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

Puerta
Madam President, I did not participate in the votes yesterday but I am recorded as having voted in a very odd manner: on my own and against my group. And I had no intentions of doing that. Therefore, the fact that I voted, and particularly that I voted in such a way, should be deleted. That is all I wanted to say. All that appears is: Mr Puerta of the GUE Group, voting against my group every time.

President
Very well, Mr Puerta, we shall naturally make the corrections as you request.
Are there any other comments? There are not.
The Minutes were approved

Communication on the 1996 discharge
Theato
Madam President, pursuant to Article 6 of Annex V to the Rules of Procedure, following the vote of 17 December on the 1996 discharge, the Committee on Budgetary Control must report back to Parliament at the subsequent part-session. We had a meeting yesterday and discussed what action should be taken. We unanimously agreed on the following statement which I - as instructed by the committee - must read out to you. I shall do this in English, as we agreed to use this language to avoid misunderstandings and translation errors. The statement reads as follows:
The Committee on Budgetary Control is taking into account Parliament's vote of 17 December 1998 by which its proposal to give discharge for 1996 was not approved. Secondly, notes that according to Annex V of its Rules, the discharge procedure is not yet closed. Third, is dealing with the question of closing the financial accounts for 1996. Fourth, will present to Parliament a report by 31 March 1999.

President
Thank you for that statement, Mrs Theato.

Agenda 2000
President
The next item is the joint debate on the following reports:
A4-0444/98 by Mr Mulder, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council Regulation on the financing of the common agricultural policy (COM(98)0158 - C4-0298/98-98/0112(CNS)); -A4-0494/98 by Mr Garot, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council Regulation on the common organisation of the market in beef and veal (COM(98)0158 - C4-0294/98-98/0109(CNS)); -A4-0446/98 by Mr Goepel, on behalf of the Committee on Agriculture and Rural Development, onI.the proposal for a Council Regulation establishing a common organisation of the market in the milk and milk products sector (COM(98)0158 - C4-0295/98-98/0110(CNS))II. the proposal for a Council Regulation amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector (COM(98)0158 - C4-0296/98-98/0111(CNS)); -A4-0496/98 by Mr Fantuzzi, on behalf of the Committee on Agriculture and Rural Development, onI.the proposal for a Council Regulation amending Regulation (EEC) No 1766/92 on the common organisation of the market of cereals and repealing Regulation (EEC) No 2731/75 fixing standard qualities for common wheat, rye, barley, maize and durum wheat (COM(98)0158 - C4-0292/98-98/0107(CNS))II. the proposal for a Council Regulation establishing a support system for producers of certain arable crops (COM(98)0158 - C4-0293/98-98/0108(CNS)); -A4-0480/98 by Mr Graefe zu Baringdorf, on behalf of the Committee on Agriculture and Rural Development, on the proposal for a Council Regulation establishing common rules for direct support schemes under the common agricultural policy (COM(98)0158 - C4-0299/98-98/0113(CNS)).
Mulder
Madam President, may I begin by welcoming Mr Funke to the House. I think it is a good tradition that the President of the Council of Ministers always takes the trouble to attend when we hold important debates on agriculture.
Regarding the financing of the agriculture dimension of Agenda 2000, I think it is a good thing to be continuing the trend of recent years. If agriculture policy changes, the funding of it naturally has to change as well. The Committee on Agriculture broadly endorses the Commission's proposals. The EAGGF must remain the principal source of funding for the common agricultural policy. As with the MacSharry reforms of a few years ago, we think it is a good thing to modify its content. Just as the MacSharry reforms for the first time introduced a budget line which had little to do with policy on markets and prices as such, this time too all manner of new chapters are being added.
Firstly there is a chapter on rural development, and the Agriculture Committee finds that this makes sense. Agriculture policy is no longer just a policy on prices and markets, but an all-embracing policy which includes policy on the countryside. Secondly, the Commission is also proposing that veterinary and phytosanitary measures should be included. That seems logical to us. Thirdly, there is information policy. The Commission proposes to include that too. This is likewise welcomed by the Agriculture Committee. We think that in general the CAP is not sufficiently well regarded in Europe. We need to highlight its positive aspects - and there are plenty of those.
What the European Commission's proposals do not include, and the Committee on Agriculture is adding this, is any mention of a policy on agricultural product quality. If there is one thing Europe needs after the BSE crisis and all the fuss over the quality of foods, it is for Europe to devise a policy for the quality of agricultural products. That has to be an key part of European farm policy.
The Agriculture Committee also thinks that in future too, farmers must be able to get their prices from the market as far as possible. Filling in a pile of forms is not all that helpful. What they want is a better price. That can be secured by a policy on quality, but also by developing other markets, namely the market in non-food uses of agricultural products. As far as the environment is concerned, it will be very useful if we can legislate for the use of certain farm products in certain areas. That will open up new markets, and prices may pick up as a result.
Lastly, with regard to European enlargement, we have no quarrel with the fact that some measure of pre-accession assistance is also included in the regulation. As far as Parliament's powers are concerned, all spending on markets and prices policy must remain compulsory expenditure, we accept that. Given that Parliament has to have a voice in all other spending, this must be non-compulsory expenditure, because Parliament has full power of codecision on that.
What, in the view of the Agriculture Committee, should not be in the Guarantee Fund? All the structural measures under Objective 1 and Community initiatives. Management of the funds must of course remain under the control of the Commission itself. Where monies are disbursed by Member States through the payment agencies, they must be scrutinised by the Member States. In view of this week's events, it will come as no surprise that we want that scrutiny to be greatly improved. We have to have better scrutiny. And how do we see that scrutiny? The Commission's proposal is for a report on the financial accounts three months after the end of the financial year, and for a policy review after two years. The Agriculture Committee has tabled a number of amendments to improve things here. We want to be told straight away, not two years later, if something has been rejected or approved. We want to have our finger firmly on the pulse of any developments in that area. We want the Commission to report to us on this every three months. This does not need to be a weighty tome. We have enough reading to do already, but it must be provided as swiftly as possible.
In conclusion, I have a comment on one contentious point in our proposal, namely the cofinancing of certain agricultural expenditure. It includes a recital in which the Agriculture Committee is cautiously in favour of that cofinancing, but there was a tied vote on whether or not to include an article on this. Eighteen members of the Agriculture Committee were in favour of cofinancing for certain types of expenditure, 18 were against and one member abstained. So this is something which the plenary will have to decide in its ultimate wisdom.

Garot
Madam President, ladies and gentlemen, in my report on beef and veal, due care was taken to ensure that three vital points were taken into account. The first is that new consumer expectations have emerged as a result of the mad cow phenomenon, expectations which focus on product quality in terms of taste and health. The second is the need to correct the structural imbalances of the market, where there is an annual 2 % increase in supply and a 1 % fall in demand. The third is the validity of the Cunha report which Parliament adopted and which advocates reconciling the economic dimension of agricultural activity with its social, environmental and territorial role.
Ladies and gentlemen, as everyone has discovered, the Commission's proposals advocate a reform in which these three concerns are not central. In fact the Commission firstly intends to increase the European Union's share of world markets and bring European prices closer to those of the countries of Central and Eastern Europe. The approach favoured in this case, contrary to previous reforms, means that it is moving towards market regulation through price control, which is why it is proposing to lower the intervention price by 30 % and abandon the public intervention system. I, for my part, am of the opinion that if we are to be realistic about this situation we have to think in terms of future European beef and veal production as being primarily linked to the European market, with external markets acting increasingly as limited markets for disposing of surpluses.
As the Asian and Russian crises reveal the Commission's excessive confidence in international markets this option appears increasingly viable. The relevance of the Commission's trade strategy for the beef and veal sector has not been decisively demonstrated. It is a sector in which our production costs are twice as high as in Argentina and three times as high as in New Zealand. In this context, accelerated moves towards alignment with world prices is likely to have detrimental effects on a large number of European Union cattle farmers which would of course be inadmissible.
This is why the proposals I have submitted for debate combine a reasonable price reduction with proactive management of volumes, the essential promotion of a food policy and the need to maintain decent incomes for producers. As regards the lowering of prices, I am proposing a 15 % reduction to stimulate consumption and maintain a correct competitive relationship with white meat, which will benefit from a reduction in cereal prices. In terms of production control, I am proposing that measures advocated by the Commission to increase extensification aid, implement veal calf premiums, encourage carcase weight reductions and introduce individual quotas for the male bovine premium, be further enhanced.
In relation to food policy and in addition to the innovative measures in the packaging and presentation of meat products, efforts should focus on restoring consumer confidence. In this respect, it is obviously by placing demands for high quality products in terms of taste and health at the centre of the COM that we will be able to restore consumer confidence in them. Lastly, as regards cattle farmers' income, a 15 % reduction and vital production cuts are set to further exacerbate their situation, which therefore gives rise to the issue of compensation. I proposed to deal with this within the budget set for this COM in Agenda 2000.
This report, which was put to a vote in the Committee on Agriculture and Rural Development in December, was not adopted, probably for reasons which go beyond its content. And yet, majority votes were obtained on a number of issues: 15 % price reduction, maintaining public intervention, uprating aid for suckler cow herds and extensification, the need for veal calf premiums and maintaining the deseasonalisation premium.
I have therefore highlighted these elements so as to propose them with my political group, the PSE Group, to the House. Then, new amendments are aimed at solving the problems posed by Italy, Germany and Holland regarding the treatment of young male bovines. The essential measure put forward in this connection consists of putting aside a sum of ECU 1 800 million, in the form of extra payments, to grant a slaughter premium for male bovines, suckler cows, dairy cows, heifers and veal calves. Such a premium would be allocated on the basis of Community criteria of a slaughter ceiling for each country, determined on historic bases, and a premium ceiling per animal for each of the categories mentioned, so as to avoid distorting competition between Member States.
This compromise should restore the balance that countries which produce male bovines have waited for, without calling into question the core element of the measure taken to enable the necessary adjustments to be made to the COM in beef and veal. This is why, Madam President, I think that the conditions are now right for Parliament to adopt this report in the near future.

Goepel
Madam President, Mr President-in-Office, the Commission's proposals on the organisation of the market in milk cover three main areas: price support, income support for milk producers, and the provision on guaranteed quantities. The Commission's proposals on price support provide for a reduction in the price of milk of 17 %, and a reduction in the intervention prices for both butter and skimmed milk powder of 15 %. These measures are proposed in order to encourage the consumption of milk and milk products in the Community, and to improve the competitiveness of these products on the world market.
In view of the proposed amount of compensation, the price reduction should, however, be substantially smaller overall than the Commission is seeking. With a smaller price reduction and with amounts of compensation remaining the same, it will be easier to achieve full compensation for loss of income. We therefore propose reducing the target price for milk by 12 % instead of 17 %, and the intervention prices for butter and skimmed milk powder by 10 % instead of 15 % in each case.
Turning now to income compensation, the Commission is proposing four components: a dairy cow premium (Article 15), an additional payment (Article 16), a supplement to the dairy cow premium (Article 12) and an additional payment within the limits of global amounts (Article 13). These proposals are extremely complicated and will lead to serious implementation and monitoring problems. In principle, however, I am in favour of the dairy cow premium together with a supplement under the beef and veal regulation, but not on the basis of a virtual European cow yielding 5 800 kg of milk per year; the basis of this cow premium must instead be financial compensation based on the amount of quota, and national or regional animal yields must guarantee full compensation. A general slaughter premium for dairy cows might also be considered - as a second strand of the organisation of the market in beef and veal - to make up for the price reduction. In practice, we would thus have two forms of premium with which to provide compensation.
Now, as regards the provisions on guaranteed quantities, we support the Commission's proposal to extend the quota until 2006 and, rather more reluctantly, the proposed 2 % increase in quotas. In allocating 1 % to young farmers and 1 % to producers in mountain areas, however, it should also be possible, in the latter case, to take account of less-favoured mountain areas, although only as far as the quantity allocated is concerned.
When discussing a reform of the organisation of the market in milk, we cannot avoid the problem of the additional levy. I propose that it should be reduced by more than the reduction already achieved through the drop in the target price for milk, and that it should be structured flexibly, almost as an economic instrument, so that an active milk producer would have the possibility of adjusting the quota for his holding to the economic situation, either through leasing or by going over quota. That would certainly influence the market price for quota leasing to the disadvantage of the so-called 'armchair milkers', and European milk producers and the dairy industry would, despite the quota arrangements, have the possibility of selling more dairy products on the world market without the payment of export refunds.
On linking land and quotas, all I have to say is that one reason for the growth in leased quotas is the fact that both EC and national law allow non-producers to possess a quota of these quotas. Another is the principle of linking quotas to areas of land. In my view, the question as to whether or not quotas should be tied to land - that is, transfer of milk quota only with a partial transfer of land - should be decided in the individual Member States themselves; there should therefore be an optional arrangement. Article 7(2) should, then, establish the optional suspension of the link between quotas and land, authorising Member States to introduce regional restrictions on the transfer of reference quantities without land.
Two days ago, it was reported by DPA that the presidency and the Commission were both convinced that all the Member States had to show a willingness to compromise, and that national interests should be represented impartially and clearly. That is precisely what I wanted to do here as rapporteur - to be impartial, but clear. In principle, I agree with the Commission that the competitiveness of European farming on the world market needs to be increased. However, I would say to Commissioner Fischler and President-in-Office Funke that I cannot cleverly boost competitiveness on the one hand, and at the same time, by clobbering farmers with step-by-step reductions, exclude whole regions of eastern Germany from this competition on the other. Jobs in agriculture are to be found in particular on mixed farms, producing beef, veal and pigmeat, but above all milk. You should give these families the same chance as all the others in the European Union.
Finally, I am grateful to have been given the opportunity as a Member of this House - almost ten years after German unification - to have a hand in the reorganisation of such an important market. I especially wish to thank those who did the groundwork for me and who have supported me in this complicated, but interesting work.

Fantuzzi
Madam President, I was not entirely happy with some of the amendments made to my report in the Agriculture Committee, such as the one aiming not to reduce intervention prices for cereals but to increase aid nonetheless. It makes little sense to me to increase internal support, at an additional cost of some hundreds of millions of euros, in a sector which - although it accounts for 11 % of gross saleable agricultural production in the Community - alone consumes 40 % of the CAP budget, in other words EUR 17 billion out of 40. I hope the Christmas break has given everyone time to reflect, and that the vote in Brussels on 28 January will lead to a revision of these amendments.
I am convinced, on the contrary, that a 20 % reduction in the intervention price - I shall be proposing 15 % - is not an irrational display of pessimism on the part of DG VI officials. The gap between the intervention price and the world price is wider than that at present; thus the reduction proposed through Agenda 2000 should be even greater, strictly speaking, as the President of the Court of Auditors reminded us in this House a few weeks ago. Indeed, the spectre of surpluses, which we thought had been banished in 1992, is rearing its ugly head again in the Community: all it took was a 2 % better harvest and a set-aside rate of 5 %, and here we are already now with cereals surpluses of some 20 million tonnes. I fear that, if we continue along this road, the forecasts for 2006 will have to be revised upwards.
Therefore, if we wish to be serious and responsible, a thorough, far-reaching reform is urgently needed. It is useless to turn a blind eye; I believe that the phoney reforms which you have outlined, Mr Fischler, would upset no one but would leave us once again with production surpluses. So there is no point in deferring the problem, because it would then have to be tackled as an emergency in the near future, under much more adverse conditions than now. For cereals, we can avoid this danger if we deal with the sector in the manner suggested by the Commission. This is in any event my own opinion. Of course certain rectifications are needed, three at least. The first consists in excluding oilseeds from the single premium. We have a protein deficit in the Community, and it has become increasingly acute since the BSE crisis; it is absurd to invoke the Blair House constraints to claim that, with this reduction in the basic premium, we shall no longer have to suffer them. That is rather like rejoicing when we hurt ourselves, because in that way we no longer feel pain inflicted on us by others. Let us take the bull by the horns, Commissioner, without taking make-believe, dangerous short-cuts. In other words, let us renegotiate Blair House!
The second rectification needed is a set-aside rate of 10 %. Its proposed abolition in 2000 is unrealistic. Even now we could certainly do with a positive set-aside rate, because of the market difficulties already highlighted and in order to ensure that the set-aside system functions effectively.
The third rectification lies in demonstrating greater solidarity and cohesion in the COM for arable crops than currently exists. If the Commission itself acknowledges in its introductory statement that the CAP reform of 1992 has not worked to the advantage of less favoured regions and producers in respect of arable crops - the most significant item of expenditure, representing the bulk of direct income support - we cannot remain hidebound by the logic of 1992. I propose that, in order to start redressing the balance, our frame of reference for productivity should be a weighted average of one third to two thirds of - respectively - average Community production and the traditional yield of a given region.
I hope that these rectifications will be accepted; looking to the future, they would make aid more justifiable in social terms. I believe that these aspects should also be included in other reports on Agenda 2000, for example the one on the horizontal regulation. This is an important opportunity to bring the CAP into line with consumers' and citizens' needs. Eco-compatibility, ceilings and differentiation are not intellectual flights of fancy, but much-needed elements to ensure that the mother of all Community policies has some sort of a future. Otherwise it will not survive. With EUR 40 billion earmarked for 7.5 million individuals, when twice that number are out of work, economic arguments alone are ultimately no longer enough unless they are accompanied by the environmental, social and territorial considerations for which society is pressing hard.
I am concerned about the outcome of this discussion in the House. I fear that, by pulling out all the stops to protect producers, we shall ultimately much dilute the Commission's already tentative new proposals and rule out innovation altogether. It cannot be maintained that because of the crisis in Russia or eastern Asia we should reject or review the reduction in cereals, milk and meat prices. I have never believed in 'fortress Europe'. For Europeans to shut the door to the outside world has always been a mistake: it is precisely at times of crisis that Europe must be a little more adventurous and assert its presence on the world stage. This is not unquestioning confidence in international markets but self-confidence; otherwise there is no point in launching the euro to stand up and be counted in the world. What is more, such a defensive stance sends a most unfortunate message to the CEECs, to the other Europe.
It really is paradoxical that Agenda 2000, launched in order to bring the two halves of Europe together, is now dividing them. Unfortunately, Mr Funke, the Agriculture Council has not impressed us with its far-sightedness over the past few months. The Agriculture Council itself deserves a motion of censure. It has been treading water for weeks on the reform of the CAP, rehearsing the same old arguments time and time again: the agricultural model, the two pillars. This has not amounted to much, and has left the field clear for the ECOFIN Council, whose theories on cofinancing and expenditure freezes have complicated and even seriously jeopardised the reform's future. Let us avoid wars of words here too: to say 'no' to cofinancing in the name of Community solidarity is to sow discord; to discuss it seriously is another matter, and means assessing all the implications. The tendency to compare net contributions and a reluctance to stump up for the poor countries of the south will not bring much progress in Europe, in my view. What is more, to turn the CAP as it stands into a monument to the inviolable principle of solidarity is an insult to common sense. Whatever anyone may say, the CAP is certainly not the best example of Community solidarity; one need only look at the level of support granted to production in Mediterranean areas.
In conclusion, Minister, we should like you to explain this new enthusiasm for a zero-cost reform. If we wish to curb expenditure and tackle the structural difficulties of excessive, uneven support leading to distortion, the way to do so in my opinion is to enact more radical reforms, not to preserve the status quo. It would be galling to discover, after March, that what lies behind the slogan of zero-cost reform is the umpteenth postponement of any reform. The last thing that farmers need is for everything to be deferred until October.

Graefe zu Baringdorf
Madam President, I should first like to provide a formal clarification: I am speaking here as rapporteur of the Committee on Agriculture and Rural Development, as all the other previous speakers have also done so far. I am not, therefore, giving my own opinion or that of my group, but that of the committee. We have the unusual situation in the Agriculture Committee that in many areas no decisions were made at all, that is, that there was no position of any kind, except that of rejecting the Commission's position. I was lucky, however, in my appointment as rapporteur because, Mr Fischler, I can congratulate you: the committee has approved in full the Commission's proposal on direct support schemes and their modulation. I am, therefore, in a position to report on your proposal here and to explain it. I shall, however, try to make a better job of doing so than you did in your remarks.
The basis for this proposal is of course the premiums, which were introduced in 1992 in the so-called MacSharry reform - as yet we have not heard much of the Fischler reform; we still need to introduce that - when prices were lowered and it was said that compensatory payments would be made in the form of premiums. These compensatory payments were not linked to quality, which, logically speaking, was right, because the amount paid out was, of course, supposed to be the same as that by which prices had fallen. The fact that this was not quite correct and that, overall, agriculture lost out somewhat, is something we discussed at the time.
The impact of these changes was, of course, considerable. Let me quote the European Court of Auditors. The Court writes in its investigation that a point was reached where 40 % of these premiums were going to 4 % of holdings. And then a point was reached where 80 % of these premiums were going to 20 % of holdings and where, for example - according to the Court of Auditors - one leading holding received DEM 6.61 million from Brussels in one year. That meant that some holdings were in a position to pay their rent and labour costs out of the premiums and still had money left over. Of course, for the holdings which were less well provided for, this is an extremely difficult situation, because the former are of course far better able to withstand price reductions than the latter. The Commission has therefore said - and in the committee we think this is right - that this has to be stopped.
We must make the payment of premiums more dependent on criteria such as employment and the environment, and take greater account of these factors. So far, the committee agrees. Now, contrary to the Court of Auditors, which actually said that direct payments above ECU 100 000 should be stopped completely - that is, capped - you have rightly, like the committee, come out in favour of a sliding scale. The intention is for 20 % to be deducted between ECU 100 000 and ECU 200 000, and 25 % above ECU 200 000. That would be the level set by Brussels. Then you say that it is now up to the Member States to make further deductions of up to 20 % for holdings which have a below-average number of workers, or in other words have reached a much more advanced stage of rationalisation than other holdings. That would therefore give a reduction of up to 45 %.
This proposal is based on a reasonable approach, because it makes employment a factor in the payment of the premium, albeit in a standardised form and not in the form of remuneration for the actual work done. But this would still mean that highly rationalised holdings would see their premiums reduced, and holdings with a large number of employees would receive a higher payout. The only problem with the whole scheme is that only around 1 % - or perhaps not even that - of holdings are affected and that the vast majority of agricultural holdings do not stand to gain anything from this sliding scale, because obviously the reductions made higher up do not necessarily benefit those lower down.
Commissioner, with your permission I will outline the proposal we tabled in the Agriculture Committee; it was not voted on, but was reported in the Commission - at least unofficially - to be a better proposal than yours. I am not allowed to report on it as such, because the Agriculture Committee has of course decided otherwise, but I should nevertheless like to touch upon it. We could in fact say that very high administrative expenditure is required for the holdings to prove that they are not working to full capacity. This might lead to legal disputes and cause difficulties. That is why we have proposed giving the holdings an option: we deduct 45 % straightaway, and then holdings with a large number of employees may voluntarily submit evidence of their labour costs, 50 % of which are offset. Calculations showed that under these arrangements, 97 % of holdings would be wholly unaffected. We therefore create a mechanism for holdings which have a large number of employees and which use ecologically sound farming methods. The two usually go hand in hand. We give holdings of this kind more than we give holdings which have undergone a process of rationalisation. That seems to me to be very sensible. The other holdings are competitive anyway because they have reached such an advanced stage of rationalisation. Thank you, Madam President. I will save the rest for when I speak for my group and on my own account.

Goepel
Madam President, we have to let fairness prevail. I must insist! I too would have very much liked to have another two minutes to talk about the milk market. I would ask you to indicate that speakers must keep to their allotted time.
Applause

President
It is very hard to interrupt a Member, Mr Goepel, especially a rapporteur, and if you had gone beyond your time you know that I would not have interrupted you either.
Our rapporteurs do an important job. As the President of the sitting, I cannot simply cut off a rapporteur.
You are well aware that I do not do that. I may be wrong, but I do not do it!

Matikainen-Kallström
Madam President, the grain reform programme in Agenda 2000 involves undoing much of the regulation relating to letting the land remain fallow. At the same time the document does not, however, pay sufficient attention to other uses of farm land. It would be sensible to invest in the increased cultivation of crops for energy, as an alternative use for land.
In rural areas important work, for both nature and the economy, is to be found in the production of bioenergy. The benefits of bioenergy are that it is renewable, clean, localised, and it provides employment. So far indirect regional, national and environmental benefits have tended to provide the incentive, rather than direct economic benefits. The adoption of developed technology has brought new opportunities for the exploitation of bioenergy, and that will allow us, in the future, to increase our level of self-sufficiency in energy production in Europe. More investment in bioenergy product development will also bring with it a vital economic benefit in relation to other energy sources.
As part of the implementation of the Kyoto agreement on climate the Commission has announced its objective to double the use of renewables in the Union area by the year 2010. Recognition of the non-food option in Agenda 2000 would also prove that the Commission meant business. The production of bioenergy as a cheap source of power will need support, along with that given to other alternative energy sources in the future, for it to gain the status we intend for it as part of European energy policy. Finally, I would like to express my thanks to the rapporteur for his hard and time-consuming work.

Garriga Polledo
Madam President, in its Agenda 2000 communication, the European Commission includes proposals that improve and consolidate economic and social cohesion through the reform of structural policies, the common agricultural policy and the policy on rural development.
Within the proposals for agricultural reform, the top priority is the Union's commitment to maintaining some viable rural communities and to protecting European rural heritage. In order to do so, it must have a very strong and competitive agricultural sector at global level that operates within a framework of sustainable development.
In this context, the Commission has set out its proposals on direct support schemes within the common agricultural policy relating to all common organisations of the market that grant direct payments.
In the proposal for a regulation in question, the Committee on Budgetary Control calls on the Committee on Agriculture and Rural Development to incorporate three amendments that have the common objective of ensuring that Parliament is better informed.
The Commission's proposal is based on the principle of subsidiarity. Without wishing to question this approach, it is important that the measures adopted to guarantee payments to farmers benefiting from these schemes are accompanied by a certain degree of coordination at Community level.
The system of penalties applied to farmers who do not meet labour or environmental standards must be applied for the same reasons in all Member States and should be similar throughout the Community.
Lastly, I should like to draw attention to the fact that the Commission wants this proposal for a regulation to be implemented by the management committees in which the Council and the Commission are involved yet which Parliament is excluded from. On this same theme, I should like to point out that Parliament approved a resolution in September in which we asked that we be guaranteed real control over the implementing measures. For this reason, the Committee on Budgetary Control stresses that the Commission must inform Parliament of the measures Member States adopt in applying this regulation. Moreover, before the final decision is adopted, Parliament should have the right to contribute, for a limited period of time, to the debate on the Commission's proposals on the implementing measures.

Funke
Madam President, ladies and gentlemen, may I first thank you very much for your warm welcome and for giving me the opportunity to be here in the European Parliament for my first, as it were, official appointment as President-in-Office of the Agriculture and Fisheries Council, and to address you. I should like to outline the German Presidency's priorities on agriculture and fisheries; I hope that Parliament will be a constructive partner in this work and will actively support us in the quite enormous project we have ahead of us. As you know, we are also under pressure of time because, of course, parliamentary elections are on the horizon. I am setting great store by your cooperation, ladies and gentlemen.
Today, you will be debating the agricultural component of Agenda 2000. I have followed the deliberations hitherto in the European Parliament's committees and plenary closely - and in this respect I am also grateful that I was able to hear what each of the rapporteurs had to say today - and I conclude, although this will certainly come as no surprise to you, that opinions do still diverge widely on the core issues. I therefore deduce that the German Presidency has its work cut out to reach an appropriate compromise.
Certainly, if you include the question of financing, Agenda 2000 is the central political theme of the German Presidency as a whole. The federal government has set itself the goal of adopting Agenda 2000 in its entirety as early as this spring. This is a truly ambitious task and it will only be achieved if Parliament, the Commission and the presidency work together constructively and in a spirit of mutual trust, and if they really want political success.
The Commission's proposals for the sector of agriculture and rural development are part of a package, and I welcome the fact that this is also how the European Parliament sees it. I would, therefore, earnestly request that you bring deliberations in Parliament to a close in good time, so that we can also stay on schedule in this respect. I believe that it is in both our interests to make a success of the Agenda and to make it clear to the people of Europe that the European institutions are not only capable of action but also of successful action, and that they can design policies for the future.
On 1 January, Germany took over the presidency for the eleventh time since the foundation of the European Economic Community. The German Government is very conscious of the great responsibility this brings, especially when the projects on the table are, after all, of such great historical significance, such as paving the way for eastward enlargement and preparing for the WTO negotiations which will begin at the end of the year. That is also why concluding the negotiations on Agenda 2000 is our top priority. We can - and for this I am very grateful - build on the solid preparatory work carried out by the Austrian, but also the British and Luxembourg Presidencies. All the same, I must add that very intensive work will be required to overcome the differences of opinion - which are in part still considerable - and to reach a workable compromise.
Despite the uncertainty over financing - and further intensive discussions will also be held on this - I will, as chairman of the Agriculture Council, lead the negotiations on the agriculture part of the Agenda on the basis of the Commission proposals. This is what was envisaged from the outset. In the meantime, we have set up a high-level group, which started its deliberations this week, beginning in fact with beef and veal, and milk. It is intended that this group should prepare for negotiations in the Agriculture Council and demonstrate possible ways of reaching compromises, and that it should, therefore, prepare draft decisions to a very large extent.
At the federal government's meeting with the Commission on Monday of this week in Bonn, Commissioner Fischler and I agreed that, if convincing alternatives are presented, the Commission is prepared to review its proposals and if necessary to table new ones. I welcome this and am extremely grateful to the Commissioner and his colleagues for giving this undertaking. For at the present stage of the negotiations, it is certainly still too early to speculate about compromises. I do not think that would be sensible. But it should be pointed out - and I fully endorse what Mr Goepel said - that all of us, despite the respective interests we hold at national level, must also be prepared to reach compromises; otherwise at the end of the day we will not have a result.
I should like to make it clear, however, that I believe it is essential to safeguard the interests of European agriculture, to invest the European model of agriculture with tangible initiatives, and to bolster rural areas by encouraging sustainable development. In the future, European agriculture will have to be competitive in order to hold its own against international competition.
With this in mind, European market organisations ought to be reformed and geared more closely to the requirements of the market. I must add, however, that in so doing it still is, and will continue to be, up to us to maintain and further improve our high standards of environmental and consumer protection, and also - in the interests of fair competition - to ensure that these standards are adequately safeguarded in international trade agreements.
As chairman of the Agriculture Council, I should like to work with the Commission towards further improving the status of environmental protection in agricultural policy, giving Member States and regions a greater say in policies on agriculture and rural areas, and making animal welfare and precautionary consumer protection integral parts of the common agricultural policy. Important ideas on these matters - for which I am extremely grateful - have emerged from the European Parliament; I am pleased about this and fully support its greater involvement, including in agricultural policy.
I would emphasise once again the necessity in European politics of the trio - if I may express it thus - of the Council, the Commission and Parliament. I could of course list the members of the trio in any order: the Council, the Commission and Parliament; Parliament, the Council and the Commission - as you wish, the order should not make any difference.
Although Agenda 2000 will be the German Presidency's main priority, alongside it are other important dossiers in the field of agriculture and fisheries, which should, if possible, also be completed. As always in the first half of the year, negotiations on agricultural prices are on the agenda, the importance of which has admittedly - as we all know - diminished. I would be grateful if Parliament were able to complete its deliberations on the outstanding Commission proposals within this parliamentary term.
If it is to live up to the expectations of the consumer, Community law should be further developed on the basis of the Commission Green Paper. The entire food production chain needs to be regulated efficiently and consistently. We also want to make improvements in the field of organic farming, in terms of both production and marketing. In addition, we attach great importance to animal welfare and combating epizootic diseases. I might perhaps mention the most important animal welfare issues here. They are as follows: decisions on treating laying hens in battery cages in a way appropriate to their species; laying down standards for the carriage of animals by sea; continuing to specify minimum slaughtering standards; and incorporating the Council of Europe recommendation on animals kept for farming purposes into Community law.
Combating epizootic diseases is becoming increasingly important in the light of the growth of trade in live animals and the economic damage resulting from outbreaks of disease. In view of this, moves are being made to amend the directives on swine fever, foot and mouth disease and zoonoses. Those are my comments on the agricultural side.
I also wish to talk briefly about fisheries, because there too we have an extensive work programme. Of course the Agenda 2000 negotiations also affect the fisheries sector. Therefore, for example, a decision has to be made on the core issue of the future financing of fisheries support. Alongside this, negotiations need to be held on the regulation on structural measures in the fisheries sector, to ensure that this proposal is adopted by June 1999 at the latest. I am aiming to table the key political elements of this proposal for a decision as early as the March Fisheries Council.
In addition, the common fisheries policy needs to be further developed to ensure sustainable and balanced management of fish stocks. Discussions on continuing or renewing fisheries agreements with third countries are a further priority, as is the review of these agreements, which was initiated by the Council. The Fisheries Council will also be dealing with restructuring the common organisation of the market in fishery products.
That was a brief presentation of the German Presidency's priorities and the work it will be doing on agricultural and fisheries policy. Obviously, in the ten minutes available to me I was only able to touch on some points very briefly. I am aware that I have exceeded my speaking time somewhat, but as this is my first speech and presentation in this House, perhaps I might be forgiven. I should like to assure you that as the President-in-Office of the Agriculture and Fisheries Council, I will continue - including within the so-called informal trilogue - to seek an in-depth exchange of views with the European Parliament. I believe it is necessary and I am convinced it is important.
Applause

President
After what was your first speech to the House, I should like to welcome you here very warmly on behalf of Parliament.

Fischler
Madam President, Mr President-in-Office, ladies and gentlemen, I should like to warn you straight away that I shall need rather more than ten minutes to comment on all the reports before the House today. If possible, however, I will try to save some time at the end of the debate.
Firstly though, I should like to thank all the rapporteurs very warmly for the work they have done in the run-up to today's debate. The individual market organisations were dealt with in the reports of Mr Fantuzzi, Mr Garot and Mr Goepel, the horizontal regulation by Mr Graefe zu Baringdorf and the EAGGF regulation by Mr Mulder.
The report on the reform of the market in wine is on the agenda for February, and the reports on rural development and on pre-accession aid were already dealt with in November. I do not, therefore, need to comment on those reports today, but I should like to make it clear that my thanks also go to the rapporteurs, Mr Görlach and Mr Sonneveld.
As rapporteurs, all of you have contributed to our being able, so far, to keep to our timetable for dealing with the Agenda 2000 proposals. Negotiations in the Council have now entered the decision-making phase. The technical issues have been resolved and the newly created high-level group started work this week. As soon as a political agreement is reached, the Commission will, in any case, make all the necessary arrangements, so that the legal texts can be adopted definitively before the parliamentary elections.
Most farmers and farming unions now agree that reform of the common agricultural policy is unavoidable. The danger of further surpluses - despite growing demand on the international agriculture markets - the forthcoming WTO round and rising production potential, which will also increase considerably with eastward enlargement, are factors which are shaping the discussion on the future structure of market management policies. In addition, there is an important internal debate on what society demands of agriculture. The effects of agricultural production on the environment are part of this debate, as is the question of social criteria for agricultural policy and the desire for a better quality of life, be it through higher food safety and quality standards, or through sustainable development of rural areas and considering the purposes they serve for our society.
We have, as you know, encapsulated this approach in the concept of a 'European model of agriculture'. If this model is not to be doomed, however, we not only need to gear it more closely to consumers and the markets, we also need to strengthen policies on rural areas. I am therefore opposed to any attempts to adopt only a slimmed-down reform or to leave important areas out of the reform. I do not believe in ruining the future prospects of farmers and the processing industry with half-baked, and therefore ineffective measures, and running the risk of our being faced with another debate on reform in the near future. The question now is what the final reforms should consist of, so that we can equip European farming for the challenges ahead. The European Parliament has played an active part in finding an answer to this question, and has prepared a number of amendments in this regard.
I will now, therefore, comment on the most fundamental of the proposed amendments and explain my position on them. Let me start with financing. The transition from price support to direct income payments will not lead directly to savings in the agriculture budget. To start with, expenditure on the agricultural policy will even increase slightly. Crucial here are, however, the positive effects which the reform will have on the economy. Independent academic institutes estimate the increased cost to the budget to be between EUR 3 billion and EUR 4 billion, but put savings to the consumer at between EUR 10 billion and EUR 17 billion. That means a reduction in the consumer price index of between 0.3 % and 0.45 %, and thus an important contribution to stability in Europe.
The most important objective of our proposal for the new EAGGF regulation is, in the future, to use the Guarantee Section to finance rural development measures outside Objective 1 programmes. This is an attempt to take account of multifunctionality and would also make it easier to defend the common agricultural policy at international level. It is intended that the Guarantee Section should also finance a series of accompanying structural measures in the fisheries sector, specific veterinary and plant protection measures, and measures to provide information on the common agricultural policy, and overall that the existing legal provisions should be consolidated and simplified. I am pleased to see, Mr Mulder, that you support the proposal to extend financing by the EAGGF Guarantee Section in your report.
Let me now turn to the individual amendments you have proposed. The legal base for the regulation is Article 43 of the Treaty. A number of amendments seek to base it on Article 209 as well. But, Madam President, this proposal only relates to provisions specifically on EAGGF financing; basing this regulation on Article 209 as well is therefore superfluous.
A number of amendments concern the issue of cofinancing for measures which are at present financed exclusively from the Community budget. This is a question of principle, which must be settled outside the agricultural regulations. The same goes for the question of whether agricultural expenditure should be classified as compulsory or non-compulsory. These matters should be discussed in connection with the interinstitutional agreement.
We also think that the amendment aimed at changing the budget year would actually simplify matters considerably. This would mean, however, that the budget year in which the change was made would last twelve and a half months, resulting in a one-off cost to the budget of around EUR 800 million. The Commission can therefore only accept this amendment if it is clear where the extra money is going to come from.
As regards the amendments on the quality of agricultural products, there is no question in my mind either that measures to promote quality are becoming increasingly important. These can, however, already be financed under the Guarantee Section at the moment, and are indeed financed by it to some extent.
The same applies to promoting the use of renewable raw materials. If we were now to start specifically naming, as it were, every single measure which we think is important, then we would have to give a whole list, which does not actually make any sense either.
On the wish you expressed for financing under the Guarantee Section not to disrupt the management and implementation of measures not previously financed by the Guarantee Section, I should like to point out that financing the supporting measures from the 1992 reform out of the Guarantee Section has not caused any particular problems. It is true that the financial provisions on paying agencies and the clearance of accounts are different in the Guarantee Section, but I maintain that overall this is an advantage and can very easily be combined with structural financing. In addition, we intend to set up a special advance payment system for rural development programmes.
Another amendment emphasises that at the end of the year, non-utilised appropriations from the Guarantee Section should be transferred to a special reserve for future years. This is an interesting idea, but the rules in the Financial Regulation for the Community budget do not allow it. This would contravene the principle of the annuality of the budget.
Finally on the Mulder report, I should like to make it clear that I will take your request for regular information on decisions on the clearance of accounts into consideration. Similarly, I will include precise evaluation measures in the financing from the Guarantee Section.
That brings me to Mr Garot's report on the beef and veal sector. I am grateful that you in this House think it is necessary for the package to include reform of this market organisation. It is well known that without a price adjustment, prospects for beef and veal on the home market are hopeless. It is also well known that WTO rules will - from the middle of 2000 - limit Community exports of beef and veal which are eligible for refunds to just 820 000 tonnes a year. If the European beef and veal industry is to be able to maintain beef production at anywhere near current levels, then, according to our analyses, a 30 % reduction in the intervention price is imperative. I have examined in detail the alternative proposal, which consists of restoring market balance solely by reducing production. I cannot endorse this proposal, because it cannot guarantee the future of the European beef industry. Nor can I, therefore, accept any amendments which - contrary to the Commission proposal - are aimed at lesser price reductions. We have to leave open the possibility of taking advantage of the positive market trends on the horizon. If we do not, then our competitors certainly will. As regards the level of direct aid, it is necessary - alongside the beef premium itself - also to take into consideration the other proposed changes to the common agricultural policy, and not least the impact we can expect these to have on the market. That is why I cannot accept amendments seeking to raise the beef premiums either.
Another question is how to find a fair solution to the question of the form in which direct payments are made. In the EU, we have, broadly speaking, just two different systems of beef production: one is based primarily on cereals or silage maize, and the other is primarily grass-based. I do not see any prospect of a solution, if we do not take sufficient account of both systems. Furthermore, as early as November 1996, the Agriculture Council committed itself to examining appropriate solutions for the particular situation of regions dependent on intensive stockfarming. On the other hand, I do also admit that the common agricultural policy needs to be more environmentally friendly. This is one of the key elements in the future success of the European model of agriculture. In view of these ground rules, and the diversity and complexity of the production systems used in the European beef and veal industry, the Commission believes that one solution might be to allow subsidiarity through national envelopes. It does seem, however, that this proposal is meeting with strong resistance here in Parliament - but not only here - and I shall therefore give further consideration to how this fact can be taken into account. Although I cannot accept the amendments today, for the reasons I have mentioned, I can assure you that the Commission will show an open mind if progress is made in the debates on the form which compensation should take, especially if it becomes apparent that this will also simplify matters.
Various other amendments seek to further tighten the criteria for granting extensification aid. Although I cannot formally accept the amendments concerned at this stage of the discussions, I should also like to point out that this issue needs to be examined further, and that I am favourably disposed towards improvements.
I shall now turn to the reform of the milk sector. I know that it will be particularly difficult to reach a consensus here, because opinions still differ widely. Let me start with the regulation on milk quotas.
I am pleased that Parliament supports the proposal to extend the arrangement for a further six years. As regards the situation after 2006, I agree that we should turn our attention to this well in advance of that date. In this context, Amendment No 45 seems to me to be quite acceptable. However, your proposals also include more extensive quota increases. You have to be clear on one point: every percentage point increase in quotas requires an 8 % reduction in price and an additional budget of around EUR 1 billion. On the other hand, I do not see the quota arrangement continuing, unless we accept a certain increase in quotas. In political terms, this means that if you want the quota arrangement to continue, you also have to accept market reform.
As far as the allocation of additional quotas is concerned, we have based our proposal on priorities, set according to the support expressed by Parliament on various occasions. I cannot, therefore, endorse the amendments which upset the delicate balance we wish to achieve with the additional quotas. The proposal to apply sanctions when the reference quantities are exceeded, as a means of managing the market, may admittedly seem attractive at first sight, but in practice I see it causing us huge difficulties.
The problems we have, in particular in Germany, with so-called 'armchair milkers' are something we have to overcome, and we should do so without departing too far from the main principles of the quota arrangement. Nor should we disregard the possible legal consequences of some of the amendments and the demands for compensation which might ensue. For that reason, I cannot support the amendments along those lines.
As regards transfers of quotas, what we are trying to do in our proposal is to extend and improve the options Member States have under the law, without restricting their room for manoeuvre in this field. The wording therefore tries to preserve a balance between the call for subsidiarity, on the one hand, and maintaining the basic principles of the quota arrangement on the other. In my view, most of the amendments tend to disturb this balance. The wording is actually being revised in a number of areas at the moment, so that the aim of Amendment No 12 can, in any case, be achieved.
Allow me to emphasise once again that the current developments on the milk markets and our quota policy make me all the more determined to press on with the reform of this sector. I conclude, from discussions in various forums, that our proposals present a balanced and reasonable answer to the challenges facing the milk sector. I cannot, therefore, support the amendments advocating a greater or lesser degree of price reductions for milk as a starting-point for reform.
On the direct payments to compensate for price reductions, discussions have focused on three problem areas. Firstly, the level of compensatory payments: here too, you should not look at the compensatory payments in isolation. The Agenda 2000 package does in fact contain several proposals which will be of benefit to milk producers, either because they result in a fall in costs, or because they result in increased output. Moreover, it is unlikely that the fall in institutional prices in the milk sector will be fully reflected in producer prices. That is why I cannot support the amendments which advocate increasing the compensatory payments.
The second point concerns the methods by which compensatory payments are made. By tying them to the milk quotas, we have tried to make the system both straightforward and fair. Unfortunately, the various alternatives discussed in the report do not meet these criteria. I thus find myself unable to comment on them here.
The third point is related to the system of national envelopes. Our proposal tries to give the Member States scope to modulate the aid, so that they can take account of producers' different circumstances. At the same time, however, Member States are obliged to notify the Commission of their national provisions before they are enacted. This should provide a guarantee against distortions of competition. That is why I do not share the fears expressed in this regard. But it will certainly be necessary - once the final shape of the beef and veal production model is clear - to make sure that the compensatory payments in the milk sector fit in with this model.
One final comment on the basic regulation: I do not believe that it is appropriate to include provisions in the basic regulation which are not directly related to the common organisation of the market in milk. I therefore propose to accommodate the provisions on animal welfare, and the aspects of milk production which concern structural policy, the environment and quality, where they each belong.
I should now like to turn to arable crops. Developments so far have shown that, although the 1992 reform was a major step in the right direction, it did not go far enough. Continuing the present regime would mean either increased surpluses or set-aside far in excess of the 17.5 %. Against that background, the reform is therefore necessary as a matter of urgency, I welcome all the changes which improve the Commission proposal, but not those which water it down.
First of all, several amendments seek to lessen the proposed price reductions, or even to dispense with them altogether. I fear that a price reduction of less than 20 % would not allow us to achieve our objectives. A limited price reduction would result in increased use of export refunds, and our exports of cereals, pigmeat and poultrymeat would thus be restricted to the maximum quantities set by the WTO, while the volume of international trade increased.
As regards set-aside, I am not ruling out the possibility that from time to time - because of unfavourable market conditions - certain areas of land will have to be taken out of production for a year. However, this should be the exception, because the market should be eased primarily by exports and not by compulsory set-aside. Should it be necessary to fall back on set-aside, then the Commission will make a proposal to the Council and Parliament to depart from the normal rate of 0 %. All amendments relating to this are therefore unnecessary.
A further bone of contention is the area direct payments. The changes you have proposed would simply perpetuate overcompensation, which came in for severe criticism, in particular from the Court of Auditors. We should not forget that, in the future, although market prices will be subject to greater fluctuations, they will, on average, be above the guaranteed price. Several amendments provide for additional payments for voluntary set-aside, in order to promote renewable raw materials.
I can certainly support any efforts to find new markets for agricultural products in industry. However, I doubt whether modulated set-aside payments are the right answer to the problem. I must also point out that subsidies introduced on new crops will not be covered by the so-called peace clause, and can easily be contested by the other WTO members. We should not, therefore, accept changes of this kind.
It is a different case for the numerous amendments directed towards retaining the existing regime for oilseeds or maize. This is not supporting new crops, but continuing or extending the existing regime. In the case of maize, I should, however, like to emphasise two points. First of all, evidence should be provided that special treatment for maize is still economically justified, when as it is, the Commission is proposing that a distinction should be drawn between irrigated and non-irrigated crops. Moreover, singling out maize for special treatment would hugely complicate the aid system, and would further enhance the privileged treatment accorded to silage maize.
For oilseeds, it is true that keeping a specific premium would mean that the Blair House constraints would continue to apply, but in some cases, these are already - because of the massive sanctions - forcing the premiums actually paid out below the future target level. For all these reasons, I cannot accept changes which shake the foundations of the proposal.
I can only comment on the main aspects of the changes here. I must also tell you, however, that the Commission cannot accept changes aimed at radically redistributing aid, or gearing Community instruments - such as, for example, the calculation of yields for the intervention system - to the national specifications of particular Member States, and to the detriment of other Member States.
I should just like to add a few words on the quality of cereals. Our produce must conform to the needs of the market and, in particular, to the requirements of importing countries, which means that we have to produce high-quality cereals. This point is in part addressed in Amendment No 4. Although I cannot accept the form of wording chosen, I do share Parliament's concerns in this regard. The Commission will therefore consider ways and means of improving quality as part of the application of Agenda 2000.
That brings me to the last report, on horizontal rules for direct support schemes. The reform of the market organisations will mean that in the future most agricultural expenditure will be in the form of direct payments. It therefore seems reasonable to align these direct payments with the general aims of the common agricultural policy. That applies just as much to the social as to the environmental criteria. The proposed ceiling on direct payments should help the social balance. Should Member States wish to go further, they can introduce a system of modulation based on the number of employees. Making it compulsory to apply this rule Community-wide would, however, cause serious problems, in particular with regard to carrying out checks and the definition of work units, which differs from Member State to Member State.
I reject the idea of extending capping or modulation to payments other than the direct payments within the market organisations, because payments made, say, under rural development, are pursuing specific goals and should be regarded, for example, as payment for work done to protect the environment, and not simply as income support. Given the great ecological variety and number of different farming structures in the Community, it would, realistically, be very difficult to lay down environmental conditions for the receipt of direct payments at Community level. The Member States should, however, be able to make direct payments conditional on compliance with environmental requirements.
As regards the appropriations saved by capping payments, it was proposed to hand this money over to the Member States. Clearly, however, this would have corresponding consequences for the budget. Consideration should be given to whether there are not other options - in addition to the agri-environmental schemes - for utilising the appropriations saved through modulation and cross-compliance in ways which would not affect competition. Perhaps we could consider earmarking appropriations for the other accompanying measures, or for the compensatory supplement or the forestry measures. They should not simply be used for income support or structural measures.
To sum up, let me stress once more that the Commission is not in the business of pushing through the Agenda for its own sake, as it were. At the heart of the debate between the European Parliament, the Commission and the Council is much more the fact that, for the Commission, the agricultural part of the Agenda will be its position for the WTO negotiations to be reopened at the end of the year, which will result in further liberalisation of the agricultural markets. Since everyone agrees that this will be the outcome, the Commission does not believe it can justify imposing several reforms on farmers shortly afterwards. This may indeed be more convenient and perhaps it also wins more approval in certain quarters, but European agriculture - like other sectors of the economy - needs stable basic conditions. The Agenda provides these, while also allowing European agriculture to have a share in the growth of the agriculture market. A slimmed-down reform could do neither. That is why it does not make sense.
Associated with this, I admit, is the fact that, in particular for demographic reasons - half of European farmers are over 55 - we are not seeking to prevent inevitable structural change, but to accept it and to shape it in an appropriate way. I am therefore extremely grateful for the broad support which our proposals on rural development have found in this House. I can assure you that I am open to all practical alternative proposals which share our objectives, as I have already suggested here in connection with the beef and veal sector and step-by-step reductions.
Applause

Mulder
Madam President, I should like to ask the Commissioner if the Commission could give Parliament a list of its position on all the amendments which have been tabled to the Agenda 2000 proposals. I ask this because we have to vote on 28 January.

