
Maij-Weggen
On a point of order, Mr President. The television sets in our offices can, I believe, receive 36 channels. One of them was a Dutch channel carrying the Dutch morning, midday and evening news. Well, it is no secret that since the start of the week that channel has vanished from our screen. Can you please ask the authorities responsible to reinstate it so that we can once again receive the news from the Netherlands in the morning, at midday and in the evening?

President
Certainly, Mrs Maij-Weggen, we will see to that.

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

Díez de Rivera Icaza
Mr President, I see that my name does not appear in yesterday's Minutes. I do not know whether this is due to an oversight on my part but I would be grateful if it could be rectified since I was present.

President
We will try to do that, Mrs Díez de Rivera Icaza.

Coates
Mr President, I wanted to draw your attention to an article which has appeared in the European Parliament magazine. It is entitled: 'The EPLP's selection controversy'.
Much of this article is political commentary which is of no interest to Parliament as an institution. However, it contains some allegations which are worrying, including one to the effect that persons who wished to become Members of the panel for the forthcoming elections were compelled to sign a memorandum making over some of their staff allowances to the Labour Party. It is claimed - perhaps justly - that this may be a breach of European Parliament Rules.
Is it possible for the presidency to examine this question and give us a ruling?

President
Mr Coates, let me say for a start that the magazine you are referring to is not a European Parliament publication and Parliament is therefore not responsible for it. It is a magazine which receives support from the European Parliament so that it can give information about Parliament, but the Bureau and our services are not responsible for the content of articles published in it.

Donnelly, Alan
Mr President, you are going to have a number of these incidents over the next months. It is pure politics on Mr Coates' part. He is one of the disappointed in this Chamber. He is someone who is no longer a member of the Labour Party but who was elected as a Member of the Labour Party. And if he had any decency he would resign his seat now and let us hold a by-election.

President
I would not like this discussion to become a personal confrontation between Mr Coates and yourself.

Tomlinson, The Lord
Mr President, would you be prepared to agree with me that anonymous articles quoted in evidence are about as useless as statements by Mr Coates?
(The Minutes were approved)

ECB: minimum reserves - ECB: sanctions - ECB: statistical information
President
The next item is the joint debate on the following reports:
A4-0332/98 by Mr Hoppenstedt, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the recommendation of the European Central Bank for a Council Regulation concerning the application of minimum reserves by the European Central Bank (ECB0002/98 - C4-0451/98-98/0808(CNS)); -A4-0329/98 by Mr Katiforis, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the recommendation of the European Central Bank for a Council Regulation concerning the powers of the European Central Bank to impose sanctions (ECB0003/98 - C4-0452/98-98/0809(CNS)); -A4-0327/98 by Mr Hendrick, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the recommendation of the European Central Bank for a Council Regulation concerning the collection of statistical information by the European Central Bank (ECB0001/98 - C4-0450/98-98/0807(CNS)).
Hoppenstedt
Mr President, ladies and gentlemen, the report on minimum reserves is one of the many building blocks in the intensive dialogue conducted between the European Parliament and the European Central Bank for the purpose of formulating a set of basic conditions for monetary measures. In his address to the Subcommittee on Monetary Affairs on 22 September 1998, Wim Duisenberg re-emphasised the importance of a minimum reserve requirement as a potential instrument of monetary policy. As the parliamentary rapporteur on this topic, I am pleased to be able to assist in fleshing out the concept of this monetary instrument.
In the discussion on minimum reserves over the past few months, three key functions of this instrument have taken shape. First of all, a system of minimum reserves could contribute to the stabilisation of short-term interest rates. Secondly, such a system could help to increase demand for central bank money, thereby creating and increasing a structural liquidity shortage in the money market. The ECB considers this helpful, because it gives the Bank greater leverage to operate efficiently as a provider of liquidity and to respond effectively in the longer term to the development of new payment procedures, such as electronic money.
Thirdly, the minimum reserve system of the ECB could also serve as an instrument for controlling the supply of money, since it is able to influence demand for money by means of interest-rate elasticity. Nevertheless, the use of minimum reserves an instrument of monetary policy is not universally accepted, since it can result in distortions of competition with countries outside the economic and monetary union. Against this background, I welcome the ECB decision to fix the minimum reserves at a fairly low level on the one hand and to set the interest on these minimum reserves close to market rates on the other.
Both of these measures reduce the risk of transactions being shifted to financial centres outside the euro zone. In this context I should like to highlight two other important elements of this report. The first is that the ECB should submit a study dealing with the inclusion of off-balance-sheet items in the basis of assessment for the minimum reserves. In view of the explosive growth in off-balance-sheet transactions, especially in derivatives, the stability of the entire financial system would benefit from the inclusion of off-balance-sheet items.
The second point I wish to make is that, in view of the increasing importance of electronic money, which the ECB itself has also recognised and studied, something it had not yet done a short time ago - at the hearing there was talk of a 10 % ratio, but a good deal more thought has been given to the matter since then - the policy on minimum reserves should be devised in such a way that it can respond flexibly to such future developments.
The inclusion of electronic transactions in the basis for the calculation of reserve requirements could prove to be an important aspect of the control of money supply. Let me stress that the purpose of the present report is to provide the ECB with an effective instrument and to enable the Bank to make flexible decisions on how to use the instrument to respond to present and future developments. That is why I assume that the Council will adopt this recommendation at the next ECOFIN meeting on 12 October 1998 in order to support the ECB in the implementation of its monetary strategies.

Katiforis
Mr President, Commissioner, ladies and gentlemen, despite the technical character of this debate, we can say that it is of historic significance because this is the first time that our Parliament has been called upon to legislate on issues relating to the European Central Bank, and I think we should take note of that. The special draft legislative resolution I am bringing before the House concerns the adoption of a Council regulation on the powers of the European Central Bank to impose sanctions. Under Article 34(3) of the ECB's Statutes, the ECB is entitled to impose sanctions in connection with its rules and decisions concerning the carrying out of its duties in the area of formulating monetary policy and, in a more limited way, in the area of monitoring the banking system.
Mr President, I think it must be seldom that circumstances can have made a debate on a rather technical subject as topical and important as this one. The events of the last few weeks in the money markets have revealed three things: firstly, that the scope of speculation is virtually uncontrolled; secondly, that it has brought us to the brink of economic ruin and, thirdly and most importantly of all, in relation to what we are debating here today, that the people responsible for those events and dangers are not only private speculators, but that those who are supposed to be monitoring them are also involved, i.e. the central banks, which not only cover up their speculative activities but also, when the markets happen to impose sanctions, hasten to redeem the losses they would have sustained. I am referring to the well-known affair, the notorious scandal of the Merriweather hedge fund in the United States. You may say that such things only take place in the United States, but the ethos and dogma of the central banks are the same everywhere, and we in Europe have no guarantee that things would have been better over here. Because what is happening is this: we have the phenomenon of the Central Bank of Italy, which itself speculated with public money in the hedge fund that was speculating in Italy with Italian government bonds, which the Central Bank of Italy is supposedly committed to protecting so as to maintain some discipline in the market.
Now, Mr President, who is to keep tabs on the Central Bank of Italy is an interesting question, because the Treaty is quite incomplete as regards the subject of controls on credit institutions. Who is to keep tabs on the Central Bank of Italy? The Italian authorities? The bank can retort that it is independent. We have made central bankers independent. The European System of Central Banks? The bank can respond by invoking the principle of subsidiarity. So what with independence and subsidiarity, central bankers have managed to acquire rights and powers unmatched even by the divine right of kings. And they are supposed to be serving democratic regimes. It is a dangerous situation - how dangerous is clear from what has happened in the last few days - and of course it is unacceptable. The weapon we will be putting into the hands of the Central Bank to enable it to exercise control and impose discipline is quite inadequate, because we are dealing with a procedural decision - which we must of course adopt, which is certainly excellent from the technical standpoint, as shown by the fact that not a single amendment has been tabled - and your rapporteur's opinion is that we should approve it and commend the quality of the work. But we should be aware that what we are doing is quite inadequate, because the checks must become much more substantial if the public is to be protected against the situations that are developing in the international money markets. Because, with the powers we are conferring upon them, the central bankers should understand that their job is to make sacrifices on behalf of the public and not on behalf of speculators, as they have unfortunately been doing until now.
Of course, central bankers point to their triumph in relation to inflation. But where inflation is concerned, many factors have played a part: not just the policy of the central banks, but the financial policy and the policies of governments in the area of prices and incomes. But in the very place where the central banks should have achieved their greatest success against inflation, i.e. in their own back yards, they have completely lost control because the inflation of shares and bonds resulting from speculation - which they did nothing to control, but covered up as we are now finding out - has reached a peak and has created an enormous danger for European stock markets, American stock markets and for the worldwide economy. We are giving them a weapon today, as indeed we ought to, but at the same time we must warn them that weapons they receive from democratic regimes are intended to serve Europe's peoples and not its speculators.

Hendrick
Mr President, Article 5.1 of the Statute of European System of Central Banks requires the European Central Bank, assisted by the national central banks, to collect statistical information for carrying out the tasks of the European System of Central Banks. The information is to be collected either from the competent national authorities or directly from economic agents.
The draft recommendation for a regulation is quite straightforward in a number of respects. However, I am concerned about certain matters relating to the confidentiality of statistical information supplied to the ECB. It appears to me that the ECB, in its drive to be as independent as possible, would like all the benefits of this statistical regime but without the responsibility that Eurostat are placed under by Community law. The good faith of the NCBs in collecting the information on behalf of the ECB should not be prejudiced by the ECB failing to respect the confidentiality of the information in its possession. In this respect, I have tried in my amendments to tighten up these aspects.
In order to collect the information necessary for carrying out the tasks of the ECB, particular attention must be paid to 'the reference reporting population'. A number of issues were raised. Firstly, on sanctions: if no information is received by the ECB or NCB by the established deadline, a daily penalty payment not exceeding 10 000 euros may be imposed. Secondly, if the information supplied is incorrect or incomplete, in a form not complying with the requirements, a fine not exceeding 200 000 euros may be imposed. If the reporting agent obstructs the verification of the accuracy of the information, again a fine not exceeding 200 000 euros may be imposed.
Confidentiality is a big issue and, in order to gain and maintain the confidence of the reporting agents, I consider it a prerequisite for high quality statistical data. Such data should remain confidential wherever possible.
Looking at the regime itself, recital 22 argues that the confidentiality regime in this Regulation 'must differ to some extent from the general Community and international principles on statistical confidentiality'. This is the argument about it conflicting with the Eurostat provisions. The justification for this is unclear and the use of information should therefore be made to conform with the provisions on confidentiality in the Council Regulation itself.
Concerning the imposition of sanctions, there is no 'get-out' clause to allow for circumstances where reporting agents are themselves unable to provide statistical information, i.e. there is no provision for a fax machine that does not work. There should be provisions for this and my report makes provision for that.

Randzio-Plath
Mr President, ladies and gentlemen, in exactly 87 days' time European economic and monetary union will begin. The preparations for the introduction of the euro by the European System of Central Banks are well under way and are keeping to schedule. Today's adoption by Parliament of the secondary legislation permitting the imposition of sanctions for failure to comply with the monetary element of minimum reserves and on the collection of statistical information represents a very important step in this direction. We should take this occasion to remind ourselves that monetary union is a project without historical parallel.
For the first time in history, nations are ceding sovereign rights to a federal European institution. In so doing, however, they are gaining in sovereignty over monetary policy. This point has just been proved once again by the current turbulent state of the finance markets, in the midst of which the euro zone has emerged as a haven of stability.
In this situation, every effort must be made to create the technical and legal basis on which the European Central Bank can best perform the tasks assigned to it in the Treaty. It is a matter of ensuring that the secondary legislation is implemented as soon as possible. The European Parliament has arranged its timetable with this objective in mind. This means that the ECOFIN Council can now complete the adoption of this legislation on 12 October. The involvement of the European Parliament in this legislative process is only one element in establishing the democratic legitimacy of European monetary policy through monetary dialogue between the European Central Bank and the European Parliament.
It is not only a question of guaranteeing the democratic accountability of an institution which enjoys a historically unprecedented degree of autonomy; conversely, it is also about the fact that only a policy backed by the public acceptance and credibility that comes from democratic legitimacy can achieve the goals imposed upon it by the Treaty. That is why a monetary dialogue with the European Parliament is in the best interests of the European Central Bank, enabling it to acquire credibility and acceptance in the marketplace and among the population at large.
The Hoppenstedt report rightly draws attention to an important instrument of monetary policy. If the European Central Bank is to achieve the aims set for it in the Treaty and if monetary union is to succeed, care must be taken to ensure that the ECB has a set of differentiated and efficient monetary instruments at its disposal. The minimum reserve is one such key monetary instrument; it is able to steady the banks' demand for central bank money and thus to prevent highly volatile short-term interest rates. Active use of this instrument to prevent speculative flows of capital, as happened in Germany, for example, in the early 1970s after the abandonment of the Bretton Woods system, does not feature in the armoury of European monetary policies at the present time.
In view of the worldwide financial crises and the speculative movements of 'hot money', minimum reserves will serve even more purposes in the future. Potential developments in the domain of electronic money, which could supplant cash and thus reduce demand for central bank money, it is important that the ECB should have this instrument in its monetary toolkit. Minimum reserves do, however, create problems, in that their use acts like a tax on the banking sector and could result in competitive disadvantages for financial markets in the euro zone.
Now that the ECB Council has decided in favour of moderate reserve ratios and the payment of interest on money deposited with the ECB by way of minimum reserves, the way is clear for the introduction of a compulsory minimum reserve. The European Parliament can assent to this proposal, as the Katiforis report has also spelled out very clearly in connection with the right to impose sanctions. So the European Parliament rightly has no objections to the draft regulation. Similarly, the collection of statistical data is a necessity in the European Union, especially when the money supply has to be controlled in this way; since the development of money-management and saving patterns in the European monetary union is an unknown factor, a broad database will be vitally important.
As Mr Hendrick and also the draft regulation rightly state, the European Central Bank must be given the legal authority to assemble an adequate database.
It goes without saying that the European Central Bank cannot act in a legal vacuum in this area. The general precepts of the law must be the yardstick against which its actions are judged. That is why the Hendrick report is right to draw attention to the problems of confidentiality and protection. It is important, in other words, that proper provisions are adopted, as the European Parliament has underlined in the compromises proposed in its amendments.
As has been the case over the past few months, European monetary union is still on schedule and undergoing thorough preparation so that it can begin 87 days from now, on 1 January 1999, and can do so with an European Central Bank which is equipped with an efficient set of instruments.

Gasòliba i Böhm
Mr President, a few days ago, Mr Duisenberg, the President of the European Central Bank, addressed the Subcommittee on Monetary Affairs, which is chaired by our colleague, Mrs Randzio-Plath. He assured the subcommittee that the relevant deadlines and provisions were being met as required to ensure that the operational mechanisms of the European Central Bank run smoothly when the euro comes into effect on 1 January next year. However, he did suggest that there were still some important aspects that needed to be clarified sufficiently before the euro came into effect.
These three reports, which were approved by a large majority in the Committee on Economic and Monetary Affairs, refer to some basic points of those issues that are essential to ensure the smooth running of the European Central Bank. And, as the various rapporteurs have demonstrated, there are still some fundamental questions that must be taken into account. Similarly, any observations that have been made in this respect must be included, for example on issues such as the reserves, the relations between Member States and the European Central Bank, the level of sanctions, the application of these sanctions, etcetera.
As Mrs Randzio-Plath said, there are less than 90 days left before the euro is introduced and, in these times of economic and financial upheaval, it has been shown that the euro will provide extremely important security and stability for the euro area. But the euro must be consolidated for this to happen. And I believe that - from Mr Duisenberg's speech and the comments that have been made here in committee debates on these basic issues - there is still an excessive imbalance between the running of the European Central Bank and the application of economic and monetary policies by Member States and their own central banks. This is a matter that we should resolve as soon as possible, and we must take all the necessary precautions to ensure that the euro runs smoothly from 1 January next year.

Gallagher
Mr President, today we are dealing with three regulations pursuant to Article 106(6) of the Treaty, covering the application of minimum reserves, the power to impose sanctions and the collection of statistical information by the European Central Bank, which have been drawn up according to a special procedure laid down by the Treaty. In this case the European Central Bank and the Commission are agreed that the bank itself prepare the projects for recommendation to avoid duplication.
With regard to the regulation on the collection of statistical information, our group, for its part, considers that the amendments adopted by the Committee on Economic and Monetary Affairs and Industrial Policy define yet again the area and the methods of collecting statistical information by the bank. The text before us seems to be satisfactory.
With regard to the regulation on sanctions, I note that the bank has been granted powers in a wider area of responsibility than most national central banks on the subject of statistics. It is not unusual that the armoury of sanctions foreseen by the regulation is vast. In Article 2 the regulation specifies that the sanctions must be proportionate to the faults committed and provides, before their implementation, for a detailed procedure to be followed which guarantees that the establishments threatened by sanction can evaluate their position before the competent authorities. That appears to be a good idea.
I come now to the regulation on obligatory reserves. We must remember that in July the European Central Bank announced the constitution of obligatory reserves from 1 January 1999, which would be paid at the rate of their principal operation of refinancing of the European Central Bank; this would guarantee a remuneration at the level close to the rate of the monetary market. We must remember, nevertheless, that this point does not appear explicitly in the draft regulation. The legal base on which this is based is Article 19(2) of the European Central Bank statutes. This does not allow it.
On the other hand, certain Parliament amendments propose to include more explicitly in the assessment of obligatory reserves a due date which is linked to posts outside the estimate and particularly to derivatives 'to support a monetary policy aimed at stability' and contribute 'to the stability of the whole financial system'.
Some here question the merits of these amendments in the sense that the request is already covered by Article 3 of the draft regulation. On the other hand it belongs to the ECB to determine, according to the objective criteria, the coefficients which should apply to each category of requirement. In any case the inclusion of derivatives in the assessment of obligatory reserves could not be justified for precautionary reasons, as seems to be suggested in one of the amendments.
Finally, the obligatory reserves are an instrument of monetary policy aimed at stabilising the rate of interest of the monetary market and at mastering the growth of money supply. From this point of view, in our opinion, the inclusion of certain derivatives in the assessment is justified.

Ainardi
Mr President, the reports of the Committee on Economic and Monetary Affairs and Industrial Policy unreservedly approve the three draft regulations concerning the powers of the European Central Bank to impose sanctions, apply minimum reserves and collect statistical information.
These regulations demonstrate the excessive power of the Central Bank. The direct management of the measures involved would effectively be handed over to the ECB without any intervention by national governments or even national central banks. No political control would be exercised over the ECB at Community level because the 'euro' Council is, at the moment, a powerless structure. Yet I am hearing that the euro zone will be a zone of stability. I would say my colleagues are being rather optimistic. If the global financial crisis weakens the economies of the emerging countries, everyone knows that the industrialised countries will also be affected. This is actually already happening, and it is also clear to everyone that this will have serious economic and social consequences.
Obviously, it is therefore imperative that we begin considering this matter and that we put forward proposals on the objectives and operating procedures of the European Central Bank. We cannot allow the Central Bank to become the censor of national budgets by imposing policies, in the name of the fight against inflation, which are restrictive in social and employment terms. It is a matter of urgency that we change the priorities and redefine the objectives of the Central Bank so that it can help by boosting appropriations for employment and growth and so that it can act to limit the free movement of capital and to curb the power of the financial markets.
Our citizens and their elected bodies must have the means to control this Central Bank. It is therefore essential to establish the transparency and democratic control of its activity, particularly through control by the European Parliament and the national parliaments and by opening up the major economic and monetary challenges to public debate. Beginning work to redefine the objectives and activity of the Central Bank is essential if we wish to start gradually redirecting European integration so that it really can respond to the needs and aspirations of the people of Europe.

Wolf
Mr President, here we are in the last furlong of a trotting race that is suddenly being taken at a gallop. Suddenly there is an unholy rush to complete in a matter of months the work that has lain undone over the years. We should at least admit that the whole thing is making us somewhat breathless. It is indeed true that minimum reserves are a key dimension of monetary policy. Mrs Randzio-Plath has already explained why. However, we should also perhaps go on to ask whether we ought not to envisage minimum reserves as a means of stabilising the euro in the global context and to create a broader basis for the reserve requirement. I can encapsulate the reasons for this in the words 'derivatives' and 'casino capitalism'.
As far as sanctions, supervision and control are concerned, Mr Katiforis has already said that these are not enough. When irresponsible traders operate with enormously potent hedge funds, the guarantees set out here will be insufficient, and as far as the statistics are concerned, not even a broad database will give us any genuine influence on real economic developments.
For all we may be on schedule, it is still worrying, I must say, that the present level of technical preparation for the introduction of the euro offers no guarantee against the eventuality of our being confronted with major problems. As far as political support, adjustment and preparation are concerned, however, I do hope that the essential last-minute adjustments will indeed be effected. Oskar Lafontaine certainly shows a clear understanding of the problem when he enumerates the main economic goals as follows: reducing interest rates as the key monetary task, putting economic governance into effect, incorporating equal rights as an employment target and contributing actively to the stabilisation of the international financial edifice. Mr Katiforis rightly said that it is simply not enough to keep closer tabs on the situation. More supervisory control is essential. We cannot only protect the rights of those who own monetary assets; it is high time we also closed the open wound resulting from the lack of democratic legitimacy and control of the European Central Bank.

Torres Marques
Mr President, we are in the final stages of launching the euro, which will come into force in under 90 days. And, as promised by its President Wim Duisenberg, the European Central Bank is sending Parliament its recommendations in connection with the Council's approval of the necessary regulations to ensure the smooth operation of the ECB and the achievement of the stated goals. The first of these is price stability, but economic and monetary measures are also needed to maintain Europe's present economic expansion which is jeopardised by the monetary crisis in Russia, Asia and Latin America.
The three regulations in question relate to the application of minimum reserves by the European Central Bank, the power to impose sanctions and the statistical information to be provided by the Member States. The rapporteurs were respectively Messrs Hoppenstedt, Katiforis and Hendrick, whom I congratulate.
These are essential measures in ensuring the smooth operation of the third phase of monetary union, and they are no doubt consistent with the way in which the money supply in the 11 euro countries will be controlled with a view to making the markets not only more attractive but also safe, which is no simple task or foregone conclusion. The requisite measures are covered by these three regulations which, overall, deserve our approval.
In respect of Mr Hoppenstedt's report on the application of minimum reserves, there is a clear need to balance the advantages and security offered by this measure against the need for flexibility to ensure that there is no distortion of competition. As we know, a system for the application of minimum reserves has three fundamental functions: first, to stabilise interest rates on the money market; second, to create the conditions to deal with a structural liquidity shortage and third, to control monetary expansion. The 10 % level proposed by the ECB, on which interest is payable and including electronic money which is increasingly widely used, and the broader scope of its application merit our approval, as do the remaining proposals.
With regard to Mr Katiforis' report on the ECB's power to impose sanctions, I agree with his sound and sensible conclusions. The balance between the ECB and the national central banks under the regulation is particularly appropriate: while both the ECB and national central banks can initiate a sanctions procedure, decisions can only be handed down by the competent bodies of the ECB. It is thereby simultaneously ensured that the central banks remain vigilant and that the sanctions procedure is uniform at all levels of the system of European central banks.
Lastly, let us consider Mr Hendrick's report on the collection of the ECB's statistical information. Everybody knows that exchange rate and monetary decisions should and can be taken on the basis of the most accurate statistical data possible. This explains the precautions contained in this regulation and all the provisions that it includes. I share the rapporteur's belief in the absolute need for confidentiality of the information that is made available by national central banks to the ECB. The proposed amendments are more stringent in this regard.
We are living through an extremely important, difficult and interesting period: the birth of a new euro currency which is designed to be stable and is shared by countries whose economies are pursuing rigorous budgetary control policies, but where growth remains strong, in a climate of widespread monetary crisis and instability. We hope that this new currency will become a factor of stability, not only in Europe, but throughout the world.

Carlsson
Mr President, Commissioner, ladies and gentlemen, we have less than three months to go before the euro is with us and the European Parliament is being been asked to give its view on a number of technical points. Let me use this opportunity to say that the Union should be proud of what is happening. A new process has been launched - promising stability and growth - and I once again lament the fact that Sweden is stuck with a government committed to remaining outside.
The right monetary policy instruments must be deployed if the European Central Bank is to enjoy credibility. Equally important, however, is the collection of sound information upon which to base policy decisions. I think that Mr Hoppenstedt has produced a very good report. The Committee on Economic and Monetary Affairs and Industrial Policy was invited to comment on the ECB's recommendation for a Council regulation concerning the application of minimum reserves. In his excellent explanatory statement, Mr Hoppenstedt notes that the importance of minimum reserves is waning. If monetary policy objectives can be achieved using the other instruments available to the ECB, he argues, the possibility of a 0 % lower limit could be envisaged. I believe that the scope for adjusting liquidity via open market operations is probably adequate and agree with what the rapporteur said earlier about incorrect use of minimum reserves leading to distortions of competition. The reserve requirement is also a temptation for itchy-fingered bureaucrats who are eager to tax the banking system. We can therefore support the proposal for a regulation, since it gives the ECB plenty of leeway to assess whether minimum reserves are necessary and, if so, how high they should be. The PPE Group has no doubts as to the ability of the Central Bank's management to make the right judgements and decisions.
If the European Central Bank is to act credibly and effectively, its decisions must be based on correct information. Monetary policy has to be underpinned by reliable statistics, verifiable by outside parties. The Hendrick and Katiforis reports cover the provisions for imposing sanctions on institutions which fail to meet their responsibilities and honour their commitments. I congratulate the two rapporteurs on their good work.
Forwarding statistics to the ECB is a sensitive matter and presupposes a climate of trust between the national and European levels. Data must be of high quality and based on common standards. We cannot afford any lack of clarity, although the reporting burden should not be too heavy.
Provided it has the right foundation upon which to work, I am confident that the ECB will be capable of taking the necessary monetary policy decisions. If it is open in its dealings with the markets and transparent in its decision-making, the foundations for a successful European Central Bank will have been laid.

Seppänen
Mr President, over the last few months it has become commonly accepted that the IMF has failed in its task of rescuing the world's organisation of its finances. We are on the brink of worldwide deflation. The IMF has prescribed policy cures for different countries that have not improved, but only served to make worse, the disease brought about by the virus of speculation. In all its operations the IMF has been guided by an invisible hand: liberalist logic. The IMF, with our money, has baled out supranational banks, instead of individual countries.
The ECB is now being given the means to prevent a financial crisis in Europe caused by speculation. For that reason, according to Mr Hoppenstedt's report, we have good grounds to include all the financial institutions in the minimum reserves base as well as many of their off-balance-sheet items. The securitisation of credits and speculation in the derivatives market could generate a bank crisis.
However, the Committee on Economic and Monetary Affairs and Industrial Policy is mistaken in its second recommendation. The banks should not be paid market rates of interest on their minimum reserves. In that way the ECB will be able to more effectively protect the banking system from overheating, which has recently been the case in Asia, Russia and Latin America. The job of the ECB is not to rescue banks, but societies.
The ideology of the European Central Bank is the logic of free capital markets. The ECB faces the impossible task of overseeing the same monetary policies for different countries. It should take heed that Europe does not fall under the control of the logic of capital market inflation and deflation of the real economy.

Hautala
Mr President, I would mainly like to speak about Mr Hendrick's report, which concerns the powers of the European Central Bank to collect statistical information. The European Central Bank creates a source of information from these statistics as a basis for practising a common monetary policy. This information is in principle collected from various agents in confidence, but as the rapporteur and the committee state, this proposal for a regulation is not absolutely clear from the point of view of confidentiality. That is why the committee is proposing that this notion of confidentiality should be made more precise and that another Community regulation should be observed in so doing, one that concerns the confidentiality of statistical information. Information can in principle be very sensitive. It can even contain industrial secrets, and it may be that inner-circle problems will be caused if this information, surrendered as it is to the Central Bank, does not main entirely confidential. Information that is not directly identifiable can be deduced, just as the rapporteur says, so this really must be clarified.
All this makes for continued tension when it comes to the demand for openness on the part of the ECB. The ECB should therefore draft general rules on the public's right to access documents in its possession without delay and to acquaint themselves with the open regulations on restrictions and exceptions.

Paasilinna
Mr President, ladies and gentlemen, the euro must be strong and dependable. In the present economic turmoil of Asia and Russia, we can see that money and monetary policy are inevitably tied to the economy, social relations and politics itself.
Confidence in the market is not enough. It is the confidence of our citizens that is needed for the euro. That means the need for more democracy, supervision of the Central Bank and responsibility to democratic bodies. A central bank for democratic states cannot shut itself away merely to execute monetary policy. It has to realise it is part of a broad economic policy that takes the social dimension into account, with the emphasis, as we have pointed out here, on employment. For that reason, I am in favour of the idea of creating a secretariat in contact with ECOFIN, for example, to prepare questions relating to finance and economics.
Supervision of the ECB must be in accordance with today's standards - standards that acknowledge social responsibility. With the ECB, money appears to be getting further and further away from democratic systems of decision-making, circulating as it is in electronic form and in worldwide networks. We seem to have given up the monitoring and control of money, which has resulted in money controlling us and currency speculators controlling entire states. The decisions of the ECB affect the economy and thus have an impact on employment. Consequently, the degree of unaccountability hitherto granted to the Bank and its jealously guarded secrecy are no longer acceptable. Changes have to be made. The ECB must be accountable and that is because neo-liberalism, which has wrought havoc in the lives of ordinary people, has come crashing down in all major recent elections. Is the message not clear enough? We have to address the big issues like the control and regulation of speculative money and the global giants.
Income tax has risen tremendously in the last few decades, while tax on capital has fallen. Most lucrative of all business occupations is thought to be that of international currency speculator. It falls entirely outside the scope of taxation. At the same time SMEs, which actually employ people, complain that they are taxed too highly. We have to remember that we have 18 million SMEs and 17 million unemployed. This is the wrong sort of ratio. The wrong people are paying excessive amounts of tax. The euro must be in competition with the dollar, but more is required of the euro than the dollar in the ethical sense. Ruthless speculation on the stock market causes a great deal of damage. The speculators are the ones who enjoy the fruits of human labour. As my colleague Mr Katiforis said, instead of trying to penalise the speculators, we are helping them. And there can be no good grounds for this.
Many particularly large companies are prepared for the third stage of the euro, the figure being 64 % of them in my own country, Finland. This is hardly true of the SME sector. Only 7 % have started to prepare themselves in this way. The situation is even worse in companies in the service sector. The SME sector, however, as I said, is the main employer in Europe. This being the case, I hope that the Commission will produce a guidance package for the SME sector as we move towards the single currency.
Mr Hoppenstedt mentions in his report that minimum reserves act like a tax on the deposits of the banks' clients. As a result, there may be a shift from domestic activities subject to minimum reserves requirements to foreign activities free from such requirements. The banks in the euro area will thus be placed at a major competitive disadvantage compared with non-member countries. The worst situation of all will be the one that bank employees will face here in Europe before long. It has already happened in Finland.

Lulling
Mr President, Commissioner, with regard to the Hendrick report, in my opinion the independence of the European Central Bank and its role of ensuring that the euro is a strong currency fully justify this regulation. This will allow the ECB to collect the statistical information needed for carrying out its tasks.
Unlike our rapporteur, I am not worried about the confidentiality of statistical information supplied to the ECB. We have entrusted the European Central Bank with the task of independently managing our European currency - the euro - whether or not this suits some of my colleagues sitting opposite me who are clearly nostalgic for systems which have failed where they have been applied, for example in the countries of Central and Eastern Europe.
I therefore believe that it would be absurd to try and impose obstacles which would block the production of carefully interconnected statistics within the European Union. Confidential statistical information on, for example, cross-border financial transactions may prove to be necessary. Preventing confidential statistical information collected in this way from being used to respond to additional requirements would be as overprotective as trying to labour the point using the provisions of such a regulation. This would just be in vain and would involve, for example, the need to limit the constraints imposed on people subject to the reporting obligation. Everyone is agreed on this.
The Committee on Economic and Monetary Affairs and Industrial Policy voted for some of my amendments, including those which specify that the statistical information may be used to carry out basic tasks, in accordance with Article 5(2) of the Treaty. These safeguards, I would say, are quite adequate.
With regard to sanctions, we should refrain from proposing texts such as Amendment No 4 which would only benefit lawyers, by giving them plenty of work, without really limiting the burden inherent in the preparation of declarations by undertakings, however these are affected. There can be no question, in an area as delicate as the management of the single currency, of allowing reporting agents to gamble on the payment of fines instead of supplying information which the ECB would certainly not collect if this was not essential to its task.
We should not forget, Mr President, that a central bank, as with any other political or other type of decision-maker, will make poor judgements and decisions if it is poorly informed.

Ribeiro
Mr President, these three reports on the European Central Bank obviously emanate from the need to regulate the activities of the new institution. Which, it may be said, is not only necessary but positive.
Regarding the first regulation on the application of minimum reserves, there is clearly some concern about the possible distortion of competition if such reserves are seen as a tax on deposits, and also about the broad margin of manoeuvre that is permitted. This might be a good time to reflect on the role of reserves in the banking system.
But what we would like to emphasise in this brief statement is that the approach and philosophy adopted in the other two regulations give the ECB substantial power to impose sanctions. We have already sharply criticised the ECB for not being sufficiently democratic and for having disproportionate powers which are not subject to political control, in the name of unrestricted independence, and our criticisms and concerns can only be exacerbated by this power to regulate and impose sanctions. We do not question the need for reliable and timely statistical information, but the power to impose sanctions, particularly in connection with statistical information, could create a series of obligations and pressures whereby the ECB acquires new and more broad-ranging power without the necessary political and democratic constraints and limitations.
These regulations, as proposed and as supported by the House, serve to strengthen the powers of an institution which is beyond all form of control. We therefore feel that these powers have become excessive.

Ettl
Mr President, ladies and gentlemen, the three reports before us, dealing with minimum reserves, sanctions and the collection of statistical information, were unanimously adopted at the committee stage - to all appearances, three more or less routine reports, but in view of the latest developments in the international finance markets they are anything but insignificant.
Allow me, therefore, to make a few basic remarks about these developments. The background, briefly, is as follows: in the early summer of 1997, the failure of a building loan triggered mass hysteria among creditors in the South-East Asian finance markets and plunged the 'little tigers' into a gigantic economic and social crisis. This crisis of confidence then spread to Japan, South Africa, Latin America and finally, for political reasons, to Russia as well. The results are sufficiently well known: growth forecasts had to be scaled down, and plummeting share prices led to worldwide losses in the order of four trillion dollars - equivalent to Japan's entire GDP. Many of these crisis-torn countries are caught in a liquidity trap from which only an injection of funds can extricate them.
The G7 decision to set up an emergency fund must be seen in this light and is naturally a welcome step. One of the crucial factors in this whole crisis, however, has been the failure of the IMF to perform its supervisory function properly. The real economic impact of the speculative movements and the loss of growth that has resulted from this crisis of confidence, which actually has nothing at all to do with purely economic developments, cry out for a change of system. The present system simply costs the general public too much. The opinion that finance markets should be subject to control and regulation is gaining ground, even among major owners of capital.
Europe, with its converging economies and stable currencies, has largely succeeded in keeping clear of this crisis. This stability has had to be bought time and again with high interest rates. That affects growth rates in turn, but - and this is a decisive point - the use of interest-rate policy as a means of currency stabilisation, especially through the minimum reserve ratio, is an object lesson to European banks on how to behave in a deregulated supranational economic system. It provides the Central Bank with the means with which to restrict the commercial banks' lending activities and to control the money supply. This national instrument, as it has hitherto been, must now become a European instrument of supervision and control. This is the line of thought that has to be pursued.
One reason for this is that up to 1.8 trillion dollars is moved around daily on the international finance market in the form of speculative transactions - that represents about 10 % of global GNP. In the case of Thailand, for example, the lowering of the minimum reserve ratio generated a rash of high-risk short-term transactions. This naturally provided greater scope for the hedge funds, which operate not only in the money market but also in the commodity market and which, because they can be quickly liquidated, lead to a doubling of costs for entire industries. If, for instance, commodity prices soar because of poor cotton harvests, buyers can already expect to be charged an additional hedge-fund supplement, as it were. Surely that is not the name of the game! It certainly has nothing to do with work or with innovations in the finance market.
The general public have to foot the bill, which is precisely why I really do believe that it makes more sense to base a minimum reserve policy to a greater extent on the true-cost principle than on remuneration for so-called competitive reasons, which is somewhat contrary to what Wim Duisenberg has been saying. But Mr Duisenberg, of course, need not always be right. Excessive deregulation makes expectation the main determinant of the finance markets, which stop using economic development as their yardstick and allow their actions be governed by competitors' performance patterns. Growth and employment must have priority, and that must be reflected in political decisions. This means that the open market must be governed by recognised international rules. The minimum reserve is one such rule. The discussion is not about abolishing it but about making it into an effective instrument.

Rübig
Mr President, ladies and gentlemen, with the present reports we are consolidating the strength and independence of the European Central Bank. May I congratulate Mr Hendrick on his report. I believe that he has grasped the main thrust of the case. It is very important that we give the ECB the greatest possible degree of independence, but at the same time its activities must be governed by the legal principles that apply in the European Community.
I am especially pleased to see that, with regard to the collection of statistical information, we intend to take special account of the interests of small and medium-sized businesses. We know from many surveys that the administrative effort required for the collection of data, which is often badly structured, tends to get out of hand and to hamper companies in the performance of their actual work. We intend to combat this problem by means of Amendment No 7, which seeks to establish thresholds in order to ensure that compulsory reporting does not apply to all small businesses - and even, in extreme cases, to households - as soon as they engage in cross-border transactions.
The European Central Bank itself is to set these thresholds and is to set them quite liberally. This preserves its independence and the efficiency of the system. Lastly, it is perfectly natural that the sanctions provided for in the regulation should be governed by the general principles of criminal law and statistics. For that reason, penalties must be determined in accordance with the proportionality principle and with the degree of culpability. In the case of force majeure , in other words if failure to transmit data is caused by factors beyond the control of the reporting agent, sanctions are not to be imposed at all.
The present proposals strike a reasonable balance between the need to collect data and the aim of avoiding additional burdens on businesses and households. The key role played by small and medium-sized businesses in job-creation within the internal market shows why these specific refinements are necessary.

Theonas
Mr President, we are debating three Council regulations which confer enormous powers on the European Central Bank and which should be considered very carefully indeed by the European Parliament, especially at this time.
I sometimes wonder whether the current financial crisis is happening on some other planet. The scope of speculation is uncontrolled. The vast worldwide economic crisis, which is still very much alive and shows no sign of coming to an end, is most evident in the stock markets and the financial credit system, but it will soon have a direct impact on working people, with higher unemployment, lower disposable incomes, drastic cut-backs of consumption and international trade, and a significant fall in production all over the world.
Can it really be that the central banks have no responsibility for the tragedy being experienced by millions of people all over the world? Authoritative international economic organisations are already sounding alarm bells in connection with the creation of the euro.
The reports we are debating today concerning the European Central Bank express a historic irony. At a time when the world's economic leaders, under the aegis of the International Monetary Fund, are debating how to deal with the impact of the crisis, even to some extent, the European Parliament and the European Union persist in applying old and outdated prescriptions. These reports place the low cost of banks and freedom of competition above exchange-rate security and protection of the public, and entrust to the central bankers the task of monitoring speculators, a control which should be exercised by politically and democratically elected organisations and bodies.
An agonising question is emerging. Who is to guard us from the guardians? Who is to impose political and democratic control on the uncontrolled European Central Bank?

Wibe
Mr President, as we know, Sweden will not be taking part in monetary union. The explanation lies not with the Swedish Government's attitude - as stated by a previous speaker - but with the climate of public opinion. Swedes in general are highly critical of EMU and they have the support of an overwhelming majority of academic economists, who see a threat to monetary stability if control over exchange rates is lost. Yet I did not take the floor to talk about Sweden, but rather to comment on these three excellent reports we have before us. My main focus will be the provisions governing minimum reserves.
Minimum reserves constitute an extraordinarily important monetary policy instrument - one which we deployed with great success in Sweden until 1985. Minimum reserve requirements were then abolished in the wave of banking deregulation which followed. The result was financial mayhem, with annual increases in borrowing of 25 %. The main lesson for us is that minimum reserves do matter in terms of monetary stability.
Admittedly any such system has its shortcomings. l have three particular areas of concern. For a start, new liquidity is constantly being created. Mr Hoppenstedt refers in his report to the recent rise in the number of promissory notes circulating 'off-balance-sheet'. The effect of this is to boost monetary demand. Secondly, we have trading in derivatives - which also swells liquidity. And I can readily imagine that once people have got used to trading in derivatives, they will soon move on to derivatives of derivatives. This will alter the price of derivatives and trigger further rises in liquidity. Reference has already been made to my third worry: electronic money.
All these elements make it very difficult to come up with precise rules on minimum reserves - and, over time, there will anyway be a loss in effectiveness. It is not easy to draw a line between institutions which should be subject to minimum reserve requirements and those which should not. Do we focus solely on the banks, or should we take in other financial institutions? Swedish experience suggests that it is wise to have as broad a base as possible. The constant risk is that peripheral companies will be created, whose very position will enable them to circumvent the regulatory structure. Another point touched upon was the competitive disadvantage that could arise from the introduction of a minimum reserve requirement throughout the euro area. Capital is a volatile thing and there will always be a strong tendency to move business to parts of the world where there are no rules on reserves.
My conclusion is that we must have minimum reserves, but these are not enough in themselves to create monetary stability. Other regulatory measures are needed. In a global world we have to look to global agreements - primarily in order to pre-empt the kind of unhealthy competition just described.
I have just one further point concerning the Hendrick report on the collection of statistical information by the ECB. My concern is not so much confidentiality as the quality of inflation statistics. International research has frequently highlighted how easy it is to overestimate inflation by not taking account of improvements in the quality of products.

Donnelly, Alan
Mr President, can I first of all just pick up the point that was made by Mr Wibe, when he said that the reason why Sweden was staying out of the single currency was because it could manage much better on its own.
Given the turmoil in financial markets in the global economy, Sweden, like the other countries, would be very wise to look to more rapid membership of the single currency because the one area of Europe which is stable in terms of monetary policy is that of the eleven countries that are planning to join the currency on 1 January 1999. That is why the Conservative Party in my own country that voted yesterday to have nothing to do with the single currency for 10 years, is a real ostrich sticking its head in the sand and doing nothing for British or indeed European industry.
On the critical question of minimum reserve requirements, it is very timely that we are discussing this matter today. When you look at the collapse of LTMC in the United States, it had own capital of US$ 5 billion. The leverage it was able to exert was $ 200 billion initially; then the other estimates are somewhere in excess of one trillion dollars. The problem that we have at the moment in financial markets is the leverage that major financial institutions are exerting around the world. We have no control over that. We need to ensure that we have strong minimum reserves and complete transparency, particularly with regard to the leverage that financial institutions are exerting.
We have also to ensure that this is the responsibility of central bankers. When Commissioner Bangemann responds, and certainly when the Central Bank responds to us, we need to ensure that they understand it is their responsibility to monitor this process and to ensure transparency. We need to strengthen central control given the size of some of these financial organisations. If you look at the gross domestic product globally, some of the largest GDP producers in the world are not countries - they are actually companies. Therefore we have to ensure that the central banks are involved when financial institutions conduct their business. We need transparency and less subsidiarity in this area. We do not want individual Member States or other states operating their own rules. This is one area where pooled sovereignty is going to help to solve the problem. We need to clarify the powers of the European Central Bank in two areas: firstly, its role in relation to its own member states and secondly, its role in relation to financial institutions in general.
In conclusion, it is now a matter of urgency that this House holds a major hearing, and brings the people who have been involved in G7 and G22, brings Mr Duisenberg and the head of the European Bank for International Settlement together as quickly as possible to look at the conclusions of what has been going on in Washington. We must exercise our authority as a democratically elected Assembly to make sure that they bring about this transparency and this clarification of future roles.

President
The debate is closed.
The vote will take place at 12 noon.

Telecommunications equipment
President
The next item is the recommendation for second reading (A4-0337/98), on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the common position adopted by the Council (C4-0342/98-97/0149(COD)) with a view to adopting a European Parliament and Council Directive on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity (Rapporteur: Mrs Read).

Read
Mr President, colleagues on the Committee on Economic and Monetary Affairs and Industrial Policy will know that this is the second attempt we have made to reach a working directive on this matter. The previous proposal from the Commission in 1990 relied on the 'test house' method of ensuring conformity before terminal equipment could be placed on the market. For a variety of reasons which are now, I think, shrouded in history, that directive did not work particularly well. The Commission has quite properly brought a second proposal here which is shifting the emphasis away from a 'test house' method of certification to a method involving a manufacturer's declaration. I, as the rapporteur, think that is the right approach and have no quarrel at all with the Commission's ideology on this matter.
The Commission has also properly included radio equipment as part of the remit of this directive. Again, I think that is perfectly proper. I was lobbied in the early stages of the first reading on behalf of radio amateurs who were fearful that their own activities could be affected by this, but they are now well on the way to being reassured about that.
I have spent a considerable amount of time - perhaps the Commissioner could comment on this - on the vexed question of harm to the network and the likelihood of harm to the network. I have tried to ensure that my recommendations on this matter, both in the first and second readings, are in proportion to any likely damage. Many people concerned with implementation of the directive were naturally interested in this matter.
The proposal, and Parliament's response to it, also recognise there have been very major technological changes between the first and second proposals. We have tried to take account of that, as indeed we have tried to take account of the question of consumer interests and liability and, particularly, to take into account the needs of disabled consumers, particularly blind and deaf consumers.
There has been an enormous amount of work, for which I thank colleagues in Parliament, the Commission and the Council, to arrive at a workable text which satisfies all of those reservations. There was considerable pressure to avoid a conciliation on this. It is right to say it openly. I am sure that the Commissioner will appreciate Parliament's sensitivities about this. We know that there is to be a major review of all of the legislation next year. I am sure that if there are any points about this that prove not to be workable in practice, they can be reviewed at that time.
I want to be able to explain at the time of the vote why the compromise text in the name of my colleague, Mr Hendrick, is particularly to be commended. This is Amendment No 18. This is the best option. I hope Parliament will support it, not just to avoid a conciliation - although that has been a goal - but more importantly to make sure that we come up with a directive that can help the industry, help consumers and particularly help the most vulnerable consumers.
I commend the text to you. I very much hope it is going to get widespread support across the groups when it comes to the vote later this morning.

van Velzen, W.G.
Mr President, Commissioner, ladies and gentlemen, the rapid pace at which new telecommunications equipment is developed these days, the liberalisation of telecom markets and the fiercer competition which this creates all mean that swift procedures are needed to introduce telecom equipment such as phones and faxes onto the market.
The directive we are discussing today, the RTTE Directive, relieves the manufacturers of these products of the burden of difficult and protracted national approval procedures. Our thanks are due to Mrs Read for her help with the broad lines of this highly technical directive and also for the excellent cooperation we have received from her in recent weeks and months. I must thank the Commission too for the constructive manner in which it has worked with the European Parliament and the Council to improve this proposal, which was very unclear to begin with.
The focus of the directive is the essential requirements which telecommunications equipment has to meet in Europe. It is very important to telecom companies with their own networks to keep inferior products out of them, because otherwise consumers may get the impression that the network is not efficient. So the Economic Affairs Committee, on the basis of a proposal from the European People's Party, accepted an amendment to the effect that competent national authorities may exclude inferior equipment from the network if it is apparent that there are problems and that these are documented. Why is it so important that they should be documented? In the Netherlands if a telephone company, such as Telfort, for instance, can show that an item of equipment seriously harms or abuses the network, the national radio communications authority in Groningen can decide to remove that equipment from the market. But imposing the condition that documented problems must have arisen before equipment is taken off the market will stop operators from possibly abusing this directive in order to keep new competitors out of the market. At the same time, this proposal by the European Parliament will provide an incentive for network operators to spend money on expanding and improving the quality of their networks.
Better innovative products do, after all, place more demands on the network. Operators cannot resist these products on the grounds that their networks are not up to it. So I believe that this balance safeguards the interests of both operators and the manufacturers of terminal equipment.
Regrettably, Mr President, the industry was not involved to a sufficient degree in the preparation of the Commission proposal. Happily, the common position adopts my suggestion that the Commission must regularly consult the representatives of network operators, consumers and manufacturers. This guarantees that these market players will have a say in future developments. This directive takes account of the needs of the 50 million or so handicapped people in Europe and all praise to Mrs Read for that. Parliament has made it a part of the directive that disabled people must be able to use telecom equipment either without or with only minimal adaptation. The directive assumes that manufacturers will operate self-certification but that ultimately each Member States will have a body to oversee compliance with the directive. So I think this flexible approval procedure will allow the fast-growing telecom market to work better.

