is primarily a matter of prolonging the reduced VAT rates. It is a matter of extending a more flexible mechanism and of making plans for this mechanism to be extended until 2015. It is a matter of coherently discarding what is included in the notorious Annex H. On the initiative of the UK Presidency, it is a matter of evaluating the entire mechanism every five years. It seems to me that we have here before us balanced proposals that will make it possible, I repeat, to sustain employment in labour-intensive sectors – that is where the coherence of the proposed fiscal mechanism comes in – to combat undeclared work and to contribute to what is in line to become the leitmotiv of this House – and, I hope, beyond this House, of the Council – namely, better regulation and the Lisbon objectives.
Allow me once again to say to the Council, even though I see that it is not represented in this House this morning, how important it is to obtain the agreement of the Ministers of Economic Affairs and Finance. I believe that solidarity, which must also govern this College’s work should, at the very least, if the Luxembourg and UK proposal were sadly unable to obtain unanimous approval, lead to a further one-year extension of the system as it stands. This would be the ‘least worst’ solution. 
László Kovács,
   . Mr President, before I start my introductory remarks I would like to offer my apologies to you and to the honourable Members for the delay. We had some traffic problems but now I am here and I will let you know the position of the Commission.
I would like to express my thanks to the rapporteur, Mr Becsey, for his two reports, and to Ms Berès for the oral question on such an important issue which is very close to my heart. I will first comment on the proposal on the minimum standard VAT rate. I will continue with comments on the oral question and the motion for a resolution concerning the reduced VAT rate. Finally, I will comment briefly on the eighth VAT directive proposal, which is part of the one-stop-shop package on which an extended debate took place in this House back in September.
The Commission thanks the European Parliament for the quick handling of the minimum standard VAT rate proposal and in particular the rapporteur, Mr Becsey, for his active and positive contribution. This proposal needs to be adopted as a matter of urgency as the present rules come to an end on 31 December 2005. The absence of a timely decision would imply a legal gap in EU legislation.
The rules concerning the standard VAT rate currently in force combined with the transitional system mechanisms have functioned so far to an acceptable degree. It is therefore appropriate to maintain the current minimum standard rate at 15% for a further period of five years in order to cover the ongoing implementation of the strategy to simplify and modernise the current Community legislation on VAT.
For your information, the proposal has received a positive reaction from the European Economic and Social Committee. The committee has acknowledged that in the current environment – i.e. the rule of unanimity – the Commission’s proposal is the best way forward. I would like to stress that, while I fully understand the concerns of the honourable Members regarding the absence of a decision in the Council only one month away from the expiry date for the reduced rates for labour-intensive services, I do not think that the current proposal can be used to solve this problem. Therefore I would very much urge honourable Members not to make a link between this dossier and the discussions on the scope of the reduced VAT rates which are currently being held in the Council on the basis of the Commission’s 2003 compromise proposal.
I now come to the oral question and the motion for a resolution concerning the reduced VAT rates on labour-intensive services. I would like to thank you for putting this question to the Commission. I am conscious that this issue is of high concern to the public and to business. I am also very much concerned about this issue as the current regime to apply reduced VAT rates on labour-intensive services is due to expire at the end of this year. I very much appreciate the UK Presidency’s efforts to find a compromise on reduced VAT rates. This issue was discussed at the Ecofin Council on 8 November and will be discussed again on 6 December. The absence of a decision by the Council before the end of this year on the application of reduced rates to labour-intensive services would be a very bad outcome. Businesses are very concerned as they need legal certainty. I can assure you that the Commission will do its utmost to help the Presidency reach a conclusion on this matter.
Without going into details about the Presidency’s compromise, I want to explain the difficulties that have arisen in previous debates on this issue. Some delegations reject any extension of Annex H as a matter of principle. I must say that I do not really understand that position. The reduced rates listed in Annex H are optional, so that, apart from a few categories in respect of which reduced rates are largely applied throughout Europe, there are already today huge disparities between Member States.
If we take into account the numerous specific derogations granted to some Member States, these disparities become even bigger. Restaurant services are a very good example. Currently half of the Member States apply reduced rates to restaurant services by way of specific derogations and this has not given rise to any complaints or distortion of competition. Why not, therefore, give the opportunity to all Member States to apply a reduced rate in this sector if they wish to do so? Some Member States press for more subsidiarity. The budgetary impact of applying additional reduced rates also comes into play. In my view only very few sectors are really relevant in this respect. In principle, only restaurants and construction services might have a significant potential budgetary impact. For instance, regarding the building sector the Council could explore criteria for restricting the scope of the reduced rates in order to limit the possible budgetary impact for example by limiting the reduced rate to buildings over a certain age.
I want to underline the economic importance of the building sector. You know that the Commission has always been doubtful about the positive employment effects of introducing reduced VAT rates. This is still the case. Nevertheless, we have to realise that at least in this sector the VAT rate plays an important role. In contrast to the reduction of the rate, its increase by the reintroduction of the standard rate could well lead to an immediate increase in prices for consumers. This would have negative consequences for employment and could even encourage the black economy in the Member States concerned. I am aware that businesses, the Member States concerned and the European Parliament have great concerns in this regard. Therefore I consider that there are good political and economic arguments to allow at least the preservation of the status quo in this sector.
However, there are some conditions. First, only locally delivered services should be added to the existing scope of the reduced VAT rate provisions. The extension of reduced rates to new categories of goods should be avoided, as the risk of creating distortions of competition is too high.
Second, the mere prolongation of the existing experimental reduced rates for labour-intensive services is neither viable nor desirable. Although I was initially tempted by this solution, we have to recognise that it is an illusion to believe that a mere prolongation has more chance of being unanimously adopted by the Council than the compromise currently under discussion. Furthermore, this experiment has been limited to nine Member States and a mere prolongation would only prolong the unequal treatment of Member States. I have to stress that the Council has already had more than two years to reach a decision. It should not duck its responsibilities yet again.
Third, the compromise must be fair in the sense that it should represent a step towards the equal treatment of all Member States. In my view, the UK Presidency proposal for an initial extension of the time-limited derogations for the new Member States to 2015 would precisely contribute to this objective.
I know that some of the honourable Members might not entirely agree with this line, especially as regards the extension of the labour-intensive services. Let me, therefore, take this opportunity to remind them of the fact that when the Council agreed on the second extension of the reduced rates for labour-intensive services for two more years, the Commission considered that the same possibilities should be offered to the new Member States. At the time of the pre-accession negotiations, the possibility of applying reduced rates to labour-intensive services was not considered relevant since the experiment was due to end on 31 December 2003, i.e. before EU enlargement. Therefore, the extension of measures constituted a new element calling for a review of the situation. The situation is clearly not the same as it was in 2003 and it is therefore exceedingly unlikely that the Council will – as it did previously – unanimously request that the Commission propose an extension. In addition, a simple extension of the labour-intensive services experiment offers no solutions for the widespread demand to also include restaurant services in the scope of the reduced rates, because currently they are not in Annex K.
In conclusion, I consider it to be imperative that the Council should now draw up the lines of a viable compromise with a view to a political decision in December during the last Ecofin meeting under the UK Presidency. However, the Commission is in the hands of the Council and we can do no more than help the Council as much as possible to reach an agreement.
As the Commissioner responsible for taxation, I can assure you that the Commission is prepared to do its utmost and show the maximum flexibility during the Ecofin meeting on 6 December in order to help reach unanimous agreement on the basis of the UK compromise.
Finally, I should like to comment briefly on the eighth directive proposal. On several occasions I have underlined that one of the ways of attaining the Lisbon Objectives is to reduce cross-border administrative burdens and compliance costs in order to facilitate Community-wide activities by businesses. Today it will be possible to take the next step towards this objective. The proposal which is tabled today is part of the larger package known as the one-stop-shop scheme. The other parts of the overall proposal – the simplification measures, whereby taxable persons can discharge their VAT obligations in the Member States of establishment, and the rules containing the exchange of information between Member States – were adopted by this Parliament in September. This part of the proposal aims at reforming the VAT refund procedure for traders who have to reclaim their VAT in a Member State in which they are not established. An entirely electronic procedure will replace the current burdensome paper-based eighth directive refund system. As a result of the new proposal, it will become possible to speed up the VAT refund procedure substantially. This will be of particular help for small and medium-sized enterprises. In this respect I welcome the positive contribution of the rapporteur, although I cannot accept the proposed amendments. Most of the issues are actually already covered by the Commission’s proposal on the one-stop-shop package. I therefore invite you to support the original position of the Commission.
Now I am eager to listen to your opinion on the three VAT dossiers on the agenda of this meeting and in my closing remarks I shall take a position on the amendments that have been tabled. 
Marianne Thyssen,
   . Mr President, Commissioner, I am grateful to you, Commissioner, for giving us hope with your speech. I think that we can use all the optimism we can get in VAT legislation, because whilst everyone is full of better legislation and good governance, we notice the opposite is true in two of the three topics that are on the agenda.
I welcome the simplification of the regulations on VAT refunds to those liable to pay tax who are based in a different Member State. Enterprises, including the smallest among them and also all SMEs, will now all be given the opportunity of actually claiming their money back within an acceptable period of time. Those of us who are members of the Group of the European People’s Party (Christian Democrats) and European Democrats can only endorse this.
There is also, however, the proposal to extend the threshold of the normal VAT rate. It is, of course, a good thing that this extension should be proposed, and we support it, but we do find it a bit dramatic to introduce a measure of this kind less than 30 days before the deadline arrives and the successor enters into effect. Anyway, everyone knows what is coming. A decision will be taken at a later date, after which everyone will be able to relax for another five years.
Worse, though, are the difficulties – and I cannot describe them as anything else – surrounding Annex K and, indirectly, also Annex H to the sixth VAT Directive. The experiment involving the reduced VAT rate for labour-intensive services has been running for double the amount of time originally planned. The Council just cannot manage to make an assessment and take decisions.
The sectors to which we, the Commission and Parliament, had, in 2003, held out the hope of a reduced VAT rate – the hotel and catering industry, the building industry, but also laundries and garden maintenance businesses – all these sectors remain wanting. The Council is not saying ‘yes’ and it is not saying ‘no’; the Council is taking no decisions and is absent from this Chamber. We are creating uncertainty, and uncertainty is detrimental to economic development. This, at a time when we are desperate for growth and more employment, is unacceptable. Commissioner, we are counting on your support in the debate with the Council. For the rest, we fully endorse the two Becsey reports and the resolution linked to the oral question. 
Ieke van den Burg,
   . Mr President, it was I who applauded, and I did so because I wholeheartedly agreed with what Mrs Thyssen said. First of all, let me pay tribute to the rapporteur, Mr Becsey, who has fought his way through this difficult subject matter and who has now become our VAT expert in the Committee on Economic and Monetary Affairs. We endorse his report and also what others have said about the VAT refund. It really is vital that this should be introduced more quickly and in a simpler way for companies that operate transnationally; otherwise the internal market in Europe is a farce.
The other report is to do with the oral question that we have tabled and the deadlines within which certain matters must be dealt with. I completely agree with Mrs Thyssen when she says that it is ridiculous that now, with only one month still to go, there is still uncertainty, particularly in the labour-intensive services sectors, who still do not know where they stand. The Commissioner is beyond reproach in this; it is the Council that is the legal body with responsibility for this and it cannot manage to lay down a regulation.
I stand here as one who speaks up for those labour-intensive services. Ideally, I would like to see them incorporated in Annex H, namely in the structural solution. I hope that our appeal here in this House will, in any event, be the last nudge needed to secure an agreement, and that time will be found for this to be debated next year. I, for one, am in favour of having this discussion on a much broader footing. I think that the whole debate about the shift from indirect to direct taxation, something which your Prime Minister, Mr Verhofstadt, has once again made very explicit reference, has everything to do with the way in which we deal with those VAT rates in a structural manner.
That is why I join Mr Becsey in saying that I am not in favour of formulating a maximum rate in this interim period and that I am all for making the possibility of using those low rates structural. If you want to bring about a shift from direct to indirect taxation, which can indeed be very advantageous, you also need to differentiate the rates. Low rates apply on social grounds, employment grounds, and in order to regulate and prevent moonlighting. Those are all elements that should be factored in. Higher rates should, perhaps, apply to certain luxury or environmentally-polluting factors.
I think that this structural discussion should really be held next year, and I hope that this Commissioner can give the initial impetus for this. I hope that the Member States will not each time hide behind the unanimity rule and the option they have to put up all kinds of blockades and to conclude underhand deals. I follow Mrs Berès in what she said earlier when I say that I do not consider this to be good governance or good legislation. 
Margarita Starkevičiūtė,
   . I would also like to express my gratitude to my colleague Mr Becsey for his work in connection with the value-added tax issue and the related documents. Today we are discussing a tax with pan-European significance. Although the European Union does not share a common fiscal policy, the value-added tax is a key source of funding for the European Union’s budget. It was as early as 1977, upon adoption of the sixth value-added tax directive, that attempts were made to create, in a general sense, a common value-added tax base in order to ensure the stability of payments into the European Union’s budget.
The work in this area has yielded significant results; however, the current system of VAT rates still foresees exceptions in the form of considerably lower VAT rates applied to certain goods and services. Moreover, the issue is not only of the specific products subject to these VAT rates in different Member States but also the varying terms of validity of these exceptions. Such a complicated system poses problems of forecasting long-term budget flows and also creates potentially different conditions under which Members States would apply the provisions of the VAT directive.