Fischler
Madam President, I think that it would be useful to have a list of this kind. We will see that you have one for the vote on 28 January.

Graefe zu Baringdorf
Madam President, I have a question for Commissioner Fischler: we have in fact just dealt with amendments which have not yet been put to the vote. You have anticipated events somewhat. The situation is rather difficult, as you yourself described just now. That might mean, however, that after the vote we have to ask you once again whether you can accept the amendments. If you do not accept them, there is a possibility that we will refer them back to committee, which is, of course, what we also did in the case of the structural measures under the second pillar. Will you be present at that time to give us that information, if it proves to be necessary, so that we can decide whether to embark on this procedure?

Fischler
Yes sir, God willing, I will be there!
Laughter

Rehder
Madam President, Mr President-in-Office, following on from what you just said, Commissioner, may I also wish you a long political life, irrespective of the discussions which will - we hope - be coming to a head again tomorrow!
Ladies and gentlemen, in this parliamentary trilogue - and I should like to start on a positive note - we agree on one point: CAP reform is inevitable and necessary, and it is not only up for discussion because of imminent eastward enlargement. This is an argument which, when advanced in various Member States, including my own, is always misleading.
The problems caused by overproduction and the fact that the agricultural policy has hitherto lacked an ecological dimension - and this is something we Social Democrats explicitly recognise, Commissioner - have actually been tackled successfully in the past, and here too, some success can be discerned. Nevertheless, and we are all agreed on this, reform of the current agricultural policy, in the light of the many years of repeated and serious shortcomings - and this is once again our view - constitutes our primary duty to the people. The common agricultural policy does work, but recently it has in particular started to lean more towards the social side, meaning that there is a danger that a common agricultural policy and its attendant costs will meet with less and less acceptance from the European public, and the European taxpayer.
This increasing lack of acceptance on the part of the general public cannot, however, be written off as academic debate, and thus as not having any repercussions. An increasing number of jobs in rural areas will be at risk as a result of these difficulties, unless, in the interests of those concerned, an unvarnished and - if necessary - blunt analysis of the shortcomings is finally carried out. We have indeed come a long way together in this respect.
Commissioner, some of your proposals are along the right lines, but these parts of the proposals are not, in our opinion, sufficiently thorough and remain basically symbolic. You are somewhat lacking in courage here to lead the way and to show your teeth for once, so as to improve the lot of weaker farmers in Europe. Some details are, we believe - and this also emerged from the contributions made here by our rapporteurs from the Group of the Party of European Socialists - in need of improvement: you made proposals in the milk sector, for example, which further undermine the position, in particular, of smaller and weaker farmers in less-favoured areas and which - I must also add this - are a hotbed for yet more bureaucracy to rear its ugly head.
In the Middle Ages, being sentenced to be quartered was one of the most severe punishments there was. In bringing in the dairy cow premium, please do not reintroduce the quartering of premiums. We have actually moved on since then, and by the way: why not just go outside and try to explain this to a perfectly normal European - no one will understand a word, not to put too fine a point on it!
Detailed criticism in this House should not, however, result in total rejection of reform, which would only become necessary with eastward enlargement. We cannot accept that. We Social Democrats strongly urge all the Members of this Parliament to make an active contribution to this analysis, to help to provide alternatives which fulfil our responsibilities in the field of social and environment policy, and not to make themselves dependent on pressure groups which refuse reform of any kind. We have, unfortunately, had bad experiences in the various countries in this respect. I should also like to make the following point clear: anyone acting and arguing in this way - including through the media - robs the weaker, and often enough those who have lost out as a result of this agricultural policy, robs those very people of their hope for a better future.
For us as Social Democrats, it is intolerable that only one third of the annual agriculture budget reaches active agricultural employers. This state of affairs becomes nothing short of grotesque when 80 % of this aid is paid out to just 20 % of farmers, who are also the wealthiest ones. The President of the European Court of Auditors was quite right when he recently once again described this - basically, although he expressed it in diplomatic terms - as a scandal.
Moreover, the Social Democrats refuse to support a policy in the future which still gives the same entitlement to aid to the country millionaire - who, by massive rationalisation, has almost made his well-situated holding into a one-man business, and by having the best access to world markets secures the best prices - as to a farmer in a less-favoured area, who often enough can only hold his own by going short himself. Let me just make one point clear: we do not envy this global player in the agriculture industry his economic success. But in our policy, which must be geared to social criteria, we take account of the fact that this role of global player is something which smaller and weaker farmers in many areas of Europe simply cannot assume.
European support policy, Mr President-in-Office - and I believe this to be one of the most important headlines to have emerged from recent discussions, including under the new presidency - European support policy in rural areas must, in critical aspects, become social policy. We must also make this clear to the lobby groups. Obviously, we also have to come up with an integrated policy for rural areas throughout Europe. We must not only safeguard existing jobs, we must also create new jobs in rural areas and also, by means of better infrastructure policy, ensure - and this is all part of it - that in a rural area it is possible to travel, on a daily basis, to a job outside agriculture, so that the rural community remains viable. If we translate this better approach - which is also perceptible in the Commission's proposals on Agenda 2000 - into active policy, then I will have no further concerns about its being acceptable to the public.
One of the points close to the heart of European Social Democrats is that we make the amount of aid distributed to agricultural holdings dependent on the number of long-term jobs - on which social security contributions are payable - to be maintained and created in that holding, and of course this includes both employees and members of the family.
Reducing unemployment is one of the main themes of the Council presidency; of course, this also affects rural areas and agriculture, and we want to work together against this severe employment crisis.
The Social Democrats in the European Parliament call this policy a policy for rural areas. This is an integrated policy. We have also had a wide-ranging discussion in our group. We have had to reach compromises, and we are glad that we are also able to reach compromises of this kind in direct negotiations with the Council and the Commission. I can, however, tell you a secret - it is no secret really - the secret of the democratic Members of this House: in the future, we do not want these negotiations to lead simply to our making a contribution; as elected representatives of the European people, we also want to have the power of codecision in this final part of the European budget, because that is what we have been elected for, and we ask for your support in this respect too!

Gillis
Madam President, I wish to begin by thanking Mr Garot for his report on beef. As rapporteur he tried to mellow the severity of the proposals in the beef sector.
The beef regime is the most complicated of all the regimes, mainly because it has the longest lead time. Beef farmers are still suffering from the aftermath of the BSE crisis in the UK, which has thrown the whole beef industry into a spiralling free fall, with consumption badly damaged. For example, pig and poultry meat consumption at 23 million tonnes is now more than three times higher than beef consumption at 7.1 million tonnes per year. This is only partly related to price. When imports of beef into the EU are added to domestic production, the total is almost one million tonnes higher than the internal market uptake. A major difficulty arises because of the constraints of the Blair House agreement on export volumes and the level of export refunds payable, together with the collapse of the Russian economy and the strategic downward price pressure which is applied by other third-country markets as they take advantage of the Russian problem. On the one hand there are added pressures from the West, mainly from the US and the Cairns Group, as we prepare to start negotiations on the next WTO round and, on the other, there are pressures from the East to reduce the cost of enlargement.
It is essential that beef farmers are shown the maximum consideration. The 10-month and 22-month premium for steers and the deseasonalisation premium must be kept in place. The proposed slaughter premium, while it is a contentious issue, is not a good replacement system. While it might be very simple to operate, it is not linked directly to land area and does not suit the highly desirable objectives of the Commission to promote environmentally friendly grass-based systems of production - which the Commissioner has just mentioned.
It is also vitally important that the market be stabilised with the continued availability of intervention, whenever that is necessary and until such times as balance is restored to the market, and that imports and production be reduced.
Finally, I wish to say to the Commission that I understand what it is trying to do but, until the beef market has time to recover from the recent crisis, it is absolutely necessary to ease the very severe proposals so that farmers can stay in business. The Commission has a responsibility to find out why food prices to consumers are increasing steadily while farmers' product prices continue to fall heavily. Someone in the middle is profiteering. We need to stop this so that consumers can benefit from the price reductions to farmers. I know the Commissioner is aware of this.

Mulder
Madam President, in the first instance I should say that despite all the interesting contributions we have had to this debate, the whole discussion of Agenda 2000 is somewhat unreal, because as Commissioner Fischler has rightly indicated, the changes in policy will mean that the policy costs more. I keep hearing everywhere that there is less money available. Is there really much point in talking about changes to agriculture policy when we do not know exactly what the future financial position is going be? It is high time Parliament was told. What funding is available for agriculture? I should like to know how Commissioner Fischler sees his proposals in relation to the availability of funds.
The position of the Liberal Group in general is that the prospect of accession by the Eastern European countries makes it necessary to modify the agricultural policy. We are in favour of price cuts for the principal products. However, and above all because the world situation has changed significantly from two years ago, the general line is a smaller price cut than that envisaged by the Commission, together with full compensation for that reduction.
We favour equal treatment for the most important products, and in specific terms that means equal treatment for the price of cereal starch and potato starch. We think that quotas have to remain, so we must have the milk quota, but also and above all a variable system of set-aside.
Lastly, a word or two on cofinancing, largely for the benefit of the German minister who is here with us. The Liberal Group favours the cofinancing of income subsidies, not in order to improve the net payment position of certain countries, but primarily because this is unavoidable in the context of the accession of the Eastern European countries. If we had to pay income supplements as well, that would bankrupt the common agricultural policy and we do not want that. Yes to cofinancing, provided it can vary according to region, provided payment by the Member States is compulsory, and provided that Member States which do not do this are penalised by Brussels. But policy must continue to be set in Brussels, and there must be equal opportunities for competition throughout the European Union, with no distortion of policy by national rules. These, Madam President, are the broad lines of the Liberal Group's position, and many speakers from my group will have points to add.

Rosado Fernandes
Commissioner, having heard your proposed reductions, I doubt that the famous European model of agriculture can continue because there is not just one model but two: the successful model and the poor model.
In addition, the famous and much-discussed option of multi-functionality will actually become a reality. Many farmers will have to work in other sectors in order to earn a living. It is interesting to see that the five reports were produced by Members who come from the rich areas of Europe and who naturally have shown evident impartiality for which I must congratulate them all.
I come from a poor area and this is reflected in my views. I must also congratulate Mr Rehder for having made a left-wing speech in this sitting, which is something I do not normally expect from the social democrats, while the Commission generally talks only of the market, using highly capitalist rhetoric. This is therefore somewhat of a change, hopefully in the right direction.
With regard to cofinancing, I must say that this is clearly a problem for the poor countries. They will have difficulty in maintaining cohesion and in remaining within the concept of cohesion if the compulsory expenditure is not covered in full by the European budget.
As for milk and milk products, it is clear that a fairer allocation of quotas and the targeting of the more disadvantaged areas and young farmers is of the greatest importance to us. This would correspond to the European model of agriculture. With regard to cereals, we are clearly in agreement, but not on the amount by which the price of cereals must be lowered. However, we do agree, for example, that non-food production must be encouraged so that we can continue to be farmers. We agree that the compulsory set-aside should be maintained and in this I agree with the opinion of Mr Mulder who suggests a figure of between 0 % and 17 %. With regard to beef and veal, Mr Garot is an expert on the subject. We agree almost totally with his proposals and we naturally consider that the modulation is important. I also feel it is important to carefully note this modulation in the report by Mr Graefe zu Baringdorf. Just one thing needs to be decided: who is going to assess the modulation and who is going to judge the question of the work units on each holding?

Jové Peres
Madam President, Commissioner, I will simply make a few general comments on Agenda 2000. I should like to acknowledge the work done by Parliament's various rapporteurs. My group is always prepared to contribute right up until the last minute and I should point out that we believe that some of these reports are extremely valuable.
Commissioner, before beginning this debate, we must take two basic facts into consideration: firstly, the result of the votes in the Committee on Agriculture and Rural Development; and secondly, the debate on the Cunha report.
Although it is true to say that the Committee on Agriculture and Rural Development has not managed to produce clear reports on the reforms of the common organisations of the market, we must take account of the fact that the Commission's proposals have been rejected by a wide majority. The reasons for this situation are clearly outlined in the Cunha report and reflected in Parliament's limited authority in agricultural matters. In my view, if this House had greater powers in agricultural issues, as should be the case, the Commission would not have been able to put forward the current proposals once the Cunha report had been adopted.
The Commission's proposals do nothing more than take the 1992 CAP reform one step further. Yet we are now unfortunately aware of the considerable consequences of that reform. Extremely high numbers of holdings are disappearing and agricultural jobs are being destroyed. In addition, the current imbalances caused by the fact that aid is allocated to farms in accordance with their size are becoming more marked, as are the imbalances between continental and Mediterranean production. As a result, these proposals would compound the social problems in rural areas. The Commission's proposals on the fundamental question of limiting and modulating direct aid are tentative and insufficient. They do not rectify the imbalances between farmers, so they will not help us prevent farms from disappearing.
Commissioner, with all due respect, it cannot be said that your proposal for modulation will protect social equilibrium.
The Commission should have been aware of the problems in presenting proposals for Agenda 2000 when it drew up a package of proposals on rural development that attempted to convey the idea that it would compensate for the negative effects of reforming the common organisations of the market. The truth is that the proposals on rural development are insufficient, as Parliament has said. At times they are more destructive than constructive and the whole fundamental and innovative aspect of agri-environmental aid, which my group supports, is partially distorted by financing regimes and proposals that, to some extent, conceal a partial renationalisation of the Community's policy.
Having discussed the content, I should like to briefly mention the circumstances that gave rise to Agenda 2000. Although it is clear that it was an attempt to prepare for the enlargement of the European Union to include the CEECs, this aspect is only reflected in the dramatic reduction of the mechanisms for regulating the markets. However, there is no indication of how the CAP would apply to the new members, nor of how it would be financed after 2006. Therefore, Commissioner, what will happen after 2006? Will the dismantling of mechanisms regulating the market be taken even further? Will the common agricultural policy be renationalised once and for all? This all remains a mystery.
In truth, my group believes that the proposals in Agenda 2000 are not so much related to enlarging the European Union but rather to developing negotiations within the World Trade Organisation.
And if this is the case, Commissioner, we should like to know that recent legislative developments in the field of agriculture in the United States will not be ignored, and that the proposed mechanisms for decreasing protection for Community agriculture will not be taken too far.
Lastly, I would like to make a brief comment on the financial aspects of Agenda 2000. Initially, the proposals proved wanting due to the Commission's game of juggling the flow of euros. What is more, the effects of the crisis have not been sufficiently analysed and, in the agricultural guidelines, the margin needed to finance rural development will undoubtedly be reduced. In this respect, the Commission's lack of political vision has given rise to the suggestion in the context of the report on own resources that direct aid be cofinanced. This is an abuse of the Commission's powers, as well as a violation of Article 2 of the Treaty and of the principle of financial solidarity. It may also pave the way for the renationalisation of the CAP.
Commissioner, you yourself have acknowledged that the debate on cofinancing should not have been held in the context of agricultural regulations, but in other forums. However, Commissioner, this severely distorted the debate we held in the Committee on Agriculture and Rural Development. I believe that the Commission has sent out clear signals with its messages.
Finally, I should like to end by once again acknowledging the difficult task the various rapporteurs had, and to point out that my group believes that some of this work was extremely important.

Graefe zu Baringdorf
Madam President, Commissioner, our group believes that the approach being taken to reform is a step in the right direction. We think, however, that in many areas the action being taken is too half-hearted. It is a question of abolishing public intervention, and not just of reforming it. A price reduction within the intervention regime is wrong; instead, we need to set a deadline for being able to dispense with intervention altogether. It is also wrong to cling to the instrument of export promotion; instead, we need to indicate when we will finish with this.
I believe that both the policy of reducing prices and, in particular, the policy in the beef and veal sector, constitute a step towards abandoning intervention. In 2006, we - or however many of us are still around then - will discuss this, but a deadline should be given. The same applies to issues connected with the milk sector. We need to be told what will happen in 2006. Are we to expect quotas to be discontinued at that time? Holdings need to prepare for this. This also affects the question of quota trading, and the value of the quota. That concerns Germany in particular. This should be clarified. Of course, Mr Funke, that is also a request to the presidency. Holdings need to have security.
A further criticism is nothing new to you, Mr Fischler. We do not want old-style alignment with the world market. We do not want a closed shop. We want doings and dealings, but please, if so, then we also want farmers to compete on quality. Anyone who wants to produce for the world market should go ahead and do so, and will then have to see that he adapts his trade to the other trading partners. The state must stay out of this. This should not be supported with public money.
Our next criticism is that you are still not concentrating enough on the internal market. After eastward enlargement to include the countries of Central and Eastern Europe, we will - after China - be the largest internal market in the world. Production should also be targeted at this market, and competition on quality should prevail. We want the market, and we want to make it possible for producers and farmers to gear themselves to the market.
I now have to commend you - and our group has consistently supported this - for deciding to create a specific line for structures, appropriations for which will be diverted from the EAGGF Guarantee Section, albeit rather too cautiously. More should be done here! But the resistance to going down the road of quality-based policy is huge. Perhaps your courage has deserted you. But we can of course still appeal to it. At the next round of reforms in 2006, it is to be hoped that the measures which are at present only accompanying measures will become the focus of agriculture policy.
Allow me now to comment on the conduct being displayed here in Parliament. Until the elections in Germany, you had the German Government's blocking tactics to deal with. Now we have the PPE Group's blocking tactics to deal with. All the groups' coordinators on agriculture policy here had come to a unanimous agreement. We wanted to reach a compromise. We wanted to produce a line of argument, and this time we wanted to have a say in the reform; we wanted to use this procedure to postpone the vote, to bring our influence to bear, and also to strengthen your position vis-à-vis the Council in many other areas. Chaos was the only result. I hope that in the vote in the plenary it will still be possible to reach a sensible consensus, so that we achieve a majority and are, after all, able to continue to exert this influence.
I should like to say to you, Mr Funke - as President-in-Office and as the German Agriculture Minister - that if Mr Borchert had still been here, the PPE Group would have gone along with this, so that there was support and a demand from Brussels; Borchert could thus have claimed that Brussels had issued demands. Now they are going down the opposite path, so that people can say that the new Agriculture Minister is selling off agriculture and reducing prices. You should bear that in mind too. It is the opposition which is at work here, and the present opposition still has to learn to adopt a constructive approach.
I hope that at the Council negotiations a way will be found to move employment and the environment to the centre of agriculture policy, and that in 2006 we shall be able to set this agricultural policy back on its feet once and for all.

Barthet-Mayer
Madam President, Commissioner, ladies and gentlemen, last year Parliament adopted Mr Cunha's report on CAP reform within the framework of Agenda 2000. The ARE Group, in its proposal for a federal and united European Union, contributed substantially to this report and fully endorsed the proposed European agriculture model.
In the context of today's debate we must enter into the spirit of the Cunha report and the measures adopted by Parliament, in particular regarding future CAP financing. The cost of enlargement to include the countries of Central and Eastern Europe requires a more ambitious reform and equitable budgetary revision. For the second year in a row, the average agricultural income per holding has fallen in the Union. What is more, after more than a year the Commission has still not responded to the political demands of the European Parliament.
I should like to remind you that although the 1992 reform led to a temporary improvement in markets, it did not remedy the main problems in the operation of the CAP. For the European Union to be able to cope with the challenges of enlargement and renewed negotiations within the WTO, the CAP needs to be thoroughly reformed so as to provide us with a viable system for the next ten years. Such reform must be jointly determined and controlled by Parliament. Simply proposing a unilateral reduction of the intervention prices of agricultural products does not in itself constitute a policy. Proposing to offset scheduled price reductions by giving farmers national direct aid that might quickly be called into question, would weaken agriculture, employment and the environment, and would once again increase public aid.
If there has been a consensus on one issue, that issue is the need for CAP reform. What is more, the Commission's motivation to carry out such a reform might indeed be questioned. It doubtless needs amending, but with what aim in mind? The Commission, while claiming to uphold CAP principles, is in fact gearing its reform towards scrapping Community preference in favour of prior acceptance of a new opening to third-country imports, to the detriment of a thorough reform for the benefit of the Community. This would lead, among other things, to an increased reduction in the number of holdings.
In this context, what new approaches can be taken in relation to these five reports, none of which was fully adopted in the Committee on Agriculture and Rural Development because of national disagreements, despite efforts by my fellow rapporteurs who should be congratulated for their work and tenacity. In my opinion Mr Mulder's report is an improvement on the Commission's text, particularly as regards agri-environmental measures and technical management measures, but the problem of cofinancing remains to be solved.
As regards Mr Graefe zu Baringdorf's report and the fact that the European Commission's proposal was adopted unamended, I intend, in the spirit of the report, to endorse those amendments aimed at improving provisions relating to aid ceilings, for example on the basis of measures relating to employment and the environment.
As regards Mr Garot's report, which I fully endorse, the compromise currently under discussion calling for a limited slaughter premium per animal category should be fully endorsed by the committee. What is more, I shall support the rapporteur's call to restore balance to cattle farmers' low incomes in relation to other categories of farmers who receive more support.
In terms of milk, which is the only COM that was not amended in 1992, a delicate balance has been created by introducing quotas. This must be preserved by resisting overproduction and inflationary tendencies. Like the rapporteur, I am in favour of balanced development in all regions and of equal income. Additional quotas that do not distort the market must be granted firstly to young farmers and less-favoured areas such as mountainous regions by increasing aid for processing high-quality milk products.
Lastly, we must support Mr Fantuzzi's position regarding more selective intervention in quality standards and the implementation of minimum import standards. We cannot endorse a single rule for cereals and high-protein oleaginous crops when the European Union continues to suffer a shortage of proteins for animal food. The Commission's refusal to propose a specific regulation for high-protein oleaginous crops does not bode at all well for future WTO negotiations. As regards set-aside, the base rate must remain low and continue to allow production to be controlled. By the same token, voluntary set-aside for environmental reasons or non-food purposes must be reviewed.
To conclude, once again on behalf of the ARE Group, I call on the Commission to set this necessary and urgent CAP reform in motion by redistributing aid in a way which resolutely favours the rural economy, the environment and product quality, for the benefit of farmers, consumers and European taxpayers. For many reasons, of which you will all be aware, the CAP in its present form is neither sustainable or permanent. It is the Commission's duty to bring CAP reform closer to Community preference by basing its bilateral agreements on equitable trade rules that are aimed at maintaining jobs in agriculture and a balanced number of holdings in line with the notion of rural development adopted by Parliament. By moving away from the traditional policy of support through price control, the CAP is not aimed at sustainable and humanist agriculture. Any future CAP must respect the right of Europeans to control their agriculture and their food. This is the price the European Union will have to pay if it wants to be a leading player in globalisation. Once again, to conclude I would say that it is not more or less aid that is needed, but better aid!

Nicholson
Madam President, I should firstly like to congratulate the rapporteurs for their hard work and diligence in preparing the reports. Unfortunately the committee did not reward them as it should have done when they brought their reports to committee. We are now embarking on a further reform of the common agricultural policy under Agenda 2000. There is no doubt that when we are finished it will cost more and will become more difficult to defend. We have to strive to find a balance between the producer on one hand and the consumer on the other because the taxpayer is becoming less inclined to support the rural community.
The whole of agriculture across the European Union is facing a very difficult time financially. Returns to the farmers are reducing year on year in spite of major support going into the industry. We are in agreement with that support. We have to ensure that the industry survives because the family farm is the backbone of the European Union. We must ensure that young farmers will come into the industry, that their status within that industry will be a good one and that it will be an industry they want to be part of.
Milk is an important part of the industry. Many farmers throughout Europe depend on it and we must ensure that we get a policy that is balanced and correct. Milk quotas in principle should remain but should be changed in line with the suckler cow and sheep quotas. In my area farmers who do not get out of their beds in the morning to milk cows can lease their quota and make more profit than the farmer who does and who has to pay money to lease the quota through another farmer. There must be something wrong with a system that produces a situation like that. It must be reformed and brought in line with other quota systems.
With regard to beef, in my area the industry has been totally shattered and something needs to be done to restore it. I do not think private storage would be enough and we need to consider keeping the whole area of intervention. I am against paying premiums on heifers and bulls and that is something the Commission should look at. I do not think it will be a help because no extra money is available.
I cannot agree with the Commissioner when he speaks of the national envelope. This will thoroughly change the common agricultural policy. The national envelope will mean inequality between the nation states. It means farmers in one area will have advantages over farmers in other areas. We should not go down that road. I would ask the Commissioner to take on board one other point. If we are going to tie the hands of the producers as to how they produce food, we should not import food from non-EU countries which is not produced to the same high standards. Do not tie farmers' hands any more. Give them fair and equal competition with the rest of the world. Make sure that imports into the Union are of the same standards as the food we produce.

Martinez
Madam President, Commissioner, the debate on the agricultural facet of Agenda 2000 and its 8 regulations would appear to provide us with a solid legislative structure and a whole range of attractive new elements. It therefore seems strange for us to be talking about the national envelope, sustainable or global development, cofinancing, multifunctionality, eco-conditionality, subsidiarity, high quality and the challenges to be met when, in fact, everything can be summed up in just one word: continuity.
What we are dealing with here is a new CAP reform, an overhaul of the 1992 reform. Nothing has changed: price reductions - 15, 20, 30 % - the Malthusian set-aside, rationing and austerity. The situation is even worse than in 1992 because not everyone will receive compensation.
It is true that you have at least achieved something new tactically speaking in that you have succeeded in dividing the Committee on Agriculture. Proof of this lies in its rejection of the five reports. Northern Europe, Britain, Germany, ultra-liberal Europe and the Europe of accountants have applied pressure which has led to submission, then despoliation and lastly, illusion. Pressure, submission, despoliation, illusion: this is the downward spiral in which European farmers are trapped.
The first stage is pressure, which has three sources. Firstly, there is budgetary pressure from Germany, which is keen to reduce its contribution; I can understand this and, what is more, the French might be working along similar lines; secondly, there is pressure from the cohesion countries, namely Spain, Portugal and Ireland, who all want to retain their share of the Structural Funds; thirdly, there is pressure due to enlargement to the East, which will require additional Structural Funds. Enlargement is adding pressure precisely because it dictates agricultural price reduction to the extent that once the ten Eastern countries have arrived, EAGGF expenditure and guaranteed prices will not increase. Lastly, pressure is being exerted by the WTO 2000 negotiations, given that Agenda 2000 is the progeny of WTO 2000. This will lead to reductions in land aid and export aid and, as a consequence, will result in submission once again to the United States.
This submission is twofold: in the first place there is submission to Germany. It is Germany that is pushing for cofinancing to reduce European agricultural credits and evidently to increase the Structural Funds for the countries of Central and Eastern Europe, which are of strategic interest to Germany.
Then there is submission to the United States, as in 1992, something which appears to be genetic in the case of the European Commission. Even before negotiations got under way, it began by aligning itself with the United States and not once did it call on them to engage in fair trade which would take into account animal welfare, environmental protection, social protection for farmers and food quality. No, instead it aligned itself with the United States! And this occurred despite the fact that the United States, exceptionally, is not hesitating to release 6 billion dollars of aid for farmers when they advised us to stop giving out aid.
The result is that instead of taking the offensive we give in to them. A perfect example of this is the symbolic banana dossier. Section 301 applies, or is threatened to apply, and we, moreover, do not even possess the same legislative arsenal. A fitting expression to sum this up might be: when the going is good we give in, when the going is bad we still give in!
The consequence of this is the despoliation of farmers, which is my third point. By way of example, under the Guarantee section of the EAGGF, ECU 500 million are to be redirected to cover pre-accession funds. In other words, farmers in the West will suffer in order to finance the accession of farmers from the East. The last to arrive will be the first to receive financial aid. This is undoubtedly a very Christian way of going about things: the worker who arrives at the eleventh hour earns more than the people who arrived before him.
Moreover, the financial resources under the Guarantee section of the EAGGF will be used to finance restructuring and the fishing fleets which until now have been financed by the FIFG. This means that in order to help the victims of the fisheries policy, those who have suffered under the agricultural policy are forced to endure further hardship. This is the unfortunate illusion the reform has created.
Commissioner, we are told that the aim of the reform is to achieve the European agriculture model as developed by Arlindo Cunha. Indeed, we all agree with the family-run farms, food safety, environmental protection and sustainable development.
Nonetheless, in reality you are rigorously ensuring that the opposite of this occurs. If the reduction in agricultural prices is not fully compensated the outcome is a fall in agricultural incomes, which forces the farmer to look for other forms of compensation to keep his head above water. And where does he find such alternative sources? In the race for overproductivity.
This in fact means that farming will grow to the detriment of young farmers, family-run farms, country populations and the survival of the European model. Costs will be reduced through the use of growth activators, cheap inputs and urban sludge, for example by using antibiotics, which results in a drop in quality, safety and environmental protection. And lastly, it will lead to increased depopulation, desertification and insecurity, and a reduction in quality and food independence.
I grant you that if this scenario comes true you will have achieved the tour de force of turning the clock back to the 1960s where we counted for next to nothing on the world market. So in this context, that of an agricultural Euro-Disney, you will not play the part of Mickey as that part is played by Mr Kantor. Neither will you play Uncle Scrooge as Germany plays that part. You will not be the director as Walt Disney is American. All that is left to play is the part of Pluto, the dog that keeps guard over American interests. But at least the character of Pluto is as nice as Sissi, which will mean that Austria will get out while the going is good. All the same, it is a shame that you are forgetting and abandoning the great agricultural operas in favour of little operettas.

Colino Salamanca
Madam President, today we are debating the proposals for reform of the various agricultural sectors without knowing the possible financial impact of such proposals and, above all, whether or not they fit in with the future financial perspective. This prevents us from being able to realistically address the fundamental question of how to finance such proposals.
It is true that the Commission has come up with some optimistic hypotheses, according to which there will not be any problems. However, as the Court of Auditors itself has established, the truth may be somewhat different. In particular, the Court of Auditors draws our attention to the question of whether or not we will be able to manage an agricultural policy where the new Member States, which will join from 2003 onwards, will not receive direct support. Could we maintain such a course over time without tensions arising?
The second general comment is that, although the Commission wishes to increase the competitiveness of European agriculture, it is essentially doing so through pricing instruments and by reducing guaranteed prices. But this new direction lacks the necessary extra element as the Commission has not set up programmes promoting the high level of quality in European production.
Having established these premises, I should like to say that the path chosen by the Commission would seem to be the right one, in view of international growth forecasts, the increased competitiveness of European agriculture, the opening up to new Members and the future WTO negotiations. But this should be an opportunity for using these proposals to correct any anomalies which still remain from the past. For example, in the cereals sector, it would appear to be too optimistic to establish a zero rating for the compulsory set-aside of land. There are some forecasts which say that we will still possibly need to reintroduce export refunds and will certainly to reintroduce legally binding measures. Also, the possibility of adjusting the reference periods for regionalisation plans in some Member States should be raised, and even the idea of setting different production levels for maize in comparison to other cereals. Moreover, it does not seem necessary to use surface area to even out aid for oilseed in relation to aid for other cereals.
As regards dairy produce, whilst the price guidelines are acceptable, there is no real justification for providing support according to the 'virtual cow' system. Prices drop in the same way for all livestock farmers and it is ridiculous that the way support is allocated benefits precisely those who are most competitive and, in contrast, penalises those who are working to make their farms become competitive.
A similar situation applies in the meat sector. Reform should not further penalise those Member States who have less premium units - whether these be for suckler cows or male bovines - and these reforms are on top of the age limits established for obtaining premiums for sheep.
The system that allows the Member States to distribute some support according to national guidelines also seems to us to be raising more problems than it solves. And, as the Court of Auditors itself pointed out, the need to respect a minimum Community framework is still a vague provision in the proposals. The proposed decentralisation could cause problems when it comes to precisely determining which costs can be subsidised with Community funds.
Finally, in relation to the horizontal regulation, although we are delighted that it tries to correct some imbalances within the CAP, we do however regret the fact that there is a danger that this will be unworkable. Defining the environmental obligations to be fulfilled must remain in the hands of Community authorities. The same applies to setting the overall ceilings for receiving aid where permanent employment can and must be taken into account.
Despite their tentative nature, we support the Commission's proposals, not so much for the savings that these proposals could make but more because we believe the indiscriminate granting of subsidies is unjustifiable. And as the Commission's own information shows, we must remember that only 0.2 % of farmers receive aid worth over ECU 100 000. We believe that the Commission's small effort outlined in these proposals should not be subject to so much criticism from the right.

Funk
Madam President, Mr Funke, we are almost namesakes! The Fantuzzi report, on which I should like to say a few words, has indeed received a great deal of attention - at any rate, 93 amendments have been tabled by the groups, all of which are, of course, justified to a greater or lesser extent. Mr Fantuzzi has done a good job - I have to grant him that - and he also always wears the nicest ties in Parliament, because they are made in Italy. But he has advocated a 20 % reduction in prices, which I oppose, and I shall tell you why: 20 % is far too much for farmers to withstand. We can only just, with gritted teeth, withstand a 10 % reduction, above all because only 50 % of this will be compensated.
In my region in Baden-Württemberg, there are not any of these holdings which Mr Rehder always claims are receiving millions. Perhaps he should show them to me. Not in my region in any case, where the situation is quite the opposite; farmers have a hard time of it there, and it would be nothing short of insulting to reproach them constantly for being some of the rich ones.
If we want to be competitive on the world market, Mr Funke, then we also need to know whether farmers are able to withstand this. I wonder, however, with whom we are supposed to compete. With countries where wages are only 10 % of ours? Where the environment is being damaged? I reject conditions of competition of this kind. That is also why we must reject price reductions of 20 %.
Price reductions alone are not the right way to help agriculture in the long term; instead, we need more intelligent solutions, if we want to hold on to our farmers. In practice, therefore, we also need to promote oil plants and protein crops - I fully agree with Mr Fantuzzi there - and we need to promote energy and industrial crops. There is a shortage of these crops on the markets, and we need better support for them so that industry, and the processing plants we have now set up, can also source these products in the future. If we promote these crops, they will enrich ecological diversity, while at the same time this would have the advantage of our not concentrating solely on cereals, cereals which we cannot sell as it is.
By constantly reducing prices, we should not turn our agricultural producers into whipping boys - it only serves to depress farmers. After all, there is 1.5 pfennigs' worth of wheat in a bread roll, and a bread roll costs 70 pfennigs. After the reform it will probably cost 80 pfennigs, despite the Commissioner's reducing the price of wheat by 20 %. I cannot explain that to anyone, Mr Fischler. Can you? Please let me have the recipe, and then I can go to the people and say that this is as it should be.
Two thirds of EU governments are led by Social Democrats, and they are unable to accept Mr Rehder's proposals. Why then, Mr Funke, are the two thirds not saying: Mr Rehder is right, we will adopt this agricultural policy? I would take advantage of his claim that 20 % of farmers receive 80 % of the aid, but I am not even sure if he really knows what he is talking about. In the future I should like information which is a little more specific, because that is a sound bite which is doing the rounds and which disavows agriculture ...
Heckling
... perhaps in many other regions too: I have also seen holdings of this kind in Andalusia, Mr Colino. It does not irritate us when the information is specific, but it should be specific, and not delivered as a sound bite; otherwise we will also have to investigate in Lower Saxony, to see whether all is well there, that is quite clear.
We reject sound bites, Mr Funke - I agree with you there - and instead we should call a spade a spade. Help us out of our plight, and afterwards I will shake your hand again, because having the name Funke is not such a bad thing after all, is it?

President
Mr Rehder feels that he has been challenged. I hope that you only want to ask a question, since we are not going to embark on a debate amongst ourselves.

Rehder
Madam President, I should just like to point out that this is not something which Mr Rehder - who may have been underestimated - has made up. I invite you to go and see the President of the European Court of Auditors; he can show you the figures. The fact is that you cannot simply denounce things which do not suit you. That is a remedy which inflicts further damage on small farmers. Mr Friedmann will explain it to you quite calmly, even if you still do not believe Mr Rehder, whom you have surely underestimated.

Anttila
Madam President, Mr President-in-Office, Commissioner, the Luxembourg summit called for agricultural production to be able to continue in all regions of the Union, including wherever there were special problems. The realisation of this expression of political will is the responsibility of the Council of Ministers, for which Parliament drafts an opinion. Agricultural conditions vary widely in the Union. In the south it is too hot and dry, while in the north it is the opposite: too little warmth, which reduces crop yield and raises building and heating costs. The Union's permanent adverse natural conditions, both in the southern and northern regions, must definitely be taken into consideration when decisions are being made.
Maize does not grow in all Member States. Aid for the storage of maize should therefore extend to silage for those producers of milk and beef who cannot farm maize because of the prevailing natural conditions. Otherwise aid for maize will distort competition in the single market. Parliament has already approved aid for silage in Mr Cunha's report. In northern regions crop farming needs increased subsidies owing to local conditions. Grain too has to be dried.
The harsh experience of the war has taught the nations of Europe the vital importance of their own food production. In Finland, the Union's northernmost Member State, food production is possible thanks to the Gulf Stream. The reductions in producer prices in Agenda 2000 are too great for producers in the EU's most problematic regions, as farmers there will not even be able to recover their production costs at current market prices. This would lead to virtual farming.
The crises of the global economy in Asia, Russia and South America have forced world market food prices down. The USA also had to grant aid to its producers to the tune of USD 8 billion, so that farmers would not go bankrupt. For that reason the proposed reductions in producer prices in Agenda 2000 should be halved and farmers should be fully compensated for those reductions, so as not to put too great a squeeze on European producers. The changes in the global economy have to be taken seriously, and we should not be making it difficult for farmers to cope in the face of major challenges. I have a question for the President-in-Office: how do you intend to make sure that the considerable producer price reductions in Agenda 2000 do not lead to a wave of bankruptcies in Europe?
Finally, I would like to remind everyone that food is a lot more than just a product with a price on it. It is European culture at its best and high quality food always has its own price.

Hyland
Madam President, the common agricultural policy was to remain central to the medium- and long-term planning of European agriculture. Despite its limitations it has stood the test of time. But having said that, we must also provide for the unpredictable.
The present difficulties experienced by farmers are serious. They are not the result of the 1992 reform but due to unpredictable circumstances which include BSE, the collapse of the Russian economy and, in some cases, the renationalisation of food markets. In my view we are not responding to these short-term difficulties. Many farmers may not survive to benefit from the long-term measures of the proposed reform which is the subject of Agenda 2000 and this debate.
I urge the Commission to look seriously and urgently at these more immediate problems. Whatever the cost, it is not in the interests of the European Union that the family farms which are central to the European agricultural model are fast becoming marginalised. We have a duty to respond to their plight. In my view they are not crying 'wolf'. Perhaps their difficulties serve the hidden agenda of some who do not have to courage to say openly that family farms do not have a future in the Europe of a new millennium.
I propose today that some financial reserve be provided within the agricultural budget to address such emergency eventualities when they occur. With improving job opportunities outside agriculture I am worried about the continuity of family farming. I feel young people will not take up farming as a profession. If we ignore this fact we are burying our heads in the sand. Down the road this Parliament will find itself having to address the serious problem of the human resources of agriculture necessary for the continuity of the agricultural sector.

Querbes
Madam President, Mr President-in-Office, Commissioner, ladies and gentlemen, everyone is engaging in an analysis of the exceptional conditions which appear to have reduced today's debate to an impasse.
In fact, although the Committee on Agriculture and Rural Development clearly rejected the Commission's proposals, it has been unable to come up with any coherent alternatives in spite of the quality of the reports presented. There are at least three reasons for this.
The first is the lack of precision and the weakness of the Commission's projections. Today it appears clear that these projections were seriously affected by the financial crisis, the underestimation of the actual cost of the reform and prior acceptance of American demands in renegotiating the WTO agreements. The second reason for this impasse is the financial constraints imposed by the Stability Pact with the introduction of the euro. The third and most fundamental reason is the decision to base this reform on the need for capital returns through a reduction in agricultural prices, and not on the needs of producers, consumers or society.
The Commission can firstly be reproached for having retreated into the triple across-the-board logic of reducing prices, dismantling market management instruments and reducing European financial intervention. It can also be reproached for wanting to impose all its ideas despite their unpopularity. In this way, following the Vienna Summit, President Santer labelled the positions adopted by Heads of State and Government as being 'purely tactical' and went on to state that the final agreement would be based on the Commission's proposals. To think in these terms amounts to a blatant refusal to acknowledge the widening gap between the aspirations of farmers and citizens of the Union for more jobs, higher incomes and a better quality of life, and the Commission's ultra-liberal ambitions.
If those countries who are experiencing the gradual exodus of agricultural workers, the growing imbalance between producers, produce and land, and the uncertainties surrounding food safety, had the opportunity - as we will tomorrow - to censure such a policy, they would do so.
In this context, it is incumbent on both Parliament and the Council to develop an alternative policy. We have the means to do so. Twice Parliament has called for a new approach to the CAP, an approach based on employment, balanced land use, the Community preference and a rejection of cofinancing.
I also think that the Committee on Agriculture's vote on the various reports has revealed an overall desire to reject alignment with world prices, to protect agricultural incomes, to pay for all the social benefits agriculture offers in terms of employment, land development and the environment, to limit and modulate public aid by distributing it more fairly and to maintain producers' organisations and market management instruments by improving them.
This constructive and alternative approach can once again be demonstrated either in preparation for Parliament's vote on 28 January or by referring the reports back to committee, which would give the Commission a strong hint that it needs to formulate other proposals.
As regards the Council, the presidency yesterday and today reaffirmed its good intentions to develop a more competitive and ecological form of agriculture, protect farmers' interests and advance a more effective employment policy. However, by enclosing all of these proposals in the straitjacket of budgetary austerity and reduced agricultural expenditure, would the Council be able to resolve current contradictions in European integration? Might it not worsen the economic and social recession that threatens us at present, given that the solution would appear to lie in increasing the Union's financial resources from the profits generated by financial activity? This would appear all the more essential as agriculture and food production are faced with the human and global challenges of the next millennia.
Parliament focused its report on the need to respond to the challenges facing humanity in terms of food, energy, the environment, water supply and sustainable development. The decisions this House will make on 28 January must remain faithful to these aims.

Hudghton
Madam President, the Agenda 2000 package of reforms provides a major challenge to Europe's decision-makers and I do not underestimate that in any way. The need to achieve an early agreement on the package must be balanced with the importance of ensuring that a fair and a reasonable set of proposals is seen to be adopted.
The common agricultural policy clearly must be examined and adjusted in an attempt to strike a balance between on the one hand providing proper support to our food production industry, and on the other hand ensuring that good value is achieved for the expenditure of public funds. Adequate and transparent systems must of course be in place to ensure that financial controls meet the high standards that we are entitled to expect.
The diversity of circumstances across the European Union in the agricultural sectors clearly requires due consideration in the new common agricultural policy, which must be tailored to properly fulfil its purpose. My home area of Europe - the north-east of Scotland - is sometimes called the larder of Scotland, containing as it does some of the best examples of high-quality agricultural, and indeed fisheries, production in Europe. Aberdeen Angus beef, cereals, oilseed, sheep, poultry, soft fruit and potatoes, to name but a few, are all produced in an industry which is economically crucial to Scotland, with an output of £2 billion and one in ten of all Scottish jobs being dependent on it, directly or indirectly.
Our farmers are all aware and accept that common agricultural policy reform is needed, but the nature of the final report proposals should reflect the needs of the industry in Scotland, for example, in the definition of farm unit size. Scotland, politically, is in a disadvantaged position at this moment, with our national interests being represented from London. I hope that, as the reform package is finalised, the UK Government will, this time, properly articulate the case of Scotland's agricultural industry and that the Commissioner will take due note of any direct representations received from Scotland.
Our farmers, as well as our consumers and our taxpayers, are entitled to expect that reforms will bring about a genuine improvement in any new package and that specific changes, once agreed, can be carefully phased in so that our farmers can adjust to further changes in a properly managed way. The farmers that I know are hardworking people, many in small family businesses who are aware of, and accept fully, their responsibilities to the consumer, to the environment and to the rural economy.
Madam President, Commissioner, let us work towards a common agricultural policy which will encourage, not further discourage, their efforts to continue to survive.

des Places
Madam President, Commissioner, in September 1997 when I drew up the opinions of the Committee on Agriculture on the Agenda 2000 Communication and on the Structural Fund reform, especially concerning Objective 2, I highlighted the financial problems of the CAP as well as the dramatic consequences that the initial proposals put forward by the Commission would have on European farmers' incomes. For more than a year these problems have been hidden to a certain extent, both by the Commission and by a great many professional agricultural associations who at the time had not fully comprehended the situation.
Today the problems are building up, from the partial disappearance of the green ECU to the fall in both farmers' incomes and the number of farmers - it must be added, contrary to the objectives of land-use planning - and so on. So, in order to solve this financial equation we no longer talk only in terms of reduced prices for agricultural products, with of course the promise of full or partial compensation through aid that will inevitably be called into question within the framework of future WTO negotiations. Given that this will not be enough to help budgetary balance, the needs of enlargement and many other problems, some are advocating CAP cofinancing. This would mean an artificial increase in the European budget which would be entirely inconsistent with the Edinburgh agreements and the Treaties.
As Mr Fantuzzi mentioned earlier, all of this seems worthy of a motion of censure even if a good financing plan that was clear, precise and took into account the development of expenditure at current or constant prices had been able to clarify our debates and prevent all the rapporteur's proposals from unfortunately receiving such a pounding. The CAP, I should like to stress, is the only genuine common policy we have and I was surprised to note today that the defenders of a federal Europe are prepared to sacrifice it in favour of other interests.
No one would deny that the CAP in its present form is in need of reform, Commissioner, which goes to show that the original version was no good or at least was not sufficiently well adjusted to agricultural development and the needs of society. We have had the problem of BSE to contend with and very shortly the GMO problem will lead to understandable consumer concerns over food safety.
If there was one reform needed it would evidently be needed in this area, but the Commission's proposals - your proposals, Commissioner - for price reductions force farmers to seek compensation for this steady fall in their income through ever more intensive production methods by enlarging their buildings, finding ways to reduce their input costs and by intensifying production to the detriment of environmental issues. For some this will mean fertilisation using urban sludge with all the risks associated with it. For others it will mean using growth activators and using less costly animal feed.
Finally, Madam President, when these proposals for CAP reform are discussed with other proposals on animal welfare and the responsibilities of farmers who produce agricultural foodstuffs, we note that European farmers are caught up in a downward spiral, the inevitable consequence of which will be to speed up rural depopulation. Is this really your aim? Is this really our aim? I do not think so, but the action we are taking is unfortunately leading us in this direction.