Sichrovsky
Mr President, any scheme that simplifies the European system of telecommunications terminal equipment is surely to be welcomed, as is the special emphasis on the need to ensure that such equipment can be used by people with disabilities. In actual fact we are faced with another problem, to which too little attention has perhaps been paid.
There is an enormous disparity between the prices of the equipment which consumers can buy in Europe at the present time and equipment prices in other continents. More and more inhabitants of the European Community are returning from holidays in the United States or Asia with equipment that is considerably cheaper than in Europe. A method must be found to enable the Member States to exclude substandard equipment from the market without affecting competitiveness.
We have one more wish to add to the list of outstanding tasks, namely simplification of market transactions between the United States and Europe.

Bangemann
Mr President, as always, it has been a real pleasure to work with the rapporteur, and the outcome we are discussing today is a considerable improvement on the common position. This is reflected in the fact that we are able to accept all the amendments apart from Nos 1 and 13, and our objections to these are purely formal, as the rapporteur knows. We also support the proposal she has presented again here on merging Amendments Nos 15 and 18 into a compromise to avoid the need for conciliation with the Council.
The very fact that this directive replaces two directives that we previously adopted, as well as about 1500 national instruments, is proof of its importance. This means that our change of approach will eliminate a great deal of red tape, and I believe that this alone will enable us to achieve an improvement in telecommunications markets.
The new instrument takes very good account of many special needs, and may I say to Mrs Read, as Mr van Velzen has already indicated, that the provisions which have now been formulated also seem to guarantee compatibility with the networks, so that no unduly serious problems ought to occur in this respect.
It is true that, come what may, we shall have the opportunity next year to review this entire matter if necessary, and I should like to express my gratitude for this opportunity to continue our cooperation. I believe that the position we have now adopted on the information society in the widest sense is the envy of our main competitors. We have become leaders in this field, primarily through our technological development, but also through the way in which we have monitored and promoted this development on the political side.

President
The debate is closed.
The vote will take place at 12 noon.

Changeover to euro
President
The next item is the report (A4-0304/98) by Mr Langen, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the Commission communication on the impact of the changeover to the euro on Community policies, institutions and legislation (COM(97)0560 - C4-0591/97).

Langen
Mr President, we are dealing today with a report on the impact of the changeover to the euro on Community legislation and policies, a report that dates from the end of 1997. It was tabled by the Commission before the decisions on the 11-country euro area were taken, and we are able to affirm today that some of the tasks referred to in the report have already been completed.
Quite a substantial amount remains to be done, particularly in terms of implementation by the Member States, but progress has been made in the intervening period with the homework assigned to the Commission itself.
The decisions in favour of the euro, I believe it can be said at the start of a debate on this subject, were highly gratifying, and the stability of the European economic and financial area throughout the Asian, Russian and Latin American crises has shown that a large euro area will benefit the people of Europe and the world economy in general. We can therefore see clearly now that the decisions on the euro may be unreservedly reaffirmed and that this European monetary union can enter into force on the appointed date of 1 January 1999.
One of the subjects addressed in the report is the agrimonetary regime, a matter we have discussed in connection with Mrs Schierhuber's report, which is on the agenda for Friday; this relates to the new scheme that must at all events be ready for entry into force on 1 January 1999. The Commission has tabled two draft regulations on this point; these will be discussed on Friday and are also dealt with in the present report.
The Commission communication covers three sectors in all: the Community budget, agricultural policy and administrative expenditure. You can judge the intensity of our parliamentary discussions from the fact that a total of five committees were asked to deliver an opinion, and we have finally reached agreement on a report that incorporates the arguments from the budgetary, agricultural, regional, external economic relations and legal perspectives.
The second field is the amendment of Community legislation to provide the legal framework for the euro and the main implications of the euro for Community legislation.
The third field covers the operational aspects of the changeover, which relate to statistics, treasury and financial management, information systems and communication issues.
Let me refer briefly to the main sectors covered by the communication. First of all, there is the Community budget. The problem of exchange-rate crises and the cost of the financial management these entail have been a considerable burden on the Community budget. On the expenditure side, about 44 % of payments have been made in ECU and just under 56 % in national currencies, while the vast majority of the EU membership contributions are paid in national currencies. In the past this has necessitated an enormous input in terms of financial management and resources, since all payments were based on national exchange rates and currencies, but this will not be required in future for the 11 participating states.
As for the agrimonetary regime, in addition to the variable official ECU rate, there has also been a so-called green rate, the purpose of which was to counteract exchange-rate fluctuations, thereby guaranteeing comparable incomes for farmers in all countries of the European Union. Agricultural conversion rates were used for this purpose, and in recent years these rates have deviated more and more from the actual market conversion rates and thus from the value of the ECU. When exchange rates shift, the fixed prices and payments in national currencies change in value; according to the Commission, the old form of the compensatory system, which had to be abolished in 1995, was costing ECU 8 billion per annum. Even today, the reformed system can still cost ECU 1000 to 1500 million every year; in other words, an allocation of almost three billion marks is required in extreme cases. Only a new agrimonetary regime will be able to prevent these expenses, subject to a five-year transition period, and will only apply to non-participating countries, but we shall discuss that on Friday, especially the question whether a country such as the United Kingdom which has chosen not to sign up for monetary union should receive the same compensatory payments in future as it has received in the past.
The third sector is administrative expenditure, which amounts to about ECU 2.7 billion. There are 30 000 EU officials; 90 % of them live in Belgium or Luxembourg, and since both countries have signed up for EMU, some of the problems are surmountable. But it will no doubt be quite a task to encourage the Member States in which EU officials live to complete the conversion as quickly as possible and to ensure that the European Commission does likewise.
I should like to express my sincere thanks to all the committees which have delivered their opinions. The report, I hope, will secure the support of a broad majority. The two amendments tabled by the Group of the European Radical Alliance are misguided, in my opinion. Particularly in the light of last week's discussion with the President of the ECB, Wim Duisenberg, in the Subcommittee on Monetary Affairs, I firmly believe that the House will not feel able to approve these amendments.

Arias Cañete
Mr President, Commissioner, ladies and gentlemen, on behalf of the Committee on Regional Policy, I would like to congratulate Mr Langen on his excellent report and on the goodwill and generosity he has shown in including the modest contributions from our committee in the report.
The Committee on Regional Policy agrees with the warm welcome the Committee on Economic and Monetary Affairs and Industrial Policy has given to the communication from the European Commission on the impact of the changeover to the euro on Community policies, institutions and legislation. As the rapporteur points out, this Communication is the result of a wide-ranging dialogue within the European Commission and with other Community institutions.
It is clear that, within the framework of the Structural Funds, the fact that contributions and payments are already expressed in ecus will make the changeover smoother and, at the same time, the exchange risk will be eliminated for participating countries in the euro area.
The situation of the 'pre-in' countries is indeed very different and we must ensure that these countries are not penalized in terms of their structural measures by the fluctuations of their national currencies against the euro.
The changeover to the euro will have a significant impact on Community statistics and, therefore, we support Eurostat's intention to re-scale the time-series for primary statistics to guarantee the continuity of this series. We also welcome the fact that in his report our rapporteur has asked that priority be given to a common conversion policy for the entire European statistical system. Our committee asks, too, that we use this opportunity to create a cooperation network for administration in the fields of informatics and statistics in order to guarantee coherent systems, not only for routine follow-up financial information but also, and above all, for the general information needed in decision-making.
The Committee on Regional Policy believes that in its information campaigns the Commission should do its utmost to ensure that regional authorities and beneficiaries of Structural Funds are well informed of the impact of the changeover to the euro.
Finally, we would like to point out that there is still a need for a more efficient and detailed study of the impact of monetary union on existing disparities between regions in light of the principle of cohesion. And we are therefore anxiously awaiting the findings of the general study that the Commission is currently preparing.

Randzio-Plath
Mr President, in what is undoubtedly a good report, the rapporteur has made it very clear how much work awaits the European institutions and how important a prompt changeover to the euro will be to the future of the Community, not only because some 4000 legislative acts will be affected by the changeover, but also because the coming of the euro age will manifest itself in substantive changes to the positions adopted by the European institutions.
The brunt of this effort will naturally be borne by the national administrative bodies, from the tax offices to those responsible for the conversion of parking meters and the levying of public charges, but what we are concerned with here is that the budget of the European Union, agricultural conversion rates, emoluments and pensions should be converted into euros and converted in good time. In adopting the Green Paper on the introduction of the euro, we in the European Parliament made it very clear that we believe the public sector must lead the way in the introduction of the euro.
Sadly, we could not fail to observe that this has not been the case in the Member States or within the Commission, for it must be remembered that the communication has been in circulation since 1997. We see no signs of further progress in the domain of secondary legislation, even though the Commission has rightly agreed that there will be further legislative acts.
For the private sector too, I consider it very important that clarity should prevail and that numerous provisions of 'winmark' legislation in the realms of statistics and accounting should be regulated as soon as possible. One reason why this is so important is that it will enable even more businesses to make arrangements for the timely introduction of the euro, since the statistics still tell us that only about 24 % of European businesses actually intend to conduct their non-cash transactions in euros in the new year when the euro age has dawned. It will therefore not only be important that the budget is changed over to euros, for although the budget is currently drawn up in ECU, most payments into it are made in national currencies, while disbursements are made in both ECU and national currencies. We can make truly enormous savings in terms of exchange-rate risks and the cost of financial management, and - as the rapporteur has expressly indicated - the agrimonetary system will benefit when prices and subsidies are fixed in euros, since the old regime with its distortions and pressures will be swept away.
The regulation on the introduction of the euro and the other European monetary legislation have created legal certainty and guaranteed the continuity of the Treaty. No one may be compelled to use the euro, nor may anyone be prevented from using it; the European institutions are called upon to prove by their involvement in the euro changeover that the euro age has indeed dawned, but that fact must not turn out to be the Achilles' heel of the changeover process. I am relying here on fresh dynamism and a new wave of activity from the European Commission and the other European institutions.

Porto
Mr President, I congratulate the Commission and Mr Werner Langen on their reports which deal, in some cases in great detail, with very important aspects of the implications of the changeover to the euro in such diverse spheres as the Community budget, including agri-monetary payments and operational spending, customs tariffs and contracts, as well as statistics and financial management. Their analysis confirms the anticipated positive micro-economic impact of the euro in all these spheres, as a result of the elimination of transaction costs, uncertainty and the current calculations required by the existence of different national currencies. Indeed, the Commission itself concludes in its report that the overall assessment is clearly positive.
However, we surely cannot expect to cover every last detail in all these different areas. For instance, it should be accepted that the communication proposed in conclusion No 27 detailing all the monetary references in the 4, 000 Community acts in which the monetary denomination will change to euros is of secondary importance.
Judging by the manner in which the process is currently proceeding, both economic operators and citizens in general will immediately identify with the new currency. I believe, therefore, that every effort should be made to continue the successful information campaign regarding the euro and, with possibly greater implications, to continue to make the necessary adaptations, ranging from equipment to commercial management, particularly in small and medium enterprises. Also, although it is not a subject of this report, we should continue with the dissemination of the euro abroad, given the interrelationship between all world markets.
The expectations generated by the euro are prompting companies to publicise their choice as a sign of efficiency and modernity, as is occurring for instance in my country. This represents a form of widespread promotion, and is of benefit simultaneously to companies and to the new currency that we are launching.

Boogerd-Quaak
Mr President, the report now before us shows, from the point of view of the Commission and of the rapporteur Mr Langen, how many complex procedures we shall have to complete together before the introduction of the euro. So I think it is most important to be properly informed.
The Commission's and Mr Langen's reports tell us that the change will bring considerable savings because in agriculture alone, for example, there will be no more monetary compensation between Member States and abolition of the green rates will save about one to one-and-a-half million. This prompts me to ask what will happen to the money saved? Is there a chance here of extra aid to industry or for information purposes? I should like to know a little more about that.
I should also like to say that our group will be supporting the ARE Group's amendments. We believe that the euro countries must speak with a single voice vis-à-vis the outside world and that the ECB is the body which must speak for our monetary authorities in international summit gatherings such as the G7. Our group has drafted some oral questions on this point for the next part-session. We shall certainly be voting in favour.
Lastly, Mr President, there is the possibility of new distortion or discrimination between countries which are and countries which are not adopting the euro. We face wide-ranging reforms as part of Agenda 2000, and we saw with the MacSharry plans that some countries handled the reforms neatly by devaluing their currencies. Similar things may happen here. My question is this: how are the two regulations to coexist in the longer term and are we not going to have new forms of discrimination here?

Hyland
Mr President, it is imperative, when the new euro currency and the euro rate come into existence in January 1999 and when the green pound is abolished, that farmers do not lose out in terms of the value of their income supports under the common agricultural policy.
In Ireland at present there are two green rates: the first is for CAP support, such as the payment of export refunds and intervention stocks and has varied substantially over the last eighteen months. The second green rate is for direct income support for farmers such as premium payments. The green rate for these payments has been frozen at a favourable level since 1995 and therefore has not been subject to currency fluctuations.
I support Mr Langen when he states that he is concerned to see that European farmers do not lose out as the new euro currency comes into play. His draft resolution recognizes that agricultural compensation will need to be put into place so that all sectors of society can benefit from the EMU regime. Those close to our farming sector will be aware of the growing concern about the future viability of our traditional family farm structure. The continuing decline in the number engaged in farming and the deteriorating age profile of farmers are social indicators which we ignore at our peril.
The Commission has brought forward proposals to the Agriculture Council on this issue outlining possible courses of action. A working group has been set up in Europe to bring forward conclusive proposals on the basis of draft regulations which have been drawn up, so that a level playing field can be reached on this issue. Compensation measures for beef price reductions are included in the new draft regulations, but more work needs to be carried out to guarantee that Irish and European farmers are fully protected when the new euro changeover takes place.
The present agrimonetary system in Europe is a very complex regime mainly as a result of the dual rate, whereby expenditures increase due to CAP conversion rates which are higher at times than market values. There is currently a need for simplification to be brought into any new arrangement, with the minimum of red tape. This would serve a very positive function for all farmers in receipt of CAP payments in future.

Soltwedel-Schäfer
Mr President, ladies and gentlemen, the Langen report deals with the impact of the changeover to the euro in three sectors, namely national and local authority budgets, agriculture and administration. As far as agriculture is concerned, it is not enough to limit the changeover to the euro to purely administrative action. The euro will gain in stability if we adopt a completely new agricultural policy, as this House has so often advocated and demanded, and if the new Commission proposals for this domain are recognised internationally, i.e. throughout Europe.
Let me make one point on the information campaign. It has emerged time and again in the Committee on Economic and Monetary Affairs and Industrial Policy that the information campaign is a very important central element in the changeover to the euro. However, let me express this earnest plea quite clearly here and now to the responsible Commissioner in particular: in the domain of consultancy, please do not portray women, for example, as disabled persons, but rather adopt a different approach to the issue.
Allow me to add a few words on the SMEs. It is not enough for us to launch an information campaign in this area. The consultancy service offered to SMEs must include the free conversion of computer software and of other facilities. We must press vigorously for such provision. We can thus bring the euro closer to the people and remove the hurdle that the euro still has to overcome in this respect.
A brief comment on the preceding debate regarding the European Central Bank: I have the feeling that the previous speakers have been asking too much of the European Central Bank and have been weighing it down with a great amount of unnecessary baggage. Transparency and control are what the European Central Bank lacks. That, indeed, must be the core policy on the euro. Even at this early stage, when I look at the example of Italy and see how little transparency the European Central Bank can operate with, it becomes crystal-clear that transparency is precisely what it will take to prevent future weaknesses and instability.

Dell'Alba
Mr President, ladies and gentlemen, I did not quite understand the reference made by our colleague from the Green Group to Italy and the lack of transparency in the handling of Italian monetary policy; she can explain it to me later.
I should now like to turn to the Langen report, naturally to announce that our group will be voting in favour, but also to ask colleagues and the rapporteur to consider the two amendments put forward by Mr Castagnède and myself. It seems to me - and current events and the latest meeting of the ECOFIN Council have made this abundantly clear - that, over and above the many and varied important points made in the report - not only technical ones, but political ones too, of course - one of the key problems in the changeover to the euro is the external representation of the euro. This is missing from the report, despite being at the very heart of the debate over the past few weeks. It is no accident that the ECOFIN Council has still not managed to give a clear indication as to who will represent, in international forums, the monetary and economic policy, the economic and monetary union of the euro zone members.
I think that it is important for this issue to be pointed up in the Langen report, so that we can come back to it later and be involved in the overall debate. To my mind, the President of the European Central Bank, and he alone, would be the person to participate in international meetings on behalf of the euro zone members, in the name of EMU. Parliament must, I believe, make it absolutely plain that this issue can no longer be fudged - first all three are to participate, then they are to take turns, then it is to be someone else - because all of this only adds to the confusion, puts us in a poor light and prevents the euro from obtaining the confidence which is crucial to its success.
In conclusion, I hope that you will accept these two amendments from the Group of the European Radical Alliance.

Blokland
Mr President, I have often heard two one-sided opinions expressed in the debate on the euro. One says that the euro will bring nothing but benefits, and the other that it will bring nothing but drawbacks. I have little time for either view. The financial benefits of the euro for the Community budget are obvious. It is only logical, when the number of currencies involved is ten fewer.
Great savings are also expected in the agrimonetary system. The so-called 'dual rate effect' will disappear because there will no longer be a green rate. But the new agrimonetary system is still open-ended in that compensation will be paid for revaluations but no action will be taken for devaluations, even though the income of the farmers concerned will temporarily have improved. There is something of a distortion of competition in that.
The financial risk to four Member States is far less great. The saving of 1.3 billion guilders seems to me to be a cautious estimate. But if the European Union is to be enlarged by new Member States which do not take part in EMU, the Commission will have to do something about the open-ended nature of the system if it wants uncontrolled excesses to be a thing of the past.
Finally, I cannot understand the political and symbolic significance of wanting to express the salary payments of Community staff in euro as of 1 January 1999 - certainly not when the money concerned is still largely spent in Belgian or Luxembourg francs. For the staff's sake I think it is most important to proceed with clarity and care here.

Paasilinna
Mr President, ladies and gentlemen, the economic and monetary turmoil in the world, as I said before, is so great that it is producing shockwaves in the lives of ordinary people far and wide, including people in countries other than those it which it began. The issue in Russia is more of a political crisis which has economic consequences. For that reason, I think that the next EU summit should have on its agenda the question of currency speculation, its taxation, and its control in general. We would have more than enough to discuss on that subject.
We also have to ensure in particular that, at the start of stage three, structural funds are used for currency reforms, so that Union policy may be fully applied in the transition stage too. There are examples of many types of operation, such as the administration of TACIS funds, that must be properly in place. Obviously, the EU's own institutions have to lead the way here.
I agree with my colleague Mr Langen that reforms to the agrimonetary regime are a sensible idea and very necessary. The changeover to the euro will reduce losses of income for those who practise agriculture, at least in the respect that exchange rates will become stable. The position of those Member States remaining outside monetary union will become a problem. We have to bear in mind that the notion of the single market should hold true in those areas too.
The prospect for the currency of the euro area would appear to be one of stability. But our citizens need to have faith in this currency, and questions of responsibility have once again to be considered. I am worried about the position of SMEs in this respect. In Finland they are barely prepared for the change. There is a lack of know-how. For this reason I would like to refer back to the suggestion that the Commission should produce an information pack with SMEs employing staff in mind, in particular for the service sector, which seems to be the furthest behind in preparation for the changeover to the euro.

Garosci
Mr President, there are now roughly one hundred days to go until the launch of the single currency, and the Commission intends with this communication to assess in full the effects which the changeover to the euro will have at Community level, as well as its repercussions on the Member States. There will be both risks and opportunities; obviously the latter will outweigh the former. We must use these three years, when technically speaking nothing will be compulsory and nothing forbidden, to prepare as best we can, involving the private and public sectors, companies and institutions, and conducting targeted information campaigns for the public as well as training within companies.
Mr Langen's report quite rightly details all these moves, and says in essence that a number of positive elements should be borne in mind. The first is the disappearance of exchange-rate risks and the elimination of banking and foreign currency charges; the second is peace of mind for a whole series of people, be they public servants, for example Community officials, or pensioners; and the third is certainty for firms that - from 1 January 1999 onwards - at least 75 % of their turnover will no longer be subject to exchange-rate risks, whereby they stand to gain one year or month and lose the next, because all their buying and selling will be done in a strong currency, one which will be a match for those other two strong currencies, the dollar and the yen.
So there will be risks and opportunities, but we must above all assess the risks - even though at present they are outweighed by the opportunities - so as to be ready technically and psychologically for the advent of the single currency.
On this subject, let me end with one minor point. I would ask the Commission to defer by one year the printing and issuing of the 500 euro banknote. This denomination is too high, given that we will also be getting to grips with six other notes with new denominations. In my country, for example, 500 euro are equivalent to a million lire, and the highest value note in Europe corresponds to half a million lire, or 250 euro. What is more, all of this should be linked to the well-known fact that counterfeit euro designs are already in circulation. One print plate has already been stolen. Hence the need for psychological and also practical assurances for the single currency, which will usher in more opportunities than risks.

Lukas
Mr President, the report presented to us is an excellent catalogue of all the financial implications that the introduction of the euro will have for the European Union. Permit me, nevertheless, to observe that the report perhaps has one weakness in so far as it does not indicate that the abolition of the present agrimonetary system will release a large sum of money from which the Member States ought to benefit.
The stringent savings packages adopted by the EU Member States in preparation for the euro have drastically reduced the volume of public investments in Europe, thereby contributing to a rise in unemployment. As we all know, public investment in Europe is at a very low level. In order to strengthen public confidence and thus to achieve increased consumption in Europe, every effort must be made to ensure that the Member States can benefit from the funds released by the introduction of the euro to finance measures designed to combat unemployment.
The total savings should therefore be specifically used to fund a practical reduction in the Member States' contributions to enable them to take special measures to combat unemployment.

Wibe
Mr President, although I have no substantial objections to this report, I would like to take up one point of detail. I am concerned about the fate of those Member States which will end up outside the euro area - the 'pre-ins', as they are called in the report.
The agrimonetary problem facing these countries is that prices are set in one currency and have to be converted into another. Differing exchange rates lead to variations in income. A compensation mechanism was introduced before to offset the difference, but I suggest that we drop all compensation schemes with the changeover to the euro. There are two possible ways of doing this. My preference is for all payments to be made in euros. Income discrepancies will of course occur when converting into national currencies, but that is only logical. Had the system been based on market prices, products would have been priced in an international currency - the dollar or ECU - and incomes in national currencies would still have varied. If a national currency appreciates relative to the euro, that currency increases in value. It follows that people should receive less of it - or more, if there is depreciation. My first choice is therefore a euro-based system of payments.
Alternatively, I could envisage a system based on national currencies and that would be my second choice. Admittedly, the costs for the Union would vary in line with exchange rates. That would however be offset by the fact that EU revenue - which is based after all on national currencies - would fluctuate in exactly the same way. The bottom line for the Union would remain unchanged.
In summary, my proposal for the non-euro countries is that we do away with the compensation mechanism and switch to a uniform system.

Bangemann
 Mr President, in expressing my thanks to the rapporteur, may I also ask him and the Members who have been taking part in this debate to accept the apologies of my colleague Mr de Silguy, who is unable to be here this morning. He is on his way back from Washington and has asked me to state the case for the Commission on his behalf in this discussion.
It is true that a considerable time has now elapsed since the communication was adopted, and so it might be appropriate for me to give you a brief résumé of the present situation.
I shall begin with the adaptation of Community law. In cooperation with the interinstitutional working party, we examined the body of Community law systematically to identify where changes would be required. Up to the present time, all deadlines for the formulation and implementation of amended provisions have been met.
We have presented the following proposals: amended financial regulations, on which Parliament is currently deliberating and which, if my information is correct, can be in place by the end of the year, amendment of the regulation on staff retirement pensions and emoluments, which will be fixed and paid in euros from 1 January 1999 - this proposal can probably be adopted in November - and the much-discussed amendment to the agrimonetary regime, which is designed to phase out the difference between the green exchange rates and the fixed exchange rates; this process can be completed for the countries in the euro zone by the end of 2001 and for the countries that have not signed up in the first wave in the year 2004. This proposal can also be adopted before the end of the year.
The amendment of customs and fiscal legislation is also running to plan. For that reason, we do not consider it necessary to take up the rapporteur's suggestion and publish a list of the legislative provisions affected by the introduction of the euro.
Incidentally, in accordance with your wishes, we have decided, in agreement with the participating Member States, to establish a new uniform system of commercial interest reference rates for the euro. The new system will shortly be presented to the members of the OECD; responsibility for its implementation will lie with Eurostat.
As far as the practical aspects of the changeover are concerned, as your rapporteur has recommended, we are preparing for the changeover of all internal information systems to the euro. The most urgent changes relate to the switchover to euros for the drafting of the budget from January of next year. Here too, Eurostat is continuing its work on the conversion of the statistical systems and data files.
Mr Langen has rightly drawn attention to the importance of the information campaigns directed at the staff of all European bodies. The first phase of this campaign was launched at the start of this year, and a second phase is now being prepared. Before the end of the year we intend to distribute to the entire staff of the Community bodies, including superannuation recipients, a brochure explaining the effects of the introduction of the euro on pay and pensions.
I therefore believe we can say that the targets set out by the Commission in its communication have been achieved on time, so far at least. In response to the wish expressed by the rapporteur, we can certainly also submit a report on the entire process that is taking place to prepare the Community for the euro, and we shall probably manage that by the end of November, which I hope will ensure that Parliament is not only informed about the present situation but is aware of the action that remains to be taken. Thank you for your comments and suggestions.

Langen
Mr President, may I express my thanks to the Commissioner for his review of the situation. On behalf of Parliament and in my own name too, I should like to commend the Commission for its timely and focused performance of all these tasks and to thank you especially, Commissioner, for acceding to our request for the presentation of a general report to the House at the end of November. We shall then be able to use the report as the basis for another discussion of the various specific measures that we in Parliament can take to ensure that this process is successfully completed.
However, I should like to put one question to you, and I do not know whether you are willing or indeed able to answer it, because this is not your own area of responsibility. Following on from the request made by Mr Dell'Alba, I should like to ask whether the issue of external representation of the euro area and the role of the European Central Bank in international conferences could also be included in the report.
As I mentioned briefly before, ECB President Wim Duisenberg said last week that there will be considerable problems with the legal status of the ECB in international organisations because the ECB is not a state, and only states have hitherto been actively represented on these bodies - the International Monetary Fund, the World Bank and the G7. The question is whether the ECB needs to have itself drawn into the political realm in this way at all or whether its role is purely advisory. In any event, Article 105 of the EU Treaty gives it a quite clearly defined responsibility for the maintenance of stable exchange rates and prices. Should political decisions run contrary to this objective, the ECB might be required to implement them, even though that could cause problems.
One question, Commissioner, which I am aware may be unreasonable: could you provide us with any information about the Commission's thoughts, and perhaps even those of the Council too, on the subject of external representation?

Bangemann
Mr President, may I thank Mr Langen for asking that question, because there is nothing I like better than wandering outside the confines of my own portfolio. However, I must point out to him that there is quite a considerable difference between the subject of the report we have been dealing with today and the issues he has raised, very important though they undoubtedly are. The report deals with the practical problems that occur in connection with the implementation of our decision to create a common currency. I think we have reached agreement about the fact that we have done what had to be done and have observed all the deadlines, so far at least.
At the last ECOFIN meeting, when these problems were also discussed, the Commission was entrusted with the task of making proposals in a report of its own. These are complex and difficult issues, which naturally have to do with the legal character of the Union and with international organisations that are perhaps a little helpless in the face of the dynamism we have been developing here. We plan to submit that report before the end of this month, so that you can then enter into the discussion, and together with the Council and yourselves we can adopt a position which will ensure that the European Union is duly and properly represented in the global institutions where monetary and economic decisions are made.
There are no grounds, of course, for assuming that, having given an entirely new dimension to global monetary policy by introducing the euro, we should then retire to the sidelines. That must not happen. I presume that in this report we shall not only emphasise the need for our involvement but shall also make sound proposals to that end.

President
The debate is closed.
The vote will take place at 12 noon.
(The sitting was suspended at 11.25 a.m. and resumed at 12 noon)

VOTES
Boogerd-Quaak
In the previous vote, in other words the last vote, I wanted to vote in favour and I voted in good time, but the machine is just not working.

Kirsten Jensen, Blak, Sindal and Iversen
The Danish Social Democrats voted for the report extending Regulation No 1408/71. The regulation currently only applies to EU citizens and to stateless persons and refugees. This amounts to discrimination against the 13 million citizens from third countries in the Union, who pay their taxes and social contributions in a Member State but lose their entitlement to social security if they move to another Member State.
The problem is, however, that to be covered by Regulation No 1408 presupposes that the persons concerned already have the right to freedom of movement. As things stand at present, citizens of third countries do not enjoy freedom of movement within the Union. We therefore think that a solution should first be found to the problem of freedom of movement for third country citizens. Once that has been settled, the question of extending Regulation No 1408 can be addressed.

Oddy
I welcome this proposal from the European Commission because it will remove an anomaly in current social security rules for third country nationals. This anomaly was flagged up by the European Parliament and I am pleased that the European Commission has taken up this issue and produced this sensible proposal.
Third country nationals who are legally resident in one EU country working and paying tax will be able to transfer their social security contributions to another EU country if they move for work.
This is particularly important in the UK where the national health service has about 40 000 overseas doctors working for it. Many are very well qualified and are offered consulting positions in other EU countries. It is completely unjust that at present social security contributions cannot be transferred. I commend this proposal to Parliament.

Waddington
We support the principles behind this report which extend the same rights to legally resident third-country nationals who are workers and their families (as a means of extending equal treatment) that apply to EU citizens. We wish to await further consideration of the implications of the details contained in the proposal as they affect the UK, which will take place on 4 November by the Select Committee, before determining our final position, in view of the possible effect upon the non-contributory benefits system.
Leperre-Verrier report (A4-0342/98)
Trizza
I am fully in favour of Bulgaria participating in the Youth for Europe programme. It is important, under the pre-accession strategy for such countries, to provide instruments like this which help to educate people about Europe and give them an understanding of Community policies and their operation.
The urgency of this measure is linked above all to the punctuality and precision with which Bulgaria has provided all the information requested for its inclusion in the programme, particularly in respect of the purely financial aspects.
Wibe report (A4-0317/98)
Antony
Madam President, future historians, if any have the courage to study the role of this Parliament, will consider today's vote against Jean-Marie Le Pen as an abject detail in a long list of even more abject details. The only freedoms which the majority in this House is prepared to defend are the freedoms of division, decadence and now even drugs, in defiance of the morals of the Decalogue and natural law. This Parliament refuses to defend the freedom of thought or the freedom of expression.
Nowadays, the great French Jewish historian, Robert Aron, would be condemned for having written on page 178 of his memoirs that he and others took for granted the horrors of the Hitlerian regime of the Gestapo and its work and that, for the rest, they did not go into this in detail. Similarly, the immunity of the great aircraft manufacturer and Gaullist deputy, Marcel Dassault, who was deported to Buchenwald, would be waived given that he described in length in his memoirs the role of the Communist 'capos', led by the Communist, Marcel Paul, and given that, in particular, he described the reality of this camp in a manner far removed from the legend which some are trying to impose here.
Shame on this Parliament which is behaving like a reserve of the Stalinist thought police; this is a Parliament where no inquiry, no evocations, no condemnation have ever occurred about the endless depiction ...
(The President cut the speaker off)

Fabre-Aubrespy
Madam President, since 1989 the European Parliament has received 50 requests for the waiver of parliamentary immunity. It has approved only five, rejected 32, and the other 13 were inadmissible or incomplete. No request has been approved since 1994.
The case law of our Parliament actually takes the view that, in any case where the offence which a Member of the European Parliament is alleged to have committed forms part of a political activity, immunity is not waived, and the freedom of expression must prevail. This is specifically the position which we took recently with regard to our colleague Mr Campos.
Our case law would therefore indisputably advocate the rejection of the request for the waiver of Mr Le Pen's parliamentary immunity. To approve this request would be to take a decision based on who Mr Le Pen is, on the specific nature of the offence committed and on the words spoken. However, when using its power to waive or not to waive parliamentary immunity, the European Parliament must not take any account of the person involved. It must not establish a hierarchy for the offences committed, it must not consider the merits of the case, as pointed out in Article 5 ...
(The President interrupted the speaker) Madam President, you allowed the previous speaker 30 seconds more; please allow me to have my say.
(The President cut the speaker off)
Blot
Madam President, I note that the majority of the Members of this Parliament claim to be rationalists and are proud of it. Whether they are Liberals, Socialists, Christian Democrats or of other political persuasions, they all claim to be supporters of the 18th century rationalism of Voltaire, Rousseau or even Kant or Goethe. And yet here we have all these rationalists yielding to a totally archaic ideological taboo which is a real insult to the freedom of thought, because Mr Jean-Marie Le Pen clearly stands accused on the grounds of freedom of thought.
To say, as Mr Rothley does, that the German law aims to protect the truth is the very essence of totalitarianism. The purpose of the law is not to protect dogmas, but rather to protect freedom of thought, because no one holds a monopoly on the truth. Consequently, this German law whose defence is being claimed in this case is based in the tradition of the Third Reich. This is no cause for celebration. I consider that immorality rules in this Parliament, since the freedom of speech, which is an essential human right, is not being respected. Gutenberg, who lived in Strasbourg, and Goethe, must be turning in their graves.

Lang
Madam President, I should like to address the German members of this Parliament who voted to waive the parliamentary immunity of Jean-Marie Le Pen, by reminding them that German bullets, bombs, shells and mines killed tens of millions of men and women in Europe and caused infinitely more deaths than the gas chambers. However, as you seem keen to reopen 50-year-old wounds, we will remind you of your duty of remembrance.
Jean-Marie Le Pen remembers the German mine that killed his father, but he has forgiven the German people. Now, 55 years on, a German public prosecutor has the arrogance to ask for an explanation from Jean-Marie Le Pen, a war victim and a war orphan, relating to a comment on events for which Germany is solely responsible. Do you have so much to be forgiven for that you must look for the guilty among your victims? It is not Jean-Marie Le Pen who built the concentration camps. These camps were yours, not ours.
If you want to settle accounts among yourselves, as Germans, that is your problem, but the time has passed when you could impose your laws on France and the French. The Occupation is over, the French people are free, and we are too.

Le Gallou
Madam President, in waiving the parliamentary immunity of Jean-Marie Le Pen, the European Parliament has committed an error. It has deliberately forgotten that parliamentary immunities were rightly established to guarantee the freedom of speech of elected Members. Obviously, the freedom of speech only comes into its own in the case of words which risk causing offence, which may even be shocking, even if this was not the intention of their author.
This is an example of witch hunting. In France, the definition given in dictionaries for the word 'detail' has been changed to allow more room to condemn Jean-Marie Le Pen. In the European Parliament, the last speaker from the Socialist Group, Mr Ford, lied to justify the unjustifiable. He lied by stating that Jean-Marie Le Pen had described the Holocaust as a 'point of detail', which is false. He lied by attributing revisionist opinions to Jean-Marie Le Pen, because the latter, in a weekly paper, denied the existence of the gas chambers at Buchenwald. However, official historians acknowledge that there actually were no gas chambers in Buchenwald, and this is since the statements made by Doctor ...
(The President cut the speaker off)

Martinez
Madam President, Article 9, on legal matters, of the Protocol on Privileges and Immunities limits immunity, if I may say so, to the performance of duties. What does the performance of duties mean? Should it be interpreted in a broader or a narrower sense? Since this is a guarantee, it should be interpreted in a broader sense. In fact, the Court of Justice of the European Communities has widened the interpretation of this so far that it covers a Member's whole term of office and not just the session. And what is the criterion for interpreting the performance of duties? For the rapporteur, it is a geographical criterion. A Member is performing his duties when he is in the European Parliament building. If Jean-Marie Le Pen had said these words in the building of the European Parliament delegation in Germany, then depending on which side of the door he was standing, he would or would not have enjoyed immunity. That is quite absurd.
The interpretation must in fact be teleological, relating to the intended purpose. This is so true that the accounting rules for the reimbursement of travel expenses are not based on the official nature of the building to which we travel, but on the political purpose which we are pursuing. And this is also so true that, on 23 June 1789, when the Revolutionary Assembly considered immunity for the first time, it decided that those who attacked the State were to be regarded as traitors and criminals acting against the State. However, it is true that for you, the State ...
(The President cut the speaker off)

Soltwedel-Schäfer
Madam President, I would ask you to examine, as a matter of urgency, whether this European Parliament is a platform for speeches that repeat the same thing time and again, the selfsame thing for which Mr Le Pen has been cited. My blood boils, my stomach turns and I am deeply saddened to think that anyone here can desecrate the memory of the Holocaust victims by conducting a debate of this kind. May I ask you to consider urgently whether we cannot restrict this platform to one such speaker rather than permitting all of them to speak.

President
Everyone has the right to speak here, Mrs Soltwedel-Schäfer, and everyone speaks for themselves.

Mégret
Madam President, ladies and gentlemen, this Parliament has just taken a vote which goes totally against what it claims to defend and embody. Your vote represents a very serious blow for democracy in Europe, because one of the essential principles of democracy is the separation of powers. It was precisely to protect the legislative power from the judicial power that parliamentary immunity was established.
Now, the judges themselves intend to define what politicians can or cannot say. This is what the Munich judge is trying to do, and this represents the total negation of the independence of the elected members. And you, through a petty hatred for politics, are denying these essential principles. By waiving the parliamentary immunity of Jean-Marie Le Pen, it is not just his rights which you are denying but also the parliamentary institution which you are calling into question. Now, because of you, democracy in Europe is moving closer to that of Stalin ...
(The President cut the speaker off)

Florio
Madam President, I deliberately refrained from participating in the vote on the waiver of Mr Le Pen's immunity. I took it for granted that this House would vote in favour of the waiver, whereas personally I believe that Voltaire's famous maxim should apply even to the odious politician from beyond the Alps: 'I disapprove of what you say, but I will defend to the death your right to say it'.
I would point out that I am deputy chairman of the parliamentary delegation for relations with Israel. In my view, Mr Le Pen represents the worst that politics has to offer: racism, intolerance, incitement to hatred and bigotry. The German judiciary wishes to try him for having said that the gas chambers are a detail of history: a ludicrous assertion, but still only an assertion. Democracies must not use against their enemies the same intolerant methods as those used by Mr Le Pen.

Ford
Madam President, I voted in favour of waiving Mr Le Pen's immunity. From the contributions that we have heard from the right of the House, there seems to be some confusion about what parliamentary immunity actually is. We have parliamentary immunity in our Member States, which includes immunity for Germans in Germany and for the British in the United Kingdom.
In the United Kingdom we have the right to say anything we wish in the parliamentary chamber. We have full parliamentary immunity, as Mr Le Pen has here. Despite my abhorrence of his views I fully support that. But you do not have that right outside Parliament, not in Germany either. Mr Le Pen, either by commission or omission, overstepped that mark. Whether he is guilty or innocent is an entirely different matter. That is something that the courts will decide. The contributions from the extreme right in the House seem to indicate that it is not on the same planet as the rest of us. If the aliens ever do take over they may have the same view of history as it does.

Pinel
Madam President, ladies and gentlemen: 'I do not agree with what you say, but I will do my utmost to ensure that you can continue to say it'. This is a concept which is at the very heart of democracy, and from which we are a long way removed today.
Conversely, two centuries ago, the bloodthirsty Saint-Just invented an expression which gained a following among all those in favour of totalitarianism. He said that there can be no freedom for the enemies of freedom. That says it all. When those in power become both judge and judged, when they lay the foundation for a single line of thought, when the majority imposes silence on the minorities, when the freedom of speech is challenged, then it is clear that democracy no longer exists.
Ladies and gentlemen, we are no longer in a democracy.

Bourlanges
Madam President, I have to say that this is the first time I have voted to waive the immunity of Mr Le Pen. Hitherto, my stance has been dictated by the arguments put forward which, according to Parliament's case law, reject the waiver of a Member's immunity when the accusations against the latter are clearly political in nature. This is the case with the statements of Mr Le Pen, with these statements as with others.
And yet I have changed my mind, for a simple reason: the fact is that the relationships between the executive, legislative and judicial powers, and particularly the reinforced independence of the judiciary, now mean that it is unjustified for a Member to benefit from any exemption over and above the exemptions that our citizens may enjoy. What Mr Le Pen would call a privilege of establishment is also therefore unjustified.
Mr Le Pen yesterday asked to be treated like a citizen. That is precisely what I wish to see.

Le Pen
Madam President, although I demonstrated yesterday the perfidy of the Munich public prosecutor, 420 Members have voted to waive my immunity. I would say to them: 'Many enemies, much honour'. I noticed yesterday the spokesmen for the political groups in Parliament giving their voting instructions, which resoundingly proves that this is basically a political matter conducted on the orders of those who wish to censor individual thought.
The 'Europeanists' and 'Euro-internationalists' of this Parliament have seized this opportunity to oppose the President of the National Front, a patriotic Member who prefers his native country, France, to the Europe of lobbies, unemployment, immigration, insecurity, taxation, corruption ... and even cowardice.

Gollnisch
Madam President, as expected, this Parliament has once again brought disgrace on itself. Faced with the diktat imposed on it, nearly all its members have bowed. Why this fear? Why are the words of Mr Le Pen regarded as blasphemy when they would have raised no objection if they had referred to any other comparable drama of the twentieth century?
What is the still uncertain truth of this history, discussion of which is forbidden? Why this strict ban? This senseless taboo is primarily down to the Communists, their Socialist allies, the Conservatives and the Liberals who have been so accommodating towards each other because they want to ensure that their own long lists of crimes are forgotten.
However, the involvement of Israeli extremism and its international connections must also be considered. The precarious situation of the Israeli extremists and their desire for power requires the burden of guilt to be generally and perpetually imposed on everyone else so that they can assert their moral superiority. The absence of any critical capacity is a prerequisite for the extravagant financial demands which they arrogantly claim should follow on from the reparations which Germany has stopped paying. If certain Germans, Socialist internationals ...
(The President cut the speaker off)

Le Rachinel
Madam President, as a printer by profession, I am therefore particularly attached to the freedom of thought, which is also the first freedom acquired thanks to Gutenberg, who is well known to Strasbourg.
I am therefore horrified that Parliament could vote to waive the parliamentary immunity of Mr Le Pen for a crime of thought. This House brings disgrace on itself with such actions and lowers itself to the level of a Supreme Soviet. The fact that everyone is voting according to group instructions and not according to their consciences is particularly shocking. This waiver of parliamentary immunity today concerns our colleague Mr Le Pen. Tomorrow it will be someone else's turn. So today is a day of mourning for freedom and particularly for Strasbourg.

Stirbois
Madam President, it is incredible and scandalous that this Parliament is today waiving the parliamentary immunity of a man whose father was killed by the Germans. I myself am the daughter of Resistance fighters. I just missed being born in a concentration camp and I find it difficult to accept these lessons and these actions. Yes, we have suffered at the hands of the Germans. It is true that, today, in order to forget an extremely troubling past, we are prepared to do anything. Immorality rules in this Parliament. Drugs are allowed, but Jean-Marie Le Pen is refused the freedom of expression. Shame on this Parliament which is disgracing itself! Shame on those Members who have not had the courage to be independent, as the great philosopher Voltaire was!

Andrews
The lifting of parliamentary immunity of a public elected Member of the European Parliament is a very serious matter. However, the European Parliament has had to look at this issue following a request made on 17 April 1998 by the Public Prosecutor's office in Munich relating to statements which Jean-Marie Le Pen had made at a press conference in December 1997. Mr Le Pen stated that 'the gas chambers are detail in the history of the Second World War' and 'the extermination of those who were killed in the gas chambers is to be considered as merely an insignificant part of the history of the Second World War'.
The Public Prosecutor's office in Munich has asked the European Parliament to lift the parliamentary immunity of Jean-Marie Le Pen on the basis of Articles 130 and 220 of the German Criminal Code, which provides for a maximum prison sentence of five years or a fine to be imposed on anyone who publicly approves, denies or presents as inoffensive any act committed under Nazi rule.
Mr Le Pen uttered similar statements in France which subsequently led to him being fined substantially.
Censorship is always a very difficult issue to address and the European Union and national Member State governments of the EU must strike a balance between freedom of expression and the protection of public policy. The right of free speech is enshrined in the Irish Constitution but there comes a time when the State must be given the necessary power to tackle naked hatred which can result in breaches of national public policy or national public security.
I support free speech but not in an unfettered manner. In Ireland we have the incitement to hatred act, which is a legislative device giving the State power to prosecute those who seek to promote naked hatred in society as well as enshrining freedom of expression as a fundamental right in our constitution.
Mr Le Pen's comments were made in Munich in December 1997 during the presentation of a book 'Le Pen, the Rebel' written by the former MEP Franz Schönhuber, the leader of the German Republikaner Party. His comments were wholly inflammatory and an incitement to hatred and if the German criminal legal system wishes to pursue the matter, the European Parliament should not stand in its way.

Berthu
I condemn the statements made by Jean-Marie Le Pen in Munich, with regard to both their basis and their form. The gas chambers are not a 'detail in the history of the Second World War'; on the contrary, they are an essential aspect and it is indecent to choose such a serious and painful subject on which to cause a political controversy. I believe that the French and among them, I am sure, the majority of the electors or members of the National Front, share this opinion.
However, today, the Members of the European Parliament are not being asked about the merits of the case. They are being asked only if, in response to the request of the Munich public prosecutor, the parliamentary immunity of Jean-Marie Le Pen should be waived.
In this respect, it could be asked whether, in countries such as ours which support the freedom of expression, it is really the State's role to bring proceedings against the author of certain words, even if we believe that these words are false and reprehensible. These proceedings would contradict the very idea of the freedom of thought, which contributes to the strength of democracy. Where would the abandonment of this principle lead us?
The error must be eliminated by exposing the truth. However, we are not setting a precedent which could be used in the future by public authorities to intervene in an authoritarian manner in other, as yet unknown, debates. In order to combat a risk which, in my opinion, is non-existent - namely the risk of a revisionist contagion on the question of the gas chambers - we should not risk committing an abuse which is much more palpable, much more immediate and much more menacing in many ways - the abuse of muzzling the freedom of expression by an official line of thought.

Carlotti
Once again Jean-Marie Le Pen is trying to pass himself off as a victim, the scapegoat of a vast European political plot.
He likes this situation, because each time it helps to raise him to the rank of martyr.
By describing the gas chambers as a 'detail of history', Jean-Marie Le Pen is defiling the memory of those who lost their lives, or their loved ones, during this period.
By saying these words on German soil, he is consciously seeking to provoke the European democrats! He has outraged the German people with his pardon for the victims of the Shoah!
Jean-Marie Le Pen intended to open Pandora's box, in an attempt to let out the old demons of our common past; but he has made an error which could cost him dear.
Whereas he tried to obtain a favourable electoral situation from the first two waivers of immunity, the third is likely to prove fatal to him!
This is why he has offered us a new set of words, in an attempt at pathos ... But he has not moved me.
For the peace and solidarity of our people in Europe, I will therefore vote to waive his parliamentary immunity.