Therefore, I would like to propose and support those proposals, that the European Commission review and draft a common list of goods and services that would be subject to lower rates; in addition, the Commission should evaluate the macroeconomic impact on and experiences of different countries in order to ensure that the list is valid in the long term rather than being temporary, unless otherwise specified by mutual agreement. The introduction of a common list would help avoid the flawed practice on the part of some countries of applying lower rates as exceptions, while other countries cannot apply such rates. A common list would also undoubtedly ensure the stability of inflows into the European Union’s budget, as it would facilitate the forecasting of long-term financial flows. 
Ian Hudghton,
   . Mr President, on the subject of reduced rates of VAT for labour-intensive services, it is almost a year since Parliament approved a report, for which I was rapporteur, that overwhelmingly supported the principle that all Member States should have the right to implement the scheme. It is disappointing to see that no progress has been made in the past year.
I stated at the time that we should, of course, have equality amongst the Member States, but also that we should be pressing the Council to make this principle a permanent feature of our hopes of achieving the Lisbon Strategy. I accept that it can be difficult to quantify the positive benefits in terms of job creation, but I am also convinced that suddenly reapplying VAT to labour-intensive services will have a negative impact.
I know from personal experience in a small business in the construction sector that having to charge VAT at the full rate has an impact on consumer choice. In a significant number of cases consumers choose to go where VAT is not applied. This resolution, which all the groups have supported and which will be voted on today, is reasonable. This is the least we can expect from the Council if we are not to see a sudden shock being triggered by the end of this scheme, in which I would hope Member States can be encouraged to participate more fully so that we can build up data on the beneficial impacts, which I am sure can be quantified. 
Diamanto Μanolakou,
   . – Mr President, indirect taxation is a basic lever for fleecing grass-roots income and is therefore anti-grass roots.
Constant tax exemptions for big business and its profits, on the pretext of increasing investments, are accompanied by a simultaneous increase in indirect taxes and a reduction in grass-roots income. That is why we are expressing our opposition to all forms of indirect taxation and, in particular, to the value added tax system as it operates today.
Just recently in my country, the Greek Government, implementing faithfully the dictats of the Stability Pact, increased VAT by one percentage point. At the same time, some people are saying that, under pressure from the Commission, there may be a further increase. Of course, for the profits of companies a tax cut of 10 percentage points has been promoted. It is ironic, but we may ultimately arrive at the paradoxical position of being in favour of a ceiling of 25% on VAT, because then we can be sure that it will not go up any further.
The rates of 15 to 25%, which allow no distinction between immediate necessities and luxuries, the uniform rates which require the poor worker and the rich businessman to pay the same excise and tax toothpaste at the same rate as a yacht, are often higher than the rates at which big business is taxed directly. There are even proposals to abolish graduated direct taxes and create a standard rate which will be the same rate as for indirect taxes.
The fact that the experimental directive allowing a lower rate of VAT for labour-intensive services cannot be applied generally is typical of the uniform strategy of big business and of capitalistic infighting. The period of application of this directive, which allows the Member States to apply reduced VAT rates to certain activities so that the corresponding jobs can at the same time be maintained, has been extended twice. It has not been possible so far to apply it generally to all the Member States, which is precisely why it is representative of the disagreements.
We are fighting together with the workers for the protection of grass-roots income, for the abolition of indirect taxes and the application of a progressive income and capital tax policy in order to stop the workers, pensioners, unemployed and grass-roots classes in general from picking up the tab and to stop taxes from being one of the tools for redistributing the workers' income for the benefit of big business. 
John Whittaker,
   . Mr President, Mr Becsey’s report on the minimum standard rate states that the European Parliament’s ultimate goal is to contribute to boosting economic productivity and growth rates in the EU. Whilst these are noble sentiments, I hope you will allow me to offer a few words of general advice.
The current growth projection in 2006 for the eurozone is estimated by the IMF at 1.8%, with the largest economies being the worst performers. This weak growth is far from sufficient to sustain the EU’s social programme. The Commission suggests that a cut in income tax of 1% of GDP would produce a greater than proportionate rise in growth. A harmonised VAT scheme, therefore, should be used to shift from direct to indirect taxation. Unfortunately, there is no undisputed evidence that this growth would occur. Moreover, this shift implies a redistribution from the poor to the rich, like the common agricultural policy, which rewards landowners rather than farmers. Is this really what we want?
I should like to suggest that instead of trying to harmonise taxation, our partners in the Commission should rather leave it alone. Do they not realise that their obsessive pursuit of the illusive level playing field and their inward-looking regulation-led policies are damaging growth rather than stimulating it? The working time directive, the temporary workers directive, the common agricultural policy: are all examples of a European Union that refuses to wake up to the reality of global markets, free trade and efficiency, but is instead intent on pursuing an outdated social model, which has no place in the global economy.
Harmonisation should be the last thing on the agenda of any national government that wishes to see its country’s economic growth rise. In contrast, a dose of genuine deregulation would bring wondrous results. 
President.
   I would remind Mr Whittaker that worldwide surveys indicate that Europe is the most attractive region in the world as a whole. Most of the world’s people would rather live in Europe, even preferring it to America. It follows that the European system cannot be that bad! 
Hans-Peter Martin (NI ). –
   Mr President, your use of your leadership position to deliver yourself of political statements can be said to be an image issue, but these things, technical though they may sound, do touch upon the fundamentals of our life as a Community. It is also always the case that issues of VAT have to do with justice. It cannot fail to be noted that this European Union of ours is resorting, in its weakness – for our organisational teeth no longer bite – to the artificial aid provided by VAT in order to be able to build up a certain amount of tax revenue worthy of the name. This is a very unfair way of going about things, since, as we know, VAT very often hits the wrong people.
There are two Austrians who might be able to give you an example of how to do things. With one of them – Bruno Kreisky – you will already be familiar, whilst you probably have yet to become acquainted with the other, Karl-Heinz Grasser. It was Kreisky who, all those years ago, saw very clearly that we would get nowhere with approaches of this kind. Instead, we must focus our efforts – above all with regard to VAT rates – on the VAT applied in areas where we can get back some of what we lose elsewhere, for example the things that the rich really like: luxury limousines, yachts and second homes. The aim of the amendment is to put a stop to such things, and I regard this as wrong-headed. Karl-Heinz Grasser is trying, in Austria at least – and in this I think he is exemplary – to prevent companies operating at an international level from shifting their input tax around without ever actually having to hand over any VAT. One opportunity for the next Council presidency might be to move forward, at least on the European level, with regard to the shutting-off of VAT loopholes. 
Othmar Karas (PPE-DE ). –
   Mr President, most of the previous speakers have demonstrated that the way this matter is being handled is unprofessional, betrays an irresponsible attitude towards market participants – both businesses and their customers – and makes for more uncertainty than clarity.
There does not appear, to my mind, to be any security to plan ahead, nor do either the Council or the Commission appear to have done enough of their homework. Had they done so, there would not be in the timetable such a mishmash of reports, deferments and extensions of provisional arrangements, without any real solution being found.
In German, the word has a dual meaning: it is associated not only with taxation but also with steering. Taxes steer. Taxation policy is a political instrument for steering the economy, and if there is not greater clarity about it at European level, if we are not given more powers to deal with it, if there is no wide-ranging debate about it, if we are not given a uniform basis of assessment for the taxation of businesses, if we do not close the tax loopholes, if there are no uniform tax arrangements for occupational pension schemes – then we will be unable to achieve many of our policy objectives for growth and employment, for we will not be in possession of the wherewithal to do so.
I therefore call for a comprehensive debate on taxation – one, moreover, that is not limited to individual aspects of the subject. What I advocate is a long-term approach to taxation, something that is agreed between the Member States rather than put together at three minutes to twelve, is eventually extended and therefore fails to achieve any solution. Both examples show us that the outcome of what we are debating now will be no more than a provisional arrangement that will get us no further forward. 
Dariusz Rosati (PSE ).
      Mr President, we are currently faced with a situation in which VAT rates vary widely within the European Union. The Member States have different standard rates, different reduced rates and different rules for applying these rates. The end result of all this is price distortion within the European Union. These different rates also have a negative impact on resource allocation and, in the long run, reduce the EU’s growth potential.
At the same time, however, many doubts have been raised over whether VAT rates need to be harmonised, and indeed we have heard such sentiments voiced today in this Chamber. As I see it, the time has come for us to hold a serious and comprehensive debate on the tax system in the European Union. I would suggest to the Commission that it should undertake a detailed study of the impact, whether positive or possibly negative, of a gradual EU-wide approximation of VAT rates and their application. We need sound analytical data as a basis for serious consideration of this matter.
Moving on to reduced VAT rates for labour-intensive services, I should like to reiterate the point that these rates were introduced six years ago on an experimental basis. I am genuinely astonished that the Member States have not yet been able to assess the results of this experiment.
The current state of affairs leads to blatant discrimination against the new Member States in this field, and it must not be allowed to continue. 
Wolf Klinz (ALDE ). –
   Mr President, Commissioner, it is – as the previous speaker, Mr Rosati, said – pretty astonishing and disappointing that we should, four weeks before the end of the year, be debating something that actually should have been sorted out ages ago.
The fact is that the special rules introduced in 1999 – for three years in the first instance – on reduced rates of VAT applied only to a few Member States and to certain labour-intensive services. The original timeframe was, following its expiry, extended repeatedly, indicating that it was not possible even in the past to come up with a definitive solution. Failing another decision, this rule will cease to apply at the end of this year. What we do know is that the expectations raised by the introduction of the special rules were met – if at all – only in part.
It was in 2003 that the Commission established that the reduced rates of VAT were not being reflected in lower prices and that they had practically no perceptible influence on the employment situation.
It was this that led my group to make its support for the joint, all-party, motion for a resolution dependent on the fulfilment of several conditions. The first of these was that the extension should be a one-off event, effective only until the end of the next year. Secondly, there was the condition that the Commission should initiate a comprehensive study of the measure’s effectiveness. Thirdly, after the end of the extension period, that is to say, with effect from the end of next year, the only areas to benefit from the reduced VAT rate would be those where the reduction had had a demonstrably positive effect on prices and employment. In those, then, the special arrangement would become permanent, and other areas, those in which it had proved ineffective, would be excluded from it once and for all. New Member States would also be allowed to apply the reduced rate so that there would be no distortions of competition in the EU.
We demand a split vote on paragraph 2 of the joint motion for a resolution, as the rules have been in force for some considerable time, and the report referred to is, in our view, sufficiently detailed and explicit. 
Marie Anne Isler Béguin (Verts/ALE ). –
   Mr President, Commissioner, ladies and gentlemen, who would dare announce today the slashing of 170 000 jobs in the countries long established in our Union?. Is this madness? An aberration? No, this is simply what is taking place. In actual fact, if the ECOFIN Council on 6 December does not extend the reduced VAT rate, this catastrophic situation will begin in 2006.
The implementation in 1999 of the experiment of reduced VAT rates for labour-intensive services has proved its effectiveness. It has created jobs. In France, for example, the BTP (public buildings and works sector) estimates that 60 000 long-term jobs have been created. The experiment has also contributed to combating illegal work. Still on the subject of France, the number of offences committed in the construction sector has been halved. Furthermore, this measure is beneficial in combating global warming. Applying reduced VAT rates in the context of energy saving work would benefit consumers and businesses alike and represents a potential source of jobs that cannot be relocated. What more convincing arguments could the Council therefore present in favour of rejecting the extension of reduced VAT rates?
In France, ladies and gentlemen, the people have already expressed their anger towards a Europe that no longer meets their expectations. We therefore genuinely await positive signals from the Council in the future. 
Patrick Louis (IND/DEM ). –
   Mr President, ladies and gentlemen, on 4 May, only a few days before the referendum on the European Constitution, the EU Presidency announced an imminent agreement on reduced VAT rates for the catering sector in France, rates that would decrease from 19.6% to 5.5%. In order to make people vote in favour of the Constitution, the French Government had boldly to confirm this promise throughout the entire campaign, a long-standing promise, in reality, since it had already featured in the programme of the Presidential candidate, Mr Chirac, in 2002, and even in 1995. Likewise, in its draft finance act for 2006, the French Government, gambling on an agreement at EU level, announced and provided for a one-year renewal of the reduced VAT rate for renovation work. It is clear that this two-faced promise fuels a permanent sense of uncertainty with regard to taxation, unsettling consumers and, above all, the professionals of the sectors concerned.
Now that our people have rejected the superstate, has the time therefore not come to tell Europeans the truth? Seeking to do everything and anything with 25 Member States, no matter what the cost, has crippling effects. Has the time not come to envisage another kind of Europe: a ‘Variable-geometry’ and ‘Variable-geography’ Europe? 
José Manuel García-Margallo y Marfil (PPE-DE ). –
   Mr President, I entirely agree with Mr Becsey’s speech, and I will therefore focus entirely on the reduced rate of value added tax applied to highly labour-intensive services.
All the opinion polls carried out in Europe indicate that the Europeans have two concerns: finding work and being certain that there will be resources to maintain the Welfare State. A lot has been written with a view to reassuring the citizens in this regard, but little has been done. Plenty of words and no action.
Probably one of the few concrete initiatives to have been taken in this area has been the establishment of a reduced value added tax on services that create employment, services that promote the contracting of workers, in particular the least qualified. A reduced VAT rate that also brings to the surface resources which were previously submerged, and which can be used to fund future pensions. And a reduced VAT on work that enables us to rebalance the unstable relationship between taxes on capital and taxes on work.
The situation at the moment is that this experiment, which began in 2000, may come to an end unless it is extended. And the Council still has no opinion; the Council does not know and has no reply.
I would like to say to the Commissioner that he can do much more than he has said in his speech. The Commissioner can put pressure on the Council: he can tell it that it is not a good idea to end this experiment just when new States are being incorporated, States in which the problems we have been resolving — the lack of jobs, the black economy — are more pressing than in the old States; that it is not a good idea to end an experiment, and thereby risk an increase in prices and a reduction in employment; that it is not a good idea to end this experiment just when we are about to discuss the Directive on services, which has created such concern in terms of employment in the Member States, and the Commissioner can tell it that this Parliament is unanimous and that this Parliament does not like to be treated as a joke, especially when the Council is not offering any well-founded opinion in return. 