Moretti
Madam President, as is well known, the CAP is based on three principles: the unified market, Community preference and financial solidarity. Regrettably, these principles are increasingly being called into question. In particular, the principle of Community preference is under attack from the large multinational food companies, which see it as standing in the way of their attempts basically to destroy Europe's small farms.
As far as financial solidarity is concerned, the Member States' main concern seems to be to assess the costs and benefits arising for each of them from the implementation of the CAP. We are aware that resources must be earmarked under the Community budget to finance employment and infrastructure measures but, in our view, if agriculture is sacrificed to this end, Europe will be taking a step backwards in a sector which is crucial to international competition.
I should therefore like to know what guarantees are to be given for the future of farmers in Padania and Europe, so as to protect their incomes and their technical and human resources.

Happart
Madam President, I welcome the work carried out by our rapporteurs. It remains to be seen what you will make of it, Commissioner, at a time when the Commission is being particularly criticised. In my opinion, the best proof of our will and ability to work towards improving human society in Europe and throughout the world would involve shrewdly deciding our future and making social choices. But we need to have the means to be able to do this, and instead of limiting ourselves in budgetary terms and thus restricting our political activities in a way that is unsatisfactory, we need to ensure that we have sufficient financial resources to progress.
Since the beginning, the common agricultural policy was the motor behind the creation of what was first the common market and then the European Community and now the European Union, pending the advent of the European State. We are in a state of political penury. European decision-makers are all too often in the pay of the United States which has forced its ideas, its operation and production methods on us to the detriment particularly of European farmers - 40 million jobs in agriculture have been lost since 1960 - and the cultural dimension of European agriculture.
The United States, having imposed their antisocial rules on us by means of the GATT, now want to impose their hormones on us until such a time when they can unleash their unfettered genetic engineering in Europe. These practices, which mean a couple of extra dollars in the pockets of genetic engineers but rarely boost farmers' incomes, undermine consumer confidence in the food products that we place at their disposal. There is a huge distance between the debate on quality and the measures actually taken to implement this quality.
Budgetary phobia, added to the bad handling of what has been termed the mad cow crisis, has considerably undermined my confidence in the Commission, in its ability to shrewdly predict the future - and not only the future of European farmers - and its overall approach to what is generically referred to as rural society, its role and its future, without forgetting the Community preference provided for in the Treaty of Rome.
Commissioner, you are being asked, as we indeed are, to reorganise European agriculture through Agenda 2000 with farmers of whom over 60 % are over 50 years old. And, as you mentioned earlier, as much as possible will be achieved with these people, but there appears no desire to take measures to make the farming profession and that of rural and environmental manager more attractive to young people. Nothing specific has been proposed, not even a credible 20-year draft outlining what will be done for farmers about to retire or for the young people who might begin their careers.
I suggest you do a little test, Commissioner, if you have enough time, among the people in your office to see what conditions would be necessary to entice civil servants away from their jobs to take over or start a farm somewhere in either Northern or Southern Europe. I am sure that if we were to create conditions based on the answers given we would see young people flocking to work in farming.
Agenda 2000 also requires us to provide for enlargement to include countries of the East. I should like to say straight away that I am in favour of this enlargement taking place. But if it is stated that there will be no increase in the budget and that the same envelope will be kept for agriculture and for the Structural Funds, this will essentially boil down to Southern Europe paying for enlargement to the East. In other words it is the poor in the South who will be paying for their poor Eastern counterparts. This situation is unacceptable, Commissioner.
I should like to conclude by reminding you that our common enemy, politically speaking of course, is the Council. Commissioner, in your position regarding the resolutions adopted by Parliament, you will need to remember this.

Böge
Madam President, Commissioner, Mr President-in-Office, for us the Agenda is a package. At the outset, I will say quite deliberately that in the end, it is the results which will count and not only whether we keep to the timetable. For me, the Commission's proposals on agriculture go too far. I think that the votes in the Committee on Agriculture and Rural Development have made it clear that there will be no majority in this House in favour of the Commission proposals, as they currently stand.
After all, if we look at America, we find that two years after the farm bill came into force, discussions on parts of it have already been reopened. Let us not make the strategic mistake of already wanting, as it were, to negotiate away some of the negotiating points which we need for the forthcoming WTO round. I tell you quite clearly, Commissioner Fischler, that anyone who works in this way has never worked with cattle.
Mr President-in-Office, perhaps we should issue a joint statement to the German and European public, saying: we do not have any problem, in terms of both sides making the necessary adjustments, with fully integrating the agricultural economies of the applicant countries by 2004, provided that the basic freedoms of the internal market - free movement of people, capital, services and goods - are established at the same time. There could then at long last be a fair debate in this House about the other difficulties and stumbling-blocks connected with the agricultural policy.
On the financial side, I should like to say that obviously the issue of fair contributions and a balanced budget in terms of both income and expenditure forms part of the Agenda debate. The question of cofinancing also belongs in this negotiating package. As you know, Parliament will be giving its definitive opinion on this in February. I must of course also confess, Mr President-in-Office, that the reason why the question of cofinancing is so controversial with German farmers and the subject of such contentious debate is that they might see themselves being faced with considerable problems - in view of the transposition of the accompanying measures and the reluctance of several Länder to cofinance them - if we were to choose this approach. As you know, even Lower Saxony was not exactly at the top of the list for transposing the accompanying measures in Germany.
These days, of course, everyone has their experts. Commissioner Fischler, I should like to say very clearly that the experts recently drafted in by the Commission, whom you specifically referred to as testifying for the Commission proposals, produced reports which are based on very foolhardy theories. This is because if you are going to say that price reductions will benefit consumers, that unions and employers will take account of these price reductions and that this will affect prices accordingly, then the price of pigmeat in recent months ought to have been substantially lower.
When, during this presidency, we are debating and arguing about employment policy, we should not forget that these experts are assuming that there will be a substantial decline in the number of those employed in agriculture, if these proposals go through as they stand. That is another reason why they need to be fundamentally amended.

Kofoed
Madam President, there is widespread agreement in Parliament that we should have agricultural reform. The question is whether we can agree on a reform which has the right balance, so that the agricultural sector does not end up carrying the heaviest load, and so that the burden in connection with the reform which will take place because of enlargement and the WTO negotiations is evenly distributed.
I have a few comments to make. The first concerns the Fantuzzi report on cereals. I think the reduction in the price of cereals proposed by the Commission is too great, because inadequate compensation is being provided. I would like to bring the attention of both the President-in-Office and the Commissioner to the fact that cereals are the most important element in controlling agricultural production. If the price of cereals is low, this will result in over-production of animal products in the form of beef and veal, pigmeat, eggs and poultry, because the farmers will want to have compensation and everyone will exploit the low price of cereals. I therefore think the price of cereals is set too low and the Commission is not sufficiently interested in using set-aside. The set-aside scheme is the best tool for regulating the production of cereals. The USA has shown this for many years. If the production of cereals is too high, land is put into storage. That is cheaper than putting cereals into storage.
Finally, Commissioner, a comment on the calculation showing that EUR 3-4 billion is being saved on the budget and that consumers are saving EUR 10-15 billion. This means that agriculture will transfer EUR 15 billion to consumers and agriculture will lose out in the reform, because compensation will not be available through the market, and that is no solution for supplying the market with agricultural produce. I think there is a long way to go before we can reach agreement on agricultural reform, but I hope we can succeed. I agree that it should happen before March, and we will do our best.

Poisson
Madam President, Commissioner, Mr President-in-Office, 1999 will be a decisive year for the future of European agriculture. At the Vienna European Council in December a number of disagreements remained and some Member States wanted to reduce their contribution to the Union budget. This seriously called into question the financial solidarity between Member States and overall European unity.
I should like to remind you and, moreover, stress that agriculture is the only sector to have a common policy on which European integration has hinged for the past four decades. In Agenda 2000 the Commission proposed a reduction in support prices, an increase in direct aid to producers, cofinancing by Member States, and so on, but it remained frustratingly silent about the increase in the production of agricultural products for non-food purposes, which is something I regret deeply.
I remain absolutely convinced that the European Union needs to create a development strategy for non-food agricultural products and that the Commission needs to include a specific section on such products in the CAP reform. In fact, these non-food agricultural products are able to meet a large number of needs in terms of agriculture and rural development. For example they can meet needs relating to food production control, diversification and employment, and they can help maintain a rural bias in industrial spheres in the production of new renewable materials and meet general interest needs regarding the protection of the biosphere. All of these elements will very positively help define a specific European agriculture model.
This is why, on behalf of the UPE Group, I have tabled three amendments along these lines, in the context of the Graefe zu Baringdorf report.

Novo
Mr President, Commissioner, ladies and gentlemen, the proposed CAP reforms presented by the Commission are no more than an attempt to continue the 1992 reform. The effects of this are well-known and included discrimination between farmers, regions and products. In addition, its consequences, particularly for my country have become clear in recent years and include reducing the number of holdings and jobs, abandoning and emptying the countryside and ruining family-based agriculture.
The proposals must therefore be changed by radically altering their orientation. The support for large farmers and holdings must be drastically limited and the aid to family-based agriculture and small and medium-sized holdings must be significantly increased through positive and genuine modulation. Furthermore, sufficient resources must be provided to finance a common policy which aims to include new countries struggling with the fall in prices and the American requirements in terms of the next WTO round of talks. Finally, it must be reaffirmed here and now that the recent cofinancing proposal, that is, the recent proposed renationalisation of the costs, and only the costs, of the CAP, is not acceptable, neither in the light of solidarity nor on the basis of the Treaties. The recent rejection of the proposed regulations in the Committee on Agriculture and Rural Development is a sign which must be fully respected by the Commission and particularly by the Council.

Raschhofer
Madam President, one of the intentions of CAP reform is to reduce support prices to bring them into line with the world market, in order to comply with international agreements. The compensatory payments to farmers do not, however, cover the resulting loss of income, and thus endanger the farming community. The Commission proposals are geared towards the world market. The European farming industry is, however, very diverse and structured in smaller units than is the case in the United States, for example; it is hard to make a direct comparison.
Even US experts warned that full-blown liberalisation would threaten international agricultural commodities markets with the same fate as that of US farmers - a loss of income of 16 % - and advocated market stabilisation measures. Quantity management must continue to form part of the market organisations. We need farmers who maintain the ecological balance and care for the countryside.
Linking compensatory payments to environmental requirements is desirable and important, but for this to be fair, it has to be done on the basis of uniform European environmental standards. This reform package would continue to sound the death knell for farmers. It is not acceptable in its present form.

President
Thank you, Mrs Raschhofer.
The debate is now adjourned; it will be resumed this afternoon at 3 p.m.

VOTES
Monfils
Mr President, the text of the Treaty is perfectly clear. We have expressed our intention to reject the Council's common position and it must now call a meeting of the Conciliation Committee to see if it can reach some sort of agreement regarding the amendments. If this is not done, if the Council refuses, it is likely that when discussions have ended, the Committee on Culture, Youth, Education and the Media will put forward a motion rejecting the common position. But we are still hopeful of finally arranging a meeting with the Council so that we can work together on amendments which will enable the Council and Parliament to agree on a solution which both respects Parliament's prerogatives and guarantees the cultural quality of the cities chosen in 2005 and beyond.

President
I thank the rapporteur Mr Monfils for his explanation. We will await the Council's reaction and determine our position accordingly.

Ullmann
Mr President, you took the vote incredibly quickly, which I welcome, but I did not have a chance to speak. I would like to draw the attention of the House to the fact that there is an error in the German version of Amendment No 18 on Article 5 which needs to be corrected. In Article 5(1) it says 'sorgen dafür ' and in Article 5(2) it says 'stellen sicher '. In legal terms there is a considerable difference between the two. It should say 'stellen sicher'.

President
Mr Ullmann, we will look into that without any difficulty. In linguistic terms it can be corrected. In any event, the House has approved your report by a large majority, and that is why I congratulated you.

Sainjon
Mr President, I should like to clarify two points in relation to this report. Firstly, we need to take into consideration in paragraph 2 of the resolution the fact that Portugal - and this is something I welcome - has ratified ILO Convention 138. The reference to Portugal in paragraph 2 should therefore be withdrawn. Secondly, I agree with Mr Kittelmann's Amendment No 9 as a replacement for paragraph 19.

President
Mr Sainjon, thank you for your explanations. Of course, there is no question about the first point; it is a technical correction of a factual matter, and I need not therefore seek Parliament's approval. I have taken note of the second point.

Barros Moura
Mr President, I am pleased to note the statement made by Mr Sainjon about the need to remove the incorrect reference to Portugal in paragraph 2 of this motion for a resolution. However, I would like to ask the Bureau what procedure we can use to remove this reference. Is it the rapporteur who makes the correction or do we have a separate vote to remove these two words from paragraph 2?

President
Mr Barros Moura, what I said was precisely that we do not need a vote, it is a technical correction of a factual matter and now that the rapporteur has pointed it out, the reference to Portugal can be deleted without further ado.
On Amendment No 9

Mann, Erika
Mr President, I would like Mr Sainjon to explain how he intends to proceed with paragraph 21 if he supports Amendment No 9 by the PPE Group.

Sainjon
As I pointed out, Mrs Mann, I accept Amendment No 9 tabled by Mr Kittelmann as a replacement for paragraph 19, on the understanding that the rest of the resolution, namely paragraphs 20, 21 and 22, remains unchanged.

Schwaiger
Mr President, I can confirm that approval of the Kittelmann amendment means for us the approval of paragraphs 20, 21 and 22. I must add that for us the voluntary nature of the code de conduite is a crucial point. Only if this is included in our text can we approve it fully.

Plooij-van Gorsel
Mr President, as regards paragraph 19, I should like to withdraw the Liberal Group's amendment in favour of Amendment No 9 by the PPE Group on condition that a phrase is added, namely 'for boys and girls' after the words 'career opportunities'. I have discussed this with the PPE Group, and therefore ask for it to be approved. We are withdrawing Amendment No 4 in favour of Amendment No 9, provided the words 'for boys and girls' are added to Amendment No 9.
Parliament adopted the resolution

Andersson, Hulthén and Sandberg-Fries
We think there is good reason to consider carefully our stance on the committee's proposal to reject the common position adopted by the Council. We believe that the European Capital of Culture event is of great benefit to the Community. For the sake of the event's future, it is essential that there should be a fair and effective system for deciding which cities should host the event and when.
We feel that the compromise proposal of an automatic rota system with a guidance panel with diminished powers, as put forward by the Council, has some definite disadvantages. On the one hand, the proposal would transfer the emphasis from the cities - which are supposed to be the focus of the event - to countries, and on the other, the Council procedure undermines the position of the European Parliament. In this respect, the committee's criticism - in line with previous decisions - is correct. We would nevertheless stress the need to find a solution that is acceptable to all Member States, in order to avoid future arguments over the selection of cities and the designation of years.
Moreover, the advantage of the Council's proposal is that an element of predictability would be introduced which would make planning and follow-up activities easier for the city concerned. Our position on this issue depends partly on whether or not we think a compromise will improve the way in which nominations for the European Capital of Culture event are handled, and partly on whether a viable solution to the problem can be found which avoids argument in the future.

Palm, Theorin and Wibe
We have decided not to support this report. The European Capital of Culture event is one of the most successful Community projects. If it is to be as highly regarded by Member States in the future, then we must settle our differences on how cities are chosen, and it is important that this is done fairly.
It is doubtful whether the Council's compromise proposal to establish a rota system based on the same order as the presidency, with an additional city from a third country being chosen every year, is the best solution. However, it is a proposal for which all the Member States, after a good many ifs and buts, have expressed support.
Negative criticism of the event has mostly been levelled at the need for long-term planning and the lack of ongoing results. An automatic rota allows both countries and cities to prepare for the event and to develop it further.
Pollack recommendation (A4-0483/98)
Hautala
Mr President, I would like to emphasise the importance of Mrs Pollack's report. It is part of a general endeavour to improve air quality throughout the European Union. I consider it extremely important that Parliament continues to demand binding limit values for particle emissions, for example. The issue is a serious one and one that concerns the health of all our citizens, since the latest studies prove just how dangerous particle emissions really are. I hope the Council of Ministers will also take Parliament's position seriously.
Ullmann report (A4-0507/98)
Rovsing
Parliament underlined the importance of EU legislation in this area on 17 June 1998, in a resolution in which it argued that it was necessary to create a legal framework at European level to ensure mutual confidence in digital signatures and to promote the development of a number of certification schemes which could be used in various areas such as electronic shopping and electronic communications between government bodies and citizens. The Commission's proposal for a directive on a common framework for electronic signatures is a positive measure and a major step in the right direction. However, I hope that the many relevant amendments proposed by the committee, which are aimed at clarifying the text of the directive, will be taken into account during the next stage of the procedure.
Elchlepp report (A4-0437/98)
Lindholm
It is gratifying that negotiations with the applicant countries are progressing and that agreements are being reached on a country by country basis. Competition policy is a major issue for the countries concerned, but let us hope not unduly so.
It was assumed that it would take approximately ten years for the applicant countries to complete the transformation from dictatorship and a planned economy to democracy and a market economy. The process involved adapting to the EU and its established law and practice, but despite what appeared to be almost impossible odds, these countries, in particular the Baltic states, have succeeded beyond all our expectations in a remarkably short period of time.
However, the political and economic pressures on these countries are enormous. If they are to succeed, the Union must be flexible and provide generous economic support.
The Green Group has maintained that accession negotiations should be held with all three Baltic states simultaneously, in order to promote harmonious political and economic development in the area and to avoid endangering the fragile cooperation process. We very much regret that the Commission has chosen an alternative strategy which makes it more difficult to achieve that objective.
Seppänen report (A4-0443/98)
Posselt
Mr President, I am of course in favour of the agreement with Latvia and I am also in favour of Latvia's inclusion in and accession to the European Union as soon as possible. However, I must say that, although I agree with the Seppänen report, I have considerable problems with its explanatory statement as it is an accurate representation of the Russian nationalist point of view in this context. It describes NATO membership for Latvia as dangerous and points to the problematic issue of Russian minorities. But it does not mention that this problem is a consequence of the fact that, contrary to the provisions of international law, Latvia was occupied for decades and subjected to a systematic settlement policy, and that the country was therefore settled by occupation in violation of international law. Attempts are now being made to use this problem, which undoubtedly needs to be solved sensitively, as an excuse for possibly calling Latvia's independence into question.
Therefore, I believe that Latvian membership of NATO would not aggravate this problem but would alleviate it. If Latvia knows that its freedom and independence are no longer under threat it will also deal with its minority problems in a more relaxed manner.
Porto report (A4-0445/98)
Kreissl-Dörfler
This agreement has now been on our desks for more than two years, as the Committee on Foreign Affairs, Security and Defence Policy was right to initially withhold its approval in April 1997.
Korea has admittedly been a member of the OECD since 1996 but this country has not met the corresponding conditions with regard to its labour legislation. The main trade unions are still banned, hiring and firing is customary, and the situation in the workplace is unacceptable.-The harmful consequences of dictatorial regimes such as the National Security Law, and the resulting host of political prisoners are contrary to our understanding of the rule of law. Fundamental democratic rights continue to be flouted. As Article 1 of the agreement consists of a democracy and human rights clause, the agreement would have to be immediately suspended as soon as it came into force.-The death penalty continues to exist, and so on.Great hopes were pinned on the change of government. The financial crisis in Asia also changed the situation. Nothing, or practically nothing, has been done for this people that has been abused for centuries. Yet industry, businesses and certain sections within the Commission want the green light for bilateral trade. The reasons they give include the shift in the balance of trade, enormous market opportunities, liberalisation and the whole package of measures that the IMF has made a condition of its financial assistance. Human rights and labour rights, on the other hand, are no longer mentioned by those in favour.
From experience, however, we cannot rely on a simple trickle-down effect where human rights are concerned. There have already been too many dictatorships whose economic performance was excellent while people lived in want and disappeared.
We in Parliament would be giving up an important instrument for bringing pressure to bear if we were now to give our approval. We would then no longer have any way of intervening. Parliament has no say on the democracy and human rights clause.
Yesterday evening's debate confirmed the view of the Green Group that we should withhold our approval of the agreement. Sir Leon Brittan has assured us that he will do everything that he deems diplomatically appropriate to ensure that conditions are improved in Korea. Unfortunately, we know that the euro is much more important to him than social well-being. And his refusal to give Parliament an annual report on the situation in Korea simply means that we will never have the Commission's position in writing on this. His offer to present the information orally in Parliament certainly sounds promising, but by doing so he is avoiding any serious possibility of having to do his duty properly.
A good relationship with Korea and the welfare of its inhabitants are issues that are very important to us. It is precisely because of this that the time is not yet right for this agreement.
Brok report (A4-0488/98)
Posselt
Mr President, I abstained from the vote on the Brok report, not because I do not agree with most of his proposals; of course I do! Indeed, this week I am more strongly than ever in favour of Parliament having a stronger influence over the Commission. We must ensure that Parliament is no longer the Commission's slave but that instead the Commission - which must of course also be strong, but supported by Parliament - is monitored by a strong Parliament. This week we have seen the disaster that has occurred as a result of this not being the case hitherto. I am in favour of the strictest measures in the current crisis, perhaps going as far as a motion of censure. But there is one thing that I do not agree with: the proposal to have an elected President of the European Commission. I could perhaps have accepted this in the Social Democrats' more moderate version but not in the form in which it has now been adopted, because in my opinion an election of this kind is not appropriate for a multinational structure such as the EU and could easily lead to national or nationality-related problems. In my view, the Commission and the Commission President must be determined by Parliament, but I do not believe in this kind of EU-wide presidential election.

Andersson, Hulthén, Lööw and Sandberg-Fries
The report is a very relevant one as regards the changes in the appointment of the President of the Commission introduced by the Amsterdam Treaty. However, we do not entirely agree with the ideas contained in paragraphs I(2), I(3) and I(4). We think the implications of these requirements are too far-reaching and specific.
Instead, we support the amendments to the above paragraphs tabled by the PSE Group. In our view, they allow the governments of the Member States more room for political manoeuvre, since they make the more modest assertion that it would be interesting if, in future, the political movements were to nominate candidates for the presidency of the Commission.
Amendment No 2 is also more circumspect, pointing out that it would be wise for Member States' governments to take account of the outcome of the European elections when nominating the candidate for the presidency of the Commission. The amendment goes on to propose that Parliament should hold a vote as soon as possible on the candidate nominated by the Member States.
Nor are we able to support paragraph II(1), which we regard as too broad in scope but too specific as regards the number of Commission members to be chosen from among sitting MEPs. Instead, we support the amendment to this paragraph tabled by the PSE Group, to the effect that we should continue to develop the practice which has been successful up to now of choosing some MEPs as Members of the Commission.
Furthermore, we cannot give our wholehearted support to paragraph IV(3), since we think it is far too specific as regards the time appointed for the nominee to make a statement of intent. Instead, we support the amendment tabled by the PSE Group to the effect that the nominee for President of the Commission should make, as extensively as possible, a statement of intent, followed by a debate, at the July 1999 part-session.

Barros Moura
This debate was needed because the Amsterdam Treaty strengthened Parliament's powers with regard to the investiture of the Commission President since the vote is now binding. It also strength the power of the nominated President with regard to the choice of the Commissioners - in agreement with the national governments - the definition of the Commission's programme and, once appointed, the political coordination and direction of the Members of the Commission. It is therefore necessary to strengthen the democratic legitimacy and political responsibility of the Commission and consequently of its President. This is the main thrust of the idea proposed by Jacques Delors, and backed by Mário Soares and Felipe González among others. It aims to organise the European election campaign around not just a political programme but also the choice of Commission President, with the European political parties having to publicly present their candidate for this post to the electorate.
The main positive effect of this would be the personalisation of the election campaign and therefore increased visibility of the institutions, better understanding of the rationale and greater emotional identification of the citizens with the European Union itself and its objectives and policies. I believe that the EU would surely gain in terms of greater prestige, proximity to the people and democratic responsibility.
The Brok report generally includes these objectives, although the requirements of realpolitik , which aims to preserve the power of the prime ministers to negotiate and choose the person to be proposed to the European Parliament, have dulled the clarity of the report in favour of forms of parliamentary compromise that allow room for both sides of the argument.
In any case, it has been proposed - I am pleased to say that this is due to my amendment - that the European Council should choose the person to be nominated as Commission President bearing in mind the election results. It is therefore not right for the German Government to claim that it will start the process of nominating the next Commission at the Cologne European Council set for 3 June, before the European elections!
The method thus proposed allows the necessary involvement of the other relevant and pro-European political forces in the Commission by means of the Commissioners in important posts. In particular, this does not conflict with the continuing intergovernmental nature of the EU and its institutions, which were originally conceived as having a supranational nature. However, this method is the only way for the nomination and future appointment of the Commission to correspond to a genuine agreement - as specified in the Amsterdam Treaty - between the Council of Ministers and the Parliament directly elected by the people. Parliament would surely gain in legitimacy - because the elections would have a higher turnout - and also in responsibility.
The Commission President would gain in authority in respect of the Commissioners and the governments. This is essential in order to guarantee that the Commission is the independent body acting as the political driving force of the European Union and defining the Community interest, as is provided for in the Treaties. It is not the administrative secretariat of a Council, easily dominated by the large Member States. It is clear that this system would involve a strengthening of the political responsibility of the Commission and its Members who would be considered individually by Parliament, and this would certainly be welcome.
The experience of the appointment and performance of the Santer Commission and the circumstances which caused this motion of censure demonstrate that realpolitik has not led in this case to satisfactory solutions, be it for the EU and its prestige, be it for the Member States and their citizens, or be it for the European Parliament and its irreplaceable role in the construction of a European democracy.

Bébéar
Since the beginning of my term of office as an MEP, I have met many European citizens who deplore the lack of democratic dialogue within the Community institutions and particularly within the European Commission. The most frequent criticism relates to the European Commission's lack of direct democratic base, which is partly due to the more or less secret negotiations it holds and the balances it strikes without most of the electorate knowing.
The single currency is in place, enlargement continues according to its own criteria, and in six months the European Parliament elections will take place. It would therefore be highly appropriate for European democracy to fully commit itself to a broader process of reforming the Commission. To satisfy some 370 million Europeans it is time to seriously consider nominating candidates for the presidency of the European Commission in the elections next June to allow them enough time to present a genuine political programme. It would also enable the person nominated to be accompanied by Commissioners who have been selected from among the elected representatives of the European Parliament.
Article 214 of the Amsterdam Treaty confers new powers on the European Parliament and brings the Commission's term of office into line with that of the European Parliament. It is therefore perfectly possible for this proposal to be implemented in time for the June 1999 deadline. The advantage of this would be twofold: it would make the electoral campaign more dynamic by upping the stakes, namely European policy for the next five years, and it would also create a more independent European Commission, one that would better implement Community law and do so with respect for political equilibrium.
A more tangible Europe, and one which is closer to its citizens, has never seemed as realistic and feasible as it is now, thanks to the Brok report. I therefore approve of its provisions and as it is the beginning of a new year, I should like to express my wish to see the majority of us commit ourselves to this aim, an aim which the majority of Europeans are hoping will be achieved.

Berthu
Grand federalist moves to definitively transform the European Commission into the government of Europe are once again in full swing.
Last October, the President of the European Parliament in this House welcomed the new role conferred on the Commission by the Maastricht and Amsterdam Treaties, which according to him involve the Commission exercising political, legislative and budgetary management. Today, through the Brok report, the Committee on Institutional Affairs takes over by trying to create new provisions in the Amsterdam Treaty, the 'catalyst for fundamental changes in Community interinstitutional relations'.
The new provisions of the Amsterdam Treaty are deliberately quite unclear, in line with the tried and tested federalist way. In any case they have never been clearly explained to the citizens, as the debate currently taking place in France goes to show. For example, amendments to Articles 158(2) (appointment of the President and Members of the Commission) and 163 (internal organisation of the Commission) help the Committee on Institutional Affairs to twist its interpretation of the Treaty according to the federalist view. This view sees the gradual transformation of the Commission into a sort of government of the Union, invested by Parliament on the basis of a programme of 'political guidelines' which reflects the results of the last European elections.
The legal basis is exploited for the good of the cause. In particular, the 'political guidelines' evoked in Article 163 of the Treaty are, in the context of this Article, aimed at constituting the Commission's instrument of internal discipline and not an 'investiture programme'. Furthermore, such a programme certainly does not exist under Article 158, which deals with the Commission's appointment.
More generally speaking, the Commission's shift towards government status, as recommended in the Brok report, in our view goes against the nature of the Union and as a consequence, beyond the terms of the Amsterdam Treaty. In fact, despite its ambiguities, the Treaty leaves the Council the right of initiative in choosing the nominees for the Commissioners' posts and the power to finally appoint the new Commission (Article 158). These provisions should also be viewed in the light of the Treaty as a whole, which leaves the Member States the most important role, both under Article D, which entrusts the European Council with responsibility for providing the Union with the necessary impetus and defining the general political guidelines thereof, and Article 145, which gives the Council the power to take decisions, coordinate economic policies, and confer implementing powers on the Commission.
Therefore, notwithstanding federalist eagerness to exploit the new Amsterdam provisions to their own ends (which was only to be expected) we are firmly convinced that the Council should retain its pivotal role in accordance with the general thrust of the Treaty and the Union's status as an association of States. In fact, we should like to consolidate this role by making the Commission itself accountable to the Council.
Lastly, the idea of the 'Commission's independence', on which the report lays great emphasis, is, in our view, extremely ambiguous. Although we agree that the Commission's independence vis-à-vis pressure groups should be enhanced (and, indeed, have tabled amendments seeking to ensure this), we do not believe it to be of the least use vis-à-vis the democratically elected governments meeting within the Council.
As I emphasised yesterday in the general debate, the theory of the Commission's independence has induced a feeling of superiority which is largely responsible for the lax behaviour noted today. Fraud is the natural outcome of poor European institutional planning. We must not increase but reduce the Commission's independence, and we must reduce the excessive privileges this body enjoys: a monopoly on initiative, self-regulation, discretionary powers, and so on.

Blak, Iversen, Kirsten Jensen and Sindal
We abstained on the report by Mr Brok, which emphasises the influence and responsibility of the European Parliament with regard to approving the Commission. We are supporters of this form of vetting of the Members of the Commission before they take office, but we do not think that people should only be eligible for a post in the Commission if they are current or former Members of the European Parliament. There are many other ways of gaining parliamentary experience so as to be able to carry out such a job. Similarly, we are not avid supporters of each group in the European Parliament having its own candidate for the position of President of the Commission as part of the election campaign. The Commission should retain its independence, and Parliament should retain its own independence as a supervisory body.

Blokland
The Brok report was originally scheduled for debate at a different part-session, but the departure of Mr d'Andrea means that it has now been put on the agenda in a very timely way, because this week is dominated by the issue of the European Commission's accountability to Parliament.
I voted against the report, because what the rapporteur is seeking goes much too far. Apart from anything else, it would not be a good thing for the election of the Commission President during the European elections to mean that we got a kind of 'minister for Europe'. The European Commission is after all an executive, and in principle it thus has no responsibility for making policy.
The Amsterdam Treaty gives the European Parliament greater powers in the appointment of the Commission President. Logically, this should mean that Parliament has more influence when it comes to malfunctioning on the part of the Commission. But I think Parliament can use its powers primarily to influence the budget. That does not impinge on the work of the Council which, after all, appoints the members of the Commission and therefore bears the main responsibility for taking action. It seems strange to me that the report makes no mention at all of this responsibility of the Council.
The President of the European Commission does not have to be elected on the basis of a political programme, since the Commission, as I say, is the executive arm of the Council and Parliament.

Delcroix
If the vote on the discharge for the 1996 budget is now considered to be in the past and if the vote of censure of the Commission is currently making a mockery of this parliamentary session, then the motion for a resolution currently being examined doubtless belongs to the future. The importance of this resolution lies in the fact that it will not only affect future relations between Parliament and the Commission but also the future democratisation of European institutions. In this respect, this declaration is indeed aimed at all European institutions but its chief justification is as an internal discussion paper for Parliament. This is because it attempts to chart the most democratic course possible for Parliament to negotiate in 1999.
When the public first heard of the Amsterdam Treaty it thought that the intergovernmental conference had been a great deal of effort that had led to nothing much. The Treaty is undeniably complex and those who expected institutional progress to lead to a trouble-free enlargement of Europe have been disappointed. However, it did introduce a number of new elements which it is our duty to consider so as to fulfil our mandate as representatives elected by universal suffrage.
Our comments here centre on three of the new elements contained in the Treaty. Firstly, Parliament shall give its assent on the person nominated by governments as President of the Commission. The nominee shall then act in the capacity of the person jointly responsible for forming the Commission. Secondly, the Members of the Commission and the nominee for President shall be subject as a body to a vote of approval by Parliament. And thirdly, the Commission shall carry out its duties respecting the political guidelines as set out by its President.
In this way we are able to see the gradual emergence of a European Union with an executive body, namely the Commission, which will be formed by two legislative institutions. One of these institutions, namely Parliament, will represent the citizens, and one will represent the Member States, namely the Council. It will be a tripolar structure which a priori may seem somewhat fragile, unstable even. But we are all aware of the fragility of democracy itself and that the most elaborate structures which aim to respect the rights and duties of everyone are the weakest. This does not make them any less effective even if they do require the various partners to make huge efforts to listen to each other and compromise.
With the implementation of the Amsterdam Treaty, it is obvious that neither the Council nor Parliament will be capable of forming their executive body without first taking into account the position of the other. They are in fact forced to listen to each other and negotiate the composition, political guidelines and operating methods of the Commission. Today Parliament is therefore clearly capable of playing a bigger part in the formation of the college of Commissioners.
My second point concerns the opportunities that have arisen because of the points I have just mentioned regarding the European elections and the boost they are likely to receive thanks to a process to create ever greater European integration. In short, the main thrust behind the proposal put forward by Jacques Delors is, in my view, relevant. There is a striking contrast between the obvious loss of impetus in European architecture and the concerns of the public. This is because the public feels the impact of European policies on their daily lives but fails to see any evidence in Europe of the democratic practices they are accustomed to in the different Member States. Giving a fresh impetus to the European debate means making the choice of the future President of the Commission a campaign issue in the next European elections and preventing them from being dominated by exclusively national concerns. Lastly, this would also herald the beginning of a genuinely European political life and one which, at the same time, is highly personalised.
My third point concerns the desire to better politicise relations between Parliament and the Commission and, in this connection, to reduce the Union's democratic deficit. The public has been surprised to see that the European Parliament - which is essentially a breeding ground that states dip into when forming their governments - is called on so little when it comes to appointing the Commission and the President of the Commission. This goes against the democratic practices of our respective countries. What is more, Parliament's democratic credibility will only be truly strengthened when, as our declaration requests, 'a significant number of the members of the Commission (are) chosen from among sitting Members of the European Parliament ...' This, in my opinion, also implies due respect, here as elsewhere, for the balance between men and women.

Deprez
In spite of the progress made in terms of reform of the Treaties, many of us have for a long time been absolutely convinced that this House will only be considered as a proper Parliament when it is able, among other things, to make the European Commission fully accountable to it.
That said, it is absolutely vital that the reform of European institutions takes place within the context of future enlargement to include Central and Eastern Europe.
An enlarged Europe including some 20-25 members would be totally inefficient if it were to have a European Commission that comprised at least one Commissioner for each Member State. The vital reform of the structure and composition of the Commission should therefore confer on it a legitimacy other than that conferred on it today through the national appointment of its members.
In any democratic state the government is formed as a result of ideologies that exist in representative assemblies which reproduce more or less faithfully the divisions existing in the society that elected them.
In an ever closer union, genuine democratic legitimacy will always be visible in this House which is elected by direct universal suffrage. It is therefore indeed the European Parliament that should confer new legitimacy on the European Commission.
Implementing the report's proposals in this regard will constitute a further step forward in both Parliament's emancipation and in the democratic unification of the European continent.
I should particularly like to highlight once again the vital need for the Commission's independence from Member States and for the inevitable consequence of this, which is that Parliament would have increased control over it. At the same time the Commission must remain protector of the Community's interests and guardian of the Treaties. It must also once again become the driving force behind European integration.

Fayot
The aim of this report was, among other things, to support the proposal put forward by the Jacques Delors 'Our Europe' foundation, which suggests that the appointment of the future President of the European Commission should be an issue in the next European elections.
This is a proposal that I endorse, which is why I have signed it.
Our proposal to make European elections more personal and more political by encouraging electors to participate in appointing the future President of the Commission was watered down in the Brok report to the point of being ridiculous. This is due to the compromises made between the groups.
Why is this the case?
It is because the Heads of State and Government simply do not want it. Whether they are socialist or conservative they want to go about their business without any democratic debate, preferring a Vatican-style conclave instead. In short, they are anxious to retain control over the appointment of the President of the Commission without any outside interference, be this from the electorate or from political parties.
If this continues we may end up with the following outcome regarding the future President of the Commission:
on 3 and 4 June 1999, at the Cologne Summit, the German Presidency proposes to initiate the process of appointing a new Commission by nominating a President; -on 13 June 1999 the European elections take place.Henceforth electors will only have to record the result of 'in camera' negotiations of Heads of State and Government.
This topsy-turvy world is yours if you want it.

Lindholm
By interpreting these articles in the as yet unratified Amsterdam Treaty in a somewhat extreme way, the rapporteur and Parliament will end up turning the Commission into a kind of government. This is further borne out in the explanatory statement.
I believe that this contravenes the articles in the Treaty which establish that the EU should be a form of international cooperation between independent nations. It is an attempt to turn the EU into a federation without giving Member States the chance either to discuss it or take a decision on it, and this I cannot accept.

Lindqvist (ELDR), Seppänen, Sjöstedt and Svensson (GUE/NGL), Gahrton, Holm and Schörling (V), Lis Jensen (I-EDN)
The Brok report on the approval of the President of the Commission and the 'independence' of the members of the Commission clearly reflects the ideology which prevails in the Committee on Institutional Affairs and its belief in a federal culture. We should like to point out that the Commission has never been regarded as independent, but as a joint decision-making body with Parliament and the Council.
In the conclusions of the explanatory statement, mention is made of going beyond 'the intergovernmental method to the Community method', and of strengthening the process of integration by 'furthering the goal of a united federal Europe'. The purpose is to prepare the way for the Commission to become a kind of government that is chosen directly by the European Parliament and not by the Member States.
In our view, the report goes too far in its interpretation of some of the provisions contained in the Amsterdam Treaty. The committee has also taken too much to heart the proposals put forward by the former President of the Commission, Jacques Delors, to make the main purpose of the European elections the nomination of the President of the Commission, rather than the election of MEPs.
The report is also full of contradictions. On the one hand, it wants to safeguard the Commission's independence, while on the other it would like Parliament to be involved in negotiations to choose members of the Commission, hence 'a relevant number ... should be chosen from among sitting Members of the European Parliament'. Since we are opposed to the transformation of the EU into a federal power and advocate an intergovernmental arrangement instead, we have decided to vote against this report.

Palm
The report tackles some of the institutional problems that exist in the Union, above all from a democratic perspective.
According to paragraph III(1) of the report, Parliament would be able to call to account and to dismiss individual Commissioners. As we have seen during the past week, this is an instrument which, in Parliament's hands, carries considerable weight. Unfortunately, the same paragraph also contains the rather curious statement that it is important to safeguard the Commission's role as 'the only body with the right of legislative initiative', an idea to which I am strongly opposed. It would be democratically damaging to cooperation, as we have seen today. I do not think that the right of legislative initiative should be the exclusive prerogative of the Commission.
In my view, an instrument that allows individual Commissioners to be dismissed is so important that I intend to vote for paragraph III(1); however, I should make it clear that I am opposed to the Commission having the sole right of legislative initiative.
Despite its good points, the report also has certain weaknesses. A number of these would be improved by the amendments tabled by the PSE Group, which I shall be voting for.

Theorin and Wibe
For the most part, the report follows up the modifications to the process of appointing the President of the Commission which are contained in the Amsterdam Treaty. However, we are not in complete agreement with the report as a whole. The governments of the Member States should be given more room for political manoeuvre, as provided for in the amendment tabled by the PSE Group. Furthermore, we think the report goes too far in calling for a number of members of the Commission to be chosen from among sitting Members of the European Parliament.
We do not share the view that the Commission should have the sole right of legislative initiative. This would in fact give substantial power to the Commission, which cannot be held accountable since it is not popularly elected. In this respect, we think it is important for national parliaments to have more say in intergovernmental cooperation than at present.

Valverde López
Mr Brok's report outlines proposals for fundamentally changing the European Union's institutions, an idea which has been gathering support over recent years. Nonetheless, we must fiercely oppose such damaging proposals that will lead to the demise of our institutional system, which is revolutionary in the history of constitutional politics.
By moving closer to the model proposed in the founding Treaties, we will perfect the EU's institutions and they will progress. Any trend towards developing the Union's institutions so that they resemble the now defunct constitutional systems of the nation state would lead to disaster. The Community system supersedes the nation state as it governs different relations and realities. The Commission, Parliament and the Council are institutions which can only work together thanks to the interinstitutional way in which they operate and the internal balance between them. Although the governments of the Member States nominate the President and Members of the European Commission, the Treaties wisely put a counterweight to power, the motion of censure, in Parliament's hands. If Parliament and the political groups were to nominate the Commissioners and the President of the Commission, this essential balance would be upset and the College of Commissioners would be politicised. The Treaties stipulate that it must be independent, not only from the governments but also from any political group. On the other hand, if each political group were to put forward a candidate for the Presidency of the Commission, this candidate would actually become politically dependent on a particular political persuasion and would therefore not have the necessary independence. What is more, this would lead to a tendency to create some support or opposition groups in Parliament which would in turn upset the free political game where all Members are part of the opposition from the outset and have no reason to support either the President or the Commissioners. At every stage of the game, majorities are formed according to the issues being discussed and this is a much more free and democratic system.
Mr Brok's report is marred by some severe contradictions. It defends the collegiate responsibility of the Commission and yet, at the same time, supports the possibility of calling for Members of the Commission to resign from office. Also, giving greater powers of leadership to the President goes against true collegiate responsibility. It seems to have been forgotten that the essence of these Community institutions lies in the principle of giving all the power to the institutions and not to any of their presidents. The responsibilities belong to the institution and not to the person. It is for this reason that the Presidency of the Council rotates, is restricted to six months and only plays a coordinating role. The President of the European Parliament does not have any significant power either and if the President of the Commission were to have too much power, this would harm the 'unity through diversity' of the College of Commissioners. The presidents of the institutions have the full authority of the bodies they represent but do not have their full power. And this is a good thing.
The Commission maintains its independence by strengthening and heavily emphasising the principle of political independence and by avoiding the pressure from governments for increased politicisation of officials by imposing national and party quotas. Parliament should also be aware that if it has the power to monitor the Commission, it should adapt its staff structure and its working methods accordingly, instead of channelling its energy into commenting on news in the papers one month after the event.
Sainjon report (A4-0423/98)
Andersson, Hulthén, Lööw, Theorin and Wibe
Globalisation offers more opportunities, but it also brings new dangers. Codes of conduct for multinational undertakings play a vital role in safeguarding human rights. Using the ILO Declaration on fundamental principles and rights at work and other international minimum standards as a starting-point, a minimum code of conduct should be drawn up, to be ratified voluntarily by the European multinationals. It is crucial that the Commission, in initiating and carrying through this proposal, should work closely with representatives of companies, trade unions and non-governmental organisations.
In particular, we would like to stress that the Commission and those Member States who sit on the WTO's decision-making bodies, when assessing applications, should make it a criterion of acceptance into the WTO that candidate countries comply with minimum social standards. In order to ensure the constructive development of the multilateral trading system and to bring about reforms in world trade, further work in this area must be guided by the principles of accountability, equity and solidarity. The profits that accrue from world trade should be utilised to improve living standards in all parts of the world and to bring about an equitable distribution of wealth, with the ultimate objective of eliminating the widening gap between rich and poor.

Blak, Iversen, Kirsten Jensen and Sindal
The Danish Social Democrats voted in favour of the report concerning the upholding of human rights in international trade. To begin with, the EU should ensure that the ILO conventions are ratified and respected in the Member States. Furthermore, the EU should ensure that a social clause based on ILO principles is incorporated into agreements with third countries. We voted in favour of making a code of conduct for European multinational undertakings based on the ILO conventions as binding as possible. Experience shows that voluntary codes of conduct are not respected. It is more effective to adopt European framework provisions which can be accompanied by possible sanctions.

Deprez
The need to take the social dimension into account when liberalising international trade has, in the past, been evoked by those who in fact wish to increase protectionism in the industrialised world to the disadvantage of developing countries.
It is even more important that the call for widespread respect of a few simple principles and rules enshrined in ILO international conventions be considered as highly legitimate. These conventions are designed to restrict the use of child labour, prohibit the use of forced labour, and guarantee the right to join trade unions and engage in collective bargaining.
The European Parliament has called for this on many occasions and has also expressed its desire to see minimum standards included in a social clause, within the unilateral and multilateral trading system. It has also said that it is willing to support the principle of a more in-depth dialogue on this issue, within the multilateral framework of the WTO.
We need to demonstrate our credibility to our partners at the many discussion and negotiating forums in which the European Union and Member States participate. How can we hope to maintain this credibility when some of the Union's Member States have not ratified all of the ILO conventions specifically relating to these fundamental rights?
I broadly share the rapporteur's concerns and wishes, but I should particularly like to stress the need to put our own house in order first of all. This is why I urge Member States who have not already ratified these conventions to do so as soon as possible. Accordingly, I call on colleagues from these countries to use all of their powers of persuasion over their government authorities to ensure this is carried out.

Lindholm
The resolution and the Commission's communication recommend the inclusion of a social clause, in the context of international trade. More substantial support for the ILO Declaration on fundamental principles and rights at work is also called for, particularly in respect of child labour both inside and outside the Union. I therefore support the report, even though there are one or two things which I would question, such as financing.

Palm
The Year of the Child is just beginning. The UN Convention on the Rights of the Child, which has been ratified by the governments of all the Member States, will be ten years old this year. It is distressing to see the splits that exist in the Union over compliance with even minimum standards, such as a child's right to a childhood - to play and learn without having to work, as established in the Convention.
The report calls on the Member States to respond to serious shortcomings in the protection of children in society and at work. However, there are a number of amendments which substantially weaken the report's intentions. Amendment No 10 is the only one that actually enhances the report, and I am therefore going to vote in favour of it.