Grossetête
I voted today in favour of waiving the immunity of Mr Jean-Marie Le Pen, just as I voted some time ago in favour of waiving the immunity of Mr Bernard Tapie. This is because I am personally in favour of abolishing parliamentary immunity, which is no longer justified. The fact that I politically and morally condemn the theories and points of view expressed and defended by Mr Jean-Marie Le Pen does not enter into the equation.
Therefore, ignoring any political-media context, I would always vote in favour of a request to waive immunity, whatever the circumstances, the legal arguments and the Members concerned.
The principle of parliamentary immunity is nowadays outrageous. It seems to me to be a privilege which is no longer justified. The judiciary is now independent and the states making up the European Union all apply the rule of law and are all democratic, and within these states all citizens without exception must be equal before the law.
By this, I am defending a real equality, not a biased equality suited to the political or media circumstances. Crimes and judged offences must not be subject to the vagaries of fashion. The vote to waive immunity must never prejudge the decision delivered in due course by the competent court on the merits of the case. Since immunity will not be abolished, I hope that this can always be the case.

Hory
Nothing is more alien to the radical beliefs which I hold than the anti-Semitism and racism which are the very basis of the ideology of the extreme right.
All those involved in politics must understand the feelings of the survivors, of the families of victims and of all men free to listen to the despicable words of Mr Le Pen.
However, I will not vote to waive the immunity as requested, and my reasons for this are as follows.
In strictly legal terms, this request poses serious questions. Together with Alain, the Radicals believe that democracy is not the power of the majority but the rule of law, and that even the most guilty have the right to the protection of the law. In this case, the aim of parliamentary immunity is not to shelter the Members, but is one of the guarantees of the freedoms of our citizens. It may be assumed that legal proceedings are always based on punishable offences. We should therefore, on this basis alone, grant all the waivers of immunity which are requested. This is not the practice of our Parliament, and I believe that we have been right in the past to more often than not refuse the waivers requested, including those involving Mr Le Pen. Our opinion must not therefore be based on the legal argument of the Committee on the Rules of Procedure, the weakness of which reveals other motivations.
Might these be political? There are several political methods of opposing the extreme right and its ideas. If it were thought that these ideas constituted a real danger to democracy, it would not be necessary to fight tactically against the parties of the extreme right: they would simply be banned. As this has not occurred, we must not pretend to be shocked when their leaders say obnoxious things inspired by the anti-Semitism and racism which are part and parcel of these parties. However, would a ban on the extreme right not be an extraordinary acknowledgement of political weakness, in view of the ambiguous fascinations which it exerts over part of public opinion? For my part, I believe that an unsound idea is best combated by ideas, reasoning and confidence in the intelligence of our citizens. I believe that the obnoxious words of Mr Le Pen do him much more harm than they do to democracy. I also believe that, particularly in France, the extreme right profits from the intellectual and political bans which it provokes and which feed the paranoia of its leaders and its misled electors.
Is this a case of political morals? It is pointless to insist on a web of complicity between the extreme right and a large part of the right which today is assuming a position of condemnation. There is no need to underline the objective use which a number of the parties of the left make of the neo-fascists in their respective national arenas. Morals do not come into these choices. Is morality really profiting when an assembly elected by universal suffrage is asked to pursue one of its own who is also elected? I do not think so, and I would invite my colleagues to reflect on the use which could be, which may be or which might be made, in another context, of this fearsome weapon.
In the end, talking about political philosophy with regard to Mr Le Pen honours him greatly. I wish to do this, however, in order to remind you that the Radicals have a method - that of reason. In this humanist and secular philosophy, there can be no revealed truths, carved in stone or catechised. There is no truth with a capital letter, indisputable and revered without the help of critical reasoning. Truth is humble, non-majestic and republican to a certain extent. It constantly fights against lies and falsification and keeps away from acts of faith. Are Mr Le Pen and his cronies denying the Holocaust? Are they quibbling about the total horror of this? Do they view the gas chambers as a 'detail'? Let them speak so that the contemptible poverty of their thinking can be confounded, unmasked and revealed to everyone. This is the best fighting option open to the truth. This is also the only homage which politics can now pay to the victims of this barbarism.
Read recommendation (A4-0337/98)
Eriksson and Svensson
We voted in favour of the report, since the telecommunications market requires a regime of the kind described.
We would stress, however, that the commercialisation of the telecommunications sector has brought severe administrative problems. There is now a danger that regions and consumers alike will receive differential treatment. Difficulties will also be caused by the complex fiscal problems remaining to be solved.
It would have been far better to maintain the national monopolies, with proper structures for public supervision and mutual cooperation.
Hoppenstedt report (A4-0332/98)
Berthu
The European Central Bank has just made a proposal to the Council for a regulation allowing the ECB to impose a system of minimum reserves on banks, which may help to regulate the liquidity of the market. There can have been no doubt that the 15 governors of our central banks, meeting around a table, would end up producing this purely technical text. However, we would actually be interested to know how this is all going to work, not from the point of view of the technical relations between the banks - we know that the bankers can sort this out themselves - but from the point of view of the economic, budgetary and social balances which must be preserved, even within the single currency.
Firstly, an important question must be asked between now and the end of 1998 relating to the convergence of the short-term interest rates which will be unified on 1 January 1999. The gaps are currently very wide, ranging from 3.2 % in Austria to 6.4 % in Ireland. These reflect the different positions of the Member States in the stages of the economic cycle. Should these gaps not now be gradually reduced? The end of December is only three months away, and it seems unthinkable to unify everything suddenly. However, Mr Duisenberg, who is very proud of having finalised the rules on minimum reserves, is incapable of answering this basic question.
Similarly, nobody seems able to answer the question about the new mistrust of the markets which, in view of the varying impact of the Russian crisis, have reintroduced increasing gaps in the long-term debt ratios of the Member States. Is it not the case that Austria has just withdrawn from issuing a government loan due to the fear of having to pay more for it than Belgium?
Finally, also, nobody wishes to answer the question about the increase in budgetary deficits which is starting to be predicted for 1999, the first year of the euro, and which is becoming very worrying in the case of Italy. The Italian Prime Minister, Mr Prodi, has just proposed using the central bank reserves not transferred to the ECB in order to carry out a policy of major infrastructure projects which could revive the economy. He seems to be ignoring the fact that these reserves are already, in the main, invested in the economy. Germany will not be reassured by proposals of this kind.
All these unresolved questions simply underline the great lie of the single currency. There has been an attempt to ignore the real differences between countries so as to improve the success of the monetary unification project, which is the springboard to federalism. In other words, ideology has made governments blind, and reality will soon have its revenge.

Kirsten Jensen, Blak, Sindal and Iversen
The Danish Social Democrats today voted for the reports on minimum reserves (Hoppenstedt), powers of sanction (Katiforis) and collection of statistical information (Hendrick) for the European Central Bank.
This should not be taken as a change of signal in the Social Democrats' policy on Denmark's reservation with regard to the third stage of EMU, but as a statement of our keen interest in what happens in this area. The content of the Hoppenstedt and Katiforis reports will have no direct consequences for Denmark of any kind, since it only concerns countries which participate fully in EMU. The Hendrick report will to a limited extent have implications for Denmark too.
The application of minimum reserves means that credit and financial institutions are required to maintain a certain liquidity reserve, which is sensible for a variety of monetary policy reasons, for example the money market interest rate is stabilised, and better control of the country's money supply is achieved by restraining the creation of money by private banks. The proposal for sanctions is to ensure a uniform procedure within the areas covered by the European Central Bank when fines are imposed on the individual Member States, on institutions and on firms.
The aim of the Hendrick proposal is to give the ECB the right, in cooperation with the national central banks, to collect relevant statistical information so that the European System of Central Banks (ESCB) can carry out its work. The information collected will of course be treated as strictly confidential, in the same way as statistical information from Danmarks Statistik , the Danish Central Statistical Office. Furthermore the proposal provides the possibility of imposing sanctions on countries or institutions which do not report on time, which is also wholly in line with the practice of Danmarks Statistik .

Lindqvist
The Swedish Parliament decided that Sweden would not participate in the third phase of EMU, which will see the introduction of the euro as of 1 January 1999. The Centre Party is against Swedish membership of EMU and I therefore abstained in the vote on the three ECB reports: Mr Hoppenstedt's on the application of minimum reserves, Mr Katiforis's on powers to impose sanctions and Mr Hendrick's on the collection of statistical information.

Trizza
With regard to Mr Hoppenstedt's report, the maximum rate of 10 %, with a practicable minimum of 0 %, represents a clear sign of flexibility in the use of this instrument. Therefore, without prejudice to the use of other methods available to the European Central Bank, geared to pursuing monetary policy objectives and through which a 0 % reserve rate could be imposed, I agree on the need to remunerate sums lodged with the Central Bank in accordance with market rates, so as to avoid distortions of competition between different financial markets. I approve of the report in its entirety.
Turning to the report by Mr Katiforis, I am in full agreement with the way in which the European Central Bank wishes to go about imposing sanctions on any public or private operator transacting business with the ECB. The chosen solution guarantees two requirements which are vital to the functioning of the entire system: flexibility and freedom of action for companies, on the one hand, and the need to protect the public on the other.
I am likewise in favour of allowing national central banks to initiate sanctions, whilst giving the ECB alone the final say: greater controls at local level will be matched by more uniform treatment throughout the ESCB.
As far as the Hendrick report is concerned, although I think that it is essential to introduce a confidentiality regime covering statistical information provided by persons subject to reporting requirements, I do not see why this cannot be handled under the provisions of Council Regulation No 322/97 on Community statistics. A lack of compliance with these requirements would mean that poor quality information would be obtained from suspect 'informers'.
Finally, I agree on the need to tone down the provisions in the draft regulation imposing rigid, irrevocable sanctions on reporting agents who have not managed to furnish the statistical information by the deadline or in the required manner, or have done so only in part.
Sanctions should not be applied where reporting agents are unable to transmit the data for reasons beyond their control.
Katiforis report (A4-0329/98)
Berthu
The draft Council regulation concerning the powers of the European Central Bank to impose sanctions will perhaps surprise even well-informed citizens who did not realise that, in 1992, they gave such supranational powers to the new institution managing monetary union. There is, however, a legal basis for this regulation even though it is not particularly obvious: the sixth paragraph of Article 106 of the Maastricht Treaty effectively gives the Council the right to 'adopt the provisions referred to in ... Article 34-3 of the Statute of the ESCB.' Article 34-3 of this Statute, which is not contained within the Treaty but in an annexed protocol, discretely states that 'the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.'
At the end of this legal trail, the ECB gains quite extraordinary powers. It will itself be able to decide on the sanctions to be imposed on undertakings which do not apply its own rules, and these sanctions will be directly applicable, without passing through the filter of national governments, national central banks or Community courts. In order to properly appreciate the excessive nature of this, it should be remembered that the Commission - a largely supranational body - does not as a general rule have such an independent power of sanction. It should also be stressed that the ECB is not subject to any democratic control. In other words, the powers granted to the ECB constitute, in their principle, a very worrying supranational and antidemocratic precedent.
What is more, the Bank is clearly determined to use these powers to the full. It is quite revealing that the draft regulation deals only with sanctions and does not mention the obligations which these sanctions are supposed to guarantee. Therefore, Article 2 fixes the ceilings for the fines and periodic penalty payments without any mention of the infringements to which these ceilings will apply. This quite farcical situation at least has the merit of showing that the ECB is primarily concerned with the repressive side of its action.
The European Parliament's rapporteur, Mr Katiforis, is enchanted by these provisions which he considers to be real finds, satisfying 'all the fundamental principles of the rule of law' and avoiding 'any dictatorial tendency'. That is not our opinion.
We do not know what association of ideas led the rapporteur to the expression 'dictatorial tendency' but, in any case, the question deserves to be asked.

Christodoulou
The ECB recommendation we are debating, concerning a Council regulation on the powers of the ECB to impose sanctions, provides in Article 3(8) that revenues derived from the imposition of fines belong to the ECB. This proposal is justified by the ECB on the grounds that it is an expression of the ECB's economic independence. No amendments were tabled on this point, even though the destination of the product of the fines as income for the ECB might be questioned, given that it is not a direct but an indirect result of the ECB's monetary function. For my part, I voted for the proposal as it stood, considering that revenues from the imposition of fines represent only one aspect of the issue. On this question, I would point to the European Parliament's resolution before the Intergovernmental Conference - document A-0102/95, paragraph 34(v) - in which, amongst other things, we called for 'the ECB's income (income from seniorage) to be considered as an own resource of the Community'. Subject to the constraints of what is provided for by the Treaty, it would be appropriate for the whole issue of ECB revenues to be more generally debated at some stage.
Hendrick report (A4-0327/98)
Berthu
The proposal before us today would allow the European Central Bank to adopt rules for organising the collection of statistical information useful to its work, based on an arsenal of sanctions which it would be alone in deciding. The aim is to provide comprehensive indicators of monetary development in the Member States 'which are viewed as one economic territory'. These provisions result logically from the principle of a single supranational currency, as adopted at Maastricht.
Leaving aside the question of the principle of the single currency, this text poses three major problems relating to confidentiality of information, equality of treatment and uncertainty as to its limits of application.
With regard to confidentiality, the ECB, which prepared the draft, seems to want to take its quest for independence to the extreme, even to the extent of absolving itself from Community rules on the preparation of statistics, as observed by Eurostat. This behaviour is even more open to criticism as the Bank would like to be granted extensive discretionary powers. These would allow it to send its own agents directly into reporting undertakings and to examine the books and files of these, in order to verify the information reported or to carry out the compulsory collection of this. We would ask that the ECB be subject to all the standard rules of confidentiality, in particular the Council Regulation of 17 February 1997 on Community statistics.
The second problem is that all the members of the Union would be subject to the statistical rules of the ECB, but only those participating in the euro zone would be subject to the sanctions. This curious lack of symmetry may lead to doubts about the reliability of the future statistics. If the threat of sanctions is really essential to the quality of the statistics, what point is there in introducing obligations which are not backed up by sanctions for some members? 'We are preparing for their future integration into the euro zone' say ECB officials. The citizens of the countries concerned, who so far have refused the euro, will appreciate that.
Thirdly, how can the text be applied to national official authorities which themselves produce statistics or which define the conditions for the production of these statistics by other bodies? The draft regulation prudently avoids the problem, but leaves options open which could pave the way in the future to recalcitrant states having sanctions imposed on them by the ECB. But this will be dealt with at a later stage. It is obvious that, in the eyes of the Eurocrats, a draft as delicate as this one cannot be immediately put at risk.
d'Ancona report (A4-0211/98)
Caccavale
Madam President, I voted against Mrs d'Ancona's final text because, although based on the best of intentions, it has been ruined through fear and hypocrisy. Yet again this House is guilty of distasteful hypocrisy. No one is prepared to admit that prohibition has been an utter failure, that 95 % of drugs are moving around freely, that 80 % of crime in our cities and towns is drug-related, and that over 50 % of our prison population is made up of drug addicts. Once more, Parliament has chosen to close its eyes and believe that the response to all of this is empty words, the idle chatter of hypocritical prohibition.
It is an unpleasant episode for this House, which I hope will soon change its mind.

Andersson, Lööw, Theorin and Wibe
We have now reached the final stage in this report's lengthy passage through the House. The strongly liberalising stance taken in the original version has now been substantially altered after meeting a great deal of resistance in committee. I highlight this because of the fears expressed when the report was referred back to committee. These fears have proved unfounded; the referral decision was not a way of giving a pro-liberalisation report a second chance.
We have maintained our commitment to say 'no' to any European-level harmonisation of narcotics policy. We undertook from the outset to combat every single pro-drugs statement in the European Parliament and to press the case for an approach to drugs based on human respect and social concern. We argued for preventive action, rehabilitation for those who had fallen prey to addiction and compliance with international conventions.
This is an area where the Union has no competence to act. That should especially be borne in mind given the controversial nature of the subject, with dissension cutting across party lines and national frontiers.
Now the whole exercise has become somewhat irrelevant in any case. The idea was to take recommendations to the UN General Assembly's extraordinary session on coordinating the international fight against drugs. That session was held last June and the report is therefore being discussed three months after the event.
The amendments which we jointly tabled have met with a positive reception across party and national boundaries. We are calling for a drugs policy based on prevention, rehabilitation and respect for international conventions. The European Parliament's position on these amendments and its attitude towards the undermining of the wording of recommendations 10 and 11 were the criteria guiding our voting behaviour.
Whenever Parliament has been poised to send out what could be interpreted as a pro-drugs message, we have refused to play along. And we intend to maintain that stance in future. The fact that this report and its predecessor have taken so long to produce surely demonstrates that the European Parliament is not a forum for the promotion of liberal drugs policies.

Angelilli
It is without doubt crucial that EU measures to combat drugs should not be restricted exclusively to repression, given that drug addiction is not merely a judicial or police matter.
For these very reasons, it would appear illogical to adopt the proposed attitude of damage limitation, including the decriminalisation of soft drugs such as cannabis and controlled administration of hard drugs. A drug-free society, such as the one described by the UN General Assembly, cannot be built on a so-called 'pragmatic' anti-prohibition policy.
Furthermore, delegating anti-drugs measures to local and regional authorities could create 'islands' in Europe which depart from national regulations and, hence, from the democratic will of citizens in the Member States.
The reference in the explanatory statement of the d'Ancona report to Article 129 of the Amsterdam Treaty would appear quite inappropriate to the report itself: that article confirms the Member States' commitment to take action against drugs-related health damage, including through information and prevention. This is in no way consistent with damage limitation, which consists in the possible - but far from proven - reduction of the damage, and not in fighting drugs as an escape route out of social difficulties.
Experiments conducted to date, for example in Switzerland, prove better than any report the negative effects of such experimentation, which has always led to huge upsurges in the consumption of drugs. The proponents of legalisation have then calculated that a smaller percentage of deaths from AIDS and overdoses has occurred.
Nor would an anti-prohibition policy solve the problem of new synthetic drugs, which would exert constant pressure for the legalisation and controlled administration of new substances.
The European Union must not adopt a policy which amounts to resigning itself to a society compelled to live with drugs, and merely trying to limit the damage they do. On the contrary, it must step up its action and boost its resources, targeting them at prevention and assistance for welfare and health bodies, the rehabilitation of drug addicts, exchanges of information between Member States and the harmonisation of statistical and scientific reporting systems. Positive action should above all be focused on young people, so as to reduce the demand for drugs, improve social conditions, and combat marginalisation and unemployment.
For these reasons we ask you to vote against the d'Ancona report.

Bébéar
Since the start of our parliamentary year, we have on many occasions considered the problems linked to the use of drugs.
Today we are dealing with an essential point: cooperation in the fight against drugs. Experiments have been carried out for over 30 years, the results of which are well known. These results must be widely circulated whenever possible or they must lead to additional experiments.
Currently, this cannot be sufficiently achieved or is not being sufficiently achieved. The cooperation needed in this respect must be better planned. We have an instrument for this in the European Monitoring Centre for Drugs and Drug Addiction. It is up to us to intensify its research and monitoring work.
I can therefore approve the d'Ancona report, given that it develops these aspects. I must, however, indicate my disagreement with two other subjects contained in this report.
The d'Ancona report cannot be blamed for wishing to link drug problems to poverty and unemployment. However, a failure to take this analysis further would be rather simplistic. Everyone knows that the levels of drug use do not necessarily go hand in hand with those of unemployment.
The other criticism I have of this report is the weakness of its arguments when repeating that we are overwhelmingly in favour of a drug-free society.
With the exception of the two reservations just mentioned, I consider that the d'Ancona report is heading in the right direction: that of cooperation in order to solve one of the most crucial problems facing us at the end of this century.

Blot
There is a clear contradiction between parts A and B of the report.
The proposal for a recommendation B4-1238/96 is extremely dangerous. It might have been written by a clever lobby of drug traffickers if it had not been different.
It is based on recital C, which indicates the failure of repressive policies. This is not true. The policy against drug trafficking, as conducted in Singapore, is apparently producing excellent results.
The report complains that the current policies restrict individual freedoms - on page 17 - although it is obvious that the repression of illegal trade is always going to restrict freedoms. There must therefore be a balance between freedoms and the authority responsible for protecting human beings. To forbid the freedom to kill someone by drugs is perfectly legal!
The policy of decriminalising and demarginalising the use of drugs and the 'controlled distribution of heroin' would profit only the traffickers, as indicated by the former head of Interpol, Car Persson.
It is a disgrace to this Parliament that this report could have been put on the agenda of a plenary session.

Buffetaut
Is there any point to Mrs d'Ancona's report on European cooperation in the framework of the UN General Assembly special session on drugs? This question may be asked on two counts, firstly because this text is an ambiguous compromise and secondly because the UN General Assembly special session on drugs took place last June and the idea, therefore, of adopting this report in October makes little sense.
The text before us actually says very little because attitudes on this subject are basically irreconcilable. This, incidentally, is what caused the first draft report to be returned to the committee. While it is positive that the report asks the Member States to 'acknowledge that the aim of anti-drugs efforts is a drug-free society', it is to be regretted that the explanatory statement has little coherence with the actual text of the recommendation. In fact, this explanatory statement is marked by the spirit of the first d'Ancona report and is couched in terms which are definitely not neutral. Thus it talks of a more restrictive or more repressive approach, involving policies which ban the sale and use of narcotic drugs, and of more pragmatic approaches, with policies of liberalising narcotic drugs.
The whole explanatory statement therefore tries, without saying as much, to push forward the idea that the future, imagination and realism recommend the liberalisation of the so-called soft drugs, whereas prohibition measures would be repressive and archaic. These are the reasons why we cannot vote for this report, the ambiguity of which clearly has an ulterior motive.

Carlotti
Drugs are one of the main scourges which our societies must face today as they represent approximately 8 % of world trade.
The drugs problem must be tackled with a comprehensive approach, guaranteeing our efforts both in the context of prevention and also through medical treatment and social measures.
Mrs d'Ancona stresses in her report that the decriminalisation of cannabis and the supply of drugs on medical prescription must not be identified, as the Council is doing, as the opposite of the repression of the illegal traffic in narcotic drugs.
The two approaches are not mutually exclusive!
Moreover, in this respect, the European Parliament approved a resolution three years ago which underlined that a policy of complete repression had not produced any tangible results.
Next June, during the UN General Assembly special session on drugs, we must be united.
Despite the rather different approaches of the European Union countries, the various national laws are gradually moving towards each other.
As underlined by the rapporteur, I am convinced that we must base our European drugs policy on the success of local experiments and that we must develop strategies of cooperation.

Cars, Olsson and Thors
Having been referred back to committee, the d'Ancona report on European drugs policy has emerged looking considerably more balanced. We now have a set of recommendations on how to prevent drug abuse and the calls for liberalisation have gone.
The adoption of two of the rapporteur's own amendments, however, means that there is no longer any reference to the aim of creating a drug-free society, nor are the Member States expressly called upon to comply with the UN conventions. Two important elements from our point of view have been dropped and we therefore find ourselves obliged to vote against the report. Policy goals are not clearly stated and the wording in places lends itself to ambiguity.

Darras
I am pleased that this report by our colleague can finally be discussed in plenary sitting. It has taken five months of patience and relentless consultations on the part of our rapporteur to arrive at this consensus resolution, which will hopefully gain the approval of the House.
I am unreservedly in favour of establishing and recognising experiments carried out locally, as in my commune we have been supporting for years the associations fighting against drug addiction and tackling the drugs phenomenon from the medical and social perspectives.
It is now accepted that a purely repressive policy has not brought any progress in the fight against drug addiction. Let us therefore allow the people 'on the ground' to put their ideas into practice, according to the local situations. And we should surely help them, in successful cases, to disseminate their methods. This is the role which the European Union ought to play.
This is what our Member States should agree to support, at international level, by granting the European Commission a Community negotiating mandate for the United Nations Conference - with this mandate based on a pragmatic approach to the drugs problem - and, at national level, by implementing an urban policy able to assist the anti-drugs policies developed locally.
This is what Mrs d'Ancona's report demands, and that is why I voted for it without any qualms.

Deprez
Illegal drugs are one of the scourges afflicting our societies and also one of the most tempting sources of illegal profits. As stated by our rapporteur, this problem has many causes: pursuit of profit, social impoverishment and marginalisation, and also curiosity, prosperity and fashionable trends. The fight against illegal drugs must therefore be undertaken within a comprehensive approach which combines sectors of action as diverse as the information and education of young people, the transformation of objective socio-economic conditions which contribute to the development of drug addiction in all its forms, assistance for drug addicts, the fight against traffickers and money laundering, and the economic and social development of the producing countries.
Everyone knows how crucial and burning this issue is, with the partisans of prohibition and the tenants of an 'alternative policy' often poles apart. We must now advance beyond this fruitless debate and concentrate on how to implement, as effectively as possible, the conclusions of the UN General Assembly special session on international cooperation in the fight against drugs which was held in June.
This is even more important now as it is clear to everyone that the eradication of illegal drugs - which must be our common aim - requires, more than anything else, close international cooperation, particularly in the areas which are wanting, highlighted by the UN special session: reduction of production and demand by 2003 and international legal cooperation in its various forms.

Ephremidis
If we are at long last to talk meaningfully and realistically about one of our century's worst scourges, drugs, we must first decide to remove the narcotic gag of hypocrisy, wishful thinking, embellishment and cover-up from the mouth of tragic truth.
Dilemmas such as whether or not to legalise hard and soft drugs are disorienting, dangerous and false, because reality is always harsh, both for drug users and for society, which always ends up paying the high price. Thousands of people, most of them young, are dying each year as the result of drug abuse. Every day, tens of thousands of people lose their dignity, personality and basic identity and fall victims to the cure-all 'fix' that shields them from the problems they face.
It is those problems which are the first and greatest cause of drug dealing, and the ones to blame are those who bear a heavy responsibility for creating them, those who then shed crocodile tears about the extent of the problem and how difficult it is to deal with it; the policies which create conditions of occupational, social and emotional insecurity and marginalisation, which have corrupted values and created decadent societies; the modern capitalist societies you are so proud about that you amplify their main characteristics every day - the pursuit of profit, the prevalence of the laws of the jungle in the markets, the devaluation of man and the deification of money; a system incapable of creating real and earthly paradises which leads to wretchedness, personal and social isolation and the quest for false avenues of escape and paradises via drugs.
The capitalist system will never solve the drugs problem, not just because it is the inherent cause of its existence, but mainly because it is both served and nourished by the problem. It numbs the conscience, reactions and resistance, it absorbs the emotional, existential shocks and dreams of certain specific social groups, mainly the young. 'Escape' gives life to the establishment and is the best possible safety valve for the smooth and untroubled operation of its markets. Let us not deceive ourselves: apart from anything else, the drug market deals in vast sums of money, supports governments and 'adjusts' markets.
We cannot, however, remain indifferent and inactive to this gangrene, nor to the ineffectiveness of our policies so far. Large-scale organised crime must be attacked, and we must expose the links between the various forms of authority which provide what is drug trafficking in name alone with all the protection it needs for the transfer and 'laundering' of the huge sums of dirty money it deals in.
The most substantive approach to preventing and dealing with the problem is the struggle to create a different society, one centred upon man, in which man's values and dreams will not be subject to the fluctuations and crises of the money markets - a society to which people have access and in which they can participate, and one which respects personalities and creativity.

Elliott
I voted for this report as did most Labour MEPs because I feel that in this highly charged and controversial area, the rapporteur has achieved in her resolution a good, balanced approach. It proposes greater coordination and cooperation between Member States in dealing with the serious problem of the escalating use of illegal drugs, whilst recognizing that - with the current divergences of view in the policies adopted by different countries - full harmonization is not practicable at the present time.
There are many good, sensible proposals contained in the resolution for expanding education about and awareness of the dangers of drug taking - especially amongst young people - and on the health treatment and care of addicts. Also practical suggestions for improving EU cooperation in apprehending and prosecuting drug dealers and for seeking support from the authorities and people of those countries which are the main sources of illegal drugs.
This resolution is certainly not soft on drugs. It embodies tough - but practical and realistic - proposals for tackling this worrying problem.

Eriksson, Seppänen and Svensson
The tenor of the drugs debate in the European Parliament clearly demonstrates that harmonised legislation is not feasible. Nor do we consider it desirable.
Amendment No 3, which calls upon the Council to confirm that drugs legislation should be handled at national level, therefore determined our decision on the final vote.

Gallagher
I welcome this report from the Committee on Civil Liberties and Internal Affairs of the European Parliament which highlights the dangers of synthetic drugs in society and the need to fight organised crime in drug trafficking.
Synthetic drugs such as ecstasy, LSD and amphetamines are dangers to the public health of the people of the EU and I am happy to see that the vast majority of Members in the European Parliament recognises this fact.
Our young people simply do not know the long-term physical and psychological effects of the use of these dangerous and addictive drugs and more research is required into the effects of the use of such substances. Some members of the Green group of the European Parliament had previously tabled draft amendments defining users of synthetic drugs as only consumers and endeavouring to have the use of synthetic drugs regulated and legalised.
We must remember that the UN Convention against illicit traffic in narcotic drugs prohibits the use, manufacture and distribution of ecstasy, LSD and amphetamines and that is the way it should remain.
While most European governments including the Irish Government are trying to implement policies which have the objective of reducing drug use, some members of the Green group of the European Parliament are promoting policies which clearly have the effect of increasing drug use with its resulting social problems.
I would like to welcome the fact that the Irish Government has set up a young people's facilities and services fund at a cost of £30 million which was put in place earlier this year. The purpose of this fund is to develop youth facilities including sport and recreational facilities and services in disadvantaged areas where significant drug problems exist.
The Irish Government is also correct to take a tough line with those people who try to sell drugs in Ireland. I fully support the provisions of the Criminal Justice Bill 1997 which introduces mandatory prison sentences for those caught in possession of controlled drugs valued at £10 000 or more.

Gahrton, Holm, Lindholm and Schörling
We find it rather strange that Parliament should reject Amendment No 4, which argues that the development of new strategies to combat drugs should be in line with the UN's drugs conventions of 1961, 1971 and 1988.
The European Parliament has also said no to cooperating with UNDCP and the Member States in establishing evaluation indicators. The view seems to be that EMCDDA and other European bodies are sufficient. We have sadly come to doubt the European Parliament's willingness to cooperate within the spirit of the UN and to work with its institutions.
It is both shocking and distressing that a sizeable majority should have voted against Amendment No 3, which sought assurances that no Treaty provisions would be used to force Member States to harmonise their drugs legislation. Given the way it voted on Amendment No 10, it is also clear that Parliament has no interest in learning from those countries that have been implementing restrictive policies. Priority is instead given to preventive action.
For some inexplicable reason, the principle that the goal of treatment and care should be to promote a drug-free life was also rejected. This is particularly lamentable and we look ahead with concern and trepidation to Mrs d'Ancona's next report, which will deal with the EU's drugs policy for the years 2000-2006.
For these reasons we voted against the report.

Hyland
I would like to begin my comments by commending the Irish police and all the Irish state agencies involved in their unenviable task of defeating illegal drug circulation in Ireland as well as assisting drug users in rehabilitation programmes.
There is a drugs problem in Ireland. While the main drug circulated in Ireland is cannabis, the most serious problems relating to drug abuse are associated with heroin, ecstasy and other drugs such as LSD. In fact the use of ecstasy is very much on the increase. In Ireland, in 1991, there were 429 ecstasy tablets seized compared to 17 516 tablets in 1997.
The 1997 Annual Report on the state of the drugs problem in the European Union, published by the European Monitoring Centre for drugs and drug addiction, points out that the upward trend in the number of drug-related deaths has continued in Ireland. In fact, the report indicates that 4 out of 10 Irish school-going teenagers admit that they have used cannabis, which is twice the average in most EU states.
I would like to briefly turn to comment on a few of the measures which the Irish Government is taking to address the rising drug problem in Ireland.
A multi-agency approach, involving the Department of Health and Children, Justice, Equality and Law Reform, Environment and Local Government and Education and Science and their respective agencies have been identified by the government as providing the best possible framework to deal with the drugs problem in Ireland. I fully agree with this strategy because the need for a coordinated approach is especially apparent to those charged with law enforcement. The connection between drug dealing, drug addiction and crime is well established.
Measures to improve the EU response to the drugs problem have continued through the activities of the Horizontal Drugs Group. A key part of this work has been the development of a post-1999 EU drugs strategy and the elaboration of priorities for the period 1998/1999.
The Treaty of Amsterdam is another important element in the EU's fight against drug trafficking and organised crime. It sets out a more specific mandate for closer cooperation between police forces, customs authorities and other law enforcement agencies within the European Union, which is also to be welcomed.

Kirsten Jensen, Blak, Sindal and Iversen
The Danish Social Democrats today voted for the d'Ancona report on European cooperation in the framework of the UN General Assembly special session on drugs.
Legislation on drugs varies considerably from one Member State to another. We should therefore not under any circumstances try to harmonise the Member States' legislation in this field. At Community level we must have practical cooperation under which effective action can be taken against organised crime, which is smuggling and selling drugs across frontiers on a grand scale.
Beyond that it is up to the Member States to lay down national policy on drugs. That should of course not prevent us learning from each other's experiences, both good and bad. Common drugs legislation at EU level is neither appropriate nor desirable.

Lis Jensen, Bonde and Sandbæk
The report on drugs contains many positive and good elements. It is important in gaining an understanding of and in any work on drug addiction to focus on the individual's social conditions and marginalisation in society. To believe that it is possible to achieve a completely drug-free society is utopian. It is therefore crucial to focus efforts on prevention and treatment. However, we think that drugs legislation is a national matter; it is thus not desirable, let alone possible, to force the Member States to harmonise their drugs policies. We cannot therefore vote for the final report, since it does not accommodate this view.

Malone
The d'Ancona report makes a large number of positive recommendations which would be of enormous use in the fight against drugs.
I strongly support the emphasis on prevention and on providing better treatment facilities for addicts.
I also welcome the fact that a recommendation in an earlier draft, suggesting that more consideration be given to legalisation of some drugs, has been dropped.
The main thrust of the recommendations has received qualified support from organisations in Dublin working on the drugs problem.
Europe must work towards trying to achieve a drug-free society. Too many people are consigned to a lifetime of drug use - even if prescribed and under supervision. Methadone, according to recent research, is not the panacea for controlling or treating the problem. A higher profile should be given to drug-free lifestyles and to treatments and rehabilitation programmes that work towards this aim.
I also want to see the EU acknowledging and directly supporting the role of local communities in combating the drugs problem, particularly in relation to community and family support systems to cope with the consequences of drug addiction on the health of the family as well as on the individual. Europe must also actively support treatment and rehabilitation programmes relevant to community needs.

Mendes Bota
This is a unequal struggle. In comparison to the astronomical profits of drug traffickers, the funds available to those who seek to oppose them are laughable. The uncontrolled expansion of synthetic drugs, which are manufactured close to consumers, has further complicated the task.
Police and judicial resources may be increased; Legislation may be harmonised; People may have illusions about the liberalisation of consumption; Any number of conventions may be signed; Money laundering may be more heavily sanctioned; Drug plantations may be bombed; Armies may be mobilised; All this may be done!
But the frontline of the fight against drug trafficking and drug addiction is called PREVENTION, and the FAMILY, SCHOOLS and LOCAL COMMUNITIES are the ones who implement it.
Education within the family and at school are essential. A family that is well-informed and a school that provides information are half the battle in preparing young people for their first inevitable contact with drugs and in helping them to resist the attraction of instant pleasure and easy profit.
For this reason we strongly support recommendations 15 and 17 of this proposal. But we also believe that, where prevention is concerned, the strategic field of battle lies in each municipality, in each local community. Who is more familiar with the tragic dimension of the problems caused by drug addiction than family and neighbours? Who is better placed to notice the sudden affluence of some and the physical and moral degeneration of others?
The local COUNCILS, in direct partnership with FAMILIES and SCHOOLS, have a decisive role and should receive ample financial and technical support from the European Union and the Member States. MUNICIPAL PLANS TO PREVENT DRUG ADDICTION must be drawn up. Information must be disseminated; help must be provided for those who need it; the phenomenon must be studied in the context of each community; young people must be given leisure and activity facilities; rehabilitation and social and professional reintegration centres must be built for drug addicts.
Another aspect that should be dealt with in this proposal relates to cooperation with the management of night entertainment centres to implement joint prevention and suppression measures. They have no interest in a low-income clientele of drug addicts who spend their money on drugs and merely parade the effects of their addiction.
Drug dependence is the direct cause of much of the unhappiness which torments our families, feeding insecurity and violence, dragging human dignity down to unimaginable depths. It is our duty as citizens and as people with political responsibility to take an active part in this struggle. The danger is upon us. We hope that the Council is equal to assuming its responsibility because, as the Portuguese anti-drug campaign states, 'drugs are the end'.

Novo
The series of recommendations contained in the d'Ancona report certainly demonstrate a very positive endeavour to seek consensus on the issue of combating drugs.
Indeed, the connection between the drug addiction phenomenon and the social causes which are largely to blame, be they unemployment, poverty or social exclusion, is an important aspect of this report. So is the need to tackle dependence as a public health issue and to deal with the whole question of prevention, treatment and recovery, while simultaneously warning of the need to increase the budget of the Community and of Member States to deal with these matters.
Other positive recommendations are those which warn against concentrating on the role of the police in combating drug addiction, and those which advocate a greater focus on the aspects of education and prevention, on awareness-raising and information campaigns and on the need to enhance cooperation between the Member States and within international organisation s with a view to coordinating activities, carrying out research, harmonizing statistics and making them compatible.
However, the report falls far short of what would be desirable and possible in the area of combating drug trafficking and money laundering.
Only one of the 27 recommendations deals with this important (and decisive) dimension of the fight against drugs. No explicit mention whatsoever is made of tax havens; no explicit mention is made of financial havens; no mention is made of the need to consider, therefore, the possibility of lifting banking secrecy; nothing is said about the ramifications of the euro in facilitating money laundering.
It was because of these fundamental shortcomings, which mean that the report fails to deal with a decisive element in the fight against drugs, that we abstained.

Seillier
However useful the repressive, therapeutic, economic and social approaches adopted by my colleagues may be in the fight against the drugs problem, they are inadequate and do not tackle the crux of the matter. Indeed, for several decades - hence the crisis of 1968, 30 years ago - the adult generation, parents primarily, but also teachers, journalists and members of parliament, has not been passing on the intellectual and spiritual elements needed by young people to dynamically and courageously face the various tests in life, or to take on family or political responsibilities, for example. The search for artificial havens demonstrates their need for absolutes; however, neither work, nor science, art, sport, ecology or politics, whether at national or European level, are such absolutes.
It is as if you have forgotten that human beings, particularly when young and therefore not yet hardened by conformism and compromise, need their parents and adults in general to talk to them about the reasons for living and not just the means of living. The belittling of literary culture and culture in general can be seen in our various countries, and yet the works of literature consider the main questions about the human condition - love, suffering, death and God - which are essential for spiritual maturity.
Young people are no longer nourished by the extremely rich sources of European humanism which for over 2000 years have fed the extraordinary cultural and spiritual heritage of our continent. The repeated but purely abstract allusions to the 'European social model' in the Amsterdam Treaty cannot fill the gap, intellectually and morally, faced with the terrible confusion of youth. Fortunately, the World Youth Days which took place in Paris last year brought a real ray of hope for many European youngsters.

Stewart-Clark, Sir Jack
Yesterday's debate and today's vote on Mrs d'Ancona's report on drugs is a victory for common sense. United, this House can achieve a very great deal; divided, it is without influence. On a subject as sensitive as drugs abuse, where very different points of view exist, not everybody could have their way. What has resulted is a sensible, human and positive report. We have emphasised the importance of cooperation at all levels. We have stressed the need to learn from one another. We have asked that both the European Drugs Monitoring Centre in Lisbon and Europol should be made full use of, and that Member States must fully cooperate in providing adequate and meaningful information.
We are happy that Parliament has been able to vote clearly for helping youngsters to lead a drug-free life and that we have supported the upholding of the United Nations drugs conventions. Both are essential if we are to have effective policies for helping young people to stay off drugs and for tackling drugs traffickers and their accomplices.
In conclusion, I am glad that my Group has been able to support this report.

Vaz da Silva
The erratic course of the Ancona report which is once more before the House, in a more coherent but much weaker version, reveals the disorientation in the minds of politicians which in turn accounts for the disparities between national drugs policies. And the problem is that as long as the battle to achieve harmonisation of national legislation based on common indicators is not won within the European Union, traffickers will continue to grow rich and the toll of young victims will continue to increase.
Combating drugs relies, primarily, on three types of positive measures: information/prevention (for the general public), reduction of risks and recovery (for drug addicts) and support for producer countries (to grow alternative crops). Police clampdowns are just a marginal aspect in comparison to the main issue and, have hitherto served merely as an 'aspirin' which relieves the problem but does not solve it. Such clampdowns attack traffickers but do not eliminate them, and indeed goad them to outdo themselves, as is apparent in the growing volume of business, the low prices of products and the appearance of new drugs that are now produced on our doorstep.
Unfortunately, we now have sufficient evidence that implementing United Nations conventions is actually counterproductive. And sufficient experience exists in a number of Member States to show that the only course is to change priorities in combating drugs. The need now is to change policy and to boost or, rather, to rechannel and concentrate resources.
It would appear that fairer winds are now blowing in Portugal, judging by the report that was submitted this week to the government. On a number of previous occasions, Portugal has pioneered new legislation, having been the first to abolish capital punishment and, more recently, with its 'family laws'. It is my hope now that my government will heed these winds and set a course in the right direction.
I regret that I must abstain from voting on this very important topic, but I consider that the Parliament has not succeeded in reflecting the urgency of the situation in its text.
What will it take to wake Europe up?
Bontempi report (A4-0285/98)
Bonde and Sandbæk
Corruption must be fought tooth and nail, but there are limits to how far one should go when it comes to choosing the way to do it, for we run the risk of giving the EU more tools to extend its powers than it already has at present.
The Bontempi report on corruption has some good things to say on such aspects as openness and the damage corruption does to the public. At the same time it talks of 'centralised registers' and 'specialised units' to be set up in the Commission's Directorates-General, and it calls on the Commission '... once the Treaty of Amsterdam enters into force - to make immediate use of its right of initiative in the field of police and judicial cooperation in criminal matters...'. The Danish June Movement will not be party to the writing of such a blank cheque for centralisation.
Among the good things in the report, Parliament draws attention to the need for the EU to combat corruption within its own system. It refers in particular to the Commission and points out that the rules which are there to ensure openness are insufficient. The report rightly points out that there is a problem for the individual citizen when corruption takes place. Every time, for example in a tendering procedure to decide which firm should get a contract, that a firm is selected on the basis of corruption rather than on a factual assessment of the firm's tender, our citizens are damaged. In such cases, taxpayers' money is not used to obtain the best quality, safeguard environmental interests in the best possible way and get the work done at least cost, instead it disappears into the pocket of the staff member who has been bribed by a firm to ensure that the order is placed with that firm.
It is a situation which should be avoided. But it is also a situation that can arise more easily when the office authorised to place contracts or select firms submitting tenders is part of a large, impenetrable and bureaucratic system. The EU is just such a system. Rather than react to the problems by introducing further centralisation, some of these contracting and selection procedures should revert to the countries themselves. A single language and press and the fact that each country in isolation makes up a smaller unit than the EU will make it easier to maintain democratic control over money that is used on the citizen's behalf.

Buffetaut
Our colleague Rinaldo Bontempi has undisputedly become an expert on the fight against organised crime and the anti-corruption policy of the European Union. Current events have unfortunately just reminded us that the problem of corruption and unacceptable behaviour reaches even into the European institutions, particularly the Commission. This is why Mr Bontempi's report has appeared at exactly the right time to invite the Commission 'to devise a comprehensive anti-corruption plan' and to call for 'specific proposals aimed at combating more effectively corruption within the EU institutions'.
It is right and proper that this report insists on the need for more transparency in decision-making processes, for more clarity in the rules on tenders and for more effectiveness in internal controls. It also raises the difficult problem of the policy of cooperation with third countries. It is to be welcomed that the rapporteur says in the explanatory statement that it 'would be wrong to take a fatalistic view of corruption' because it has always happened; his reminder that 'the word 'corruption' originally meant physical or moral disintegration' is also positive.
The fight against organised crime and corruption, the latter being one of the manifestations of the former, is a typical area in which European cooperation is helpful and should make national policies more effective. The European Union is 'an asset' in this case, since it reinforces the action of the Member States. Emphasis must be placed on the fact that it would be advisable, when a scandal affects the Commission's services, for the Commission to practise the transparency it so often recommends to others and not to block our parliamentary fact-finding with delaying tactics.
To conclude, Mr Bontempi's report contains sound principles and advocates realistic cooperation. That is the reason why our group voted for it.

Delcroix
If there is an area where the sensitivity of European citizens is particularly acute, it is corruption. Together with expectations which are never met of social Europe, tax harmonisation and democratisation of the Union, the revelation of cases of corruption - with those occurring within the European institutions being at the top of the list - causes feelings of rejection which are extremely damaging to European integration and from which the extreme right profits. The Bontempi report has the merit of establishing the broad outlines of a comprehensive anti-corruption policy, and I congratulate its author for having attempted this integrated and coherent approach which is the only one likely to succeed.
However, at the same time as implementing measures aimed at reducing corruption at international level, both inside and outside the frontiers of the Union, I feel it is both useful and imperative that, as a priority, Europe reinforces the fight against corruption within its own institutions by using firm and visible measures encompassing prevention, detection through increased controls and sanctions for all forms of corruption committed by natural or legal persons. This is of prime importance. On the one hand, how can we give lessons to others and be credible without first washing our own dirty linen in public? And on the other, for about ten years, too many allegations have been repeatedly made without the Commission reacting in a convincing way.
In this area of the fight against corruption, citizens keen on democracy demand transparency. Setting up a central office for fighting corruption, as the report requests, is not enough; it should also be insisted that cases of corruption are brought out into the open - for example by means of communications to the European Parliament - as well as the administrative, civil and disciplinary sanctions arising from these cases.
As with all European texts, this transparency must apply to the decision-making processes, to the simplification of the law and also to the financial situation of anyone - including MEPs - who occupies a post open to corruption. It is also essential for these people, officials in particular, to undertake special training enabling them to be fully informed about the different types of corruption and the means to effectively combat these.
Furthermore, a close link must be established between the report before us and the Bösch report which we are also considering at this part-session. The latter concerns the independence, role and status of the Unit for the Coordination of Fraud Prevention, UCLAF. This report requests the replacement of UCLAF with an anti-fraud office - OLAF - whose jurisdiction would extend to all the European institutions and which would be supervised by a supervisory body appointed by the European Parliament in agreement with the other institutions. These two reports closely complement each other even though certain points should be dealt with in more depth, such as what is meant by the 'independence' of OLAF. In my opinion, this body cannot become a new Community institution, which would involve a revision of the Treaties. While remaining within the Commission, OLAF should enjoy broader independence, guaranteed initially by the choice of its supervisory body.

Deprez
Tax fraud, money laundering, organised crime and international crime have found extraordinary scope for development in the liberalisation of trade and the globalisation of economic activity. For those engaging in these activities, which are as lucrative as they are criminal, corruption is clearly one of the favoured means of action, both in the public and the private sector.
Recent events have shown how our countries and our institutions are also to a greater or lesser extent affected by this world phenomenon. The need is clear for the Commission to follow a decisive initiative, within its terms of reference, in the fight against corruption. The challenge is a fundamental one. We should make no mistake about it: democracy, the rule of law and corruption are incompatible. The development of one necessarily leads to the perversion and then the destruction of the others. The fight against corruption must therefore be one of the priorities of the European institutions and of our states.
Legal and cultural differences are clearly so important in this respect that it would for the moment be unrealistic to set the objective of achieving legislation which is identical in all points in all the Member States. It is therefore right that the Commission is proposing to proceed gradually and to concentrate for now on simplifying the concepts and approximating the laws of the Member States.
In making this joint effort, it is also the responsibility of the Member States to eliminate, as quickly as possible, the most shocking aspects of their laws, particularly those which tolerate or encourage corrupt acts in other states, and to rapidly formalise the undertakings to which they have already agreed.