Joseph Muscat (PSE ). –
   Mr President, thank you Mr President. I have the impression that here we are preaching to the converted for the simple reason that the Council is not here and the Commissioner is agreeing with the strong position which we are taking, even though he is saying that he does not think that the extension of the experiment is a good enough solution. I think we should, at this moment, at the beginning of December, also consider that solution. There is no doubt that the Council should take note of our position which is strongly in favour of the renewal of this facility which is strongly labour intensive and which seemed to be an experiment which succeeded and which created new jobs. Apart from this, this experiment should also be widened and should be given as a possibility to new Member States. The irony of all this is that while here we are speaking about having lower rates, to experiment with these low rates, there are some governments in other countries, including that of my country, Malta, which, since joining the European Union not only did not experiment with low tax rates, but increased VAT from fifteen to eighteen percent. I also believe that the range of services should be widened and should apply also for other services such as environmental services and restaurants. This experiment has proved successful, and in order to ensure our credibility with the people who elected us and whom we represent, the Commission and the Council should place greater value on one of the few experiments that have been truly successful. 
Paolo Costa (ALDE ). –
   Mr President, Commissioner, ladies and gentlemen, I add my voice to those of my fellow Members, at the risk of repeating the same arguments and opinions.
The experiment of reduced VAT rates has been carried out in some Member States, but unfortunately for all of those countries, it has been carried out at a time when the European economy has not been particularly impressive, especially in many of the largest Member States.
In labour-intensive sectors, this experiment has, in fact, made an even greater contribution than could have been envisaged, in so far as it has sustained significant employment levels.
Among other things, another argument in favour of continuing this experiment is the fact that Europe’s overall economic situation is changing slightly, if only very weakly at the moment, meaning that an end to the experiment would have disastrous effects.
Secondly, the experiment has been positive inasmuch as it has brought about changes of an all but structural nature in some countries in the space of six years. In my country, Italy, for instance, the experiment of reduced VAT rates has coincided with a measure providing incentives for building renovation via income tax – something that has met with enormous success. It is a genuine success because it has both enabled a large part of Italy’s building heritage to be renovated quickly and improved the country’s economic and financial situation.
From a financial point of view, the ‘income tax-reduced VAT’ formula has exposed an enormous amount of undeclared work – which can be taxed for the benefit of the country itself – whereas, from an economic point of view, this formula has probably been the most important ingredient in sustaining the country’s overall demand at a time when, in Italy, consumption is slack, productive investment is down and exports are falling.
Among the very many thoughts expressed, I add my own two in favour of the experiment. I therefore hope that, with the support of the Commission too, the Council will at last listen to the voice of the European Parliament. 
Astrid Lulling (PPE-DE ). –
   Mr President, while I support the report’s conclusions with regard to the minimum standard VAT rate, it is my duty to share a few problems I have with some of our rapporteur’s arguments, and I am pleased to have the support of the great majority of my group in this matter.
After much thought, the idea of proposing a maximum 25% for the standard VAT rate seems wise to me. We would therefore have a kind of corridor between 15% and 25%, somewhat like the currency snake in its day.
Let us recall that the starting point in 1992 was indeed one of moving in the direction of converged VAT rates in the context of the single market. This convergence did not actually take place, but Parliament’s proposal to set a maximum rate of 25% could decisively encourage us to move in that direction and thus prevent too great an imbalance between rates, something that is disadvantageous. That is why I support this proposal, which has been adopted by the Committee on Economic and Monetary Affairs and endorsed on two occasions by the European Commission.
I will not disguise my reservations, either, regarding the general idea, outlined by the rapporteur in his explanatory statement, to fundamentally restructure the tax systems by increasing indirect tax at the expense of direct tax. For the time being, I can see many more disadvantages than advantages to doing this: the danger of stimulating even more the inflationary pressures that are already too much in evidence; the danger of taking the momentum out of an often lifeless internal demand; and the problem in terms of the social equity of such restructuring. In short, let us be very careful before embarking on such paths.
Allow me, finally, to say something about reduced VAT rates in relation to labour-intensive activities, among other areas. The non-renewal of this measure, which has positive effects on employment, whatever Mr Klinz’s and others’ views on the matter, would not only be regrettable, as you said, Commissioner, but would also be a real catastrophe for all of the sectors concerned. I support Mrs Bérès, who very competently explained our concerns in order to press the Council, when it convenes for the last-chance meeting on 6 December, to reach a solution on the basis of the Luxembourg proposal, which has been taken up and enhanced by the UK Presidency. I therefore hope that our resolution on this matter will at last make an impression on the Council, which still has no representatives in this Chamber.
With things as they stand, Mr President, I believe that it should be possible for the Member States to have a great deal more scope to determine which sectors will benefit from a reduced rate, and the cause of the French catering workers, to give just this one example, seems, in my opinion, to be one of the most worthy. I therefore send out an appeal for the new German Government to demonstrate greater flexibility. 
Richard Howitt (PSE ). –
   Mr President, I wish particularly to emphasise the need to reimburse non-profit organisations or charities for the VAT they pay. I would ask Commissioner Kovács to reiterate his support for this idea, which he expressed at a conference of the European Charities Committee on VAT here in Brussels two months ago.
Charities like the Home Farm Trust – which supports 900 people with learning disabilities and has shops in Braintree, Colchester, Newmarket, Saffron Walden and Sudbury in my own constituency – cannot recover huge sums of money as they do not charge VAT, and provide their services heavily subsidised or for free.
Studies in Ireland and Denmark, as well as the UK, show that this eats up some 4% of charities’ total expenditure. Given that charities almost invariably provide services at a local level, they are a prime case for subsidiarity and national decision-making on the VAT rates they pay. This principle has already been accepted by the European Parliament in the Randzio-Plath report, and I call for the Commission’s support in the decisions to be taken before the end of this year. Without it charities will lose millions of euros each year. 
Avril Doyle (PPE-DE ). –
   Mr President, I welcome this package of proposals from the Commission, particularly in the context of achieving a reduction in the administrative burden for businesses, especially the small and medium-sized enterprises, which supply goods and services to other Member States. Streamlining VAT procedures for these businesses will enhance efficiency and encourage increased activity within the internal market, feeding to the Lisbon Agenda, which is supposed to be the focus and aim for all of us at the moment.
The one-stop-shop schemes, which are at the heart of the package, will ultimately enable new rules for cross-border businesses and business-to-consumer services to be introduced. This will have particular benefits in my own country for Irish companies that deliver services electronically over the internet to consumers in other Member States.
The current minimum standard rate of VAT fixed at 15% is due to end at the end of this year. The Commission is proposing to extend it to 2010. I support that generally and, in particular, I support the decision of the Committee on Economic and Monetary Affairs to have an impact analysis on implicit and standard rates of VAT in the Member States, which should also consider allowing all Member States the same opportunity to apply reduced rates on certain goods and services. We need to revisit the issue of special exemptions on reduced rates. My own country never applied for reduced rates. I think there are only nine Member States – if my facts are correct – that have the benefit of this.
We need to do something here. Restaurants, catering and hospitality services need particular attention in all Member States. In terms of jobs and services, these are areas which could really ignite economies throughout Europe at the moment, given that tourism is one of the growing areas. Currently, VAT rates on food in some Member States are prohibitive and need to be looked at urgently.
I note that the report on the one-stop-shops and the refund of VAT generally was only referred to Parliament because of a change to the legal basis. I have ongoing concerns about the number of times issues around a legal basis arise in this Parliament. These are consultative-only as far as Parliament is concerned. However, what is happening with legal bases? What is happening in terms of Commission proposals on different legal bases and the Council subsequently changing or amending them or, in many cases, introducing a dual legal base? We need certainty in our law. Uncertain law is bad law. We need to have an open debate on the legal basis issue in this House urgently. 
László Kovács,
   . Mr President, I once again express my thanks to Parliament for rapidly examining the proposal on the minimum level for the standard rate – considering that the current rules come to an end on 31 December 2005 – and for the positive contribution by the rapporteur. I understand the concerns of the honourable Members that we are running out of time, but wish to remind you that the Commission tabled its proposal as early as 2003, and it is the Council that has been unable to come to a unanimous decision.
I shall briefly comment on some of the amendments. The first amendment concerns a restriction on the level of the standard rate by setting a maximum level of 25% to prevent growing divergence in the standard rates of VAT applied by the Member States. This would require a new proposal from the Commission, thus preventing the adoption on time of a minimum rate to be applied as from 1 January 2006. Moreover, given past experience it has no chance of being unanimously adopted by the Council.
The second amendment aims at allowing more flexibility in VAT provisions in order to enable Member States to react to the changing economic situation. This is not in line with the first amendment, which tries precisely to prevent such flexibility as regards the standard rate. Generally speaking, this proposal is not yet the appropriate vehicle for carrying out a general assessment of the macro-economic impacts of VAT rates and the associated revenue and budgetary implications for the EU Member States.
I am pleased that part of the one-stop-shop package concerning the VAT refund scheme has the support of the honourable Members. Unfortunately the Commission cannot accept the proposed amendments, for the following reasons.
Amendments 1 and 2 relate to the regulation and cooperation arrangements for the refund procedure, which forms another part of the one-stop-shop proposal. Amendment 3 seeks to extend the deadline, which I believe is not necessary. Amendment 4 is not workable as, on the one hand, a strict deadline of four months for refunds would be imposed on the Member States, but on the other hand, there would be no deadline for a taxable person to hand in the requested additional information. The amendment is, furthermore, in contradiction with the second subparagraph of the same article, which mentions that a new period of three months starts to run as from the moment the additional information is received from the taxable person.
I am convinced that the positive opinion of Parliament will contribute to a timely decision in the Council on the standard rate proposal, and will facilitate the discussion on the one-stop-shop proposals with a view to their adoption under the Austrian Presidency.
Concerning labour-intensive services, I have listened carefully to all the contributions and I can only remind you that the Commission has already taken the necessary steps to support their inclusion in the scope of reduced rates as defined by Annex H. However, the current discussions in the Council are not easy.
I extensively explained in my introduction why I consider that an extension of the experimental arrangements is not really a viable way forward. Moreover, we need to be very cautious, since a unanimous agreement in the Council on such an extension would seem as hard to achieve as a genuine agreement on the scope of the reduced rate as such.
I support the consensus expressed in Parliament’s resolution. This is a very important signal to the Council of the need to reach an agreement that takes into account the interests of the European Union as a whole, as well as those of all the Member States. 
President. 
    I have received one motion for a resolution(1), tabled pursuant to Rule 108(5) of the Rules of Procedure.
The debate is closed.
The vote will take place today at 11 a.m.
Bruno Gollnisch (NI ). –
   Mr Chirac deliberately lied to French catering workers by making them believe that it was possible for him to reduce the VAT on their work without asking for Brussels’ permission.
It is not certain whether the Council will reach an agreement before the end of the year on the recasting of the VAT Directive, and particularly on the application of a reduced rate for labour-intensive services. If the authorisation of these reduced rates is not extended in one way or another on 1 January 2006, then entire sectors, with construction foremost among them, will feel the full force of the consequences.
Why have we ended up here? In terms of the labour-intensive services, this is a ploy to pressurise the Council into adopting a comprehensive reform of the VAT Directive. In terms of the catering sector, the Annexes of the directive must be changed. Germany is opposed to this. It does not want to see similar demands sprouting up on its soil at a time when it plans to increase its indirect tax by 20%. Is Germany wrong? No.
These problems would not exist if the Member States had held on to their fiscal sovereignty and were able to use it to stimulate employment. The real mistake and the real errors lie with those who sought to strip the Member States of their sovereign powers. 