Souchet
Even if it contains several inappropriate comparisons, for example, regarding child labour in the United Kingdom, which are based on unsubstantiated information (school children or students who do a morning paper round cannot be considered in the same light as those who work 12 hours a day making carpets), the Group of Independents for a Europe of Nations has nonetheless decided to vote in favour of Mr Sainjon's report. This is because we all recognise the need to put an end to social dumping which has corrupted the world trading system as it currently operates within the framework of the Marrakesh agreement.
And yet, in 1994, not so many of us were of the view that the Uruguay Round negotiations had their place in the 1960s, in a world in which trade generally took place between a small number of similar or comparable countries. However, the end of the Cold War and the globalisation of transport and communications systems meant that countries of socially different levels found themselves in competition with each other. Rules which may be beneficial in a specific context can nonetheless become quite the opposite in different circumstances. Such is the situation we have been forced to acknowledge just a few years after the Marrakesh agreement entered into force.
In making an inventory of the EU resources still available to combat social dumping, the Sainjon report notes that such resources are scarce. What is more, the rapporteur can only propose optional and incentive measures. One can only agree with the rapporteur's recommendations regarding the very stringent limits to be brought to bear on the marketing of products made by prisoners. The same applies to the desire to combat forced child labour. The suggestion put to the Commission to intervene in WTO decision-making procedures to ensure that respect for minimum social standards by the applicant countries is upheld as a criterion for admission is also very positive. We must urge the Commission to rigorously ensure such demands are carried out. It is in fact clear that the decisive level for action in this area as in many others is global and not European. Unilateral European provisions may even backfire on European companies if competitive third-country companies are not subject to the same rules.
The European Union and the Member States must therefore work at global level to promote the need for binding measures to put an end to both unacceptable working conditions and the phenomenon of distortion of competition linked to social dumping which has a direct effect on European companies and jobs.

van Dam
The increasing liberalisation of world trade has shown that this area of human activity cannot do without standards and values either. We have to have standards for trade. If we do not, there is the chance of certain groups of people being exploited. International recognition of labour standards is a valuable way of preventing such exploitation.
We are therefore glad to see the Commission making the point that the liberalisation of world trade is not altogether being matched by the recognition of labour standards. We as the European Union must endorse international initiatives in this area as far as possible. But if the Union is to do this credibly, its Member States must first put their own house in order. We back the rapporteur's call for various Member States of the European Union to recognise and comply with labour standards.
However, the development of a whole range of independent European initiatives goes too far in the opinion of our group, for example when it comes to promoting education and training opportunities for young people in other countries. We think it is better for us to make labour standards an integral part of our other policy areas, such as development cooperation. So we did not support the rapporteur's paragraph 19. We were happy with Amendment No 4, however.
We are in favour of a voluntary European code of conduct, and Mr Howitt's Amendment No 10 best reflects our vision of this. Later this week, we shall be having a more comprehensive discussion of this topic. Various other amendments are, we think, of little significance and we did not support them.
Our group agrees with the rapporteur that little has been achieved in the last four years as regards the recognition of international standards. The adopting of this resolution will be a significant step towards an ethical system of trade. We thus voted wholeheartedly in favour of the rapporteur's report, precisely because it seeks to support existing international initiatives.
Danesin report (A4-0372/98)
Bernardini and Darras
Since 1996, in discussions about the common transport policy action programme for 1995-2000, Parliament has considered using private capital to fund TENs.
The delay in financing means that the whole job-creation project is failing at European level. We are all aware that one of the reasons for this delay is the decline in infrastructure investment by Member States that are keen to reduce their public deficit.
The public sector alone cannot provide this financing, which is why private sector funds are being considered. The Commission's communication, which is the subject of our colleague's report, paves the way for such collaboration by setting up partnerships between public sector organisations and private sector investors and companies.
However, as with any successful collaboration, guidelines need to be set out. A public-private partnership (PPP) should be aimed at planning, programming, financing and carrying out a project given the go-ahead by public authorities. And in order to see it through to completion, the risks involved should be distributed according to everyone's ability to cope with them. In fact there should be some form of guarantee to fall back on should one of the partners involved fail to deliver.
Lastly, as the rapporteur suggests, for the PPP to succeed, 'public procurement' directives will need to be amended. However, they must not become too liberal in nature and, to counteract this hypothetical risk, it would be preferable if the notion of public service utilities were taken into account.
Although the concept of the public-private partnership has the support of high-priority projects, there is doubtless great interest in smaller-scale infrastructure projects which are also 'of major potential value at local or regional level' (paragraph 17 of the resolution).

Palm, Theorin and Wibe
The rapporteur believes that the mobilisation of private capital is essential if we are to be able to implement Community transport policy and, in particular, construct the trans-European transport networks (TENs).
Before the final vote, we should like to stress that in our view it is vital, when establishing public-private partnerships for infrastructure projects, to ensure that the basic infrastructures remain in public ownership. We welcome private capital so long as public-private partnerships remain temporary ventures within an overall public procurement framework, but cooperation should not be allowed to lead to shared ownership.
Jarzembowski report (A4-0375/98)
Bernardini
The port sector handles more than 90 % of the Union's trade with third countries and approximately 30 % of intra-Community traffic, as well as more than 200 million passengers every year. It is therefore indispensable for Europe to have an efficient port and maritime infrastructure in order to assure the important services offered by this sector. Similarly, it must not be forgotten that ports constitute a crucial factor within the regional economy, particularly in the peripheral and ultraperipheral maritime regions of the Union.
The European Commission's Green Paper has the advantage of initiating a broad debate with all the parties involved (port authorities, sea transporters, freight forwarders, Member States) on the opportunities for improving the infrastructure and economic efficiency of European ports. I welcome the fact that the House has had the opportunity to participate in the debate and, as an elected representative from a large port city in the south of France, I should like to make two comments.
The Commission document does not deal with the issue of recognising the notion of general interest services pursuant to Article 90(2) of the Treaty. Nonetheless, a large number of installations, services and undertakings in sea ports can be classed under this category. This omission therefore needs to be rectified.
Lastly, the main objective of the Green Paper is to eliminate the present discrepancies in regulations in the various Member States. This is to enable European ports to be better adapted to the international context and relates mainly to the establishment of financial and competitive conditions. We agree with the Commission's proposal to make an inventory of the financial flows of Europe's biggest ports before drawing up a proposal for a directive. This should not be made on the sole premise of banning state aid for this sector, but should aim to correct the imbalances between southern and northern ports in terms of development. The key role that ports play in local employment should not be undermined.

Girão Pereira
The need to define and implement a European policy in the area of sea ports and maritime infrastructures has been apparent for some time.
In our opinion, the ports constitute a fundamental part of the European and trans-European transport networks, not only in terms of European competitiveness in the world economy, but also for intra-Community traffic and for the integrated development of the whole European territory. Particularly in an enlarged Europe, short sea shipping is the alternative to road transport which is causing increasing congestion on Europe's roads.
The French lorry-drivers' strike, for example, paralysed a large part of the economy of several regions, and this is a warning that Europe needs transport alternatives based particularly on sea and rail transport. Also, from the environmental point of view, sea transport offers unrivalled benefits.
An efficient port system can also constitute a local and regional development factor, particularly in outlying and insular areas. In addition to bringing these outlying areas closer to the centre, it is a dominant factor in economic and social cohesion.
We therefore welcome this Commission initiative, in the belief that other measures will follow to finally produce a port policy.

Kestelijn-Sierens
Mr Jarzembowski's report is a balanced one. Measuring it against the situation of Flemish ports and my party's priorities in that respect, I am glad to see that the rapporteur has focused on the right things.
Our priorities for a policy on ports and maritime infrastructure are as follows:
Easy accessibility of ports and better communications with the hinterland. Better opening up of ports by means of improved rail links with the interior will ease the burden on the road network and lead to sustainable mobility. I would mention here the importance of modernising the existing 'zeren Rijn ' link which connects Antwerp with the Ruhr. The port of Zeebrugge also needs better links with the hinterland.-Greater clarity over the financing of infrastructure, whereby it must be clear that port superstructure does not have to be financed by government.-It is essential to have the same operating conditions for all ports. This should ensure that all structures which distort competition will disappear. It is no longer acceptable that the Flanders region as a shareholder in the port of Zeebrugge should act as both judge and jury.-I would also stress how important it is for each port to have a strong local base. Every port must retain its autonomy.-Finally, the success of a port depends partly on the economic and fiscal policy of the country in question. We must ensure that economic but above all fiscal measures do not have an inhibiting effect, and we must prevent high wage costs and tax considerations from making a given port less competitive than others.I support Mr Jarzembowski's report and hope that we will follow this example in Flanders too and rapidly approve the maritime ports decree.

Lindholm
Maritime transport and therefore ports play a vital role in terms of both people and goods. We must increase the use of waterways if we are to achieve a 'policy of sustainable mobility'. We are all agreed on that.
At the same time, conditions in terms of coastal regions, climate, population density, fishing and so on differ widely between Member States.
There is still some doubt as to whether ports come within the EU's field of competence, or even whether they should be regarded as part of the TENs.
However, a significant proportion of the structures, services and operations in ports are not specific to ports, and so comparisons cannot be made. This also has repercussions in terms of competition and public procurement.
On the whole, the matter needs further discussion, particularly in the Member States and with the players concerned.

Souchet
The economic importance of European sea ports lies in the fact that more than 90 % of Member States' trade with third countries and almost 30 % of intra-Community trade is handled by them.
Traditionally considered by governments as growth poles, fulcrums of national and regional development and instruments of regional planning, Member States' ports and in particular the bigger ports have today become interfaces between trans-ocean sea transport, short distance sea transport (coastal shipping) and land-based transport. They are also centres of transshipment, services, distribution and logistics.
Given this development, the most pressing problem concerns finance and charges for sea and port infrastructure. However, it must be stressed that Member States' ports differ in terms of ownership as well as in their organisational and administrative structure. This structural complexity generates a considerable number of problems when it comes to analysing the differences in aid to be given so that the level of fairness in competitive terms can be gauged.
Our group endorses all the points contained in the Committee on Transport's resolution. But it must point out that another category of ports exists. In fact, some ports or port installations, services and undertakings are, by their very nature, of general interest and should therefore be entitled to aid for specific development projects, contrary to the rapporteur's proposals. There are a number of modest or medium-sized ports which serve as a good example of this because they enable links to be established with remote islands. Since these ports enable islanders to receive supplies they are clearly of general interest.
If the motion for a resolution were to be adopted in its present form, this category of ports would be excluded completely, which would certainly have detrimental economic and social consequences. This is why our group supported Amendments Nos 1 and 3, which would enable this type of port to receive aid from national and local authorities. In the name of fair competition, the public service offered by some ports or port infrastructures must not be undermined.

Theonas
We condemn any attempt to intervene in the ownership status of ports. The aim of such a policy is to do away with the social role ports and marine infrastructures are called upon to play, and to open them up to private exploitation and the creation of more profits for the Community's monopolistic enterprises. Aiming to facilitate the direct or indirect privatisation of the whole or parts of port installations and to liberalise the market in port services, the Commission views ports as mainly commercial enterprises, 'commercial entities' as it characteristically calls them, and is promoting the restrictive application of the concept 'public asset' to obscure their inalienable and non-negotiable nature.
The Green Paper we are debating gives notice of specific legislative proposals, such as a proposed directive on port dues, a regulatory framework for the liberalisation of the port services market, facilitating the participation of private capital in port activities, the adoption of uniform pricing principles, etc., supposedly to improve the 'competitiveness' of ports, whereas in reality it promotes cost cutting and increased profits for private capital with major adverse consequences for society as a whole, on the pretext that there are prospects for the further development of international trade, for increasing European exports and for intensifying competition against other major ports outside Europe.
In the context of the celebrated public-private sector cooperatives, the Commission is trying in this branch as well to hand over the prime profit-making activities to the shipowners. It is burdening the public sector with the cost of financing infrastructure and insisting that private capital must participate even in the planning and formulation of investments, and should be granted long-term exploitation rights. The Commission's statements about the way ports are to be financed aim to undermine public or public-law enterprises by giving notice of the systematic and strict application of the Community framework for state aid.
The Commission is ignoring the fact that besides purely commercial transit functions, ports and port authorities provide very important services related to monitoring the implementation of safety requirements, carrying out surveys and reviews, exercising supervisory and administrative responsibilities, for example in the context of implementing the principle that ports should be controlled by the state, and social services to the benefit of the coastal and island regions they serve.
Measures are announced for the pricing system, which will result in a steep rise in prices in the name of the 'user pays' principle. The cost, of course, will not be borne by the shipowners who have been pushing in that direction, but will emerge in the end price, in other words the price paid by the travelling public and in consumer prices for goods. There is no mention at all of the fact that for countries like Greece, with an extensive island network, sea transport is the basic means for local development, communication and the development of tourism, and consequently any increase in transport costs would have an adverse effect on the development potential of those areas. The Commission's plans for port dues will lead to a substantial reduction in the revenues of small ports which have a low turnover, with the result that their viability and operation will be placed at risk.
There are also serious threats to the rights of working people, while significant job losses are also on the agenda. The Commission is seeking to extend flexibility in the port sector, it expresses reservations about the legitimacy of worker registers, and is preparing the ground so that the private companies it wants to bring into the market can use other personnel, non-registered personnel, thus giving the green light for an extension of black-market labour and the employment of low-paid port workers and thereby abolishing the long-established rights of workers in the sector.
Finally, as regards the inclusion of ports in the trans-European transport networks, we wish to stress that the said inclusion is not intended to secure Community resources for their development, but to impose the involvement of major capital in that sector. We consider that any Community aid must take into account the development needs and characteristics of each region, and not be determined by the choices made by major multinational capital.
Workers in my country and in other countries too are already disturbed by these proposals, which some governments are already trying to implement by amending their national legislative framework. Already the Piraeus and Thessaloniki Port Organisations - though both are profit-making bodies - are among the agencies likely to be privatised with a view to bringing Greece into the euro and are in the process of being converted to limited companies. In any event, we will support working people in their struggle to prevent the adoption of these proposals, which hold out no promise of anything good for them.
Langenhagen report (A4-0413/98)
Rovsing
The Commission's proposal for an EU strategy for Global Navigation Satellite Systems (GNSS) deserves the full support of Parliament. This is a very important area in which the EU already has substantial strategic, political, economic, industrial, employment, security and defence interests. With a world market for GNSS estimated to be worth EUR 50 billion in 2005, it is clear that a European strategy must be given high priority.
The action plan proposed by the Commission represents a practical step towards developing a civil multimodal system, fully integrated into the trans-European transport and telecommunications networks. I assume that the ESA - the European Space Agency - will act as the EU's technological arm in this area. I was pleased to note the list of recommendations and proposals made by the committee in its report, and I largely agree with them.

Souchet
Over the past 30 years the satellite sector has undergone a veritable revolution. Telephone networks and television channels are the prime users of space technologies, but a great many services based on satellite facilities are also provided to other sectors such as transport, agriculture, fisheries, protection of natural resources, and others.
As regards transport, for example, satellite navigation could help to make more efficient use of existing transport infrastructure, improve safety and reduce pollution.
In the fisheries sector, satellite navigation systems will enable widespread and undisputed implementation of controls within the framework of the common fisheries policy, but also and above all they will improve safety for ships' crews.
In terms of agriculture, satellite systems will facilitate control over planting perennial plants (arboriculture and viticulture), the analysis of ground water resources, the control of irrigation, and so on.
Over the next few years new applications will be developed to include worldwide satellite communications networks and new research platforms in space. Everything must be put in place to enable Europe's Member States to gain a leading position in this highly competitive satellite market which is at present dominated by the United States.
Aeronautical and aerospace activity has developed thanks to cooperation between European companies in these sectors in accordance with their specialisms. As a rule, this cooperation has largely occurred outside the European Community. It is therefore necessary for European countries to adopt a similar approach to the satellite sector. The success of the Ariane and Airbus projects, which were both developed outside the scope of European institutions, proves that it is perfectly possible to build a high-technology Europe without a heavy administrative technostructure. The example given of the Ariane and Airbus projects, which used very few Community financial resources and in which the Commission played a purely anecdotal role, should serve as a model for the development of this European satellite industry in years to come.
The sitting was suspended at 1.10 p.m. and resumed at 3 p.m.

Agenda 2000 (continuation)
President
The next item is the continuation of the joint debate on the reports from the Committee on Agriculture and Rural Development on Agenda 2000.

Maes
Mr President, by way of a point of order, I have a request to make. We are all busy preparing for important votes. The Commission has promised to give us the list of the 157 UCLAF inquiries. Twenty-seven of these concern the work of the Commission itself. I think it is most important for us to have that list if we are to make a sound assessment of the Commission's work and its financial management. May I ask you, as the President of Parliament, to do what is necessary tomorrow to get these documents for us ahead of our important votes on the Commission?

President
Mrs Maes, there is no list at present, but your request will be passed on and, if any such thing appears, you will be informed at once.

Hardstaff
Mr President, when I spoke on the Görlach report on rural development late last year, I said that this Parliament should be honest as to whether it is serious about reform of the common agricultural policy. A large number of amendments tabled to the reports we are discussing today sadly demonstrate that some political groups in this House are more interested in short-term political advantage in the run-up to the European elections, than in achieving realistic reforms to create an agriculture policy appropriate for a Europe of 20 to 25 countries in the 21st century, operating in a global economy and subject to World Trade Organisation rules.
It is unrealistic for some political groups to table large numbers of amendments to all the reports calling for increased subsidies year on year, where the Commission is proposing progressive decreases in order to reduce agricultural spending and make EU enlargement possible. Indeed, events of this week and the last month must make the applicant states wonder just what sort of organisation they have applied to join. Either we are serious about building up a genuine Europe, embracing all the countries which were separated from western Europe for 40 years by an accident of history, which we must ensure never happens again, and take steps that we know are necessary to make that possible, or a majority of this Parliament votes for amendments calling for subsidies we know are unsustainable and betray this historic moment of change.
Yes, we need to protect our farmers in the short term against too rapid change, so that they can cope with this transition period. Yes, we should be encouraging the development of renewable non-food crops, though not tobacco, particularly on voluntary set-aside land. Yes, we should encourage more extensive livestock rearing by adjusting the way premia are paid. Yes, there should be financial assistance to those farming on the most difficult terrain and to help older farmers to retire. Subsidies should be targeted to where they are most needed and an upper limit put on the size of individual payments, unless higher payments can be proved to benefit the wider rural economy or the environment.
These reforms are necessary quite apart from the wider context of Agenda 2000. Europe needs competitive, but also sustainable, environmentally-friendly agriculture producing the high-quality food our citizens need for a healthy diet, without massive surpluses, without polluting our countryside, and without causing unnecessary animal suffering. We need to support those who preserve on our behalf our rural environment and beautiful countryside, through special environmental payments. New jobs, not directly connected to agriculture, need to be created in rural areas if we are not to suffer rural unemployment, depopulation and villages reduced to dormitories for towns and cities, with all the attendant transport and environmental problems that entails.
I challenge the groups when they draw up their voting list to look beyond short-term electoral gain and to vote in such a way as to support and improve implementation of the Commission's reform proposals rather than undermine them.

Olsson
Mr President, Mr President-in-Office, Commissioner, there are different ways of discussing agricultural policy: in principle and with a long-term perspective, or in terms of what can be achieved today.
In principle, I would prefer to see a more extensive reform of the CAP than the Commission has proposed. Our agricultural policy has been handed down to us from the 1950s. It is out of tune with our wish for a more efficient global market in line with the objectives agreed during WTO discussions, namely a global market with increased demand and where quality and protection of the environment are given higher priority both at home and abroad.
However, there have been many changes since the Commission first devised Agenda 2000. In a single year, we have been hit by economic crises, particularly in South-East Asia and Russia, which knocked the wind out of our export market. It is also interesting to note that the USA has reintroduced significant agricultural support measures.
There is consequently a question mark over what we should do in our present situation. With hindsight, we know that between 1996 and 1997 the market caused prices to rise. However, the position today is that the market has depressed prices. In my view, it is an absurd situation when prices drop so far that they cannot be compensated for by direct payments.
On the question of 'renationalisation', I should like to ask the Commissioner for his assurance that compensatory payments and premiums at national level can be organised in a way that will protect farmers from distorted competition in countries whose governments are unsympathetic towards agriculture.

Ephremidis
Mr President, taken together, the Commission's proposals amount to a package of measures designed to make even more suffocating and oppressive the Procrustes' bed upon which for some time now farmers' incomes have been sacrificed, with price cuts and the reduction or abolition of subsidies, the abolition of interventions to save resources, amounts which will now be made available for funding the campaign for the colonial exploitation of the Central and Eastern European countries by monopoly capital. On the other hand, the same measures aim to do away with the inalienable right of farmers and their children to cultivate their land and develop their output, by means of unacceptable and arbitrary quotas, large and savage compensatory fines, so that there too monopoly capital will be able to spread, get its hands on agricultural holdings and throw farmers out of work or, if it allows them to remain and work in the countryside, then to do so as a new type of share-cropper. Finally, these measures aim to establish economic and trade conditions such that monopoly capital, in negotiating its agreements with the World Trade Organisation, will be able to make concessions in return for benefits from American capital which will be to the cost of farmers.
By speaking for more than half an hour, the Commissioner tried to make all this sound better than it is. But the whole plan will be upset by the angry and orchestrated response of the farming community. And do not think that such a thing will never happen, that we will not have a repetition of the peasants' revolt. We will have a mass agricultural movement with the manpower to brush aside this unacceptable policy.
The President cut the speaker off

Guinebertière
Mr President, CAP reform doubtless constitutes a vital stage in Community life because it must pave the way for the third agricultural millennium. The same can be said of Europe's economies and cohesion as well as life in Europe's countryside. CAP must of course evolve, but let us not too hastily overlook its finer points. It has enabled the development of modern agriculture, agricultural exports and European markets to be supplied with safe, high-quality products. It has also guaranteed farmers' incomes and has been the only fully integrated policy at European level.
What form does the Commission propose the reform should take? A generalised price reduction in line with the world market, compensation in the form of direct aid, but granted on the basis of the criteria set, and Member States' participation in the allocation of flexibility envelopes. At the same time Member States are set to become the promoters of animal welfare in an increasingly globalised market.
None of this is acceptable in its current form. The tough negotiations taking place here in both the Council and Parliament are proof enough of this. I am particularly concerned about the COM in beef and veal and about extensive production systems in general. Their role is in fact important in terms of land use and environmental protection and must not be overlooked, but it is above all the interests of farmers and consumers that I should like to protect with this reform.
In this connection, we will support Mr Garot's position as rapporteur and his request for limited price reduction, increased production controls and quality in terms of taste and health. We also support his request for public intervention to be maintained. The difficulty of managing this reform is further complicated by the milk reform and other general measures. Overall, CAP reform should prepare European agriculture for moving closer to the countries of Central and Eastern Europe and their agricultural products, as well as preparing Europe for future WTO negotiations. This should not be carried out by setting European prices and immediately aligning them with world prices, but by asserting our European model which respects human life and life on earth.

Lambraki
Mr President, today we are in the home stretch for the completion of approval for the part of Agenda 2000 which relates to the common agricultural policy - I would say its most important part, given the importance of the agricultural sector at many levels and its multi-functional character, let alone the extent to which the agricultural guideline plays a part in the Community's budget.
The proposed regulations for financing the markets for beef, cereals, dairy products and the direct support systems constitute a substantial package which relates to the rules and procedures for financing the common agricultural policy, while in parallel it concerns three common organisations of markets which absorb most of the agricultural guideline. Of course, the fact that those three COMs relate to the main sectors of farming activity in northern Europe indicates the inequality and the degree of preferential treatment they enjoy compared to markets for products from southern Europe, inequalities which the present review - like its predecessors - has been able or has tried to mitigate. As regards the financing regulations, though the Commission's proposals are not very far removed from the existing framework, they leave a substantial gap.
The addition of new actions to the EAGGF's field of intervention in the Guarantee Section, especially the measures concerning the development of the countryside and pre-accession aid to the applicant countries, raises serious questions about whether it will be possible to finance those policies in the future in parallel with expenditure related to the COMs, given the resources available.
A second but very important problem will be created by the proposal to introduce a cofinancing system for direct income subsidies by the Member States. Commissioner, if cofinancing is adopted under pressure from the Member States who regard themselves as net contributors to the Community's budget, this will clearly be a first step towards renationalising the CAP and will act as a catalyst to exacerbate inequalities and nullify progress towards economic and social cohesion within the framework of the Union.
The attempt to renationalise the CAP is at the same time an attempt to call into question the fundamental principle of financial solidarity upon which the European Union's only common policy so far has been based.
As for the COMs for beef, cereals and dairy products, and granted how difficult it is to formulate common policies which will reconcile and satisfy so many different interests, the Commission's proposals form a good basis and are on the right lines. This is the first time I have said that to the Commission. I believe, however, that there is still much room for improvement and I have two things to say, one general and one particular.
The general comment concerns the need to increase support for small producers and for producers in mountain and disadvantaged areas. The particular comment concerns the conditions pertaining to the milk market in Greece, because of the distance from other markets and the existence of a large number of islands. Those conditions, along with the real need for fresh milk, have created a large discrepancy in relation to the existing reference amount.
I believe the Commission should take another more realistic look at the request to increase the reference amount for Greece by 150 000 tonnes. The problem is not just a recent one, it began after the 1992 distribution and, unfortunately, though the Commission claims that it is trying to eliminate or mitigate the inequalities between products from different countries and areas, where milk is concerned it is causing this really distressing situation in Greece to continue.

Cunha
Mr President, Mr President-in-Office, Mr Santer, despite the efforts of the rapporteurs, it was not possible to find a compromise solution on this reform within the Committee on Agriculture and Rural Development. This is to be regretted as it does not lend prestige to the role and image of this House.
I want to highlight four priorities with regard to the CAP reform, which were actually contained in the report approved last June.
The first priority is that it is essential for care to be taken when lowering prices. The proposals of 15 % for beef and veal and 10 % for milk and milk products presented by this House seem more acceptable than those of 30 % and 15 %, respectively, presented by the Commission. The reduction of 0 % approved by Parliament for cereals seems unrealistic.
The second priority is that it is essential for every effort to be made to achieve the internal rebalancing of the CAP by strengthening its second pillar and particularly by strengthening structural policy, agri-environmental and agri-forestry measures, special aid to disadvantaged areas, support for quality products and, in general, economic diversification and rural development. Without this, there can be no European model of agriculture and no fair response from the CAP to the various European agricultural systems, which are patently very different.
The third priority is that it is necessary to avoid an uninformed decision in terms of the criteria for establishing different types of quota, premium rights or reference surface areas. Very special cases, such as in my own country, Portugal, which is lagging behind structurally and which is highly dependent on imported food, will have to be dealt with selectively.
The fourth priority is that it is essential to respond to an enormous European deficit in oilseeds and protein plants. Therefore, the difference in aid between cereals and the other oilseeds and protein plants must be maintained together with a specific base surface area for maize.
Finally, I want to say that the option of renationalising 25 % of the CAP financing is a matter for debate which must not be considered within this reform. It is not a prohibited or taboo subject, but the debate must take place on a different level from this one, namely on the level of financing and own resources.
To conclude, I must say something to the President-in-Office, who I would especially like to welcome. I would remind him that yesterday in this House, his colleague, the Minister for Foreign Affairs, said that one of the main reasons for reforming the common agricultural policy was to reduce the expenditure of the European Union. Previously when holding the Presidency of the Council, Germany has always defended agriculture. It now seems that the new German Government has changed strategy. We would like clarification on this.

Boogerd-Quaak
Mr President, Commissioner, Parliament deserves no bouquets for its failure to reach a compromise on a number of dossiers. Personally, I think we have to be realistic. Agriculture policy must not become any more of a drain on European resources. So I found it particularly interesting to hear Mr Santer saying this morning in his first speech that he was very sorry that Parliament had not welcomed a partial renationalisation of income support or national budgets. It is an interesting option. It would be a weapon in the battle against fraud, and this system would also make it easier to introduce environmental standards in individual Member States.
And I believe this part of the debate must really be conducted on a far broader basis, because I think this is what a majority of Parliament's Committee on Economic and Monetary Affairs wants to see.
Furthermore, I agree with Mr Olsson that we ought really to be far more innovative in agriculture policy. Eighty per cent of people live in towns. I do not, I live in the country, but I am well aware that this is so. So there is a need for good animal health, a sound environment and a policy for quality. It is therefore extremely important that attention should be focused on these things.
I also believe that any incentives we give should favour the countryside, such as using non-food products as raw materials for construction and energy.
Lastly, I would point to the great opportunities which information technology provides for new initiatives in the agriculture sector. We have been too prone to see European agriculture as the producing of food in a way we have been accustomed to for years. At the moment, innovation is the most important thing that we can introduce.

Daskalaki
Mr President, when we speak about financing the CAP within the framework of Agenda 2000, we must remember that the Vienna Council was a Council which put off taking any decisions. No decision was reached about own resources, nor about the way to divide the cost of enlargement. The important decisions were left for March in Brussels, and there is no Council position on how much of the cost of enlargement is to be borne by Europe's citizens.
Meanwhile, the German Presidency's first concern was to inform us that Germany wants a considerable cut in its contribution to the Community budget. Here, it is useful to remember that in Edinburgh the Community budget's own resources were set at 1.27 % of GDP, with the intention of increasing them over the period 2002 to 2006 to 2.5 % against average Community inflation of 2.2 %. All this simply means that agricultural expenditure will have to decrease steadily if any of the above assumptions are not adhered to, or if, as mentioned in Agenda 2000, agricultural expenditure should become non-compulsory. Let us also remember that in the last two Community budgets the upper limit of own resources never rose above 1.15 %, while a limit of 0.4 % of GDP has also been set for the Structural Funds.
This cofinancing for agriculture is really tantamount to partial renationalisation, indeed up to a significant level of 24 to 25 % in accordance with the third solution in the Commission's report. We have already accepted some underhand activities vis-à-vis cofinancing, such as the 1996 review of the COM in fruit and vegetables, the recent abolition of intervention for oil and the possibility of redeeming unused individual tobacco quotas. The proportion of cofinancing must be related to the level of economic strength of the Member State concerned, and in that case special attention must also be devoted to agricultural products in which the European Union is deficient.
We support the 'fair assumptions' on which the rapporteur at least wishes cofinancing to be determined, but we disagree with the choice of Article 43 of the Treaty as the decision-making procedure to be followed. We favour Article 209, granted that what is involved is a financial amendment which requires unanimity in the Council, and we oppose partial renationalisation and the introduction of a generalised structural mechanism.
Now, as regards the reform of the CAP, we call for equal treatment for Mediterranean products and full compensation for loss of agricultural income by direct aid, especially for small producers and disadvantaged regions.
Finally, as regards the persistent more general imbalances between north and south, which have been mentioned already and are quite evident, I would like to remind you that the Cohesion Fund was no more than compensation for the single market policy which mainly benefits the industrial countries in the north.

Alavanos
Mr President, in my opinion the review of the common agricultural policy is largely motivated not by the actual internal dynamics of development and the new challenges to be faced, but by pressures exerted by certain powerful Member States related to the reduction of the European Union's budget, and especially a reduction of their own national contribution to it. In that sense, I think we are rapidly moving towards worsening conditions governing the exercise of agricultural policy, which ought not to abandon agricultural production and the countryside to the dictates of the free market, but should take into account demographic and environmental factors and the danger that large areas of agricultural production may be deserted. I wish to express our complete opposition to any attempt to use financing provisions to renationalise the common agricultural policy in any way, which would be particularly intolerable for countries with the weakest national budgets and financial means, and also to express my opposition to two major imbalances: firstly, between products from the north and the south, and secondly, between large and small producers.

Campos
Mr President, I am always delighted to listen to Commissioner Fischler because he has come on several occasions to this House. We are very concerned about the extent of the common agricultural policy reform. He says that he intends to carry out a reform for the future yet I do not see how the Commission can claim to be carrying out a reform for the future which involves wasting half the Community budget on a sector in which 1 % of the richest people in Europe receive 40 % of this budget.
This is not right, Commissioner Fischler. It is not right that a few Members and the Commission are speaking on behalf of farmers. You are talking about a privileged minority who, thanks to the CAP system, will apply for public funds that we should be managing very carefully. This is not happening because we are giving these funds to people who do not need them. It is impossible to reconcile your speech on the protection of the environment, on the protection of employment, and on the protection of safety and quality with payments for production. There are currently no problems with production, Commissioner. Technological developments and biotechnologies guarantee that production will continue to rise. The problems are with the people. Due to this policy, the rural population is already seven times smaller than in 1950. Under this policy, just 2.5 % of the population will still have links with the rural world. What you have to do is propose an end to all the production aid. This aid must be used for research, it must benefit small farmers and it must be used for family-based companies, employment and quality. This is how the aid must be used rather than for this incredible waste of half the Community budget, which is potentially paid for by those who need it most and distributed among those who do not need it. I am doing you justice, Commissioner. You are less of a lobbyist than the Members of the Committee on Agriculture and Rural Development because the three dossiers presented by that committee are worse than the proposal from the Commission itself. In fact, they want more, not to modulate, not to set a fair ceiling, not to keep people in agriculture, but to produce more for the surpluses. We can then pay ourselves for storage, pay ourselves for not producing, and even pay ourselves again for producing, storing and exporting. This policy cannot continue Commissioner Fischler. Enough is enough!

Redondo Jiménez
Mr President, Commissioner, ladies and gentlemen, at this stage in the debate we have already torn apart each and every one of the legislative proposals contained in Agenda 2000. Therefore, please let me comment on a few aspects that have not been touched upon by my colleagues, although I support much of what has been said here by Mr Goepel, as well as by Mr Funk, Mr Cunha and Mr Colino.
I will only mention three specific major points and three minor points. As regards the major points, I should like to discuss the innovative aspect of Agenda 2000 regarding rural development. Although it is not an issue under debate today, you said that more than 50 % of the population was over 55 years of age. Therefore, the main objective in agricultural policy, Commissioner, must be to support the population in the rural environment and here there are two major problems: that of young people, and that of supporting women in the rural environment. Without women, there is no solution to this problem and that is the truth of the matter, however much we may resent it. Men follow along behind women and we are left with a rural environment where the number of people is dropping and where we have too many agricultural policies.
Another major point is the issue of cofinancing. Do not destroy the principle of solidarity. I believe that in cofinancing direct aid - aid that requires Member States to comply with certain measures - we could be heading towards severe discrimination.
In addition, we must maintain the requirements - and the control of such requirements - for products coming from third countries. These products must meet the same requirements as we lay down for our own products.
As for the minor points, I cannot forget a few long-standing problems. I should like to remind you of the matter of past yields, or of the increase in male bovine quotas, which is already over 70 000 and which should once again be increased. We also welcome the increase in milk quotas although we will continue to protest that it is insufficient.
Commissioner, we have already established a European agricultural model. Adopt it, fight for it and, along with all the European institutions, fight for those farmers whom you already defend so fiercely.

Iversen
Mr President, the common agricultural policy, which was set up in the 1950s when there were only six Member States, is now facing change. Everyone, or virtually everyone, recognises that this policy is not equipped for an enlargement which means that the Union is going to consist of more than 20 countries. We are therefore obliged to make some changes, whether we want to or not. We would like to participate in those changes, and we actually think that the Agenda 2000 proposal from the Commission is both elegant and bold. We know the main ideas: general support schemes are to be abolished and European farmers will have to compete on the world market. That is something we shall have to accept as a result of the WTO negotiations, and I also believe it is healthy for agriculture that we are going to have this liberalisation in future and that we are therefore also going to move closer to world market prices. I also believe that, in the slightly longer term, this will make it necessary for us to abolish the whole milk quota system. Some people will have regrets. But I have no regrets. I think it will be a good idea to do this in the longer term. I believe in fact that people should be aware that the process which will be started by Agenda 2000 will lead to more and more liberalisation in the agricultural sector. We Danish Social Democrats are very happy with the Commission's proposal, and we think it is a necessary change both in view of the WTO agreements and also because of the enlargement project and the whole financing situation we are in.
We have tabled amendments to a number of the proposals which have been put forward in Parliament. We also have some other amendments. We feel that in many ways the Commission's proposal is more realistic than what Parliament has been able to agree on, and I hope that Parliament will understand that it is in fact necessary to fall in line with the approach set out by the Commission. The fact is that a number of the amendments proposed by Parliament - which we have voted against, but which are still on the table - entail an increase in the budget rather than a reduction, which is what the Commission's proposal is about. We therefore have to find a solution which can be implemented, and we also have to respect the time factor. That is why it is crucial for us to be able to deliver our opinion when we vote on this later this month in Brussels, and it is crucial that these things are ready on time. I therefore wish both the President-in-Office and the Agriculture Commissioner good luck, and hope that things will be in place in March.

Filippi
Mr President, I agree with those colleagues who are concerned that the very valuable debate being conducted on Agenda 2000 might result in low-profile conclusions in terms of CAP reform. The difficulties are clear; they emerged during our deliberations in the Agriculture Committee, where we were unable to come up with a uniform view on reforming the major sectors, and they re-emerged this morning during the speech by the President-in-Office, when it was said that a compromise should be sought within the Council of Ministers - and we all know how many obstacles to such a compromise have already arisen.
It would however be wrong to adopt the interpretation which has tended to surface during this debate, namely that on the one hand we have an innovative, reforming Commission and, on the other, a Parliament which is incapable of following the trail marked out by the Commission. Unfortunately the truth lies elsewhere, as we have said since the outset: the Commission's proposals are interesting and important, but the resources earmarked are inadequate to sustain them from a quantitative and qualitative point of view. On one side we have the ECOFIN Council - yesterday morning the German Foreign Minister repeated what the UK Foreign Secretary said at the start of his term of office, namely that we must curb farm spending - and on the other we have the farmers, concerned that price cuts will adversely affect their budgets.
We must get out of this impasse and move forward. The appeal I would make at the end of my contribution, therefore, is that the high-level group announced by the Commissioner this morning, which is to begin its work very shortly, should make a real effort to find a way of protecting farmers' interests, somehow seeking an outcome which is in keeping with the declared objectives - very ambitious ones - of the reform.

Wilson
Mr President, I will speak generally and not to any specific report. Whatever policies we agree for European agriculture from the year 2000, they must be easy to understand, easy to administer and easy to inspect. Our reforms must continue to use the common policy as a social tool. We argued during the GATT talks that our policies were helping the economies of poorer rural areas, not supporting production. If we argued this before, we cannot now argue that it is wrong to penalise efficiency.
We must put a ceiling on the aid to larger cereal farms. We must use modulation but we must use it fairly and sensibly. We must ensure the local economies do not suffer unjustly. We must develop efficient and effective complementary national policies but we must ensure the policies remain common to us all and we must retain common financing. We must resist the move to renationalise funding and policy-making.
If we agree part-national financing the required spending must be mandatory. There is merit in the proposal for area payments. This is part of our social responsibility but we must retain benefits for farmers in the hills and other difficult terrain and we must ensure that benefit goes where it is required - not to the large, the rich or powerful. Re-distribution must ensure fairness. While we should all welcome proposals to increase extensive farming, we must ensure that we can police the system simply and efficiently. We must not build a huge bureaucracy living off the back of small farmers. We must also ensure that health and safety costs, consumer protection costs and abattoir control charges do not escalate to the point where they cannot be afforded. At present in my country of Wales there seem to be more inspectors than sheep.
We must also ensure that where regional policy objectives apply, they and agriculture policies cooperate rather than compete. All over Europe we are seeing rural areas getting poorer and losing vitality and urban areas getting richer. Rural areas need economic aid as well as houses for holiday-makers and relatively rich retired people. Agenda 2000 through the CAP must be an integral part of the support required for rural economies.

Schierhuber
Mr President, Commissioner, Mr President-in-Office, ladies and gentlemen, the development of the common agricultural policy is a concern for all of us. Nevertheless, I would like to make it clear that I personally consider the level of the cuts in intervention prices contained in the Commission proposal to be unacceptable. I would now like to discuss two points contained in the Graefe zu Baringdorf report.
The first point concerns the concept of good farming practice, which means that farms that are managed in accordance with the principle of good farming practice will in future receive full financial aid. Of course, this applies only if they also meet the other conditions laid down in this regulation. Where services rendered by farmers with a view to preserving the agricultural environment go beyond good farming practice, special payment should be given, for example within the framework of Regulation 20/78.
Member States should be able to impose sanctions on the basis of objective criteria if environmental principles are not complied with, and these criteria must also be in accordance with the principle of good farming practice. This method of farming must be recognised EU-wide and generally accepted. I believe that Member States should develop codes which they can then promote accordingly.
The second point I would like to discuss concerns the employment situation in rural areas. We all know that farming families must in future be given more new opportunities for income security. It is up to politicians to create the conditions so that well- educated, innovative farmers - and this is how I see the farmers of the future - can ensure that rural areas retain their attraction. An eco-social agricultural policy must be tailored to the multifunctional world of agriculture and rural areas. The European farming model was agreed at the Luxembourg Council, and this must be the fundamental criterion for the next round of WTO negotiations, as European agriculture is of course considerably different from that of our other partners in the WTO.

Myller
Mr President, Mr President-in-Office, Commissioner, one of the major issues of a future common agricultural policy must be how we are going to achieve an active rural policy and a clarification of roles in the field of agricultural and rural policy. The countryside must be viewed in its entirety. There must be diversity in the range of rural occupations, and the countryside has to be developed with respect for nature and recreation. We must safeguard access to areas of recreation. We must have access to woodlands, meadows, beaches and the shores of lakes. The right to roam the countryside must in no case be connected to rights of ownership, and public right of access must be secured.
Agricultural policy demands reform. Agriculture that is closer to nature must be the norm, not the exception. It has to be said that the views of the Committee on Agriculture and Rural Development and those of the Committee on the Environment, Public Health and Consumer Protection are reasonably close to one another here.
Direct subsidies for agriculture must be tied to compliance with environmental standards. The decisions taken under the Treaty of Amsterdam and later at the Cardiff summit on the inclusion of the environment in all EU policy, based on the principle of transparency, must be taken seriously in agricultural policy too. Under this principle, linking environmental standards to the payment of aid cannot be left up to individual Member States. This would not achieve the aim of a more environmentally sustainable agricultural policy and agriculture, whose produce we can rely on as being healthy and safe.
In order for the environmental view to be taken fully into consideration Member States must work with the Commission to develop a code of practice for environmentally sustainable agriculture. Aid should be paid only to farmers who comply with the agreed rules. Special agricultural environmental aid should be paid only for projects which either protect the natural environment or improve the present state of the agricultural environment. Special attention must be paid to the protection of areas of water. Applying a code of good agricultural practice must be made more effective by being able to claim back our resources.
It is vital that the question of diversity in the European Union is taken into consideration, as agriculture is practised from the north to the south. For example, in Finland organic meat production is not successful as the animals have to be kept outside the whole year round. At this time of the year there might be a metre of snow and the temperature could be thirty degrees below zero.

Sturdy
Mr President, I also wish to welcome the President-in-Office of the Council. I do not want to reiterate what has already been said today but I should like to mention to the President-in-Office one of the points he mentioned: the WTO. I have long argued within the Committee on Agriculture and Rural Development that it is important that Agenda 2000 and WTO dovetail together. The Americans are no angels when it comes to WTO negotiations and we have to be very careful not to lose out in those negotiations. I am quite sure that he is well aware of that situation and will make sure that we are in a strong position for those WTO negotiations.
I was delighted to hear the Commissioner say that 50 % of farmers are over 55. I just qualify as being under 55 - I am not quite sure whether that also applies to the Committee on Agriculture. It is a very poignant point: we must prepare for the younger generation because if we allow these young people to wither then the vine dies and with it the industry.
I should like to air one or two things which have already been said. I agree with Mr Wilson that we must have clear decisions, uniform policies and continuity, because agriculture needs continuity. There are three main issues in British agriculture which worry us. We have seen a 40 % fall this last year in our income and yet we talk about such things as national envelopes and a renationalisation of the common agricultural policy, which strikes fear into people's hearts in the United Kingdom because it allows governments to control the spending on agriculture.
One of my colleagues mentioned modulation. One of the problems with modulation is that there is genuine concern that it will not be fair across the board. Modulation is great as long as it is larger than your particular farm. We are totally opposed to that.
Finally, again, do not allow cofinancing to be a renationalisation of the common agricultural policy.

Haug
Mr President, ladies and gentlemen, we all know that the success of the Agenda 2000 negotiations is closely linked to success in all parts of the Agenda, in other words to a compromise that we must all accept. The reform of the common agricultural policy is a central pillar of the overall structure, but it is only together with the other pillars of reform that it can support the Agenda 2000 structure. This means that the course for a successful financial reform must be set now in the context of the negotiations on the common agricultural policy.
It is obvious that proper financial regulations are not possible without appropriate changes in agriculture, the area that accounts for almost 50 % of the European budget. As a financial manager myself, you will forgive me for being particularly annoyed by this.
President Santer rightly pointed out that the negotiations on the future financing of the budget represent one of the key elements of the Agenda 2000 negotiations. But alongside the financial reforms support must also be given to the necessary agricultural policy reforms. I do not agree with the assessment given by Commissioner Fischler this morning. Cofinancing of agricultural policy measures, as proposed in some amendments, should not be dealt with separately from agricultural reform. On the contrary, in our view it is one of the successful elements of the reform proposed for the agricultural sector, and it is clearly in line with the Commission's thinking in proposing to redirect the CAP away from price guarantees and towards income support. If is it correct that we can assist rural areas more effectively by means of this redirection, the Commission should not have applied the brakes halfway through; not only should it have thought it through logically to the end but it should also have prescribed reform. This also means that we have to put our faith in the tried and trusted mechanism of the Union and the Member States sharing joint responsibility for structural measures under the agricultural policy too.
In addition, Commissioner Fischler, if I had been you I would not have missed out on the dynamic effect of cofinancing. There is no doubt that it increases willingness to discuss the scale and structure of the common agricultural policy objectively and in detail. Awareness of the need for reforms, as proposed by the Commission, will increase rapidly in the Member States if in future the Ministers for Agriculture have to fight with their Ministers for Finance for part of the funding. The proposed cofinancing is not in fact a means of solving net contributor problems but instead will play a crucial role in restoring the balance between market policy and income policy on the one hand and structural policy in rural areas on the other. It is not a form of renationalisation, to reply to a fear that has just been expressed. Like Mrs Boogerd-Quaak, I hope that the Committee on Budgets will find a majority in favour of cofinancing, as we need to show that almost 50 % of the budget is being used efficiently and is achieving results if we are to allow citizens to have confidence in the way their taxes are being used.

Otila
Mr President, the common agricultural policy must manage and control agriculture all the way from Sicily to Utsjoki, in countries that have totally different natural conditions. It will be a tough job, and the fear that the special conditions prevailing in peripheral areas will be ignored in the final decisions that are taken is a very legitimate one.
One of the many problems with the Agenda 2000 agricultural reform is the plan to turn grain policy upside down. The reduction in the administrative intervention price of grain proposed by the Commission is a problem. At the same time the Commission is proposing that only half the reduction in the administrative price should be paid back in compensation. Grain production in the areas that are classed as peripheral in Finland is now very unprofitable, so that any reduction in price would cause production to suffer even further. Special regional conditions, relatively low yields, and high costs must be taken into account in the reforms.
Rural Europe will need viable agriculture in the future to preserve its vitality and diversity. Agricultural development will continue to affect the well-being of the entire population of the continent. If agriculture were left to waste away it would at the same time lead to the decline of the food and agricultural equipment industries and the commercial sectors connected with them, as well as limiting consumer choice.
Agriculture has to move in step with the liberalising world market, but we must be able to impose a change in direction and speed. The direction in agriculture must not be downward. Preserving the model of the family-run farm is dependent on the political will of the European Union. If we can put our trust in the future of European agricultural production and unanimously take the necessary decisions, Europe will have a vital, diverse food and agriculture industry for the next millennium.

Baldarelli
Mr President, the proposed reform of the CAP contained within the Agenda 2000 package, to be implemented through the Structural Funds and the draft regulations under discussion today, is an effort, albeit a tentative one, which deserves our support. But in actual fact, even these tentative efforts are being undermined by the desire for balanced national budget contributions and the lack of any true innovation. The outcome or compromise, as the President-in-Office, Mr Funke, deliberately repeated several times this morning, must however take account of a long-standing culture which is remote from the real interests of consumers and producers.
High-level groups, diplomatic mediation, informal contacts and claims that the budget is untouchable, on the one hand, and the desire to renationalise expenditure, on the other, make the gulf between economics and politics plain for all to see. Farm incomes have dwindled. Price reductions have forced European producers to compete in ways which have often been detrimental to both quality and social conditions, quite apart from having led to a decline in health and hygiene standards.
We shall never forget BSE and what it did to consumer confidence. But the most immoral aspect here is that the type of production which caused BSE has not been rooted out. Production for its own sake, to rake in premiums, the misuse of scientific research, the difficulty of monitoring certification standards on the use of transgenic products at consumer level, the use of antibiotics and growth promoters in plants and animals - all of these have continued. Impenetrable levels of specialisation and sophistication have been reached, and the phenomenon has continued to spread even since the BSE crisis. How should we respond to these questions and these external costs?

