Commission Question Time
President
The next item is Question Time (B6-0437/2006).
The following questions have been submitted to the Commission.
Part One
Subject: Airline overbooking
Bearing in mind Regulation (EC) No 261/2004 on Air Passengers' Rights, will the Commission consider doing more to discourage the practice of overbooking by airlines?
Jacques Barrot
Mr President, the Commission currently receives fewer complaints about overbooking than before the compensation levels were raised by Regulation (EC) No 261/2004. At the present time, only 8% of the complaints received by the Commission concerning air passengers' rights relate to instances of overbooking or denied boarding, while 60% refer to delays or cancellations. This trend is due, among other things, to the development of low-cost carriers and to the increasingly frequent use of charter companies, which do not tend to integrate overbooking into their working methods.
Since this regulation entered into force, the airlines have demonstrated more flexibility in looking for volunteers who will agree to give up their seats in return for certain agreed benefits. This practice encourages the airlines to resolve the problem there and then.
That being said, I should like to point out to Mr Evans that, in accordance with Article 17 of the regulation, the Commission is going to present a report on the functioning and application of this regulation to Parliament and the Council at the start of 2007. This communication will be based on a study carried out by an external consultant. An invitation to tender has been published for the purposes of recruiting this external consultant.
Overbooking is one of the items that will be dealt with in this study, and the Commission will obviously wait to learn the results of the study before it decides whether or not there are grounds to adapt the legislation. The fact is, Mr Evans, while these new regulations have indeed had a noticeable effect on passengers' rights, it is the decline in overbooking that has become, in certain cases - it must be said - a trend that is very detrimental to passengers.
Gary Titley
I should like to thank the Commissioner for that very thorough and clear answer. However, it is a fact that people still complain about over-booking.
My other concern is that there are still airline companies which are ignoring this Regulation on Air Passengers' Rights and are telling their customers that it does not apply to them. Is the Commission going to get tough on some of these operators who seem to think they can operate outside the law and outside EU regulations?
Jacques Barrot
Mr Titley, it is absolutely vital that we ensure that these passengers' rights are applied. I must also say that, at the moment, I am trying to call on all of the airports to display passengers' rights, so that it is quite clear that all passengers must be informed of the fact that they cannot be made the subject of an overbooking without being offered significant compensation in return, as the regulation stipulates. There are three key words in relation to this issue: information, investigation and audit, as I pointed out to you. Next, we shall see whether there are grounds to impose penalties or, at any rate, to bring before the Court of Justice those Member States that have not really monitored the application of these passengers' rights.
There you have it, Mr Titley. I thank you for your question, which highlights the importance of applying European law.
Reinhard Rack
(DE) Mr President, the Vice-President of the Commission was right to point out that we, together, have managed to solve the problem of over-bookings or, at any rate, to improve the situation. In adopting this directive back in 2004, we had set the standard for delays very low after the airlines told us that the 9/11 disaster meant that stringent rules would make life virtually impossible for them. They make a practice of simply letting delays pile up, so that, with several landing and takeoff manoeuvres in the course of a day, these delays eventually add up to many hours, for which no financial compensation is paid. We have put stringent rules in place for the benefit of railway passengers, who can be entitled to full reimbursement of their fares, yet airline passengers ...
(The President cut off the speaker)
Jacques Barrot
I just briefly want to say to Mr Rack that we receive numerous complaints about excessive delays and that we specifically wanted to carry out this audit in order to determine how exactly we can ensure that the new passengers' rights are applied more effectively. You are right: as European citizens, we have a right to demand to be treated decently as air passengers and, in the future, as rail passengers. Therefore, rest assured, Mr Rack, that it is indeed the aim of the Commissioner for Transport to ensure that passengers' rights are applied more and more rigorously.
Jörg Leichtfried
(DE) Mr President, Mr Vice-President, I am glad that the number of complaints appears to be relatively low, but I have myself had the experience - for we are relatively frequent flyers - of the last three flights I was on being overbooked.
I would now be interested to know whether this is a more frequent occurrence on any airlines in particular. Can it be said that there are certain airlines that make overbooking a matter of professional practice? Might it not, under certain circumstances, be possible to consider taking action - quite apart from proceedings for breach of contract - against these companies, not only in order to obtain compensation, but against those companies themselves. What is the likelihood of an improved public relations effort to make passengers aware of the possibility of compensation payments?