Dominique Vlasto (PPE-DE ). –
   The European Union has made employment its priority and yet it is unable to make a decision regarding the application of the reduced VAT rate in labour-intensive sectors.
As a result of the Council continually blocking this decision, it is impossible today to modify in the Member States the list of sectors able to benefit from the reduced rate. Rushing to renew a Council decision year after year is not a responsible way of approaching matters. The legal and economic uncertainty hanging over these sectors of activity is no longer acceptable.
In the buildings and public works sector, the reduced rate applied to renovation works has enabled thousands of small businesses, which are most affected by this measure, to increase their activity and to recruit workers.
In the home care services sector, this reduced rate has made it possible to reduce the amount of illegal work and to improve recruitment conditions.
As regards the catering sector, which is an important source of jobs in Europe, there is no doubt that the application of the reduced VAT rate will produce the same advantageous effects in the Member States seeking to apply this measure.
I therefore call on the Council to assume its responsibilities and to reach an agreement that makes it possible to free the potential for job creation in labour-intensive sectors. 
President. 
    The next item is the Commission statement on developments in Slovakia regarding police forces. 
László Kovács,
   . Mr President, the Commission is well aware of the concerns raised by honourable Members in relation to the Slovak police force. Given the complexity and sensitivity of the matter and the time needed for the Commission to take a position, further time is required to analyse the issue and acquire objective and impartial information.
The Commission services responsible have been in contact with the Permanent Representation of the Slovak Republic here in Brussels and they are seeking the required information. In addition, the Commission was informed extensively on the matter by the European Confederation of Police.
I regret that we cannot give you a more complete answer at this stage. The Commission is doing all it possibly can to reach conclusions on this matter as soon as possible and it will promptly report to you on its findings. The Commission would therefore be ready to reply to the oral question at a subsequent part-session, should Parliament decide to add it to its agenda. 
Ján Hudacký,
   Discrediting one’s own country in pursuit of one’s political goals. That is how we might characterise the intervention of Mrs Beňová and her proposal to place a discussion on the situation in the Slovak police force on the agenda.
Political manoeuvring of union bosses in the police force has nothing to do with the protection of working conditions and human rights. Their lies, half-truths and suppression of the facts regarding the salaries that, by the way, were raised two weeks prior to the meeting in question had the aim of manipulating decent police officers and undermining the effectiveness of the police, thereby depriving citizens of their right to protection and security. The prospect of the Slovak Government caving in to union bosses dangerously draws the police into the political strife.
The political shenanigans of union bosses must not detract from the excellent results achieved by the police in the fight against organised crime and corruption in Slovakia. The slogans put up at the most recent meeting, such as ‘If the government will not pay the police, the mafia will be happy to’. go beyond all the accepted principles of independent trade union activity.
The assembly right of the police has never been curtailed or questioned, as proven by the rally scheduled for next Saturday. Neither the European Parliament nor other institutions of the European Union should allow themselves to be drawn into these unsavoury political manoeuvrings, which have been orchestrated with the aim of discrediting the achievements of the governing coalition in Slovakia. 
Monika Beňová,
   Commissioner, your response has disappointed rather than surprised me. I will continue to insist that the Commission pursue this matter very closely. I can make no further comment on what you have told us, since you have in fact told us nothing. Please do not take this as a personal attack, as it is intended rather as an attack on the content of the material submitted by the Commission.
My colleague Mr Hudacký, who like myself is from Slovakia, spoke of how a political squabble has been escalated to the Chamber of the European Parliament. I would like to state categorically that what happened at the Interior Ministry has been roundly condemned even by the deputy chairman of the Committee for Defence and Security, who is a member of the governing coalition, from the party of Premier Dzurinda. This indicates that the affair cannot be dismissed as an internal political squabble. It is now a question for the European Commission to state whether it is acceptable to suppress the rights of police officers in Slovakia. For, a police officer is an EU citizen and an employee just as any other EU citizen or employee.
We have placed two important questions before the Commission. These questions are all the more important for us because there may have been a breach of the European Human Rights Convention and of the Code of Police Ethics of the Council of Europe. We believe that the European Commission has a duty to give its opinion on whether or not the rights of citizens of an EU Member State have been breached. Parliament yesterday allowed this question to be referred to the Commission, thereby giving a very strong signal that it does not agree with the use of such practices by any EU Member State. Therefore, Commissioner, I ask once again that this matter not be sidelined and that we return to it at the next sitting of Parliament, and that you inform the MEPs about the opinion of the Commission. 
Angelika Beer,
   . Mr President, Commissioner Kovács, my group – the Greens – was in favour of us having this debate today. We take this line because of information received from Slovakia, in particular from the ‘European Confederation of Police’, which has been in our hands since June. It is because we are deeply concerned about something that we do not regard as an internal matter for Slovakia that we urge you to examine these accusations as soon as possible. Making Slovak police subject to military jurisdiction quite self-evidently goes against what has been laid down by the Council of Europe, not to mention police ethics. Treating police and soldiers as one and the same is in breach of the Geneva Convention and the United Nations Convention.
Civilian status for the police is one of the things democracy has achieved in Europe; it is something we have fought for, particularly in the Balkan countries, where police were involved in military actions during the ethnic conflicts. If the reports we have received are to be believed, we have to require the Slovak Government – and the country’s parliament as well – to reverse this misguided decision, which constitutes a reversion to an era and a type of politics that is not compatible with European democratic principles, and to return to the democratic community.
Police officers have a right to demonstrate too! Their freedom to do so is emblematic of the freedom of our society and of democracy. It is for that reason that we ask the Commission to examine these accusations with the minimum possible delay and to state its position on them. 
Tobias Pflüger,
   . Mr President, this is a two-spheres issue. It appears that, in Slovakia, the police were returned to military jurisdiction, which amounts to remilitarisation and is not acceptable. The police and the armed forces are, to put it quite simply, two different pairs of boots. It has to be said, though, that it is precisely this sort of confusion between the civilian and military spheres that is characteristic of the European Union when it deploys the military or the police abroad. The forthcoming Austrian presidency has gone so far as to define this as one of its priorities.
Secondly, there is also, in this context, the issue of the limitation of police officers’ trade union rights, which is not acceptable either. This House always makes a big thing of the violation of human rights in countries outside the European Union, but it also needs to call by their proper name manifest infringements of human rights within the European Union, and this is where your statement, Commissioner, did not go far enough: there is room for improvements here, and it is in this area that you need to make them; it is about this that you need to provide more information. Nor should we be reticent about highlighting human rights abuses in other countries; I will give you one example from Germany, for there, too, people are currently being excluded from certain jobs and there is excessive police violence and this needs to be said openly in this House. 
Sergej Kozlík (NI ).
   I have been following the recent activities of the Slovak Interior Minister, Mr Palko, with great concern and disquiet. These activities directly undermine the basic principles of democracy and civic freedoms in Slovakia.
The Interior Minister has interfered and continues to interfere with a legitimate trade union protest by Slovak police officers. By dismissing the chairman of the Police Federation and demoting him to the rank of ordinary police officer, he has interfered not only with personal rights of a police representative, but has thereby threatened the constitutionally guaranteed rights of citizens, citizens’ associations and trade unions to freely express their opinions. Our People’s Party – HZDS perceives Minister Palko’s threats of imposing disciplinary measures against the protesting police officers as a preposterous manifestation of the arrogance of power.
Esteemed colleagues, Mr Palko is a senior representative of a political party belonging to the European People's Party. I would therefore urge the leadership of this group not to stick its head in the sand, but to investigate the matter closely. On behalf of independent members of People’s Party – HZDS in Slovakia, I express our support for the call made by the European confederation of police EUROCOP to change the system of management of police forces in Slovakia, and convey our request that the matter be investigated by the European Commission. 
Anna Záborská (PPE-DE ).
   Our discussions today about the issue and expressions of support for protesting policemen are part of the opposition’s election campaign and of a smear campaign against a successful Slovak Government minister.
It is not true that at time of war policemen will be tried in the same way as soldiers. It is not true that from 2006 Slovak police will be overseen by the military. It is not true that policemen will be deprived of their rights, because military tribunals will conduct proceedings under the civilian legislation and, at time of war, policemen will be tried in the same way as ordinary citizens.
The Slovak police work under the same set of rules as the gendarmerie in France and carabinieri in Italy. The practice of military prosecution handling the criminal offences committed by policemen has been long established. Any claims that the police service is being remilitarised should be dismissed – if you excuse the use of such terms – as nonsense and demagoguery. I would like to point out to my esteemed colleague Mrs Beňová that a majority of the MPs from her own party supported this draft legislation in Slovak parliament, and indeed withheld their support from an amendment proposal aimed at changing the system. 
Poul Nyrup Rasmussen (PSE ). –
   Mr President, I must insist that the Commission give a full reply at the part-session in Strasbourg. I thank the Commissioner for his offer. Unfortunately, he cannot give us his response today but we must have a clear response.
I would like to say to the previous speaker that this is not a question of propaganda. What we are talking about here is Slovakia, a new Member State of the European Union, which, under the Copenhagen criteria, has exactly the same duties and rights as any other member.
Article 6(1) of the EU Treaty provides for democratic rights and fundamental freedoms. In Article 6(2), the European Union guarantees rights under the European Convention on Human Rights. In that Convention, we talk about equal access to the legal system and equal treatment in court. A military court does not consist of independent judges: it is appointed by the government and is in contradiction to the fundamental values of the European Treaty.
I therefore ask the Commissioner to answer two questions: first, are we right in saying that the police in Slovakia do not have the same access to a fair treatment in court as any other citizens in Slovakia? Second, am I right in saying that every Member State – including Slovakia – should fulfil the Copenhagen criteria and that the Slovak Government, in opposing a free trade union for the police, denying it the right to negotiate, to gather and to act, is acting in contravention of the Copenhagen criteria?
These are the two fundamental questions which I would like the Commissioner to answer clearly. I do not doubt that Slovakia and its government – in particular its government – have to respect these fundamental rights. That is why I fully agree with Mrs Beňová that this is a serious case and we need to have a serious and correct answer from the Commission so that the Slovakian people know that the European Union is on their side. 
László Kovács,
   . Mr President, I just want to respond to those honourable Members who urged the Commission to give an adequate answer. I would like to tell you that we need more information. In order to get more information we need more time, and certainly before any Member of the Commission comes before this House to give an adequate position, we need to have a debate in the College, on the basis of the information we need.
That is my answer for the time being, but it is certainly not the Commission’s last word on the matter. 
President. 
    The House has clearly expressed its wish that the questions raised here today should be answered at a later date, and I hope that the Commissioner will pass on this wish. 
Poul Nyrup Rasmussen (PSE ). –
   Mr President, I would just like to ask a formal question on procedure. From what I understood from Commissioner Kovács, the Commission would be prepared to answer the question at the part-session in Strasbourg in two weeks’ time. Have I understood that correctly? It is important and it is urgent that we receive a reasonable, rapid answer. The people of Slovakia really need a clear answer from the Commission, so it is an urgent matter. I would just like to ask you whether we can expect such a timescale – after all, it is two weeks we are talking about. 
President. 
    I would point out that the agenda for Strasbourg part-sessions, and indeed for all part-sessions, is decided by the Conference of Presidents. As I understand it, therefore, if the Commission is prepared to answer this question in Strasbourg, it will be the Conference of Presidents that is able to decide whether or not to include this item on the agenda.
The debate is closed.