Fraga Estévez
Mr President, as a Spanish Member, I must express my disappointment at the Commission's proposal on the common organisation of the market in the milk and milk products sector. As I see it, a great opportunity has been missed to propose a true reform that would redress the balance in this sector of the European Union.
Commissioner, you are well aware that my country has been asking for increased quotas of one million tonnes, but in your plan we are allocated approximately 220 000 tonnes, which is much lower than our needs. It is clear that there is no real explanation for the fact that a Member State such as Spain, which accounts for 12 % of dairy farms, 11 % of the population and 6 % of consumption, only has 4.67 % of the overall Community milk quota. In contrast, other Member States receive considerable increases in quotas that they neither need nor have ever requested.
Nor is it acceptable that less favoured areas have been forgotten in the new reallocation of quotas. These areas should have been included, along with the mountain regions. I also do not believe that the 'virtual cow' system is acceptable in calculating premiums as, once again, it will clearly penalise those countries that have insufficient quotas and whose production is less than the Community average.
Lastly, Commissioner, I believe too that maintaining the unjust and insufficient fat content referencing quantities, which many dairy farms have, is unacceptable. There is no explanation for the fact that a Spanish livestock farmer can produce milk with an average fat content of only 3.63 % and yet, in contrast, a Danish livestock farmer is allowed to produce milk with a 4.31 % fat content.
All this, as you know, has serious consequences, not only for profits but also for the quality and viability of farms. Perhaps, Commissioner, an interim solution would be to allow all dairy production with an average fat content reference quantity under 4 % to be exempt and not subject to an additional levy.

Berger
Mr President, Commissioner, regardless of the outcome of the vote on the Agenda 2000 agricultural package and of the decision taken in the end by the Council of Ministers, I think it is clear that we expect - and must expect - European farmers to undergo enormous changes. However, I have the impression that we are still doing too little both at national and European level to facilitate change and support the farmers through it.
Unfortunately, it is often the traditional farmers' associations who, in their indiscriminate rejection of reform, forget to draw the attention of their members to new opportunities in good time. These new opportunities are contained in the Commission's agricultural reform package, despite all the tough measures it may contain.
For the majority of farmers in Europe - and these are the smaller farmers - the package of reforms is a step in the right direction, even if it is often lacking in vigour and is not sufficiently binding in terms of environmental and social criteria for aid. Incidentally, it is the smaller farmers who have so far been most willing to accept change and to approach it positively. But we often neglect them.
By way of comparison, I would point out the important and necessary measures taken by the Commission and the Member States in order to prepare companies and banks for the euro. Companies and banks are not exactly helpless organisations. Nevertheless, we have helped them. Members of Parliament have now even received euro key-fobs from the Commission.
It would be much more important to launch a campaign to support farmers not only with practical matters such as adapting facilities and adjusting to change, but to lend them what we could perhaps call moral support. It is sometimes easy to understand why farmers feel excluded from European politics and feel that they are always cap-in-hand outsiders.
We must also place much greater importance on farmers' non-output-related performance in terms of its image as a service and a job, and we must make the transition from price support to direct aid more palatable.

Virgin
Mr President, Mr President-in-Office, Commissioner, Agenda 2000 already contains many far-reaching proposals from the Commission for making changes to the agricultural policy. A reduction in prices to world market levels for milk, beef and cereals has been proposed. The price reductions would be partially offset by higher compensatory payments based on area and the number of livestock. In my view, it is important to adhere to the Commission's principle of basing this compensation on production capacity, for example in the case of milk. In some cases, Parliament is proposing lower price reductions and thus lower fixed compensatory payments. I have to say that I think the Commission's proposals are better and more carefully thought out, and therefore more deserving of our support.
It is true that there will be more pressure on the budget when the compensatory payments are raised, but any extra burden on European consumers and taxpayers would be more than offset by lower food prices. In all probability, the charge on the budget will lessen over time. According to most forecasts, the world market prices for current products are going to rise, enabling the compensatory payments to be gradually phased out.
The danger in some of Parliament's proposals lies in the fact that they go only half way and would make it harder for European agriculture to operate on the world market and achieve the competitiveness that is essential for our long-term survival.
The Commission's proposals also contain a number of drawbacks. Countries which cannot grow silage maize should receive fair compensation. In the debate, it has been said that 20 % of farmers would receive 80 % of the support, but in fact most farmers come within the 20 % band. This is where we find the family-run farms. The rich minority who happen to farm a large area make up a tiny group.

Thomas
Mr President, I should like to begin by expressing my regret that the Committee on Agriculture and Rural Development was unable to come to any opinion on these reports in committee. It seems to me a sad loss that no-one has mentioned that so far. However, sadly, the vision of many of my colleagues in the Agriculture Committee appears to be one of national interests and not the global view that has been expressed by the Commission. The global view must prevail if progress is to be made in this important sector.
The reductions in support prices envisaged by the Commission are not only desirable but vital in the light of expansion and our WTO commitments, not to mention the legitimate concerns of those who have levelled criticism at the level of support enjoyed by this sector. I have doubts as to whether the proposals will meet the objective of lowering the cost of agricultural products to consumers, but I sincerely hope that the Commission's forecasts are correct.
The introduction of measures designed to protect our rural environment and encourage more extensive farming practices are welcome, but I would draw attention to the degree of flexibility proposed for Member States to decide their own priorities, namely the national envelopes for the beef and milk sectors, the application of cross-compliance requirements and the labour force criteria. Whilst the notion of flexibility is commendable, we must caution against creating an uncompetitive situation which will divide Europe's farmers.
In conclusion, we need reform. Most people in this Chamber would accept that. I hope that my colleagues can be realistic in their voting pattern on 28 January and ensure that at least, at minimum, the Commission's proposals will be accepted.

Trakatellis
Mr President, the Commission has quite rightly proposed to extend the role of the European Agricultural Fund, which will in future undertake additional activities aiming to develop the countryside. In addition, part of the review of the financing system should aim to improve the quality of agricultural products. This helps both the producer facing international competition and the consumer as the end user of the products. I also think that the Guidance Section should finance all measures to develop the countryside, including structural, agri-environmental and agri-forestry measures, as well as provide compensatory aid for disadvantaged areas.
The common agricultural policy is a cornerstone of the Union's European integration and an incentive towards development in the agricultural sector. The possibility of cofinancing will in essence lead to renationalisation of the CAP, even in part, and will affect mainly those countries which fall below the Community average in economic terms, such as Greece and other countries in the south, while in parallel it will have negative consequences for the development of Community agriculture. For that reason, I categorically oppose proposals, legislation and amendments which undermine the fundamental nature of the CAP and go against the principles of economic and social cohesion and solidarity. The Union must not condemn the financing of European agriculture to Procrustes' bed in order to satisfy the demands of some countries for a reduction of their contributions to the budget. And on that point it would be useful to examine not just what those countries contribute to the budget, but also the extent to which they benefit from the common market of the European Union's millions of purchasers. I therefore believe that the principles of cohesion and solidarity demand that the agricultural policy should remain an undiluted common policy, and that it must be understood that efforts to renationalise it would set us on the slippery slope towards its gradual abolition, with the result that the cohesion of the European Union's fabric would be eroded.
Finally, I disagree with the proposal for pre-accession financing of agricultural measures in the applicant countries from the Guarantee Section, and I support the entry of a separate category of pre-accession aid, one that is independent of the guideline for agriculture.

Santini
Mr President, we waited seven years for this reform of a reform. Now that it has arrived, the manner of its presentation hardly makes us reach for the champagne.
Let us repeat once again that the Commission's proposals severely marginalise the countries south of the Alps, that is, on Europe's southern periphery. There is no in-depth understanding of the true problems inherent in carrying forward the proposals for the future.
A second reason for dissatisfaction comes from the work which we have done - or rather, I should say, have not done - in Parliament, in that only one of the five reports under discussion was approved in the Committee on Agriculture and Rural Development. I dare not imagine what will happen next week, when we begin to discuss the reform of the COM in wine.
It has to be said, all things considered, that the scope of these proposals is very broad, in a territorial sense as well as time-wise. Reference is made to a target date of 2006, but the effect of this attempted reform will probably last even longer. Reference is made to openness towards Eastern Europe, and above all to what is happening in the west, in other words the WTO constraints. What is perhaps missing, Commissioner, is a little more attention to people, to farmers themselves, who are still somewhat unprepared for all these developments. The challenge of so-called globalisation affects them directly, but insufficient account is perhaps taken of the persisting uncompetitiveness of European agriculture. The transition is a harsh one, and for once we can say that bureaucracy has actually outstripped the pace at which Europe's citizens are adjusting.
I am reasonably satisfied with the particular attention devoted in this reform to peripheral areas, such as mountainous regions, with the raising of milk quotas by 1 %, and above all the attention paid to young farmers. Farmers are in fact a dying breed, Commissioner, given that 3 % of them are lost every year.

Mayer
Mr President, Mr President-in-Office, Commissioner, ladies and gentlemen, in the wake of important events, it seems that everyone wants to have their say on agriculture today. So I would just like to comment briefly on the Graefe zu Baringdorf report, specifically on direct payments and reductions. I think it is right that European agriculture needs more long-term stable conditions, but it also needs to become more competitive so that, as well as producing foodstuffs, it can also, in accordance with the European agricultural model, cope with the additional major tasks facing the whole of society, such as preserving the agricultural landscape or generally protecting the environment.
The Commission proposals are logical. Changes made in one area are balanced by changes in another. But they are also very blunt. For example, not enough attention is given to the situation of individual holdings. Compensatory payments, introduced in the 1992 reform, are almost always really only partial compensation for losses incurred by farmers in the past and still today as a result of price reductions. They are necessary if we are to be able to maintain extensive farming. Good farming practice should be a prerequisite here. However, high payments are often made in the case of farms that have substantial land or a high number of livestock, and these often attract criticism.
I think that reductions are necessary for this reason. Large-scale holdings find it easier to cut costs than smaller family-run farms. Reductions are necessary in order to allow the situation to become reasonably fair for family-run farms. The question is how to we are to carry out these reductions.

Lulling
Mr President, Commissioner, Mr President-in-Office, in the two minutes I have been allocated in this important debate I will merely state clearly, in view of the significance of the present reform proposals for the existence of European agriculture, that these proposals could have unreasonable consequences for agriculture and for the European economy and society as a whole. They are therefore not acceptable unless they are amended as my group has recommended. In addition, they are incompatible with the decisions made at the 1997 Luxembourg summit.
I would remind you that, following the exploratory debate by the Ministers of Agriculture on the European agriculture model, the EU Agriculture Council on 19 November 1997 unanimously requested that the agricultural reforms should be organised in such a way as to allow the European agriculture model to be maintained. At the Luxembourg summit in December 1997 this demand was taken on board. The Heads of State and Government declared themselves not only against unilaterally dismantling European agriculture but in favour of further developing the existing European agriculture model with its multifunctional role in all regions; this means that the provisions of the reform under discussion today must target solutions that make economic sense and are justifiable in social terms, and also allow farmers to achieve an appropriate income.
Why did the Commission, in presenting its drafts, pay so little attention to these options that were agreed at a high political level? It is truly incredible. In my small country the proposals in their present form would result in income losses of LUF 650 million, and would of course mean that agriculture would, quite unreasonably, be dependent on public finance. This cannot be allowed.
I would also like to comment on milk production, which is such an important part of agriculture in Luxembourg. We at least agree that the milk quotas must be retained. However, the proposals as presented by Mr Goepel are the absolute minimum if we wish to prevent milk production from disappearing in many European regions. I fear, Commissioner Fischler, that it is a naive fallacy if you would have us believe that the drastic price reductions you propose, which are so damaging to farmers, would allow consumers to enjoy price reductions in the order of EUR 10 to 17 billion. The collapse of prices in the beef and pigmeat sectors has shown us that this is not the case, and you do not have a monopoly on political wisdom. Listen to us and to the farmers a little, and then we will be able to find a balanced arrangement.

Varela Suanzes-Carpegna
Mr President, Commissioner, ladies and gentlemen, a long-standing error is restricting the development of agricultural and livestock farming in those Spanish regions that are lagging behind economically. Galicia is one of these regions, with Objective 1 status under the European regional policy, and it has a clear and long-established history of livestock farming. The error I am referring to is, of course, the inadequate milk quota Spain was allocated when it joined what was then the EEC. Spain, and Galicia in particular, is therefore still calling for a larger milk quota.
In our amendments, we ask that special consideration be given to allocating an additional quota to certain regions that suffer as a result of this unfair disadvantage. This would rectify the severe imbalance in the economic and social cohesion of some less favoured areas. In order to survive and be competitive, these regions need a specific restructuring programme, cofinanced by the European Union.
The structural deficiency of the sector in these regions has led us to ask that premiums be allocated not in relation to the average Community milk production, as the Commission suggests, but rather in relation to the actual national or regional average, which is very different to the virtual Community production. And to make it worse, beef and veal, which could partially alleviate the problem, are not included among European premiums that do not cover calves. We ask that they be regulated and included and that the age for the slaughter premium be brought down to a maximum of eight months. This could help rectify the serious and unjust situation experienced by the Galician livestock sector, a sector which could have great potential. We call on our European colleagues to show some understanding and ask them to support our amendments in a spirit of solidarity and justice.

Klaß
Mr President, Mr President-in-Office, Commissioner, ladies and gentlemen, in the belief that persistence will get us there in the end, we hope that the discussion today will achieve something. The farming families of Europe need a reliable political framework. The 1992 reform introduced direct payments for farmers as a result of a price reduction. Commissioner, the criteria for direct payments are explained only in vague terms by the Commission and are even left to the discretion of the individual Member States.
But what we need in this area is equal treatment for all agricultural holdings in Europe. The level of the direct payments to be made to farmers and the additional conditions to be imposed must not be decided at national level. This is the only way in the end to ensure that market and competition distortions are avoided. Farmers must be given a regular sum on which they can rely, and they must also be able to plan economically and successfully.
The Commission recognises the need to adjust to the world market. This would expose European agriculture to worldwide competition, but it would at the same time be burdened by additional costs resulting from Europe's high environmental and social standards. But how can we be competitive if conditions are so varied worldwide? Direct payments to agriculture must in my view be considered from the point of view of less favourable natural production conditions. We must not forget that farming families look after and preserve the agricultural landscape.
I would urge the Commission to use the given criteria as a basis for deciding on any further requirements to be imposed on agricultural production. We must in future regard the principle of good farming practice as our starting point, a principle addressed by both Mrs Schierhuber and Mr Mayer. We must establish a framework for European agriculture in which Europe's farmers can in future also survive on the world market.

Keppelhoff-Wiechert
Mr President, Mr President-in-Office, Commissioner, ladies and gentlemen, it seems that everyone wants to have their say today. Seldom have such great expectations been held of an EU presidency as of the German Presidency in the first half of 1999. Bringing Agenda 2000 to a successful conclusion is almost equivalent to squaring the circle.
You may be able to bring our negative response to the proposals back to the Council in time, Mr Funke. The content of the new agricultural policy must be finalised quickly, by the end of February, and my question is: are the Ministers of Agriculture still involved in any way in determining policy, or will the Heads of State and Government set the financial framework in advance at the summit in March? The time for questions is long past. Specific options are required, and farmers want finally to know where we are headed.
Yesterday in the House Mr Fischer, the German Foreign Minister, called for a reduction in agricultural expenditure. However, he also promised support for European farmers. Mr Funke, I am sure you will be able to explain this confusion. You speak in a very straightforward way that I really like; you have not adopted this technocrats' German, and please do not do so. But to achieve the same result with less and less money is, in my view, a very difficult task.
Financial leeway is becoming limited in the search for solutions and there is not very much room for manoeuvre. Perhaps this reform is the last available. Following enlargement towards the east, the emphasis is increasingly on liberalisation, which our farmers know, but in my view the solutions that must now be negotiated under Agenda 2000 are only an intermediate stage. In 2005, following the accession of the first group of applicant countries from Central and Eastern Europe, agricultural policy will be under the microscope once again.
As a member of the farming community, I really cannot endorse the discussion about price reductions. In twenty years of professional involvement in agricultural policy I have never seen consumer prices fall as a result of lower agricultural prices. Mr Funk said the same this morning. We have a German expression: although cereal is becoming cheaper, bread is becoming dearer. I could also say that although milk is becoming cheaper, yogurt is becoming dearer; you can be fairly sure of that.
In order to lay down Community rules for direct payments, which was my task as shadow rapporteur, I would also like to ask the Commissioner what these regions must commit themselves to paying their farmers if they can expect higher environmental requirements at the Commission's insistence, as is currently planned. I know what I am talking about; I come from North Rhine-Westphalia and our farmers may be able to handle increased environmental requirements, but the question is: who will pay?
My second and final question concerns the sliding scale of direct payments to farmers in accordance with the number of workers, as Mr Graefe zu Baringdorf proposes. Please simply tell me whether you accept Amendment No 27 or not. Then we will be in agreement.

McCartin
Mr President, when Mr Andriessen became a Commissioner which was many years ago, I was already a Member of Parliament. I said to him that the big challenge before him was to make European agriculture competitive. Since that day there has been no talk about making European agriculture competitive, but I want to thank Mr Fischler for continuing with that theme and at least putting forward the aspiration that European agriculture can take its place in the world and take its share of world markets.
With the world population increasing by 80 million per year, it ought not to be all doom and gloom. We ought to plan and lay out some sort of strategy by which we can play our part in supplying this market. It was extraordinary to read this morning that Argentina is importing beef at the moment. That is an area of the world which we had thought was a great competitor and a threat. Because of the climatic situation Australia is able to supply them with beef. It gives us some reason to believe that things do not always remain exactly as they are. When the MacSharry reform came in we proposed reducing production and increasing importation of food. Today we propose taking a bigger share of world markets. I welcome that.
I was a bit disappointed that the President-in-Office of Council talked more about animal welfare, environmental considerations and consumer protection than about the livelihood of farmers. While I accept the point he made on those matters, we cannot consider those ideas in isolation from the need to provide farmers with an adequate income. Farmers may complain about the common agricultural policy, but without it we would have a worse situation in Europe. So I would be seriously concerned about any effort to shift the cost or the policymaking of the common agricultural policy back to Member States. Under no circumstances can we permit this to happen. There are so many different countries and climates in the EU and the common agricultural policy has saved us from the tensions that would have arisen in recent years with the great reduction in the number of people on the land. We have a policy that works. Farmers suffer from it at the moment but our best hope is to carry out the necessary readjustments and keep it a common agricultural policy for all Europeans which contains all three elements - financial solidarity in particular.

Ebner
Mr President, Commissioner, Mr President-in-Office, ladies and gentlemen, I would like to concentrate mainly on two areas: milk and beef. With regard to milk and the report by Mr Goepel, which in itself I would like to support fully, I regret that some of the amendments did not meet with approval in the Committee on Agriculture and Rural Development. Examples include the important alternative proposals concerning price support and income support for milk producers, particularly in the disadvantaged mountain areas. These must be given greater consideration and distortions of competition must be avoided or offset.
It is also essential to introduce measures to promote the consumption of milk and milk products, and the necessary funds must be provided for marketing. I would advocate that the individual reference quantity for milk be divided by the number that corresponds to the average milk yield of the region. This would be a fairer method for the mountain areas.
Finally, in my opinion the Member States should be paid in accordance with objective criteria, taking particular account of their respective production structures, especially in the mountain areas, so that they are not so dependent on variations in the market. Fourthly, I also consider publicly-financed transportation aid to be absolutely necessary and indispensable. As far as the beef situation is concerned, greater consideration should be given to the disadvantaged areas, for example in terms of eligibility for premiums.
Accordingly, young farmers should receive further additional financial support. Action needs to be taken in this regard, as Commissioner Fischler said earlier today. I hope that the Commission, in particular the very skilled and able Commissioner Fischler, who comes from a mountain area and knows the situation extremely well, and the Council will give my objections the appropriate consideration.

Funke
Mr President, Commissioner, ladies and gentlemen, as you can imagine, it was very interesting for me to attend this debate, to listen to and digest the various speeches as best I could, this morning and this afternoon, and of course to take this with me to the debate we will be having on this subject in the Agriculture Council. I already indicated in my introductory speech this morning that I place great importance on hearing your opinions and taking part in discussions with you. I am also of the opinion that what you say and think must carry weight in the discussions in Council. So I thank you for your contributions.
I should like to look at a number of points that were raised, without dwelling on them too long, particularly as some of them were addressed to me. Perhaps I might begin by saying that when I compare the various speeches the overall effect seems to me to be equivalent to squaring the circle - to quote Mrs Keppelhoff-Wiechert - as is so often the case when the subject of farming is discussed anywhere out in the countryside. Farmers are required to provide high-quality foodstuffs and use environmentally friendly production methods; at the same time, they are supposed to preserve the agricultural landscape, just on the side, and in addition they are supposed to do all of this economically, preferably at what we call world market prices.
Put in these terms, this is already equivalent to squaring the circle. Nonetheless, we must put it in these terms, as no other terms are possible in pluralistic societies. When considering compensatory payments, which I believe we were this morning and this afternoon, we are told by some that these should be as fair as possible and should take the respective structures into account. I understand and accept all of that. Yet at the same time calls are made - sometimes in the same speech, but at most two or three speeches later - for these to be implemented as simply and with as little bureaucracy as possible. Again, this seems to me to be like squaring the circle, if I am judging it correctly.
I would like to begin by making a point concerning a speech that came towards the end. I believe it was Mr McCartin who said to me that I had talked about animal welfare and environmental considerations but not the issue of competitiveness. Mr McCartin, this morning I was in an excellent position; I had been asked not to improvise because the text of my speech had been given to the interpreters, so I kept to the text. I do not usually do this, I will freely admit, but I can therefore say quite amicably and in all modesty that I know exactly what I said and what requests I made. I quote: 'Future European agriculture must be competitive in order to hold its ground against international competition.'
I admit that it is possible, of course, not to hear a sentence like that. But because it is such a crucial one, I would like to quote it here once again to show that it was not the case that I completely neglected this aspect of agriculture. It would have been terrible, had I done so.
I would like to add the following. We have often been called upon to tell farmers the truth, so in my view we need to make one thing clear over and over again: if we reduce European agriculture - however it may be defined - solely to supplying raw materials for the European market, it will fail. We have a wealthy internal market, with 80 million inhabitants in Germany alone. In total, if we include the applicant countries, we will have a large number of consumers throughout Europe who can mobilise enormous purchasing power.
When reference is made to the purchasing power of the European internal market - especially when the other countries join - I must on the other hand continually point out that we have a degree of saturation in Europe and even surpluses, at least in some areas of agricultural production. How can we hope to develop an image of the future face of European agriculture if we do not recognise that we must also conquer markets outside Europe? I do not want to expand on this now, but to my mind this has to be part of European agriculture. I want to make it very clear that European agriculture cannot function otherwise.
On the other hand, if European agriculture produces under very specific requirements - whether crop or livestock production - because society demands it, but the agricultural systems in other competing countries do not do so because their societies react differently to certain production conditions, then both compensatory payments and a minimum level of protection from foreign competitors must be guaranteed. This is part and parcel of the fair trade conditions that we want to see, and it is a crucial point. It also concerns the WTO, which you mentioned, Mr Sturdy. Of course we must also look at this in detail, including in the debates on that specific issue. In any case, Mr Sturdy, I agree with what you said.
In view of the Commission proposals, the question arose - or rather I was asked very specifically, by Mrs Anttila, I believe - as to how I, as President of the Council, proposed to prevent farmers from going bankrupt as a result of the price reductions. Here I must say something about our concept of politics in general. To believe or claim that politics can prevent bankruptcies - by means of any instrument, action or basic conditions - is an assumption that I would warn against.
Politics will never be capable of this under any conditions. At best we can ask whether, with a view of the proposed solutions, the basic competition conditions are fair or not. We must discuss whether this makes sense for the future of agriculture. But it does not relieve farmers of the business decision; it does not relieve me, as a manager, of the responsibility of taking the necessary decisions in my company to ensure its long-term existence in the light of the current conditions.
But we should not ask too much of politics. Indeed, it seems to me that in the past we perhaps too often gave the impression that politics was capable of such things. Perhaps we should no longer give this impression in future. I therefore very much agree that we need reliable basic conditions, that we need to be competitive. I also agree with the view that we must be careful with our money.
Another element of this squaring of the circle is that, on the one hand, we rightly require agriculture to provide a livelihood for as many people as possible, but on the other hand we must constantly explain to the non-farming population, and also to the farmers themselves, that the total sum spent on agriculture is not a small one, when we take into account the European budget, the national budgets and part of the regional budgets in federal Member States. Nonetheless, we have a correspondingly high drop-out rate in farms, and we have not managed to satisfy the farming population either.
This is a discussion needs to go into more detail in certain areas. This seems to me to be particularly important. Perhaps it is true that we spend a great deal of money, but we do not spend it in such a way that it benefits the people working on the farms. That is putting it very simply, but it is certainly worth thinking about. It is a point some speakers mentioned, and although I do not want to go into detail because of time constraints, it is certainly a point worth noting. Yet the call for greater extensification, increased environmental protection, a move away from purely economic considerations, and at the same time reduced expenditure - and such a call was made, if only indirectly, unless I misunderstood - is again asking us to square the circle. It is important that we realise this is impossible. It is easy to talk about whether to pursue greater extensification or increased environmental protection, but we must realise that it costs money, either because local requirements make compensatory payments necessary or because the environmental protection is organised as part of an agreement; it could be either. One will mean more for one person, the other will mean more for another, but either way it will cost public money. That is an aspect that must not be forgotten.
I believe I have covered the main points that were put to me. Perhaps I placed too much emphasis on certain points, as I am new to this, but that should help you to get to know my point of view.
With regard to the view that we should perhaps nationalise the financing of the agricultural policy, which means that we would only receive money from Europe if we had organised national funds in advance or were obliged to organise these funds subsequently, forgive me for saying so, but I think that would be the end of a Community agricultural policy. For this reason I have great doubts as to whether we should choose this path.
Applause

Cunha
Mr President, I should like the President-in-Office to clarify a statement by his colleague, the Minister for Foreign Affairs, who yesterday said that we should reform the common agricultural policy in order to reduce the expenditure of the European Union. The Minister did not give me any information on this subject and he did not answer me, but I asked him if the German Presidency had changed from its traditional position. This question is very relevant, politically speaking, and I would therefore ask and insist that I am given an answer.

Funke
Mr President, ladies and gentlemen, Mr Cunha, it is not just the Germans who have so far discussed financial issues, particularly with regard to the agricultural policy; we can see from the negotiations in the Agriculture Council in which I was involved, and from the discussions which followed with the various Member States, that financial issues are discussed continually. I just emphasised in my reply that in my opinion it is of course very important, and indeed it is part of the reason we need agricultural reform, to ask whether the money we spend on agriculture - at European, national and, in federal Member States, regional level - is always spent in such a way, because of the way the system is organised, that it really benefits those on the farms.
To my mind this is not really a question of the level of funds provided, but a question of distribution. I want to place particular emphasis on this point. We say that for an indefinite period we will allocate 45 %, or, according to some, 50 % - I do not want to argue this point - of the European budget to agriculture, and at the same time we see that agricultural income is going down, not up, at least in some areas of agricultural production. Surely we have to ask ourselves what we think we are doing? We cannot simply accept it and say that the more money we have, the happier everyone is.
I believe we would all, in particular the landowners, be well advised to get involved in this discussion. I do not know what the Foreign Minister said on this point, but if he thinks, as I understand it, that we can reduce expenditure without saying how and in what area it is to be done, then I would be inclined to say that just as I would come to an agreement with the Foreign Minister before expressing an opinion on foreign affairs, so should the Foreign Minister come to an agreement with the Minister for Agriculture before expressing an opinion on agricultural issues. But I do not know what he said on this issue so I cannot comment. I would like to discuss this with him.
In conclusion, I would like to say something that should give cause for thought. I do not have sufficient information to speak for the other Member States of the European Union, but I can speak for Germany and for its Länder: it makes almost no difference - please note that I say 'almost' - what instruments we use in agricultural policy or what we focus on, we have had an average drop-out rate of 3 % in farming in the last 50 years since the end of the war. Note: the last 50 years. This drop-out rate corresponds exactly to the increase in agricultural productivity. Scientists have looked into this and the answers are quite clear. I cannot be quite so clear cut, but I wonder whether we are not going to have to realise that the increase in productivity levels is undoubtedly going to mean structural changes in agriculture, with farms being abandoned, as long as economics is the basis of agricultural policy, I might add. For me it would be inconceivable not to have economics as the basis of agricultural policy. The result would be a great waste of resources if this were not the case. But perhaps we should also discuss this more in public than we have done in the past.

Fischler
Mr President, Mr President-in-Office, ladies and gentlemen, I would firstly like to thank all those who contributed to this debate. In my opinion it was very constructive and set an excellent example, as I hope the public will note.
On the many questions concerning specific amendments, I will repeat what I said this morning, which was that I am prepared to distribute a list clarifying which amendments the Commission considers acceptable. I also realise that I promised to be brief in my final speech, and I would like to keep to this.
Mr Funke has just given a very clear explanation of what is important in relation to the competitiveness of European agriculture. European agriculture must be competitive in two ways. Firstly, our products must be competitive, and they can only be competitive if we pay greater attention to quality that we have hitherto, if we realise and act upon our consumers' new appreciation for quality, and above all if we take into account the strength of European agriculture, which, as we know, lies in using agricultural raw materials to produce high-quality end products.
However, competitiveness in European agriculture also means that services other than the production of agricultural products must be accorded economic value and must be integrated into our market economy system.
A great deal has been said about the extent to which agricultural policy must also be social policy. We must be realistic here. Agricultural policy should have a social dimension but should not be purely social policy. That would really be a mistake. The question here is surely how we are in future to achieve a reasonable ratio, so that we do not have an imbalance like the present famous 80: 20.
With regard to environmental policy, I would like to remind you once again of the principle on which we in the Commission based our considerations. The issue is not the importance of the environment within the common agricultural policy but the fact that in future we want to emphasise that compensatory payments, as we currently call them, must be linked to the environment. For us it is essential that all farmers who receive public funds from the Community budget at least observe the principles of good farming practice. We must certainly discuss the definition further in terms of production system, climatic region and so on.
However, we also consider it essential that other services that go beyond this are compensated separately, but these services must be voluntary. We do not want to introduce a command economy in Europe by the back door.
I now come to the issue of financing. The Commission has not made any proposals concerning cofinancing, as was suggested several times. It merely described, in the context of its report on own resources, possible ways of achieving a better balance between the contributions of the individual Member States. In our view, it is now primarily up to the Member States themselves to say which of these financing models they would favour. I therefore believe that we firstly need the basics to be clarified before any political agreement can be set out in the relevant legal texts.
In the meantime, however, as you know, there are also other considerations such as stabilisation models that are very much worthy of examination. We are prepared to look into them. But one point must be clear: regardless of which model we use, we will not be in a position to bring about an agreement between the Member States if we do not have the necessary financing to compensate for changes in pricing policy. As the saying goes, money makes the world go round. We really must make available the funding that is needed and that is recognised as being needed, otherwise we will not achieve proper reform.
I would like to remind you of one further point: do not forget that with regard to payment for services that will in future be part of rural development, cofinancing has already been agreed and is planned to continue. This means that the more we push forward rural development and the more importance we attach to payment for environmental services and similar, the more likely it is that cofinancing will become automatic, but in a form that does not allow cohesion to fall by the wayside.

President
Thank you, Mr Fischler.
The debate is closed.
The vote will take place on 28 January at 9 a.m.

Organic production
President
The next item is the debate on the following oral questions:
B4-0719/98 by Mrs Barthet-Mayer on behalf of the Committee on Agriculture and Rural Development, to the Council, on rules relating to organic production (livestock production); -B4-0720/98 by Mrs Barthet-Mayer on behalf of the Committee on Agriculture and Rural Development, to the Commission, on rules relating to organic production (livestock production).
Barthet-Mayer
Commissioner, Mr President, as rapporteur for the Committee on Agriculture on the extension of Regulation 2092/91 to organic production, I would remind you that we obtained very wide consensus in Parliament on this text. To the great satisfaction of Members, the Commission then took over a large number of our amendments and included them in its amended proposal.
During 1998, the successive versions of the text discussed in the Council unfortunately resulted in a significant shift. So the purpose of my two oral questions today is to alert the Commission and the Council on behalf of the Committee on Agriculture, and I want to thank my colleagues in the Committee on Agriculture for their confidence and support in taking this action that meets their concerns.
This shift relates to three areas. First, the transitional conversion periods are considerably extended. It does not take 15 years to reduce the number of chickens in a building. Next, there is an increase in the number of derogations, which could end up distorting the proposal. This applies, for example, to the sensitive issue of feed. In principle, this should be entirely organic in this type of production, and in this respect the Commission's proposal is already sufficient derogation in itself, since it recommends 90 % organic feed. Finally, standards and thresholds going far beyond the Commission's proposal have been progressively introduced. There is also a risk of it becoming a form of catch-all regulation authorising intensification in organic agriculture, which is a contradiction in terms.
I am aware of what is at stake economically in connection with consumers' recent interest in this sector of production in the European Union, and also in connection with potential future exports. I thus felt bound to react to put the legislators on their guard against the internal risk from such a flimsy and incoherent regulation, which is likely to distort competition according to different national or regional interpretations and methods of control that are not harmonised.
I also want to put them on their guard about the fact that the application of a complete regulation is being delayed even further, with the risk that the European Union - a pioneer in this field - might have only have to meet the general standards of the codex alimentarius , its text being currently under discussion, with all that that also involves in terms of the actual nature of imports from third countries.
As in other agricultural sectors, the lack of a strong common proposal threatens to weaken the Union later on in the World Trade Organisation, because we know the debate is going on in the United States to try to impose GMOs, the use of urban sludge, irradiation of foodstuffs, and even natural hormones on organic farming. All this is very different from our European conception of this sector. Organic farming must undoubtedly remain a symbol of the most demanding, the strictest and the most thoroughly controlled quality, to the benefit of all who want it, both producers and consumers. It is a voluntary approach and everyone is free to adhere to it or adopt another type of quality production.
As a result, I call on the Commission to stand by its proposal, and even withdraw it if it is being excessively distorted by the Council. But I do hope that it will not be necessary to go that far. And I am also very hopeful when I call on the Council to have another in-depth look at this proposal, in the knowledge that we are, of course, in agreement with its proposal of last December, which lays down the principles of organic breeding. But we very firmly reiterate our request that the Council's text be revised, and we hope, in line with what Mr Funke gave us to understand this morning, that the Presidency-in-Office will heed the combined voices of Parliament and the Commission.
Commissioner, Mr President-in-Office, please do not let cut-price organic farming develop.

Funke
Mr President, ladies and gentlemen, Mrs Barthet-Mayer, we dealt with this issue in the Agriculture Council of 14-15 December and, as you know, agreed on guidelines, but we also urged that it should be adopted as soon as possible in the spring of this year, in accordance with your wishes, as the Council also saw the need for speedy adoption.
Certainly, we cannot currently predict what the substance of the text of the regulation ultimately submitted will be. We shall have to wait and see, but the opinion of the Council was that, as you requested, we need a clear demarcation between organic production and conventional production. I fully agree with you on this. However, on the other hand, we must proceed with the necessary flexibility and simply appraise the situation as we go along. We must also be flexible in facilitating the transition for those who wish to change over to organic livestock production. For this reason we also discussed appropriate transitional periods. One side called for fifteen years. If I remember correctly, we agreed on twelve years. I know that there was a lengthy, in-depth discussion about this twelve-year period and - you are shaking your head anxiously - that we can of course also call for shorter periods. On the other hand, however, we know that it was as a result of practical experience that we decided to favour longer periods. I assure you that we will implement this quickly in accordance with your wishes and that we will monitor observance of the demarcation very strictly.

Fischler
Mr President, ladies and gentlemen, as Mr Funke has already indicated, there were various problems in the discussions in the Council with the proposal submitted by the Commission following debate in Parliament. The main problem is really that some of the elements of our proposal cannot be readily introduced in all Member States. We therefore had a debate on transitional derogations to allow the national provisions that currently exist in most Member States to be brought into line with future Community law.
Some of the amendments concern in particular the origin of the animals, as animals or feedingstuffs can come from conventional holdings. We must not forget that in a number of Member States organic farming has hardly been practised up to now. We must give these countries an opportunity to start organic farming if they wish to do so. This is really why we want a transitional provision of this kind.
I would also like to stress that harmonisation can only progress gradually, particularly if the relevant livestock production has hitherto been governed predominantly by national or regional rules. Certain amendments were proposed in order to solve this problem. They concern in particular the tethering of animals and requirements in terms of the lying area and litter area that should be provided for each animal.
Do not forget that for centuries tethering was the normal way to keep animals, particularly on small holdings. And if a farmer has his small farm in the middle of a village it is not always easy to provide the appropriate litter areas. Nor should you forget that it is the smaller holdings that today are already recognised as organic farms, but that this recognition would have to be revoked if they did not have a litter pen. So here we must be prepared to reach a compromise.
In conclusion, I would like to point out that derogations always apply for a transitional period only and that these are by no means unprecedented. Such provisions also exist for example for seeds and plants or for conventional ingredients in organic foodstuffs. With regard to future action I would simply like to clarify that the Commission is of course prepared to defend its proposal and if necessary to justify why certain exceptions are necessary on a temporary basis.

Rehder
Mr President, Commissioner, Mr President-in-Office, I would like to say briefly that the Social Democrats in the European Parliament are very pleased that you have clarified these matters for us and that common sense has prevailed. Of course snow falls in the beautiful Tyrol, in the almost as beautiful Allgäu and also in beautiful Lower Saxony, and then the cows just have to be brought into their stalls.
All this - you know that I defend the Commission and also the Council on all important issues - fell victim to propaganda in my home town during the election. It was said that ropes were banned from cowsheds, so of course people moaned about the nasty Eurocrats again. I am pleased that this subject is now closed and that common sense has prevailed in Europe. Thank you. We can now at long last continue to support a very reasonable method of production.

Ebner
Mr President, Commissioner, Mr President-in-Office, organic farmers have often been depicted as outsiders, and I believe that if this continues they will continue to be outsiders. The basic conditions should be created to ensure that they do not remain outsiders, with the exception of ideologues. Flexibility, which you mentioned, Mr Funke, is right, necessary and sensible, but it should take the right direction and should not be a form of protection for large industrial concerns that wish to maintain forms of production that admittedly lead to relatively low unit prices in economic terms but ultimately harm public health. I believe this is what you meant by flexibility. In any case that is how I see it.
In my view, the transition periods are too long. Pointless conditions that make organic farming much more difficult should be abolished or not introduced in the first place. But I believe that marketing and promotion are vitally important and necessary, both to change consumer habits and, in the form of commercial initiatives, to create sales opportunities for small farms, as most of the farms concerned are small holdings.
Four weeks ago a study was presented to us by the chamber of commerce in Bozen in the south Tyrol. It was a comparative study of 1 500 cooperatives in the Alps, from France to Slovenia, and we learned that the farms that were involved in these cooperatives fared much better than the others in terms of income security. Since mainly small farms are involved we would need to introduce greater support for cooperatives in this area. If you do not yet have this study, I would be glad to provide you with a copy.
In Austria we have learned that almost 20 % of current production comes from areas of organic production. I believe we are moving in the right direction. It is an advantage for our consumers, for health, for better extensification of farmland and, I believe, it offers good future prospects for young farmers too, particularly as the average age of more than half of those employed in agriculture is over 55 years.

Mulder
Mr President, in terms of our subject this afternoon, we all agree that there is a steadily increasing consumer demand for organic products. There are already rules in Europe on fruit and vegetables, and almost everyone knows what the definition of these is. This is far from being the case with animal products. I think it is very important that we should allow as few derogations from the rule as possible. If there are derogations, I think consumers will lose all confidence, and it will also mean that there is no proper competition. I think that Mr Funke's suggestion just now that we should look at all this again in the spring is a very welcome one.
Certainly not all countries will be able to start at the same time. But that is not the issue here. The issue here is whether we can sell customers things which satisfy their expectations and which are able to meet certain standards for organic production. Other countries can join in later. But it is important that consumers should have the assurance that there is a specific definition consistent with their expectations, and that producers should know the requirements to which they must produce. That is it, really. Anyone who cannot meet those expectations will not sell these products and will not produce them either. Once again, we look forward with interest to the spring.

Graefe zu Baringdorf
Mr President, the history of the regulation on organic farming began in 1992. Initial discussions led to the regulation on plants, then followed the commitment by Parliament and then by the Commission that animals would be covered a year later. It is now 1999, and as the President-in-Office said earlier, all we have to do now is to adopt it. But please, Mr Funke, do not put urgency before quality since we have been working on this for so long already!
What is the current situation? We are now at the stage of the legislative procedure where Parliament has adopted a position on this issue. The Commission has adopted some of Parliament's amendments. The Council requires a unanimous vote to reject this modified proposal containing Parliament's amendments, if the Commission keeps to its proposal.
I would like to discuss two points: tethering and gene technology. Tethering is not mentioned at all in the Commission's proposal. This means that it will have to be inserted later and the Commission will have to be prepared to compromise so that this problematic issue can be covered, because it is a subject that has been neglected completely, at least for cattle. I would ask you not to insist excessively on animal welfare, which essentially has nothing to do with appropriate ways of keeping animals. Appropriate tethering is perfectly possible, but exact details must be given, and we must not throw the baby out with the bath water.
For the use of genetically modified organisms the principle is different. The Commission adopted the proposal that we do not want the use of genetically modified organisms to be included in this regulation and therefore in organic production. This is therefore a ban. There is a ban on using genetically modified organisms, and it should remain.
Yet we have the problem of what to do with potentially contaminated organisms. This is where we begin to weaken. With regard to tethering I am in favour of a moderate approach, but here I am in favour of a strict approach, because if we allow contamination and then in the novel foods regulation, to which it relates, allow a certain percentage that need not be labelled, we are allowing the use of genetically modified organisms through the backdoor; if tests then show that products do indeed contain such organisms, we will lose our markets. Here I would ask that we proceed with caution. Furthermore, the question of contamination is dependent on what measures are taken to ensure that other areas are not contaminated during release experiments. I would ask for a very strict approach to be adopted here, Commissioner. It is in your hands. If you do not seek a compromise with the Council on this, the Council's hands are tied. We may postpone the matter once again, but then we must not act in haste but give priority to quality.

Souchet
Mr President, the Group of Independents for a Europe of Nations has also signed the joint motion for a resolution on organic livestock production because the Commission's proposal is much too lax. It provides for far too many derogations and it is in contradiction to the rigour of the national standards established by a number of Member States, including France. Even if the final revised version allows Member States to maintain stricter national provisions than those to be applied at European level, we are bound to fear a levelling down.
Our group is aware of the potential of organic livestock production for the agriculture of Member States. After what has happened with BSE and GMOs, the consumer wants a level of food safety that organic production can guarantee.
But before signing the joint motion for a resolution, the Group of Independents for a Europe of Nations called for the incorporation of a certain number of points that it considers essential. Derogations must be strictly and entirely limited to production subject to the external constraint of extreme and exceptional climate conditions. Transitional regimes must be limited in terms of their duration to allow producers to adapt their system of production to European standards that are stricter their own specifications.
With the codex alimentarius due to determine the rules relating to production, labelling and marketing of organic products as from the end of June 1999, the Union needs to adopt a clear position that incorporates strict standards. Finally, as regards labelling, our group is opposed to the harmonised European logo for organic products that some people want. As national specifications are different, the harmonised European logo would be a source of confusion for the consumer and would involve a levelling down of the health standards of organic livestock products.
Through its national legislation, the United States has tried to authorise the incorporation of GMOs into feed for animals intended for organic production. American consumers have succeeded in getting this proposal withdrawn and our group welcomes that fact. Thanks to the constraints it imposes in terms of specifications and the traceability of products, organic farming represents an attractive opportunity for some producers. It represents one means of linking agriculture closely to the land and permitting an agricultural price differential higher than standard world prices. Mr President, this dual advantage must not be abandoned to the benefit of the purely mercenary approach adopted by certain Member States towards organic production.

Pinel
Mr President, two types of farming coexist today. The first is one that responds to the demands of the multinationals, which are mainly American, that poisons the ground and foodstuffs, and that intends, for the first time in history, to patent living creatures and alter genetic heritage. It also plans to market non-reproducible seeds, has been spreading cancer for the last 50 years and has cut human sperm production in half through pesticides, herbicides and fungicides. Then there is the other kind of farming, the form of peasant, traditional farming, which respects employment, the environment and human health, but which has been systematically marginalised by the lobbies, right down to its very name - organic - which is an ambiguous and opaque term as far as the general public is concerned.
The National Front prefers to talk about traditional and natural farming and chooses the farming that has shaped our civilisation down through the millennia. Farmers are the main victims of chemical methods. The socialists are the leading accomplices of this system: in France, for instance, they only grant FRF 100 per farm per year for conversion to organic farming. For the leading agricultural nation in Europe, faced with the challenge of a rapidly expanding market, this is ridiculous. Consumers want something other than mad cow disease, hormones and GMOs. These substances should be banned. In the face of the challenges of pollution, urban overcrowding and the destruction of the countryside, organic farming makes only a vague appearance in Agenda 2000 and that is unacceptable.
So what should be done? Firstly, we must increase the level of resources set aside for conversion.
Secondly, we must oppose all levelling down and any derogation that will endanger the quality and credibility of organic farming networks of any kind. French standards are excellent in this respect, and must not be undermined. We say 'no' to cut-price organic farming!
Thirdly, it is scandalous that in 1999, products that guarantee jobs and protect the environment and public health are taxed at the same rate as doctored products that are full of hormones and that are the result of chemical, transgenic methods that are tragically destructive for consumers and for natural environments. So no tax or VAT should therefore be levied on organic farming.

Hardstaff
Mr President, the UK currently lags behind most EU countries in its production of organic food. Currently only about 1 % of our farm output is recognised as organic. However, the demand for such produce has risen enormously over the last few years, and not just because of the BSE crisis: our supermarkets simply cannot obtain enough organic produce to keep pace with this rising demand from their customers, even when looking to other Member States to meet the shortfall.
The demand is there and consumers are prepared to pay high prices for what they regard as a healthier and higher-quality product. However, the transitional period for farmers switching to organic production is often very difficult, as they incur extra costs for some years before being able to obtain recognition as a fully organic producer and so able to command the higher prices. On the other hand, consumers need to know that they are paying more for a genuine organic product.
Here I want to join my colleagues in urging both the Commission and the Council to take speedy action to implement the measures to further organic husbandry, as recommended by the Committee on Agriculture, for which Mrs Barthet-Mayer has been such an eloquent spokeswoman on this issue.

Keppelhoff-Wiechert
Mr President, ladies and gentlemen, I will help to save us some time. I think we can say that the EU Agriculture Council has essentially succeeded in dealing with the new EU eco-regulation. In our opinion the Federal Government has found acceptable compromises, particularly from a national point of view, in order to achieve vital objectives relating to livestock farming, feedingstuffs and veterinary medicine. I consider this intermediate step to be an initial reaction. An acceptable basis has been found for sustainable basic conditions for improved ecological livestock production. Several speakers considered this to be long overdue. It is now possible to conclude the amendment of the EU eco-regulation under the German Presidency in the first half of 1999.
I have another question concerning the quality mark. But perhaps I am simply not well enough informed. Are we again to have all the different national quality marks and an additional quality mark that can be recognised EU-wide, as Mr Mulder requested before in his report? I think it would be helpful to have an answer from you on this issue. But perhaps it is already in the text. Will there be different national quality marks or a harmonised EU quality mark?

Fischler
Mr President, I would like briefly to answer two questions. In reply to Mrs Keppelhoff-Wiechert's question, the Commission is working towards developing an EU-wide logo, as called for in the resolution.
The second question concerns GMO. For us it is not problem - and we stand by this - that we do not want to allow the use of GMO. But as Mr Graefe zu Baringdorf rightly said, there is a problem with contamination. However, we wish to be as restrictive as possible here, so we would rather talk about unavoidable contamination than just contamination. The details have yet to be worked out, however, so that there can be no excuses.

President
Thank you, Mr Fischler.
I have received eight motions for resolutions tabled pursuant to Rule 40(5).
The debate is closed.
The vote will take place tomorrow at 11 a.m.

Question Time (Council)
President
The next item is questions to the Council (B4-0004/99).
I should like to welcome Mr Verheugen, and we look forward to working with him and having the pleasure of his company in the days ahead.