Holm
The Commission cannot wage the battle against corruption on its own, or assisted by an internal structure such as UCLAF. If we are to prevent corruption and fight fraud, one necessary condition is that every citizen and every journalist should be in a position to find out what is going on within the Commission and the other EU institutions. We therefore need a fully-fledged system of open government in order to halt corruption. The risk of internal fraud will be drastically reduced once EU officials know that their activities can be investigated by anyone, and not just by a handful of colleagues from their own institutions.
The ECHO case illustrates the need for measures to combat the kind of fraudulent practices that are patently rife inside the EU system. The manner in which the Commission has tried to put a lid on the issue, refusing to come forward with information on what has been happening, demonstrates that it has confidence neither in the competent supervisory authorities, i.e. the European Parliament and its Committee on Budgetary Control, nor in the public at large. A sorry pass has been reached when an organisation indulges in self-protection of this kind.
The report talks about 'debureaucratisation', but it is not clear what is meant by this. If we are truly to cut red tape, we must set about it in the right way. There has to be a proper system of record-keeping in place when taxpayers' money is at stake, or when public calls for tender are launched, so as to avoid the 'disappearance' of sensitive documents. On the other hand, in-house monitoring - checking to whom officials say what - is indeed unnecessary bureaucracy.
Employer-employee solidarity is not achieved by means of submission and obedience, but through an open debate about what needs to be changed.

Lis Jensen
The Bontempi report covers a very relevant and serious subject which is a scourge the world over, namely corruption. The problem of corruption is, as the Bontempi report points out, one that also affects the EU's Member States and, not least, the EU's institutions. The question is then how that scourge is to be combated. There is no doubt that, with the globalisation of economies, the problem is spreading its tentacles across national frontiers. But the view taken by the Bontempi report that the first duty of the individual Member States and the individual EU institutions is to put their own house in order when it comes to combating corruption in their own ranks is entirely correct.
If the EU Member States and the EU's institutions do not take their responsibility absolutely seriously and honour the range of initiatives and conventions that have been adopted in the field internationally over the years, even the best declarations at EU level have no value.
A combined strategy for the EU to combat corruption is not relevant in my view as long as the Member States fail to honour the commitments they have already entered into. The arguments of the Bontempi report for more centralised arrangements at EU level to combat corruption, including a central body for the purpose, mean that I cannot support the report, despite the good elements it contains.

Lindqvist
The political and technical anti-fraud measures proposed here are sound, and I therefore voted in favour of the report. The introduction of a system of open government, with protection for those providing information, would however constitute the single most significant step towards combating fraud. If all EU documents were to be made public as a matter of principle, and the right to inform the media were properly enshrined, then instances of corruption and deception would be more easily uncovered and we would have less of a problem.
Langen report (A4-0304/98)
Berthu
The European Commission has just published a communication pompously entitled 'Impact of the changeover to the euro on Community policies, institutions and legislation'. Contrary to the impression given by the title, the communication contains no comprehensive analysis of the impact of the euro on the development of European integration, but only a list of the legal amendments required in various technical areas such as the budget, agricultural policy or administrative expenditure.
The Commission and the European Parliament are taking this opportunity to congratulate themselves on the 'considerable simplification' which the euro should bring. Certainly, everyone is firmly persuaded that monetary union may make the management of Community finances, or subsidies, simpler than with 15 national currencies. However, the real question is not whether the euro will facilitate the life of European officials, but whether this will facilitate the life of the citizens of the Member States.
Viewed from this essential angle, we have extremely serious misgivings. Leaving aside the question of the transition and adaptation problems, I would simply point out that the imposition of a single currency on countries in different situations will cause major lasting problems of conciliation, generating incessant conflicts and likely in the end to divide Europe. The President of the European Central Bank, Mr Wim Duisenberg, confessed to us, at the meeting of the Committee on Economic and Monetary Affairs and Industrial Policy of 22 September, that the establishment of a monetary strategy was proving to be more complex than he had previously anticipated.
And this is the real crux of the matter: in simplifying internal exchanges, the euro will complicate all other exchanges and even make them matters of conflict. In the end, Europe will have been the victim of an optical illusion which will have led it down the road to ruin.

Fourçans
The introduction of the euro will have overall positive effects for the whole zone. Nevertheless, it is interesting to look in more detail at more specific sectors in order to assess its effects. The Langen report, therefore, following the example of the communication from the Commission, targets three sectors in particular: the Community budget, the agrimonetary arrangements and administrative expenditure.
With regard to the Community budget, the introduction of the euro will result in considerable simplification. In fact, the Member States' contributions are currently paid in national currency and then have to be converted into ECU. Part of the Community expenditure uses national currency, in particular agricultural expenditure which constitutes the largest part of the expenditure of the European Union. The rest of the expenditure is in ECU. The departments responsible for finance must therefore buy ECU on the free market, with all the inherent exchange-rate risks. It is clear that, with the euro, the exchange-rate risk will be eliminated as expenditure and income will be in a single currency without any conversion being necessary.
In respect of the CAP, agricultural prices are set in a unit of account which is based on the ECU. This means that, in the event of a devaluation or revaluation, agricultural prices are directly affected, leading to considerable variations in the agricultural income of the Member States affected by these exchange-rate fluctuations. In order to cancel out these effects, agricultural prices must be converted through the EAGGF. With the introduction of the euro, these problems will disappear as prices and amounts will no longer have to be converted, and the fear of trade distortion will automatically disappear. On the other hand, the problem will remain for the four Member States outside the euro zone, which will then be obliged to convert prices and amounts into the euro, under the scheme established by the CAP.
The introduction of the euro will also positively affect the sector of administrative expenditure. This expenditure is at present incurred in national currency. The salaries of officials, calculated in ECU but paid in national currency, obviously must remain constant. This involves adjustments and sometimes greater costs due to the exchange-rate variations. In fact, the budget expenditure in ECU varies every month. With the euro, these variations will disappear.
Since Mr Langen's report gives a good assessment of the impact of the introduction of the euro on these various sectors, I have voted in favour of it today.

Kirsten Jensen, Blak, Sindal and Iversen
The Danish Social Democrats voted for the Langen report today. This should not be taken as signal indicating a change in the Social Democrats' policy of reserving our position with regard to the third stage of EMU, but as a statement of our keen interest in what happens in this area, despite the fact that we are not participating in the third stage. It should of course be borne in mind that the countries which are not participating in the third stage of EMU will still need exchange rates.

Martinez
The euro will have consequences, primarily on Community legislation: 4 000 Community acts will have to be amended to take account of the change in unit. When you consider that, in the laws of the Member States, all the monetary references in tax, criminal, commercial, social and other codes will also have to be altered, the extent of the administrative and other costs involved in carrying out these simple legislative adjustments can be appreciated.
Certainly, for the European institutions, the euro may lead to a reduction of the costs of budget management, since 56 % of Community payments which are currently converted into national currency will remain in the euro, hence the disappearance of the exchange-rate risk.
The euro may also give an advantage in the agricultural sector by allowing the agrimonetary conversion arrangements to be abolished. These each year cost between ECU 1 000 and 1 500 million.
We also believe that the payment of the salaries of 30 000 officials, of which 90 % work in Brussels and Luxembourg, will be simplified. There will be no more payments in the national currency of the country of employment, which is currently the case for 76 % of the ECU 2 700 million in administrative expenditure. In respect of salaries and pensions, the administrative burden will be partly lifted.
But this is not the most important point. In addition to the IT and administrative costs, the euro will accelerate competition between the 11 participating economies. In order to adapt to this, undertakings must therefore cut their costs, leading to a reduction in pay, social protection and jobs.
This will lead to euro-unemployment, euro-rationing of investments and welfare and also euro-inflation, because traders will round prices upwards.
But there is even worse to come. In a Europe with a large population of senior citizens spread over several generations, everyone over 65 years of age will have their internal money clocks disrupted. The oldest and weakest in our societies will fall victim to increased fraud, due to pensions, for example, being paid in a currency unit which the majority of the elderly may no longer be able to take on board.
It would have been so much simpler to have an intelligent euro by making this a reasonable common currency instead of this single dogmatic currency.
It is not even certain that, at the end of day, the euro will be as effective as expected in a globalised market whose finances are destabilised. Even before being introduced, the euro has been shown not to be up to the basic problem: the limitations of the IMF, the international financial chaos and the money dumping carried out by the dollar.
As with federal Europe itself, the single European currency is perhaps the light of a star which has already faded, given that globalisation and internationalisation have happened so quickly - more quickly anyway than the construction of a federal Europe.
So much so that, in the final analysis, the nation states themselves are revealed to be the only ones able to protect the people and their freedoms as required.

Trizza
I share the optimism concerning the introduction of the euro as a single currency in Europe: its entry into the marketplace will facilitate the implementation of Community policies and help the European institutions to operate more efficiently and effectively.
The advantages of the euro for agricultural policy are also obvious: its introduction from 1 January 1999 will facilitate trade in all products, including agricultural ones. Indeed, the advent of the euro will coincide in that sector with a new, radically simplified agrimonetary regime, whereby the 'green rates' - used to convert agricultural aid and prices established in ECU into national currency - will disappear altogether. Here, however, transitional measures are required to soften the adverse impact of the new agro-monetary system, in that farmers will no longer be compensated for the negative effects of exchange rates.
Finally, I too am optimistic that the euro will have a positive effect on the drawing-up of the Community budget, as well as on Community staff management. Salaries and pensions will be calculated on a constant basis, no longer subject to the vagaries of exchange rates.

President
That concludes the votes.
(The sitting was suspended at 1.28 p.m. and resumed at 3 p.m.)

UCLAF
President
The next item is the report (A4-0297/98) by Mr Bösch, on behalf of the Committee on Budgetary Control, on UCLAF's independence; sound financial management and administration; opposing irregularities, fraud, corruption (Court of Auditors' Special Report 8/98) (C4-0483/98).
I should like to welcome the President of the Commission, Mr Santer, together with Commissioners Liikanen and Gradin, and first give the floor to the rapporteur, Mr Bösch.

Bösch
Mr President, ladies and gentlemen, the debate on this report on the future of UCLAF was on the agenda back in September. At the last minute, and in spite of the protests from our committee, it was postponed. At the end of the day, however, that postponement might well have been beneficial; first of all, it enabled us in the Committee on Budgetary Control to push through the procedure we are applying here. Article 206 of the EC Treaty, on which our approach is based, had even been forgotten by one or two of the officials in our own administration. We took the opportunity to call back to mind the extensive powers of control vested in Parliament in connection with the granting of discharge.
Secondly, the headlines of the past few days are a sharp reminder of the importance of this subject in terms of the credibility, and hence the future, of the European Union. I hope that through this report we can help to consolidate, or even recover, some of that credibility.
Let me say from the outset that the fight against fraud in the European Union will never be anything other than a difficult undertaking. We should have no illusions about that; it is inherent in the structure of Union expenditure. The allocation for administrative expenses is decidedly paltry at a mere 5 %. Conversely, the amount earmarked for support funds is very high. That should not change, but we must be aware that, wherever subsidies flow, covetousness rears its menacing head. We must keep it under control. That is easier said than done, as the money is not centrally disbursed. Eighty per cent of these funds are channelled through the administrations of the Member States. In some cases non-governmental organisations are also involved somewhere along the line. That can cause problems, as the ECHO case illustrates.
Problems are particularly liable to occur if the rules of the game are not entirely clear or if the various players, sometimes at the highest levels, agree with a nod and a wink not to take the rules too seriously. Once that happens, there is no turning back. What begins as an irregularity ends with corruption and fraud.
What the Commission is lacking in many areas was described by the Court of Auditors - and let me emphasise that it was the Court of Auditors, not the European Parliament - in its special report as a 'zero-tolerance policy'. I do not intend to quote numerous excerpts from the report here. I shall only quote point 2.33, in which the Court of Auditors writes, 'Well-known cases exist (for example in the tourism sector) where dossiers have been withheld from UCLAF investigators and where incriminating documents have been systematically destroyed'. How we assess that from a political point of view is something we can surely discuss further today.
It must be demonstrated, the Court of Auditors states in point 6.9 of its report, and I quote, 'that any cases of suspected internal fraud, corruption, breach of discipline or mismanagement will be investigated in a professional manner and, if proved, that the appropriate disciplinary measures will be instigated with rigour and transparency'.
If such a policy is to be enforced, the first thing that is needed is genuine political will. The Commission, sadly, seems to have been lacking the necessary resoluteness. Anyone who seeks to pursue such a policy must also arm himself with the necessary resources and instruments. The first implication of this is that we must increase staffing levels in the Commission departments which are involved in the distribution of aid and support funds. From the domain of development aid, we know that national governments may employ twice to three times as many staff as the Commission to administer and control comparable amounts. We do not seek to advocate the creation of a bloated bureaucracy, but there is some catching up to be done in this area. Otherwise, I fear, we shall keep discovering fresh instances in which the administration of funds has been organised on the very edge of legality or beyond with the aid of dubious companies.
And so to UCLAF itself. I believe it will be quite clear to anyone who has read the special report by the Court of Auditors that things cannot go on like this. Only the Commission itself, it would seem, has so far failed to recognise that. I shall only refer to the most serious findings. First of all, the UCLAF caseload is growing and is becoming too much, sometimes obviously so, for the staff there to handle. According to the findings of the Court of Auditors, as many as 1400 files were opened over the past year, though in a good few instances two or three of them related to one and the same case. On the other hand there are evidently files that lie around for months without anything being done to expedite the treatment of those cases.
UCLAF's electronic databases, an indispensable resource in the fight against fraud, are still in their infancy. The data they contain are incomplete and cannot be systematically processed. This means that a reliable risk analysis is scarcely possible.
The files that are opened on the various cases are not drawn up in accordance with uniform rules and often fail to meet the minimum requirements laid down for documentary evidence by the judicial authorities of the Member States. A lack of discipline in the treatment of the files makes it possible to manipulate them by adding or removing documents. The black list for agricultural expenditure is not yet operating satisfactorily. The early-warning system in the realm of direct expenditure is only now being established.
The flow of information between UCLAF and the competent authorities in the Member States and the coordination of approaches reveal considerable shortcomings on both sides. Anyone who reads the Court of Auditors' report is left with the impression that the EU must first put its own house in order before the problem can be solved, hence the great importance attached by our committee to the issue of internal fraud and corruption within the EU institutions. An intensive discussion of this issue was kick-started more than a year ago by Mrs Wemheuer's report on fraud in the tourism sector and Mr Fabra Vallés's report on the MED affair.
Many parties to this discussion process initially took the view that fraud could only be effectively combated if UCLAF became independent and were reconstituted outside the Commission framework. That would certainly solve the problem of the Commission having to investigate itself, as it were, as long as UCLAF is within the Commission framework and is thus a part of the Commission. Would it not be best to draw a clear dividing- line here?
What is right and proper in principle could prove to be wrong and disastrous in practice. As long as there is no European judicial authority and no European public prosecution agency to protect the financial interests of the Union, it would be a mistake to detach UCLAF completely from the Commission and to establish it somewhere on the outside as a sort of satellite. UCLAF would then literally be left hovering in a vacuum without access to important internal information and without the inspection rights it enjoys today as part of the Commission, particularly its hard-won right to conduct site inspections on its own initiative.
On the other hand, it would be equally disastrous to leave the present structures as they are and merely to increase the staffing of UCLAF above the present level of 126 officials. Of course UCLAF needs more staff, but what it needs most of all is to be independent of instructions from above on which suspected cases it should investigate and the way in which it should investigate them. UCLAF, in other words, needs operational autonomy.
So what it boils down to is that we are not seeking a tabula rasa. We neither wish nor require to start again from scratch. We do want a new beginning, but not one in which tried and tested methods are thrown overboard. This new beginning should be reflected in the name of the organisation itself. UCLAF should give way to OLAF, the Fraud Prevention Office, which, while continuing to have a coordinating role in cooperation with the Member States, could shift the main focus of its activities to its own investigations.
As we see it, OLAF would remain inside the Commission framework but would have the greatest degree of independence that is possible within that framework. This would have to be governed by special rules and regulations, which are described in detail in my report.
Allow me to highlight one more point. We are proposing that, in addition to the Commission, the other institutions of the Union should participate in OLAF if they so wish. In my report we invite them to engage in such interinstitutional cooperation, an invitation that is expressly extended to the Council, which in its opinion on last year's discharge drew attention to the fact that all institutions of the Union should have instruments at their disposal with which they can combat internal fraud.
The proposal that, to this end, OLAF be created by a joint decision of the participating institutions has been misunderstood in some quarters. It is not a matter of creating a new institution in addition to those that already exist, nor is it a matter of jumbling together the powers of the various institutions. All the institutions of the Union have a duty to act against corruption and fraud within their own ranks, and they are all entitled to undertake this sort of task jointly. So let us not conjure up any legal problems where none exist. We shall ensure that all necessary decisions are taken and that the way is clear for the establishment of OLAF when we face the voters in a few months' time. Unless we signal a new beginning in this way, we shall ultimately lose all our credibility.

Santer
Mr President, ladies and gentlemen, I wished to speak today, during the debate on the Bösch report, because this raises questions which are very important to the Commission. I wanted to do this so that there could be a calm and constructive debate on reinforcing the fight against fraud and corruption. I believe that the lack of calmness in the current debate is in fact leading to certain generalisations. This worries me, and this is why I want us to have this discussion today.
Since I came into office, my aim has been to ensure sound and efficient management. I have always made this a priority. That is why, at the beginning of my term of office, together with Erkki Liikanen and Anita Gradin, I launched the SEM 2000 initiative to considerably reinforce the management and supervision of the use of public funds. SEM 2000 is the embodiment of a real political will among all the Members of the Commission, and its implementation is progressing successfully. This is an ambitious reform which should result in more efficient and more transparent management. Today, before the House, I should first of all like to clarify the situation and then to make some constructive proposals, with an eye to the future, which take up many of the points made in the Bösch report. However, I propose to go further with the conclusions which must be drawn.
Before considering the heart of the matter, I know that there is one point which concerns you in particular: the forwarding of information on investigations in cases of internal fraud. I am aware of this, and I agree with the wider and more complete forwarding of information in order to ensure that Parliament is fully able to carry out its task of budgetary control. However, you will agree with me that this improvement of the forwarding of information must take place in accordance with the law and must take account of the presumption of innocence and the secrecy of the inquiry. To this end, I will very shortly make some specific proposals to the President of Parliament.
I shall now turn to the Bösch report and will firstly make some comments on this. My first comment is that a sweeping criticism of the results obtained by the Commission hitherto in combating internal fraud committed against the Community budget leads to inaccuracies which thus result in generalisations. The first of these inaccuracies relates to what UCLAF actually does. Firstly, UCLAF coordinates the work of combating fraud in the Member States. In this respect, approximately 5 000 cases were dealt with in 1997 involving ECU 1 400 million. Secondly, UCLAF conducts direct investigations using its own resources. This was not its main task on its creation, but there are currently 950 cases subject to this type of investigation. Thirdly, among these investigations, there are some which may obviously implicate officials. This applies to about 20 cases. UCLAF must be judged on its work in its three areas of competence. The function of coordination with the Member States has been proven and is appreciated. As for the investigation function using its own resources, significant results have been achieved, to which I will return. I am prepared to consider with you the best ways of further enhancing this area of activity of UCLAF.
My second comment relates to the internal investigations. If I may be frank, your report contains an intolerable insinuation to the effect that the Commission '... in cases of corruption within its own ranks ... has a tendency to cover up such cases ...' You must realise that I take this as a personal attack which I vigorously reject and which the facts prove to be unjustified.
What are the facts? It was this Commission which, thanks to the work of UCLAF, itself revealed the case of fraud detected in the context of ECHO and which, after an in-depth investigation by UCLAF, forwarded the file to the judicial authority. It was this Commission which, last November, approved the guidelines for improving the action against incompetence, financial irregularities, fraud and corruption. This Commission also sought to reinforce the independence of UCLAF by upgrading its status to that of a task force. We also adopted a new internal structure which was actually welcomed by the Committee on Budgetary Control. It was this Commission which, on 14 July, laid down the principles applicable to the conduct of internal investigations, in order to give UCLAF inspectors a clear and solid basis for their work while fully respecting the guarantees of personal rights. It is this Commission which, since 1995, has referred nine matters to the judicial authorities in cases where officials have been under suspicion. Since 1995, this Commission has dealt with 49 disciplinary procedures, not all involving cases of fraud but also reprehensible behaviour. As a result of these procedures, the Commission has decided on eight dismissals, two demotions, four downgradings in step, 11 reprimands and four warnings.
Mr President, ladies and gentlemen, let us now turn to the concept of 'zero tolerance'. The European Parliament denounces the absence of a clear policy on the part of the Commission with regard to corruption. I totally, steadfastly and resolutely reject this attitude. No one can say that the President of this Commission has ever tolerated or covered up any corruption. However, I do agree with you that, in all the institutions, the grey area of favouritism and conflict of interests must also be tackled. Let us therefore jointly agree on an action to comprehensively raise moral standards in all the institutions, so as to remove any ambiguity. The only way to achieve this is through transparency. However, I would stress that I am not prepared, under the pressure of more or less orchestrated leaks to the public and quotations taken out of context, to take part in an indiscriminate and unfounded witch hunt. Nor am I prepared to disregard the most basic personal rights, primarily the respect for the presumption of innocence. Finally, I am not prepared to sit back and allow the sullying of the image of excellence which the humanitarian work of the Union has acquired throughout the world, through the daily work of ECHO on the ground, in very difficult conditions and in collaboration with the United Nations, the Red Cross and a large number of non-governmental organisations.
This brings me to my third comment. Fraud and administrative irregularities should not be regarded as being on the same footing. The latter relate to non-compliance with the Financial Regulation and the budget as approved by the budget authority, which must not be confused with fraud, which is a concept under criminal law involving the wrongful collection or retention or embezzlement of public funds. And I will be very clear about this: I obviously do not approve of administrative irregularities, but you should consider the reasons why departments have been forced to look for a certain administrative flexibility, sometimes resulting, it is true, in real acrobatics. New and heavy responsibilities were entrusted to the Commission by the Council and by yourselves at the beginning of the 1990s. The urgency of these often external tasks and the inadequacy of the resources immediately available were at the root of these administrative acrobatics which had to be eliminated.
It would not be proper to impose individual sanctions on officials who committed these irregularities for the sole purpose of keeping departments going. It is precisely for this reason that the Commission, with the agreement of the budgetary authority, decided in 1992 to end these administrative irregularities. The European Parliament helped to eliminate the irregular mini-budgets by converting appropriations into over 1 800 posts. Parliament should be congratulated for this. I therefore understand the irritation on the part of some of you who, having made a personal effort in this respect, see that certain practices continued for some time and are now wondering whether these practices have in fact totally disappeared. I would say to you very clearly: we must achieve total transparency.
With regard to ECHO, the practice of mini-budgets ended in June 1995. For all the other departments, I have asked that a check be carried out by each Director-General, under their responsibility, so that any similar practices which may remain are fully identified. I will inform Parliament, in all transparency, of the results of this check. If problems do remain for the Commission, the budgetary authority will be clearly told of this so that we can find solutions together.
I now come to my fourth comment. I cannot accept the connection made, in the Bösch report, between the alleged lack of independence of UCLAF and its subordination to the Secretariat-General of the Commission.
Mr President, ladies and gentlemen, I know of no case where the hierarchy might have prevented UCLAF from carrying out its investigations. I would also point out that, according to our rules, UCLAF can open internal investigations at any time on its own initiative.
Having set the record straint on these points, I will now turn to the proposals made in the Bösch report. First of all, I said at the beginning of my speech that there are many elements in this report with which I agree: the concern to standardise and clarify the rules according to which investigations are conducted; the demand for a clearer and more uniform definition of the rules for handling confidential information, and an identical and consistent handling of files. We started this work last July and this is still currently ongoing.
As for staff numbers, this question must be reviewed in the light of the future structure and objectives. But I will go further. I believe that, in the light of the experience gained, the external and internal inquiry function of UCLAF would profit from being reviewed and reinforced. Why? As I said previously, I very firmly reject the statement that UCLAF is not functioning independently at the moment, but I will say quite honestly that if, due to the presence of UCLAF in our structure, the fraud prevention efforts of the Commission are being called into question or denigrated, I would prefer the externalisation of the inquiry function.
I therefore propose that we move towards the creation of an external and internal Anti-Fraud Office which is totally independent and not subordinated in any way to the Commission. This would provide another advantage: it would allow this future Office to more easily extend its inquiries to all the institutions and to all the other Community bodies.
The other functions performed by UCLAF - the proposing of legislation and coordination with the Member States in combating fraud against the interests of the Union - will continue to be performed, in accordance with the Treaty, by the Commission in close liaison with the Office.
It would currently be premature to say exactly what the structure and working method of such an Office should be. However, it is clear that there must be independent supervision of the work of this future Office. I do not believe that the three-tier structure of director, board of directors and, supervisory body proposed by the Bösch report is a suitable one. It is too complex and cumbersome. The responsibilities must therefore be clarified and the Office given well-defined rules, in order to guarantee maximum efficiency in accordance with respect for and protection of individual rights.
This new structure must be based on mutual confidence between the institutions. This implies that these institutions must have the same rights and obligations when participating in a supervisory body, in proposals for appointments and in relations with the Office.
With regard to the steps which the Commission is ready to take towards creating the Office, I can specifically tell you that I would be prepared to entrust a senior Commission official very shortly - if this is what the other institutions want - with the task of preparing a proposal for a joint decision on the basis of the principles which I have just indicated.
Furthermore, a joint report of the institutions involved should be prepared as soon as possible. This report should list the measures to be taken, before and after the entry into force of the Amsterdam Treaty, together with a timetable for their implementation and, in particular, proposals for amending the relevant Council regulations.
Mr President, ladies and gentlemen, those are my thoughts. I hope that the confidence between our institutions can be restored, that tempers can be calmed and that the necessary clarifications can occur without the pressure of leaks and a general climate of suspicion. It in this spirit that Mrs Gradin, Mr Liikanen and I myself will reply to the specific questions which you may wish to ask us during the debate.

Dankert
Mr President, we must not lose sight of the fact that we are concerned today not specifically with the Commission's position on ECHO, on tourism, on instances of corruption inside the Commission or other European institutions in general. The purpose of this debate is to consider the report of the Court of Auditors which highlights a number of serious shortcomings in the functioning of UCLAF. But at the same time, the Court of Auditors' report makes the point that over 80 % of European Union money is spent in the Member States and that scrutiny of that spending depends very largely on the willingness of Member States to cooperate with UCLAF. So far it has gone well, so we must not throw out things which are working well just because we have no better alternatives.
Mr Bösch has just presented his report and I think we are totally in agreement on a number of essential points. The Socialist Group too is resolutely opposed to fraud and corruption both in general and in the institutions - where there is much room for improvement. We agree too that for a number of reasons UCLAF is not adequately equipped to do its work, that one of the shortcomings is that it is not sufficiently autonomous. UCLAF must be given greater independence. But there are differing views on that, namely on how this should be achieved.
My group applies a number of principles in considering how we can counter fraud more effectively and make UCLAF more independent. I think it is a pity that the Commission President skated round this a little. First of all the Commission is the guardian of the Treaties. That task is conferred on it by the Treaties and it has a duty to fulfil it. The Commission also has responsibility for implementing the budget. The European Parliament's role is nothing less than to exercise scrutiny of the Commission and it can rap the Commission over the knuckles, as we are doing now, if it fails to discharge its responsibilities. I believe that a new institution, separate from the Commission, requires a Treaty amendment, the procedures for which are set out in the Treaties themselves.
Also, there are a number of institutional issues which arise over the combating of fraud and corruption. The combating of fraud and corruption is only partly a Community matter. Most of the law-making and action in this area is decided on in intergovernmental cooperation under the third pillar. And in the short term it is unlikely that Member States will be willing - I find it regrettable, but they are not - to set up a European Public Prosecution Service or a European criminal law area. So we cannot expect an institution or unit responsible at European level for anti-fraud measures - to the extent that such powers exist at that level - to be able to do much more than collect and analyse information and cooperate with national authorities in the detection of fraud.
Because of these principles and the complications I must, on behalf of my group, reject Mr Bösch's proposed solution of a new institution, separate from the Commission or semi-linked to the Commission, because any new institution of this kind will necessitate a Treaty amendment or a treaty under the third pillar. Amending the Treaties is not an option, Mr President. A treaty under the third pillar invites the question, to whom is that institution to be politically accountable? Even after Amsterdam, the European Parliament has no powers in this area. A treaty under the third pillar would also have the drawback of inadequate legal safeguards for individuals, given that the powers of the Court are limited. In short, there would be the danger of a legal and/or a political vacuum.
But a fully independent OLAF or Anti-Fraud Office, semi-linked to the Commission, is not the answer either. It is a contradiction in terms, or at any rate would be a total abrogation by the Commission of its responsibilities in this field, responsibilities which the Commission as guardian of the Treaties cannot delegate. Could the Commission be held liable in such a case for the functioning of OLAF? Or who should be? All Parliament can do is make the Commission mindful of its responsibilities and grant the Commission a discharge - or not, as the case may be - or in the last analysis dismiss the Commission. As President Santer rightly said, a board of directors is not the answer. It means that the Commission would be subject to direct scrutiny of its internal workings, which is contrary to the Treaties, and it would mean a total intertwining of the responsibilities and powers which are separately defined in the Treaties. So it is not possible, Mr President.
So, ultimately, I have to reject the solutions which Mr Bösch offers and I hope the Commission will come up with a meaningful proposal which will give real and considerably greater independence to UCLAF.

Sarlis
Mr President, I must point out that the Bösch report is being presented to the plenary at the behest of Parliament's resolution of 22 October 1997, which required Parliament and the Committee on Budgetary Control to submit the report.
I must also say that I am very pleased about the proposals we have heard from the President of the Commission, Mr Santer, which largely adopt the thinking and general lines of approach which Mr Bösch has set out in his report, and I must tell you that the Group of the European People's Party will support Mr Bösch's report, because we think it is correctly based. I gather that the Commission feels the same, in other words that there is an element of deceit in relation to the management of the Community's budget and the Union's Member States, while on the other hand there is an internal issue regarding what is going on in the Community's various institutions and whether those Community institutions and their services are functioning as they should do. I think we are quite right to go ahead with the creation of OLAF, and I personally agree that it should be clearly separate and that UCLAF will have to remain in place to scrutinise relations between the Member States and the Community's bodies.
On that subject you must know, Mr President of the Commission, and the Commissioners too, that in recent times we have been bombarded by reports from the Court of Auditors. But nothing has happened to change us into detectives. We are obliged to respond to and verify what the Court of Auditors says. And you will agree with us that we cannot cover up anything, but on the contrary, we must respond to the Court of Auditors' indications with the greatest transparency and sincerity.
The issues of ECHO, tourism and MEDA have their origins in initiatives and special reports by the Court of Auditors. The same has happened concerning many other subjects which you will be hearing about as the days go by and which perhaps will also influence Parliament's attitude towards the Commission's discharge in respect of the implementation of the 1996/97 budget.
At this point, I should also like to say that in our cooperation with UCLAF over the past two years, there were occasions when UCLAF came along, we asked for information, and we were told that the information could not be given because the upper echelons of UCLAF would not allow UCLAF to give us information. That is one of the things you too pointed out, and I hope that it will be cleared up soon. You will understand that the issue is a very serious one, and I am glad that this evening you have told us you are looking into it, and that you will be coming back with specific proposals.

Kjer Hansen
Mr President, I will start by congratulating Mr Bösch on this report. I am glad that it has finally been put on the agenda so that we can have a debate on this important subject. I very much agree that there is a need to strengthen UCLAF. The many cases convey an unmistakable message but, most important, the investigation of the Court of Auditors contains clear criticism of the present situation and gives concrete indications of what can be done. The situation is quite unacceptable, and that is why it is so important for us to strengthen the role of UCLAF and give it more powers and better tools to get to grips with fraud and corruption.
As regards Mr Santer's answer today, I have to say that it is no use chiding us for criticising the Commission and complaining that things are moving at a very slow pace. If Mr Santer had sat with us hour after hour in the Committee on Budgetary Control just trying to get the key information out of the Commission, he would understand our urgent desire to see real action and to see a change in the present procedures. There is quite simply a need for a more independent office. After all we have received a clear answer from the Commission to the effect that the proposal Mr Bösch has brought before us does not require a Treaty amendment, which means in other words that it is a viable way forward. So, Mr Santer, what we need is something more concrete from the Commission on what the Commission really intends to do in this area. But is the true position not that an external office will in fact require a Treaty amendment and that the Commission has in this convenient way again secured a postponement of the decisions long into the future?
It is so crucial to people's confidence in the EU system that more decisive action be taken on corruption and fraud. And once again it is the European Parliament that comes up with a concrete initiative on what should happen and on how we can get better procedures. It may well be that it is not a final or a complete proposal, but at least the debate has got underway. I am glad that Mr Bösch's report on behalf of the Committee on Budgetary Control has enabled us finally to get a reaction and initiate a discussion on what additional arrangements are really needed in order to make it possible to combat fraud and corruption more effectively.

Rosado Fernandes
Mr President, President of the Commission, I still think that controls mean controls and that they actually serve a useful purpose. You gave us a list of reasons why such controls are absent, which I accept. But I also know that fraud and corruption are combated both upstream and downstream of where they occur. The fact is that the whole system of projects and programmes in the Commission functions in such a way as to give officials responsibility for very substantial sums of money which they frequently cannot themselves control adequately. Hence, what is missing is a prevention policy which, as in firefighting, is the best way to combat such occurrences. Fight the fire in the winter and not in the summer, when it is already raging. Consequently, the whole system must be changed, in such a way as to make Commission officials and Commissioners themselves more responsible for the programmes they administer within the Community and indeed beyond.
We know that the ECHO issue is extremely disagreeable: a billion ecus are at stake. We also know that today, in 'Le Monde', UCLAF said that the control carried out was of a metaphysical nature. Making allowance for UCLAF's irony, it is obvious that it feels in considerable difficulties.
So, we know that controls are necessary. But controls are not just to catch prevaricators. To control is to prevent, and that is why I stress that prevention is essential. But if prevention is to exist, the will must also exist on the part of Parliament and the Member States. We all know that although the Committee on Budgetary Control has issued this report, the Committee on Budgets vetoed it and voted against the purchase of scanners which would make it possible to take preventive action against fraud in European ports. And the fact is that there are certain European ports which are genuine havens for those who wish to smuggle contraband or to avoid paying taxes, be it VAT or consumer taxes.
We also know that criminal legislation has not been harmonised. And we know that the Member States themselves hamper UCLAF's work by frequently failing to make available material which could be provided if they really wanted to combat fraud in their territory. Of course, I am not blaming the Commission for all this. Let nobody think so for a moment, since it is in fact the Member States that are largely responsible for what is happening. It is up to the Commission to make people aware of this, it is up to the Commission not to condone, by its silence, what is happening in the Member States. Without giving up their individual powers they must join forces to combat organised crime, to ensure that the Community is not somewhere where crime pays and where people get rich quickly by breaking the law and engaging in every manner of cheating at the expense of Community funds.
It would also be advisable to persuade the Member States that Community money is not national money, it is Community money, and they have an obligation to defend it. My group will vote for prevention, and for increased resources and protection for UCLAF.

Moreau
Mr President, there are hundreds of cases of fraud against the Community budget every year, involving large amounts. And yet these are only the declared or detected offences. The real figures are no doubt much higher.
The Bösch report indicates that UCLAF has only a limited capacity for action. The feelings aroused by certain current events therefore demand greater vigilance. The Commission frequently cites the responsibility of the Member States which manage 80 % of the expenditure. It is demanding of them, so it should also be demanding of itself. Parliament is rightly asking for explanations and measures to put an end to the current cases of embezzlement and to impose sanctions on the guilty parties.
The transparency mentioned by the President of the Commission must become a permanent reality. In this respect, I would highlight the importance of the proposal aimed at creating a body to combat fraud which is independent of the Commission and which has resources allowing it to successfully carry out its task. The fact that it is not possible to be both judge and judged is a basic principle.
A colleague has asked that UCLAF should be a little more independent. Surely it can be either independent or not independent - degrees of independence are impossible. However, the fight against fraud cannot be discussed without noting that total freedom in the circulation of goods and capital - that is, the absence of any controls - favours fraud and trafficking on a large scale.
Commissioner Gradin therefore underlined last May that fraud against the Community budget is increasingly due to international criminal groups, namely the Mafia. This situation definitely requires attention and measures at the highest level.

Müller
Mr President, Mr President of the Commission, ladies and gentlemen, what we are discussing here today is not only the question of the independence of UCLAF but the question of the independent investigation of fraud, corruption, nepotism and mismanagement in the Commission itself. We are not discussing specific cases such as ECHO, MED, BSE, tourism or the security service, affairs which have accumulated into an almighty crisis among the European institutions. What we are discussing here today is how the Commission can escape the threat of non-discharge as well as - and this, ladies and gentlemen, is the key issue - the question of political responsibility. The ECHO case is only a symptom of a deeper malaise.
I should like to emphasise that we are not talking about normal minibudgets. Falsified contracts, imaginary reports and disappearing documents are apparently regarded by the Commission as high-spirited pranks. But I have now learned a new expression from you, Mr Santer. From now on we shall call these things 'administrative acrobatics'.
The bottom line is that this attitude has prevented the adoption of any disciplinary measures. Anyone who believes, like Mrs Bonino, that it is possible to gloss over the whole thing quietly by simply saying, 'Oh yes, the Commission will naturally assume responsibility' has, if you will forgive my saying so, failed to understand what political responsibility really means. Responsibility is not just an empty word that can be used at will to terminate a debate and hasten on to the next item.
Responsibility means being prepared to answer for those things for which one is individually accountable. The ECHO case, I believe, is a prime example. When Commissioner Marín found out in February 1994 about the illegal practices that were taking place in his sphere of responsibility and was unable, for whatever good reason, to put an immediate stop to it, who but he should have accepted responsibility for it and therefore tendered his resignation? The collegiate nature of his institution does not enter into the equation.
This, Mr Santer, comes right back to you. What does the President of the Commission do in such a case? Regrettably, you have kept silent thus far. The people of Europe must see responsibility being borne; that applies to ECHO and to all other cases. If there are no consequences other than the punishment of the actual fraudsters - and I am certainly capable of distinguishing between frauds and irregularities - that would only enshrine the principle of the end justifying the means.
That, however, is untenable, not only in this case, in which, after all, aid funds amounting to ECU 2.4 million were misappropriated - not embezzled in the legal sense, but nevertheless channelled into other directions. What is far worse is that it discredits all the good work done by the administration - and the great bulk of their work, I may say, is good. That, Mr Santer, cannot be what you want either. The Staff Regulations provide for various disciplinary measures, but the powers that be within the Commission are apparently reluctant to apply them.
What exactly has to happen before the flagrant circumvention - that is what Commissioner Van Miert called it - before the flagrant circumvention of rules is punished? In the talks I have attended, I have even had the impression that people were afraid to take action. If things have come to that pass, something has to change drastically! Do you not agree, Mr Santer? You are accountable for a huge conflict of loyalties among the staff of the Commission. How many of them long for certain abuses to be rooted out and for some straight talking to be done at long last! It is time you took action, not least for the sake of your honest and committed employees.
The Commission lives in an ivory tower. The lack of communication between Parliament and the Commission is primarily due to the fact that our quest for information and supervisory powers is systematically interpreted as distrust, because the principle that good administration must, with few exceptions, be publicly accessible has been inverted by the Commission, at least in those areas in which criticism is voiced and in which Parliament exercises its supervisory powers.
My speaking time is up. I also intended to speak about the culture of distrust, about the right to apply Article 206 and about the fact that the Commission must expect discharge to be refused if it does not give a clear and appropriate signal. Those who wish can read the full text of my speech, including you, Mr Santer. I shall have a copy sent to you shortly.

Vandemeulebroucke
Mr President, ladies and gentlemen, Mr Bösch's report deserves our full support. Parliament pressed 14 years ago for a flying squad to carry out random checks in the Member States and act against fraud and corruption. UCLAF was not set up until 1989 and went through many teething troubles. In the meantime, I have had occasion to observe a number of cross-border scandals at very close quarters. I am thinking of the Transnuklear affair and the scam over the smuggling of nuclear waste. There was the matter of illegal growth-promoter hormones in stock breeding. In my own country that led to intimidation, threats and even the murder of a veterinary inspector. There were all the dirty tricks over meat, organised by mafia-type groups, entailing fraud to the tune of millions over VAT, import duties and export refunds. Parliament set up a Committee of Inquiry into the Community Transit System which looked particularly at the illicit trade in cigarettes. Just recently there were corruption scandals and cases in the tourism sector and an investigation is currently under way into ECHO.
The European Court of Auditors has audited the work of UCLAF and the findings are rather discouraging. I see that electronic databases are still at an early stage, that there is no uniform system for opening, pursuing and concluding dossiers, that there are numerous shortcomings in coordination and transparency of cooperation with Member States, and that even where obvious misdemeanours are detected, in many cases no disciplinary proceedings are initiated. The rapporteur is right in suggesting that UCLAF should be revamped as an Anti-Fraud Office, 'OLAF', operating independently of the Commission and having responsibility for all the European institutions, moreover. The staff would naturally have to be increased to 300 specialists able to work effectively with the national judicial authorities. Magistrates who have to deal with international fraud and corruption inquiries on a daily basis are on a hiding to nothing. They waste an incredible amount of time, energy and money coping with the obstacles created by 15 national borders, and the report does not make enough of this fact in our Europe without frontiers.
UCLAF or OLAF should be a unit with quasi-legal powers, enabling international corruption and fraud dossiers to be tackled properly by the national courts. It is precisely this approach which has achieved visible results. As far as we are concerned, the proposal is very important in seeking to regulate cooperation between OLAF and the national judicial authorities via legislation in the shape of new regulations.
Mr President, ladies and gentlemen, this is my last address to a plenary. On 15 October I shall be leaving the European Parliament of which I have been a member since February 1981. Then we had just 434 members. I have seen six new Member States join the Community and I have seen a systematic and welcome increase in Parliament's powers. I am very much a European and at the same time I am a regionalist because our democracy means living in small circles. This Parliament is the biggest of those circles. All of us have a duty to ensure that our citizens continue to believe in Europe as manifestly a good thing. A Europe which needs to be more transparent, more open and less controversial. I think that in approving this report we can do a lot to further that aspiration.
May I end by expressly thanking the people I have dealt with here over so many years; I am grateful, irrespective of party political affiliations, for the comradely cooperation, the openness and manifest correctness of behaviour which all of you have shown. Lastly, my sincere thanks to the administration and also to the interpreters and translators.

President
Thank you very much for that speech, Mr Vandemeulebroucke, and thank you also for your many years of hard work here in Parliament. The House has shown its gratitude to you by its applause, and I should like to thank you once again.

Bonde
Mr President, I should like to thank our colleague Jaak Vandemeulebroucke for 17 years of acquaintance and friendship. I hope we shall meet on numerous occasions when you have left Parliament. You have done a great deal to combat hormone fraud in Belgium. You have always had a great social heart. I hope we shall meet again.
In the municipality I live in, no taxpayer would accept that 10 % of the local authority's budget should be lost in fraud. Nor would it be accepted in my country as a whole. I think it is the same for everyone in this Chamber. How can we allow 10 % of the budget to be lost in fraud, just because the money is sent via Brussels? In my view the explanation lies in the distance from the voters, the distance from those who have to pay. The decision-making processes in the EU make it possible to adopt support arrangements that no country would adopt if it had to foot the bill itself. The solution therefore is no more Brussels, with more staff, more grants, common criminal justice and police. The solution is to do away with most of the support arrangements, to focus on something less in cross-frontier matters, and to do the work better. The cheapest and best way of dealing with fraud is to ensure complete openness on appropriations. Anyone who receives support from the EU must accept that the voters and taxpayers should be able to see what has been appropriated and what has been spent on what. That way journalists and a critical public would enforce the necessary self-accountability. Post the budget records on the Internet, and the rest follows of itself. We prefer full openness to a new bureaucracy in Brussels, a leaner and more transparent EU instead of fat times for yet more fraudsters.

Amadeo
Mr President, the persistent increase in fraud perpetrated at the expense of the Community budget requires an immediate solution, especially since the phenomenon appears to have spread to the institutions themselves in recent months. We do not need to recall here the ugly episode concerning ECHO and irregularities in the former Yugoslavia and in the Great Lakes region - still to be proved - nor the much-discussed anomalies in the research sector, on which the Committee on Budgetary Control is awaiting clarification. However, we certainly cannot say that we are satisfied with the results we have been able to obtain regarding either the detection of irregularities and fraud or - above all - the lack of effective judicial action at EU level.
I would recall that some time ago the Committee on Budgetary Control, thanks in particular to the efforts of its chairman, Mrs Theato, called for the insertion into the Treaty of a legal base making it possible to introduce anti-fraud regulations, perhaps under the codecision procedure, and to draw up legislation obliging Member States to protect Community funds as they do their own.
The rules must be harmonised at administrative level, by centralising sanctions and controls, but also in legislative terms through the ratification of the 1995 Convention on the protection of the Union's financial interests, which has remained a dead letter until now. This convention is accompanied by two protocols, which are without doubt important but have aroused the suspicions of the Member States and made it unlikely that they will ratify it directly.
We too are of the opinion that the judicial authorities, and not UCLAF, should be empowered to intervene in the private affairs of suspects. However we wonder why, even when UCLAF or Financial Control amasses sufficient proof of serious violations, the Commission only very rarely institutes disciplinary proceedings.
The creation of an anti-corruption unit, responsible for fighting corruption and fraud within the EU institutions, should be backed by assistance from the institutions concerned. I would refer for example to the possibility of securing rapid access to documents and where appropriate seizing such documents, but leaving the task of verifying and punishing corruption to the judicial authorities, which possess judicial and police powers that the anti-fraud unit cannot and should not have.

Theato
Mr President, may I thank President Santer for his words to us. Allow me, however, to confess to a certain doubt and to express it in the following words: 'I hear the words, but I lack faith'. In a similar vein, I should like to say to you, 'Help us to believe', so that we can make up these deficits together.
I should like to come back now to the Bösch report on today's agenda and to begin by expressing my thanks and appreciation to Mr Bösch for having overcome a good many difficulties to put the report on the table today. As is clear from the title and substance of the report, it is based on special report No 8/98 of the Court of Auditors and hence on Article 206 of the Treaty. Our Committee on Budgetary Control has never subscribed to the misinterpretation of this legal basis. Such misinterpretations, however, have delayed the presentation of the report to a plenary sitting of Parliament. This is regrettable because, in view of the revelations of alleged abuses in the European Community Humanitarian Office, a rapid response by Parliament in the form of proposed remedies would have been useful.
The ECHO case has subsequently received exhaustive coverage in the media. We could certainly have done with quicker and more comprehensive information from the Commission. Once again, this case illustrates the way in which the EU still has to struggle to win the fight against the misuse of its resources with one hand tied behind its back. Long-familiar cases, such as the MED, transit and tobacco frauds - I could name more - still await full investigation and prosecutions. The special report by the Court of Auditors proves that Parliament is right to be dissatisfied with the present structural competence of UCLAF, especially when it comes to internal Commission investigations. This is not the fault of UCLAF's officials or its excessive reliance on temporary employees, but rather on the unsystematic manner in which it processes its cases. The Court of Auditors mentions more than 1300 pending cases, not including those opened after April 1997, a point to which Mr Bösch also referred.
An inadequate flow of information and poor coordination are another point. In the event of suspected corruption within the Commission, the Court of Auditors notes, powers and procedures are not clearly regulated, nor is there even a requirement to inform the prosecuting authorities. It is to be feared that the introduction of the euro and the enlargement of the EU will create further scope for fraudulent operations. These are only some of the reasons for the demand that the function, structure and powers of UCLAF be given more incisive and independent shape in the form of a Fraud Prevention Office. That is what Mr Bösch has put on the table.
Today, however, we are not taking the ultimate step by approving OLAF. But this Parliament, as a controlling authority, has to do something that will enable us to devise jointly a means of tackling the new challenges that confront us. For that reason, we are not making a legally based proposal but are marking out the basic shape of our ideas. We beg the Commission earnestly to take serious note of these markers and to include them in its deliberations. Otherwise, I fear, we shall have a rather lengthy discussion ahead of us before we find another efficient way to combat fraud.