President. –
   The next item is voting time.

Gay Mitchell (PPE-DE ),
   . Mr President, the proposal before us seeks to merge economic objectives with development objectives. It seeks to remove codecision, for which Parliament fought for 20 years, by taking 16 regulations away and replacing them with one regulation that writes Parliament out of the script. A strong and unanimous approach by the Development Committee, supported by three other committees, has seen some sense prevail.
We can now seek to amend this proposal by referring it back to the Development Committee, and I very much appreciate the work done by the Presidency and those in the Commission who proposed a new draft.
In Irish one would say , which means be ready, be vigilant. Parliament is not a rubber stamp, it has the power of codecision. That is a principle. It is not a product for sale. 37 Members of my Committee have signed a recommendation, on my own advice, to refer this proposal back for amendment. I hope the House will agree to that. 
Hannes Swoboda (PSE ). –
   Mr President, I would like to give this proposal my wholehearted support. It is not acceptable that the Commission should propose that we should lose powers, and so I endorse the proposal that this be referred back to committee. 


Johan Van Hecke (ALDE ),
   . Mr President, it is possible that some confusion may have arisen as a result of a number of errors that have crept into the nominal list prepared by the Bureau, and this I would like to eliminate by making it clear that all those who endorse the compromise that we have struck with the Council and Commission is supporting the amendments in Block 1, while rejecting all the others. During yesterday’s debate, the Commission and Council made it clear once again that there is no compromise unless the whole of Block 1 is approved, without any other amendments.
All groups, except the Confederal Group of the European United Left/Nordic Green Left, declared themselves in favour of this compromise yesterday. It is crucial that we, on the eve of the WTO Conference in Hong Kong, should have a regulation in place. This compromise is the result of hard work. Thanks to the cooperation of the shadow rapporteurs of the other groups, we have managed to reach a compromise that is accepted and endorsed almost unanimously. It strikes me as important that this should now be approved and that if, as a result of possible confusion, it is not, yet another vote should be held, and this is something that may not be what we want but is on the cards nevertheless.
I would therefore repeat that if we support the compromise, we must approve Block 1 to the exclusion of all other amendments. 

Neil Parish (PPE-DE ),
   . Mr President, I very much welcome this directive from the Commission to control and monitor avian influenza in the EU. We need a strong contingency plan to keep the disease out of the EU and if we are unfortunate enough for the disease to enter Europe we will need the right procedures in place to stamp it out quickly.
What is new in this directive is the monitoring of low pathogen avian influenza for the first time in Europe. I very much support this because the low pathogen form has the potential to mutate into the highly pathogenic form of the disease, which is highly contagious and fatal for poultry. I disagree with the Commission on one point, however. Once low pathogen avian influenza is found in poultry, that poultry needs to be disposed of very quickly so that the potential for the disease to spread and mutate into a highly pathogenic form is stopped immediately.
The directive maintains that meat from poultry found to have LPAI is safe to enter the food chain. I do not argue with the scientific advice, but the processing and marketing of this meat will be almost impossible. Furthermore, it would destroy public confidence in the very high quality of European poultry meat. I ask all Members in this House to support the amendments put forward by the PPE-DE Group in order to establish a common sense approach to stamping out LPAI in the European Union and maintain full public and consumer support for the industry.
While I am on my feet, I would like to add an oral amendment presented to me by Mr Ebner, which I fully support. I understand he has spoken to other groups in Parliament and gained their support. It is to involve hunters in the monitoring for LPAI. The Commissioner was also supportive of this last night. The oral amendment is to insert a recital 11b (new), which would read: ‘whereas hunters in Europe should be encouraged to assist in the monitoring of avian influenza outbreaks in wild birds by informing the competent authorities when they suspect that birds may be infected’. I would like to put that to the House. 


Jo Leinen (PSE ). –
   Mr President, item 4f has to do with the composition of the boards of directors of the European agencies. The text reads as follows: 
‘Parliament, for its part, should two representatives to the board of directors’. 
 I propose that it should read as follows: 
‘Parliament, for its part, should two representatives to the board of directors’. 
 What is the justification for this? Although Parliament, being part of the legislative power, should not claim the right to have two official representatives in all executive agencies subordinate to it, it should retain the right to delegate trusted experts to agencies of its choice, as it does with the European Environmental Agency in Copenhagen or the Monitoring Centre for Racism and Xenophobia in Vienna.
My amendment enjoys the support of the draftsman of this paragraph, Mr Florenz of the Committee on the Environment, Public Health and Food Safety, and also of the rapporteur on the regulatory agencies, Mr Papastamkos. I ask for the House’s backing for it. 


Harlem Désir (PSE ). –
   Mr President, there has been a translation error, so it is the English version that is deemed authentic. By voting in favour of Amendment 3, we are not deleting the part of the sentence in paragraph 13 that states that an exception in the field of services must be made of the health care, education and audiovisual sectors. By voting in favour of Amendment 3, therefore, we are clearly saying that a distinction must be made between commercial and public services and that public services such as water, sanitation and energy must be neither dismantled nor weakened, and we stand by the fact that the education, health care and audiovisual sectors must also be made an exception of. 
President. –
   Mr Désir, this means that the original English version is deemed authentic. We shall check all the translations in order to bring them into line with this original.
Robert Sturdy (PPE-DE ). –
   Mr President, I wish to make an oral amendment to Amendment 19. I realise that the Socialists may wish to have a split vote on this. It is a clarification point on TRIPs and TRIMs. You might say that we have been tripped up by the acronym of TRIMs. They are the wrong way round. I shall read the amendment with the technical changes: ‘calls for a permanent solution to be found, as a matter of urgency, in the field of TRIMs – trade-related investment measures – and of TRIPs – trade-related aspects of intellectual property rights – to ensure access to medicines for countries with no manufacturing capacity facing public health concerns’.
It is a question of turning those two words around. 
Harlem Désir (PSE ). –
   Mr President, I am afraid there has been a slight mix-up. There is one point on which I agree with Mr Sturdy. Paragraph 19 in fact mentions the agreement on investments, and this is an error, because this paragraph relates to the measures for accessing medicines and, therefore, it is definitely the agreement on intellectual property – the ADPIC Agreement in French and the TRIPS Agreement in English – that should be mentioned and not the TRIMS Agreement, the agreement on investments. That is why we requested a separate vote in order to delete the part of the sentence relating to the agreement on investments. I do not believe that this part of the sentence can be re-inserted at the beginning of the paragraph because this paragraph really has nothing to do with this agreement on investments. 