President
As they deal with the same subject, the following questions will be taken together:

Question No 1 by Patricia McKenna (H-1172/98) Subject: Convention on mutual legal assistance and lawful interception of telecommunications
Will the Council report on the outcome of the Justice and Home Affairs Council of 3-4 December 1998 with particular regard to any discussion on the Draft Convention on Mutual Legal Assistance, and the protocol thereto, on any debate or conclusions reached on the lawful interception of telecommunications (ENFOPOL 98, 10951/98, and 10951/1/98 REV 1 amending the Council Resolution of 17 January 1995 - ENFOPOL 87), and on any ongoing discussion taking place at the K4 Committee and its working parties? How can the Council justify the secrecy and lack of consultation surrounding these initiatives when the documents become available anyway, and the only result is a lack of democratic debate, either in the European Parliament or in the national parliaments? Why do not the Member States debate the matter openly in advance before agreeing in the 'group of twenty' countries, since these are such crucial and far-reaching measures, with enormous potential impact on the realm of privacy? What exact legal redress is available to citizens, should they wish to challenge either these rules, as being in breach of rights enshrined in the Treaties, or the decisions taken under these rules?

Question No 2 by Inger Schörling (H-1236/98) Subject: ECHELON
One of the subjects discussed during a debate in Parliament on 14 September was the ECHELON surveillance system. The Commission said on that occasion that it had no knowledge of the existence of ECHELON. It would, therefore, be valuable to know what emerged during the Council meeting on justice and home affairs of 3-4 December 1998, particularly with regard to covert listening and monitoring of telecommunications and how that relates to ENFOPOL 98, 10951/98 and 10951/1/98 REV I amending the Council resolution of 17 January 1995 .
Why does the Council not find it appropriate to discuss these matters openly with Parliament, particularly in view of the fact that they concern the individual's right to a private life and that any agreements concluded may be in direct conflict with Member States' national legislation?
I give the floor to Mr Verheugen to answer the questions by Mrs McKenna and Mrs Schörling, and would like to welcome him once again.

Verheugen
Mr President, in reply to this question, the Council has already pointed out on several occasions when answering questions on this subject in the House - and I can only repeat this - that it has never been involved with issues concerning the matter which the honourable Member refers to in her latest question. I would therefore ask her to appreciate that the Council is not in a position to provide an answer on this.
I would also point out that the interception of telecommunications, which is the subject of the proposal for a Convention on Mutual Legal Assistance in criminal matters, seeks to promote international cooperation in order to control international crime. This type of interception does not pursue any other objectives apart from that of fighting organised crime.
I might add then that the honourable Members' questions are concerned with the interception of telecommunications for the purpose of solving crimes. The relevant Council bodies are currently dealing with a draft Council resolution on new technologies which is clearly connected with both the Council Resolution of 17 January 1995 on the lawful interception of telecommunications, and the discussions on the interception of telecommunications within the framework of the Draft Convention on Mutual Legal Assistance in criminal matters between the Member States of the European Union.
The requirements of the competent authorities with regard to the technical implementation of lawful interceptions in modern telecommunications systems are summarised in the 1995 resolution. It should be noted that this resolution does not deal with the legal basis for authorising interception; it deals solely with the technical requirements for the monitoring agencies with regard to monitoring telecommunications on the basis of a valid authorisation.
The 1995 resolution is applied in principle to current and future telecommunications systems. In view of ongoing progress in telecommunications technology, however, it is being considered whether the resolution needs clarification on a series of points, pertaining to satellite systems and the Internet in particular. This draft resolution seeks to provide the necessary clarification.
As regards the Draft Convention on Mutual Legal Assistance in criminal matters, the possibility of adopting rules on the interception of telecommunications for the purpose of solving crime has been carefully examined both by experts and by the Council itself. Conventional telecommunications systems operate within one country and are based on the assumption that a target in any one country can only be monitored by means of the telecommunications system in that particular country. However, these technical restrictions do not apply to the new satellite systems. New forms of cooperation are therefore necessary.
The ongoing discussions involve a series of highly sensitive political issues. Moreover, the issues concerned are of a highly complex technical nature.
Naturally, due respect should be paid in this connection to the human rights angle and in particular to the relevant provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms.
At its meeting on 3 and 4 December 1998, the Council examined the most difficult political issues. These concerned cases of monitoring for the purpose of solving crime, where the technology could be made available for a country to monitor a target in another country without this country providing the technical support to do so.
A broad majority of Member States took the view that the country in which the target is located should be informed in these cases and should be in a position to demand that it is not monitored, or that it ceases to be monitored. One Member State declared itself in favour of providing for exceptions for reasons of national security.
Some other issues were also discussed, in particular the question as to what extent the Member State in which the target is located should be in a position to demand that material already seized be destroyed. In this connection, however, the question that requires urgent clarification is whether it is sufficient to merely inform the country in which the target is located, or whether this country should arrange for the target to be monitored under the mutual legal assistance arrangements in accordance with its legal framework.
This issue is also particularly important because the result of an obligation to merely inform the country in which the target is located would be to shape technology in such a way that individuals could be monitored in their own country by another Member State.

McKenna
What we are talking about here is that the Internet would be forced to put facilities in place so that the police can come in through the back door. If these plans were implemented ENFOPOL would be able to monitor almost every communication mode. This would be a gross abuse of people's right to privacy and of basic civil liberties.
There is an internal Council document which was to be discussed. It has been put on the Internet in German. In the interests of transparency, this document should be available in all languages so people can see what is going on at these K4 meetings. Even though you talk about the justification for this, you do not mention what the consequences are or the cost effect for the Internet providers to provide such a facility. They are going to be asked to pay for this so that the police can, without warrants and without any justification, bar this bland statement by yourself, say that this is done to fight crime. We need openness and to know what is going on. Parliament should be informed, Member States should open up this discussion so that people in the Member States know what is going on before it is too late.

Verheugen
Mrs McKenna, I would point out once again that the interception of telecommunications, which is the subject of the proposal for a Convention on Mutual Legal Assistance in criminal matters, seeks to promote international cooperation in order to control international crime.
This type of interception does not pursue any other objectives apart from that of fighting organised crime.

Schörling
I should like to ask if the President-in-Office can comment on the memorandum or protocol issued by the K4 Committee, which states that work on the overall structure of a global surveillance system, as agreed in the scheme arranged between the EU and the FBI, should take place outside the third pillar. This is rather an interesting piece of news, since it could be that discussions do not take place within the Council itself but elsewhere, for example in the K4 Committee and in other committees and working groups.
However, the question still remains: why does the Council not find it convenient to discuss the matter openly with the European Parliament, particularly in view of the fact that it has a direct bearing on the public's right to privacy? There is also the possibility of any agreement turning out to be in direct conflict with national legislation. A reply would therefore be much appreciated.

Verheugen
Mrs Schörling, I fully understand your concern, and I can assure you that the Council takes this seriously. However, the discussions which you mentioned have not been concluded and, therefore, the outcome you indicated is not the case either.
If the Council were to achieve an outcome, everything necessary would of course be done to safeguard the rights of Parliament, but also of course to give the Member States the opportunity - which they will also have during the discussions that take place beforehand - to explain their interpretation of the law, and to see to it that fundamental questions concerning the legal culture of the European Union are not adversely affected.

Sjöstedt
I have two supplementary questions. The first concerns the 1995 resolution on the lawful interception of telecommunications. My question is as follows: what kind of cooperation has taken place with the USA and other non-European countries in this area? Equivalent legislation already exists in the USA.
My second question concerns illegal telephone tapping and more precisely the Echelon system, which is a global military surveillance system without any legal base. Has the Echelon system ever been discussed in the Council of Ministers, and is there any link between Echelon and the system of lawful interception that exists in the EU?

Verheugen
Mr Sjöstedt, I would gladly answer your question, but I am unable do so because it is so far from the original question that I was unable to prepare for it. I therefore hope it is acceptable if I reply in writing to both these questions.

President

Question No 3 by Alexandros Alavanos (H-1174/98) Subject: Changes in the system of EU own resources
The Commission report on the operation of the EU's own resources system includes a proposal that the Member States should continue to pay direct aid under the common agricultural policy based on Community legislation as they do at present, but that instead of receiving a 100 % refund from the EU budget, they will receive only a partial refund of 75 %. Since, according to the Commission's data, such a change to the own resources system will not only harm the 'cohesion countries', and particularly Greece, but will also undermine the basic principles and rules governing the common agricultural policy, will the Council confirm that no proposals will be adopted which deprive the cohesion countries of some ECU 1.2 billion annually, while the unacceptable refund arrangements enjoyed by the UK since 1984, amounting to some ECU 1.3 billion, are retained?
I give the floor to Mr Verheugen to answer Mr Alavanos's question.

Verheugen
Mr President, the negotiations on Agenda 2000 have entered their final phase and are to be brought to a close at the European Council meeting on 24 and 25 March 1999 in accordance with the undertaking given at the Vienna European Council. Mr Alavanos will understand that the Council cannot comment on individual points mentioned during the discussions, given that the negotiations are still taking place and full agreement has not been reached. However, the Council can at this stage indicate that it was specifically asked at the Vienna European Council to carefully examine all the issues raised and viewpoints set out during the discussions, so that full agreement can be reached.
The European Council has also asked all Member States to participate fully in helping to achieve, on the basis of solidarity and careful budgetary management, a fair and balanced outcome that is acceptable to all.

Alavanos
Mr President, I thank the President-in-Office for his answer, though it cannot be categorical since the negotiations are still in progress.
More particularly, I should like to ask whether this proposal for the substantive renationalisation of part of the funding of the common agricultural policy is still on the negotiating table, because in negotiations some initial proposals are lost, other new ones appear, and so on. Is the proposal for the nationalisation of part of the common agricultural policy still up for negotiation?

Verheugen
Mr President, Mr Alavanos, the situation is such that all proposals which were made by both the Commission and the Member States during the discussions up to now are still on the negotiating table. An important prerequisite for the German Presidency was to make it clear that in this final stage of the discussions all proposals are on the table for the moment. This does not mean that the package which is to be adopted as a final compromise will include everything that is currently on the negotiating table, but that all proposals which the Commission has made, and which have in the meantime come from the Member States, are part of the negotiations which the presidency is currently holding.
Moreover, I can assure you that solidarity in financing the European Union and making decisions on the European Union's budget is a matter which is of crucial importance for the German Presidency in particular.

President

Question No 4 by Eva Kjer Hansen, which has been taken over by Mrs Spaak (H-1176/98) Subject: Institutional problems on enlargement
Do the unresolved institutional problems really mean that there will be no enlargement of the EU before 2005? There are still no plans as to how enlargement will take place: Firstly, the protocol on the institutions with the prospect of enlargement of the European Union reduces the number of Commissioners to one per Member State provided that the weighting of votes in the Council is modified, but 20 new Commissioners are to be appointed in January 2000 for a 5-year term of office. Secondly, Article 137 of the Amsterdam Treaty lays down that the number of Members of the European Parliament must not exceed 700, but at the next elections 626 MEPs will be elected for a 5-year term of office.
I give the floor to Mr Verheugen to answer this question, which Mrs Spaak has now taken over.

Verheugen
Mr President, the Council would point out to Mrs Spaak that the protocol on the institutions with the prospect of enlargement of the European Union, which is intended to form the basis of a plan for adapting the institutions, has not yet entered into force, since the Amsterdam Treaty to which this protocol is annexed has not yet been ratified by all the Member States. As soon as all the instruments of ratification have been deposited in Rome, the treaty and the protocols in the annex, which constitute an integral part of the treaty, will enter into force on the first day of the second month following the deposit of the final ratification instrument.
Mrs Spaak, this last sentence was so incomprehensible even in my own language that I should prefer to clarify it. In other words, if everyone has ratified the treaty by the end of March, it will enter into force on 1 May, and if everyone has ratified it by the end of April, it will enter into force on 1 June. I had trouble understanding the sentence myself.
At the Vienna European Council on 11 and 12 December, it was agreed that the ratification of the Amsterdam Treaty still constitutes our first priority. When it meets in Cologne the Council will decide when and how to tackle the institutional problems which are not resolved in the treaty, and which must be resolved before enlargement takes place. The important question which you raised, Mrs Spaak, must be considered in this context.
Moreover, the Council would point out that, until now, there has been no formal confirmation of the date on which the current accession negotiations with the applicant countries will be brought to a close. The case considered by Mrs Spaak is therefore not on the agenda.
As regards the question on Article 189, formerly Article 137 of the consolidated treaties, it should be noted that the number of 700 Members of the European Parliament from the entry into force of the Amsterdam Treaty is valid for the number of Member States in the Union at that time. Apportionment amongst the individual Member States following enlargement will be negotiated at the appropriate time.

Spaak
Mr President-in-Office, I would just like to point out that the Amsterdam Treaty resolves none of the institutional problems raised in Mrs Kjer Hansen's question. Waiting for ratification of the Amsterdam Treaty seems to me to amount to a long delay, especially for the applicant countries.
My supplementary question is as follows: has the Council yet considered the various proposals and the various problems highlighted by Mrs Kjer Hansen in her question?

Verheugen
Mr President, I consider the question to be a completely legitimate one, and I also share the concern which underlies it. The Council has not yet dealt specifically with the proposals you mentioned, but has merely discussed the question of how the unresolved institutional problems are to be tackled. As you know, the German Presidency was instructed only a few weeks ago to make a procedural proposal for the summit in Cologne. We are currently holding the necessary discussions on this, and I have just pledged within another parliamentary body to ensure that the discussion within Parliament and the opinion it forms will be duly taken into account, because Parliament has a particularly important role to play, especially concerning the development of the institutional character of the Union.
We will therefore not be able to reach a decision on the core issues regarding institutional reform during the German Presidency, and do not even wish to, because for the moment we have only been instructed to make a procedural proposal. I must draw your attention to the fact - and you of course know this - that agreement on a particular procedure is often already halfway to reaching overall agreement in the Union.
In connection with enlargement, I should also like to tell you that in the opinion of the presidency, there is full agreement on the need to resolve the institutional problems by the time the first accessions take place. That the presidency also wishes to speed up the decision-making process on institutional issues is a positive signal to the applicant countries, and I think it is in our mutual interest that this positive signal can actually be given as well.

Elliott
I found the President-in-Office's reply very helpful and encouraging as far as it goes, but it does not fully address some of the points that are made in this question. I am a member of the Joint Parliamentary Committee with Poland. The Polish Government has indicated that it believes it will be ready for accession in January 2003. They may not be able to achieve that. But are we, in effect, shutting the door to any enlargement within the period of the next five years? It seems to me that if Commissioners are to be appointed at the end of this year on the same basis as they are at the moment, it would present serious problems. The same, to some extent, applies to Parliament. I wonder if some thought is being given to these issues. If we are going to wait until next year or later before we begin to think about these factors, you can see the difficulties that will arise.

Verheugen
Mr President, I am very grateful to you, Mr Elliot, for asking this question because it gives me the opportunity to clarify a point. A date has not been fixed for the accessions. Neither a later nor an earlier date has been indicated, but rather the date fixed will depend solely on how the negotiations progress. As you know, there are altogether 31 packages for negotiation. You are aware of the current situation. Three of the 31 negotiation packages have been concluded provisionally, and four more are about to be concluded. We intend to start negotiations on six to eight more packages during the German Presidency, so that about half of all the packages are in the process of being negotiated by mid-1999.
By then we will have perhaps almost reached the stage where we can see how much longer we actually need. We will then have to decide whether or not to fix a date for the accessions. I do not see the danger you seem to in the effect that institutional reform would have on enlargement. According to the consensus we have established within the Member States, the institutional problems should be resolved by the year 2001. However, I would see this as the latest date for this. It is highly unlikely that an accession treaty can be agreed upon and concluded with any one applicant country by 2001.
To answer this question very precisely, I do not believe that we will be in a position where the negotiations on accession have been concluded, but the European Union is not ready for enlargement because the institutional issues have not been resolved.
This matter is of the utmost importance for the German Presidency, and I am grateful to see that this is also an extremely important issue for Parliament. I firmly believe that the credibility of the entire enlargement process also depends on how seriously we work towards completing the institutional reforms.

President

Question No 5 by Paul Rübig (H-1183/98) Subject: Security in cities
During the European Parliament's May part-session in Strasbourg, the representative of the British Council Presidency, Mr Douglas Henderson, agreed to the immediate establishment of a group of experts who were to deal with the topic of the increase in crime in European cities.
Could the Council give me some indication of the composition and the activities to date of this Council group, as well as an insight into the further priorities of the German Presidency in this field?
I give the floor to Mr Verheugen to answer Mr Rübig's question.

Verheugen
Mr President, security in cities is certainly one of the areas in which only a coordinated approach extending across authorities and disciplines can be successful. Experts within the Council group on police cooperation are dealing with crime in European cities. In the past, their work focused on violence in cities, police cooperation and violent gangs in urban areas.
In order to improve the exchange of information on proven methods, increase the exchange of experiences and extend practical cooperation, the group has agreed on an exchange programme for officials active in the area of violence in cities. One of the first exchange schemes for police officers who are active in the campaign against violence in cities took place in France in October 1998. Such exchange schemes will also be run in the future.

Rübig
Mr President, a few days ago Mr von Wogau's press officer was attacked at Place Schuman at 7 o'clock in the evening. He was taken to hospital with a cut. However, this is by no means an isolated case. In the last year, Mr Voggenhuber, Mrs McCarthy, Mr Schiedermeier, Mrs Pack and many others have been attacked in Brussels. My office carried out a survey of 300 offices in the European Parliament; over a third of them reported an incidence of criminal assault in Brussels within the last year.
I believe that the European institutions need to be made safer. The Belgian national parliament is kept under surveillance by the army and the police force. As far as I know, the European institutions are not kept under surveillance at all. There are more than 10 reported cases of theft on average each month in the European Parliament alone. How does the Council presidency intend to improve this situation?

Verheugen
Mr Rübig, you will understand why I have to point out firstly that maintaining public law and order on the territory of the Member States is primarily a matter for the police forces of the individual states. Having said this, the facts which you described are to be taken seriously, and I will use this as an opportunity to address the issue at an appropriate time.

President

Question No 6 by José Salafranca Sánchez-Neyra (H-1185/98) Subject: Communication on the First EU-Latin America and Caribbean Summit
The First EU-Latin America and Caribbean Summit of heads of state and government is to be held in Brazil in June 1999. The European Parliament has already participated in the Ministerial Conferences of the San José Group and the Rio Group, in both the opening ceremonies and the various work sessions. On what basis does the Council intend to include the European Parliament as a participant in this summit?
I give the floor to Mr Verheugen to answer Mr Salafranca's question.

Verheugen
Mr Salafranca Sánchez-Neyra, I must say right at the outset that you will be disappointed by my answer, but you will appreciate that as we have only been in office for 12 days there has not yet been a Council meeting during the German Presidency. The Council has therefore not yet had any opportunity to examine the question of the European Parliament's possible participation in the meeting which you mentioned, and indeed has not done so.

Salafranca Sánchez-Neyra
I should like to say to the Council representative that the disappointment in his response does not mean that the Council's action should be disappointing.
I would like to point out that at the last Ministerial Conference in San José, held last February under the British Presidency, the way in which the European Parliament delegation was treated was obviously wrong. It was in fact treated worse than the delegations from third countries.
I would like to ask the Presidency-in-Office to ensure that the European Parliament delegation is treated correctly at this important summit, in accordance with the institutional role it plays and in accordance with its importance in maintaining momentum in relations between the European Union and Latin America
On that particular occasion, a rather serious incident occurred at the beginning of the Conference. I would therefore be grateful to the German Presidency if it would guarantee that the European Parliament will be able to fulfil its corresponding institutional role, as I have requested.

Verheugen
I am grateful to Mr Salafranca for expressing these concerns. They give us a reason to make an effort to ensure that complaints of this kind are no longer necessary during our presidency.

President
As they deal with the same subject, the following questions will be taken together:

Question No 7 by Freddy Blak (H-1192/98) Subject: Ending of duty-free sales in the EU
As a vice-chairman of Parliament's Committee on Budgetary Control, I was astonished to read the answer I received from the Council to my question of 1 October concerning the ending of duty-free sales. I am a directly elected Member of the European Parliament, and the people I represent expect the questions I submit to be treated seriously, as do I. What I received on 19 November 1998 is not a serious answer. I therefore have no alternative but to resubmit my original question, and I expect that, this time, a proper answer will be given.
Duty-free sales in the EU will come to an end on 30 June 1999. The 22nd recital of Council Directive 92/12/EEC states that before their abolition 'a certain period of time will be required to take the necessary measures to alleviate both the social repercussions in the sectors concerned and regional difficulties ... which might arise'.
In a reply to the Ombudsman, the Commission takes the view that it is not required to carry out an analysis of these problems, stating that it had never been the Council's intention to impose such an obligation on the Commission and that this was confirmed when the Ecofin Council discussed the question in November 1996, adding that, as these were informal discussions, the conclusions were not recorded in the official minutes, but that the matter was again discussed by the Ecofin Council on 19 May 1998 with the same result (Commission's observations in response to a request from the European Ombudsman for further information (complaint by Freddy Blak, ref. 0879/97)).
Will the Council confirm the Commission's reading of the Council's conclusions and explain how this view is in keeping with the above Directive?

Question No 8 by Gisèle Moreau (H-1227/98) Subject: Postponement of the abolition of intra-Community duty-free shopping
On 19 May 1998 the Council confirmed that the decision it took in 1991 to abolish intra-Community duty-free shopping would indeed be implemented on 1 July 1999.
All the studies that have been carried out highlight the very large number of job losses which will result from the abolition of duty-free shopping in airports and on ferries. In France, for example, more than 12 000 jobs would disappear in regions where unemployment levels are already very high.
Is the Council prepared to draw the appropriate conclusions from these impact studies and postpone implementation of the decision abolishing intra-Community duty-free sales?
I give the floor to Mr Verheugen to answer these two questions together.

Verheugen
Mr President, the joint answer to both questions is as follows: I should like to refer to the conclusions of the European Council on this matter, as my predecessor did in a written answer to the questions asked by Mr Cushnahan, Mr Watts and Mr Wibe at Question Time in December last year. The conclusions read as follows: With regard to the decision taken in 1991 on duty-free sales for travellers between the Member States, the European Council has asked the Commission and the ECOFIN Council to examine by March 1999 the problems which may arise with regard to employment and, on the basis of proposals from the Commission, to look at how these problems can be dealt with, including the possibility of extending the transitional provisions for a limited period. From the Council's point of view, it cannot say anything further on this matter at the present time.

Blak
I should like to welcome the new President-in-Office and say that I was extremely pleased with his reply, in which he said that it would be sensible for us to decide to postpone the matter. I am particularly pleased that you say that the Council has directed the Commission to carry out this study and produce an answer by March 1999. I have received an answer from the Commission in which the Commission denies any responsibility and says it is not its job, so I would like to ask you as President-in-Office of the Council to kick the Commission up the backside and ask it to start carrying out the study, which should be ready in March 1999. I am extremely pleased with your reply, which is what we would have liked to have heard from the Austrian Presidency, which gave a completely unintelligent reply last month. I really think this is a good start. We would really like to thank you for that.

Verheugen
Mr President, Mr Blak, I am grateful to you for your kind words of acknowledgement, though I must add that we do not deserve them. The praise should go to the Austrian Presidency, because the decision which I referred to comes from the communiqué of the Vienna summit. It was agreed in Vienna. The European Council has asked the Commission to present a report on this by March 1999; this is therefore not very far away, and it will of course be the presidency's task to ensure that the deadline set by the Council is observed. I can promise you that we will not wait until the end of the year before asking whether the report is on its way and when it will be made available.

Moreau
Mr President, first of all I want to emphasise that the Commission's study ought to be carried out objectively, given the serious consequences the elimination of duty free could have on employment, and I have an article here, an interview with the President-in-Office, Mr Schroeder, which highlights those serious consequences for employment at a time when the Council is, in fact, stressing the importance of employment issues.
So my question is as follows: do you not think that the Council use as a basis the precedent of the extension of excise duty exemption for the Nordic countries, which was justified on economic grounds and accepted by Mr Monti in 1996, and the opinion expressed by the European Economic and Social Council last September in favour of an extension of this system?

Verheugen
Mr President, Mrs Moreau, as you can imagine, the opinion of Mr Schröder, the President of the Council, is well known to me. Your information is indeed correct. However, I am still not in a position to report any conclusions; the Council cannot of course draw conclusions until the reports it commissioned are actually available. I would ask for your understanding in this matter, but once again I specifically refer to the last phrase in the Council decision I quoted, which mentions that the possibility of extending the transitional provisions for a limited period is also to be reviewed.

Maes
Mr President, at the start of this afternoon's sitting, I asked for the list of the 27 cases referred to UCLAF so that Parliament could deliver an informed opinion tomorrow. I received an answer in writing to a note in German from someone who is a French speaker - so it was a truly European conversation - and I was assured that this list had been given to the Committee on Budgetary Control. All the time we have been sitting here, my colleagues have been trying to track down this list which we were supposed to have been given. It could not be found. Mrs Theato, for whom I have the utmost respect, refers us to the secretariat of the Committee on Budgetary Control. But we have been talking all afternoon to this committee and to Mr Darras, the head of division. The list is nowhere to be found. I would ask you as President to take the necessary steps to procure this information for Parliament before we vote.

President
Thank you very much, Mrs Maes. The Bureau's services will set to work immediately as you are indeed right and we must find out where this list is and bring it here. I therefore share your concern in this matter. The Bureau's services will look for this list so that it is in fact available before the vote.

Corbett
I should like to underline the words of the President-in-Office when he emphasised that the Vienna European Council spoke only of a possible extension of the duty-free regime and said that this would be for a limited period of time. I would like the Council to pay due attention to those two conditions.
I should like to ask the President-in-Office of the Council if he is aware that many Members of this House do not share the view that an extension of duty-free is a good idea? The duty-free regime is a tax break mainly for the benefit of the alcohol and tobacco industries. If the Finance Minsters of the Member States have some money to spare, I would submit that there are better ways of spending this money than allowing a tax break to continue for the benefit of the alcohol and tobacco industries - available, incidentally, only to international travellers.

Verheugen
Mr President, I can answer this question in the affirmative. The Council is aware that opinions on this issue vary a great deal both in the Member States and in Parliament. The Council is also aware of the fact that the decision which was taken in Vienna commissions a review and nothing more for the moment.

Watts
Does the Council share the view of my own Prime Minister, Tony Blair, that the loss of duty-free could lead to the loss of thousands of ordinary people's jobs across the European Union? Does he consider it helpful as part of this examination that there is consultation with the industry, with the trade unions and indeed the regions to make sure that the concerns of local people are addressed?
Would he agree with me that a suitable limited extension could be five or six years? That is a figure that Messrs Blair and Schröder were contemplating during the Vienna Summit.

McIntosh
Regrettably, during the whole of Mr Watts' intervention there was no interpretation because his microphone was not switched on.

President
Yes, it was interpreted. Perhaps you could not hear it but it was interpreted. I could hear Mr Watts and I believe Mr Verheugen could too.
Mr Verheugen, I would invite you to reply to Mr Watts' question.

Verheugen
Mr President, Mr Watts, I understood the question in both languages. I am assuming that the Commission and the ECOFIN Council will naturally be using all relevant sources as a basis for carrying out the task which they have been given. I believe the sources you mentioned are relevant and should therefore be taken into account when collecting data and estimates which are really important for this. You will understand that in my present capacity I cannot and may not comment on the political opinion of a Member State's Head of Government. However, I can of course assure you that conclusions from the reports which have been commissioned will not be drawn until the reports are made available, and that no conclusion is excluded for the moment; neither, therefore, is the one to which you referred.

President

Question No 9 by Anne McIntosh (H-1193/98) Subject: Third country poultry hygiene inspections
What inspection measures is the President-in-Office taking to ensure that EU hygiene standards are being met in imported poultry from third countries?
I give the floor to Mr Verheugen to answer Mrs McIntosh's question.

Verheugen
Mr President, on 15 October 1990 the Council adopted Directive 90/539/EEC on animal health conditions governing intra-Community trade in, and imports from third countries of, poultry and hatching eggs. This directive has been in force since 1 May 1992, and Articles 20 to 28 in Chapter 3 include provisions for imports from third countries. As you know, Mrs McIntosh, it is the Commission's task to ensure that the standards laid down here are complied with. If in your view there is cause for complaint, the presidency would be grateful if it were to be duly informed of this. However, I also believe that it would be better to address your question to the Commission.

McIntosh
I have put this question to the Commission on a number of occasions. The last time was yesterday. Is it really the Council of Ministers' and the Commission's intention to put our own poultry producers out of business in favour of third-country imports?
My question relates in particular to the implementation of the directive on fresh meat, which dates from the 1960s, which states that checks on poultry can be made only on a through-put basis, which would help producers. In fact, they have to be done on a one-hour inspection. The increased cost to the United Kingdom alone is deemed to be £40-£50 per inspection of each factory. I cannot believe that it was the Council of Ministers' and the Commission's intention to do this. There is also a 1972 poultry meat directive which makes EU and UK producers equally uncompetitive. I just want an assurance from the Council of Ministers tonight that it is not its intention to put our own poultry producers out of business.

Verheugen
Mrs McIntosh, I fully understand your concern, and I think that it will be necessary for the Commission to propose a solution to the problem which you have rightly described.

President

Question No 10 by David Martin (H-1195/98) Subject: Democracy and human rights in Burma
In the light of continuing reports of human rights abuses and the detention of democratically elected MPs in Burma, would the Council raise with the Burmese Government the issue of the 182 elected MPs and 701 members of the National League for Democracy (NLD) who are still held in detention in Burma?
I give the floor to Mr Verheugen to answer Mr Martin's question.

Verheugen
Mr President, the Council's position on this issue is clear. It has repeatedly called for the immediate release of all political prisoners in Burma. It was because the Burmese Government did not respond to this demand, nor to the Union's appeal to the SPDC to promote democracy and national reconciliation, that on 26 December 1998 the Council reformulated its common position on Burma, extending its scope and expressing it in stronger terms.
The Council has also made an attempt to discuss these issues with the Peace and Development Council. The presidency proposed a visit of the ministerial troika to the Burmese Government in the margins of the United Nations General Assembly in September 1998. However, the Burmese Foreign Minister turned down the proposal.

Martin, David
I thank the President-in-Office for his reply. He is quite right to say that the Council has been consistent in its opposition to the regime in Burma. I would ask him to consider, during the German presidency, putting this matter either on the informal Foreign Ministers' meeting or on the Heads of State agenda so that we can look at further measures for tackling this regime. I agree that it is very difficult. We are getting no cooperation from the SLORC regime in Burma but the European Union must continue to put pressure on that regime and the Council should continue to monitor and look at new ways of applying pressure.

Verheugen
Mr Martin has hit upon the presidency's intentions completely with the suggestion he made in his question. We consider it to be quite an important matter. Our concern over the continuing human rights abuses in Burma is so great that I am able to add that the situation will be discussed further among the Foreign Ministers. We will also have other opportunities to discuss this issue during our presidency, and also with the countries in the region.
The aim of promoting the European Union's clear position on human rights and human rights issues in the area of international relations and wherever possible, to not only convey our concern regarding human rights issues, but also to take action to remedy the situation, is an absolute priority for our presidency.

President

Question No 11 by Gerard Collins (H-1199/98) Subject: Expanding voluntary care programmes at EU level for children with disabilities
In the mid-west of Ireland, a voluntary 'Have a Break' scheme - aimed at enabling children with disabilities to have a holiday in the home of another family while their own family can have a break from constant care - has been running since 1987.
Does the President-in-Office consider that such schemes should be extended to other EU countries and, if so, in what way does the Council consider such schemes could be promoted and developed at EU level?
I give the floor to Mr Verheugen to answer Mr Collins's question.

Verheugen
Mr Collins, I regret to have to inform you that the Council has not received a Commission proposal on the promotion of a scheme similar to that which you described, where families provide care for children with disabilities. I can therefore only suggest that the information you require can be obtained from the Commission, if anywhere.

Collins, Gerard
Arising from the reply from the President-in-Office, would he consider requesting a proposal from the Commission on this important matter?

Verheugen
Mr Collins, your suggestion is certainly worthy of consideration, but you know the procedures. It must firstly be discussed in the Council, and only then can such a decision be made.

President

Question No 13 by Liam Hyland (H-1207/98) Subject: Reversing rural depopulation
Does the President-in-Office of the Council consider that the extent of rural depopulation is a cause for serious concern at the level of the European Union and that a comprehensive strategy to safeguard the common agricultural policy and promote new rural development policies should be considered as an essential way of reversing this decline?
I give the floor to Mr Verheugen to answer Mr Hyland's question.

Verheugen
Mr President, the Council has always shown a special interest in matters in connection with maintaining a healthy population structure in rural areas. I should like in particular to point out to Mr Hyland that the employment problem in the rural areas of the European Union is the subject of a letter which the President of the Agriculture Council sent to the President of the European Council in November 1997 in the context of the special employment summit.
This letter focused in particular on the possible ways of maintaining a healthy rural population structure throughout the European Union. A European agriculture model was drawn up in the context of work previously carried out by the Council on the Agenda 2000 proposals. This model, which is to be further developed in the future, is for a multifunctional and competitive form of agriculture throughout the European Union, and also in the regions with specific problems, which is viable in the long term. It is a programme which should in particular be able to make an important contribution to the survival of rural areas.

Hyland
I would like to ask the President-in-Office whether he perceives the role of family farming as representing the backbone of the rural economy. Does he agree that the contribution of farmers to a society cannot always be evaluated in purely economic terms and that their role as environmental managers and guarantors of food security and quality puts them outside the economic realm of other professions?
Finally, does he agree that rural development policy will not achieve its full potential in isolation from integrated regional policy? Is it intended to make it mandatory on national governments to implement such a regional policy, thus providing jobs in the regions to sustain rural communities and provide off-farm employment for farmers who do not have viable farms and other rural dwellers?

Verheugen
I can assure Mr Hyland that I fully understand his question, because I, as a Member of Parliament myself, come from such an area and see the problems at first hand everyday. I can therefore say in principle that the task of maintaining sustainable rural areas is a matter of priority for the Council. We must really make sure that the people in rural areas have the chance of a future. This future need not necessarily be in the traditional areas of agriculture. Opportunities for the future can of course also be created through structural change, as you know very well.
I firmly believe that we will manage to target European Union funds in the area of regional and structural policy even more efficiently on this objective, not least within the framework of the reforms which are being carried out under Agenda 2000. This is a really important objective of the Union's regional and structural policy, in the opinion of the presidency at least. It not only involves making standards of living more equal, but it means that important agricultural landscapes in the rural areas of Europe will continue to offer people quality of life and job prospects in the future as well.

Martin, David
I welcome Mr Hyland's question and the Council's reply on rural depopulation. Would the Council accept that agricultural policy is only one method by which we can assist rural areas? In particular, looking at reform of the structural funds, will he bear in mind that we should not just look at per capita income or unemployment but also at levels of population density and depopulation in determining areas that should qualify for Objective 1? I have in mind here - to be parochial - particularly the Highlands and Islands in my own country. On per capita income, it would not qualify but - given its other problems, particularly depopulation - it should in my opinion remain in the Objective 1 zone.

Verheugen
I completely agree with Mr Martin. The problem which we have just discussed can naturally arise in any of the assisted areas of the European Union, with the exception of urban agglomerations, of course. It can arise in Objective 1, Objective 2 and former Objective 5b areas, and we now need a coherent policy which coordinates and uses all our funds in such a way as to limit the effects of the problem we are discussing.
Moreover, I am firmly convinced that the reform proposals which are under discussion within the framework of Agenda 2000 will considerably improve the quality of life in the countryside as well. The adoption of Agenda 2000 is therefore also a matter of priority for the German Presidency.
In connection with the Employment Pact which Europe is seeking to achieve, it will depend to a great extent on not only bearing in mind the traditional areas of industry or the development of new technologies, but also taking into account in this context the specific problems of rural areas. I am able to add that the German Presidency will give this matter its fullest attention.

Crowley
Following on from the President-in-Office's two responses to my colleagues, Mr Hyland and Mr David Martin, I would like to ask whether you have any proposals with regard to more focused coordination between the regional funds and the rural development funds as a way of ensuring that people in rural areas who suffer because of a drop in income can gain off-farm income through job creation and so on?
Would it be possible to see, through the presidency, whether this type of coordination will take place and would it be possible for the President-in-Office to come back to Parliament and present a proposed model of the type of integration which would take place, at the same time ensuring that there is no reduction in the commitment towards rural development, but also guaranteeing that all of the funding towards employment creation - which is so important for all of us here in Europe - is not just focused on urban areas.

Verheugen
Mr Crowley, I agree with you that this is a very important issue. I can therefore assure you that the presidency is convinced that it will be possible, on the basis of the forthcoming reform of the agricultural policy and as a result of the new impetus which the rural development policy will be given, to develop a second pillar of the common agricultural policy; this second pillar will then be the foundation for a comprehensive and coherent policy for the benefit of the rural population in the European Union. In order to achieve this, it will actually be necessary to achieve greater coordination between the different policy areas and also to establish clear priorities. However, I must ask you to appreciate that we cannot be more precise about this until Agenda 2000 has been concluded and we have started to implement its objectives.

President
Thank you, Mr Verheugen.
As the author is not present, Question No 14 lapses.

President

Question No 15 by Pat Gallagher (H-1211/98) Subject: Fisheries
Will the Council, under the German Presidency, state what importance it attaches to developing the fishing potential of the less-favoured regions, such as Ireland, which have to contend not only with competition from within the EU but also from outside the EU and how it intends to conduct future negotiations with the applicant countries as regards fishing policy?
I give the floor to Mr Verheugen to answer Mr Gallagher's question.

Verheugen
Mr President, first of all, on the issue of Community structural policy, the Council should like to point out that its discussions on the Commission's proposals with regard to reform of the Structural Funds, including the future of structural policy in the fisheries sector, have not yet been brought to a close. Mr Gallagher will be aware that in view of the whole background to these discussions - that is, Agenda 2000 - decisions on these issues are being taken on a comprehensive basis. These decisions will include the future status of regions in the Community from the point of view of their classification according to different objectives and the corresponding financial support provided by the Community in the area of structural measures.
At the same time, the Council would point out that Ireland will continue to enjoy the Community support it currently receives until the end of the next programming period under a phasing out arrangement, no matter what the outcome of these decisions.
On the issue of future enlargement, I should like to remind you of the general position of the European Union regarding the accession negotiations in the area of fisheries when the accession conference was opened on 31 March 1998. According to this, there will be no exceptions whatsoever for the acceding countries when adopting and transposing the acquis communautaire .
If transitional arrangements are agreed, then these must remain the exception, and they must be for a limited period of time and restricted in their scope. They must have a plan that clearly establishes the individual stages of application of the acquis communautaire . It is therefore obvious that these accession negotiations do not involve negotiating mutual concessions, but rather guaranteeing that the applicant countries adopt all of the acquis communautaire , and are also in a position to transpose it effectively.
So that the applicant countries are completely aware of the obligations which membership of the Union involves, an analysis of the acquis communautaire, which is known as screening, is carried out by the Commission prior to the accession negotiations. The applicant countries are currently presenting their negotiating positions on fisheries. The Union will analyse these positions and prepare its response in the first half of 1999. As usual, the Commission will make a proposal for a common position to the Council, and the Council will establish the Union's common position for the negotiations. The content of the common position cannot of course be anticipated at present.

Gallagher
First of all let me thank the President-in-Office for his response. In short I presume it can be said that, in the negotiations, any applicant country will have to comply with existing criteria, and that any transitional arrangements will have to be limited. Unfortunately that is the situation. But can I say this to the President-in-Office: I am sure he will appreciate that in the region I represent - the west and the north-west of Ireland - and indeed the entire Irish coast, we had at one time prolific fishing grounds until these were plundered, not by Irish fishermen but indeed by our partners in Europe. We have learnt a sad lesson from this and I would not wish this on any of the other countries who in future may join the Union.
In the regions and the coastal area of our country, an island state, we have no alternative source of employment. Priority should be given to this in any future negotiations. We will deal with the Irish case in the review of the common fisheries policy, but other small states should learn from the serious situation in Ireland, as a result of fisheries not being treated on the same level as agriculture or indeed industry. Let us learn from the past and let other smaller states benefit from our sad experience.
Reference was made to the Structural Funds, and I should like to ask the President-in-Office whether he believes that Ireland will qualify for the transitional arrangements. He will be aware that we are an applicant for Objective 1 status for the west coast of Ireland, which is very much part of the region that I referred to, but will he also let me have his view on having an Objective 5 or 6 or a specific objective for regions highly dependent on fishing, whether or not the country in question has Objective 1 status?

Verheugen
Mr Gallagher, I am very grateful to you for the advice and information you have offered, and we will naturally take it into account during the current accession negotiations. Also, your country, Ireland, is participating in the accession conference and has every possibility to raise the national and supranational viewpoints you have described during the negotiations. I also firmly believe that this will be done. However, I am not in a position at present to tell you anything about the implementation of the redefinition of assisted areas, or the criteria which affect assisted areas, as the decision of general principle has not yet been taken. The individual Member States have obviously established their own positions. However, as you already know, the Council has not yet stated its common position with regard to Agenda 2000. I would therefore have to rely on assumptions at the present time, and making assumptions unfortunately serves no purpose in this case. We must continue to be patient and wait until Agenda 2000 can be concluded. However, it might be important for you to know that the presidency has agreed to exchange information and cooperate closely with Parliament on a particularly intensive and regular basis during the current decision process.

Killilea
I should like to thank Mr Gallagher for the question and the President- in-Office for the very positive response. As you are a new and fresh man in this particular position, may I also remind you, concerning the question of conservation, that somewhere in a cupboard in the Council or the Commission there is a very important scientific report concerning seals and the living resources in the North Sea.
I appeal to you, President-in-Office, that during your six-month presidency you take that report out, have it reviewed, its consequences applied, and hold a very fresh and open debate on this most serious matter. It is a reliable fact that the seals in the North Sea are eating more white fish than the total allowable catch by the European Community. It is a very serious matter. It is a matter which necessitates immediate consideration and an open and frank debate, before all the stocks are taken by the seals.

Verheugen
Mr Killilea, I see that your question is an attempt to help the presidency carry out its task. I am grateful to you for this, and I can assure you that the information which you have just given me, and the political problem to which you refer, will be taken into account during the current negotiations.

President
Thank you, Mr Verheugen.
As the author is not present, Question No 16 lapses.

President

Question No 17 by Brian Crowley (H-1215/98) Subject: The fight against organised crime
Will the President-in-Office of the Council provide an outline of the policy issues which it proposes to pursue in relation to the fight against organised crime, its position on the consumption of drugs, and the way it would like to see EUROPOL's role developed?
I give the floor to Mr Verheugen to answer Mr Crowley's question.

Verheugen
Mr President, as far as organised crime is concerned, it is the presidency's intention to actively promote the implementation of the action plan approved by the European Council at its meeting in Amsterdam in June, and to start discussions on stronger measures to fight organised crime in accordance with the request made at the Vienna European Council, as well as to guarantee the unrestricted protection of civil rights.
In connection with this, the Council will examine measures to step up the fight against fraud and counterfeiting. On the basis of the Communication from the Commission on a framework for action on combatting fraud and counterfeiting of non-cash means of payment, discussions on an instrument of criminal law in this area have already been started. The work begun under the Austrian Presidency on the protection of the euro under criminal law is being continued and intensified. Moreover, the German Presidency will take an initiative under criminal law against fraudulent activity in awarding contracts in the internal market.
Particular attention is being given to creating a European legal and judicial area in accordance with the Amsterdam Treaty. This European legal and judicial area will be, or is meant to be, equipped with instruments which are necessary for effective judicial and police cooperation. The presidency will arrange initiatives which will make it possible for the Council to closely examine to what extent and in which priority areas some form of approximation or harmonisation of the Member States' laws could help to fight organised crime.
Furthermore, the presidency will actively continue the discussions on the Convention on Mutual Legal Assistance, which will be an important instrument for officials working on the ground to fight organised crime. The effective operation of the European judicial network and the mechanism set up by the Council for mutual assessment will also be priority issues for the presidency. The German Presidency is particularly concerned to see Europol take up its duties. As the agreement entered into force on 1 October 1998, we are making every effort to remove the remaining legal obstacles so that Europol can take up its duties.
In this context, it is of prime importance to clarify the questions which remain unresolved in terms of the adoption of rules for the joint data protection monitoring agency. Europol will take up its duties on the basis of a mandate which in the end was extended to include terrorism and certain aspects of trade in human beings. Its mandate is soon to be extended to cover criminal offences such as counterfeiting of coins and banknotes and of other means of payment. The German Presidency also intends to make a start with the discussions on the development of Europol in accordance with the Amsterdam Treaty. In connection with this, consideration needs to be given to the role and duties falling to the judicial authorities in their relations with Europol in view of the extension of Europol's powers.
As regards the drugs problem, the German Presidency will actively continue to pursue the current initiatives, particularly in connection with Latin America and Central Asia. In addition, great importance is attached to the development of a strategy for the period following 1999, under which measures to reduce demand will play an important role. This role was confirmed at both the recent meeting of the United Nations General Assembly and the conference which followed it in Vienna in December 1998. The European Monitoring Centre for Drugs and Drug Addiction is a very important player in the campaign to reduce demand.

Crowley
I would like to thank the President-in-Office for his response. Indeed, I am delighted to hear that he sees Europol's role as being central to the development of the fight against organised crime on a pan-European level. I hope that the presidency will have the opportunity to expedite the removal of the remaining difficulties, by bringing fully into play the role and opportunities available through Europol's operational capabilities.
However, I was somewhat disappointed at your lack of response on the matter of consumption of drugs. The increasing use of drugs is one area where there is common concern across all Member States. Bland statements such as 'reducing demand is an important aspect' is not good enough. What we want to hear from the President-in-Office to day are specific measures for a common European strategy to save the future generation from dying from the effects of drug abuse.

Verheugen
This is a very difficult issue. Mr Crowley, you know of course that a special summit of Heads of State and Government on the subject of organised crime is planned for the second half of this year under the Finnish Presidency, and that the issues you mentioned in connection with the fight against drugs will also play a central role in the preparation for this special summit. However, in cooperation with the Finnish Presidency we will do our bit so that the preparatory work for this is under way and so that the decisions we are currently in a position to make can be made at this special summit. This limitation relates to the fact that we can obviously only make decisions which are in keeping with our capabilities, our resources, our instruments, and our institutions.
The presidency wholly shares the political assessment on which your question was based. We consider the fight against drug abuse to be a key task of domestic policy in Western countries, and indeed in all countries. It is naturally also a joint task which we should tackle - as far as possible - within the framework of the European Union.

President

Question No 18 by María Izquierdo Rojo (H-1217/98) Subject: Agenda items for the forthcoming Euro-Mediterranean Summit in Stuttgart
What measures or proposals are being prepared in order to give substance to the 'new impetus' to be applied to the Euro-Mediterranean Partnership, as referred to in paragraph 116 of the conclusions to the Vienna European Council? What new suggestions are likely to be put forward at the Third Euro-Mediterranean Conference, to be held in Stuttgart in April 1999?
I give the floor to Mr Verheugen to answer Mrs Izquierdo Rojo's question.