Brinkhorst
Mr President, it is clear it is an urgent problem. Let me begin by declaring a personal interest: as a former Director-General at the Commission I know the difficulties of a staff situation and of new tasks. But we must make swift decisions.
The Bösch report gives a clear political signal and we must heed it. Personally, I am still doubtful about what we should do in concrete situations. I wish to exemplify this by a few specific points. Mr Bösch rightly said that the present situation cannot continue. Institutionally, I have doubts as to whether his position of having a structure which is half inside and half outside the Commission is the right one. A board of directors from five institutions means that the director of UCLAF or OLAF will have five bosses, and someone who has five bosses has no boss. That point must be addressed.
In view of the very short time available, I wish to address myself to the President of the Commission. The President of the Commission said that we must have an external inquiry function, and I understand that. But my question to the President is: does that not mean that the Commission ultimately will lose its own final responsibility in the whole fight against fraud? That is a very important point. This Parliament only has the institution responsible for the budget as the institution with which it dialogues. If that situation is lost, to whom is this external inquiry office responsible? To begin with I would like to see a strengthened UCLAF within the Commission, but with full independence. Perhaps the director should be nominated by the Court of Auditors or the Court of Justice and with an institutional agreement to work together with other institutions. But I wonder whether an external inquiry at this stage is the right solution if we do not know to whom that external inquiry will be responsible. Are we then not in a worse situation? I hope we can come to a positive reply. There should be something happening so that Mr Bösch will not be voted down but I do not think that this is the end of the debate. As Mrs Theato said, it is the beginning of the debate, but there is great urgency to respond.

Miranda
Mr President, the investigation by the Court of Auditors into the issue under discussion certainly went to the heart of the matter. Neither the minimum necessary resources nor the basic conditions exist to combat fraud and corruption which, for their part, certainly do exist and are proliferating.
UCLAF does not have enough staff and they are not all available to operate on the ground. UCLAF's structural dependence also prevents it from acting horizontally in an effective manner at institutional level. Therefore, if we are to combat fraud, a lot must change not only in the area of external action but also, and most importantly, as regards internal action. Without going into specialised analyses, I would venture to say that such a change should be undertaken in two principle directions: by strengthening the scope of Community action, particularly by strengthening UCLAF, freeing it from constraints imposed by supervisory bodies which restrict its action and guaranteeing adequate resources, and, at the same time, by ensuring satisfactory cooperation with equivalent departments in the Member States.
Transparency, independence for the body responsible for fighting fraud and more widespread action by all the institutions, including the Commission, seem to me to be essential and of priority importance. The ECHO case and the dubious manner, to say the least, in which it has been dealt with by the Commission, particularly in its relations with Parliament, have guided us to this inevitable conclusion and we therefore welcome the proposal to turn UCLAF into an independent body.
Obviously, there are limits on our expectations. On the subject of external action, I would stress that little progress will be made if there is no cooperation between the Member States, as I referred to earlier, and if they do not show a genuine political desire to act. And I also consider that a certain degree of caution is necessary, particularly in the areas relating to crime and external action.
But none of this detracts from the significant step forward proposed by the rapporteur, which is essential as a minimum response to certain situations of which we are all aware.

Holm
Over recent years we have seen various ways in which the Commission's way of operating has proved conducive to fraud. This is simply not acceptable. The Court of Auditors' latest reports have contributed evidence of the need for an external unit to fight the internal corruption and fraud that are clearly occurring within the EU institutions. But I do not believe we can leave it there. Mr Jacques Santer once announced eloquently 'We need openness and transparency.' Fine words are not enough, Mr Santer, action is also required.
Applying the principles of open government is one of the better ways of preventing internal corruption, as the Commission ought to know. Mr Santer, please do not use the pretext of employees' rights to avoid talking about what is actually going on in the Commission. We are dealing here with taxpayers' money. We demand to know what is happening. And please do not deny the Committee on Budgetary Control the information it needs to pass on to us if we are to be able to grant the Commission discharge. That would be no way to behave towards a parliament.
Finally, I wish to make it clear that I am not calling for the new body called OLAF to be given the status of a judicial authority. The results of its inquiries should be passed on to the national judicial authorities. I am not interested in seeing some kind of EU-level public prosecution service set up. All I want is an external unit capable of monitoring what the Commission is doing.

Dell'Alba
Mr President, ladies and gentlemen, on behalf of the Group of the European Radical Alliance, please let me say a heartfelt 'thank you' to Jaak Vandemeulebroucke for his 17 years of service to the European Parliament and for all the work he has done with us over those years. I wish him every success in everything he does following his resignation from Parliament.
Mr President, I should like to thank you for your speech, because you have asked the questions which needed to be asked in a debate whose purpose has largely been eclipsed by problems which are certainly serious, but which have made us forget the report that is before us today. You have done a good job of dotting the 'I's, and certain speakers have got to the heart of the matter. Others have preferred to continue making exaggerated statements on subjects which should be dealt with at other times and in other places. In respect of these, decisions must be taken which are transparent, but without this transparency, to which we are all attached, being combined with leaks and incriminations, which can only poison the atmosphere between us, instead of creating calm. Your speech was therefore a very timely one.
You told us that you had met with the President of Parliament and that you were going to take steps so that certain information which we wish to obtain in the context of another dossier - I will not go into this today - can be communicated to us as soon as possible. I hope that this is the case, in the interests of both our institutions.
I believe that the Court of Auditors' report has not been mentioned sufficiently, given that the Bösch report is based on this. It is a quite overwhelming document which leads me to ask the question that was asked in ancient Rome: Quis custodiet custodes ? The climate is one of concern, as stated in the Bösch report. We are rightly asking ourselves where the Community's resources are going, and in particular what use may have been made of them at a given moment. However, it has not been mentioned that the Court of Auditors' report highlights serious shortcomings in the operation of UCLAF itself: lack of transparency, lack of security, lack of permanent officials - half the people working for UCLAF are temporary staff - deficiencies in the Unit's database, and so on. It is said that UCLAF's computer system was set up by the Perry-Lux company, and some are even going so far as to refer to the risk of misuse of the data.
Mr President, I agree with your acceptance of the improved operation of UCLAF and your rejection of the creation of a new institute, as also voiced by Mr Dankert. I believe that our work should be improved and extended so that UCLAF can be truly independent, within the possible structures - that is the current structures - so that it can be strengthened, and so that there is an end to these leaks and incriminations, which only poison the atmosphere and which do nothing for either ourselves or for Europe.

van Dam
Mr President, Mr President and Members of the Commission, there can be no doubt that measures to combat fraud within the European institutions need considerable improvement. The Court of Auditors' report has brought a number of serious shortcomings to light. One of them is the fact that UCLAF has hitherto been able to conduct investigations only within the Commission, not in other EU institutions.
The rapporteur rightly makes the point that all the institutions need effective safeguards against fraud. He advocates the setting up of an Anti-Fraud Office, with an interinstitutional remit. Like other honourable Members, Mr Dankert and Mrs Wemheuer, I would prefer to see that broader remit given to the UCLAF we already have.
I would also stress that this body must concern itself only with in-house detective work, the identifying of fraud within the EU institutions. The responsibility for investigating outside the institutions, for example cases in Member States of frauds against the Community budget, remains with the Member States. And that will not change after the Treaty of Amsterdam is ratified.
Investigation outside the institutions is not reconcilable with the laws of Member States or their criminal justice systems. I thus reject outright recitals L and M, in which the rapporteur calls for a European criminal law area and a European Public Prosecution Service.
Action against fraud outside the EU institutions can best be improved by ensuring that the national investigation services are as efficient as possible and cooperate well with each other. The anti-fraud units of the Commission have an important coordinating role to play here.

Lukas
Mr President, Mr Bösch's report is clear in its assessment of the situation and explicit in its demands. However, I do not consider it helpful to vest the Commission with the power to appoint the staff of OLAF. The proposal that OLAF should be overseen by an independent five-strong inspectorate, on the other hand, is to be welcomed. But OLAF would not possess real autonomy as long as the Commission enjoys even indirect authority over OLAF personnel. Only an independent OLAF, cooperating with the Court of Auditors and, of course, with the Commission and answerable to the European Parliament, will develop into an incisive instrument in the fight against fraud and cooperation.
I believe that an inspectorate operating in a vacuum, as Mr Bösch called it, can indeed be successful if it is endowed with a sufficient number of first-class personnel. That investment would surely pay dividends.

Elles
Mr President, I rise as the parliamentarian responsible for recommending discharge for the 1996 budget. I have listened to this debate with great interest as this is one of the main subjects, within the granting of the 1996 budget discharge, that we must decide upon before the end of the year.
I would like to make a couple of personal comments on this debate. Firstly, I very much welcome the fact that the President of the Commission came to our Chamber this afternoon to tell us how he felt about the conduct of matters and to look to the future.
On the first point, the conduct of matters, I very much welcome his wish to give us further information so that we can better understand what is happening within the Commission. What has driven some of us to put the 1999 ECHO budget for humanitarian aid in reserve is precisely this lack of information and inability to be able to judge for ourselves. I hope this will be done as soon as possible.
In his remarks he made a comment which seemed a little strange, saying it would not be proper to impose individual sanctions on officials who committed these irregularities for the sole purpose of keeping departments going. One wonders where responsibility begins and ends. Edith Müller was absolutely right to say that, in certain instances, without of course conducting a witch hunt, where there is responsibility then that responsibility must be taken up.
Secondly, as the Court of Auditors report said, on the broader point of improving the system, we want to strengthen the UCLAF operation rather than weaken it. The EPP would like to support the Bösch report even it is not supported by his own colleagues because we believe that progress must be made. No doubt once we have had this debate and voted, we can also take into account the remarks made by the President of the Commission, so that we can have a really efficient procedure for anti-fraud to take us into the 21st century.

Rack
Mr President, there is method in madness, but if madness is the only source of our method, a new type of method is needed. The Bösch report contains sound proposals that should be fully endorsed. The circumstances surrounding the report were anything other than satisfactory. The Bösch report has been held up, and what has subsequently hit the headlines has been disastrous. It is reminiscent of the time of the BSE crisis and of many other problem cases that have been mentioned today. Documents disappear; the information is not there, and we cannot check anything. The guilty parties have gone too, either promoted or sent away with a golden handshake. The responsible Commissioner is no longer there either. Even today, and I particularly regret this in view of the latest ECHO revelations, neither Commissioner Marín nor Commissioner Bonino is here, and the same thing happened last time for part of the hearing.
Mr President, we welcome your proposals that the ideas put forward by Mr Bösch be further developed. We believe it is right and important to do that. Entering into contact with the President of Parliament is a first step, but many more steps must follow, and above all must follow quickly. We cannot seek protracted or long-term solutions, because we need to send out credible signals now.
You, Mr President, have assumed political responsibility. When will the two main defendants, Commissioners Marín and Bonino, do likewise? How quickly will the promised disciplinary law become fully operative? How long do we really have to wait until each of the relevant documents is available?
I believe there is one thing that really would be a problem, namely if the debate we are holding on this report today were to be shelved until next year when the new Commission is appointed, and we should then have to sanction all the mistakes that have been made during the present five-year term.
And one final word: the fact that the Group of the Party of European Socialists has left its rapporteur out in the cold makes me think and should make us all think. Would it do the same if the incriminated Commissioners had different affinities?

Fabra Vallés
Mr President, as we will shortly be reaching the end of this debate, I would like to put all conflicting points to one side so that we can come to some agreements. And, in order to do this, I am going to discuss the crux of the problem, and the points in the Bösch report on which I am sure we agree. I believe that we all agree that UCLAF has gone through a stage that has involved more positive than negative points, but also that it has reached a point where it is in need of more economic and human resources. It is at a point where its powers need to be extended to include all Community institutions and, above all, it has reached a point where it must be transparent in order to be credible. I hope that no-one will throw up their hands in horror if I say that whilst examining the report on ECHO, Parliament lost faith in the anti-fraud unit.
Therefore, the time has come not only to provide UCLAF with all it requires but to create a truly new version of UCLAF so that its credibility can be salvaged. UCLAF must ensure that it leads the way in the transition from the current system to becoming a true officer of the court with an enhanced group of criminal experts. And there is no better way to redefine its organisation and legal framework than to make use of this key moment in relations between Parliament and the Commission. We can face up to the challenge before us: the Council, the Commission and Parliament are responsible for doing everything that is necessary to establish an anti-fraud office. It must have real experts and professionals whose code of conduct will be based on respect for the law, and, although it is a body that will be dependent on the Commission, it will have full political independence. In short, it will be an office with the necessary equilibrium to ensure that its work is in the interest of the Community and not any particular Member State.
Mr President, when voting on the Bösch report, there can only be one way to vote: either we are for or we are against change.

Gradin
Mr President, many thanks for a diverse and constructive debate. Parliament and the Commission need to work together on the basis of mutual trust, and I am therefore in favour of plenty of discussion of this proposal in the House.
UCLAF is still young - not yet ten years old - and of course it has experienced growing pains. Over time, though, it has developed into a very good organisation, in my opinion. Three years ago UCLAF's staff were scattered throughout the Commission. Today the whole operation is under one roof. It is capable of coming to grips with cigarette smuggling; it has recently turned its attention to the Central and Eastern European countries, and to the PHARE and TACIS programmes, among others.
I should however like to iron out one or two misunderstandings. Several speakers stated that the Court of Auditors has uncovered cases of irregularity and fraud, yet it was UCLAF, not the Court, which did the uncovering. The Court of Auditors' report dealt with the organisational side of UCLAF. Its data system was felt to need modernising; there was a call for improved record-keeping. And this call was heeded by both the Commission and UCLAF. We have now made changes in working methods. In July a new programme was adopted, laying down how UCLAF's investigations should be organised and, importantly, providing for protection for individuals supplying information.
I believe that UCLAF is on the way to becoming what Mr Bösch and many others in the European Parliament want it to be: namely an even better organisation, ready to perform the tasks expected of it by taxpayers in the Member States. As a parallel exercise, we have launched SEM 2000, the aim of which is to overhaul our general administrative culture and turn ourselves into a fitter and more modern institution.
I should like to conclude by saying that my personal experience has taught me that openness and transparency are of great value in pre-empting fraud and corruption in an organisation. That is why we in the Commission, with the help of the Amsterdam Treaty, are working alongside our partners to foster more open and transparent practices for the future.

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

1996 discharge
President
The next item is the report (A4-0289/98) by Mr Miranda, on behalf of the Committee on Budgetary Control, on the discharge procedure for the 1996 budget:
Section I, European Parliament-Section IV, Court of Justice-Section V, Court of Auditors-Section VI, Economic and Social Committee and Committee of the Regions.
Miranda
Mr President, allow me to begin by saying that this report is far more than just my own. First and foremost, it is a report by the Committee on Budgetary Control which was the subject of long and transparent reflection and thought and was finally approved almost unanimously.
I would also like to say that the differences that may exist between the report we are discussing today and the version I would have preferred do not prevent me from approving it in its entirety. I am making these apparently unnecessary statements for two simple reasons: first, because I cannot but be surprised by the comments that have been made about it, particularly in various Parliament bodies, but never in the Commission on Budgetary Control and without any involvement by any of its members and certainly not its rapporteur. Second, and no less important, because I fear that if a disagreement arises on a particular point, however important, the fundamental problems which most urgently need a response will be neglected.
Having said that, let us move on to the substance of the report. There are two factors that have had a particularly marked effect on the discharge procedure for 1996. First, Parliament lost an excellent opportunity to reduce the final cost of the D3 building in Brussels by some ECU 30 million, which had been our priority for this financial year; second, the administrative irregularities revealed by the audits carried out by the Economic and Social Committee itself and by the Court of Auditors cannot be overlooked.
It is important that these two particularly serious factors should not, however, lead us to ignore other matters relating to the implementation of the budget which also deserve attention and appropriate action to correct them.
Let us consider the matter of the ECU 30 million. Without wishing to take the place of the Parliament's Bureau which decided to institute an inquiry that has now been completed, the particular responsibilities of certain services are clear, namely the authorizing officers, firstly, but also other services involved, and the absence of cooperation between them is patently obvious. My particular concern in the report, from the outset, was to examine these two issues in a balanced manner, as this is the only way to show people the various errors which led to the loss of the sum in question and, consequently, the opportunity to pay for D3 in advance.
Indeed, the errors were legion. Use was not made - in this, as in other earlier processes of a similar nature - of the option unilaterally to establish the sum to be paid in advance. It was argued that this was established practice. The situation was further complicated to the point of absurdity when it came to the wording of the additional agreement, and particularly the amount to be specified, to the extent that what had been done on previous occasions appeared to be forgotten, with everything meanwhile growing increasingly complicated, as though there were no deadlines to be met whereas they were in fact about to expire. Opinions were given and comments were made, some of them contradictory, others too late and irrelevant, contributing nothing to the satisfactory and timely solution of the matter but only complicating things still further.
Not even the main priority was observed, no attempt was even made to keep the losses to a minimum, as would have occurred if at least the advance payment of ECU 29.5 million had been made. Some lessons should at least be learned to prevent any recurrence of such situations. Everything must be done to ascertain not only the professional qualifications but also the solid professional experience of the institutions' main administrators. Maximum transparency and stringency are essential in filling such posts, and all possible steps should be taken to ensure efficient and continuous cooperation between the various services of the House.
I would like to end this point on a positive note by mentioning the measures subsequently taken by the Secretary-General to remedy such administrative errors and to ensure the success of recruitment competitions.
Still on the subject of Parliament, I would like to draw attention to a few other points, including the increase in cancellations of appropriations, the various refusals of approval, particularly regarding interpretation, and the need to regularise the discrepancy of some ECU 4 million between the cash situation and accounts, which has been outstanding for several years.
On the subject now of the Economic and Social Committee, as I said before, the audits carried out both internally and by the Court of Auditors reveal obvious irregularities and manifest administrative negligence in connection with the travel expenses of members. It should be remembered that the Council itself, when it learned of the results of the audits, stated its opinion on the matter in the clearest terms. However, certain measures have subsequently been instituted and remedial action taken but, if discharge is to be granted, it is essential that the Court of Auditors and UCLAF take note of the conclusions, particularly as regards responsibilities, the reliability of the new system of reimbursement and the conditions for recovering sums overpaid. It is obvious that until these matters have been settled, we cannot grant the discharge.
We likewise regret the irregularities revealed by the Court of Auditors regarding the Committee of the Regions, and we take due note of the interim report which brings us back to the matter of recovering sums incorrectly paid and the administrative measures taken. Meanwhile, we consider that the Court of Auditors should also verify that the measures taken are appropriate.
Two brief points regarding the Court of Justice and the Court of Auditors. First of all, we need to improve financial forecasts for the amounts and the justifications given for the various budget headings. Secondly, we need to include the Court of Auditors systematically in the horizontal audits carried out.
Lastly, I would emphasise that Parliament's particular responsibilities in the discharge procedure mean that the Commission needs to draft amendments to the Financial Regulation promptly. And they make it essential that Parliament should be consulted prior to the appointment of the treasurer and financial auditor of each of the decentralised institutions and agencies.

Wynn
Mr President, I am speaking on behalf of the Socialist Group in the absence of Mrs Wemheuer, the coordinator and Mr Tomlinson who is our spokesman on this issue. In my five minutes I cannot really say a lot but I know there were four points that Mr Tomlinson wanted to be highlighted and these are as follows.
Firstly, the 'mopping-up' transfer, which the rapporteur has described quite eloquently. This was nothing short of a disaster for Parliament. Many of us considered that to be the case. We have gone through the implications of it, we have gone through the reasons that it occurred and whatever else. One can only hope that it is now in the past, and there is a statement in the report which welcomes the actions taken by the Secretary-General to make sure that this type of thing will never happen again. It should not have happened and the fact that it did did not help Parliament's budget one iota. That is one item that the rapporteur has already dwelt on.
The second item concerns qualified staff as outlined in Paragraph 14. Mr Tomlinson would say that there is a lack of qualified staff, certainly when it comes to accounting and financial control within Parliament. Here again we welcome the action being taken by the Secretary-General. We should not forget that this report is based on the 1996 budget and we would hope that the staff who will manage the resources within Parliament will be as the Secretary-General expects and certainly as we expect.
Another item was the inventories. Paragraph 19 says: 'Regrets the 1994 triennial inventory check has not been completed by the end of 1996'. In other words, we do not know what Parliament owns. We do not know what Parliament's total resources are. Not long ago I received in my office a piece of paper which was in effect an inventory check. It asked me to fill in what I had. Quite frankly that was an open invitation to nick half the stuff in my office. I could fill in the desk and chair and take everything else. That is not the way to do an inventory and it is one of the points I know Mr Tomlinson and our group have been commenting on for quite some time. One would hope it can be rectified.
The main item Mr Tomlinson would want to emphasize is in paragraph 15. It is the comment about the legal services. I know that there will be amendments to this paragraph and therefore I intend reading it out so at least it is on record before it is amended. It says: 'Parliament...reaffirms its support for the drawing up of quality opinions by the Legal Service which should enable decision makers to protect Parliament's interests swiftly and effectively'. The part which seems to give offence is as follows: 'Notes the shortcomings in the quality of legal advice provided by the internal legal service of this institution, as identified by its rapporteur and as reflected in cases lost in national courts, in the European Court of Justice and in the Court of First Instance; asks its Secretary-General to commission a study into the effectiveness of the results of the legal service's advice over the past ten years. Calls on its Secretary-General to provide the Committee on Budgetary Control with comprehensive job descriptions for the A-grade officials in the legal service'. That is paragraph 15 in its entirety.
If, at the end of the day that is amended significantly, at least that now is on the record and I would hope that the services can take cognizance of what has been said there and can act upon it. It is not a condemnation of individuals within that service but it is a hope that we can have a better legal service for the future for Parliament.

Theato
Mr President, Mr Miranda's report, for which I thank him, contains two proposals for decisions giving discharge and one motion for a resolution postponing the discharge decision. I should like to highlight the discharge given to the Committee of the Regions and to inform the Committee that we are very concerned about its staff policy and that the latest exchanging of posts approved by the budgetary authority with the Economic and Social Committee cannot exactly be regarded as progress.
As far as Parliament is concerned, we are closely monitoring the measures that were adopted on the basis of the Court of Auditors' report in relation to Members' expenses. We had to delay by several months the discharge that can now be given to the Secretary-General, because our committee wished to await the findings of the inquiry conducted by the Bureau into the cancellation of funds amounting to about ECU 30 million.
The Bureau has decided on the question of personal responsibilities, and we respect that decision. However, we are duty-bound to state that the decisions of the budgetary authority could not be implemented and that this was due to procedural errors and inadequate administrative structures. We note the reforms and decisions adopted by the Secretary-General and we hope that these will eliminate the defects.
The administration of the parliamentary budget is fraught with many more difficulties, which are enumerated in Mr Miranda's report. I only wish to point out that the problems dealt with by the Court of Auditors in its report on Members' allowances will have to be considered in our discharge for the 1997 financial year, since we only received this report two weeks ago. I should also like to stress that we are not satisfied with the present arrangement whereby we grant discharge to the Secretary-General while responsibility for overruling a decision to withhold approval rests with the Bureau. The 1996 budget was not affected by this anomaly, but it would be useful if we could reach an agreement with the Bureau as quickly as possible.
What concerns me most in Mr Miranda's report is the postponement of the discharge decision in respect of the Economic and Social Committee. The situation described by the Court of Auditors is so serious that the Council, in its recommendation on discharge, asked the Court of Auditors and UCLAF to conduct an inquiry in order to establish the precise scale and implications of the irregularities..
This is also one of the reasons why we have been calling for the Bösch report on the independence of UCLAF and demanding that UCLAF be permitted to conduct its investigations in the other institutions too. What we have discovered to date tends to suggest that the Economic and Social Committee is not taking our demands seriously. It evidently considers the matter closed, but there is nothing to suggest that such irregularities cannot recur at a future date within the Economic and Social Committee. A Financial Controller was appointed without our being given the necessary assurances concerning his independence. For these reasons, we cannot guarantee at the present time that we shall grant discharge. Everything will depend on how the Economic and Social Committee responds to our requests. I hope we shall have the opportunity to apprise the new Secretary-General of the situation at our next meeting.
It seems to me that a separate vote is necessary on each of these three proposals.

Kellett-Bowman
Mr President, first I want to praise the courage of the rapporteur, who has tackled a difficult job over many months. It is not easy to be responsible in this place and to make recommendations to the Committee on Budgetary Control and Parliament, because we are monitoring other institutions. I know that Mr Elles is looking after the Commission's discharge, but Mr Miranda looks after the rest.
This Parliament cannot be guilty of double standards. If we are to criticise others we must make sure that our finances are dealt with in a correct way. We must not hide our embarrassment and we must not be seen to break the rules of transparency in our procedures and our accounts.
In paragraph 4 we are dealing with the matter of the ECU 30 million. The word 'deplores' is strong. But the paragraph does not mention that the financial controller had, before the event, advised against the idea of using the automatic carry-over procedure. There was not time enough. However, almost because he made that recommendation, the procedure of automatic carry-over was tried. What happened? Parliament fell on its face and we missed the deadlines.
It is my belief that in many of our Member States a minister would have lost his job in such a case. I have put down an amendment which has been refused. I will refer to that at a later date and I will name names later. The Secretary-General has an easier job in ensuring correctness. He must make sure that Parliament staff follow the financial regulation and follow Parliament's internal rules. If that had happened we would not have lost ECU 30 million.
In paragraph 13 we mention consultants. I am not opposed to outside consultants. I do not believe this House contains all the wisdom. We must be prepared to ask other people's advice, but the rules must be followed. The rules must be laid down and proper contracts must be made so that we are not paying on-running sums in order to make sure that the advice is paid for.
Paragraph 19 refers to the 1994 inventory, not completed by 1996. This is disgraceful. But the previous one was a farce. We did not get to the bottom of it. Inquiries showed that some of the items said to be missing had not been received by Parliament but had been paid for.
The Members' Cash Office case is also mentioned, with the loss of money which came to light in 1982, 16 years ago. It has not yet been dealt with. It is before the courts, I know, and they are responsible for the delay. But some of the delay in the courts is due to the fact that we did not follow proper procedures in this House in 1982. The matter was dealt with wrongly at the time. This leaves us in a very serious position. Year after year we have to mention in our accounts that so much money has been lost to Parliament and we do not know yet whether there is any chance of recovering it from the insurance companies. It was sloppy procedures in the House that made it possible for this affair to start and it has been procedures in the House which have prolonged it.
l congratulate Mr Miranda on the way in which he has looked into ECOSOC and the Committee of the Regions. Both needed his close attention.

Garriga Polledo
Mr President, we live in difficult times where any lack of control can lead to irregularities or to fraud, and I am making a clear distinction between the two as Mr Santer previously requested.
Every day the media sound the alarm bells to report that certain things are not running smoothly within the European Union. They report that the apparently efficient Community machinery is not as efficient, as honest or as incorruptible as we used to believe. This did not begin yesterday as there have been signs of a deterioration for some years now, and this has given rise to books, press articles, television programmes and individual and collective accusations.
When this parliamentary term began we, the new Members, were surprised with Parliament's building policy at that stage. It is possible that many of the problems that are still hanging over us today date back to this time, when inadequate property management made the Members of the European Parliament seem like the main characters in a play when we were only really spectators, and passive spectators at that. In politics, the sin of omission or passivity is doubly serious: it is a blow to the legitimacy of the system and it abuses the goodwill of the citizens who vote for us. We should never, and particularly from now on, allow inaction or omission in this House to lead to situations being overlooked, situations that may later become deadly weapons aimed at the heart of the European Union, that is, its credibility and its honest image. It is for this reason that the discharge procedure is so important. If Parliament does not discharge the budget that this Parliament voted for, then the honesty of the discharge procedure is called into question and we will have to immediately take action to restore freedom, honesty and trust.
The rapporteur, Mr Miranda, suggests that we discharge specific sections of the budget. This House has complete faith in Mr Miranda and we therefore support his conclusions. However, I would like to clarify two specific points. The first is that my colleague Mr Edward Kellett-Brown is right: we are a Parliament and we have a duty to report any irregularities, giving first and last names. Transparency does not hurt anybody and it often helps to provide an honest environment. And secondly, we must not harm Parliament's bodies that are responsible for legal certainty. The legal services of this House may have their limits, and their operation must certainly be improved, but to cast doubt on them does not help our work. The amendment we are tabling reflects this and we hope that it will be adopted by the House.

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

European Agency for the Evaluation of Medicinal Products
President
The next item is the report (A4-0338/98) by Mr Tappin, on behalf of the Committee on Budgets, on the proposal for a Council Regulation amending Council Regulation (EC) 297/95 on fees payable to the European Agency for the Evaluation of Medicinal Products (COM(98)0021 - C4-0284/98-98/0135(CNS)).

Tappin
Mr President, firstly I should like to thank the Commission and colleagues from the Committee on the Environment, Public Health and Consumer Protection and the Committee on Budgetary Control for their support for this report. Part of my thanks goes to the Council and the Commission, which recognise that as part of the budgetary authority Parliament has a role in deciding the future of the fee structures for this agency.
The basic regulation only requires consultation of the industry before the Commission presents its proposals to Council. Getting that inclusion has come after a considerable delay and a great many problems have been created for the Agency in London as a result of that delay. This year alone the agency finds itself ECU 4m overspent and the Director risks finding himself operating from an illegal position. The Commission has started proceedings for a transfer, but the lateness of the transfer will mean there will still be some difficulties.
This situation must not be repeated in the future. We have an obligation to make sure that Community bodies operate legally, efficiently and to the ultimate benefit of the Community. So the first two points which need to be stressed as far as this report is concerned are: firstly, Parliament must automatically be involved in future decisions affecting fee levels without delay; secondly, as and when fees are revised in the future that must be done within a budgetary deadline so as to allow the agency to manage its affairs in a proper and efficient manner. Failure to achieve agreement within that deadline puts an automatic obligation on the Commission to ensure the agency's ability to carry out its function is not adversely affected.
This particular agency has always been most accommodating of Parliament's requirements concerning budgets of the Community's decentralized bodies and is to be congratulated on the excellent report it received from the Court of Auditors. We have always insisted: firstly, that an agency's resources should be budgetised; secondly, that as an instrument of European policy, agencies should be accountable and transparent to the budgetary authority; thirdly, that all surpluses should be returned to the budget. These are outlined in the Kellett-Bowman report. This agency has always supported those principles inasmuch as it could. However, it was unable to give me all the necessary information on the costs involved in processing applications, etc., simply because it does not have that information.
It does not even have a breakdown of how the Member States use the money they receive from an agency to pay for the action study of an individual product. The actual evaluations are carried out by the Member State rapporteurs, who receive 50 % of the agency fee to cover the costs of producing the report. The agency did not decide on this fee any more than it decides on what the pharmaceutical companies should pay for the evaluations as a whole.
The Commission claims that the fee levels do not cover the costs incurred either by the Member States or the agency and that they should therefore be increased. Parliament may remember that it was the Council that reduced the fees the last time. In general we would agree with the Commission and Mr Valverde López, who has produced an excellent opinion on behalf of the Environment Committee, an opinion which I have happily endorsed and for which I thank him. But, since the figures given by the Commission can only be guesstimates we feel that future evaluations should be made on the basis of real information provided by both the agency and the Member States.
So our next recommendations are that: firstly, with the assistance of the Commission - for which we thank Mr Mingasson and his staff - the agency should complete its installation of a complete automated financial system, which will provide a breakdown and facilitate a cost analysis of the work of the agency; secondly, the Commission should require member State agencies to make similar information on their costs available to us as the budgetary authority; thirdly, in two years' time we come back to a full review of fees based on an evaluation of real data. This will tell us if it takes longer, for example, to evaluate an application for a veterinary product which would end up in the food chain as opposed to one which does not, or whether a variation of an original application takes the same amount of work or only half or quarter as much.
Such an analysis will also resolve the question of how much time is spent by the agency on evaluating commercial products or carrying out public health related tasks on behalf of the Community as a whole. The pharmaceutical companies feel it is unjust that they should have to underwrite these costs. They warn that if the fees are set too high or at levels which undermine their profitability, they will cut back on research and development. They are obviously determined to protect their vested interests as we all are.
Members may be aware that the European Union has just taken a series of decisions on the desirability of maintaining work on orphan drugs, on pre-accession technical cooperation, on mutual recognition agreements with third countries and so on. It is in all our interests that this important Union business is carried out effectively and efficiently.
It is in everybody's interests, including the Member States', to reduce the costs of medicines since much of that cost is eventually subsidised by the state through public health programmes and medical care. Although it was envisaged that the agency will become self-funding, we have to recognize that it is not going to happen in the immediate future even though we have continued to diminish the EU contribution as a proportion of the agency's total budget year on year. It is also clear that the future financing of this agency will rely on the structural mechanisms we put in place to guarantee the stability it needs to do its work properly.
These principles will apply to all agencies, not just London. Although the starting premise has to be that each agency is different and must be treated as such, the sort of framework I am referring to is designed to ensure that the levels of accountability, transparency and financial efficiency, once assured, can be relied on.
Firstly, Parliament requires a mechanism to be introduced to adjust the budgets of the agencies automatically up or down, to compensate for the effect of exchange-rate fluctuations or changes to the institutional weighting allowances. It is ridiculous that bodies such as the agencies, which are tied to institutional statutes and which have their budget levels decided after much debate and consultation by the budgetary authority, should have all that consideration thrown out of the window in mid-year by an institutional decision, which must be obeyed, on the weighting adjustments to their Title 1, or by a decision of Mr Soros or one of his financial speculator friends to raise or wreck a particular currency.
The EMEA has suffered huge losses as a result of the strength of the British pound. The point is not whether they lose or gain money, but that an agreed budget should be a budget which is executed.
We have also introduced a new line this year which would hold additional funds in reserve for all the agencies, except Torino which is in category 4 and, therefore, cannot draw down the line from category 3 to cover the operational costs of activities and programmes relating to Union policies which the agencies may implement. This is not to be used as a slush fund. We will require that the agencies show the greatest attention to cost management. This is not instead of the Council and the Commission agreeing to increase funding for the agencies when they wish to increase their workloads - and this is important.
As we squeeze the budgets generally, some people might imagine they could transfer activities out to agencies without transferring the matching fundings, and thereby shift their budgetary problems to someone else.
This new line is to allow additional activities to be incorporated into the agencies' work programme, as long as doing so does not involve increases in staffing or capital expenditure beyond the limits of existing budgets.
To make sure that London and all the other agencies maintain their support in the future of the principle, we have established and drawn up a code of conduct. This involves, for example, agreements on reporting and transparency such as, firstly, asking agencies to report on any changes to their budgets to the budgetary authority; secondly, reporting of their organigrammes and work programmes for consideration in the drawing up of their budgets. Just to make sure there is no delay in getting this agreement through, we are putting 10 % of all agency budgets in reserve, subject to their signing and returning the agreements. This could be done before the second reading.
I must stress that the vast majority of agencies have been totally supportive of the code and, indeed, it has been drawn up in consultation with those involved.
We have also had agreement, in the main, on the harmonisation of the founding regulations. Although this passed through Parliament, it remains with the Council awaiting agreement. It has been there far too long and we should be putting every pressure on the Council through the budget procedure to urge it to deal with this as a matter of urgency.
We have also included a section in the general budget which will cover the agencies' buildings. It seems ridiculous that the EU has assets or liabilities in the Member States of which we have no details.
What conclusions can we draw? Over the three years in which I have been standing rapporteur for the agencies for the Committee on Budgets, I have been fortunate to have the very positive support of people like Edward Kellett-Bowman - my colleague across the way - Mr Mingasson, and the agency directors. We have tried to demystify the satellite agencies: to bring them down to earth as it were. We want to make sure that, although they operate at a distance from the central places of work, they are still part of Community bodies, still accountable to the democratically elected Members of Parliament, controlled but not overwhelmed either by lots of different groups which have dropped in to check up on them and their work, or by the bureaucratic demands of people trying to assess what is going on from a distance. We wanted to strike a balance. Many of the agencies are still in their start-up phases. Many were frozen in mid-growth by the standstill budgets of the past two years. Some may never achieve the format originally set out in their establishment plan, and there are still ideas for more agencies in the pipeline. Once there is a code of conduct and the harmonisation of regulation is achieved, we have all the transparency necessary to enable the budgetary authority or the standing committees to ask the questions they need.
The automated financial systems, which not just London but almost all the agencies will have up and running in the near future, will help. This project, which has been developed in a spirit of cross-agency cooperation, is typical of what has been achieved in requiring the agencies to avoid duplication of effort in activities and to make themselves more aware of how they can increase their own efficiency. It will also permit electronic financial control. Our satellite links will never have been better.
The next agency budgets will take place in the new parliamentary term. By then all the mechanisms and structures should be in place to make arguments about budget levels much more informed.
The budgetary authority should be able to make its assessments on the basis of real evidence of need and performance, surely the best basis for judgement.
To conclude, I commend my recommendations specifically on the fee structure for the EMEA but, in general, for those which will impact on this and other agencies' abilities to produce the work we require of them in the most efficient and effective way. I hope the House will support my amendments and the amendments of the Committee on Budgets and the Committee on the Environment, Public Health and Consumer Protection.

Kellett-Bowman
Mr President, I want to congratulate Mr Tappin. Clearly he has become an acknowledged expert on the workings of the decentralised bodies and agencies.
The conclusions of the Budgetary Control Committee are brief, and read as follows: 'The Committee on Budgetary Control welcomes the proposal of the Commission whereby the EMEA charges its customers fees that are more commensurate with the costs it incurs, and also takes this opportunity to congratulate the agency on operational progress made.'
I wish to make four points. Firstly, the agency is a splendid example of subsidiarity. Here pharmaceutical manufacturers around Europe can get registration at one place which works in all the Member States. This is far more efficient and certainly cheaper. The fees problem has been well outlined by Mr Tappin. The agency is squeezed by the way we go about it. However, I am puzzled by one point - why veterinary products should attract a much lower fee than human products. So many of the former products will ultimately be getting into the human chain and I wonder whether they should not actually incur a higher cost, but that has not happened. Some months ago the House passed amendments to Statutes, as mentioned by Mr Tappin. I am assured by the Council that those amendments are not blocked in the Council, but are merely behind schedule. I hope the conciliation meetings will find an opportunity to raise this matter with the Council.
The fourth point is that the European Court of Auditors' initial report on this agency for the past year gives them a clean sheet. This is highly creditable. It looks as if they might even be the first body to get the certificate of assurance within the European Community. This certificate has eluded the Commission and all other bodies over the years since the Maastricht Treaty brought it into being but I see this agency as being a candidate for taking the blue ribbon very soon.
Mr Tappin has produced a good report. I encourage the House to support the amendments and his report.

Valverde López
Mr President, I would firstly like to add my congratulations to those for the rapporteur, Mr Tappin, as he has drawn up an excellent report. In this case, the report was based on the European Agency for the Evaluation of Medicinal Products but it also affects the overall structure of the running and financial control of the rest of the Agency. The agencies are proving to be an excellent working instrument within the Commission. And, in fact, although the European Agency for the Evaluation of Medicinal Products only came into operation in 1995, it has already received international recognition. The entire sector and all those involved are very pleased with the exemplary running of this Agency. Therefore, the three committees that have drawn up reports all express their support for the Agency and its excellent work.
It was necessary for fee levels to be updated - as provided for in the regulations establishing the Agency - and I therefore believe that it is appropriate for this Parliament to support the change in these fee levels. Above all, I believe that the annual fee proposed by the Commission is extremely important as it will help meet the costs of post-authorization surveillance and maintenance activities, which are very important in this sector. But perhaps we must also remember that these fees are not taxes and should only be paid for services rendered. That is the basis of some of the amendments I have tabled - and I would like to take this opportunity to thank the rapporteur, Mr Tappin, for having taken over the seven amendments tabled by the Committee on the Environment, Public Health and Consumer Protection - and these amendments aim to graduate fees in accordance with the work carried out.
However, Mr President, whilst I support an increase in fees, I would like to highlight the pressing need to maintain the Agency's independence. The contribution from the EU budget must be safeguarded - in other words, it should be maintained and reductions be avoided - as the Agency is working for the pharmaceutical sector in Europe but it also has the interests of millions of patients, health professionals and consumers at stake. We must remember that Parliament has always supported this fundamental question of the Agency's independence.
The European Union and its pharmaceutical industry - the largest in the world - need a strong Agency that has the necessary scientific resources. And this will only be achieved through transparent and adequate funding.

Eisma
Only recently, Mr President, in connection with the marketing of the Viagra pill, we saw how useful the European Agency for the Evaluation of Medicinal Products is, because it was on the strength of the Agency's opinion that the Commission decided to license it. It is just one example of how important this body is. It can only grow in importance, bearing in mind that it has only been operational for three years.
We too regard the EMEA as to some extent a government body. I quite agree with the rapporteur because this Agency is to some extent concerned with implementing the policy of the single market and safeguarding public health. So I think that most of the EMEA's revenue should come from fees, but that some of it should continue to come from the EU budget. But as the rapporteur points out, it is rather unsatisfactory to know that there has still been no in-depth study of the costs of processing applications. Like the rapporteur, I find that regrettable. It would give us a better idea in future of what proportion of the Agency's work is taken up by the public health responsibilities laid on it by the institutions. I hope we may quickly have a result on that.
The rapporteur also says that the Agency made a loss of 20 % due to currency fluctuations and the effect of the corrective coefficient or weighting. Will the Commissioner tell us what she thinks about that? How does the Commission deal with this question of currency movements and the weighting in the Agency's case?
Lastly, we think it is important, and this must be clear, to guarantee the payment of a certain sum from our budget. As rapporteur on the budget for the Environment Committee I argued in favour of an extra ECU 2 million over and above the present figure of twelve million. The Committee on Budgets decided last week to give one million more, or half of what we had asked for. But as you see, we in the Environment Committee are doing our best to safeguard the budget for this Agency.

Gradin
I am very pleased that it has been possible to have this item on the agenda of the plenary session so quickly. I would therefore like to thank all those who invested a considerable amount of work on this draft proposal.
The current level and structure of fees payable by the pharmaceutical industry to the European Agency for the evaluation of medical products was set out in the 1995 Council regulation. In accordance with Article 10 of this regulation the Commission submitted a report on its implementation. In the light of that exercise we proposed the definitive regulation in January 1998.
In preparing this report the Commission has sought to ensure two aims: first, not to place undue burden on applicants; second, not to endanger the achievement of the EMEA's primary task which is to provide scientific advice of the highest possible quality in relation to the authorisation and supervision of medical products.
The proposed increase in fee levels is clearly demonstrated and supported by a cost survey of the national competent authorities and the EMEA. Particular attention was given to the fact that fees should normally be lower than the total of fees charged by 15 Member States. The Commission's proposals also foresee some major new orientations: the introduction of an annual fee; the introduction of a fee for scientific advice and protocol assistance; a reduced fee for certain variations which do not involve detailed scientific evaluation; fees for the establishment of maximum residue limits for clinical trials; administrative charges; the introduction of differentiated fees for the initiation of Community referral procedures.
I am pleased to announce that the Commission will take up several of the amendments proposed by the European Parliament. We will therefore shortly produce an amended proposal. It will take on board the following issues: the suggestion that future amendments to the fees regulation will be based on a complete evaluation of all costs of the Agency - Amendment No 16; clarification that the fee for evaluation covers all strengths and pharmaceutical forms of a product - Amendments Nos 10 and 11; increase of the additional arbitration fee for veterinary medical products - Amendment No 12; increase of the fees for changes to a maximum residue limit of a veterinary medical product - Amendment No 13; the introduction of a flexible fee for scientific advice; Amendment No 14.
Unfortunately we will not be able to take on board all amendments. This is for several reasons. Some issues cannot be taken up for legal reasons. For instance, it is not possible to change the legal basis for the regulation.
Article 10 of the 1995 regulation already gives a precise and specific legal basis which has to be respected. In other cases we think that the suggested amendments might bring about a possible risk for public health. For example, by encouraging an inflation in different presentations of one medical product.
The proposal to make the first fixation of a maximum residue limit for several animal species more expensive cannot be accepted. This would be contrary to the Commission's policy to encourage and stimulate applications for fixations of new MRLs.
Other issues will be laid down in horizontal legal texts and not in the fees regulation. This includes, for example, the mentioning of the euro and budgetary details. Thank you once again for your quick and fruitful cooperation on this issue.

Eisma
Mr President, I asked the Commissioner how she proposed to deal with the question of currency movements and the effect of the corrective coefficient. The Agency has lost 20 % because of these. What is the Commission going to do about it?

Gradin
Mr President, I am representing Mr Bangemann and I will ask him to give you a written answer.

Tappin
Mr President, I think that as Mr Kellett-Bowman might well attest, in the budget arrangements for 1999 we put in a series of amendments to ensure that the Commission actually tops up on the third or fourth payments every year the losses made by any agency through exchange rate fluctuations or the weighting arrangements. If the budget goes through the first reading in early December, that will actually be operational. Similarly, if agencies win out, they will lose their grant the next year, so there will not be a win-win but rather a win-lose situation. I hope that clarifies the position.

President
The debate is closed.
The vote will be taken tomorrow at 11.30 a.m.
(The sitting was suspended until 5.30 p.m.)

Question Time (Commission)
President
The next item is questions to the Commission (B4-0483/98).

President
Mr Liikanen has just arrived and is probably running on Finnish time, which is not exactly the same as our own. Nonetheless, we would like to welcome him and ask that he answers Question No 30 by Marjo Matikainen-Kallström (H-0885/98)
Subject: The impact of the crisis in Russia on the country's energy production and nuclear safety
The deepening economic, social and political crisis in Russia has given rise to fears that the coming winter may cause major energy management problems there. It has also been suggested that serious economic problems, as well as unpaid wages and the possible neglect of maintenance operations, may adversely affect the country's capacity to produce nuclear energy safely. Russia has nuclear power stations, inter alia near the Finnish border, whose technical condition and safety are not entirely certain even under stable conditions. Because of this, the impact of the crisis, which is now rapidly becoming more acute, on Russia's energy management and nuclear safety should be investigated as thoroughly as possible and above all quickly.
In view of the above, how probable and how serious does the Commission consider the adverse consequences of the growing crisis in Russia for the country's energy management and nuclear safety to be? What will the Commission do to help the Russian authorities to avert and eliminate any safety hazards arising from the above energy problems? I give the floor to Mr Liikanen to answer Mrs Matikainen-Kallström's question.

Liikanen
Mr President, there is nothing to indicate that the present situation in Russia is having a negative impact on the energy sector and nuclear safety. There have been signs that the government intends to pay employees in the industries concerned the salaries that have remained outstanding. In this way there could be a positive effect on the present difficult situation. The Commission is monitoring the situation and makes a daily assessment of developments, mainly through its delegation in Moscow. At the same time the implementation of the TACIS programme which is currently under way, particularly in the energy sector, will enable us to acquire the information that we need. In this way, the situation with regard to nuclear power plants can be monitored continuously. It is with this programme very much in mind that the Commission and the Russian authorities are developing fresh strategies. Since the start of the programme around ECU 300 million has been made available to improve nuclear safety in Russia. Safety standards have improved mainly through cooperation between the European Union and most of the Russian nuclear power plants. It is hoped that the strategy will be fully in place before Viktor Kliman, Jacques Santer and Boris Yeltsin meet in Vienna on 27 October.