Charles Tannock (PPE-DE ). –
   Mr President, in the interests of making the wording of paragraph 5, indent 2 clearer and less clumsy, I would like to replace: ‘undertake political reforms leading to democracy and the rule of law starting through a multiparty system and the right for all currents of opinions to express their views’, the ending of which is rather clumsy, with the following: ‘to draw up and implement as soon as possible all the necessary reforms required to democratise the country, guarantee the peaceful expression of political opposition and ensure a speedy holding of multiparty elections under international monitoring with a view to national reconciliation’. 


Jana Hybášková (PPE-DE ). –
   Mr President, for clarification I will first read the amendment, ‘recognises the full right of women to participate freely in sports and encourages a greater participation of women in sport’. 
 Mr President, the aim of my amendment is to clarify and improve the text. In my opinion, it is crucial that Parliament and the European Union should recognise the right of women in developing countries and in Islamic countries, for example Saudi Arabia, to participate fully in all sporting activities. I hope that the male Members in the Chamber today, as well as the female Members, will vote in favour of my amendment. 

President. –
   That concludes voting time. 

David Martin (PSE ),
   . I voted in favour of sending this flawed proposal on Development Cooperation and Economic Cooperation back to the Committee. Since the Commission has now made it clear that it does not intend to come forward with a new proposal, substantial amendments will be needed to ensure that Parliament can maintain its right of scrutiny over the formulation and implementation of development policy.
I believe it is vital that the European Parliament stand united on this issue in fighting for co-decision over the development cooperation policy, currently undermined in this proposal. Poverty-alleviation should rightly remain the central focus of any development cooperation instrument and therefore further discussion is needed by the relevant Committees (Development Committee and International Trade Committee) in this context.
I remain unconvinced of the merits for developing countries of splitting the development and economic chapters of this instrument, since the majority of EU development policy has a joint legal basis in the treaty as development assistance and external economic cooperation. 

Zita Pleštinská (PPE-DE ).
   I voted in favour of the motion on the basis of my professional experience with Slovak-Polish cross-border cooperation within the framework of the Tatra Euroregion. Several Euroregion initiatives have come into being naturally, as bottom-up initiatives. The Euroregions of today are associations with legal personality and their own cross-border structures, and they have the best expertise in the field of sustainable regional development. They have also become important instruments of cross-border cooperation, which is of fundamental importance for European cohesion, under the terms of the European Outline Convention On Transfrontier Cooperation Between Territorial Communities or Authorities.
In view of their knowledge of the problems facing border areas, it is vital that the Euroregions participate in the development of strategies for 2007-2013, and that they play a greater role in cooperating with national institutions in the management of EU programmes. This report is an important initiative of the European Parliament, since our support for the Euroregions will speed up the fulfilment of one of the key EU objectives – elimination of regional disparities. 

Anne Ferreira (PSE ),
   .Thanks to the commitment of the UK Presidency and of the European Parliament’s rapporteurs, it has been possible to reach an agreement on this regulation relating to the compulsory licensing of patents for pharmaceutical products.
This agreement enables a new balance to be found for the European Commission’s proposal which, in the context of the WTO decision, made it still more difficult for countries faced with serious public health problems to gain access to medicines.
This compromise with the Council is satisfying because the compulsory licensing system is extended to NGOs, international organisations and non-WTO members. The compromise authorises exports to countries forming part of the same regional bloc.
I regret the refusal to promote technology transfer to the countries of the South, as well as the continued ability of the Member States to prescribe additional requirements.
This legislation, which will, however, only enter into force two and a half years after the adoption of the WTO decision, proves necessary for a large number of developing countries faced with serious public health problems. I am delighted that this decision coincides with World AIDS Day. 
Pedro Guerreiro (GUE/NGL ),
   .  Although they introduce some improvements to the regulation proposed by the Commission, Parliament’s proposals do nothing to tackle the market stranglehold that the practice of patenting drugs confers on the multinational pharmaceutical corporations, which is the key issue at stake here.
The proposals put forward by Parliament make a point of ‘legalising’ and imposing a ‘compulsory’ model for dispensing essential medicines to vast numbers of people. The professed aim is regulation, yet this is a deeply cynical move, as the proposals fail to provide mechanisms for promoting research, and fail to develop a capacity for research, manufacturing and supply – by and for these communities – of the medicines that are essential to them and to which they are entitled.
The idea is to ‘regulate’ access to medicines for so-called underdeveloped countries, in such a way that the multinationals can charge less, thus enabling them to increase their markets without losing the privileged status that they enjoy.
This strategy, however, runs counter to the conclusions of the World Trade Organisation’s Doha Conference, which stated that countries should ‘break’ patents on the grounds of public health, Brazil and South Africa being cases in point, as they have succeeded in providing medicines to AIDS patients free of charge.
Hence our vote against. 
David Martin (PSE ),
   . This regulation marks an important milestone for improving access to medicines in developing countries and it has my full support. It moves the EU beyond the current stalemate at the WTO regarding the granting of 'compulsory licences' to pharmaceutical products to combat diseases which afflict millions of people in the developing world.
Its adoption means that the EU, the world's largest single market, can now provide not only the vital medicines needed by poor people at affordable prices, but can support the all-important development of local manufacture through the transfer of technology and know-how to public health systems in developing countries.
I particularly endorse the attempts by the Rapporteur and Draftsman to extend the applicability of this regulation to non-WTO members, of which at least 40 are developing countries. Attempts to ensure that this new regulation can also allow for the important role of NGOs and UN agencies as providers of healthcare treatments also have my backing. 
Luís Queiró (PPE-DE ),
   .  Although I feel that we have yet to find ideal solutions, I applaud the efforts made in the proposal for a resolution before us. I particularly welcome some of the amendments adopted by Parliament aimed at empowering the poorest countries to pursue the fight against serious diseases that cause appalling loss of life, in the most effective and least expensive way possible.
The protection of copyright, and in particular intellectual copyright, is certainly not incompatible with health protection, and with the commitment that we must make to improve the access of the poorest countries to the medicines that they need most. 

David Martin (PSE ),
   . I welcome this proposed Directive on measures for the control of avian influenza. The proposed Directive aims to update EU measures based on lessons learned from recent epidemic scares and new scientific knowledge on how the disease spreads and risks to human health. The existing directive only establishes control measures against the 'highly pathogenic' avian influenza viruses, i.e. those causing major disease outbreaks in poultry and that may also occasionally infect humans.
However, there is evidence that these highly pathogenic viruses actually originate from the so-called 'low - pathogenic' avian influenza viruses as a result of virus mutation. In order to prevent major avian influenza outbreaks, the new legislation would also establish compulsory surveillance and control measures against the low pathogenic avian influenza viruses that can be transmitted to domestic poultry from wild birds, such as ducks and geese. The low pathogenic viruses cannot be eradicated from wild birds, but the infection of domestic poultry can be effectively controlled and virus mutation into the risky forms of the virus can be prevented.
I fully back the aim of the new legislation as it will ensure that the most appropriate surveillance and prevention measures against avian flu are in place and that the health risks, economic costs and the negative .......
Jean-Claude Martinez (NI ),
   .As far back as 1989, the dangers of humans being contaminated by the bovine spongiform encephalopathy (BSE) agent were foreseeable. The Commission and Member States such as France waited until 1996 before taking protection measures.
In the same way, the ultraliberalism of Mrs Thatcher’s Government had led the British Government to dismantle its national veterinary networks. When foot and mouth disease swept through Great Britain’s cattle and pig farms in 2003, there was no longer any kind of health barrier. Millions of animals were slaughtered as a precautionary measure and gigantic pyres burned everything. Only the ideological foolishness of ultraliberalism and of misguided free trade remained intact.
After the laxness of policies, we are now moving in a direction whereby, in the case of avian influenza, an attempt is being made deliberately to obscure the issue by exploiting people’s basic fears. All of this is dressed up as a precautionary principal that is nothing more than the regressive reaction of an Amish-style European elite.
A virus, non-existent at the present time and dreamed up by a political world seeking to make amends for its past weaknesses in the field of health care by implementing health protection measures left, right and centre, is meant to be threatening humankind with a Hollywood-style pandemic on a par with Spanish flu.
Taking this as a starting point, we stockpile ineffective antivirals such as Tamiflu at the same time as increasing people’s fears to make them forget about the inadequate measures taken in relation to relocations, Islamisation and other genuine problems that, for their part, remain overlooked. 
Luís Queiró (PPE-DE ),
   .  As the rapporteur correctly points out, the best way of preventing a potential human pandemic of avian influenza is by completely removing the disease from birds.
The Community must therefore channel its efforts into research and into making funds available, for the purpose of developing and obtaining oral vaccines, effective in all relevant bird species, to combat various strains.
We also welcome the amendment to the directive currently in force, advocating measures to cover low pathogenic viruses in poultry, to prevent the risk of mutation into the highly pathogenic form.
The report covers a range of measures aimed at preventing human infection, and we accordingly voted in favour. 

Ilda Figueiredo (GUE/NGL ),
   .  I am delighted that my report has been adopted. Greater Community support is needed to develop research into an oral vaccine to combat the various strains and to promote the use thereof should the need arise; the total cost of vaccines should be borne by the Community.
Community support must moreover be given to the Member States to develop a system for monitoring the disease, including laboratory diagnosis and research into suitable vaccines. Measures should also be taken involving cooperation and technical support for third countries, in particular Asian ones, in order to enable preventative and screening action to be taken in the countries in which avian influenza originates;
With regard to Community financial assistance, I am disappointed that my proposal to raise support from 50% to 60% in respect of the costs borne by the Member States in cases of both high and low pathogenic avian influenza was rejected.
The proposal for 50% support in respect of loss of income until a new holding is up and running, without of course undermining the workings of the market, was also rejected.
These considerations aside, I trust that the Commission and the Council will take due heed of the adopted proposals to protect public health. 
Luís Queiró (PPE-DE ),
   .  Public health measures cost money. They are designed to help a huge range of people, and involve research, prevention and control. In the case of avian influenza, the method of providing financial assistance to cover costs incurred in taking the necessary veterinary measures needs to be updated.
There is a possibility of a worldwide pandemic, but some Member States are more at risk than others owing to their location on the migratory flight path of wild birds.
If one factors in prevention, in particular regarding the development of monitoring systems, laboratory costs and research into new vaccines, one appreciates the enormity of the financial commitment required. I therefore voted in favour of the report. 