Verheugen
Mr President, please excuse the fact that this answer will also be relatively long, because it is a very complex issue. Mrs Izquierdo Rojo, the Foreign Ministers' meetings which are held regularly generally serve to examine whether the Barcelona Declaration is being applied, and to define measures which make it possible to achieve the objectives of the partnership, as laid down in the Barcelona Declaration itself.
The work of the conference in Stuttgart will therefore cover all three chapters of the partnership. As at the previous Euro-Mediterranean ministerial conferences, the participants should confirm their total commitment to the partnership, examine the results which have already been achieved, and give new impetus by laying down new guidelines. The importance of the partnership's balanced development in all three chapters of the Barcelona Declaration and its work programme should also be emphasised.
As in the case of the second ministerial conference, the Council expects a Commission communication this time as well; this should be available at the beginning of March, and will serve as the basis for establishing the EU's position for the conference in Stuttgart. Close cooperation with our Mediterranean partners will continue to be necessary in order to guarantee a successful outcome at the conference. Within the framework of the economic and financial partnership, particular importance should be attached to the work carried out by government experts on economic transition and the overall view, which covers issues of free trade and the effects of economic transition in the region in accordance with the conclusions of La Valetta. This will serve as a basis for the discussions on the future strategy.
In this context, the Council continues to hope that the negotiations on an association agreement with Egypt and Libya can be concluded before the ministerial conference in Stuttgart, and that progress can be quickly made on negotiating agreements with Algeria and Syria, in order to achieve the objective of creating an area of shared prosperity. Moreover, the Euro-Mediterranean Conference on regional cooperation, which is being held on 28 and 29 January in Valencia, will prepare for the discussion of various aspects of regional cooperation at the conference in Stuttgart.
The EU's programme for these discussions will essentially be based on the Council's conclusions concerning the Communication from the Commission on the Euro-Mediterranean partnership and the single market. The Council continues to expect proposals for the renewal of the MEDA regulation, MEDA 2 covering the period 2000-2004, including proposals for the simplification of MEDA procedures, which the Commission should present before the conference in Stuttgart. The Council pays particular attention to achieving the political objective of creating a Euro-Mediterranean area of peace and stability. At the ad hoc ministerial meeting in Palermo on 3 and 4 June 1998, an integrated approach for regional stability was adopted, and it was made clear that we need to devise a common understanding of the factors which can, according to general consensus, contribute to a regional stability programme of this kind.
These factors include terrorism, organised crime, proliferation of weapons, illegal entry of immigrants, socio-economic challenges, prejudice, racism and xenophobia. Furthermore, the Euro-Mediterranean partners will concentrate their efforts on drawing up a charter which contains the elements mentioned, and which will help to create a stable political and institutional framework for the whole region.
The creation of an area of shared prosperity will make it possible for the Council to firmly support common values that should be recognised and applied by all Mediterranean partners. With this in mind, the Council will work to ensure that greater attention is paid to human rights and fundamental freedoms as crucial elements of security in the region. Without a political framework, the economic, social and cultural progress in the Euro-Mediterranean region will not be sustainable. The Council will work energetically towards the adoption of the charter which I have referred to.
The conference in Stuttgart could give a lasting impetus that allows us to move a little bit closer to achieving this objective.

Izquierdo Rojo
It seemed as if the President-in-Office was talking and was saying something, but in fact, he said absolutely nothing. He did nothing more than make empty general statements that we had heard before
It is truly disappointing, Mr President-in-Office, to listen to a question from Parliament being answered in this meaningless bureaucratic tone. As someone who, in just over four minutes, said nothing, please now answer a question for me, and I only have one minute to ask this question. I want you to be more specific about something that is extremely important in the Mediterranean.
I would like to know what the German Presidency is going to do, as far as Algeria is concerned, to combat fraud, corruption and abuses of power. Above all - and this is a very important matter - how is it going to defend the human rights of the Algerian people? How are you going to safeguard the right to life of the dying rural population in Algeria - where 20 people died today, 20 yesterday and 40 the day before that - if the Council of the European Union does not take the hint, not even to say that it will take some action?

Verheugen
Mrs Izquierdo Rojo, I am sorry that you are so unhappy with my answer. However, I would ask you to understand that I must report the positions which are supported by 15 countries. Surely you realise as well as I do that one of the Union's problems is that we do not have a common foreign and security policy in the stricter sense. Answers such as that which I have just given you are the result of this situation.
Such an answer does not reflect the capabilities or intentions of the presidency; it reflects the state of affairs in the European Union in the area of foreign and security policy. I assume that you see this in exactly the same way as I do.
The presidency is obviously not in a position to change internal relations in Algeria. It is merely in a position to exert an influence - by continuing the intensive political dialogue which has already been started with Algeria - on the improvement of relations with regard to democracy, human rights, rule of law, and fair social development. I can assure you that the German Presidency will work towards this in this dialogue.

President
Thank you, Mr Verheugen.
Mr President-in-Office, ladies and gentleman, we have reached the end of, and indeed gone beyond, the time set aside for questions to the Council. I should therefore like to thank Mr Verheugen for being here and for his political contribution. I wish him the very best for the coming year, particularly the six months we will spend together. That concludes Question Time.
Questions Nos 12 and 19 to 29 will receive written answers.
The sitting was suspended at 7.10 p.m. and resumed at 9 p.m.

Application of Article 93 of the EC Treaty
President.
The next item is the report (A4-0418/98) by Mr Areitio Toledo, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the proposal for a Council Regulation laying down detailed rules for the application of Article 93 of the EC Treaty (COM(98)0073 - C4-0160/98-98/0060(CNS))

Areitio Toledo
Mr President, this evening in the privacy of this Hemicycle we are going to debate an issue with the Commissioner which, in spite of the fact that there are very few people present, is very important. The issue of State Aid and the need to control it has been a longstanding objective for the Commission and for the whole European Union. Such aid distorts competition and free trade, hinders industrial restructuring and impedes the achievements of the stability pact.
The total volume of State Aid awarded is by no means insignificant, and I should like to remind you of the amount involved. We are talking about figures approaching 1.5 % of Community GDP. We are talking about 2.6 % of public spending in national budgets which, compared with the Community's own budget, is even higher. And I believe that this cannot be tolerated within the framework of monetary union.
Unfortunately, due to the Treaty, the Commission only has the necessary authority to control such aid on an individual basis, analysing the compatibility of each case with the Treaty. It is obvious that the resources available to the Commission to carry out such controls on each situation where aid is granted or on each aid scheme are clearly inadequate. As I was able to point out on other occasions, I believe that in the long term there will be a need to put a global limit on the total volume of aid awarded by each Member State. Indeed, Parliament has already approved this approach in various resolutions. If this does not happen, then tensions will develop within monetary union. It is true that if there are weeds growing in a garden they can be pulled up one by one, but if there are too many weeds, then it is best to use weedkiller.
In any event, the Commission was aware of this problem and it began to reorientate the State Aid control policy at the end of 1996. The aim was to reduce the number of cases to be investigated and to improve the efficiency, transparency and coherency of the control procedure. To this end, the Council adopted a financial regulation in November 1997 which allowed the Commission to exempt the Member States from declaring certain categories of aid, such as for small and medium-sized enterprises, for research and development, regional aid, aid for employment, aid for training, and so on.
The Commission's proposal for a regulation that we are considering today is the second stage of this reorientation which the Commission's new direction is based upon. The aim of this regulation is to establish a clear procedure, which has never existed before now, to be applied to the Commission's control procedures for State Aid. In short, it is a matter of increasing the transparency of this procedure and the legal certainty of those involved.
I must say that the Commission should be congratulated on this initiative that will undoubtedly make the control procedure easier, both for those who enforce it as well as for its victims. With this very objective in mind, the rapporteur has suggested three amendments to the text which the Committee on Economic and Monetary Affairs and Industrial Policy has adopted and which simply seek to strengthen the guarantees of transparency and legal certainty and to eliminate some aspects of the proposal which we believe to be of a discretional nature.
In any event, the need to give the Commission prior notice and the principle of suspensory effect, laid down in Article 93(3), remain central to the control policy.
I am not going to go into detail on the amendments. I believe that the Commission is already aware of them and, in addition, they were also debated in the Council.
I trust that the contribution we have made with this report will help towards improving the State Aid control policy and I trust that State Aid will be more strictly controlled. But I cannot fail to highlight, as I have said before, that when weeds grow too wildly in a garden, pulling them up one by one is ineffective. I must also point out that, sooner or later, this issue will also have to be dealt at macroeconomic level within the stability pact.

President.
Thank you very much. That is a good example from colleagues. Perhaps we will not go beyond midnight.

Rapkay
Mr President, ladies and gentlemen, looking around me I realise that my three minutes would still be pretty much intact even if I were to greet everyone in the Chamber individually! But time is precious at this late hour and I shall not be needing to use up my ample allowance of minutes on too many questions of substance. Let me explain why.
Firstly - as we have seen on many similar occasions - there is no fundamental disagreement among the big political groups in Parliament on the substantive issues of competition policy. Unanimity reigns. As to this particular matter, we may have argued in committee over a few minor points, but in the end we reached a uniform, consensual view. We all share a desire to see procedures clarified and decisions taken in a transparent way.The Commission needs to see its position as a competition authority consolidated and its supervisory role in the field of aid strengthened. I can go along with the rapporteur on all these issues.
I would make one point, however. Not surprisingly - looking at the clock - no one from the Council is to be seen. Our much-esteemed Competition Commissioner is with us, however, and perhaps he can enlighten me. I am keen to establish what precisely we are doing here tonight. It is not the content of the debate that worries me, but the form. We have come together to deliberate over a text; tomorrow we shall be voting on our amendments. As far as I can see, however, we have been overtaken by events. The actual decision was taken two months ago in the Council. So I am wondering where we as a parliament come in. Perhaps it is true that our views have been taken into account, but what about the points which were not heeded?
Article 14 - in the Council's version of the text - contains a paragraph which refers to the suspension of recovery proceedings. This paragraph was unanimously rejected in committee. I happen to know, because the relevant amendment came from me and, as shadow rapporteur for my group, I managed to get all my points through. The committee expressly voted against this paragraph, but it figures in the Council text. What happens now, Commissioner? Could it be that we are simply engaged in intellectual gymnastics? This is what concerns me. Maybe we need to rethink our own procedures. The horse would appear to have bolted; it seems rather futile for us to be discussing the angle of the stable door.

Metten
Mr President, the time when my group thought state aid was the ideal solution is long past, and we now support the Commission's current view that state aid should be allowed only in special cases, such as for regional aid or research. But even here we must be careful. Regional aid must not be allowed to lure jobs from one area of the Union to another, and research support must not become state aid for businesses by another name.
However, it has to be said that state aid is still being granted on a considerable scale, even to firms that do not represent the public interest. Some of it is traditional aid that the Commission has tolerated or even approved up to now, and some is illegal support. I have to say that it is very hypocritical of the Member States to support the generally rather restrictive policy on state aid, but then to make difficulties about claiming back aid that has been granted illegally. As I see it, punishing abuses is all about showing credibility and effectiveness. This also applies in my view to state aid in the form of tax concessions. Demanding repayment means of course that the state has to get money back from individual firms, and it is rather ironic that the governments should be worried about this.
Regarding the fiscal aid that the Commission has tolerated up to now, I would heavily criticise the Commission decision published in the Official Journal of 18 December last year, which classifies Ireland's extremely low corporation tax that applies only to foreign undertakings as aid for exploitation and distortion of competition, but at the same time allows it to be extended until 2003 or even 2010. The Commission is clearly being far too lax and inconsistent. It is time to put an end to these sorts of practices.

Sindal
Mr President, ladies and gentlemen, Commissioner, I shall be brief. As previously mentioned, the matter has already been discussed in the Council, but I would like to mention something that was also touched on by Mr Metten, namely that there can be extenuating circumstances in connection with state aids. What we are talking about is employment. I would like to emphasise that aid should be given during periods of restructuring, and that it should always be temporary. I would also like to emphasise that it has been found that when people decide to remove the aid and to develop businesses instead, then jobs are in fact created. So some of our competition money could well be used for development rather than aid. I hope that when the Commission comes to simplify the administration of Article 93, it does not turn a blind eye to problems. I realise that Mr Van Miert does not have so many people at his disposal, but I hope that it will be a good and effective simplification. I am particularly pleased that on-site checks are being proposed. I think that is a good thing, which could make this more effective and transparent and improve legal certainty. I also think it is good for countering national bureaucracy and bad faith.
It is very difficult for a country to admit that it has made a mistake. I know that from Denmark and from Germany. We have had a lot of cases in shipbuilding, but as politicians we must all commit ourselves to looking forward. I believe that what is on the table, even if it has now been dealt with in the Council, is a good way forward. I also believe that, year by year, we should look at how it can be improved. What the Council has arrived at this time could perhaps be improved next year, because we are always becoming better or more skilful at administering these rules. I would therefore like to wish the Commissioner and the Commission good luck in future, and point out that Parliament supports the Commission in this area.

Van Miert
Mr President, as the rapporteur said just now, we are discussing this dossier here, which is nevertheless an important one, in what is almost an intimate atmosphere.
Firstly, my sincere thanks to our rapporteur, Mr Areitio Toledo, and those who have spoken in the debate. In a way, we are discussing this subject amongst ourselves, amongst people who are familiar with it and want to improve things, a desire which is not new. We have been trying for years to work together to achieve better discipline in the monitoring of state aids, to improve the procedures, to be more transparent and better balanced. On this or that point - and I shall reply to Mr Metten presently - we do of course have differing views. Opinions will not necessarily be the same on how this or that affair should be managed. But I think I can say, generally speaking, that despite the sensitive nature of the subject of state aids, there is - if not a consensus - at least the feeling that by and large things are moving in the right direction.
This is our second initiative on the basis of Article 94, and you will remember that we made one attempt before without success. This time we have managed to agree two proposals and, between ourselves - since we have been debating privately among friends, as the rapporteur said - we have done it far faster than I had expected. And, Mr Rapkay, that rather explains our problem. A proposal which was put forward several months ago was in the end dealt with very quickly by the Council of Ministers. I was very surprised by this, because initially there had been disagreement on it. I had myself been present at the Council meeting when the Council considered this matter for the first time, and I threatened to withdraw our proposal because there was no support for it. And now, a few months later, to my astonishment, the Council of Ministers adopts our proposal on the substance in five minutes flat. There are lessons to be learned from all this - for Parliament first of all, in that it might perhaps work rather faster in cases of this kind, and for the Council of Ministers too, which might sometimes be encouraged to work more quickly.
Having said that, I think in essence that what was agreed in principle by the Council is very broadly consistent - and I stress very broadly, Mr Rapkay - with what Parliament has always said. For the first time, in fact, we shall have a truly transparent procedure. So this was a kind of inaugural act, an act which was necessary. It will enable us to work against a background of greater clarity and transparency and will enable others to understand the procedures better: I think that is in everybody's interest.
I should now like to reply to one or two specific comments. One problem in particular, Mr Rapkay, is of great concern to us. Once the Commission has decided against, which as you know it is doing more and more often, the Member State or authority which granted the state aid has to recover that aid. Most Member States do just that, but in some of them it is extremely complicated. In Germany, for example, the matter may be referred to the national courts and can drag on for years. This leads to a certain discrimination between Member States. We have tried to correct this, because there has to be consistency in implementing Commission decisions throughout the territory of the European Union. This is why we have battled over this.
Another point concerns on-the-spot checks of compliance with the conditions which are sometimes attached to the decision to grant state aids. Such checks are carried out, for example on shipyards. But in other sectors too, it is sometimes necessary to be able to check whether the undertakings given are indeed being respected. These are a few examples which prove that things are improving.
That said, I know that the question arose in Germany as to whether the Commission can do something which is not in accordance with national law. That needs to be discussed, because once again, if the Commission's decisions are implemented in most Member States but not in one or two others, there is a problem. Those who do carry out the decisions will say 'yes, but look at what these other countries are doing, payments wrongly made are not being recovered'. I come up against this problem more and more. I have to say that in all honesty. More and more I am asked 'if the others are doing that, why shouldn't we?' I feel I have to point that problem out.
My time is limited, Mr President, so I must finish, and in concluding I would address myself particularly to Mr Rapkay. I think most of the amendments were agreed in the end so that we have reason to be satisfied, even if it is somewhat after the event. On one or two points, I cannot allay your concerns, because we do not agree, as is sometimes the case. But overall, I think I can say that this arrangement satisfies the wishes of the European Parliament.
In reply to the last question put by Mr Metten it is true that we were in a special situation because in the past, rightly or wrongly, the Commission accepted this system. It goes back to the time of Ireland's accession. So the situation was, I repeat, one which the Commission accepted at a given time. It could not be ignored. And there are established rights. What we tried to do was to end that system after a transitional period. And that is what was agreed.
Another question is what the rate will be for companies. This is a more general debate which is part of the issue of fiscal harmonisation, because once you are talking about a general measure you are no longer talking about state aids. Thus we told the Irish authorities that the system as applied in the past was no longer acceptable, just as we shall have to tackle a whole series of other fiscal aid dossiers, some of which were also accepted in the past. So there too, solutions will have to be found for other dossiers which have never been notified, which have never been accepted by the Commission. We shall have to be tougher, stricter, that much is obvious. But I am sure that we shall discuss this again on future occasions.
My last point, and the rapporteur raised it, is that this lovely lady sitting next to me is part of the team of officials who handle dossiers of this kind. But as you know, we are seriously short of staff to do all the work. There are 30 or so 'fiscal aid' dossiers pending, and I do not have the human resources I need. We have to find taxation specialists to administer these dossiers. So once again I make the plea, but I know that you share my concerns here: when you have a new field to cultivate, but not the means to do it, you cannot work miracles. We are faced with a mountain of dossiers, and the human resources available to us are laughably inadequate. I have to say: do not be angry if we cannot process all these dossiers in a period of a few months. But I know that I am preaching to the converted here. All I can do is restate the problem in the hope that you may perhaps, in other places, give us a helping hand to get the minimum of personnel we need to manage our dossiers.

President.
The debate is closed.
The vote will be taken tomorrow at at 11 a.m.

Right to deduct VAT
President.
The next item is the report (A4-0490/98) by Mr Garosci, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on
I.the proposal for a Council Directive amending Directive 77/388/EEC as regards the rules governing the right to deduct Value Added Tax (COM(98)0377 - C4-0474/98-98/0209(CNS)); II. the proposal for a Council Regulation (EC) on verification measures, measures relating to the refund system and administrative cooperation measures necessary for the application of Directive 98/xxx/EC (COM(98)0377 - C4-0475/98-98/0210(CNS)).
Garosci
Mr President, I am pleased that Mr Van Miert has called for a human and social interpretation even of fiscal and economic problems. This House will undoubtedly provide the assistance he is seeking. Besides, the matter under discussion this evening, concerning value added tax, is of no small consequence for the harmonisation which we are seeking at this very time in launching the single currency.
The Commission's document contains two closely related proposals, both aiming to improve the common VAT system. The present lack of uniformity in this system directly results in the fragmentation of what should be a single market, or rather an internal market, as we prefer to call it.
The fact that it is impossible to know about all the VAT provisions in force in the other Member States means that taxpayers have to operate in a situation of legal uncertainty, which provides those who know how to exploit it with the opportunity of creating a competitive advantage, which in effect constitutes a distortion of competition.
It is important to stress that these proposals are merely provisional, pending the entry into force of the definitive rules governing the common VAT system based - as we all know - on the principle of a single place of taxation and deduction.
The Commission takes the view that at present the best way to simplify significantly the common VAT system is to authorise taxable persons to deduct the VAT paid in another Member State in the periodic VAT declaration submitted in the state of residence. This proposal requires an amendment to Article 17 of the sixth VAT directive introducing a regulation governing relations between Member States as regards compensation and VAT refunds and revoking the special VAT refund procedure described in the eighth VAT directive.
The effects of this proposal for taxable persons residing in the Community are that, if the taxable person is identified for VAT purposes in a single Member State, the VAT is deducted there, irrespective of the Member State in which he incurred the VAT-bearing expenditure. If the taxable person is identified for VAT purposes in several Member States, then if he is identified in the Member State in which he has incurred the VAT-bearing expenditure, the VAT is deducted in that state. If the taxable person is not identified in the Member State in which he has incurred the VAT-bearing expenditure, the VAT is deducted in the Member State where he supplies goods or services for which the expenditure is used. Hence, the amount of VAT eligible for deduction will be determined in accordance with the rules of the Member State of residence, rather than of the Member State which collected the tax.
This proposal introduces a derogation from the eighth VAT directive by establishing that the Member State of purchase will be responsible for verifying that the VAT has actually been paid, whilst the Member State of deduction will be responsible for monitoring the actual deduction of the tax.
The second part of the Commission proposal concerns expenditure which is not eligible for full deduction of VAT. This is expenditure which, even when incurred as part of the normal running of a business, is often intended to meet private needs too, because it has the characteristics of final consumption. At present, most Member States exclude or limit the right to deduct by simplifying the administrative procedures and limiting the opportunities for tax fraud. Only three Member States - Germany, Luxembourg and the Netherlands - guarantee the right to full deduction, the only exception of course being expenditure which has no business element.
The Commission is proposing harmonisation of the different national rules, whilst leaving the individual Member States a margin for discretion. As regards expenditure relating to passenger cars, generally speaking the normal deduction rules apply. The only exception provided for is if it becomes difficult to ascertain the non-business use of the vehicle, in which case the Member State is entitled to limit the deduction to a maximum of 50 % of the total VAT applied, thereby obviating the need to monitor whether a vehicle is actually used for business purposes or not. If the percentage of business use is not as high as the percentage of the ceiling for deductible VAT, the deduction is made according to the normal rules.
Finally, so-called 'business tourism' - conventions, congresses, business travel and so on - accounts for approximately 20 % of the total turnover of the tourism sector and plays an increasingly substantial role in it. The business sector is of both economic and social importance, and makes tourist activities and resorts less dependent on holiday seasons. In other words, the choice of a seaside, mountain, lake or other location for a business congress outside the tourist season enables such locations to be revitalised even in the off season or low season.
The national legislation of only eight countries out of the 15 allows use of the option provided for in the Sixth Directive No 388 of 1997. It would therefore be logical to make VAT deductions the same in all the Member States with regard to hotel and restaurant expenditure. Finally, the Commission considers that expenditure on luxuries, amusements or entertainment should be totally excluded from the right to deduction.
I believe that we and the Commission should be guided by this logic, given that a single currency ought to dovetail with a single fiscal, taxation and banking system. That is true harmonisation.

Randzio-Plath
Mr President, ladies and gentlemen, I warmly commend the way in which the Commission has used this proposal for a directive to simplify significantly the procedures governing the right to deduct value added tax. This will assist the further harmonisation of VAT in the Union. In future, taxable persons registered in one country only for the purposes of value added tax will quite rightly be entitled to enter the deduction directly on the periodic tax returns which they complete in their country of residence.
The actual place of supply of the services to which the expenditure relates is not the key element here. The level of the deduction depends, as one would expect, on the rules applicable in the Member State of residence. If, however, a company is identified for VAT purposes in several countries, and has outgoings in one of them, the right to deduct value added tax will also be granted in the country of purchase. Where the company has no VAT registration number in the Member State in which the expenditure is incurred, the deciding factor will be the place where the services to which the expenditure relates were supplied, bearing in mind that the deduction is linked to that expenditure.
Henceforth, value added tax will no longer be deductible solely in the Member State in which turnover is taxed. Businesses and tax administrations alike are set to gain from this new situation. The current reimbursement procedure under the eighth VAT directive is far too complicated and bureaucratic. It has meant that companies were generally obliged to hire local tax consultants and endure a long wait for refunds. Every application outside the framework of the standard tax return has to be considered individually at the moment; this takes up the tax authorities' time and creates additional red tape.
Against such a backdrop, the bilateral approach to debt compensation and refunds envisaged in this proposal certainly promises to be more efficient. Member State 'A' notifies Member State 'B' of the amounts it has deducted over the previous six months. The two states then work out what they owe one another; there is no need for a costly and time-consuming clearing procedure. The multi-phase monitoring system ensures that tax administrations are not called upon to take an immediate and final decision on deductibility. The first stage corresponds to the assessment performed by the Member State granting the VAT deduction. This state electronically informs the state in which the expenditure was incurred of the amount of turnover for which a deduction was allowed pursuant to Article 17(3)(a). Provision is rightly made for eventual irregularities to be reported; the Member State uncovering a problem must notify its counterpart within three months of having obtained the relevant information. The authorities which granted the deduction will then check whether this was legitimately obtained.
I welcome harmonisation of the rules governing deductions for expenditure of a dual business and private nature - on company cars or business trips, for example. There are currently many different yardsticks used in assessing borderline cases - witness all the various provisions in national law and the different ways in which they are interpreted nationally by the tax authorities. A single market cannot afford these variables; too often the result is that the tax due is not paid. In future, outgoings on cars will be covered by the standard rules, which is right and proper. I also think it wise that Member States should be allowed to limit the deduction to a maximum of 50 % of the tax applied. Where problems arise with establishing levels of private use, this ceiling will be calculated on the basis of maximum estimated business use.
The other solutions envisaged succeed in addressing the problems. With business travel in particular, it is certainly the case that action is required on the flat-rate deduction of 50 % in respect of accommodation costs.
While it is to be welcomed that this proposal for a directive remedies some of the shortcomings of the transitional system, I would not wish that fact to be used as a pretext for shelving the idea of a definitive new regime. The Union needs uniform arrangements in terms of structures, definitions, procedures and monitoring. The country of origin principle must become the basis for taxing turnover everywhere; we also need a single clearing procedure. This is essential, given the differing interests of the various Member States. The dawning of the age of economic and monetary union does not necessarily demand total tax harmonisation, but VAT is one charge that can be dealt with in a uniform fashion. As we speak, untaxed goods are circulating through the commercial channels, effectively depriving the EU exchequer of over 700 billion euros. That is too high a price to pay.

Secchi
Mr President, I wish to begin by expressing my support for this proposal and congratulating the rapporteur, whose arguments I fully endorse.
I should like briefly to explore three points. Firstly, I believe that - as has already been said - this proposal has the great merit of helping to simplify the VAT system by allowing the right of deduction in the country of residence in certain cases. In one sense, therefore, over and above the advantages already highlighted, it also represents something of a bridge towards the definitive system.
Secondly, I would take up the rapporteur's point concerning the right of deduction and the need - especially in certain areas - to harmonise the different Member States' systems. I too would emphasise the fact that business tourism is penalised in Italy - but not only there - from this point of view. Such tourism is clearly at a disadvantage, in that the existing rules are not only incompatible with the elaboration of a broadly harmonised, definitive VAT system in Europe, but they are also unable to compensate for the serious distortions currently burdening a sector which can provide a large number of jobs, to the benefit of local economies adversely affected by seasonal factors.
My third point ties in with what I have just said, namely the need to step up our efforts to make the VAT system more compatible with the aims of job growth and economic development. Because time is short, I would merely draw attention to the fact that the proposal to introduce on an experimental basis a reduced rate of VAT for non-commercial activities - ones unlikely to distort competition but likely to boost employment - has faded away. Quite frankly, I find it increasingly difficult to understand the inactivity in this area.

Gallagher
Mr President, at the outset I should like to congratulate Mr Garosci on the preparation and indeed on the presentation of his report. We live in an internal market operating within the Union, with the free movement of goods, services and capital across the territories of the 15 Member States, covering a population of nearly 250 million people. There is no common VAT system operating within the Union at this time and this lack of uniformity at this time has led to the fragmentation of the working of the single market across the 15 different fiscal areas. The fact that it is impossible to know all about the VAT provisions in force in other Member States of the Union means that taxpayers have to operate in a situation of legal uncertainty as well as having to work with different bureaucratic structures.
VAT is one of the areas covered by the second phase of the SLIM initiative, in which the Commission has shown considerable interest. In particular, SLIM has identified the need to bring in more simple VAT refund procedures, which would assist businesses across the Union in the payment of refunds for the sale of goods and the provision of services. This is to be welcomed. As part of the ongoing work to improve the common VAT system the European Commission has put forward proposals concerning the rate for deducting VAT costs that have been incurred, seeking to change the current system by which traders have to go through exceedingly complex and costly procedures to ask for a refund from the tax authorities in the Member States in which the VAT was incurred. This will be replaced with the simpler system under which companies can use their regular VAT returns to deduct VAT incurred in another Member State.
I support measures which help businesses to prosper and operate more effectively within the territories of the Union. The European Union must introduce fair and definite rules governing a common VAT system based on the principle of a single place of taxation and deduction.
Any proposal to simplify the tax procedures does not necessarily mean harmonisation of taxes. To simplify tax procedures is indeed to be welcomed.

Hautala
Mr President, my group also supports the Commission's proposals for simplifying the VAT system among the fifteen Member States. But as far as deducting VAT is concerned, we actually think the Commission's proposal is more sensible than what the Committee on Economic and Monetary Affairs and Industrial Policy is proposing. We believe we have to distinguish between business travel and private travel and recognise that travel is very often dual-natured. So we support the Commission's proposal that there has to be a limit to any deduction, for example 15 %. The hotel and catering sector has obviously appealed to the parliamentary groups that business travel hotel and restaurant expenses should be deductible in full, but, in our opinion, that is not reasonable because of the possible dual nature of the expenses, as I said.
However, the hotel and catering sector in itself is vital for employment and Member States should now be able to experiment with lowering VAT to give support to employment in these areas. In our opinion, the Member States should undoubtedly seize this opportunity. It is quite clear that jobs in the future will be created ultimately in service industries and the hotel and catering sector is an important example of this, but it would be a mistake if business travel costs were made entirely VAT-exempt.

Metten
Mr President, in this case my group supports the Commission rather than the rapporteur's amendments. We recognise the importance of VAT as a possible way of promoting employment, but we do not support a policy in which certain sectors are promoted on an ad hoc, arbitrary basis.
We are certainly in favour of objective and transparent experiments to find ways of using VAT to promote employment. The Commissioner knows what I am getting at here. After Parliament's innumerable calls for this to happen, the European Council in Vienna finally asked the Commission to put forward proposals on experimenting with low VAT rates for labour-intensive services.
I would ask the Commissioner when Parliament can expect to see this proposal. You know that this is a subject to which Parliament attaches great importance, and I would urge you to ensure that before this Parliament is dissolved we are given the opportunity to approve a Commission proposal on experimenting with low VAT rates for labour-intensive services. This means that you would have to come up with something concrete either this month or next, which you could do perfectly easily, because we have already had extensive negotiations on this issue and we are, I think, largely in agreement that it must be limited to a number of very labour-intensive sectors. We already agree on the approach, so I think the proposal is actually already there. I would therefore urge you most strongly to ensure that we receive the proposal in the next few weeks.

Thyssen
Mr President, in an internal market where borders no longer exist and where we have now had a single currency for thirteen days, it is not logical that traders wishing to reclaim their VAT should have to apply to each separate Member State where they have spent their money. The result, as we know, is that because of all the red tape involved many of them give up their right to deduct VAT, which is certainly not the intention.
Business people have been waiting for a long time for the rules on reclaiming VAT in other Member States to be harmonised, and harmonisation is certainly something to be welcomed, so we agree with the Commission's proposals here. They represent genuine progress.
The principle of harmonising the rules on expenditure for which VAT cannot be deducted in full is also a step in the right direction, but here we support the amendment tabled by the rapporteur, Mr Garosci. The proposal to make VAT on hotel and restaurant costs fully deductible not only responds to what the business community wants, it is also a logical fiscal approach. Entertaining business partners is often the only way to publicise a company's products and services, particularly for small firms, so it is therefore logical to classify the actual costs incurred, whether in a hotel or a restaurant, as business expenses from which VAT is fully deductible.
In my opinion, the Commission could come up with more than these specific proposals, and then we can show businesses that the European institutions are concerned not just with the problems of the multinationals, but also with the problems of small firms and more besides. This is why I support Mr Metten's question about what progress has been made with the idea of experimenting with low VAT rates for labour-intensive services. It is a question asked many times before, Commissioner, but one that is not going to go away.

Lukas
Mr President, Mr Garosci's report has my full backing. Serious distortions of competition arise because of the differences in the way Member States treat tourism companies in respect of the right to deduct value added tax. This affects 'business tourism' - in other words, conferences and congresses - as well as private business travel. As the rapporteur says, business travel accounts for approximately 20 % of total turnover in the tourism sector. Expenditure per guest is by far the highest, since many overseas visitors - especially from North America and Japan - attend these business events. Competition between the various congress and conference locations is consequently extremely tough. Business tourism deserves our support as a valuable source of jobs. Hence the particular importance of Amendment No 7, which advocates full deduction of expenditure on accommodation and food or drink, as well as on entertaining business partners.

Torres Marques
Mr President, the main objective of these two initiatives is to simplify the complex and extremely diverse procedure that exists in Europe regarding the refund of VAT as specified in the Eighth Directive.
Due to the lack of time, I will concentrate on the amendments on tourist activities, which I fully agree with. These amendments relate to so-called 'business tourism' - conventions, congresses and business travel - which already accounts for nearly 20 % of European tourism and is highly likely not only to increase significantly in the medium term, but also to compensate for one of the most complicated phenomena in the tourist sector, namely seasonal variations. Business tourism is therefore a way of helping to ensure that employment in the tourism sector remains stable throughout the year. In fact, business tourism occurs in particular outside the high season, thereby contributing to a more balanced and more profitable operation of tourism businesses throughout the year.
Eight EU countries are fully aware of this. Belgium, Germany, Spain, Finland, Luxembourg, Holland, Sweden and the United Kingdom already allow the deduction of VAT on hotel and restaurant expenditure in the case of business travel. This is a real incentive from the authorities of these countries to the development of business tourism, both for nationals of these countries and in order to attract congresses to the respective markets. It must be borne in mind that competition in this sector is quite tough, despite Europe having exceptional conditions in terms of its supply.
The seven countries that have not adopted this principle, namely Austria, Italy, France, Greece, Portugal, Ireland and Denmark, are at a disadvantage due to both the competitive edge of the other eight EU countries already mentioned and the growing number of non-European destinations in the tourism sector where VAT does not even exist. I am therefore personally in favour of the proposals included in the amendments tabled by Mr Garosci, who I must congratulate, as they seem to me to make a very important contribution to the future of European tourist activities.

Peijs
Mr President, this proposal does not entirely seem fitting in this turbulent week, since it is all about trust, trust between countries and between institutions. The tax authorities in the Member States are going to have to work with each other to make this proposal successful, and it must be a success because the current state of affairs is a recurring source of irritation for the business community.
The legislation on which we are delivering our opinion today has great potential. European businesses are heavily burdened by the red tape involved in claiming back VAT paid abroad, and if the VAT is reimbursed it often takes months or even years until it actually reaches the company in question. It seems fitting that we should have an Italian Commissioner and an Italian rapporteur here, because the longest wait that I have ever heard of was twelve years for a VAT repayment from Italy to reach the firm entitled to it.
The proposal solves a number of existing problems, but this change to the VAT directive is not enough. Our ultimate aim must still be to achieve a definitive VAT system based on the principle of the country of origin.
This proposal from the Commission is an important intermediate stage and should improve confidence between the various Member States and their administrative systems. This confidence will be needed if we are ever to have a definitive VAT system with a sort of repayment clearing house similar to the repayment system now on the table. The definitive VAT system will involve infinitely greater sums than is currently the case, since the VAT reclaimed from abroad, which is what we are discussing here, forms only a small part of the total VAT payments in Europe.
I very much support Commissioner Monti's proposal, and I congratulate the rapporteur on his report. This first step should bring us closer to the definitive VAT system, which will make a world of difference to the non-exporting small and medium-sized companies that unfortunately make up the majority of those affected.
I agree with what Mr Metten said. I think that from now on we must insist on lower rates of VAT for labour-intensive services in all our reports on taxation.

Féret
Mr President, the Belgian National Front, a national and European movement, has always believed that introduction of the single European currency, of which we were in favour, would require the harmonisation of social and taxation systems within the Union. The Council's proposal to simplify the system for deducting VAT expenditure incurred in a Member State in which the taxable person is not established, a proposal which was improved by the amendments of Parliament's Committee on Economic and Monetary Affairs and Industrial Policy, is a small step in the right direction, a very small step, since this simplification will make life difficult for the fraudsters.
A pity the Council does not have another, equally effective magic formula for preventing the corruption regularly perpetrated by one or two European Commissioners who cheat, scheme and fiddle with impunity. So much for that footnote - I have finished, Mr President.

Rübig
Mr President, Commissioner Bangemann, ladies and gentlemen, in principle I welcome the proposed changes in the deduction and refund system for VAT. These procedures are particularly cumbersome in certain Member States; we repeatedly see the adverse effect on businesses of the time and costs involved. The Committee on Economic and Monetary Affairs and Industrial Policy is therefore expressly in favour of simplifying the procedures. We would even go a step further in some areas. Accommodation and food or drink expenses incurred as part of a person's business activities should, we believe, remain fully deductible. It is hard to see why money spent in hotels and restaurants for purely business purposes should be treated differently from any other business expenditure.
The business lunch or dinner is valuable when it comes to fostering contacts and building up client confidence - especially for small companies, who can also use the occasion to present their products. In Austria, we have found that reducing the tax deductibility of business entertainment can harm the gourmet restaurant sector. We therefore believe that Parliament's amendment offers an appropriate way of resolving this problem.
We also have a proposal on translation costs. Tax administrations are quite entitled to ask for the details on an invoice or whatever to be translated. We do know, however, that this can cause difficulties for SMEs, who often do not have the necessary language expertise to hand. Some countries even require officially certified translations; this can mean bringing in a 'sworn' translator or court-recognised interpreter. Consequently, it would make sense for the costs of external translation to be borne by the requesting administration. I am delighted to see that the Commission's commitment to a leaner and fitter regulatory system at single market level is now bearing fruit in the VAT sector too.

Monti
Mr President, ladies and gentlemen, I am very pleased to be discussing with you one of the first legislative initiatives on VAT which derives directly from the SLIM exercise, and to be doing so on the basis of such an excellent report as the one by Mr Garosci.
The work of the SLIM group has led to a series of important recommendations which we are following up as a top priority within the Commission's work programme, so as to improve the operation of the VAT system. Therefore I am always happy to hear observations to the effect that, as Mr Secchi said, this is one stage on the way towards the definitive VAT system, to which Mrs Randzio-Plath also referred.
This proposal contains two parts: the first relates to the procedure for refunding VAT to non-resident taxable persons; the second relates to harmonisation of the rules governing deduction.
As regards the first aspect, the refund procedure - the purpose of which is to allow a taxable person to recover the VAT paid in a Member State in which he is not resident - has been identified as an area where simplification is urgently needed. The procedure set out in the eighth directive has proved very unsatisfactory in practice, both for national administrations and for operators. The latter criticise in particular the cumbersome administrative formalities and the delays in obtaining refunds.
The Commission has concluded that the only modification likely to bring about true simplification consists of abolishing this procedure altogether and replacing it with a mechanism enabling a taxable person to deduct, in his regular returns, tax paid in a Member State in which he is not resident. This system requires the introduction of a bilateral refund and compensation system for debts between Member States, as well as a clear-cut division of the Member States' responsibilities for verification, presupposing that a relationship of trust exists. The Commission notes with satisfaction that Mr Garosci's report supports its proposal concerning this first aspect.
The second aspect is harmonisation of the rules governing deduction of VAT paid on expenditure which is of both a business and non-business nature. The proposal relates first of all to the deduction of VAT applied to expenditure relating to passenger cars, our aim being to end the total exclusion from the right to deduct which currently applies in certain Member States.
Furthermore, the Commission is proposing a flat-rate deduction of 50 % of the VAT payable on expenditure on accommodation, food and drink, and a total exclusion for expenditure on luxuries, amusements or entertainment. I note that Mr Garosci's report basically endorses the Commission's proposed approach. The amendments put forward relate mainly to the provision for a 50 % flat-rate deduction in the case of expenditure on accommodation, food and drink. Even when incurred in the context of an operator's business activity, such expenditure is, by its very nature, intended to satisfy personal needs.
Application of the normal rules requires a discrete assessment of the business and non-business elements of expenditure; this assessment often gives rise to awkwardness between tax administrations and operators. Consequently, the Commission is proposing a flat-rate deduction of 50 %, with a view to simplifying - that is the key word - verification, especially in view of the obvious risk of improper deduction. Moreover, a flat-rate deduction makes it easier for operators to prove the business nature of such expenditure.
For these reasons, we cannot accept the proposed amendments. Nevertheless, I can assure you that the Commission will take your observations into account during the forthcoming negotiations on this proposal in the Council. Indeed, were the Council not to agree unanimously on flat-rate deduction but to argue that the application of the normal rules creates no insurmountable problems of verification, the Commission would then be prepared to suggest a practical solution, allowing a Member State to apply either a deduction in accordance with the normal rules or the flat-rate deduction of 50 %.
As well as thanking you for your support, which I consider particularly important in persuading the Council to adopt the proposal, I wish to close - in this very welcome climate of confidence between our institutions, referred to by Mrs Peijs - by answering the question concerning the possibility of a reduced rate of VAT on labour-intensive services, a subject touched on by Mr Secchi, Mr Metten and Mrs Thyssen.
As has been pointed out, the Commission presented a communication to the extraordinary European Council in Luxembourg in November 1997, asking the Council to back this proposal. As you know, there has since been some inconclusive discussion in the ECOFIN Council. The Vienna European Council invited the Commission to authorise the Member States to apply the reduced rate on labour-intensive services having no cross-border content. Naturally, under the existing legal system, the Commission cannot authorise the Member States to do this; that would require an amendment to the sixth VAT directive.
I know that this matter is of great concern to Parliament, and I am pleased to take this opportunity of announcing that I intend to present the relevant draft amendment to the Commission in February, in order that Member States wishing to do so may, on an experimental basis, apply a reduced VAT rate to labour-intensive services.
I believe that the best way for taxation to help employment is to move towards fiscal coordination, and Parliament has always supported this major undertaking of recent years. One specific contribution which may well be worth trying out is the one to which we have referred: the possibility of a reduced VAT rate on labour-intensive services.

President.
The debate is closed.
The vote will be taken tomorrow at 11 a.m.

Globalisation and the information society
President.
The next item is the report (A4-0366/98) by Mr Malerba, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communication from the Commission on Globalisation and the Information Society - the need for strengthened international coordination (COM(98)0050 - C4-0153/98).

Malerba
Mr President, ladies and gentlemen, the two Commission communications which are the subject of my report - one on the need for strengthened international coordination in the information society and the other, related to it, on the problem of an international framework of management for the Internet - raise specific points and also outline a method for addressing the challenges, legal ones in the main, which the Internet revolution has brought about.
What is new about the Internet that cannot be regulated merely by extending the rules already in force for the other media? This is a valid question. My answer is that the Internet really is a new, revolutionary technological product; its advent is on a par with the invention of the printing press. Television, print and radio messages are one-way, broadcast indiscriminately to an audience without the means to interact. In contrast, the Internet changes the way we distribute information in two fundamental respects: every message can become highly participatory, while the distribution costs of information, on a worldwide basis, fall almost to zero. Whereas in general the traditional broadcasting media are tightly regulated, on the Internet anyone can become a publisher and engage in dialogue with his readership. There are no central points of control and no access barriers; no special licences are required to get on the Internet.
The Internet is still in its infancy, but statistics show that participation is growing exponentially. Whereas a few years ago it was predicted that by 1998 there would be three million users in Europe, when 1998 came we realised that there were already 18 million, and this growth is still continuing.
As the new method of electronic data interchange develops, so do new forms of corporate organisation, looking ahead to the economy of the future. Hierarchies are disappearing, production plant and physical processes are no longer concentrated in a fixed location, as was typical of the industrial era; a new knowledge-based society is emerging, one which is more mobile both geographically and culturally.
It could be argued that highly complex organisations, such as the information society and interactive IT networks, should be regulated not from the centre but from the periphery, as happens in the biological world. Simple laws are imprinted into every cell of an organism without there being a single central control unit. Order is maintained through the interaction of a huge number of individual entities, linked together by a close network of connections and reactions.
A pragmatic and flexible approach to the Internet phenomenon would therefore appear judicious. I believe that Mr Bangemann deserves credit for his far-sightedness and perseverance in pursuing the policy of liberalising telecommunications services in Europe. It is for this reason that we are not now fazed by this new challenge. When, at the Bonn Conference in July 1997, the Americans proposed the promotion of world-wide electronic commerce, Europe was able to respond in the same vein, reasserting the principles of user protection and free access for all citizens, personal data protection and security of communication, fiscal non-discrimination where new technologies are used for electronic rather than traditional commerce, and intellectual property rights.
There is ample evidence of the need for international coordination, ranging from domain name management to the risk of a US monopoly, to the German judiciary's initiatives concerning providers' real or presumed responsibilities, not forgetting the risk of a proliferation of dissimilar legislation from one country to another as electronic commerce gradually gains ground. I would stress that our aim here is certainly not to define and list all the crimes to which the Internet potentially lends itself - although the media tend to focus mostly on these aspects - but rather to draw up a code of conduct making this new tool more secure and reliable to use.
On this basis, dialogue can be established at various levels, involving industry and content providers, and multilateral agreements can be sought not only with the United States but also with Japan, India and any other countries embarking on electronic commerce. This multi-layer, multilateral dialogue must recognise the competence of international organisations in individual fields, and the private sector and professional and users' associations must be involved in laying down the new rules.
What can Parliament do? As well as giving encouragement and support to the Commission's international initiatives, I believe that Parliament should place this item on the agendas of its interparliamentary delegations, especially the one with the US Congress, and should continue working to raise public awareness.
As for the Commission, it must finalise and put forward for adoption in 1999 - before the end of this parliamentary term - a substantial set of rules governing electronic commerce. We have observed the Commissioner's initiatives with industry in Brussels, at the OECD conference in Ottawa and at the Aspen Institute meeting in Lyons. I should now like to hear him comment on the state of play.

Plooij-van Gorsel
Mr President, Commissioner, ladies and gentlemen, the Committee on External Economic Relations welcomes the Commission's proposal on international coordination, since this is the interests of both the public and private sectors. The committee has already said in earlier opinions that it is the authorities' task to achieve agreement on an international legislative framework that is transparent, clear, technology-neutral, non-discriminatory and likely to stimulate competition. It is important that the entire business community should be involved, as at the round-table conference on 29 July last year in Brussels.
The business steering committee set up recently by Commissioner Bangemann fortunately recognises this principle and includes representatives of firms from around the world. There is a tremendous amount of work to do when you think of protecting intellectual property, the problems of encryption, data protection, liability and so on. Parliament must be closely involved in drafting legislation, whether binding or not, and in particular must be closely involved in any future conferences on the subject. The information society has enormous implications for the public and for businesses in terms of well-being, employment and prosperity, so democratic controls are absolutely vital.
This brings me on to my final point. The Commission's proposal for a new directive designed to improve the climate for electronic trade on the Internet in Europe has come not a moment too soon for the European Union, or perhaps even a little late. If we compare the European Union's performance in the field of electronic trade with that of the United States, we are forced to concede that the European Union is already lagging behind. In December alone online spending in the United States grew by 230 %, the sort of figure that many firms in Europe can only dream about. I thank Mr Malerba for his excellent report.

Sierra González
Mr President, Commissioner, as the information society has begun to use new technologies in trade, one of the problems that has emerged is the need to establish a system of general legal guarantees for supranational transactions made on open access networks.
The fact that transactions are increasingly international has led to certain conflicts over jurisdiction. These involve matters such as the terms and conditions to be used in cross-border contracts, liability for third parties, the labour laws affecting teleworkers - even in cross-border transactions - copyright, and so on. These are all matters that affect the reliability of transactions.
Without doubt, establishing a safe framework for businesses and consumers to operate in is essential in resolving these conflicts. But it should be possible to achieve this objective if, on the one hand, the open access nature of the Internet is preserved and, on the other hand, the plurality and diversity of the network is maintained.
Introducing controls, barriers or licences for access to the Internet could be dangerous, and the jurisdiction of one sole country such as the United States becoming too widespread would be equally dangerous. In my view, security must be compatible with freedom and limits should only be set in order to protect the public interest, with all that this entails.
The proposed International Charter would be a good idea, but Parliament should be involved in the debate surrounding it.