Matikainen-Kallström
Mr President, I wish to thank the Commissioner for his reply. I would still like to have it clarified what guarantees the Russian authorities have given to the employees that their salaries will be paid, since it is an absolute requirement for the employees concerned to stay on in these plants, as well as for the safety of the plants to be ensured.

Liikanen
Mr President, I am not aware of any legal guarantees on the subject, but only of a political commitment. Let us hope that the matter can be resolved. Obviously, our problem is that Russia's economic difficulties cannot be overcome with the support of the international community alone. Ultimately, it is Russia herself that must solve these structural problems, which include paying the outstanding salaries. I shall pass the question on to the Commissioner responsible. If we learn any more, we shall glad to forward the information to the honourable Member.

President
Thank you very much, Mr Liikanen. I would like to stay with this matter as, pursuant to the Rules of Procedure, I have received two supplementary questions. The first is from Mr Rübig, who has the floor for one minute. You have the floor, Mr Rübig.

Rübig
Mr President, we know that we spend a great deal of money on the safety of nuclear power stations; that is done under Euratom. But what is the situation regarding minimum standards? Are there not even any plans to introduce minimum safety standards for nuclear power stations in the European Union, particularly with the enlargement of the EU in mind? I believe it is time we all sat down to develop a common programme of safety standards for Europe, one reason being that it could serve as a basis for the applicant states to raise their own standards.

Liikanen
Mr President, I will gladly convey this suggestion to Mr Papoutsis. He will be here tomorrow at the Commission meeting, and I will ask him to reply separately to you on that point.

Flemming
Mr President, does the Commission really have any idea at all just how dangerous the Russian nuclear plants are and what condition they are in? We know that any nuclear accident there would pose a truly grave danger to the population of the European Union.

Liikanen
Mr President, as I stated at the beginning, there has been a good deal of cooperation with the Russian authorities to improve nuclear safety through the TACIS programmes. ECU 300 million has been spent on this, and there has been an immense amount of cooperation among experts. I believe the Commission has a very good overall picture of the situation, but I am prepared to ask our experts in the field to provide the honourable Member with detailed information if she so wishes.

President
Question No 31 by Pedro Aparicio Sánchez (H-0896/98)
Subject: Spanish nationality requirement for Spanish airline captains
Despite the fact that Article 48 of the Treaty bans discrimination between workers in the EC on grounds of nationality, the Spanish Government does not authorise Spanish airlines to appoint persons of non-Spanish nationality as aeroplane captains. The government justifies this restriction (laid down by law in 1960) on the grounds that, inter alia, 'the job of the captain of an aeroplane includes duties of a kind that would normally be carried out by a civil servant'. This restrictive interpretation is upheld in the face of requests for its abolition from various bodies and individuals, and in particular the Spanish Airlines Association, which represents 26 Spanish private companies.
Does the Commission believe that the Spanish nationality requirement for Spanish airline captains constitutes an infringement of Article 48 of the EC Treaty?
If so, does the Commission intend to force the Spanish Government to rectify the situation? I give the floor to Mr Liikanen to answer Mr Aparicio Sánchez's question.

Liikanen
Mr President, only posts having judicial powers or involving the public interests of the State are reserved for citizens of the country in question. These would include such jobs as police officer, judge or state minister, together with certain top executive posts in the public administration. The crew of a commercial airliner clearly does not fall within this category. According to international law and practice, however, the captain of an aircraft is a representative of authority on that aircraft, since he or she is responsible for the safety of the plane and for public order and, ultimately, for the lives of the passengers. On this basis, it could be said in a general way that the captain of an aircraft wields judicial power, or at least may wield it if called upon to do so. This is the practice adopted by most Member States and that approved by the Commission.
Any condition of nationality for certain kinds of employment is, however, an exception to the basic principle of Community law that all European citizens should be treated equally in matters of employment. This exception must therefore be interpreted within certain limitations. It is possible that, in certain cases, the captain will not normally be called upon to exert his or her judicial powers because of the nature of the aircraft itself or other circumstances. In such cases, the condition concerning nationality is without foundation. However, such a case would be an exception to the general rules concerning the typical work of the captain of an aircraft, so the burden of proof should remain with the party invoking this exception.

Aparicio Sánchez
Commissioner, thank you for your kind response that, personally speaking, gives me great pleasure. The Spanish Government argues that the captain of an aeroplane performs duties such as authorising marriages on board, registering a new-born child or guarding diplomatic bags. Although the government does not class them as civil servants, they do hold a position of authority. Therefore, in my opinion, this is a rather out-dated and old-fashioned interpretation of the role of a captain of an aeroplane. But I fear that the extremely powerful Spanish pilots' trade union is behind this oversight by the Spanish Government and that it is exerting considerable pressure to keep the labour market restricted.

President
Question No 32 by Frode Kristoffersen (H-0910/98)
Subject: Preselection tests in connection with the Commission's open competitions COM/A/8/98, COM/A/9/98, COM/A/10/98, COM/A/11/98 and COM/A/12/98
What measures does the Commission propose to take to ensure that preselection tests for Commission posts are conducted in future in such a way that it is not necessary to discard candidates' papers? What penalties will the Commission impose on the persons in the Commission who are responsible for these irregularities, and on the candidates in the tests who broke the rules for the conduct of such tests? I give the floor to Mr Liikanen to answer Mr Kristoffersen's question.

Liikanen
Mr President, the Commission decided on 23 September 1998 to annul the preselection tests for competitions COM/A/8/98 to COM/A/12/98 held on 14 September this year, since there are sufficient grounds to believe that there has been a leak of information regarding at least one of the tests and at least one of the competition languages. To ensure equal treatment for all candidates, the Commission will be organising new preselection tests as soon as possible for the start of 1999.
An investigation was begun immediately to discover who was responsible for the leak. The legal authorities are being contacted with a view to bringing possible proceedings. Those found responsible will also be liable for damages in respect of the Commission.
The Commission is aware of problems at two of the test venues on 14 September, including a mobile phone being used and certain candidates not following the instructions of the invigilators. For this reason, the Commission intends to tighten up considerably the rules on competitions and their supervision, so that all candidates can take part in them on an equal footing. The Commission deeply regrets the inconvenience which this situation has caused to those candidates who participated in the competitions honestly and in good faith.

Kristoffersen
Commissioner, I would like to ask whether consideration has already been given as things stand to ways of tightening up the rules and improving them for the purposes of future tests. Do you not agree with me, Commissioner, that this is a very serious and unhappy affair, since in reality it concerns a large number of young people in Europe who have applied for jobs in the EU? Indeed it has implications for the EU's reputation too. Do you not also agree with me, Commissioner, that it is really necessary to get a grip on this affair, in the interests of improving the image of Europe? I can promise you, Commissioner, that we will be given a hard time in the election campaign that is due to get underway soon now. All these negative developments currently hanging over the European institutions are no help to us whatsoever in advancing the European cause. Do you share these concerns with me, Commissioner?

Liikanen
Mr President, I agree completely. I personally organised three meetings on this issue, and we had to conclude, among other things, that the rules on entry to the competitions, which were the same as usual, were not strict enough for candidates. We must clearly tighten them up, for example as regards what the candidates are allowed to bring in with them when they sit the competition.
The second area in which I think the rules are lax concerns the invigilators' right to intervene in disturbances, or when someone is cheating, for example. In my opinion, the invigilators must have the right to intervene directly and not, as has hitherto been the case, only at a later stage through the system of appeals.
I agree with the honourable Member that this has been a very unfortunate and disagreeable affair. That is why it is important that the Commission's decision to annul the competition was taken quickly, and that a whole new competition should be organised carefully and thoroughly.
The third point is something that will obviously have to be discussed, and that is whether in future it will still be appropriate to hold these large-scale competitions, or whether it would be preferable to try and restrict the number of candidates so that the competitions can be better controlled. You will appreciate that organising a competition for 30 000 candidates in 11 languages at 40 different sites is an enormous logistical task. This is not a defence of the misconduct that has taken place, but it does oblige us to consider whether or not the competitions should in future be made more controllable.

President
Thank you very much, Mr Liikanen. This question has certainly aroused a great deal of interest in the House to the point of four supplementary questions being tabled. The Rules of Procedure only allow me to admit two. Therefore, I will first give the floor to Mr De Coene and then to Mr Rack.
Mr De Coene, you have the floor for one minute.

De Coene
Commissioner, your principled reaction does you credit and you have done what was necessary. Nevertheless, I would appreciate some clarification of the notion of 'penalties' here. As the questioner rightly said and you confirmed, a moral as well as a financial loss has been sustained here. So my question is this: do you indeed believe that those responsible for this loss, whether it be the organisers or invigilators, or those sitting the examination, must bear the cost of the loss which the institution has sustained?
Secondly, can you tell me the exact cost of these preselection tests which had to be declared invalid thanks to the behaviour of these people? I specifically want to know if you will tell me what the cost was, because I cannot imagine that any employer would stand for the good name of the Union being besmirched in such a way by these members of its staff.

Liikanen
Mr President, there have obviously been problems in three areas here, and in these there are two guilty parties. Firstly, the candidates are obviously guilty who entered the competition fraudulently. If necessary, this will have to be pursued under the law. Secondly, the officials are also guilty - if they are officials - who are responsible for the apparent leak, since this has done enormous damage to the administration. Thirdly, we have to judge separately the responsibility of the administrative staff in this case, in the light of how feasible the present rules governing supervision are. This is also a judgement that we shall clearly have to make. But the main responsibility lies with the perpetrators of the deception and with those parties who assisted in it.
As for costs, the total costs of the competition were high, amounting to ECU 1.2 million. It is unlikely that we shall be able to spend anything less the next time round either. As for the question of financial responsibility, we shall obviously return to that when the investigations are over.

Rack
Mr President, Commissioner, will all those who were admitted to the test this time be admitted next time? Is there any means of excluding from the next test those who have been unmistakably caught circumventing the rules, because we surely do not want that kind of official in the Commission in future? Thirdly, is there also scope for reimbursing those candidates who have expended material resources in order to be able to sit this test, who have taken a day off and may therefore have been expected to pay their own travel expenses?

Liikanen
Mr President, it is difficult for me to anticipate any future legal decisions. But I agree entirely with the questioner: neither the Commission nor any other institution of the Community needs in its service people who flout all the Community rules in the selection tests. This has to be viewed very seriously, and action must be taken accordingly.
As for the problems arising from the reorganisation of the competition, they are being addressed at this very moment. I cannot yet reply in any more detail. Unfortunately, I am afraid that most of the candidates will have to make the sacrifice once again. That is why the deception that has occurred is so deplorable. It is important in terms of people's rights that no one should profit from the deception, but that everyone is genuinely in the same situation in the new competition.

President
Question No 33 by Angela Sierra González (H-0912/98)
Subject: Death of Semira Adamu in Belgium
The death by suffocation at the hands of the Belgian police of a young Nigerian woman who was to be deported to Togo, after she was smothered under two pillows in the aeroplane which was to take her from Brussels to Lomé, has caused widespread concern among Europe's citizens.
Semira Adamu asked for asylum in Belgium to escape an arranged marriage with a polygamous 65-year-old. Does the Commission not consider that Community policy on asylum should include sexual abuse among the criteria to be taken into account? I should like to welcome Mrs Gradin and ask her to answer Mrs Sierra González's question.

Gradin
Mr President, I share the sadness and indignation felt by so many over the circumstances surrounding the death of Semira Adamu. Exactly what happened is currently being looked into by the Belgian authorities. Regardless of eventual explanations, this kind of thing simply should not occur. The Commission is not in a position to comment on the procedural handling of the Semira Adamu dossier. We do not know all the facts and are not empowered to speak out on individual cases.
Mrs Sierra González asked about the possibility of granting refugee status to a person who has suffered sexual abuse, or who might risk such abuse if deported. The basic principles are enshrined in the 1951 Geneva Convention. This states that a person shall be deemed to be a refugee if he or she has well-founded fear of persecution on account of his or her race, religion, nationality or affiliation to a particular social group, or of his or her political beliefs. The individual concerned must be outside his or her country of citizenship and be unable, or not want, to benefit from the protection of that country.
For many years now it has been my view that rape as an act of war should be treated as torture. A woman subjected to rape in such circumstances would therefore be entitled to refugee status, according to my criterion. The EU Member States have endeavoured to achieve a common interpretation of the Geneva Convention. On 4 April 1996, a common position was adopted on the definition of refugee in Article 1 of the Geneva Convention. This interpretation does not, however, cover the issue of gender-related persecution or sexual abuse - which is a great pity. We should certainly be seeking an updated definition.
In addition to refugee status, the EU Member States often offer alternative options to individuals in need of international protection. Compassionate leave to remain may be accorded on purely humanitarian grounds if there are strong reasons for allowing someone to stay. At the moment it is up to each Member State to decide, and practice differs considerably from country to country. Discussion has already begun on introducing certain minimum standards for this type of protection. The question is included in the Council of Ministers' work programme. A survey of the various national rules and practices was carried out during the spring. An initial analysis has been produced and will form the basis for future work. Parallel discussions are under way in Parliament's Committee on Civil Liberties and Internal Affairs. I imagine that this committee will also address the difficult issue of what our attitude should be towards people seeking protection on the grounds of various forms of sexual persecution and I look forward to being informed of the results of that work.

Sierra González
There are two shocking facts concerning the death of Semira Adamu. The first is that it involves the violent death of a young person who had come to the European Union seeking protection against the moral injustice being forced on her in her own country in the name of tradition. The second - that is equally important - is the fact that the methods used by the police were perfectly legal, even though they were not only violent but also degrading.
In view of these facts and other deaths which have occurred during expulsions from other European Union countries, does the Commission believe that the severity of such procedures, which hide behind the Schengen Agreement, needs to be reviewed?

Gradin
As I said in my reply, I agree with the questioner that these things should not occur, but we must remember that it is the national authorities who bear responsibility for ensuring that their police forces and government departments behave in a decent fashion when deporting individuals from their territory. I assume that countries are capable of handling these matters themselves.

McKenna
This is not just to do with the fact of people being denied the right to asylum, but it has to do with how they are treated afterwards. It is completely unacceptable that a person, even if denied asylum, should be treated worse than an animal would be treated. The EU has a responsibility. People here praise the Amsterdam Treaty for the fact that now human rights will be brought into the treaties. Countries - particularly Belgium - are in breach of human rights standards. Surely some measures have to be taken against those countries that do this. It is not just Belgium. The treatment of people seeking asylum in all EU Member States is absolutely appalling. They are not treated like human beings; they are not treated like ordinary people. They are treated in some sort of inferior way that completely denies them any basic right or dignity whatsoever. The Commission and the EU as a whole have to deal with this. There should be proper codes of conduct and proper measures brought in to ensure that this kind of thing cannot happen.

Gradin
As I said, I am as sorry as you are that this girl has been handled as she has. But it is the responsibility of Belgium to look after their policemen's behaviour when they send a person out of the country. This is something I expect every country to be able to take care of.

Sornosa Martínez
Commissioner, in relation to your speech on the Status of Refugees and the Geneva Convention, I would like to ask if the Commission is considering recommending to the European Union countries that, in all matters relating to political asylum for women, and in matters that exclusively affect women, such as abuse and other gender-linked issues, this political asylum be extended.

Gradin
As you know, there have been many years of debate as to whether we could widen the definition of political refugee status. This has not been successful. Nobody wants to change the Geneva Convention but we can complement the Convention. We could do this as we have proposed in other areas in the Union such as when we are talking about persecution of third parties, or about refugees staying for a shorter time. My personal wish would be that, with Parliament's support - and particularly the support of the women - we should take up the question of rape and sexual abuse of women. That could be a humanitarian angle.

President
Question No 34 by Mark Watts (H-0864/98)
Subject: Registration of EU citizens visiting another Member State
Are EU Member States entitled to require hotels and guest houses to demand that visiting EU citizens provide exhaustive details of their travel documentation (including type of travel document, when and where issued, expiry date and document number) as a condition of their stay? Are the authorities in Member States permitted to fine proprietors of establishments who fail to record such information from guests? Does the Commission agree that this practice, which I understand exists in Austria, makes a mockery of the principle of free movement, and what action will the Commission take to end this procedure? As well as welcoming Mr Oreja, I would like to thank him for battling against the elements to get here. We knew that he was having a rather difficult journey getting to this sitting. So, thank you for coming, and I would like to ask you to answer Mr Watts' question.

Oreja Aguirre
Current Community law on the free movement of the Union's citizens allows Member States to request that they are informed of the presence of nationals of other Member States in their country. In some countries, EU citizens staying only for a short while have to declare their arrival to the administrative authorities or the local police. In order to make this easier, some Member States allow citizens of other countries to declare their arrival through forms completed in hotels, campsites or guest houses and a copy of this is sent to the local authorities. In this way, citizens do not have to go through any additional procedures and these pre-printed forms contain all the information needed to identify a person, as they include the number, place and date of issue of the passport or identity card.
The Court of Justice has accepted that these systems for declaring arrivals are compatible with Community law. Indeed, according to the Court, this type of system cannot be contrary to the principle of the free movement of persons if the imposed time limits for declaring an arrival are unreasonable or when the penalties for not fulfilling this obligation are disproportionate to the seriousness of the infringement, for example, if they lead to a prison sentence or to expulsion.

Watts
Thank you Commissioner for your answer. The trouble is that it highlight dual or treble standards operating throughout the Community. After all, one of the benefits of the Community is supposedly free movement and if, for example, one takes a day trip to another Member State or stays in private accommodation, there is no such requirement to provide details of identification documents or passports. It just so happens that when a business person or holidaymaker goes to a hotel these rather ludicrous and petty-minded bureaucratic restrictions are imposed. The citizens of Europe demand an answer from the Commission as to why these dual standards are applied. If it is in the interests of security or information on visitors, why is the information not required from every visitor? It is clearly not. Therefore the information is not effective and, as the Commissioner implied, there should be an agreement between Member States to try to remove this artificial barrier to free movement.

Oreja Aguirre
As Mr Watts well knows, the same system does not exist in all Member States. That is to say that, in practice, situations vary considerably. In some Member States, such as Denmark, Greece, Portugal, Sweden and the United Kingdom, there is no system for declaring the arrivals of EU citizens only staying for a short while. Nor is there a police-controlled registration system operating in hotels. Such systems do exist in the other Member States. And, in the group of countries with no such system, there are certain countries that have a general system for declaring arrivals that is equally applied to EU citizens. Other countries, if they have not devised a system for the declaration of arrivals for EU citizens, have instead established a specific registration system in hotels and public accommodation that comes under the general duties of the police.
Consequently, there is no single system. What I do believe to be important is that which the Court of Justice has maintained until now, in other words, that such arrival declaration systems are compatible with Community law. Perhaps what Mr Watt is asking is if these systems should be harmonised in the future, that is, if the free movement of persons encourages us to establish an identical system in all the Member States. This is a matter that has yet to be resolved and at the moment there are two main ideas being discussed. The first is that there are certain standards, those that the Court of Justice has applied; the second is that different systems are acceptable, as long as there are limits. In other words, these limits cannot be disproportionate to the seriousness of the infringement if, as I said earlier, they lead, for example, to a prison sentence or expulsion. This is the rule as it stands at the moment but I have made a note of Mr Watts's comments on the possible harmonisation of the different Member States' positions.

President
Question No 35 by Joan Vallvé (H-0865/98)
Subject: Inclusion of the Misteri d'Elx on the World Heritage List
The Misteri o Festa d'Elx (Mystery Play or Feast of Elche) has been put forward for inclusion on UNESCO's World Heritage List. The Festa, whose origins date back to the late 14th century, is staged in the city of Elx (Elche) on 14 and 15 August each year to commemorate the Feast of the Assumption of the Virgin Mary. It is the sole theatrical representation of mediaeval origin of its kind to have survived in Europe.
Does the Commission intend to support this initiative to gain explicit recognition for this centuries-old tradition of such great artistic and cultural importance? I give the floor to Mr Oreja to answer Mr Vallvé's question.

Oreja Aguirre
The European Commission is aware of the importance and significance of the Elche Mystery Play (Misteri d'Elx ) in the history of European religious and musical theatre. And, as the procedure for inclusion on the World Heritage list dictates, the UNESCO World Heritage Committee is the body that has statutory responsibility for taking decisions on these matters. As Mr Vallvé is aware, it is the responsibility of local and national authorities to initiate the UNESCO procedure and these authorities must support any project which they wish to see recognised as a World Heritage project.
Within the framework of its powers, the Community does not have any formal or material possibilities, as far as Article 128 of the Treaty is concerned, that allow it to intervene in the procedure of naming World Heritage events. Nonetheless, the Commission hopes that the authorities in Elche are successful in their bid, as this would give an extremely important European cultural event the world-wide status it deserves.
Of course, I am fully aware of Mr Vallvé's sensitivity in this area and I completely agree with him as I have been privileged enough to witness the Elche Mystery Play. It is indeed a spectacular event and is proof of something I believe to be very important: the cultural identity of a people.
I believe that we should try to see the distinctive elements that exist in the varied cultures of the people and, undoubtedly, one of them is this Elche Mystery Play, which also has a universal dimension. In other words, it is a locally acclaimed event but, at the same time, it has world-wide significance and it is for this reason that we believe it deserves to be recognised as a World Heritage event.
Mr Vallvé can rest assured that, if consulted, the Commission will stress the importance the Elche Mystery Play deserves.

Vallvé
I would simply like to thank the Commissioner for his response. I did not doubt his sensitivity in recognising these cultural events, which have old traditions - the Misteri d'Elx dates back to the end of the 14th century - and which have continued up until today. This is, in some way, proof of the multi-culturalism inherent to Europe. For example, the Misteri d'Elx is a play in Catalan which takes place every year during these holidays. What is more, they are known throughout Europe and acknowledged internationally. Therefore, I would like to thank the Commissioner for his kind words and I am sure that the local authorities in Elche will take the necessary steps to ensure that this play receives the recognition it deserves from UNESCO, as European heritage to be shown to the whole world.

Sornosa Martínez
Commissioner, if you know the Misteri d'Elx or if you have seen it, then you know how spectacular and unusual it is to see the Assumption of the Virgin Mary portrayed in this work of European art and culture. In any case, I, too, wanted to say this to the House today as I am a devoted fan of this play.
Yet, whilst acknowledging how important it is that this celebration be included on the World Heritage list by UNESCO, and as you are here today, I wanted to take this opportunity to put a request to you. Is there any possibility, apart from this recognition, which is extraordinary in itself, and within the Commission's powers - although I know that the Commission cannot do anything -, that there might be a budget heading that could be used to help this group of artists, not as part of the World Heritage procedure but as a different category, if possible? These people do not of course do this exclusively, but they dedicate their free time to keeping this marvellous European cultural display alive.

Oreja Aguirre
Mrs Sornosa, I obviously share your interest in the issue you have raised and there is one possible option. As you know, the new framework programme for culture is currently with the two branches of the legislative authorities - the Council and Parliament - and will come into force as of the year 2000. It provides for three types of action: promoting networks; special actions; and high-profile projects. If anything can be called a high-profile project, then it is the Misteri d'Elx . Therefore, why not initiate the procedure? I call on you, and all those interested in this matter, to take the appropriate steps to take this to the Commission. And I assure you that I will follow this matter very closely. But I would point out that I do not make the final decision; a committee decides. Nonetheless, the word from the Commission, through me - if my colleagues permit it - is that I think that the Elche Mystery Play will be recognised as a high-profile project.

von Habsburg
Mr President, Commissioner, I am a great admirer of the Elche festivals myself, but in this context I should like to ask you something else, because this issue shows how important culture is to our future. My question is whether it is not time for the Commission to develop a system of its own, not only to catalogue these manifestations of popular culture but also to lend them effective support, so that a new attitude can gradually develop among us. Since in spirit we are now in Elche, I should also like to refer to the moros y cristianos , in the Provincia de Alicante for example, which are a wonderful piece of popular culture; it might be useful in places like that to encourage people to take more of these initiatives, and the Commission should support them.
Would you be prepared to involve yourselves in that sort of undertaking?

Oreja Aguirre
I am aware of Doctor von Habsburg's great sensitivity in this area and I must add that, scarcely a week ago, I passed through one of the villages in that area where I saw that one of them has, in fact, a street dedicated to Otto von Habsburg. And in that street you can see the moros y cristianos festival being prepared. I therefore believe that all this points to one thing - and it is important to highlight it -, namely, that Europe's wealth stems from the differences in the varied cultures which exist in Europe. The Commission's role will probably be to basically determine what the different European cultures have in common, but beginning with the distinguishing features of each of the cultures.
Consequently, I believe that these aspects should either come under the heading of high-profile projects or under special actions. Therefore, I am making a special note of all these initiatives, and I hope I can continue to rely on them. And now that we have, in fact, reached the legislative stage, I would like to ask that this stage be speeded up as much as possible in Parliament, and that it progresses quickly at first reading, so that on 17 November, if possible, the Council can adopt a common position, and so that we might already have this framework agreement before the end of the year. Initiatives such as those we have been discussing this afternoon will, of course, come under this framework agreement.

President
Thank you, Mr Oreja. Your respect for speed and rapidity has been fully noted and we thank you for being here with us today. We have reached the end of the questions for Mr Oreja and so we wish him farewell and a safe but not too speedy journey back. We hope you arrive as safely at that end as you did here.

President
Question No 36 by Patricia McKenna (H-0833/98)
Subject: The Ilois people of the Chagos Archipelago
Is the Commission aware that, when it was negotiating its accession to the then EEC, the UK was forcibly removing approximately 2000 indigenous Ilois people from the Chagos Archipelago, which is now an overseas territory of the EU called the British Indian Ocean Territory, and that the unstated purpose of the clearance was to lease one of the islands, Diego Garcia, to the USA as a military base? Has the Commission previously considered the matter, and in any case does it regard these people as citizens of the European Union, even though they are living in forced exile in Mauritius, many living in very poor conditions there - many, indeed, having committed suicide - and despite the fact that a financial settlement was reached with the UK Government some years ago? Whether citizens or not, does the Commission believe that these people would have legal rights within the Union, sa displaced occupants of what is Union territory, or, in a sense, as EU refugees? What does the Commission intend to do to uphold the Treaties in relation to these unfortunate people? I give the floor to Mr Pinheiro to answer Mrs McKenna's question.

Pinheiro
The European Commission is aware of the Chagos issue but has never taken part in official discussions on the matter. The question of whether the Ilois people of the Chagos Archipelago would be entitled to British citizenship is a matter between the UK Government and the concerned persons. The European Community is a major donor in Mauritius and finances, through the European Development Fund, a number of projects and programmes which aim at reducing poverty among the most fragile elements of the country's population, whatever their origin. The Commission has recently launched a detailed study of poverty issues in Mauritius in order to establish a clear picture of this problem. Although general poverty has been eradicated in Mauritius, due to impressive economic development in the last two decades, there still exist pockets of poverty among marginalised elements of the population. The focused poverty alleviation programme will be set up early 1999, financed by the EDF, from which associations or NGOs of Ilois people might of course benefit.

McKenna
I do not think the Commission is actually addressing the issue. The issue here is that basically these are overseas territories of the EU. The people of Diego Garcia have been denied the right to live in their own homeland. Surely they must have some rights under EU law as EU citizens. They have been forced off their islands to live in exile in other places. It is not acceptable. The EU has to look at this.
I should also like to know if the Commission has any legal advice on this matter. I would be very grateful if you could supply me with the legal advice you have on it. But I do not think it is just an issue for the Member State, because if that is the case, could not any government in the EU decide that minority groups in some part of its country can be shipped off somewhere else? Have they no rights under EU law? It does not make any sense.
By virtue of the fact that they were actually living on an island that was a British island, they should have rights as EU citizens. They have been living in exile now for almost 30 years. That is not acceptable. There is an onus on the EU to recognise the plight of these people.

Pinheiro
Although the European Commission is aware of the problem, this is the first time it has been raised, be it by the Mauritian Government, the UK Government or the Ilois people concerned. We therefore have no legal advice except to say that it is a complex issue. We know that the governments and the people concerned are discussing this issue but apart from that I cannot go any further.

President
Question No 37 by Glenys Kinnock (H-0845/98)
Subject: Commission studies on trade with ACP regions
Would the Commission please indicate the current status of the studies undertaken on trade relations with ACP regions? Is it true that they have been completed but are now being revised by the authors at the Commission's instigation?
When will MEPs be given the access to the information contained in these documents that they were promised in order to enable them to formulate their response to the Lomé negotiating mandate? I give the floor to Mr Pinheiro to answer Mrs Kinnock's question.

Pinheiro
I am pleased to inform Mrs Kinnock that the studies on the economic impact of introducing reciprocity into the trade relations between the European Union and groupings of ACP countries are now in their final phase. During the summer, the Commission received draft final reports for five of these studies. The last one should be sent, we hope, very soon. According to the terms of reference and normal Commission practice, the services gave their comments to ensure that all the reports were clear and complete.
We have now just received three final reports on the Caribbean, the Pacific and the SAADAC region. As I have already explained during the ACP-EU Joint Assembly, I can assure you that it has always been my intention to share the results with you and everybody else as soon as it is possible, in order for everybody to have a comprehensive view of the issues at stake during the forthcoming negotiations. Thus, you and other interested Members will receive copies of all the final reports, via the Secretariat of the European Parliament, by the beginning of November. The Commission is also preparing a synthesis of all the studies, which you will also receive together with the reports.

Kinnock, Glenys
I thank the Commissioner for that very helpful answer. Presumably, Commissioner Pinheiro, you will want those studies to support the Commission's view that FTAs would actually help ACP countries to be integrated into the global economy. Therefore, I would like to ask you whether you heard - as I know you did - the clear warning we had last week at the opening of the negotiations given by Minister Billie Miller from Barbados, maintaining that ACP economies are far too fragile to withstand any kind of asymmetrical deal with the European Union? In the light of the recent breakdown of the negotiations with South Africa, are you prepared to say that Minister Billie Miller is wrong?

Pinheiro
We can all have an opinion on the future and the prospects of what the future holds for us. My assumption and my position is that I hope and expect that our proposals will help the ACP countries, but I am not dogmatic. That is why we should look very carefully at all the studies that are currently being made and will be made afterwards in order to give an in-depth view and perception, because not every country is the same and the situation might be different from country to country or region to region. I am prepared to be extremely open in discussing these issues but, so far, I still keep my opinion.
As to the speech of the Minister of Barbados, I am afraid the response applies just to the position of Barbados, which had been previously stated by the Prime Minister. As far as I understood the speech was not cleared with the ACP group. From what I heard from many ambassadors and ministers from the other regions, they do not entirely share some of the concerns of Mrs Miller. Having said that, I gather asymmetry and the opening up of borders is inevitable if the trend towards liberalisation continues. We propose that opening takes place gradually and that countries should be assisted in that opening rather than their having to cope with a blind and horizontal opening, such as one dictated, for instance, by the WTO. At the same time, we reckon that the fragility of those economies is such that they cannot endure any shock. That is quite clear. Therefore, whatever the solution, things will have not only to be gradual but monitored very closely in order to avoid derailment of the situation.
As for South Africa - and since I know you are going there very soon - there are three outstanding issues more of a political nature than a trade nature which I hope will be solved. At the end of last week I made informal proposals and in mid-October I will see the Minister for Trade and Industry in order to try to see whether we can solve these political issues one way or another. But I am still convinced that it will be possible to close the negotiations with South Africa by the end of October/beginning of November.

President
Question No 38 by Ulla Sandbæk (H-0847/98)
Subject: Supreme Court injunction on financing any new projects because of the EU's legal basis for granting aid
In the light of the suspension of all grants from a number of budget lines involving the Commission's DG VIII (possibly including the one relating to the 'Gender action on the WTO' project), which puts all projects on hold until the spring of 1999 at the very earliest, what has the Commission decided to do about projects that are directed towards development education and advocacy work concerning the preparations for the WTO's Third Ministerial Conference due to take place in the US in the autumn of 1999? The preparatory work on issues relevant to the WTO's agreed agenda and possible new issues is already under way after the summer recess at national level and will continue at EU-level from the winter of 1998/9 and spring of 1999. (The Supreme Court's injunction has stopped a number of projects relating to the WTO that were on the verge of being approved). I give the floor to Mr Pinheiro to answer Mrs Sandbæk's question.

Pinheiro
The Commission fully realises the importance of integrating developing countries - the ACP states in particular - into the world economy. This is why the Commission supports the full participation of ACP states in the WTO and has taken several initiatives to promote this. At the same time the WTO can only play its proper role if the concerns of all participating states are met. That is the reason why I insist that trade and development have to be firmly on the WTO agenda and that the particular constraints of developing countries must be adequately assessed and taken into account during all multilateral trade negotiations. This is truly essential.
I am personally committed to this, and I use all opportunities I have in our relations with trading partners to build support for our position. By the way, I have just come from Washington where I participated in a G8 meeting on development, and it was thanks precisely to my intervention that it was possible to ensure that the next G7/G8 meeting on development will include trade and development and the concerns of developing countries as one of the main topics of the agenda.
As for the initiatives on WTO which the Commission has taken for the ACP states, and which I referred to above, I would like to mention the following. In spring 1998 an informal working group was set up with the ACP secretariat for exchanging information, discussing and possibly coordinating positions for the next WTO negotiating round. From January 1999 - and this is extremely important - an antenna of the ACP secretariat will be set up in Geneva for coordinating ACP positions within the WTO. The Commission is financing this.
Also we financed a preparatory seminar before the second WTO ministerial conference held in May 1998. We have also financed seven forthcoming regional seminars regarding the WTO agreement and its implementation. The Commission also confirms that it has a received a proposal for gender action on the WTO presented by the International Coalition for Development Action, for financing under budget line B7-611. As a result of the ruling of the Court of Justice, the implementation of this budget line remains suspended. It is not therefore possible at the moment to give a favourable response to the above request.
The Commission is, however, ready to examine project proposals for eligibility under other existing budget lines which are open to development education and advocacy projects and which already possess a legal basis and can therefore accept projects for financing.

Sandbæk
Mr President, it is the last part of the Commissioner's answer regarding the other budget lines that I am interested in. If other budget lines are found, is word then sent back to the NGOs that these budget lines are available, or are they simply told that money has already been appropriated via these budget lines? There is, for example, NGO cofinancing. It is normally very large amounts that are appropriated via that budget line, but many of the amounts that are currently being sought for seminars or other forms of training in the ACP countries with a view to participation in the WTO negotiations are very small. Is it possible, for example, to take money from the NGO cofinancing budget, where it currently is, and in certain cases make transfers, even if the amounts are very small, so that money can be made available for this very, very important area? We are after all in complete agreement that it is essential for the developing countries themselves to be included in the WTO negotiations.

Pinheiro
There are different issues at stake here. The first is WTO as a whole. The second is about gender issues and the promotion of these issues as regards not just WTO but all concerns of development. This has already been approved and it is mainstreamed. So in my opinion it is fully justified that WTO - trade and development and trade-related issues - should also be mainstreamed as regards gender.
What I suggested - I could be a bit more specific - is that for some of those actions we could appeal to the B7-6000 budget line, which is for cofinancing with NGOs, which offer possibilities for the scope of the project concerned. If it is proposed under that aegis it stands a good chance of being eligible.

President
Question No 39 by Marie-Arlette Carlotti (H-0907/98)
Subject: EU support for the presidential elections in Gabon
In the framework of the support traditionally given by the European Union to the ACP countries in organising democratic and transparent elections, could the Commission tell us what technical and financial arrangements it intends to make for the presidential election due to take place in December 1998 in Gabon? I give the floor to the Commissioner to answer Mrs Carlotti's question.

Pinheiro
In a letter dated 23 July 1998, the Gabonese Prime Minister asked the Commission to send an observer mission for the whole electoral process.
In its reply of 3 September, the Commission confirmed what it had already indicated during previous contacts, namely that it was prepared, in the context of a coordinated effort with the government and interested outside partners, to help Gabon to prepare and organise the presidential election. In this respect, the contribution of the Commission might involve training, particularly for election agents and Gabonese observers.
Such an approach, conducted with the assistance of all the political forces, would allow the necessary conditions to be created in Gabon to ensure the essential transparency of the future elections. The Commission is waiting at the moment for a reaction from the Gabonese authorities to this offer.

Carlotti
Thank you, Commissioner, for such a precise answer. However, I am concerned because the Gabonese authorities are spreading the rumour that they have not received any answer from the Commission; this answer of 3 September to which you have just referred is not being mentioned.
What can we therefore do to let everyone in Gabon, the ruling majority and the opposition alike, know that the ball is in their court? What can we do, in addition, to indicate publicly that we are not losing interest in the democratic process in Gabon? What can we do as a matter of urgency? You mentioned training, yet the longer this situation goes on, the more difficult it will be to train observers.

Pinheiro
I share your concerns about the time which is passing, particularly since Gabon is currently an extremely important country in this region of Africa. We all know that President Omar Bongo is the most senior of the African leaders. He has tried to play a peace-making role here and there, and it is absolutely essential that the presidential election in Gabon is totally transparent.
It is not appropriate to offer financial assistance since Gabon does not need this. However, training - and good training at that - is absolutely essential. Our letter of 3 September deserves a response and I believe that it will get one. And I can assure you that, following this question, I shall personally look into what is happening and insist on having a response as soon as possible.

President
Thank you, Commissioner. We have now come to the end of the questions to Mr Pinheiro, whom I would thank for his replies.

President
Question No 40 by Eryl McNally (H-0844/98)
Subject: Rational Planning Directive
What progress has been made on re-introducing the Rational Planning Directive or equivalent legislation? I should like to welcome Mr Papoutsis and ask him to answer Mrs McNally's question.

Papoutsis
Mr President, ladies and gentlemen, the Commission approved the proposal for a directive on rational planning techniques in September 1995. As you will remember, the proposal's purpose is to contribute towards the Community's aim of reducing carbon dioxide emissions. The European Parliament gave substantial backing to that directive through Mrs McNally's report which, as I had the opportunity to say then too, was an excellent report which Parliament adopted on 12 November 1996. Many of Parliament's amendments were incorporated in the amended proposal and served to clarify the directive. Unfortunately, during the Council's working group discussions, the proposal received only limited support and some Member States declared that they would prefer the proposed directive to be changed to a recommendation. In the Commission's recent statement on energy efficiency, we reiterated our position on rational planning techniques and stressed that the Commission still regards this directive as important, particularly in the light of the development of energy services that will stem from the liberalisation of the market. And we also said that we will try to find the best possible way to carry the matter forward.

McNally
I thank Mr Papoutsis for his continuing work in this area. Does he agree with me that a directive of this sort would be an excellent contribution towards giving us credibility in the negotiations at Buenos Aires, which will be coordinated - from the European Union's point of view - by Commissioner Bjerregaard, with whom, I understand, he is working closely? Energy efficiency really is the key to meeting the promises that we made at Kyoto, particularly in the domestic sector. It is in the domestic sector where we need to find ways to encourage firms to supply not simply electricity or gas, but electricity or gas as a means to have cool or warm houses, fridges, the electricity that is needed. Many people cannot make those investments of their own accord. They need encouragement and those firms need help.

Papoutsis
I quite agree with you, Mrs McNally, that this is a particularly important and topical objective, especially since we are operating in the context of negotiations based on the commitments we entered into in Kyoto. I too genuinely believe that carbon dioxide emissions from electric power generation account for over a third of the total carbon dioxide emissions in the European Union. That is why we must find new ways and methods to restrict those emissions. I sincerely believe, and that is why both I and the Commission insist, that a directive would be a very important contribution towards the efforts by Member States to achieve that target.

President
Question No 41 by Ludivina García Arias (H-0852/98)
Subject: Approved state aid to the HUNOSA mining company
The European Commission has finally given its approval to the Spanish plan for providing assistance to the mining sector but has again demanded cuts in coal production by the HUNOSA mining company, which means that for the second time it has failed to recognize the agreement between the Spanish Government and the social partners. Does the Commission not think that in future it should sit at the same negotiating table so that any intervention on its part is rendered more transparent and is not seen by the Asturian public as the result of an agreement between the Spanish Government and the Commission to demand greater cuts? I give the floor to Mr Papoutsis to answer Mrs García Arias's question.

Papoutsis
Mr President, ladies and gentlemen, the Commission applauds the fact that the restructuring of enterprises to which Mrs García Arias refers was decided on the basis of agreement in the context of the social dialogue. And it is a positive element that attention was paid to the future of the working people affected and the future of their families, and that measures are also envisaged for the economic conversion of coal-mining areas with a view to finding alternative ways and means of economic development.
Yet when the Commission expresses its opinion about that restructuring, it has a duty to ensure that the decisions taken are compatible with the provisions of the Treaties. The Commission's decision on aid for the Spanish coal-mining industry is indeed an important one. For the HUNOSA company alone, aid was approved to the tune of almost PTA 262 400 million, i.e. ECU 1 590 million. The Commission made very great efforts to reach a decision which helps the industry and which it considers compatible with Community law and can therefore now defend, if necessary, before the European Court of Justice.
Throughout the process of negotiating the Spanish agreements, the Commission showed the greatest possible respect towards all the parties involved in the dialogue, naturally making it clear that it was willing to cooperate at any time and also to express its opinion if asked to do so. The Commission notes, however, that the social partners taking part in the negotiations made no approach to it, even though they were perfectly aware of their rights in the matter.
As for the amendments which Mrs García Arias says were made to the text prepared by the Spanish authorities, the Commission never asked for additional production cuts by HUNOSA. The Commission's comments concerning that company's production in 2001 are based on a substantial and transparent analysis of developments over the last few years. And that analysis showed that, because of the theoretical basis of certain calculations put before it, the production from underground seams envisaged in the said agreements for 2001 would not in reality be reduced by the amount estimated. The Commission could therefore not accept that method of calculating the cut-back of activity, and it consequently asked for the agreement to be kept on the basis of the real figures.
Mr President, let me emphasise that Mrs García Arias was able to experience the openness and receptiveness of the Commission in person when she took an interest in discussing the problems of the HUNOSA company.
We are always at Mrs García Arias's disposal to inform her about everything which was drawn to our attention and which we knew about at that time.

García Arias
Perhaps the question should have been: how vigorously has the Spanish Government defended or explained the contents of the Hunosa plan? According to rumours and comments in circulation, the government and Mr Benavides agreed a document relating to the second stage of cuts.
However, Commissioner, I have my doubts. When Decision 3632 was discussed here in Parliament, I was the rapporteur. You know that it does, in fact, regulate Community interventions. And, in both the Council and Parliament, the concept of European reference costs was explicitly rejected and the text therefore talks of social and regional reasons and of working towards reducing costs. Although it is true that I have spoken to your representatives from the Commission on various occasions, I have never obtained a clear grasp of what those specific scales are, since there is no regulation governing this decision. I am not even convinced that the Commission has business criteria that it uses so that it might, in fact, say whether or not staff levels should be reduced by so much or production should be reduced by so much. I also believe that the directive is being interpreted in a rather limited manner as we are talking about reducing costs here and that does not necessarily mean reducing production. Any company can increase production and reduce the costs of that product. I still do not understand those business criteria.

Papoutsis
Mr President, I say again that the Commission is always ready to cooperate with the Member States concerning problems of a sensitive nature at national level, especially problems with particularly sensitive social and regional dimensions. In this particular case, the Commission has done all it could to deal consistently with the problem facing it.
The Commission also respected the agreements signed between Spanish companies concerning cuts in production. The difference of opinion between the Commission and the Spanish companies concerns the fact that the Commission, with a view to ensuring transparency, took into account the true level of production, while Spain took account of a theoretical approach to production. From the analysis carried out by the Commission's services, it emerged that the production of 2 100 000 tonnes in 2001 from underground seams proposed by Spain for the HUNOSA company corresponded almost exactly to production in 1997 from the underground seams. This means that no cut-back at all of deep-seam production would be taking place, and consequently no reduction of activity either. So the Commission took into account the aim of the net cut-back in annual production mentioned precisely in the agreements which had been signed, and held to this rigorously. We did not call for additional cut-backs, and I repeat that we will continue to deal with this issue with the greatest possible degree of social sensitivity, recognising the special problems which exist in the Asturias region.

González Álvarez
I believe that it will be no surprise to Mr Papoutsis that Mrs García Arias and I are the Members who speak when discussing Hunosa, as we are Asturians. I understand what he is saying about the aid from the Commission and I understand when he talks of the need for reductions. I would also like to thank him for suggesting negotiations between the social partners. But, Mr Papoutsis, what happens is that the Spanish Government reaches an agreement with the social partners on cutting jobs and cutting production. The problem appears to be solved but then, very soon after, the regional press reports - and there is a newspaper archive there that we can consult on this - that the European Commission is putting pressure on stating that the agreement reached is not being completely fulfilled and that it is putting pressure on to cut production and jobs. And you know that Asturias is a region that suffers a great deal. Therefore, our concern is: why does the Commission not join forces with the Spanish Government and the trade unions to draw up a definitive plan, one which does not vary depending on the government's or the Commission's situation at that particular time?

Papoutsis
Mr President, yet again I wish to repeat that the Commission was at the disposal of the Spanish authorities and the social partners at any time during the agreement's negotiation. Since the finalisation of the agreement, the Commission has respected it absolutely, deeming that the cut-back already agreed should be implemented, but always with reference to the true level of production. From then on, the Commission's only intervention was to assess whether the agreement is compatible with the Treaty. Beyond that, since the conclusion of the agreement, the Commission has never come back to ask for additional production cuts, as I explained earlier in response to Mrs García Arias's supplementary question, apart from a return to the correct way of estimating the production level in 2001. That is all.

President
Question No 42 by Esko Seppänen (H-0858/98)
Subject: Use of appropriations for energy programmes
The EU has adopted the objective of doubling the use of renewable energy resources by 2010. At present they account for 6 %, and the aim is therefore to attain 12 %.
The bulk of renewable energy now in use is hydroelectric. For practical reasons it will be difficult to increase the use of this type of energy. This being so, the objective of achieving a six percentage point increase is highly ambitious and is unlikely to be attained with the resources currently allocated.
Will the EU increase the funding of programmes to promote the attainment of the objectives? I give the floor to Mr Papoutsis to answer Mr Seppänen's question.

Papoutsis
Mr President, ladies and gentlemen, the Commission agrees that the objective set by the White Paper's plan of action for renewable energy sources, i.e. to double the contribution of those sources to the Union's energy supply from 6 % to 12 % by 2001, is an ambitious but at the same time a realistic objective. The White Paper analyses in some detail the way in which that overall target can be achieved, on the basis of the most reliable estimates available of the probable contribution from each renewable source.
The proposal presented on the strategy for increasing renewable energy sources in each sector is based on the best combination of technologies and makes it possible for the Union to achieve its aim within the framework of existing technical, practical and economic limitations. Estimates of the future share of the various renewable sources are certainly indicative, and will help in the monitoring of progress and to ensure that each technology is utilised within a clear policy framework.
It is true that most renewable energy technologies are in the phase of technical maturation. This also means that the cost of producing energy from renewable sources is continually falling, steadily decreasing. So we are at a stage when great efforts are needed to promote them in the market and to apply the policy of promoting renewable energy sources in practice, in all the Member States. It is clear that, in addition to financing basic research and demonstrations, at the stage we have reached today it is still necessary to continue providing economic support for renewable energy sources.
As for the level of finance, the Commission agrees that it is important to secure the necessary appropriations for the promotion of renewable sources. The Altener programme aims precisely to promote the use of renewable energy sources in the Community and is part of the Commission's proposal for a framework programme on energy, which Parliament will debate on Thursday. The Commission's proposal goes together with an indicative financial allocation covering the period 1998 to 2002.
The allocation refers to an increase in the budget for Altener from ECU 14.4 million in 1998 to ECU 17.1 million in 2002. I think it is clear that this represents a substantial increase compared with the present funding for Altener. However, as you know, it is you in the European Parliament together with the Council who have the final say in budgetary matters. The Commission awaits your decisions.