Ilda Figueiredo (GUE/NGL ),
   .  The purpose of this Commission proposal is to amend Regulation 974/98, which was the legal framework during the change-over period in the context of the adoption of the euro in all current euro zone countries. The intention is now to use this legal framework for the countries that joined the EU on 1 May 2004, and were under the legal obligation to become part of the euro zone. One of the key proposals is to reduce the time taken by the change-over and to find a ‘Big Bang’-type solution, with the introduction of euro notes and coins at the same time as the adoption of the euro as the single currency.
This report follows that path and seeks to ensure that no Member State can leave the euro zone. We feel that that is unacceptable and that Member States are perfectly entitled to leave the euro zone should they wish to do so. Attempting to impose such a restriction on the new Member States when two countries, Denmark and the UK, have an opt-out clause and another, Sweden, has decided not to join, is tantamount to discrimination.
Hence our vote against. We maintain our opposition in principle to the euro. It is clear that monetary policy has led to economic stagnation and unemployment, which also ...
Bruno Gollnisch (NI ),
   .What, then, does the euro zone have to offer today? The lowest growth rate of the industrialised countries. Unemployment. Increased living costs. Absurd budgetary constraints. A dramatic rise in government debt. A non-existent exchange policy and an overvalued euro. A European Central Bank focused on inflation fears to the extent that it is today preparing to increase its leading rates at the risk of jeopardising economic activity and employment. The euro has caused a great deal of disillusionment and damage, which will worsen if the economies in the zone move further and further apart.
In the wake of the new Member States’ joining the European Union, surveys published in the Western press showed that, while the citizens of these countries were in favour of a membership tying them once and for all to the democracies, they did not understand everything that such membership would involve. A number of them were, and undoubtedly still are, convinced that the shift to the euro was an option and not an obligation.
It is less a question of whether a country can or cannot bring in euro notes and coins as soon as it adopts the single currency. It is more a question of whether its people agree and have understood all the consequences of such a move. It is imperative that they be consulted via referendum. 
David Martin (PSE ),
   . I welcome this report which looks at the previous national strategies of the introduction of the Euro and suggests how they can be improved and implemented in the Member States who may wish to enter in to the Euro zone, as and when they decide.
I hope one day it will be relevant to the UK. 
Andreas Mölzer (NI ),
   . There are some ways in which it is understandable that the new Member States should be so keen to introduce the euro without much delay.
What needs to be borne in mind, though, is the fact that a mere 38% of the public in the 10 new Member States are persuaded that the introduction of the euro would be beneficial in its effects and that nearly half favour its introduction at as late a date as possible.
It is this latter choice that we should accept, since it does offer the countries concerned the opportunity to carry out the necessary reforms at a more leisurely pace and allows the people more time in which to get used to the idea of the position changing.
It is also a fact – and this is not the least of the considerations to be borne in mind – that past experience, whatever the attempts to deny it, shows that the introduction of the euro leads to increased prices, since companies endeavour to recover the costs they have incurred in the course of the changeover.
The Commission should demonstrate that it has learned from the failure of the EU’s constitution by supporting referenda to discern the popular will – such as the one planned for Poland – rather than arguing against it by claiming that Poland is obliged to introduce the euro. When such states as the United Kingdom, Denmark and Sweden retain their monetary independence, we should allow others to do likewise. 
Luís Queiró (PPE-DE ),
   .  The concept of voluntary cross-border cooperation is one that I support and that deserves to be encouraged.
Broadly speaking, I warmly welcome cooperation on various levels between the administrations of different Member States, especially when this is the result of a voluntary initiative undertaken by these administrations (although this can be encouraged) and when it does not lead to a new administrative and bureaucratic entity. I also welcome the fact that, in this specific case, this includes cross-border neighbourhoods outside the EU.
I therefore voted for this report.
There is one aspect, however, that I must make clear.
These initiatives must not be encouraged or conceived on the basis of an approach that runs counter to that of the central powers. In other words, the EU must not, by means of such encouragement, seek to bring about the internal breakdown of individual Member States, which can only be harmful to them. This is not, and must not become, the Union’s role or purpose. 
Luís Queiró (PPE-DE ),
   .  The regulation on the introduction of the euro has proved to be a sound legal framework during the change-over period in the context of the adoption of the euro as a single currency in all current euro area countries. It can therefore be considered a suitable basis for future participating Member States, although some technical adaptations are needed. More importantly, following the experience of the change-over to the euro, there needs to be an improved communication strategy, in order to provide for the dual display of prices to inform the citizens, changes to the dual circulation period for the two currencies, and an extension to the deadlines for banks to effect the change-over.
I therefore voted in favour of the Rosati report. 

Ilda Figueiredo (GUE/NGL ),
   .  Since October 1992, and following three extensions (until the end of 2005), the Council has retained a minimum standard rate of VAT in the EU of 15%. The purpose of this Commission proposal is to further extend this rate until 31 December 2010, and this is something which we endorse.
The original idea behind establishing a minimum rate was to create a band with a maximum rate that would be harmonised to a single rate of VAT throughout the Community. Although no Member State has a rate below 15% or above 25%, the establishment of this band would affect the tax sovereignty of the Member States and their financing options under the Community budget.
The report also contains an issue that has reared its head yet again and led us to vote against. Attempts are subtly being made to speed up debate on VAT harmonisation, which would undermine other flexible elements of the current arrangements, such as reduced rates of VAT in line with the different social and cultural needs of individual Member States. This lends further weight to our decision to vote against. 
David Martin (PSE ),
   . I support this report which agrees with the Commission proposal to extend the 'Annex K' experiment of applying reduced rates of VAT to certain labour intensive services.
I regret that the European Parliament has an opinion on VAT and that this issue keeps being blocked by the Council. The controversy surrounding this proposal is that if the Council fails to reach an agreement before the end of December, the experimental reduced rates system will cease to be legal in 9 Member States. This does not affect the UK and the UK applies their reduced rates through Annex H. Nevertheless, I would be disappointed if this scheme collapses. 
Jean-Claude Martinez (NI ),
   .Fifty years ago, two Frenchmen, Maurice Lauré and Georges Egret, invented the greatest piece of technology in the history of taxable humankind: the VAT system, applied by more than 123 countries, including EU countries from the time of the first directive in 1967.
In the 1990s, the monotheistic religion of the single market sought a single VAT rate whose cross-border legal system had to be that of the Member State of origin of the transaction and not the Member State of consumption or of destination.
The danger was that a Continental compensation fund would be created, a huge labyrinthine system distributing the VAT receipts from intra-Community trade.
The unanimity of the Member States enabled the Council to impose taxation on a ‘temporary/permanent’ basis in the sovereign country of consumption.
The intelligent move to make today would be to put European labour on an equal footing in terms of taxation with international labour, by turning the page on a century of mistakes and doing away with the idiotic tax on labour.
Likewise, the inspired system of reduced VAT rates must be used to clone import duties in order to levy deductible input tax on them, for the benefit of exporters, thus curing the economic and social diseases of globalisation, with its relocations and unemployment. 

David Martin (PSE ),
   . This report which I support, develops the cross border VAT refund system for SMEs stating time limits for data to be received and monies to be refunded. I hope it leads to a reduction of the administrative burden on SMEs

Mairead McGuinness (PPE-DE ). –
   Mr President, on behalf of my colleagues I wish to state that we voted in favour of this resolution on the WTO on the understanding that the reference in paragraph 6 to the CAP reform relates to the 2003 CAP reforms under Commissioner Fischler. 
Proinsias De Rossa (PSE ),
   . I support this joint resolution on preparations for the WTO conference and hope it will facilitate international trade in playing a major role in the promotion of economic development and the alleviation of poverty. I particularly support the Amendment calling for: the phasing-out by 2010 of all forms of export competition, including food aid, export subsidies and state-trading entities, by all industrialised countries in parallel. It is crucial that a distinction should be made between commercial services and public services, and that public services such as water, sanitation and energy should not be dismantled or undermined in the GATS.
The Doha Round must succeed in order to strengthen the multilateral trade system to ensure the progress and harmonious development of the world economy. Trade coupled with aid and debt relief is essential to the achievement of the 2015 Millennium Goals so concrete results with regard to the development aspects of the Doha Round need to be achieved during the Hong Kong Ministerial Conference. 
Bruno Gollnisch (NI ),
   . – The Commission is preparing to sacrifice our agriculture and our food security at the Doha Round. It is preparing to support the Agreement on Trade in Services – the notorious GATS – which is nothing more than a Bolkestein Directive on a global scale. The Commission intends to further reduce our import duties, which are, however, already the lowest in the world, and it will only half-heartedly defend European interests against dumping in all of its guises, against pirating and counterfeiting, or the necessary requirement for Europe’s competitors to respect a minimum of social and environmental standards.
It is with remarkable steadfastness and short-sightedness that this Parliament welcomes the benefits of globalisation and that it reserves solely for developing countries its thoughts with regard to the protection and diversification of economies, the necessary acknowledgement of national interests, the freedom to choose the rhythm and speed of liberalisation or, furthermore, the preservation of jobs.
Since this Assembly repeats itself, I too will repeat myself. World trade is unequal. It is unfair. Yet, its main victims are the countries of Europe and their people. 
Pedro Guerreiro (GUE/NGL ),
   .  With this resolution, the majority in this House, including the Portuguese Socialists, Social Democrats and Christian Democrats, has reaffirmed its desire to liberalise world trade, or in other words to open up markets to competition between hugely disparate countries in terms of economic development, much to the delight of the large economic and financial groups, which stand to gain enormously. The majority has sought to pull the wool over people’s eyes, by asserting that development can only happen by liberalising trade, within the framework of the capitalist onslaught, when in fact what has happened is that poverty has become worse, along with inequality around the world, a trend that will only get worse, as the United Nations Development Programme has warned, if we continue further down the current path of liberalisation policies.
The effects of liberalisation are as follows: the gains made by the workers are undermined, the sovereignty of the people come under attack, large multinationals appropriate natural resources and biodiversity, environmental destruction, higher unemployment, millions of small farmers going to the wall and food sovereignty and safety being put at risk.
What is needed, therefore, is a different international order, which, on the basis of mutually beneficial cooperation, meets the needs of every community; ensures that people can enjoy their most fundamental rights to food, health, housing, education, culture and leisure; leads to each State achieving its full potential, with its sovereignty respected; and ensures that environmental protection is promoted.
That is all that is at stake ... 
Jörg Leichtfried (PSE ),
   . I reject the resolution, in the version jointly agreed and submitted, on the preparations for the 6th Ministerial Conference of the WTO in Hong Kong. The demands and arguments contained therein are too narrow and I would like to see its demands in respect of the social dimension in the WTO go much further.
The Doha round should include consideration of such non-trade-related issues as society, the environment and culture. Internationally recognised social minimum standards should not be regarded as a form of trade protectionism; on the contrary, they make ‘fairer’ trade possible, given that there is an interaction between trade and social affairs.
In my view, fair and just economic and social development are dependent upon the incorporation, as binding provisions, of minimum labour norms in the WTO Agreements.
The prohibition of child labour, the right of men and women to receive equal pay, the abolition of forced labour, the legitimacy of trade unions and what is termed the freedom to conclude collective agreements are among the most fundamental minimum labour standards, and the ILO requires most countries to implement them already. If a fair system of world trade is to be developed, binding minimum labour norms such as these, along with compliance with international environmental standards, must be given parity alongside the prevailing WTO trade law. Laying down stipulated labour norms can have nothing but a positive effect on a country’s economy, and they must not be regarded as a hindrance. 
David Martin (PSE ),
   . I voted for a statement on the WTO Ministerial Conference which sends a strong signal out that development should remain the focus of discussions in the Doha round.
This means that richer players, such as the EU, should complete the necessary reforms to end distorting subsidies in agriculture and open our agricultural markets to products from poorer, agriculture-dependent countries. At the same time, no unfair demands should be made on the very poorest countries to open their domestic markets in other areas.
There is a great deal at stake in Hong Kong, not least the need to demonstrate our commitment to encouraging trade between developing countries. South-South trading remains an important vehicle for long-term development of countries as 70% of tariffs paid by developing countries are paid to other developing countries. Further, developing countries stand to make great gains in this area since trade between developing countries is estimated to be growing twice as fast as global trade and already represents some 40% of developing country exports. 
Jean-Claude Martinez (NI ),
   After Seattle, Doha and Cancun, now comes the turn of the Hong Kong Ministerial Conference to continue 60 years of philosophical and technical mistakes with regard to the reduction and, in the long run, abolition of import duties. This is done in the name of a Ricardian theory that is not only devoid of any serious scientific foundation, but is above all constantly contradicted by the facts.
The continuous decrease in import duties is supposed to promote economic prosperity. Well, following decades of non-existent customs barriers, Africa continues to grow poorer. The abolition of import duties is supposed to create ‘the wealth of nations’. Well, in North America, the free trade agreement – the so-called NAFTA – of 1994 destroyed Mexican farmers.
The people are supposed to want this decrease in import duties. Well, in November 2005, the indigenous people of the Andes – in Ecuador, for instance – rejected the FTA – the Free Trade Agreement – which the Bush Administration seeks to impose on Colombia, Peru and Ecuador.
The World Bank, the OECD, the IMF and the WTO explain at length that lowering customs barriers means increasing living standards. Well, the ‘banana affair’ is there to dispute that. The WTO and the WTO conference together represent the slave market embellished by Ricardo, Adam Smith and other fraudulent preachers of the jungle Bible. 
Luís Queiró (PPE-DE ),
   .  The opinion that the development of international trade contributes to economic growth, development, jobs, and indeed a better environment in international relations, is, I am pleased to note, a widely held one. Even now, however, some groups still put forward programmes and agendas that form part of a common fight against a freer and more open world when it comes to trade. While it would be unwise to sing along to their tune, we also need to understand the origin of that discontent, because politics cannot be done by turning one’s back on reality.
Against this backdrop, the present Common Resolution meets the most significant concerns and makes some highly relevant points. As far as I am concerned, the EU needs both to adopt a clear and firm negotiating position, and to demonstrate a sincere desire to support economic development and world trade growth. I therefore welcome the fact that this resolution advocates support for economic growth in developing countries, and that emphasis is placed on social, environmental, work, cultural and, last but not least, economic concerns.
What is required is more, and fairer, international trade, without losing sight of our responsibilities to our citizens. 
Georgios Toussas (GUE/NGL ),
   . – The decisions by the ΕU for the Ministerial Conference of the WTO are characterised by the ambition of the imperialists, especially the USA and the EU, to use the rules of international trade in order to plunder the markets of the developed and developing countries, to the detriment of the peoples and with catastrophic consequences on the environment.
The joint motion for a resolution, which was supported by the Group of the European People's Party (Christian Democrats) and European Democrats, the Socialist Group in the European Parliament, the Group of the Alliance of Liberals and Democrats for Europe and the Union for Europe of the Nations Group, ratified the aggressive policy of the ΕU, to the detriment of the peoples.
The liberalisation of services being promoted under the 'Bolkestein directive' in the Member States of the EU is being selected as an international strategy within the framework of the WTO by the EU in order to strike collective agreements and workers' rights in general.
The drastic cuts in subsidies for agricultural products, on the basis of the review of the EU CAP and the general restructuring of agricultural production for the benefit of the monopolies, are intended to wipe out small and medium-sized farms.
At the same time, the dominion of the pharmaceutical group monopolies continues.
The WTO is an imperialist international body which serves to ensure that the dominion of big business and its profitability are perpetuated.
It is for these reasons that the MEPs of the Communist Party of Greece voted against the motion for a resolution on the WTO, thereby contributing to the development of the fight of the workers and strengthening the anti-imperialist and anti-monopoly fight for the peoples themselves to decide on their own future by drawing up agreements on the basis of mutual benefit. 