Leperre-Verrier
Mr President, Commissioner, ladies and gentlemen, first of all I must apologise for my colleague Winnie Ewing, who cannot be here this evening to present the opinion she drew up on behalf of the Committee on Culture, Youth, Education and the Media.
In adopting Mrs Ewing's opinion unanimously, our committee showed itself to be less keen on this project to create an Internet charter than the European Commission and Parliament's Committee on Economic and Monetary Affairs and Industrial Policy. Whilst our committee agrees with the European Commission on the universal nature of information networks, which transcend regional, national and European borders and require an international response, it does not agree with the Commission's analysis of the legal and technical nature of the problems created by the globalisation of the information society. The Committee on Culture believes that our approach to the development of these new digital technologies is a mistake. We believe the current approach, which seeks to make the regulation of electronic commerce a priority in the development of the information society, is effectively giving preference to a constricting policy which is geared solely to competitiveness and which fails to appreciate the extent of social and cultural change.
How can you think the new information technologies will benefit the greatest number of people, will help to reduce inequality of opportunities, if you do not take account of the risks they create? I am thinking in particular of the dangers we have already mentioned in many of our resolutions in this House: the danger that cultural and linguistic diversity will be marginalised, the danger that inequalities between urban areas and rural and peripheral regions will widen further.
As regards the plan to create a world economic area, barely disguised in the electronic commerce sector, it seems to me that the European Commission and our Economic Affairs Committee underestimate how far ahead the United States is in the technology and how far it is commercially dominant in the information sector and the Internet, accounting for more than 80 % of the world market in computers, software and electronic banking services. Presenting this draft agreement to you as legally non-binding, whether it is or not, will not change the current situation in any way. It will only benefit the multinationals, Microsoft today, Netscape or Sun Microsystems tomorrow.
To conclude, the Committee on Culture believes - you can shake your head, Mr Bangemann, but this is what our committee believes - that the priority for the European Union should be to address the technology gap between itself and the USA, and to put in place not an umpteenth policy of protectionism, as some Member States are tempted to do, but a coordinated and dynamic European multimedia policy by stimulating a market centred on European products and services, facilitating their spread throughout the territory of the Union, in association with the most innovative small businesses - in short, by using European skills in this area to maximum advantage. After this first stage, these new technologies should also be placed at the service of the citizen, to encourage cultural and linguistic diversity and to further the development of general-interest networks. Only in this way will the myth of a European model of the information society become reality.
The 12 amendments which the ARE Group has tabled to Mr Malerba's report reflect the main concerns expressed by the Committee on Culture and seek more broadly to offer concrete proposals to ensure that the European Union does not continue to lag behind in this battle.

Paasilinna
Mr President, Commissioner, ladies and gentlemen, we are not yet living in the information society; we are still on the way there. It is a matter of information, which is refined into data, then perception and realisation, and finally culture and education: information is only a raw material. Its content, however, is of the essence. Our problem is no longer one of transmitters or receivers, computers or hardware. Content is the area where the European Union has fallen behind, compared with its competitors. Content also provides employment and is very profitable. You could say there was no end of uses for content, just as with food, such as the sausage, for example. People can in practice enjoy content in an infinite number of ways.
I support the Commission's initiative for international action and a charter for the Internet and electronic commerce. The Internet cannot work beyond the reach of the law and standards. A crime is a crime on the Internet too, and that we must be aware of. Apart from that, one advantage of electronic commerce is that the location is safe. Rules, however, must not hinder developments, but lead and alter, and be flexible.
Obviously, there must be cooperation. I believe that the United States is very keen to reach an agreement with us, as they have both economic and political interests. Apart from companies and consumers, it is important that everyone should have access to this system. It is a modern European Union's civil right and we will hold on to it. Nevertheless, it cannot be exempt from taxation.

Mendes Bota
Mr President, this is the new computer age and it is here to stay. The myth of an information-based society has become a reality. Information is now the key to everything, turning us into listed consumers of classified products. Virtual reality is the order of the day, mesmerising us into accepting our collective loss of freedom on a global scale. We are now ruled by the drug of information and all its consequences. Thinking is in binary form: I buy - yes or no; I sell - this or that; my opinion - left or right.
The information drug has invaded our daily lives and we are now even calling for computer police. The Internet revolution, due to its extraordinary potential, has developed into a massive free-for-all involving every type of deceit, fraud and abuse. Consumers are being violated and the applicable law is contradictory, incoherent or even non-existent. The central issue now for an information society in which electronic commerce is assuming a previously unimaginable dimension is to urgently establish, by worldwide consensus, the main economic groups of the world and the respective leaders.
The objective is to provide a solid and coherent legal framework that can regulate the activity of the information networks. Using the argument of American supremacy in the electronic commerce sector to exclude Europe from being a pioneer in the creation of this new global economic space, as recommended by the opinion of the Committee on Culture, Youth Education and the Media, is an unrealistic attitude. It implies that we should stick our heads in the sand and ignore or refuse to understand the major changes in the world today.
The risks of cultural and linguistic marginalisation and of outlying or rural areas becoming more isolated are real. It is obvious that the disparity between north and south has increased in the last few decades despite economic growth. Nothing can prevent the world of one-way messages becoming a world of two-way communication via the Internet where everyone can be a publisher and broadcaster simultaneously. Trying to ignore this change is as futile as trying to stop the tide coming in.

Boogerd-Quaak
Mr President, this is actually a very interesting item on our agenda this evening. In my view, the problem lies in the fact that we are trying to find a balance between the right to freedom of information and the difficulties we are facing in connection with the right to freedom of information, the right to freedom of electronic commerce, etc. And we are facing difficulties, as everyone must agree, to do with tax, liability, the protection of information and information of a harmful or illegal nature.
The proposal before us is to introduce a non-binding international charter. The fact that the charter is non-binding indicates where the seat of the problem lies. We want to regulate a number of matters, but it is precisely in trying to establish the right to free trade and freedom of information, as I said earlier, that it is extremely difficult to restrict a number of things that we do not want.
I think that we should all welcome the fact that this proposal has been made and that we are going to reach a number of agreements, but agreements must never be so strictly defined that they infringe the rights of the individual. As I see it, the information society is partly a way of encouraging individuals, states and so on to make responsible choices. What we now have to recognise is that a number of countries that have up to now been accustomed to regulating certain matters within their own borders are now no longer able to do so because of the Internet.
I wish the Commissioner success with this charter. It is a very brave effort, but it is going to be extremely difficult to find a balance between what we want and what we do not want.

Schörling
Mr President, the Green Group, including myself, agrees with the Commission and its Members when they say that there is no need for a global regulatory framework, nor a new international authority to regulate the Internet. Above all, we do not need an information police. We now have the chance to come up with a viable solution, as I believe the rapporteur, Mr Malerba, has also recognised in his report when he calls for cooperation. That is what is needed, not legal regulation.
Any agreement reached between the different countries should not be legally binding, but more on the lines of a code of conduct or, in the words of the rapporteur, a kind of highway code for the Internet. I think that such an approach would find support, since a code of this type is needed to safeguard privacy, copyright and security. We have also tabled some amendments which address the need to resolve this issue, not only from the point of view of the international organisations, but in a way that takes account of the interests of commercial undertakings, consumer associations and so on, and which also protects the interests of the general public.
Moreover, the ARE Group has put forward a proposal with which we absolutely cannot agree, since we regard it as protectionist. However, they have also tabled some amendments relating to the interests of the general public which we can support. We would also like to remind you that this is not just about Europe and the USA; we must ensure that the Internet becomes a truly global and democratic highway that everyone can use.

Caudron
Mr President, Commissioner, ladies and gentlemen, I compliment Mr Malerba on his report, which enables us to consider the issues surrounding the Internet and the information society. It enables the people and the elected representatives of Europe to engage in a debate which, as we know, has major implications for society and I know that Commissioner Bangemann is personally very aware of that.
So for me the proposed text is a starting-point for our shared deliberations, but we all know that it cannot be an end in itself. The idea of a global charter is interesting and I am in favour of it, even if it cannot answer all the challenges entailed in developing new communication tools. The priority for all of us is to move our European cooperation forward as fast as we can, so that we are better placed to negotiate from a position of greater strength with our major partner, the United States.
I also agree with the rapporteur on the question of electronic commercial transactions and his desire to protect the consumer or user by means of secure systems of payment and the respecting of civil liberties. At the same time, I think our European debate has to go further than that. The faster pace of economic processes, new forms of work, is creating complex problems. These are challenging the systems of social relationships we have in Europe. The information revolution is breaking down the ways in which society orders itself, and at the same time communication, the degree of information, is breaking down all the hierarchies, including those within businesses.
So although international agreement is necessary, I believe we must do more to ensure consistency with social and business legislation. We must never forget, Mr President, that the new technologies and the Internet are tools. After that comes the question of knowing what to do with them, and to what end.

Rübig
 Mr President, Commissioner, ladies and gentlemen, the single market is now almost complete. A few days ago, the euro was introduced; frontiers are disappearing. These are good signs, I feel. Nowadays we can use our European-manufactured mobile phone to ring home from Moscow or Malaysia; we can link up directly to the Internet. The world is in fact coming together faster than some people are willing to accept.
Regulatory systems vary around the globe, so we need to come forward with ideas on how best to strengthen international coordination in this area too. Markets will want to know what the rules of play are. Drawing these up is primarily the job of policy-makers, but it is essential that we involve users and manufacturers. All three sides will need to sit around the table.
We must first of all establish the current state of play and then move to develop ways of achieving our chosen goals. Mr Malerba illustrates the situation very well in his report. Member States have considerable scope for shaping the information society, but need to bear in mind the extent to which previously separate sectors are moving closer to one another. This is where the challenge lies. We should be envisaging setting up virtual libraries - places open to everyone, just as traditional libraries are. A click of the mouse will suffice, but people must be aware that the virtual library exists. The benefit in terms of knowledge and experience will be enormous. And think of the boost for industry if concerted efforts are put into making this vision a reality.

Thors
Mr President, Commissioner, it seems to me that a great deal has happened since the Commission first began work on its initiative nearly a year ago. I am referring in particular to resolving the problems posed by the Internet domain names, and here I believe the Commission has chosen the right way forward. Furthermore, our approach to the whole issue has changed since the initiative was first introduced. We are not just dealing with a highway, there are many other areas where regulation is needed, either by means of legislation, rules or standards.
In my view, we have also taken forward the debate on the information society. We should therefore avoid statements like the one we heard last night about Europe being so far behind America. In fact, Europe has also made progress in this field.
Two issues that were agreed and discussed recently give some cause for concern. Why did Europe go along with the so-called amendment of the Wassenaar Convention which makes it more difficult for us to export encryption techniques, and what part did the Commission play in this? And the second is, of course, that there has still been no agreement on the UMTS standard. What is needed here is continued vigilance and discussion. We cannot accept that protecting our interests is the answer; there must be a solution that is to everyone's advantage.
We are told that the transatlantic dialogue has been useful and that there has been some degree of convergence. Many people believe that it is important to combine the European and American approaches. We have also seen that there is not always total independence in the USA, but that there is possibly more administrative regulation because of the federal system, which raises more obstacles than there are in Europe.
Finally, I should like to say that Commissioner Bangemann has done a very good job in this field simply by encouraging dialogue. I am one of those who hope he will keep up the good work.

Lukas
Mr President, an Internet Charter makes very good sense. We are confronted daily with new communications technologies; these are penetrating ever deeper into all areas of our lives. Care must be taken with regard to competition law, however. We do not want to see it undermined. Globalisation and the information society influence not only industrial and cultural policy; the impact on human rights is considerable too. I am disappointed, therefore, to see that combating Internet crime is accorded such marginal treatment. The Internet is being misused for the purposes of spreading child pornography; child abuse is happening online; and trafficking in children is even being organised over the net. Society has a massive problem here.
The European Union should be giving its full attention to this baser side of globalisation. Greater international cooperation between administrative authorities and more financial resources are called for.

President
Thank you very much, Mr Lukas.
Mr Torres Couto is now due to speak but he has not graced us with his presence. Therefore, we have reached the end of the speeches by Members and I would ask Commissioner Bangemann to take the floor.

Bangemann
Mr President, may I begin by thanking the House for this debate, which has confirmed that there is no fundamental disagreement between Parliament and the Commission on this issue. There is in fact a broad consensus and my thanks go to the rapporteur, who has made a big effort to absorb the logic and rationale of our proposal. As a result, the analysis given in his report is very much to the point.
I should perhaps remind people, however, that today's discussion touches on only one element of the information society. Just because we are focusing at present on electronic commerce and the Internet does not mean that other important aspects are being neglected. What a pity that, yet again, the Committee on Culture, Youth, Education and the Media is coming out with the same old clichés. Its members preach their blinkered cultural pessimism and then depart, depriving anyone else of the chance to lighten their darkness.
Culture and open debate go together; in German, we even speak of a 'culture of debate'. The information society has now entered that debate, and committees such as Economic and Monetary Affairs, or Research, Technological Development and Energy, or Foreign Affairs - with its Subcommittee on Security and Disarmament - are demonstrating more receptiveness towards this new cultural phenomenon than the culturally-challenged Committee on Culture, which cannot seem to grasp what is at stake. The same old arguments have been wheeled out regarding the negative impact on minority languages and small or medium-sized companies. But if ever there was a 'small-friendly' technology, it is the Internet. The new developments offer global exposure to smaller languages and small businesses at a fraction of the previous cost. Much to my dismay, however, the Culture Committee fails to see this. I have attended their meetings two or three times and, on each occasion, I came up against a brick wall.
We also hear repeated reference to US domination. Mrs Thors rightly pointed out that this a red herring. Thanks to the Internet Charter, Europe has taken a global lead. We have been successful on domain names, as Mrs Thors also noted. There is a danger, however, that people will begin to believe all this constant talk of how America has got poor little Europe pinned against the wall. But it has not, and our progress can only be undermined if this is the message coming across. I am therefore grateful to you for having stated clearly that you believe we are making headway.
Mr Malerba asked about the current state of play and where we go next. Of course, Parliament will be involved in the whole process. Anyone wishing to attend the conferences has an open invitation to do so. Mr Malerba and other Members have participated in such events in the past, and we very much hope that this practice will continue
The familiar problem raised by Mrs Boogerd-Quaak has to be seen in the light of the speed of technological advance and the inherently global nature of the Internet. When things are happening fast, legislation is not easy. Regulations which we adopted at the outset are already in need of review; keeping pace with these developments is extraordinarily difficult. That is why we are seeking to devise alternative-style legislation.
The second element in the equation is the global dimension of this technology. Even if we do decide to enact directives at EU level, these have no impact beyond the frontiers of the Member States; hence the need for political agreement with other legal areas on equivalent approaches. The Internet Charter is a move in that direction, and it has taken off internationally. We have also been involved in promoting the Global Business Dialogue, which has been officially launched in Brussels. A management board has now been appointed and is currently, as I understand it, holding a two-day meeting in New York. Moreover, a conference will be taking place in September at which consideration will be given to the possibility of self-regulation. The interested parties will either agree to sort out the problems amongst themselves or, where this proves impossible, will seek to find the most appropriate solutions. The OECD meeting in Ottawa produced a list of some 12 to 15 problem issues, many of which can only be resolved through political decisions. Taxation matters obviously cannot be left to the parties directly involved.
Nor can we afford to leave questions such as encryption to the sectoral players alone. And I would point out that no decisions have so far been taken on which of the various possible systems will be authorised. Some thought was given to the matter at a meeting of justice and home affairs ministers, but no statutory provisions have been adopted. Until Parliament and the Council have been consulted on a Commission proposal, no legislative act can be envisaged. We all know that. And there is as yet no Commission proposal.
There are similar issues with regard to intellectual property; legislative decisions are required. The idea is that this conference should prepare the ground; we will then come forward with proposals for decisions. The Japanese are already convinced of the need to initiate a political process to parallel the one whereby private interests are working to find a suitable accommodation. It now remains for us to win over the Americans; we shall then be in a position to respond at international level to the ideas emerging from the private sector's deliberations. All in all, I think it is fair to say that we are satisfied with the progress of events. May I once again express my gratitude for your understanding and positive input. I know that you have high expectations of me over the coming months - and thank you for your good wishes. I take it that I may hold out some hope for tomorrow's vote!
Laughter and applause

President
Thank you, Mr Bangemann. We all share in that hope.
The debate is closed.
The vote will take place tomorrow at 11 a.m.

Commercial communications in the internal market
President
The next item is the report (A4-0503/98) by Mrs Larive, on behalf of the Committee on Economic and Monetary Affairs and Industrial Policy, on the communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on the follow-up to the Green Paper on commercial communications in the internal market (COM(98)0121 - C4-0252/98).
I give the floor to the rapporteur, Mrs Larive.

Larive
Mr President, this report by the Committee on Economic and Monetary Affairs and Industrial Policy on cross-border commercial communications also considers that the Commission is failing to do its duty. As the guardian of the Treaties, the fact that it regularly flouts Article 169 - the infringement procedure - is a major democratic failing that cannot be tolerated in a democratic constitutional system. The public, businesses and organisations are often rightly furious when their complaints take years to be dealt with, such as on France's Evin law and Greece's ban on the television advertising of toys.
I was also not exactly pleased to be handed just two minutes ago Commissioner Monti's reply to the letter that Mr Cox and I wrote to him about the infringement procedure. All I have been able to read of it is the last sentence, which says 'I am nevertheless interested in the suggestions made by Mrs Larive in her draft report on commercial communications and will take them into consideration when they will be adopted by Parliament'. I have not had time to read the rest, but I will hold him to his word.
In his eight-point plan last Monday, President Santer promised the European Parliament greater transparency and more information. If he is to remain - or become - credible, therefore, the demands made in our resolutions must be met. This means that the Article 169 procedure must be applied scrupulously and transparently, with time-limits for decisions to be reached and the compulsory proportionality assessment of all pending and new complaints. Complainants must also be able to appeal against negative decisions.
Parliament is also calling for a public register of complaints accessible via the Internet, with the complainants' agreement, naturally, giving all the relevant information on the progress of the cases, or lack of it. Parliament must be informed on a very regular basis, perhaps through its Committee on Legal Affairs, and I would propose that the committee should set up a working party to monitor infringement procedures, and not just those relating to commercial communications, of course.
The Commission can no longer be allowed to put unverifiable political considerations before legal arguments behind closed doors and without being answerable to anyone.
Commercial communications are a very delicate area. On the one hand, they too should be able to take optimum advantage of the European single market, an extremely important consideration for this rapidly expanding, new technology-led sector which already employs more than one million people. On the other hand, we naturally have great respect for national values and cultures. This is why, Commissioner Monti, we are extremely happy with your proposals to liberalise the European market for commercial communications too, first in the Green Paper and now in the follow-up communication.
We support the proportionality assessment you propose. Objective criteria can be applied in each case to determine whether a national restricting measure is in the public interest, or whether the intended public health or consumer policy objective, say, could be guaranteed by less drastic measures.
Unlike the Commission, however, we would like to see all new infringement cases subject to this assessment with clear time-limits, not just upon request, because then we would be back to the situation that I just described.
We also support the Commission's proposals for a central contact point, a website and a database, along with the expert group. In this group too, the watchwords must be transparency and accessibility, so the agenda, minutes and minority opinions must all be made public.
We feel it is very important, as you know, Commissioner, that other people concerned should be included in the group alongside national officials. I know you are a brave man, so try to persuade your colleagues to introduce what I call the 'European polder model' for the first time. By this I mean participation on an equal footing, with one representative from the government, industry and consumer organisations in each country. It is time to stop civil servants from having absolute power here.
Finally, the principle of mutual recognition and the country of origin principle must be the keynotes for commercial communications too. Only if the proportionality assessment establishes that a national restricting measure is justified can these principles be overridden. The industry must be given the chance to solve problems through self-regulation and a European code of conduct. In my view we should set to work on this now, and only as a last resort should we consider harmonisation legislation to supplement the dozen or so directives that already apply to this sector.

Paasilinna
Mr President, Commissioners, ladies and gentlemen, commercial communications should certainly be broadened further. They are a source of employment and are going through immense changes. Advertising has also made progress as far as content goes, but not necessarily only for the better. Commercial communications are becoming increasingly image-orientated. They are more and more often manipulative and carry value-related messages. This is the basis of my own viewpoint here.
Today advertising creates society's opinions. The consumer is not always able to resist the image of the world created in advertising, which is often a very unrealistic one. A good example is a certain brown drink made from a plant extract. The drink is no longer advertised as a drink in itself, especially on television, but the lifestyle that goes with it is: youth, beaches, freedom and beauty. This means that we have gone from advertising the product to advertising the image, and the social issues that go along with it. Some things are regarded as desirable, others not.
Problems are caused by advertising which is targeted at children and others who are vulnerable. We have to protect the weak. The rapid spread of sponsorship, for example, in schools, is a good example of this. Similarly, sports sponsorship and its sometimes negative associations, including the business of the Olympics, show what can happen when there is inadequate control and a criminally-inclined element.
A key aim of the Union is that the workings of the internal market should remain untarnished. By making it easier to market goods and services we are giving support to our own objectives and, at the same time, providing opportunities for growth and, obviously, employment. Good, flexible advertising is therefore an important goal. Commercial cross-border communications must be founded on recognising the importance of reciprocal action. The rapporteur suggests that if this is not going to be possible, we will have to resort to self-regulation. I do not believe, however, that that would be a satisfactory approach.

Mather
Mr President, I should like to start by congratulating Mrs Larive on her report and welcome it on behalf of the European People's Party. For some time Mrs Larive has steered the opinion of Parliament in this area on liberal economic principles and the fact that there is a lack of amendments to her report testifies to the hard work she has done and the support she has received.
I should like to emphasise four points which arise from her report. The first is the emphasis on mutual recognition in this area. The second is the approach based on emphasising self-regulation as the first resort and, as Mrs Larive said, the addition of further directives only as a last resort. The third point which strikes me as arising from this report is the importance of a mandatory system to assess the proportionality of further legislative initiatives. This is a constraint on legislators, but it seems to me a proper constraint. We must fasten rules around ourselves. If I may associate myself with Mrs Larive's broader points, the Community prospers the greater the more it is a Community of law, rules and of predictability.
This leads to the fourth point I should like to mention, which is about complaints. The Commission has built constructively on its Green Paper, but if there is one obvious area where it might usefully make some further vigorous progress, it is in the area of handling complaints. Strict time-limits would clearly be very useful here. Also, the idea of a complaints register accessible on the Internet links the last debate with this one rather nicely and empowers those who have difficulties in this area. It makes the Community systems more accessible to them. That is something I believe we can all support.
Mrs Larive emphasises the importance of the expert group and the need to bring in true outside experts to it at an early stage. We in the EPP would support that too.
I conclude by encouraging Commissioner Monti to continue his work in this area. It is a rather messy and confused one. Not all the directives which currently exist promote the aims which we would support together in this Parliament. Perhaps Mr Monti might be able to apply his skills in bringing order and synthesis to a number of subjects to this particular area.

Lukas
Mr President, along with the single market comes transfrontier commercial communication. Huge amounts of money are being deployed by the advertising industry, affecting the behaviour of ordinary people and conditioning their needs. Through sponsorship, product placement and image transfer, the influence of advertising and marketing has long been felt throughout the world of communication and interpersonal contact - in feature films and schools, for example. The net result is de facto dominance of the mighty and powerful over the smaller and weaker. This applies at both state and company level. The report is basically very sound, but it could be more explicit in advocating protection of those traditions and customs which are rooted in our historical psyche and form part of our cultural heritage.
More emphasis could also have been placed on protecting human rights and the interests of minors. These are important elements - and not all parts of Europe are necessarily on the same wavelength in this respect.

Rübig
 Mr President, Commissioner Monti, ladies and gentlemen, the notion of commercial communications might initially seem a rather abstract one. Thanks to the Commission's Green Paper and Mrs Larive's report, however, we can appreciate the true range of the subject. At issue are all forms of communication where suppliers - in order to enhance their product's image or promote sales - set about targeting consumers. The scope is that wide.
The term commercial communications therefore covers advertising, direct marketing and sponsorship, as well as sales promotion and - significantly - public relations. The sector already provides over a million jobs, and that figure is constantly increasing. More importantly, we are dealing with a market of the future, which will eventually employ even greater numbers in other areas. Since the single market will have a special role to play here, we need to ensure that its completion in this sector is speeded up. To my mind, the section in the report on mutual recognition is therefore of paramount importance. One of the cornerstones of a common market is that once an activity has been authorised in one Member State, transfrontier communication must be permitted.
This brings to mind the directive on buses, as dealt with by Mr Murphy in his celebrated report. Buses are not our topic today, but we did give priority to the principle of mutual recognition when considering that report. Let us then hope that the Commission and the Council will rise to the challenge when pursuing their legislative agenda.

Monti
Mr President, ladies and gentlemen, I wish to begin by thanking Mrs Larive for her comprehensive and detailed motion for a resolution on the Commission's communication, as well as for her interest in our policy on commercial communications in the single market. Thanks to your commitment, Mrs Larive, the European Parliament supported the Commission's proposals its Green Paper on commercial communications, thereby enabling the Commission to activate this policy through the communication now under discussion.
I welcome the rapporteur's positive attitude to our policy in this area, and I willingly take up her constructive criticism concerning further possible improvements. In addition to making suggestions on the policy as such, Mrs Larive's report also proposes various ways of streamlining the Article 169 infringement procedure. Since I have competence in both fields, I should like to give a brief preliminary reply to the main suggestions.
Let us begin with our internal policy on commercial communications. The suggestions here focus on the need to improve the methodology for assessing proportionality, on the one hand guaranteeing that none of the proportionality criteria are used as a pretext for retaining protectionist barriers and, on the other, making this method for assessing proportionality mandatory in every infringement procedure.
I must say that I agree with both proposals and shall attempt to ensure that this instrument is applied effectively. Concerning the suggestions on greater transparency in the work of the expert group, we are already taking steps to place the group's opinions and meeting agendas in the public domain. I can inform Mrs Larive that the group's first opinion, on rules governing discounts in the Member States, should be adopted and made public in February. Moreover, the names of the national representatives have been made known, and several Member States have established working groups with the relevant national organisations to inform them about discussions held in the expert group.
I hope that all the Member States will eventually proceed in this fashion, so that the organisations concerned are kept fully informed and can contribute to the debate. The members of the expert group also consider that it would be useful for the organisations concerned to be able to submit their observations to the group, but that their permanent presence could detract from the frank and constructive deliberations enabling the group itself to comply with the six-month time limit laid down for its opinions.
Finally, since we are expecting two opinions per year on average, we hope to be in a position to present these to Parliament on a regular basis, together with the initiatives proposed by the Commission in response to these opinions. I therefore believe, Mrs Larive, that we shall be able to follow through most of your specific suggestions concerning our policy on commercial communications.
Turning to the innovations proposed in the resolution concerning the Article 169 infringement procedure, I am particularly grateful for these contributions because I attach considerable importance to infringement procedures. We have in fact attempted - perhaps not to the extent desired by Mr Mather, given his kind words - to bring order to this area, accelerate matters and lend greater transparency to the practices followed under the infringement procedure.
I agree with the rapporteur that this aspect is of crucial importance, since complaints of violations enable us to identify areas where problems still exist for the internal market. I admit that the complexity and slowness of the infringement procedure may sometimes dissuade market operators from lodging complaints. This means that the infringement procedure is not properly fulfilling its important role of identifying barriers, consequently making it more difficult to achieve our aim - and yours - of a single market which operates seamlessly.
As regards more specifically the frequency and time limits of decisions, I have done everything in my power to comply with the time limits, as suggested by the rapporteur.
Nevertheless, the two proposals on a public register of complaints and on access for complainants to the Commission's analysis prior to the reaching of a decision are worthy of more in-depth examination. The register could only include cases in which the complainants had agreed to forego the right to confidentiality under the procedure.
As for the second proposal, the fact of asking the complainant's opinion on our analysis before the Commission reaches its collective decision would inevitably cause further delay. I do however agree that there are good - very good - reasons for telling a complainant why, for example, his case has been closed.
I hope I have managed, at least to some extent, to convince you that the Commission intends to attach considerable importance to this resolution, and I would conclude with a very brief remark on transparency. I am very keen on transparency and, as you know, one essential instrument of transparency in terms of compliance with Community single market legislation is proving very useful: the so-called scoreboard, which is putting pressure on the Member States to be more rigorous in enforcing the rules of the single market. With regard to transparency in the infringement procedure in particular, I would point out that since 1996 we have been abiding by our decision of that year to inform the press systematically of every decision concerning a reasoned opinion or the referral of a case to the Court of Justice.
This, I must say, is a very useful means of exerting peer pressure to encourage the Member States to eliminate more effectively and more rapidly the infringements which trigger the procedure.

President
Thank you, Mr Monti.
Mrs Larive has asked for the floor as rapporteur. You have one minute, Mrs Larive.

Larive
Thank you for your reply, Commissioner Monti. It offered reassurance on a number of points, but it was also disappointing on certain others, particularly the composition of the expert group. There were another two questions of mine that you did not answer. Are you prepared to allow complainants to appeal against negative decisions? And are you prepared to apply the time-limits referred to in the resolution for the infringement procedure?

Monti
Mrs Larive, as I said in general terms and also with particular reference to these last two points of yours, I reserve the right to carry out a more in-depth assessment. As regards the first aspect - complaints - I believe that a modification of the Treaty would be needed there. I would recall that, at the Intergovernmental Conference leading to the Amsterdam Treaty, both I myself and the Commission as a whole supported the proposal from certain Member States to strengthen these powers in order to streamline the appropriate procedures.
As for compliance with time limits, I think I said before that we are doing our utmost to comply with these time limits; I can stress this once again. As you will in fact have noted, in some cases I have hesitated to take up your proposals immediately for the very reason that, although they seem good in themselves, they could slow down the procedure to some extent.

President
Thank you, Mr Monti.
The debate is closed.
The vote will take place tomorrow at 11 a.m.

European postal services
President
The next item is the joint debate on the following oral questions:
B4-0718/98 by the Union for Europe Group, to the Commission, on European postal services; -B4-0006/99 by the Confederal Group of the European United Left - Nordic Green Left, to the Commission, on postal services; -B4-0007/99 by the Group of the European Radical Alliance, to the Commission, on the liberalisation of European postal services.Mrs Moreau has the floor for three minutes.

Moreau
Mr President, with one million five hundred thousand employees and a hundred thousand post offices serving the public, postal services play a leading role in employment and social cohesion. The European Parliament, after eight years of work seeking to involve the social players, did much to slow down the process of liberalisation which the European Commission sought in its initial proposals. How, therefore, can we fail to take a keen interest in the Commission's stated intention of stepping up the liberalisation of postal services, even before Directive 97/67 has been transposed into national law? Such important matters require a full understanding of the options for future developments, and the consideration of precise information. Our group is therefore urging Parliament to reject any new liberalisation measure and asking that any revision of the regulatory framework provided for by the directive should be preceded by a review of all the consequences of implementing it.
Is it not time, in this sector as in others, that the Commission abandoned its blind insistence on inflexibly and dogmatically applying principles which are based on one theory alone: that liberalisation is the right thing and must be taken as far as possible? On the other side of the fence from dogmas of this kind there are men and women who want a quality service, and others who work in it. One cannot fail to note a number of common trends in sectors which have already been liberalised. In transport in particular, for example, thousands of jobs have been lost and staff earnings and conditions of employment are under threat. Everyone will agree that it is essential to have the proper information at one's disposal before taking any new decisions.
For this reason, there is an urgent need for serious and thorough studies of the consequences of liberalisation, in the area of jobs, regional development, the economic and financial balance of operators, and the quality of the services provided. Recent studies of this kind carried out by the Commission have been strongly criticised by the European Joint Committee on Postal Services. If there is to be proper transparency and the conclusions of these studies are to be fully credible, they must be carried out with the cooperation of all the players, operators, trade union organisations and postal service users in the Member States. Looking at the commercial and financial offensive currently being mounted by private multinationals in the postal services market, one can be forgiven for thinking that their prime concern is not to provide a public service.
Given this situation, we stress the need for everyone to have equal access to postal services, under the same fair conditions, regardless of location, and consequently the need to foster the development of cooperation, of understanding, and not war between national and European operators. In emphasising the importance of these services, I must stress that the service they provide to users cannot be treated simply as a commodity governed by the laws of the market, because it is part of a fundamental human right, the right to communicate.

Taubira-Delannon
Mr President, Europe's postal services are big business: with a turnover of 360 billion francs, they handle a total of 108 billion items, their network comprises more than 106 000 contact points, but above all they employ 1 400 000 people and have more than 370 million potential users.
The main question is therefore whether there can be a single formula, a harmonious formula, for situations which are different: different in population terms to start with, because the areas and densities are not comparable, and four countries account for 60 % of the population; different in economic terms, with a per capita GDP ranging from less than 90 000 francs to over 150 000 francs and four countries accounting for 75 % of the turnover; different in financial terms, with a basic charge varying from 1.70 francs to 3.20 francs; and lastly, different in legal terms, with very different geographical situations and products covered.
In other words, a number of principles have to be upheld: the principle of a fair and just universal service, the principle of economic effectiveness, and the principle of cohesion and maintenance of the public service. In other words, we must not give hallowed status to competition on the pretext of transparency, which would penalise the most deprived and the most remote users. In other words, we must ensure proper safeguards for jobs and for the general interest.

Bangemann
Mr President, listening to the arguments put forward in these two last speeches, I feel as if I have gone back in time and am reminded of our very first discussions on liberalising telecommunications services. The same fears were voiced then, although the dread scenario never came about. On the question of a universal service, we did describe certain financial instruments that the Member States would be authorised to use, including in the telecommunications sector. But a universal service is, for the most part, being provided without recourse to these instruments, solely on the basis of the economic laws naturally governing the operation of communications systems. These laws are clearly so alien to some Members and political groupings in this House that anguish grips them at every turn.
Let me be perfectly clear on this, Mrs Moreau. Provided a market functions according to rules - and these can and should be laid down as part of a political process - there is no reason for an anti-social climate to arise. On the contrary, if that market is run according to the rules which we ourselves set - and I am a logical man - the consequences certainly need not in any sense be socially damaging. Just consider prices in the telephony sector. Thank goodness we say 'prices' and not 'tariffs' nowadays. Because of competition - in other words, thanks to the market - by the end of this year we shall probably have prices that are every bit as favourable as in the USA. Ordinary communications, together with access to the Internet and other information sources, will be readily affordable.
That is social policy at its best. The system is perfectly straightforward. It is no longer a matter of measuring need against yardsticks, with large bureaucracies doling out money at great administrative expense - and at the risk of fraud - to those who fit the criteria. Today it is possible, Mrs Moreau, to telephone free of charge. You need not pay anything at all; you can ring me up whenever you like - but not at night, please.
What is more, Mr President, this is the second time that I have been up and active at unearthly hours in this Chamber. I would ask you to take note that I shall be looking at the possibility of establishing a trade union for Commissioners. Things cannot go on like this. We are being forced to work under inhuman working conditions. My human dignity is at stake, Mrs Moreau.
As to your questions, Madam, I really cannot answer them, unfortunately, and I will tell you why. You understandably raised these issues because you felt the time had come for plain speaking. The trouble is, I have not reached any final conclusions yet myself. You are not happy with the studies that were carried out because the results do not match your particular vision, but there is not much I can do about that. We aimed to base our research on information from all postal operators around the Union, but I will be frank with you: sadly, not all of them provided us with the necessary information.
Heckling: It was not delivered!
That may well be so. In any event, I am still working on my own final position, which will be submitted to the Commission at a meeting in about two weeks' time.
At that meeting, there will be a general policy discussion and I will endeavour to gather the views of my colleagues on the various issues. Then, and only then, will I be in a position to indicate provisionally where we intend to go in some of these areas. There can be no question of my coming out with a Commission position as such today. What I can say, wearing a purely personal hat, is that we shall be modelling our approach to the universal service requirement on the method which has been applied in the telecommunications sector. The principle is to provide a kind of safety net, if colleagues can follow my drift. Although there will be no obligation, it will be made available for Member States if they feel the need to use it. I myself do not see the need for such a provision, but so be it. We are in the habit of taking seriously even unjustified fears, and will probably be making a proposal along these lines - or I shall be, at any rate. You can therefore go to bed with a calm conscience. Let us hope, however, that the postal services people will soon be up and about.

Simpson
Mr President, the oral question on postal services and the subsequent wind-up motions give this Parliament an opportunity to reaffirm its often stated position on the future of postal services in the European Union. It is also a great coincidence that this subject is being discussed on the same agenda that Parliament is considering the motion of censure on the Commission. One of the reasons for the deterioration in Parliament/Commission relations without doubt has been the arrogant attitude sometimes displayed by certain Commissioners.
We experienced that ourselves in 1997, and I think we are about to experience it again in 1999, when Parliament overwhelmingly supported the report I put forward but it was dismissed at that time by Commissioner Bangemann with the words that he would return to pursue his highly liberalised plans - plans that have been rejected by Parliament. Let me remind Commissioner Bangemann of Parliament's position. Perhaps in this new spirit of reverence and respect for Parliament which seems to be sweeping the Commission this week, he will take note and ensure that Parliament's position is fully included when he finally gets round to presenting us - late - with the new postal directive that is being worked on at the moment.
We want to see a reserved area large enough to sustain a viable universal service. That includes keeping direct mail and cross-border mail in the reserved area. That reserved area is the responsibility of the national postal administrations.
We want to see a reserved area based on a realistic weight limit, not the 20 grammes, or even the 50 grammes which is rumoured to be the view of the Commission. We want to see a detailed definition of what a universal service is and we want to know what the social effects of liberalisation will be on employment on jobs and on the quality of service that is delivered to the people of the European Union. Reminding the Commissioner of the thousands of jobs involved and also reminding him that Parliament has severe doubts, as Mrs Moreau mentioned, about the authenticity of previous so-called studies in this and other areas. We frankly believe they are rigged. Florus, you will get your chance in a minute, so stop whining and belly-aching at the back.
We are still awaiting this Commission proposal, in line with Directive 97/67/EC, which means that the articles relating to liberalisation of the previous directive may no longer apply. When, oh when, will the Commission recognise that you cannot compare fairly telecoms and post because, as we have often said, telecoms is about machines, and post is about people. But we still have this great difficulty in getting that between the ears of the Commissioner.
Parliament knows I am a reasonable man. But I say tonight to the Commissioner and the Commission in general that whether that Commission has one day or one year left to run, if you come to Parliament with a postal directive which attacks the concept of a publicly accountable universal service of high quality for all, if you come to Parliament having dismissed - as you have done in the past - or ignored - as you have also done in the past - Parliament's previously stated position, a position supported by the Council, and if you persist in enforcing a dogmatic, totally liberalised approach to the detriment of the postal services, then you are in for a monumental battle: a mother and father of all battles. Be warned, Commissioner, Parliament's position has not changed. Parliament is still of the same view with the exception of the lunatic fringe of the Dutch liberals. What you need to do is to listen to what Parliament is saying to you, listen to what the people in the European Union want and stop this folly of trying to liberalise the postal services purely on a dogmatic basis.

President
Thank you, Mr Simpson.
I have received seven motions for resolutions tabled pursuant to Rule 40(5) to wind up this debate.
I give the floor to Mr Ferber, on behalf of the Group of the European People's Party.

Ferber
Mr President, Commissioner, ladies and gentlemen, may I begin by saying a few words to the last speaker. I would point out to Mr Simpson that he was speaking there on behalf of the Socialist Group, not of Parliament.
Here we are again, sitting late into the night and having to acknowledge once more that the Commission has problems getting the timing right when it comes to directives. This is not the first sitting at which the Commission has had to be asked how much headway has been made. A fresh proposal for a directive was supposed to have been submitted by the end of 1998. That deadline has been allowed to pass. As I have stated on several occasions in the past, Commissioner, you cannot expect the legislative process to run smoothly unless you meet the timetables. You have forfeited the chance to produce long-overdue proposals on enhancing the quality of the EU's postal services. With proper competition, costs could be brought down and the system made capable of matching alternatives such as fax or e-mail.
If you did not act for fear of the left-wing majority in the Council, then I have little sympathy. If you failed to deliver because you are not happy with the way the Member States are transposing the directive, then that means that the Commission has not fulfilled its duty as guardian of the treaties. And whilst on this topic, I note with interest the provenance of the three questioners; their countries seem to have a particular problem with transposing this directive, although it has been officially adopted.
I would therefore appeal to you, Mr Bangemann, to come back to Parliament as soon as possible with a committed proposal for a further directive. The old one called for an intelligent approach to the development of our postal services, and I trust that this will be forthcoming in the near future.

Wijsenbeek
Mr President, as we have heard in the debate this evening, everyone knows our position. Some people may call us the lunatic fringe, but we are standing up for consumers, because they are entitled to a better service. The postal service must not be seen as a welfare service, nor must it be used by countries to provide services that belong elsewhere. We all know that as soon as postal services are put in a monopoly position, they tend to be sidelined by faxes, e-mails and other modern media.
It also appears in practice, in countries like Sweden, for example, or the Netherlands - and Sweden is not a small, densely populated country like the Netherlands, it is an enormous place covering huge distances - that a privatised service or a service where competition is possible can be just as good as the inefficient monopolies that also provide social services. This is why we are calling on the Commission not only to implement the old, outdated directive as soon as possible, but also to put forward new proposals on liberalising the sector. This is what the Commission undertook to do. The failure of Reims II and the failure to achieve full compliance because all sorts of integrators are now at work means that we need to come up with proposals for a new, modern service. I hope that the Commission is not going to take another ten years over this and that it does not produce another white elephant like the last time. Any resemblance to persons here present is, of course, entirely accidental.

Schörling
Mr President, Commissioner, ladies and gentlemen, I wonder if we might have a few comments from Mr Bangemann on his new role, since he said that it might be a good idea to start a union for Commissioners. What an interesting thought!
I must say that I am rather surprised at the way the Commission has acted in this case. In general, I am not opposed to privatisation and nor is my political group. But why is the Commission in such a tearing hurry? On the contrary, Parliament has already asked the Commission to assess the economic and social consequences, as well as the state of the postal sector, on a country by country basis. However, this has not been done.
We have also said that in evaluating the effect of liberalisation on postal services, account should be taken not only of the Commission's own feasibility studies, but also of Parliament's consultations, postal sector trade unions, user organisations and so on. If that had been done, Mr Bangemann would not be able to say that our concern is unfounded.
One of my colleagues has already mentioned that some liberalisation of postal services has taken place in Sweden. However, studies show that the quality of services has deteriorated in the more remote areas, that there has been 'cherry picking', and that postal services in villages are not as good as they used to be. Naturally, the postal sector has to be large enough to maintain the quality of what is, after all, a public service.
In my view, it would be totally inappropriate to put forward new legislative proposals without having some idea of what their overall consequences would be and without carrying out a general overhaul of the sector at the same time. So there is no hurry, and it would be better to take our time.

Schmidbauer
Mr President, Commissioner, ladies and gentlemen, as Mr Bangemann himself said, this is by no means the first time that we have sat in this House at midnight discussing the question of European postal services. And today's debate will doubtless not be the last - although a better slot next time round would be nice. We as a parliament clearly cannot overemphasise our position on liberalising postal services. No one in the European Parliament would dispute the need for a functioning single market in the postal sector; we shall therefore need to expand on the existing market liberalisation directive within a reasonable time frame. The differences of view among ourselves and with the Commission begin over when to take action and how much liberalising should be carried out. At the time of the majority decision on the current directive, that was certainly the case.
So let us take a close look at the timetable set for the new version of the directive. It was adopted in 1997 and was due for transposition in the Member States by the end of 1998, although quite a number of countries have yet to take the necessary steps. The directive also called upon the Commission to submit fresh proposals for further liberalisation by the end of 1998. It would, however, be rather strange to start revising the directive before the consequences of the original have been properly assessed.
I appreciate that Parliament endorsed this schedule at the end of 1997, but what is the point of amending a directive that has not yet even been put into effect in all the Member States? The Commission first needs to submit a report detailing the state of play on transposition and - most importantly - comparing the measures put in place in individual countries. It will certainly emerge that there are some considerable discrepancies. Once the facts are established, action can be taken.
If the directive is to be amended, two sets of guarantees will be required. We must be able to rely on an efficient universal service, with a solid financial base. And the postal sector must continue to offer jobs with proper social security coverage. You cannot reasonably make comparisons with the telecommunications sector, Mr Bangemann. As Mr Simpson said, technology pretty much holds sway there, whereas the workforce - the human factor - is far more significant in the postal services.
Only a universal service is capable of ensuring that each and every European citizen, however remote his or her place of residence, has access to postal facilities. Only then can we speak of 'communication'. Our postal services fulfil a social remit; it is not just a matter of providing a commercial service. This remit is to offer the people of Europe an affordable and readily usable means of communicating. It is therefore not enough to equip the Greek islands and more isolated villages in the Bavarian forests with computer terminals. These regions need real letter boxes, which will be emptied daily.
A universal service of this kind needs a solid financial foundation - which it will be denied if the reserved area is broken up, opening the way for commercial suppliers to pick the cherries out of the cake. Instead, what is required is a system whereby postal undertakings offer a range of services, including non-profitable ones. The universal service and reserved area dimension can then benefit from cross-funding. Nor should we forget the 1.5 million people employed in the European postal sector, for whom we bear a social responsibility. It is common knowledge that the process of postal liberalisation to date has been painful for the workforce, accompanied as it was by redundancies and switches to often socially insecure conditions of employment.
I doubt that any political group would argue with me when I say that this parliament will not stand idly by while the postal service suppliers turn their workplaces little by little into production lines. We will not countenance quick profits for the companies at the expense of employees and quality. We demand guarantees that a comprehensive and high-quality universal postal service, offering proper job security, will survive.

Stenmarck
Mr President, the old monopolies are no longer up to providing the efficient service which we have all come to regard as a right. This has led to the deregulation and liberalisation of one sector after another. Unfortunately, the postal services are a major exception to the rule.
A number of EU countries have already moved so far in the direction of free competition that they have extended it to the postal sector, and they can point to satisfactory results. In Sweden, the process has gradually assumed a political significance of its own. It is essential that encouragement should be given to its continuation.
Having filled you in briefly on the background, I should now like to put a question to Mr Bangemann which should wind up this debate: what measures is the Commission thinking of taking in order to further the process of liberalisation in the postal sector?

President
Thank you, Mr Stenmarck.
With that speech by Mr Stenmarck, we have reached the end of the list of speakers.
Mr Bangemann has asked to make a brief statement, and he now has the floor.

Bangemann
Mr President, let me attempt to answer these questions. What Mr Stenmarck asked illustrates the confusion besetting this debate. The Commission has not yet decided what measures it will take. Not, Mr Ferber, because I am frightened of the Left - or indeed of anyone else. I am not even in fear of Mr Stoiber, unlike some CSU members seeking re-election to this House. I do not aspire to have my name on the CSU list, and this spares me the need to draw attention to myself with fiery rhetoric. Nobody frightens me - not even you, Mr Ferber.
Mr Simpson seems to hold a very simplistic view of the relations linking Parliament, the Commission and the Council. He has got things the wrong way round if he thinks that the Commission should always make proposals which match Parliament's vision. The procedure is that the Commission proposes, then Parliament and the Council deliver their positions. The Commission of course takes on board the results of this democratic process. Our own right to propose would be totally undermined, however, if I or any of my Commission colleagues were systematically to advocate what Parliament wanted - particularly since you will have noticed that the parliamentary position is not clear at this stage. And how could it be? The Commission has yet to make a proposal. Once it has done so, we can see what Parliament has to say.
Let me repeat, however, for the sake of clarity: my personal intention - and I can speak only on my behalf at this juncture - is to defend the universal service. So you need have no worries, provided my colleagues in the Commission follow my lead. What I cannot do is come forward with a proposal which would rule out extending the liberalisation process to the postal sector; nor can I advocate delay, since our postal services would simply end up being overtaken by developments elsewhere. This is a point I have endeavoured to drive home in previous debates; once you have grasped it, you will understand that I am not 'out to get' those employed in the postal sector. We can already see competition developing between those postal service providers who operate in a liberalised environment - Deutsche Post AG, for example - and the others who do not. The former enjoy a natural advantage born of their market fitness. They will be better placed legally as well, free as they are to buy up or merge with other companies; that door is closed to the monopolies. Anyone who fails to comprehend that will truly be letting down postal employees - and Mr Wijsenbeek's consumers - alike.
This is not about ideology. Very well, I am a Liberal and have been all my life. Occasionally one wonders if one's colleagues on the Liberal benches have the same degree of common sense; be that as it may, I have certainly never abandoned my Liberal convictions. It is not ideology which spurs me on - I see nothing Liberal in ideological positions; my aim is to do the job entrusted to me. If you are not happy with the way I perform, Mr Simpson, you have all the opportunity in the world to kick me out, along with my colleagues. It is fine by us; that is life on the democratic stage. You can do it tomorrow if you like; the opportunity is there if you so decide. I shall not be offended; Parliament will simply be doing its job. And if you refrain because you believe that the Commission has not done so badly, after all - then many thanks in advance.

President
Thank you, Mr Bangemann.
The debate is closed.
The vote will take place tomorrow at 11 a.m.
The sitting was closed at 11.50 p.m.