Seppänen
Mr President, Commissioner, the technological possibilities of renewable energy are infinite and they have been analysed in a white paper. But in addition we need political decisions. There have not been any political decisions taken in the EU that might lend support to the exploitation of renewable energy sources. What does the Commission think? Could electricity produced from renewable energy sources be introduced into the grid at a price that is different from electricity that has been produced by traditional means, so that electricity generated from renewable sources could be subsidised by means of authorised price fixing?

Papoutsis
Mr President, the Commission has done everything possible to present all the proposals that could be put forward in the context of agreements within the Commission and in the Member States, to give a powerful impetus to the use of renewable energy sources. That is why we first produced the Green Paper on renewable energy sources and later the White Paper with a specific plan of action, which we believe can really move things along.
I would remind you that in the plan of action we chose four specific initiatives: firstly, a million photovoltaic installations, about a million roofs; large wind farms generating 10 000 MW; biomass installations generating 10 000 MW; and the introduction of renewable energy sources in 100 local communities. This is the action programme in which we have invited industry, the Member States and all the other relevant agencies to take initiatives with a view to collaborating in the promotion of renewable sources.
In addition, however, I would remind you that in the directive on the internal electricity market, the Commission proposed that there should be privileged access for renewable sources to the network. That is something we hope all the Member States will follow up and make use of.
Beyond that, though, the Commission has no powers as such to do anything else. So it is up to the Member States to make the most of all these possibilities provided by the European Union's legal framework and, at the same time, to utilise the Community finance available from various Community programmes to help industry produce cheaper technology, while at the same time making it possible for the regions and large cities of the Member States to exploit the new technologies for making use of renewable energy sources.

President
As the author is not present, Question No 43 lapses.
Question No 44 by Mihail Papayannakis, which has been taken over by Mr Alavanos (H-0916/98)
Subject: Sex tourism involving children
According to the results of research undertaken by Eurobarometer (April-May 1998), European citizens condemn the practice of sex tourism involving children and 88 % of them believe that it is vital for the European Union to take action to combat this phenomenon. The Commissioner responsible for tourism has said that the initial response by European public opinion will prompt the EU to take practical measures aimed at combating tourism based on the sexual exploitation of children, a practice particularly widespread in the countries of Asia, Latin America, and Central and Eastern Europe and closely linked to poverty, social exclusion and international trade in minors.
Will the Commission say whether there is a common approach to combating this scourge, whether the action taken so far has proved successful and what firm measures it intends to take to tackle this problem effectively? I give the floor to Mr Papoutsis to answer this question by Mr Papayannakis, for whom Mr Alavanos is deputising.

Papoutsis
Mr President, the results of a survey carried out by Eurobarometer at the request of the Commission contain some particularly useful facts and figures for everyone involved in the fight against sex tourism which victimises children.
As far as we are concerned, combating that phenomenon is a matter to which we attach particular priority. I therefore agree with the finding of the survey that intervention by the European Union is now seen not just as desirable but indeed as essential by a vast majority of Europe's citizens. As the survey shows, 88 % of those questioned considered that Community intervention was important and essential. All the activities envisaged in the Commission's statement of November 1996 have been implemented as a matter of urgency. At the end of 1998, the Commission now intends to submit to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions a report on the implementation of all these measures and on the progress that has been achieved. However, the fact that Europe's citizens already recognise that the Commission is active in this area provides real encouragement for us to continue our efforts.
Let me refer briefly to an initiative concerning support for the coordination at European level of national information and awareness campaigns against sex tourism which victimises children. The information activities currently being carried out, which are supported by the Commission, are based on the development in various Member States of two complementary programmes.
The first aims to design, produce and distribute a video on flights to destinations noted for the phenomenon, and to inform and raise the awareness of the staff of various airlines.
The second aims to design, produce and distribute first of all information leaflets for travellers and, secondly, files with data concerning sex tourism intended to increase the awareness of those in the tourist trade. In addition to these information activities, another important event is being staged: the first European meetings of agencies involved in the fight against child sex tourism, due to take place in Brussels from 24 to 26 November as part of the Brussels Travel Fair 1998. Within this tourism exhibition, the Commission will have at its disposal a substantial area in which it will present all the initiatives it has taken to combat child sex tourism. We shall also organise meetings of specialists and personalities, and six round-table discussions will be held to consider in detail all the issues and all the joint action we can take at European level in the future, both with non-governmental organisations and with the tourist industry and the governments of the Member States.

Alavanos
Mr President, let me thank Commissioner Papoutsis, because I think he has taken some important initiatives which go beyond mere words and extend to the promotion of practical measures, no matter how difficult they may be and how many obstacles have to be overcome.
I wish to ask two brief questions: firstly, as regards the countries of Eastern Asia, for example, where sex tourism is rife, very often with children as its victims, has the Commission made any approaches to Member State governments at a political level? Secondly, in the Commission's opinion, have all 15 Member States taken action with equal sensitivity and practicality concerning these issues?

Papoutsis
Mr President, we are in constant consultation with the Member State governments and already, after the European Parliament's resolution of November 1997, we have had a communication from the Council following the Commission's proposal of 26 November 1997. I have to say that in that statement there was broad agreement between the Member States. Now, from a practical point of view, the Commission's proposals for action against child sex tourism are focused on a limited number of aims which serve four basic needs.
First of all, to discourage and punish all those engaged in the sexual exploitation of the young.
Secondly, to stop the flow of sex tourists from Member States to third countries.
Thirdly, to contribute towards combating sex tourism in third countries.
Fourthly, to encourage the EU's Member States to adopt a united stance towards child sex tourism. Here, in some cases, changes in the laws in some Member States are needed. This has already started to happen, slowly but surely, because the governments are increasing their commitment all the time, and at the same time the swell of public opinion in many EU Member States is accelerating and will, I hope, soon spread to all of them.
As for third countries, the subject of course comes up within the scope of the EU's external relations, but in a way which first of all is not defamatory to those countries and, secondly, helps our joint efforts with those governments to find ways of combating the phenomenon. And here we need an input from the tourism industry, which I must say has taken some very important steps in that direction. In any event, what we must and will persist with - alongside the contribution from the industry and of course the cooperation of the 15 Member States and the governments of third countries, mainly those where the phenomenon is rife - is our joint effort to develop a tourism ethic and at the same time to find ways in which, through economic aid, we can contribute towards economic development so as to improve the standard of living of the population, especially young people, create new jobs, and in that way prevent escalation and combat the phenomenon.

President
Thank you very much, Mr Papoutsis. We have overrun our allotted time for questions to the Commission by ten minutes. I am not sure whether to call on Mr Papoutsis's generosity and that of Parliament's services, but Mr Titley is here. What do you think? Can we answer Mr Titley's question? Many thanks, both to you and to Parliament's services.

President
Question No 45 by Gary Titley (H-0900/98)
Subject: Follow-up to Parliament's support for the Harrison Report on late payments
What action is the Commission taking to ensure that it complies with the spirit and letter of the Harrison Report on late payments adopted in September, to make sure that small and medium-sized businesses which carry out work for the Commission are not the victims of late payment by the Commission? I give the floor to Mr Papoutsis to answer Mr Titley's question.

Papoutsis
Mr President, the Commission did indeed have occasion to express its satisfaction with Mr Harrison's report on this proposal for a directive on late payment, and it will take into account most of the amendments proposed in the report. According to the Commission's proposal, the payments made by Community bodies are not covered by the directive. However, the Commission will submit appropriate proposals for these payments too, aimed at establishing rules equivalent to those envisaged in the directive with regard to public authorities. In accordance with the working document on the amendment of the Financial Regulation of 22 July 1998, the Commission intends to harmonise the current provisions concerning payments, so that all the Community's bodies will work to the same standards laid down in the proposed directive. In parallel, the Commission has undertaken to carry out a study on its own delayed payments, the conclusions and proposals of which will be announced before the end of the year. In the meantime, however, the relevant Commission services will make every effort to respect in practice the guidelines of the directive we have proposed.

Titley
Will the Commission not admit to the embarrassment that is caused by the Commission on the one hand saying it wants to develop a directive on late payment while it is frequently guilty of leaving companies waiting for a long time for money? Companies are constantly complaining to me and I know they complained to the Commissioner when he was kind enough to come to my constituency. Will he not accept that this is politically undeliverable unless the Commission takes action?

Papoutsis
Mr President, I accept that the Commission has indeed been slow in some cases, and I understand that there are some justified complaints from some companies, and possibly some in Mr Titley's constituency. Yet I must say, and I must insist on this, that the Commission makes every possible effort in procedural terms, because sometimes we receive erroneous invoices and it takes time to establish if the invoices are correct or not. In any event, the Commission makes every effort to respect the framework proposed by the directive and to comply with it in practice. Beyond that, however, and I wish to stress this point, in July 1997 the Commission approved the principle of paying interest in cases of late payment, to compensate the beneficiary for the delay. So far as we know, no other international organisation pays interest in cases of late payment. I do wish to emphasise this, because it really proves that in practice the Commission has taken on board both the framework and the spirit of the directive we have already proposed concerning late payments.

President
Thank you, Mr Papoutsis.
Questions Nos 46 to 86 will receive written answers.
That concludes Question Time to the Commission.
(The sitting was suspended at 7.18 p.m. and resumed at 9 p.m.)

Ro-Ro ferry and high speed passenger craft services
President
The next item is the report (A4-0310/98) by Mr Watts, on behalf of the Committee on Transport and Tourism, on the proposal for a Council Directive on conditions for the operation of regular ro-ro ferry and high speed passenger craft services in the Community (COM(98)0071 - C4-0162/98-98/0064(SYN)).

Watts
Mr President, just over four years ago in September 1994 the roll-on/roll-off passenger ferry Estonia sank in the Baltic with a loss of over 900 lives. This Parliament resolved then that such an incident must never happen again. The Estonia tragedy was only one of many ferry disasters in the past decade. I can name others, including The Herald of Free Enterprise , back in 1987, or, indeed, the more recent Scandinavian Star .
Parliament then asked the question: why were the lessons not learned? Why were the lessons of the loss of The Herald not learned? Why was next to nothing then done? Never again is this Parliament's aim.
As Parliament's rapporteur on ferry safety, I am very pleased that we are making real improvements now today in ferry safety. Indeed, thanks to the determination of Commissioner Neil Kinnock, we have witnessed a series of measures to learn and apply the lessons. Firstly, the International Safety Maritime Code has been made compulsory to ensure that management, master, officers and crew put safety first. Secondly, passengers will in future be counted, and data vital in the event of an emergency will be collected. Thirdly, the stability problems of roll-on/roll-off vessels are being tackled as a result of the Stockholm agreement as it comes into effect.
Today we are considering the latest and the most ambitious measure so far. In future, Member States will authorise the operation of each ferry and high-speed craft operating in the EU regardless of the country of registration. In other words, operators will no longer be able to evade international safety laws by opting for a flag of convenience.
In addition, in future, black box voyage data recorders will become compulsory. In future, Member States will no longer be denied the right to investigate maritime incidents.
As rapporteur, I fully endorse these measures, not least because many ferries are still, despite recent tragic events, simply not safe enough. A recent Commission-funded survey found that almost one in three of the ferries checked had serious safety defects. These included fire hydrants rusted shut, faulty life jackets, faulty lifeboat engines and locked emergency exits. We must, therefore, secure the speedy adoption of this proposal and ensure that it is fully enforced throughout the Community.
Although we fully support this measure, we wish to see it simplified and strengthened in a number of important ways. Firstly, we believe all ferries - old and new - should be fitted with black boxes within five years, closing the loophole in Article 5 which would allow exemptions from compliance in perpetuity. Secondly, we believe that the results of the safety surveys communicated to the Commission under the terms of this directive, should be made publicly available. Thirdly, within 12 months of the entry into force of this proposal, a thorough assessment should be made to determine whether enough has been done or whether further measures are required.
As a further guarantee of ferry safety, we believe an annual safety report should be produced. All this information must be made publicly available. These three amendments reflect our determination to make ferries safer, to guarantee that ferry safety remains at the top of our agenda and, indeed, to enlist the support of the citizen and passenger in ensuring that these high safety standards are met. I hope that the Commission tonight can agree with these measures.
I also have a number of questions for the Commissioner. Firstly, given the reliance on Member States to enforce the new safety regime, what resources will be made available to ensure compliance throughout the Community? Secondly, when does the Commission plan to review the Stockholm agreement to ensure ferry stability standards keep pace with the latest technological developments? Thirdly, given the reported failure of both black boxes in the final minutes of the Swiss air flight that recently crashed off the coast of Canada, will the Commission ensure that the black boxes in all ferries are fitted with auxiliary power supplies?
Finally, I wish to thank all my colleagues and our staff. Together, we are determined to prevent another ferry disaster. Never again! This proposal, together with our amendments and if properly enforced, will ensure that the 141 million passengers who travel on a ferry in European waters each year will get safely to their destination.

Sindal
Mr President, in an election year such as this, people often ask us: what do you actually do in the European Parliament? I am always happy to tell them that we in Parliament's Committee on Transport and Tourism have worked unremittingly, in Strasbourg and Brussels, to improve safety in all forms of transport. Transnational, cross-frontier traffic must be made safe through obligations imposed on a common basis. Our commitment to ferry safety, in particular, is well known, which is reflected in the report we are discussing today. The figures - over 140 million passengers spread over 500 ferries - speak for themselves. I do not mind saying that I myself make 200 sea crossings a year, so I know the ferries. It is quite funny when you think of it that, when international rules drawn up by the IMO are to be enforced, we have to transpose them into a directive. After all, they should apply throughout the world. But that is the way it is. Given the profusion of flag states and different legislation, it is necessary to have directives which ensure that trained seafarers are employed, port state control is applied and so on.
Critics of this directive will no doubt try to find new ways. Ferries will be moved outside the EU and so forth. But, as I have said, one might wish that this approach based on the Watts report and the Commission proposal could be the beginning of a global initiative which will ensure safety at sea everywhere. Again and again we come up against the need to incorporate IMO measures into Community law. It would be better if we had something that was enforceable throughout the world.
At this time - unfortunately, it might be said - a book is coming out in Denmark which deals with the Estonia accident. So some of us will be reliving that disaster all over again. I hope that this directive, but not least the implementation of the directive, will help to strengthen the common legislation and guarantee safety in the future.
Finally, I have to mention one or two Danish problems in connection with this directive. They relate to Amendments Nos 2, 15, 16 and 17, since it is debatable to what extent the Commission should have the power to act. It could be the next question to investigate, when we have all the statistical information. But leave that to one side for the moment. I support the report as it has been adopted in committee, but have particular misgivings with regard to Amendments Nos 16 and 17.

Jarzembowski
Mr President, Commissioner, ladies and gentlemen, the PPE Group supports Mr Watts' report wholeheartedly, with two small exceptions, namely Amendments Nos 9 and 14. I think they go a little too far, but then Mr Watts is after all a perfectionist! On the matter itself, however, we entirely agree with him. More than 2000 of our fellow men have lost their life in ferry accidents in the past years.
Unfortunately, Mr Watts, the ADAC study this year showed up considerable safety defects even in countries flying Member State flags. I think the Commissioner knows what I mean. We must ensure that all Community ferries flying a European flag fulfil the safety requirements. Like Mr Watts and his colleagues, we maintain that the Commission proposals for ro-ro ferry operating conditions must be tightened up further.
We agree with the view that it is no longer sufficient to rely on the flag state's safety checks. We have fallen into that trap too often. We must ensure that the host state, i.e. the state to or from whose ports a ship operates a regular service used by its citizens, applies an effective, mandatory survey system.
We entirely agree that passenger ferries must be fitted with a voyage data recorder, which must also be equipped with its own battery, as also on the need for strict compliance with the transitional provisions that have applied hitherto. Passenger safety must be the same for everybody, as must accident investigation, regardless of the age of the vessel or the Member State in which it is registered.
We also agree with the rapporteur that the Commission's database of incidents on or relating to ferries must be accessible not only to the Member States, but also to the public who want to travel on them, so that everyone can find out which shipping lines and which ships are safe and draw their own conclusions. If shipping companies look at their bookings and find they have fallen, that might lead them to consider bringing their vessels up to the latest standards in order not to lose passengers.
It is certainly also right to accept safety standards in the form that applies during the checks and not as they apply when this directive is adopted, since I believe we will still have to tighten up some areas. In conclusion, let me draw your attention to a point we keep raising, and I am keen to hear the Commission's reply to the other questions put by Mr Watts. Our main problem is always that even if we adopt the right directives and hope the Member States will implement them properly, the key question is still this: do the Member States actually apply them, and if so how? Do they all carry out equally careful checks; in the event of defects do they all draw equally stringent conclusions? I believe quite a lot remains to be done here and I am eager to know whether the Commissioner can say a few words on this.

Teverson
Mr President, we certainly welcome this further legislation, which is absolutely essential for the safety of passengers for whom this is one of the main forms of travel between Member States. There are a number of areas that are important about this particular report such as the fact that we have included high-speed passenger craft. Now there is increasing competition between ro-ro ferries and this type of transport we need to make sure that there is an equal emphasis on both these forms.
I want to comment, in particular on enforcement. This has been mentioned by the EPP group and concerns me in a number of areas of legislation. Europe is moving ahead quite rightly with its legislation for safety on ro-ro ferries which is a form of transport that is both theoretically and, as we have seen, practically potentially a very unstable form of craft.
What I should particularly like to know from the Commission is how an enforcement system will be successfully implemented for the public good.
This is a key area for the European Parliament to be involved in. Citizens regularly travel on ferries. We need to ensure their safety.
I should like to thank Mr Watts for his report which is an extremely good one. Enforcement is an absolutely key area.

Alavanos
Mr President, we too believe that Mr Watts' report on checking the safety of ro-ro ferries and high-speed passenger craft services in the Community is a very important one, and after the many accidents that have happened we must include it in the framework of legislative initiatives on safety.
The presence of a voyage data recorder, and the Transport Committee's proposals such as those for an annual report on the safety of ships and for a data bank open to the public, are in my view important steps, although still not sufficient. We think that ship safety issues should be covered more broadly still, and in particular that their implementation should be monitored, because from a practical standpoint we can see that the situation is a long way both from what we are calling for here today, and from the measures enacted in the European Union.
Implementation must take place in ways which the European Union itself sometimes does not allow to proceed. Given this opportunity, perhaps I ought to mention that we were very concerned indeed about the fact that, in another directive on the safety of passenger craft, which requires the refitting of vessels which will be 27 years old in October 2000, Greek vessels are being exempted. As a Greek MEP, I would like to say that we cannot in any way accept this exemption, which might have been acceptable for economic or social reasons in other sectors such as textile factories or shoe manufacturing, for example, but which is not acceptable when it comes to the safety of passenger vessels, when Greek ships can be temporarily exempted from refitting, but at the same time the ships thus exempted will not be allowed to sail into European ports, thereby in effect making our country a banana republic.

van Dam
Mr President, Commissioner, it is right that the Herald of Free Enterprise and Estonia disasters should not have been forgotten. They showed once again that high priority needs to be given to maritime safety. If this is neglected it has major negative repercussions on both human life and the environment. So we need a rigorous policy of safety for maritime freight and passenger transport. That policy has to look at the seaworthiness of vessels and the calibre of crewmen. The recent ADAC survey of the seaworthiness of a number of car and passenger ferries showed that the safety of a number of European vessels leaves much to be desired. So I am very much in favour of the Commission's legislative proposal and I endorse most of the rapporteur's amendments - I compliment him on his report.
I agree that maritime safety policy must be Union-wide in its scope. Otherwise shipowners may avoid ports with the strictest safety regimes and use instead ports which operate lower standards for visiting vessels. That of course does nothing for safety. The legislation has to apply to all vessels putting in to Community ports, whatever their flag state, their nationality, if we are to ensure that safety policy works properly.
The proposed measures create a framework within which IMO regulations will be mandatory at Community level, so that the maritime fleet remains at a responsible level of safety. Applicability of the IMO rules also provides an overall consistent picture for everyone involved.
The idea of recovering the inspection costs from the shipowner if defects are discovered which render the vessel unfit to put to sea is at odds with the notion of equal treatment for undertakings. After all, the inspection is the same for all the vessels checked. So the cost is independent of any defects found. Consequently I cannot support the amendment tabled on this point.
I must also stress the importance of good information to all parties concerned. The availability of full and relevant information gives the client a full picture of the risks he runs when using the services of a given company. For the same reasons, I am also in favour of making and publishing an annual assessment of the results of the policy.
In conclusion, Mr President, I warmly endorse this proposal and I am convinced that a great deal of personal suffering and material loss can be prevented by the introduction of this directive.

Stenmarck
Mr President, let me begin by thanking the rapporteur, Mr Watts, for this report. As is generally the case when dealing with safety at sea, we agree on the fundamentals.
Over the past ten years, the safety record of ferries in Europe has been marred by a number of very serious accidents. It became necessary for the EU to act. As a result of the implementation of a whole series of proposals, safety has improved as the years have gone by. Crews are now being better trained. The SOLAS convention has been extended to cover domestic ferry traffic. Each time improvements were made, everyone accepted that further steps to enhance safety might need to be taken in future. Much of what still needs to be done can only happen if there is broad international cooperation. At EU level, common action must be taken to reassure people that they will enjoy high safety standards regardless which of the Member States is their destination.
What we have to do is ensure that internationally agreed marine safety requirements are applied more effectively to ro-ro ferries and high speed passenger craft. Many of the safety and operating standards agreed by IMO are now being made binding on the Member States. 'It must never happen again.' Those words have been spoken all too often in this House in recent years. The purpose of this exercise is to ensure that they are never uttered again.

Thors
Mr President, this directive is indeed an important link in our strategy to increase marine safety. It forms part of a series of measures decided by the Council in the wake of the Estonia disaster in December 1994. No one will be surprised to find me supporting this proposal, since the Finnish Minister of Transport at the time of that disaster was Ole Norrback, the former chairman and leader of my party.
Importantly for marine safety, the directive stipulates binding survey requirements, establishes clear rules for the investigation of accidents at sea and calls for the fitting of voyage data recorders or 'black boxes'. Although this will entail higher costs for maritime transport, I still support the proposal. We need a level playing field, because the provisions governing EMU tend to be interpreted in different ways and this creates uncertainty.
Privatisation of public administrations is not feasible where the economic interests involved are too great; this emerged clearly from the background studies carried out in preparation for this directive. Yet I am sure everyone would agree that a system of quality control and best practice will be essential to ensure that the public bodies are doing their job.
It is good to see that countries other than traditional maritime nations like the United Kingdom, Ireland and Finland are now supporting this proposal. I am fully behind Amendment No 3, which calls for the provisions to apply to traffic to and from the same port. This is precisely the kind of operation we have in my area of the world.
Amendment No 12, on the other hand, runs counter to the subsidiarity principle, in my view. The question of cost allocation should be dealt with by the Member States themselves.
I am not one to heap thanks on rapporteurs, but this time I really would like to say thank you to Mr Watts for the good work he has done. On behalf of all of us in this House, I wish him every success with his evaluation of the ADAC report he refers to in his explanatory statement. His report is certainly an excellent memorial to the victims of the Estonia disaster.

Sarlis
Mr President, I too - together with the rest of the House as we have seen - can only welcome the report by Mr Watts and applaud his work, as well as the amendments he has tabled and which I believe Parliament will approve tomorrow by a large majority.
I must say, however, that the Commission has made a great deal of progress in this area and has proposed a substantial number of directives and regulations on the safety of ships. And, quite rightly, those directives are adopted and pass into law. But it has largely neglected measures to assist European shipping. Let me remind you that, until the end of the 1980s, the Commission was literally bombarding Parliament with proposals for measures to support European shipping. Then, all of a sudden, there were no further proposals or discussions about positive measures to preserve European shipping, and the only issues which now concern the Commission are ones involving safety. That is not blameworthy in itself, but there is an imbalance. At this time, the people who have to run these shipping lines see a ship's operating costs increasing, since it must be modern and properly equipped with all that Mr Watts' report quite rightly says it should be.
However, there are no positive measures on behalf of shipping. Shipping has been forgotten as an industry. There is no interest in shipping, and so we have Hapag Lloyd leaving Germany, P & O leaving Great Britain, Stena Line leaving the Scandinavian countries, all of them going to well-known tax havens because only by avoiding taxes can they cope with the increased costs of operating their vessels. I am saying all this because I want an answer from the Commission on what it intends to do about measures to support European shipping, even at this eleventh hour. Because without European shipping there will be no European seamen. A sure way of making the European seaman disappear as a species is for there to be no ships under European flags.

Donnay
Mr President, ladies and gentlemen, maritime safety, the object of this proposal for a directive, is something of vital importance. Things had reached a point where the European Union just had to do something about it. So I congratulate the Commission and the Council on completing the legislative architecture they have gradually been putting into place in recent years after the tragedies we saw at the start of the decade.
The proposal for a directive now before us follows on from a number of initiatives designed to deal with the safety of ro-ro ferries. It is the third text which the Commission has presented in response to the Council's wishes in respect of maritime passenger transport safety.
And so, following the regulation imposing compliance, ahead of time, with the International Safety Management Code and the directive requiring the compulsory registration of persons on board passenger ships, the proposal for a directive covered in Mr Watts' report seeks to set up a system for compulsory monitoring of all passenger ro-ro ferries leaving or entering European Union ports, and to allow Member States to inspect all such vessels for safety, including the right to conduct inquiries into any accidents at sea.
These legislative texts are all the result of a Council resolution of 22 December 1994 on the safety of ro-ro passenger ferries, adopted after a number of tragic accidents to ferries operating between European ports. We all remember the Herald of Free Enterprise , Scandinavian Star and Estonia disasters, to name but few of the more recent ones. These disasters, let us not forget, took the lives of close on 2 000 people. The Union had to act.
The proposal for a directive will cover nearly 550 vessels and high-speed passenger craft and 277 European ports. The rapporteur tells us that 141 818 786 passengers were carried in 1996. That shows how timely it is to consider the issue.
In this respect standardisation, the harmonisation of safety regulations at Union level is altogether paramount if passengers are to travel in optimum safety.
In conclusion, may I compliment the rapporteur on the quality of the arguments outlined in his report. I know that maritime safety is a subject dear to his heart. He has done an outstanding job and put in a great deal of hard work.

Papoutsis
Mr President, ladies and gentlemen, I would first like to say that I am speaking for the European Commission on behalf of my colleague Mr Kinnock, who is very sorry that he cannot be here at today's sitting, since he is in Luxembourg at the Council of Environment Ministers, deputising for my colleague Mrs Ritt Bjerregaard, who has had a slight accident and is unfortunately out of action.
I am particularly pleased that Mr Watts' report is in favour of introducing into the Community an extensive and mandatory survey regime, with routine investigations in the event of any incidents on regular passenger vessel routes. I am glad to be able to tell you that the Commission will support a substantial number of the amendments proposed in the report. To be specific, with reservations about a few changes to the wording, the Commission can accept Amendments Nos 1, 2, 4, 5, 10 and 11, and can also accept in principle Amendments Nos 9, 12 and 15. Many of these amendments seek to ensure and maintain consistency with other directives and regulations concerning maritime safety. However, the same concern about consistency prevents us from accepting Amendments Nos 3, 7 and 14. Amendment No 6 proposes that the IMO guidelines, the International Maritime Organisation's Resolution No A.746, should apply as they stand during the surveys, in accordance with Article 13. While we appreciate the wish to apply the most up-to-date rules, as legislators we cannot contemplate the automatic application of future amendments to official IMO acts. However, the Commission's services are working on a proposal to deal with that situation, and I am confident that it will satisfy Parliament.
One of the most important measures proposed for the system of investigations after incidents is the obligatory presence on the vessel of an instrument to record data related to the journey, the voyage data recorder, or VDR.
The Commission has taken due note of the technical difficulties that could arise during the fitting of such instruments to existing vessels. For that reason, our proposal allows the Commission to make exceptions regarding certain technical demands which must be satisfied by VDRs. We think this possibility of allowing exceptions is fundamental, and consequently we cannot accept that it should be limited to five years as in Amendment No 8. As regards the information on the particulars of ro-ro ferries, Amendment No 13 proposes firstly that these should be made publicly available and, secondly, that they should form the basis of an annual report to be drawn up by the Commission. While we echo the demand for transparency, I must draw Parliament's attention to the risks that could stem from the publication of these data, particularly in relation to trustworthiness, security and commercial fraud. The Commission's interest in precisely this area led it to propose a comitology procedure to determine the prerequisites for access to such data. The issue of transparency brings us to Amendment No 15, which requires the Commission to assess progress in the area of ro-ro ferry safety in the light of the 1994 Council resolution. The Commission obviously agrees with the need for regular assessments relating to measures adopted by the Community, provided such assessments are carried out at the right time and at reasonable intervals so as to be effective. For that reason, I propose that the assessment called for should take place three years after the directive comes into force, and the related submission of the annual report should take place within the already existing framework for submitting reports on the implementation of Community law. Amendments Nos 16 and 17 propose that Member States should provide additional information on the customer services facilities and about the number of crew members employed on a regular service and the number employed on a temporary basis. Given that these matters are not included in the requirements of international conventions or in Community laws on the safety of shipping, I see no need to add that information, nor any value in doing so. I should like to thank the rapporteur Mr Watts, and the European Parliament too, for facilitating the early approval of the common position on this important measure, one which I sincerely believe will open the way towards improving the safety of European citizens travelling on the Community's waters. Turning to the questions put by Mr Watts, Mr Jarzembowski and Mr Teverson, I would like to say that as regards the possibility of the directive being implemented by the Member States, of course the Member States are responsible for implementing Community law. The Commission encourages the implementation of these decisions, takes care to see that the national legislation is adapted promptly, and of course takes action if there are protests. Precisely because the subject is a serious issue, we believe the Member States ought to respond quickly. As for Mr Watts' next question, I should like to say that the Commission is monitoring the application of the Stockholm review and the implementation of the directive on specifications for passenger vessels. I assure you that if we see a need to act in that context, we will do so at once.
Turning now to Mr Watts' third question, let me say that as regards the reliability of black boxes on ships, we must be quite clear: there is no guarantee of 100 % reliability even in air transport, and nobody can guarantee 100 % reliability in the use of black boxes, especially after many years. However, the Commission will certainly continue trying to ensure the highest possible specifications in accordance with the IMO rules, in other words the specifications relating to equipment and operation.
And finally, on the question put by Mr Stenmarck, I would like to say that to improve the safety of ro-ro ferries, we must fully implement the Community laws that we have adopted over all these years. That indeed is the challenge and the duty of us all.

Watts
Mr President, very briefly, on some of those points, most of us would welcome the comments in relation to Amendment 15 regarding the safety assessment. But we still need to receive a clear explanation from the Commission why these voyage data recorders cannot be fitted within what seems to us to be a very generous period of five years from the date of implementation of this directive. Secondly, why can we not trust the public to decide for itself whether or not ferry travel is safe? If we can make the data available to the operators, we should have the courage of our convictions and make the data available to the public and indeed to the passengers themselves.
I welcome the answers regarding enforcement of the Stockholm review but I note that the Commissioner failed to answer my specific point regarding auxiliary power for black box voyage data recorders. Without such power, in an emergency these black boxes are potentially worthless. While I appreciate that a response may not be forthcoming tonight, I would appreciate a response in writing to that particular point of detail. I would like to thank the Commissioner nonetheless.

Papoutsis
Mr President, first of all, I think that my answer to the questions concerning Amendment No 8 was complete and I do not think it could be made any more so, particularly in relation to the technical specifications we use to record the data. As for the other technical questions raised by Mr Watts, I sincerely promise on behalf of the Commission that he will be answered in writing.

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

Pan-European transport network
President
The next item is the report (A4-0241/98) by Mr Sisó Cruellas, on behalf of the Committee on Transport and Tourism, on the Commission communication to the Council and the European Parliament 'Connecting the Union's transport infrastructure network to its neighbours - towards a cooperative pan-European transport network policy' (COM(97)0172 - C4-0206/97).

Sisó Cruellas
Mr President, the cooperative pan-European transport network policy must be seen as part of a dynamic process that has already found expression in different procedures and in the previous pan-European conferences that were held in Prague and Crete and that certainly did not end in Helsinki.
However, what we are discussing now is bringing the results of these conferences to fruition by putting the ideas developed into practice. One of the priorities should be to establish and consolidate a global strategy that will finally lead to the creation of an integrated and multimodal pan-European transport infrastructure network. Such an ambitious objective may only be attained through a complex and sustained process of coordination of the different participants and complementarity of the available resources. It also requires the harmonisation of the principles and criteria that should govern the actions required if the Union is to play its key role of stimulating and guiding the overall pattern, bearing in mind that the various starting points are very different. And, above all, we need to have the cooperation of the governments, the international financial institutions and the private sector. But if we are to achieve the desired results from this process, it must be carried out in a transparent manner. It is vital that information be made available so that we can assess progress to date and determine what still has to be done at any given moment.
The role of the TINA group is to analyse the existing transport infrastructures, to calculate the estimated growth in the volume of traffic, to assess infrastructure needs and to determine the future trans-European transport networks in an enlarged Union. The careful completion of this work is extremely important as only in that way can we ensure that Community resources and activities are being used appropriately.
The fundamental issues which, in my mind, must be highlighted when trying to overcome obstacles to the establishment of the transport infrastructure networks that Europe needs are: interoperability, funding, the availability of mature projects, and any uncertainties that exist.
The actions aimed at guaranteeing the interoperability of these networks require, and will continue to require, a considerable technical effort and considerable investment. This is all the more important since the modern transport infrastructure networks of the Member States have been developed according to a vision that is completely different to that of the possibility of a market without borders and the role the infrastructures must play in the development of this market.
The interoperability of networks is therefore a matter that should be resolved beforehand, because if there is no interoperability, there will be no free movement. But I believe that if obstacles to interoperability are to be removed, then creating objective conditions that will eliminate any positions and interests that are objectively contrary to interoperability will be just as, if not more, important than developing agreed Community standards on every aspect involved.
As always, the main problem is how to finance the construction of the transport infrastructures. When public debates on financing transport infrastructures use the word 'finance' with no other clarification, they usually overlook or misunderstand the difference between financing in the strict sense and paying. Therefore, the fact that the resources allocated and the participating agents in each of these operations can be - and often are - totally separate is overlooked.
From this standpoint, financing transport infrastructures, in the strictest sense of the word, implies an intermediary operation which involves obtaining and providing the immediate resources required to allow investment to be made and objectives to be met.
However, paying for transport infrastructures is a more final operation which involves providing final resources that will allow the economic cycle of investment to be brought to a close.
In the present economic circumstances in the European Union, with deficit amounts and public debt being severely limited, it is very difficult to find the levels of investment needed for the pan-European transport infrastructure networks.
The variety of theoretically valid formulas for the intermediate financing of the transport infrastructures springs from the wide variety of possible responses to the identification and assessment of economic flows, which may become a source of finance and be allocated to a private agent.
The Community's obvious concern over the problem of private funding for transport infrastructures has led the Commission to present a communication on public-private partnerships in the trans-European transport network projects.
A careful reading of the communication and an evaluation of the real problems that, in the last analysis, gave rise to such partnerships suggest that the key issues are those I mentioned earlier. One of these issues is the inadequacy of European long-term capital markets: these markets are vital in managing the risks involved in an investment that matures over a long period of time. Other key issues are the absence of mature projects and the distrust and uncertainty of the private sector as regards the current and future activities of the public sector, particularly in terms of the cooperative pan-European transport networks proposed by the Commission that encompass the Union, the governments of the Member States and of the other countries involved, the international financial institutions and the private sector. We must offer potential investors, construction enterprises, transport service providers and the capital goods sector a stable framework for their financial transactions. If stability is to prevail, the governments of the partner countries will, of course, have to take on their responsibilities and create a clear political and legal framework. This will allow investors to be fully aware of the political and administrative risks involved in the projects and, at the same time, to respect EU legislation on competition, the environment and public contracts.

Leperre-Verrier
Mr President, better connections between European transport networks and those of our neighbours is an objective which the European Union has been pursuing for many years. That said, the process has for a long time been fragmentary, not to say chaotic, resulting in a whole mosaic of provisions. The Commission communication on connecting the Union's infrastructures is a coherent and rational response and is altogether consistent with the implementation of the findings of the third Pan-European Transport Conference in Helsinki. So we should welcome this desire to coordinate and bring some order into the situation, because the action plan is undeniably a step forward.
The concept of interoperability, with all it implies by way of adapting standards and legislative measures, is especially interesting because it will allow the combination of very different technologies and partnerships between public and private structures. Clearly, the prospect of enlargement makes this multi-directional approach all the more essential.
That being so, this strategy applies equally to the newly independent states and to the Euro-Mediterranean countries. But the countries of Central and Eastern Europe are concerned primarily with the creation of these nine corridors, which have now become ten. This requires these applicant countries to modernise their infrastructures and find the funds to do it. They will receive money from PHARE for the purpose, but they will also need loans from the EIB, EBRD or World Bank.
The REX Committee congratulates the Commission on the general structure of this communication, but has raised a number of questions in its opinion. I am grateful to the rapporteur for taking our comments on board in his excellent report. Whilst we see improved transport infrastructures as a factor for development and thus for growth and believe that this will ultimately bring the CEECs closer to the countries of the Union, financing these networks may prove difficult.
Nor must we underestimate the environmental and social problems which a growth in transport, especially road transport, will bring. So answers have to be found to pressing problems: the development of piggy-back transport, definition of anti-pollution standards, and so on. These observations apply to all aspects of communications in and around the Mediterranean basin; the same problem arises in our relations with Switzerland, and this is something I should like to touch on, ladies and gentlemen, both on my own account and on behalf of my group.
I refer to the progress of negotiations between the European Community and Switzerland on transport and towards a settlement of the dispute between ourselves and that country over the Swiss concern that transit traffic through Switzerland should not cause congestion in the Alpine valleys.
So we can only welcome the result of the Swiss referendum of 27 September last, even though the negotiations are not yet completed. Believe me, ladies and gentlemen, in our debate this evening this matter is far from insignificant.

Swoboda
Mr President, ladies and gentlemen, I wish to congratulate Mr Sisó Cruellas on this report. If European transport policy were as comprehensive and well-structured as his report, we would be living in a very happy Europe in terms of transport. Unfortunately, that is not the case and I must say at the outset that this report - which, like the Commission's communication, concerns connecting the Union's transport infrastructure with that in Eastern Europe, i.e. in the applicant countries, and with that in certain countries to the north and south - shows that we have not done our homework properly. When we look at what has happened to the trans-European transport networks, it strikes me that we have definitely not done enough.
The Commission has drawn up a report for the Cardiff Council. I hold Commissioner Kinnock in very high regard and I also value his optimism. He sees the glass as a quarter full rather than three quarters empty. But the plain fact is that we have not managed to fulfil the requirements of the Delors white paper in this area even to a slight extent or to keep within the time frame. The funding is inadequate. Nor have we defined the political objectives clearly enough. With its referendum, Switzerland recently sent out a signal that is important for Europe too, namely that it is quite prepared to make financial resources available in the form of a performance-related freight transport charge, in order to develop rail transport. For when we talk about a transport infrastructure we are of course talking about a common infrastructure. We are looking at roads, but most of all at the railways and at the fact that we need the financial resources to develop them.
Mr Jarzembowski will surely agree with me that the German elections have brought about a decisive change in this respect too, perhaps not to his satisfaction, but certainly to mine. Precisely in regard to developing the railways and reorienting transport policy, I hope and expect quite a few changes and new initiatives so that we can put more emphasis on developing public transport, in particular the railway infrastructure, to ensure intermodal transport and interoperability in future too. That is absolutely essential, for we can only approach our neighbours with a good conscience if we ourselves do what we tell them to do.
So we are facing major challenges here; the rapporteur has mentioned TINA, the secretariat in Vienna that is to evaluate infrastructure requirements and has already begun to do so. How much actually needs doing, and can it even be financed? According to TINA, some 18 000 km of roads and 20 000 km of railways are to be incorporated in this network. To that must of course be added airports and maritime and inland waterway transport. The estimated development costs up to the year 2015 come to about ECU 87 billion. Some ECU 65 billion will be needed for the core network. Can that be funded? Yes it can, it accounts for about 1.5 % of our neighbouring countries' GNP. That is a little more than the 1.2 % that the European Union spends on developing the transport system. Yet we must remember that some of these countries are very poor and that, not surprisingly, it is in some of the poorest countries that the need is greatest. In Romania, Bulgaria and Lithuania the investment need is far higher than 1.5 %, which means they will need European Union support if they are to have any chance of developing their infrastructure, adapting it to the Western European level or even exceeding that level. Of course both sides must engage on this adaptation process.
In this connection, since I attach great value to developing the railways, although without forgetting road transport, I believe the European railways will also have to assume more responsibility for development not just in Western but also in Eastern Europe, which means the railways will have to cooperate. So let me say at this point that the railways should stop waiting for initiatives from Brussels or elsewhere but do more themselves to develop the railway system in a client-based and client-friendly manner. By that I do not just mean passenger transport but, of course, public transport too. Agence Europe reported today that a certain unease had emerged in the discussions about eastward enlargement. That may be so and I have no intention of disputing it. We cannot just talk it away but must realise that the people of Europe will only accept and fully support enlargement if they see that both east and west are making greater efforts to help them master the challenges of their everyday life - which includes transport - than we have done in the past.

Jarzembowski
Mr President, Commissioner, ladies and gentlemen, my colleague Mr Sisó Cruellas's report is so excellent that I really have nothing to add, for it has all been said. I just want to address one point which the Socialists smuggled into the committee discussions but that really has no direct bearing on the report, namely paragraph 25, which we must reject. The proposed agreement between the European Union and Switzerland on overland transport negotiated by Mr Kinnock and supported by the Group of the Party of European Socialists contains what we regard as unacceptably sharp rises in transit charges for HGVs, which would fall on the transport industry, the economy and, in the end, the consumer.
It is unacceptable that a lorry should be made to fork out a charge of 325 Swiss francs for a one-way trip from Basel to Chiasso from the year 2001 instead of 25 Swiss francs, even if it is one of the 40-tonne lorries that will then be authorised. It is unacceptable! Even if, as Mr Swoboda and the previous speaker said, 57 % of Swiss people agreed to the introduction of this kind of performance-related freight charge in the referendum of 27 September, all I can say is that this may be an endorsement of the Swiss Government's position but surely it cannot dictate the negotiations with the European Union! Then we might as well do the same and hold a European Union referendum that Switzerland would have to accept. This cannot be true!
So I would call on the Commission to perhaps regard this referendum result as an endorsement of the Swiss Government's position, but certainly not to allow or accept it. In the interests of our hauliers, our industry, our consumers, we must have reasonable transit charges.
At any rate, let me say to my colleagues in the Group of the Party of European Socialists that we cannot accept the proposed agreement with Switzerland, if only because we do not even know whether Switzerland will approve the construction of the two new railway tunnels and the necessary funding in a month's time. If the Swiss people reject the construction of the railway tunnels and the funding required, there would be no commercial reason left for having the agreement with Switzerland. We are making overland transport more expensive and telling people to use the railway tunnels; and then we reject railway tunnels too! That is pointless! That is why we must tell the Swiss that we insist on a mutual rapprochement and expect an approach based on partnership.
Let me briefly reply to Mr Swoboda's questions. We are in favour of rail. We are glad the German railways, like the Dutch and Swedish railways, are implementing Directive 91/440. Other Member States have not even begun to implement the 1991 directive, as they should have done by 1995. But since Mr Swoboda pleaded so strongly for the railways, let me make a brief comment. I entirely agree with him, we should not preach something to Eastern Europe that we are not doing ourselves. But in that case we really should tackle the special project decided in Essen in 1994 and make a start on building the Brenner tunnel; perhaps you should discuss this with your government some time.

Wijsenbeek
Mr President, may I begin by complimenting the rapporteur, who is becoming a real expert on infrastructure and how to improve it. But we have to agree that we are in effect getting further and further away from the original purpose of the trans-European networks and their extension to non-Union countries, because the initial idea was to link up our own national networks. What we are embarking on now is a gigantic undertaking. The bill for it will be gigantic too, and we do not have the money, certainly not for Eastern Europe, where infrastructure is virtually non-existent. So we now face the problem that the people in Eastern Europe want more road transport, they want us to pay for it, and such infrastructure as they have, namely railways and inland waterways, is being sorely neglected. So I think we have to hold fast to the objective of multimodal transport.
This brings me to the point we are considering to some extent this evening, the debate on Switzerland - though that is not the main issue here. Let us be very clear. Mr Swoboda has gone, but Austria has yet to turn a single sod towards building its own rail tunnel under the Brenner. So it is all very well me holding forth about Switzerland, but we should first take a look in the mirror.
The second point is that we want to avoid road transit traffic through Austria, but that means that the Swiss are themselves busy improving their infrastructure and so we need to be sure of agreeing a fair solution with them. So the current paragraph 25, which Mr Jarzembowski does not like, is very much appropriate here, and my group will be supporting it.

Lagendijk
Regrettably, Mr President, I have to say that while there is much that is good in Mr Sisó's report, it is guilty of the same shortcoming of which he himself accuses the Commission, namely it is a very general proposal containing little by way of specifics. I am very keen that Parliament should take prompt action to follow through the proposals made by the Commission and by Mr Sisó too. But the problem arises of which way we should now go, because the opening-up of Central Europe, for example by connecting it to the trans-European networks, will lead to an enormous growth in freight and passenger traffic and thus to environmental degradation. So I am glad to see that Mr Sisó's report several times raises the question of environmental pollution and suggests how it might be controlled in future if Central Europe joins the European Union.
I think it is likely, in my view, that it is not so much the law of the inhibitory head's start which will obtain, but rather what I would call the law of the innovation lag. What do I mean by that? I believe it is possible, or should be possible in future, to make use in Central Europe of the latest sustainable and environmentally friendly technologies which we have only been to apply in Western Europe very recently, in a way which will avoid the mistakes we have made for too long in Western Europe, namely paying too little heed to public transport and continuing to build far too many roads for far too long. The danger of the same thing happening in Eastern Europe is a real one, and we must all work to stop it. My group sees two priorities here. I agree with those who say that because money is tight we must rein ourselves in and refrain from grand designs - we should confine ourselves to a few plans which meet the criteria of sustainability and transparency, and we should not lose sight either of the fact that things are happening in Eastern Europe which hint at the imminent collapse of forms of public transport which in fact work perfectly well, whilst more and more people are travelling to work under their own steam. I am very anxious that the Union should spend time and money on reversing this trend and clearing the way for sustainable transport systems in Eastern Europe too.

Sindal
Mr President, there is nothing more satisfying than to sit in front of a computer drawing infrastructure, roads and railways, then doing some calculations, thumping the desk and saying 'that is how it will be'. Mr Swoboda also said something on those lines. Many of us feel the same way about all these traffic planners. We suspect them of making it a little too simple. But let me warn them: it is a long way from theory to practice. We must be clear that the aim of this communication from the Commission is to secure the strategy. Let there be no doubt about my support for that. But the strategy only works if one is able to ensure that neighbouring countries and Member States are serious and will honour their commitments. I have three comments of a general nature to make on this.
To begin with, the partnership which is to create a transport network extending into the next century will also, in the context of an enlarged internal market, help to secure growth possibilities and have a decisive influence on the sustainability of the pan-European project. That has something to do with prioritisation and realistic economics. I cannot associate myself with Mr Wijsenbeek's remarks regarding the new applicant countries. They are currently spending more of their gross national product on their transport networks than we are.
Secondly, the communication represents a huge leap forward, without subsidiary aims or description of methods. That has also been mentioned. Perhaps they are not appropriate at the present stage, but we ourselves know the situation when neighbouring countries disagree over strategy and method. It is even more difficult when the Union takes one view and the neighbouring country takes another. I could conceive of a process of step-by-step agreements, so that a common way forward is assured. Now the Commissioner will perhaps say shortly that that is how it is done. Yes, but I know of both good and bad examples. I know of a good example as regards shipping in the Baltic area, but I also know only too well of a bad example in connection with the development of motorways.
A third comment relates to ambitious technological projects, such as satellites, telematics, traffic service, etc. These are good advances, but they can only be exploited if the transport carrier has the equipment for them and they can only be exploited if the law provides for their use. We talked earlier about black boxes. Now, for the fourth year, I am rapporteur on what is called 'vessel traffic service', which means that, by analogy with air traffic control, ships can be assigned sailing routes via satellite. That would indeed be a way forward, which could prevent many accidents, but unfortunately we cannot implement these proposals.
I am certain that we are on the right road, but I am also convinced that, if we do not follow up what we decide on operationally, we shall have some problems.