Athanasios Pafilis (GUE/NGL ),
   . – The joint motion for a resolution endeavours, in an insulting and unacceptable manner, to slander the Socialist Republic of Vietnam, by accusing it of human rights violations.
The objective is to exert pressure and create a climate for overturning socialist and grass-roots achievements, in order to create the preconditions for plundering the country. The intervention strategy of the ΕU by creating a financed 'opposition' is well known.
It is brazen-faced impudence to cite the 30th anniversary of the tremendous victory of the Vietnamese people against American imperialism and to accuse the government of a lack of democracy. The heroic people of Vietnam won their independence at the cost of the lives of the millions of people murdered by the imperialist interventions. Where is the sensitivity to the human rights of the tens of thousands of Vietnamese who were murdered, of the thousands of children who are born with huge problems because of the use of 'agent orange' chemicals? Why does the otherwise sensitive EU not ask the USA and the Monsanto multinational group to pay for the victims of chemical and biological warfare?
The European and American imperialists will never forgive the country that managed to crush three major imperialist powers, the USA, Great Britain and France. We express our support and solidarity for this heroic people, which symbolises the history of mankind. 

Mario Borghezio (IND/DEM ). –
   Mr President, I greatly regret the fact that Mrs de Palacio, on behalf of the Commission, has already stopped the Olympic truce from being enforced in the Suze Valley during the 2006 Winter Olympics. Even the Piedmont region requested this truce in order to put a stop, during the Games, to the tensions and disturbances created by the popular opposition in relation to the works under way on the high-speed Lyon/Turin line. Independence for the Suze Valley, free Piedmont! 
David Martin (PSE ),
   . I welcome this resolution on the Olympic Truce in the context of the Turin Winter Olympics 2006. The Truce is an essential symbol of the Olympic spirit and one that must be retained and respected. 

Jean-Pierre Audy (PPE-DE ),
   .I gladly voted in favour of the motion for a resolution on development and sport tabled and supported by my colleague, Mrs Martens, as sport is one of those disciplines bringing people together and moving them forward along the road to greater wisdom and progress. This resolution should be the starting point for an ambitious EU sports policy, by relying on the Member States’ national sports federations, particularly at youth level. 
David Martin (PSE ),
   . I voted for this resolution. I believe more must be done to encourage young people to take an active part in sport. We should also do more to encourage women to take part in previously male dominated activities. Finally, although not an EU issue we must encourage Member States to do more to retain green spaces and playing fields in major urban conurbations. 

Frank Vanhecke (NI ). –
   Mr President, to my mind, something essential is missing from Mr Duff’s report on guidelines for the approval of the European Commission. Indeed, I would remind you of how, last year, Mr Buttiglione, the Italian candidate Commissioner, was positively crucified as a result of being briefed against in a scandalous manner. In much the same way as in the Spanish Inquisition, the reason was not the policies that Commissioner Buttiglione might pursue, but the question as to whether, in his deepest and innermost belief system, he did not harbour opinions that fly in the face of this appalling political correctness.
Mr Buttiglione’s butchering was yet another step in the repression by our new Left-totalitarian priests. If this House were honest and consistent with itself, then this report would state that European Commissioners are not allowed to think in ways that political correctness does not permit. 
Philip Claeys (NI ). –
   Mr President, the Duff report reminds me of William Shakespeare’s immortal words ‘much ado about nothing’. Independence, competence, European commitment, these are all fine qualities, but in practice, I notice that this House has no problem with accepting people such as Louis Michel, who, in his former capacity as the Belgian Foreign Affairs Minister, ran counter to the very notion of European cooperation by demonising Austria; Mr Michel, in respect of whom it is generally known that he regards the European code of conduct for weapons export as no more than a scrap of paper; Mr Michel who, in March, during a flying visit to Cuba, said that things were not that bad over there and that the human rights organisations should stop defying Mr Castro. How fortunate that ethics and respect for human rights are not express criteria for the appointment to the post of Commissioner.
Ilda Figueiredo (GUE/NGL ),
   .  Regardless of the assessment of the principles, criteria and standards that the Commission must, as a college, follow, it is unacceptable that Parliament should adopt reports stating that ‘the Constitution is to enter into force on 1 November 2006’. Only an unhealthy obsession with federalism and neoliberalism would lead Parliament’s majority to persist with this idea, even after the defeats in France and the Netherlands blocking the adoption of the so-called European Constitution.
As regards the assessment criteria and principles, there are some welcome points, but we must not lose sight of the fact that, beyond the candidates’ competence, commitment and suitability lie their policies, be they individual or collective. This is the key criterion on which we base our assessment. 
Bruno Gollnisch (NI ),
   .I would point out that the French and Dutch citizens’ rejection of the European Constitution – by a large majority and via a referendum - rendered this text definitively null and void. The repeated references to this text in Parliament’s reports is a denial of democracy. Those who claim to represent Europeans should be the first ones to take account of Europeans’ desires when they are clearly expressed.
Secondly, this Parliament, which is not representative of European public opinion, given that it supports, for example, the accession of Turkey, immigration for the purpose of reinforcing the population and, furthermore, the country of origin principle in the Bolkestein Directive, sadly does not guarantee Europe’s smooth functioning. Parliament did not sanction the Santer Commission. It carried out a selective witch hunt during the appointment of the Barroso Commission – not for the good of Europe, but for ideological reasons and on account of power struggles between institutions.
The bottom line is that Europe is not a State. The Commission is not, and categorically must not be, a government. It is just a College of civil servants. Parliament’s approval of the Commission’s composition and of its President remains a mere pretence. It grants the Commission absolutely no democratic legitimacy whatsoever. 
Andreas Mölzer (NI ),
   . There are lessons that need to be learned from the failures and mistakes in the appointment of the Commission last year.
It was worthy of criticism not least in that a competent candidate was required to withdraw because he held fast to his conservative religious convictions, while an incompetent Stalinist remained in office. It is not in the least acceptable that dubious candidates – those, for example, who hush up their involvement in the murky side of party finance – have no problem getting through. After all, future members of the Commission should meet the highest moral standards – those condemned by a court of law have no place in it.
It is also embarrassing to see that there is no agreement as to how the competence and suitability of a future Commissioner are to be evaluated, with the consequence that different benchmarks are applied. All the more is this the case when uniform criteria and requirements would have put other candidates out of the running.
Not only must we at last be given the chance to pass judgment on the designated Commissioners as individuals, instead of being fobbed off with one vote on them all, but it is also essential that we in this House agree to uniform criteria for evaluating them. The Member States, too, must take greater care in selecting them and put up only those contenders who really are up to the job. What certainly would achieve this would be the drawing up of a shortlist from which the most suitable applicants could be chosen. This is the only way in which future farces can be prevented. 

Luís Queiró (PPE-DE ),
   .  Maritime transport is of vital importance to Portugal, given our significant coastal area. It is similarly important to the entire Union, which has a massively extensive sea border.
I therefore feel it is crucially important to ensure that Europe’s seas are viable and competitive, in accordance with the Lisbon Strategy.
Community measures covering competitiveness in the area of maritime transport must take account of the appearance of new maritime nations, such as China, Korea and Taiwan. We therefore need instruments protecting the new framework for business cooperation between operators of liner services into and out of the Union.
I therefore voted in favour of the Kratsa report. 

Ilda Figueiredo (GUE/NGL ),
   .  Without wishing to become embroiled in a debate on tax harmonisation and the common VAT arrangements, the main purpose of this resolution is to extend for a further year – until the end of 2006 – the trial period for those Member States that chose to do so to apply a reduced rate of VAT to certain labour-intensive services.
We feel that, as this is a one-off measure, it can help to promote job creation and to reduce the parallel economy. It is too early at this stage to assess the socio-economic impact of this measure, which will also lead to greater flexibility in terms of indirect taxation.
It should be borne in mind that, were this measure to end suddenly, prices could rise. These arrangements should apply to all current Member States, as new Member States should not be subject to discrimination, which would be unacceptable. 
President. –
   I declare the session of the European Parliament adjourned.