Stenmarck
Mr President, one of the most worthwhile projects we can pursue is providing the physical infrastructure to link the EU candidate countries with the existing Member States. A bird's eye look at Europe reveals the dividing line drawn after World War Two between those countries which received Marshall aid and those that did not. This is the division we now need to bridge as part of the current reunification and integration process. There are those who say that the enterprise will cost a great deal of money. Quite true - and it will inevitably take a number of years, but we should remember that spreading prosperity is in our mutual interest. Improvements in road and rail networks on the other side of the old Iron Curtain directly benefit the countries concerned, but all of us will gain from the improved situation. Any such investment has a positive spin-off for everyone. Increased growth and new job opportunities can be expected, not only in the candidate countries, but within the whole area of what I hope will one day become a much larger European Union.
The rapporteur has indicated one major problem: access to private capital. Perhaps I might ask the Commissioner responsible what further steps the Commission intends to take to boost private investment in roads and railways in the former Communist countries.

Schifone
Mr President, there can be no doubt as to the need for a global transport strategy. The transport sector is vital to socio-economic growth in the Community, and so a long-term, across-the-board strategy is needed for the development of social relations within the European Union.
A pan-European, multimodal transport infrastructure network is therefore needed, one which is well balanced and encompasses the entire continent, including the Mediterranean basin. In this context, the Commission has drawn up an impressive communication setting out its five themes for action: development of the concept of nine pan-European corridors, plus the latest one for the former Yugoslavia; extension of the Union's trans-European networks to the applicant countries; a joint approach to the use of interoperable technologies; intelligent network use; and cooperation in research and development.
Nevertheless, all of this could remain hypothetical unless attention is paid to the sources of funding to be used. Therefore our request to the Commission is that it provide more precise information, both on the progress and timetabling of these actions and on the relevant sources of finance.
I should like to end by reminding the Commission that a fresh commitment to improving links with the East European countries should not divert the EU from the equally vital task of improving transport links with the Mediterranean basin. These too are without doubt crucial for the European Union.

Schierhuber
Mr President, Commissioner, ladies and gentlemen, transport routes have been vital to trade and commerce since time immemorial. The economic growth of a region and the prosperity of its people depend on opening up trade routes. Rural areas in particular need an effective transport infrastructure which, together with other infrastructure measures, can prevent rural depopulation and decline. Products can reach the buyers and consumers, there is more chance of employment in rural areas and that of course boosts competitiveness in general.
That is why we must support a coherent, efficient and safe, but also environmentally compatible transport system in the Union. But the European Union must also pay attention to link-ups with neighbouring states and the development of the Central and Eastern European countries' transport infrastructure. Both they and the European Union will profit from improved transport links, since this can further strengthen export and trade.
Under the PHARE and TACIS programmes, interregional and cross-border projects are to be supported. The rural areas of Central and Eastern Europe need a well thought-out transport infrastructure for their development, to prevent large-scale migration to the towns and to promote employment and economic growth. But we must realise one thing: within the Union, and in view of enlargement, our priority aim must be to shift traffic to environmentally friendly transport modes. Here I am thinking in particular of combined transport, rail transport and, above all, inland waterway transport.

Pomés Ruiz
Mr President, I would like to congratulate Mr Joaquín Sisó Cruellas on his excellent report. As has already been said, we are honoured to have a Member such as Mr Sisó Cruellas in our midst with such knowledge of the field of transport.
Secondly, I would like to briefly refer to the Commission's well-chosen title for this communication: 'Towards a pan-European Policy'. Transport policies should indeed be Community policies, they should continue to be Community policies and they should continue to come under heading 3 of the budget and not heading 2, as some think, since this may be structural expenditure. It is strictly a Community policy and, therefore, should remain under heading 3.
Transport networks are, undoubtedly, one of the most direct factors of development and, as a result, we must pay close attention to the fact that, with the future enlargement of the Union, we will have to give priority to such networks. Yet we should not offer more than a helping hand as there are severe financing problems. We cannot raise expectations and then realise that we are unable to finance them. Therefore, the time has come to involve the free market as much as possible, and to bring private businesses and private investors into the construction and financing of these networks. In this way, the unfortunately small amount of money we will be able to take from the budget to finance these networks might act as an incentive so that those businesses, banks and groups of investors can get a return on their investments in the medium term.
It cannot be denied that the trans-European networks will be the making of the European Union. Now - and in the future with enlargement - we must believe that the European Union will be more of a union in that it will be more united. Also, trans-European networks will no longer be a pipe dream, and this will be shown in the budget with a sufficiently large amount to encourage public or private initiatives to help develop these networks.

Pinel
Mr President, the rapporteur's aspiration is for a system which is coherent, safe and kind to the environment. That is a good thing. Today, the overwhelming volume of road freight transport is a typical example of practices which are incoherent, unsafe and dirty. Goods trains are disappearing from our railways, waterway transport is stagnating. At the same time, the proliferation of heavy goods vehicles on the roads is pushing up considerably the cost of maintaining our major highways and the number of road accident victims too.
The report passes over in silence a question which is nevertheless a fundamental one: who is to pay for infrastructure, the user or the taxpayer?
At present there are two coexisting systems as far as the roads are concerned, which means duplication and many forms of wastage. It is not good for the environment, or for our finances either. We shall have to choose between these two systems one day. Nowadays we have the technology to apply the principle that the user pays, and to make its application widespread. Modern on-board electronic equipment means that we can measure exactly how much a vehicle costs. This is the most environmentally friendly and fairest solution, and the one which uses taxpayers' money to best effect.
Some aspects of the report are problematic. Firstly, the action plan does not specify which measures are needed, concrete problems are not identified and there is no timetable. The rapporteur himself deplores this. Secondly, the manifest intention is that European taxpayers should pay for infrastructure in the countries of the Maghreb, in Turkey or the Middle East and I, for my part, am opposed to that.
As regards Russia, and even beyond, as the report says, I am in favour of certain agreements with Eastern Europe but there would seem to be areas which require far more urgent attention, not least the energy sector, before we reach into our pockets for infrastructure in Russia which, let us not forget, the West has already funded in the past for no return at all.
For all these reasons and because I do not think this has been thought through sufficiently, I am in favour of referring this dossier back to committee.

Papoutsis
Mr President, ladies and gentlemen, in our policy on transport infrastructure in Europe, there is a clear distinction between on the one hand the strategy concerning the transport network on the continent of Europe as a whole, and on the other hand the special situation applying to countries which are candidates for accession to the European Union.
For that reason, the Commission's communication firstly deals with the enlargement of the Trans-European Transport Network of the European Union, which was designed to serve the needs of the internal market and the social and economic cohesion of an enlarged Europe. Secondly, it deals with the pan-European corridors and transport areas which provide appropriate links throughout the continent. And, thirdly, it deals with links between Europe and Asia. I need not repeat the details of the differences between those concepts, since it is clear from the report by Mr Sisó Cruellas that you agree with our view about the appropriateness of that approach.
To form the Pan-European Transport Network, we propose that a partnership should be set up which covers the continent as a whole. The Helsinki Conference supported the idea of that partnership, recognising that it concerned us all. It concerns the countries involved, it concerns the European Union, the European Investment Bank, the other international financial institutions, it concerns private sector investors, and of course it concerns the social partners. The massive challenges awaiting us can be met only by joint efforts and, in addition, by the development of flexible but effective means of cooperation.
The report by Mr Sisó Cruellas refers in particular to the need to coordinate investments related to infrastructure in Europe, and also to the need to monitor the creation of the appropriate transport infrastructure for the benefit of European citizens, for the benefit of those in the professions, traders, and European travellers too. Precisely that aim will be served by the partnership which, while remaining an unofficial one in legal terms, is intended to facilitate cooperation and the monitoring of progress. The Community provides sufficient finance for the implementation of its policies, and that is a basic concept in which we believe. Our policy in the area of transport infrastructure has two basic priorities: first of all the creation of a cohesive transport network for an enlarged Europe involving a reasonable price structure and, secondly, the mobilisation of the necessary financial resources for the establishment of that specific network. It is clear that the cost of these investments will be borne mainly by the countries involved, a particularly painful burden for the national budgets, which are already under severe pressure. Of course substantial loans will be granted by the international financial institutions, among which the EIB will of course lead the way. But there will also be a substantial contribution from the EU's budget, at least for the countries which are candidates for accession.
Between 1992 and 1998, the PHARE programme provided a total of some ECU 1000 million. We hope that from 2000 onwards the contribution from the instrument for pre-accession structural policies, ISPRA, will propose the provision of an annual sum of around ECU 500 million for the transport sector. Estimates of the cost of developing satisfactory and modern transport networks in Europe vary, but I should like to mention, by way of indication, that an estimate of the transport infrastructure needs in Central Europe has given a figure of ECU 100 billion by 2015 for the modernisation of 20 000 km of rail and road networks, to bring them up to the current specifications.
We also give priority to the mobilisation of sufficient financial resources for elements of the European transport networks outside the future enlarged Union, in the Community of Independent States or even in the Mediterranean basin, so that the necessary infrastructure can be created in good time. However, the potential for providing Community finance for those areas remains limited, given that the TACIS and MEDA programmes can at present only provide finance for technical aid.
As for cofinancing by the public and private sectors, we are clearly aware of the realities. However, even the most optimistic assumptions make it clear that the national budgets, the budget of the European Union and the international financial institutions will not be able to find the necessary resources to bridge the gap in the area of infrastructure in good time. Consequently, I am sure that the need to mobilise financial resources to improve the quality of the projects, but also to increase economic productivity, which led the EU countries to set up various partnerships involving the public and private sectors, will now provide an important incentive for similar efforts in Central and Eastern Europe. The combination of those needs, the new problems arising and the new practices in the context of the transforming economy of Central and Eastern Europe could substantively prepare the ground for the establishment of new financing instruments and new ways to manage infrastructure.
Mr President, the Commission's contribution towards adapting Europe's infrastructure to meet the requisite standards has been and will continue to be substantial. We will of course continue to keep Parliament informed on a regular basis about the progress being achieved.
With these comments, I would urge the European Parliament to approve the report by Mr Sisó Cruellas, whom I would also like to congratulate on his work and on his dedication to the task of developing transport networks in Europe.

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

Transport telematics
President
The next item is the report (A4-0246/98) by Mr Baldarelli, on behalf of the Committee on Transport and Tourism, on the communication from the Commission on a Community strategy and framework for the deployment of road transport telematics in Europe, and proposals for initial actions (COM(97)0223 - C4-0239/97).

Baldarelli
Mr President, the Commission communication seeks to establish a framework for action at EU, national, regional and local level, and puts forward five priority areas: traffic information services, based on the RDS-TMC system; transport data exchange/information management; electronic fee collection; the human/machine interface; and system architecture.
The Committee on Transport has no objection to the identification of five areas in the proposed strategy, but we consider that the range of priorities should be extended to cover goods transport, and that there should be a clearer specification of the place of public transport, in particular to encourage the development of coordinated multi- and intermodal transport. This area is not spelled out clearly in the Commission's document; it does appear among the other actions of the Commission, but this does not satisfy us.
Another point concerning the Commission's document is as follows: the Commission sets out its intention to develop telematics and illustrates the advantages, but does not analyse the costs of not using telematics. This might be a semantic point, but in actual fact the costs of not using telematics are closely related to its advantages. Looking at these advantages, the VMS system should bring about a 30 % reduction in accidents and a 40 % cut in the numbers of dead and injured, an average reduction in speed of 10 %, a 30 % reduction in rain-related accidents and an 85 % reduction in fog-related accidents.
The system of emergency satellite or cellular links should cut reaction time for the emergency services by more than 40 %, and the survival rate should increase by between 7 and 12 %. The collision alert system, coupled with on-board computers, should increase driver safety and, what is more, the VMS should cut traffic delays by 20 %.
All these aspects are very important, and you will appreciate that, when analysed in terms of cost, their advantages are significant indeed. Some interesting research has been conducted into the internalisation of infrastructure costs. These data should, I believe, be investigated further in respect of the cost of not using telematics; in other words, the social benefits should be assessed in financial terms.
Turning to the aspects not directly addressed by the Commission, but which could be taken up more specifically in further measures, and indeed in future communications, the principle of universal access for all the Union's citizens must apply to telematics. Ultimately, telematics establishes hierarchies and leads to democratic authoritarianism, so somehow we must ensure that telematics will benefit everyone. This is the principle of free and universal access. We would envisage telematics being freely and universally available for certain basic services: emergency situations, traffic congestion, dangerous goods and meteorological conditions.
These aspects could be extremely useful, and could be managed in the interests of the community at large so as to benefit all users. Other actions need to be devised to this end. We are very keen on the financial possibilities opened up by the fifth framework programme of research. We are convinced that a good job of work has been done here, and would encourage the Commission to work along these lines. However we are also convinced that the financial resources for the trans-European networks need to be committed somehow or other - we discussed this a short while ago - with the involvement of the regional authorities.
I would conclude with a word on the local, regional and national authorities: regional, local and even national authorities tend to undervalue these issues. Much more needs to be done in terms of public transport too.

Camisón Asensio
Mr President, I must start by congratulating the rapporteur, Mr Baldarelli, on his excellent report which, generally speaking, we agree with. Nonetheless, as the rapporteur knows, our opinions do differ on a few minor points. For example, it would have been logical to regulate the equipment requirements for vehicles with technological instruments or the tendency towards abusing tollbooths, even in protected areas.
As draftsman of the opinion of the Committee on Research, Technological Development and Energy, I would like to highlight the most significant elements of this Community strategy. It certainly deserves the most resolute and urgent political support from all the European institutions and, of course, from this House. It is clear to us that no real progress will be made if research and development is not given the maximum support possible, and the fifth framework programme should not forget this.
Mr President, this strategy must be the first in a series covering each of the interfaces of all other modes of transport, as telematic applications for the various forms of transport must fit into a strategy aimed at developing a general, integrated transport system.
The Commission must also calculate the costs involved in the overall programme in order to allow an assessment of the correlation between the resources used and the practical results.
Nor should we ignore the principle of correcting territorial imbalances.
Similarly, the research programme should cover the development of telematic assistance systems for use when driving in fog or should seek to create the possibility of using on-board receivers of the 'no hands' type with GSM functions.
Community strategy in support of telematic safety measures in the carriage of dangerous goods should also be strengthened, as Mr Baldarelli stressed.
There is an urgent need to improve traffic management systems, particularly in the large European urban areas, with a view to using telematics to improve mobility in congested cities. In this respect, we also need to devise a range of models for cooperation between the public and private sectors.
And finally, Mr President, although this may seem obvious, we must ensure that we protect consumers.

Stockmann
Mr President, Commissioner, ladies and gentlemen, Mr Baldarelli's fine report continues the discussion on transport telematics that we started at the beginning of our legislative term. This Commission communication differs from the last one in two ways. Firstly, unlike the earlier one it is not concerned with specific telematics applications but with Community strategies and with the framework conditions for the Europe-wide deployment of telematics. That reflects the very rapid developments in this field, or at least in the area of road transport telematics.
This brings me to the second difference from the earlier communication. We are concerned here only with telematics applications for one mode of transport, road transport, which is a good thing in that it leads to proposals for practical action. But it is also a bad thing, because it is not a multimodal approach. When we speak of an integrated transport system in transport policy and say that is the only way to achieve sustainable mobility in the long term, that means we consider two types of integration necessary: quantitative integration of the individual modes of transport beyond national borders, and qualitative integration, namely linking up the transport modes to form a multimodal transport system.
We have a particular need for telematics with regard to the second aspect. The integration of road transport alone could even prove counterproductive for the overall project. So we expect the Commission to set out a strategy and propose practical actions for multimodal transport telematics.
Turning now to the strategies for road transport telematics, even if the communication and the report are very belated, since most of the strategies have already been implemented, let me say this. One: we welcome the strategy of introducing RDS-TMC-based transport information services; we do, however, expect that this will be done across the board, Europe-wide, and not just in Germany. We also expect a parallel strategy for introducing the technically superior DAB system.
Two: the exchange of traffic data and the creation of an information management service should be geared to intermodal transport from the outset.
Three: the effect of the Memorandum of Understanding on technical norms and operating reports needs checking.
Four: greater efforts should be directed at making the systems of electronic fee collection interoperable, since there is some need for political action here - at least in my view. If we can sharply reduce what are called the external costs of road transport by means of telematics we must also be able to ascertain and apportion the residual costs on a uniform basis.
Five: we need comprehensive socio-economic studies on human/machine interfaces.
Six: the attempts to define an open, European system architecture are lagging behind recent developments. That is why we look forward to the Commission's next communication on telematics.

Jarzembowski
Mr President, Commissioner, ladies and gentlemen, it is rather like a family party here tonight!
The PPE Group supports the development of framework conditions for the deployment of telematics in road transport because transport telematics can significantly increase road safety, improve traffic flows and thereby reduce the environmental damage caused by traffic.
We thank the rapporteur for his excellent report. But let me make two points of criticism. We Christian Democrats believe that, firstly, the advantages and disadvantages of road pricing need to be checked thoroughly. Secondly, we categorically reject new charges for driving into towns.
On my first point, electronic, distance-related charges - called road pricing in short - for goods transport by road or even for private motorists may in theory be fairer than non-use-related charges. But we Christian Democrats fear that the costs of introducing and maintaining this kind of gigantic electronic system - for all 15 countries and not just one or two, and here I agree with Mr Stockmann - will be so enormous in practice, for the Member States, the private HGV companies or indeed the individual citizen if this kind of system is also applied to private cars, that it will no longer have any economic advantages over the current system of road-use charges or tolls. In that case it would be better simply to give up the idea of road pricing altogether.
At any rate, we Christian Democrats totally reject a road pricing system that would involve a special charge for lorries or cars entering the inner cities.
Inner-city parking fees, whether on the roadside or in car parks, are enormous, in my country at least. It costs DM 2 to park for half an hour in my home town, Hamburg, which is pretty steep! So I believe that we really would be putting too much of a burden on the consumer, the customer, if we also introduced a road pricing system for driving into the inner cities. High charges would in effect put an end to delivery traffic into towns, and also make it impossible for customers to reach business centres.
On the one hand, we keep saying that we must revive our inner cities. On the other we force drivers out to the suburbs, to the big shopping centres, so that they no longer come into town. We want jobs in city centres, we want the inner cities to be alive and well. That is why we emphatically reject charges for entering the inner cities!

Papoutsis
Mr President, ladies and gentlemen, on behalf of the Commission, I would like to thank the rapporteur, Mr Baldarelli, for the excellent report he has brought before us. Like Mr Baldarelli himself, we too recognise the importance of road transport telematics services in our common effort to make our roads safer, cleaner, more competitive and more effective.
Telematics can serve individual citizens, vehicle fleet operators or indeed emergency service providers, and of course they can benefit public transport agencies, while at the same time creating opportunities on the labour market for our industries and helping to ensure a more efficient use of energy resources. It was for all those reasons that the Commission drew up the communication we are debating today. It provides a framework for the development of a broad range of telematics services and systems for road transport, in a flexible way so as to respond to both local and Community needs.
We also share the view that RTT services will only be more effective if they have been incorporated in transport strategies aimed at achieving specific policy aims - in other words, RTT is a tool to help in the implementation of political decisions.
The communication published in May last year identified some very specific actions for the sectors with first priority, and also indicated actions in other sectors. Most of the first-priority actions have already been completed, as many Members will know from the excellent hearing held by the Committee on Transport and Tourism at the beginning of this year. For example, we have already concluded memoranda of agreement in the RDS-TMC sector for the radio broadcasting of data and road traffic messages and for the exchange of data, which have already been signed by the main players in these sectors.
As for the arrangements being made by the various bodies to put these memoranda into practice, they too have made significant progress. Alongside these arrangements, the situation is now developing through European regional projects and national projects financed by the budget for trans-European transport networks. And we have already started examining certain other sectors which Mr Baldarelli's report rightly regards as important, for example information before and during a journey, public transport and multimodal transport. Indeed, in the next few weeks we expect to be submitting a communication on interoperational systems for electronic fee collection in Europe.
The importance of European regional projects as a driving force for the development of RTT is also recognised in the report presented to Parliament. These projects envisage the creation of RTT services in cross-border regions and have already attracted the participation of 12 of the 15 Member States. Their contribution is of truly fundamental importance in securing the interoperability of RTT systems and the continuity of RTT services across the borders of these countries. They presuppose the monitoring and management of traffic on the main arteries, including the formulation of new itineraries, information before the journey, information during the journey via message signal converters and the RDS-TMC services. This presupposes the cross-border exchange of data between traffic monitoring centres. In some projects, indeed, there is already cooperation in the sector of interoperational systems for electronic fee collection.
The Commission agrees that there is a need to establish standards at a high technical level for this sector, and for that reason it has commissioned the European Committee for Standardisation, the ECS, to carry out a project on matters which we regard as having particular priority for the achievement of our aims. We asked the ECS to draw up a new working programme which would exactly reflect all those priorities. Indeed, given the global nature of RTT markets, we will also be examining, again in collaboration with the ECS, to what extent the arrangements for the cooperation of the ISO on common standards are satisfactory from the standpoint both of the aims of a transport policy and those of our industry. It is clear that the security of RTT systems on vehicles must be of great concern to us all, and that is exactly why it has been included as a priority among our actions.
Today, then, I am in the happy position of being able to tell you that an operational group set up by the Commission has drawn up a list of principles, and after consultation that list will undergo further refinement so as to give more accurate information about exactly what is required. The Commission hopes to submit detailed proposals both to Parliament and to the Council on how this can be transformed into a self-imposed memorandum of agreement, a code of practice with which manufacturers of equipment and motor vehicles, and those who assemble them, will have to comply. At any rate, I can assure you that if the self-imposed system we have proposed does not work, the Commission will not hesitate to submit new proposals for legislation in the sector.
Finally, another concern which runs through Mr Baldarelli's report is that RTT must not be available only to a select group. The Commission shares that view completely. However, we will have to work closely with Parliament and the Member States to make sure of that.

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

Tourism
President
The next item is the report (A4-0247/98) by Mr Novo Belenguer, on behalf of the Committee on Transport and Tourism, on the Commission report to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on Community measures affecting tourism (1995/96) (COM(97)0332 - C4-0576/97).

Novo Belenguer
Mr President, Commissioner, ladies and gentlemen, the report I am presenting to you today will be my last parliamentary initiative as, regrettably, I am giving up my seat tomorrow and leaving it in your hands to develop from now on a true Community tourism policy.
The Commission's report arrived at a key moment for the future of the Community tourism policy, between the problems of fraud concerning certain actions in the early 1990s and the major challenge that the start of the new millennium represents for us. Perhaps for this reason, my intention as rapporteur is to present the report more from a strategic point of view than from the point of view of giving due recognition to Community activities in the field of tourism in 1995 and 1996, although it must be acknowledged that there have been many such activities and that they have been extremely varied.
The Commission's communication on Community measures affecting tourism in 1995 and 1996 was presented to Parliament in accordance with the requirements laid out in Article 5 of the 1992 Council Decision, which establishes a Community action plan to assist tourism. I would point out that this plan ended on 31 December 1995 and has not been renewed, mainly due to the lack of a legal basis in the form of a multiannual programme. For this reason, we have tabled an amendment - Amendment No 9 - that calls on the Council to adopt a Community framework for actions in this extremely important sector. In any case, the resolution suggests that the tradition of presenting an annual report to Parliament on the Community measures affecting tourism should continue, together with an evaluation of the actions. This will allow us to hold an annual debate in Parliament and to impose democratic control on future Community measures.
I would also like to highlight the main problems that, in my opinion, are hindering the development of a Community policy. Firstly, there is the unwillingness of national authorities to entrust the European Community with the role of coordinating activities and supporting the tourism sector. This was reflected in their refusal to adopt the PHILOXENIA programme last year, which meant that there was no legal basis to finance supplementary actions at Community level. We are now in danger of making the same mistake once again for 1999. Secondly, there is a lack of confidence, once again on the part of national governments, in the Commission's own services that does not allow it to develop an action programme; this is mainly due to the incidences of fraud detected in 1991, European Tourism Year, and in the most recent action plan. Thirdly, the lack of human and financial resources means that the European Commission is having difficulty in developing a tourism policy that effectively coordinates the various Community policies affecting this important sector.
Finally, there is a lack of planning and long-term strategy. Mr President, Commissioner, it is shocking that, in this day and age, there is no shared vision between the Community institutions and the various Member States of a sector that makes up approximately 14 % of GDP and provides 10 % of jobs in Europe. However, it seems to me that now is the right time to relaunch a Community tourism strategy. Since I began to prepare this report, I have been calling for a complete reorganisation of the Commission's services, which would signal, from this moment on, a new beginning for European tourism. This would provide the Commission with the necessary human infrastructure to enable it to contribute a real added value to the activities of the Member States, and to the different regions. Therefore, I can only be grateful to the Commission for announcing this summer that a directorate for tourism is to be formed from three units within Directorate-General XXII. And I believe that, by and large, we agree on the abilities and competences these units should have. They include, firstly, guaranteeing cooperation and systematic consultation with other Directorates-General, maintaining a close and permanent link with the industry and with national tourist offices, carrying out the ex-ante and ex-post evaluation of all Community actions to promote tourism, and increasing the amount of information made available to tourists, particularly on those aspects relating to their rights and responsibilities as consumers. Secondly, we also believe that the time is ripe for this as, in July, the Commission itself published its official response to the report by the Court of Auditors on the previous, allegedly fraudulent actions. The Commission has identified all of the most problematic actions of the period in question, without prejudice to the legal proceedings that the national courts have yet to complete. It estimates that approximately 9 % of all the actions carried out or financed between 1990 and 1995 show irregularities. It also points out that it is taking action to recover funds that were overpaid and is referring the matter back to national authorities where appropriate. Thirdly, the meeting of the group of experts on tourism and employment, chaired by the Commissioner, was an excellent initiative and we are currently awaiting its conclusions and recommendations.
In conclusion, Mr President, I defend and support the added value that the European Community can bring to tourism in Europe. All we need is for the Member States to recognise this.

Wijsenbeek
Mr President, as draftsman for the Committee on Legal Affairs and Citizens' Rights, I could restate the conclusions that we reached, but I will refrain from doing so. I have to say that tourism policy, and the Commissioner knows it full well, is something of a poor relation in terms of Community policy, and this is actually strange, because neither the Commissioner nor the rapporteur needs to be told that tourism is the biggest employer in the Community and is also a sector which could generate a great deal of economic activity in areas whose economy is in difficulty. In short, we have a duty to see to it that something is made of tourism policy. That means first of all that we have to do a good deal more about quality, and it means too, as we say in this opinion from the Committee on Legal Affairs and Citizens' Rights, that we have to do something about the recognition and equivalence of diplomas. Secondly, Mr President, we referred to fiscal policy. Precisely because tourism is increasingly international, fiscal policy hugely distorts the level playing field, notably with regard to VAT. Le me give you just one example. Take the way in which theme parks are treated in one country...
... the President's own country. Parc Astérix is regarded as a cultural attraction and is subject to a low rate of VAT, whereas other countries view this kind of park as a tourist attraction and so apply a high rate of VAT.
(NL) Having said that, Mr President, I would point lastly to Amendment No 9, on the new Article 7a, in which the rapporteur says that a framework programme constitutes a legal basis. Not so, Mr Belenguer. Framework programmes are not a legal basis, only Treaty articles are. So once again our committee calls for the inclusion in the Treaty of an article which properly addresses tourism.

Torres Marques
Mr President, I would like to congratulate not only the rapporteur, Mr Novo Belenguer, but also the draftsman of the opinion of the Committee on Legal Affairs and Citizens' Rights. Both present us with a series of conclusions of great interest, and the clarity, conciseness and the scope of the proposals contained in Mr Wijsenbeek's opinion, in our view, add a great deal to the report.
Although no specific legal base exists for tourism, Commissioner Papoutsis has succeeded not only in reorganising the tourism service in keeping with the guidelines drawn up by the European Parliament, but he has also continued to submit to us proposals with an obvious impact on this activity which is so important for Europe. Although the principle of subsidiarity applies to this sector, in that each country should maintain its specific features and differences, and since tourists travel in quest of difference, it should nonetheless be carefully analysed, because the countries of the European Union have benefited from using the Structural Funds to maintain the specific features of each region and in particular to defend their own cultural heritage.
Information about the introduction of the euro and the greater freedom of movement within the Schengen area should be disseminated at Community level since citizens of the European Union account for some 90 % of the tourists received by these countries. Even where third countries are concerned, action at European level is justified, since action taken individually by countries is of limited effect while action taken jointly can have a far greater impact and far more significant results for European tourism.
I would once more stress the need for a specific legal base for tourism in the Treaties. Until then, Commissioner Papoutsis, continue to endeavour to coordinate the 6 % of the Structural Funds that are spent in the tourism sector and use all the possible legal bases to continue the Commission's action in support of the increased competitiveness of the European tourism industry.

Bennasar Tous
Mr President, Commissioner, ladies and gentlemen, I would like to congratulate Mr Novo Belenguer on his report and on the excellent steps he has taken during his time in this Parliament.
I would also like to take this opportunity to mention the pressing need for an action programme covering all the aspects of tourism that have already been identified as providing added value to this sector at European level. Whilst showing the greatest respect for subsidiarity, it is vital that we promote the quality and competitiveness of this sector.
With the reform of the Structural Funds and the process of enlargement towards the East, this is a crucial time. Tourism is the industry that has proven to be most effective in stimulating depressed areas by creating economic activity and employment. Its effects are extremely beneficial for regional development, be it urban, rural or coastal. There is a great deal that we can teach the Eastern European countries and that we can share with them so that they do not make the same mistakes as we did and so that they can reclaim their historical heritage in a coherent way and make it profitable through tourism. This, ladies and gentlemen, is added value.
All responsible Europeans value and are aware of the fact that tourism must be sustainable and that tourist destinations must be clean. We are in favour of protecting the environment. In today's world, if environmental factors are not included, then the idea of quality in tourism has not been fully understood. These factors include integrated plans and hotels, no waste, clean water, solid waste monitoring, clean energy and harsh measures against atmospheric, noise or visual pollution.
Tourism in Europe is coming to the final stage of a long process that will lead to good value for money and increased competitiveness for SMEs. Some countries promote cultural tourism, others promote rural tourism, good weather, beaches, sport, business tourism or tourism for children or older people. Yet all countries are trying to diversify what they can offer, trying to break with the seasonal nature of tourism and to create employment. Added value means promoting quality in training and the exchange of experiences. Added value means projects for applying new technologies to tourism in reservations systems or in tourist destinations.
We would like to congratulate the Commission for having promoted the organisation of a conference on the impact of the euro on the tourism sector in order to help develop changeover strategies for businesses and consumers. The euro will promote tourism in Europe and will promote Europe as a tourist destination.
We are looking forward to the report from the 'group of experts' and we strongly support continuing actions to combat sex tourism. Ladies and gentlemen, everything I have mentioned here is added value. We must inform and convince the Council of this. I believe that there are sufficient elements to warrant an action programme that could form a legal basis and that would be warmly welcomed by the Member States. I hope that the Council will be forward-thinking on this issue.

Tamino
Mr President, I should like to say first of all that I agree with the report tabled by Mr Novo Belenguer, and I think that he has put some extremely important points before the House. In particular, he is right to stress the links between tourism and numerous other sectors falling under EU jurisdiction. Therefore, although the lack of a clear legal base is a very real problem, it is also true to say that tourism has links with many other activities and sectors where the legal bases are clear.
Be that as it may, the problem of the legal base remains and must be solved. Unfortunately, as we all know, the Intergovernmental Conference in Amsterdam did not come up with a satisfactory solution, and the consequences are evident in that the Philoxenia programme, dating back to 1996, has still not been adopted because there is no legal base and hence no budget line.
In view of all these factors, we believe that efforts should at last be made to find a legal base, an appropriate programme and appropriate budget lines, and to recognise tourism as an issue in its own right. For us Greens, this means in particular saying 'no' to tourism that destroys the land, 'no' to tourism that has so often led to the land being concreted over, but 'yes' to sustainable and eco-friendly tourism.
This is why we Greens have tabled a number of amendments, and I would draw particular attention to one of these. It seeks to take account, when assessing tourism, of the tolerance threshold of individual areas affected by tourist activities: we propose a so-called eco-label for tourist areas and bodies. In this way, we can give a clear indication of how tourism can itself become a part of sustainable development.

Schifone
Mr President, I was councillor for tourism in the Campania region for three years, and during that time I heard many people maintain that tourism is an important factor of development and an essential economic activity. Unfortunately, these statements of fact were never followed up by any tangible administrative, legislative or economic measures of support.
The Commission's report likewise recognises the importance of tourism, both from the point of view of protecting and promoting our countryside, history and culture, and from that of economic expansion and job opportunities. And yet, at European level, we have this state of affairs whereby tourist sector activities do not receive due recognition.
I therefore believe that immediate action is needed in three fundamental areas, which have been highlighted both in the report and by previous speakers. Firstly, the determination of a legal base to promote tourism at European level: there is no title in the Maastricht Treaty, and nor does the Amsterdam Treaty allude to it. Secondly, an undertaking should be made to insert a specific title into the Treaty at the next revision, as was said at the European Study Days held in Naples in 1996.
Finally, a Directorate-General for tourism should be created and, in the reform of the Structural Funds, particular attention should be devoted to integrated projects which identify tourism as a factor of development and environmental protection.

Schierhuber
Mr President, Commissioner, ladies and gentlemen, tourism is an important economic sector in the European Union. It is also important to job creation. And let me remind you that it is not only urban and coastal tourism that are important, but especially tourism in rural areas. This brings in extra revenue and also supports regional development. Of course it also creates jobs, which benefits the entire region. Priority must be given to soft tourism here.
The European Union ought to create a suitable framework for the future development of tourist policy, as is being discussed in the Philoxenia programme. Another positive step would be to submit a white paper, following on from the Green Paper, to define the future strategy - not the communitisation of tourist policy but a strategy. It is important to maintain and promote specific, individual customs and traditions. I believe that we must give real priority to training those employed in the tourist industry.
To conclude, let me once again protest strongly in this House about sex tourism. I call on the Commission to do its utmost to combat and finally put a stop to this truly shameful form of tourism.

Linser
Mr President, let me, as a representative of the most tourist-intensive country in the European Union, say a few words on this excellent report. After all, Austria derives 6 % of its GDP from international tourism. The domestic pressure of competition is enormous, as a result of extremely cheap offers in areas with good climatic conditions. Tourist companies are faced with a totally uncoordinated and inefficient EU tourism policy. There is no uniform concept of tourism. Twice now the Council has rejected the Philoxenia programme, which offers some really positive ideas. In my view, this kind of action programme should obey the principle of subsidiarity and give priority to advertising particular regions, because I believe that would be the best way to find third-country customers for the European market.
The report calls on the budgetary authority to make a functioning budget available for direct Community measures for 1999. Budget line B5-325 is the only one that refers explicitly to measures to promote tourism. Then it emerges that this budget line, which was virtually non-existent in the past given that it only accounted for ECU 2 million, is to be cut even more under the Council and Commission proposals. That is incredible when you think that the Commission described tourism as one of the five economic factors most likely to create jobs.
Tourism is to be promoted via the Structural Funds and various Community initiatives that were not originally geared to tourism. As the Commission report shows, this results in an unfair distribution of resources, which is a serious disadvantage to Austria, among others.

Mendes Bota
Mr President, tourism in the European Union does not have its own fundamental law. And since the Treaties omitted to mention it, it has no legal base. And since it has no legal base, neither does it have any activities: the PHILOXENIA programme is still on ice. Consequently, it has no budget: the budget proposal came to nothing and the Committee on Budgets made sure that the amendment proposed by the Committee on Transport and Tourism, involving the modest sum of ECU 3.5 million for 1999, came to nothing.
How is it that, when everybody agrees that tourism is such an important sector for the European Union in terms of jobs, economic activity, investment and sustainable development, it did not merit even a tiny paragraph in the Treaty of Amsterdam? Why should it be bound by the unanimity rule in the Council of Ministers, even for decisions relating to minor measures, in a way which undermines the very process of European integration? Why is it that, although it is so clearly a sector which cuts across the greatest number of other sectors, from transport to the environment, from regional policy to employment, from trade to agriculture and rural affairs, the Council insists on denying tourism a minimum of institutional dignity and delegates it to a dark and shameful corner in the basement of DG XXIII?
I know that subsidiarily should be the rule. We all know that regional policy supported tourism-incentive projects during the 1994-99 period to the tune of ECU 9 billion, but this cannot be used to justify the absence of a Community action plan for tourism, because there are areas in which potential exists for Community added value, with external promotion outside the European Union, reduction of seasonal variations, coordination of the activities of different programmes and policies where they affect tourism, fiscal harmonisation, classification of tourism structures, safety and information for tourists as consumers.
If tourism is to acquire some dignity, it must be given a higher budgetary profile. It is now up to the political groups of this House to achieve a consensus which will put an end to this irrational situation of a tourist sector with no foundation.

Cornelissen
Mr President, there is good news and there is bad news for tourism in the European Union. The good news first. The introduction of the euro will make travel and tourism in 'Euroland' easier and cheaper. I have worked out that, thanks to the euro, one day out of a two-week holiday in the European Union will be free. Another piece of good news is that there is every indication that travel and tourism will be the number one growth sector in the next few years, although the less optimistic economic outlook suggests that this growth may be less spectacular than we had thought until recently.
Now the bad news. The crisis in Asia and Russia will reduce the numbers of tourists from those countries visiting Europe. At the same time, these countries will become more attractive because of the devaluation of their currencies. I am thinking of the important sector of conference tourism, where we shall get more for our money. My question is this: what is the Commission's response to this development? We urgently need a strategy to enable Europe to benefit from the level of growth expected. The watchwords of this strategy should be: quality and greater competitiveness for Europe's tourist industry, particularly with regard to SMEs. In this context, I would like to see a uniformly low rate of VAT being levied on tourism. Tourism does, after all, provide a great many jobs. We must in future have tourism which is sustainable.
My second question is what part does DG XXIII play in the allocation of sizeable sums of money from the regional funds to tourism? And my last question, Mr President, how does the Commission rate the chances of getting Philoxenia approved by the end of the year, given the energy displayed by the Austrian Presidency?

Vaz da Silva
Mr President, Commissioner, ladies and gentlemen, Europe should assert its difference in tourism as it is doing in the information society. The European tourist industry must, increasingly, be an industry of quality. A European concept of tourism exists which links it closely with the promotion of the environment, culture, regional development, health and the safety and well-being of individuals.
The Novo Belenguer report appeals for a European tourism policy, and rightly so. This policy should, on the one hand, seek to create within the Commission a structure that is able to carry out studies, compare statistics, promote training, encourage innovation and facilitate cooperation networks and, on the other, encourage coordination structures in the Member States to enable Europe to maintain its leadership as a tourist destination. The recent example of the establishment of the 'Europa Traditionis Consortium' to promote tourism in traditional private homes is just one example of a joint initiative in society which is on the right track, but which will be but a drop in the ocean if it is not publicised and extensively replicated.
The European Union could and should have a role to play, both in promoting cooperation networks and in training professionals, making them aware of the medium and long-term advantages for the sector itself of a sustainable type of tourism which respects nature and heritage.
If the Council persists in hesitating to deal with tourism policy at Community level, it should but consider the impact of its failure to do so on the competitiveness of the sector in Europe and on the development of its peripheral regions. Under the present conditions of increased competition, with the absence of coordinated measures and common policies in the areas of mobility of professionals, efficiency of communications and marketing, in short with the failure rapidly to upgrade the sector as a whole, Europe could well lose its leading position, which it would subsequently find it difficult to recover.

Santini
Mr President, as the last speaker, I shall touch on certain matters which have merely been alluded to by others, above all ones relating to the economic and employment potential of this sector.
The statistics tell us that tourism is now the world's third industry, after the oil and automobile industries. The same statistics state that, in the year 2000, tourism will be the world's number one industry. There are figures to substantiate these claims. Between 1990 and 1995, revenue from tourism rose by 8.5 %: it was USD 400 billion in 1996; by 2000 it will be USD 700 billion. Currently tourism around the world accounts for 12.5 % of GDP; in 2007, the statistics say, this figure will rise to 12.8 %. Here are a few more numbers in spite of the late hour: 19.1 million people are employed in tourism today in the European Union, the equivalent of 12.8 % of total jobs. 65 % of these posts are occupied by women; by 2007 there will be an additional 1.8 million jobs.
That, then, is the economic scale of a sector which is progressing, growing, increasing, and to which Europe's institutions still seem not to give proper consideration. But I believe that, in spite of subsidiarity - which still remains a valid principle at territorial level - tourism can at the same time be promoted for Europe as a whole. Yes, let us spread the word about this old continent of ours, just as the United States of America now speaks with a single voice, and similarly certain Eastern bloc countries. Competition is worldwide. We have the reasons; we lack the money. ECU 10.5 million to promote Europe! My region has 450 000 inhabitants - true enough, we can offer Lake Garda and the Dolomites - and alone spends ECU 7 million, almost as much as the European Union. Perhaps it is an example worth following!

Papoutsis
Mr President, ladies and gentlemen, let me firstly thank the rapporteur, Mr Novo Belenguer, for his detailed report, and Mr Wijsenbeek for the opinion of the Committee on Legal Affairs and Citizens' Rights. This report conveys an important message, namely that it is time we did something to improve the efficacy of Community action in the tourism sector, and to maximise tourism's contribution towards achieving the Union's objectives. Of course, the necessary appropriations have to be secured, because the lack of specific finance for the budget line relating to tourism is creating serious practical limitations. I am optimistic, however, that the Austrian Presidency's efforts will bear fruit and that we shall achieve agreement on the very important Philoxenia programme in the coming months. Let me now refer briefly to the basic priorities you have set out in the motion for a resolution and which many of you have just mentioned in your speeches. First of all, I too agree that tourism-related action must include employment, training and education. As you know, after the European Conference on Tourism and Employment in Luxembourg, we set up a high-level group whose mission was to examine how best tourism could contribute towards employment.
The first stage of that process is already nearing completion, and in the next few weeks I shall be receiving the group's recommendations. My intention is that the Commission should send the European Parliament and the Council a communication by the end of the year, in which an overall assessment of the report will be presented, along with guidelines for future action.
Secondly, there is the issue of modernising the tourism industry and improving its competitiveness, especially that of SMEs involved in tourism activities. I absolutely agree that the application of new technology and the smooth operation of the internal market are essential prerequisites if Europe's tourism industry is to maintain the strong position it holds today at world level. I therefore believe it was appropriate to adopt an initiative which provides a basis for the development and dissemination of technical knowledge concerning the use of information technology in tourist services. The Commission is already looking into the specific needs and actions required for tourism, which will have to be taken into account when implementing the fifth programme of research and technological development.
Thirdly, there is the matter of the introduction of the euro and the challenges this presents for both tourists and tourism companies. As you know, we have been involved in far-ranging consultations about the preparatory measures being taken for the euro's introduction. Taking part in those consultations were banks, credit institutions, professionals in the tourism sector, and of course consumer associations. The results of that work will be presented at the conference due to take place in Brussels on 18 October. User-friendly guides for tourism companies are in the final stages of preparation and will be available by the end of the year.
Fourthly, there is the issue of the Structural Fund reform proposed in Agenda 2000 and the opportunities which could arise in that context for full exploitation of tourism potential in the less favoured parts of Europe, or even in declining areas. In the context of the Structural Funds, then, the Member States are drawing up plans and indicating their sectoral priorities. Experience shows that almost all the areas eligible under the Structural Funds have included plans related to tourism and its programmes. However, application of the new operating rules for the Structural Funds is an opportunity for interested regional and national authorities to assess and reconsider their plans for the development of tourism, and in this way to determine coherent measures to upgrade tourist infrastructure and improve the quality of tourism-related services in those areas.
Fifthly, there is the question of applying the principle of sustainability to the development of tourism. I agree with you that tourism cannot be developed successfully unless the principle of sustainability is fully respected. I also agree on the need for a more widespread use in tourism of Community resources to protect the environment, and to protect and promote Europe's cultural heritage. Together with the Member States, we must strive for broader dissemination of the results of certain previous worthwhile programmes in that sector. And finally, there is the matter of overall monitoring and assessment and the preparation of the reports on Community action that affects tourism. I agree with you that these reports are a way to improve transparency, a means of helping to ensure the democratic control of Community activities. I can therefore accept the continuation of the existing arrangements regarding preparation of the reports.
In conclusion, I should like to take this opportunity to tell you about some administrative developments, because this is an issue which is touched on by the recommendations in the motion for a resolution now before the House. Recently, under the umbrella of DG XXIII, we have created not just a sector, not just a working group, but a directorate - a directorate for the coordination of Community measures and coordinated action related to tourism. This directorate includes three operational units respectively concerned with matters of policy, competition and sustainability.
Before I end, I would certainly like to mention the Community action to combat sex tourism which victimises children. Thanks to your support, and especially thanks to the decision by the budgetary authority to establish a special budget line, very considerable progress has been made in connection with informing the public about the problem.
We are continuing our initiatives along these lines, and towards the end of the year I am glad to say that I shall be able to put before Parliament a report on what has been done in this area over the past two years.
Lastly, Mr President, I would once again like to congratulate Mr Novo Belenguer on his work and to thank all the Members of Parliament who have steadfastly maintained that tourism is and will remain a major and dynamic industry, which must be actively supported by the Community, I would say even more so than at present.

Cornelissen
Mr President, my thanks to the Commissioner for his answer. I did not get an answer either to my question of how he rates the chances of getting Philoxenia approved by the end of the year, given the energy displayed by the Austrian Presidency. May I also take this opportunity, Mr President, of saying how much I appreciate it that there is still a representative of the Council in the Chamber for our debates, despite the lateness of the hour. It is right and proper that there should be, but thank you nonetheless.

Papoutsis
Mr President, I wish to assure the House that the Austrian Presidency has indeed launched an effort by presenting a compromise proposal which contains ideas which I believe are fully in keeping with the spirit of Philoxenia. It is based on the compromise proposed by the Luxembourg Presidency, and the Austrian Presidency is currently in consultation with the other Member States. However, after the German elections we do not yet have the new government in the Federal Republic of Germany, and we are consequently waiting to consult with that new government because, as you will be aware, Germany is the only country, apart from certain reservations expressed by the United Kingdom, which has reacted against the acceptance of the Philoxenia programme.
I hope these negotiations will result in success. And I certainly hope that the Council of Ministers for Tourism which the Austrian Presidency has scheduled for the beginning of December will be the meeting which approves the Philoxenia programme. In any event, however, I sincerely hope for the European Parliament's active support so that these efforts may be successful.
The European Parliament, the Economic and Social Committee, the Committee of the Regions, the whole of Europe's tourism industry, all the agencies involved in the tourism sector and 14 out of the 15 Member States are in favour of this programme. At last, I think the time has come for the Philoxenia programme to form the legal basis for a multiannual programme on behalf of tourism.

President
I should like to take this opportunity to thank Mr Novo Belenguer, since this is the last report that he will be presenting, and to wish him every success in his future career when he leaves the House.
The debate is closed.
The vote will take place tomorrow at 11.30 a.m.
(The sitting was closed at 11.40 p.m.)