(The President cut off the speaker)
Jacques Barrot
Mr President, I can confirm that there has been a reduction in the number of complaints about overbooking. In 2001, they exceeded 16%, and they now stand at 7%. Nevertheless, I, like you, am entirely convinced that the victims of this practice should apply, in each of the Member States, to the body in charge of investigating these complaints. Then - as I pointed out to you - this audit will enable us to have a far more comprehensive view of these problems. We will thus be able to know which airlines regularly carry out this practice and which ones deserve a serious warning.
Subject: Protection of youngsters in chat rooms
Internet forums and chat rooms are used predominantly by young people. Users can exchange views in a quick and simple manner. In principle, this use of new media is to be welcomed, but ensuring youth protection on the Internet is proving extremely difficult. Anyone interested can join in a given conversation in a chat room and, to do so, must provide some personal details. In many cases, this information cannot be verified. It is impossible, therefore, for children and young people to know precisely with whom they are dealing. For example, offenders could log into a chat room using false personal information.
Is the Commission planning to take action regarding child and youth protection in chat rooms? Does it have a strategy in mind to prevent the misuse of children's and youngster's chat-room forums?
Franco Frattini
Mr President, ladies and gentlemen, the communication that the European Commission adopted in July, at my suggestion, addresses the general theme of a European strategy on the protection of children's rights. It is clear that special attention is paid in this European strategy to the risk of children and young people falling victim to the actions of criminal paedophiles who use the Internet.
We support very strong preventative action. In particular, we are in favour of the creation of an international database that can gather together all of the principal data relating to criminals and to those who operate via the Internet for paedophilic purposes, mainly so that we can stop the spread of images that, obviously for reasons to do with sexual exploitation, affect children and young people, and so that we can root out and clamp down on the culprits, namely those who use the Internet for these purposes.
We have also decided to fund a programme called 'Safer Internet plus', which consists of a European network of telephone lines and, above all, of Internet communications aimed at allowing Internet users to cooperate with the police. Through this system of safer Internet use, which is called Safer Internet plus, Internet users will be able to inform the police authorities or Internet providers of any potentially dangerous 'hits', and thus the presence of those who use the Internet for pornographic purposes.
Furthermore, we have recently adopted a communication on the trafficking of human beings that includes a chapter specifically dedicated to children and to violence against children. I am looking into the application of the framework decision on the fight against the sexual exploitation of minors and children and against the use of children in pornography. In conjunction with the application of this framework decision, I believe that we will be able to come up with measures to further enhance the legislative framework and to clamp down even more harshly on Internet-based sexual exploitation that harms children. I will report on this issue before the end of the year in a Commission communication.
Finally, the general theme of computer crime will be addressed at the start of next year with a strategic document that will contain a chapter specifically dedicated to child protection. Mr Ebner will be aware that we have refinanced the Daphne programme. The Daphne II programme is dedicated to European initiatives combating violence not only against children but also against women and will have a budget of EUR 50 million for the new operating period. Through this system, we plan to promote best practice in preventing violence against children and to launch information campaigns aimed at promoting more responsible Internet use on the part of children and young people.
Michl Ebner
(IT) Mr President, ladies and gentlemen, I am grateful to Mr Frattini for his very thorough reply. I must acknowledge the fact that he has done some very extensive work in this area, and I believe that he will succeed in bringing about the security and the protection that we want for our children.
I hope that this programme and its activities bear fruit and I, for my part, hope that Parliament will firmly support its work.
Franco Frattini
Vice-President of the Commission. (IT) Mr President, ladies and gentlemen, I am truly grateful to Mr Ebner.
We are currently at the implementation stage. The European strategic plan will, however, include other important advances. We are thinking about launching a European emergency helpline in the near future for children who are in difficulty. It will have the same three numbers for the whole of Europe - 116 - followed by a national number for each country, and will help children who have been kidnapped, who are lost or who are in difficulty.
Together with the major international credit card companies, I am also looking into the possibility of blocking the credit cards of those who access paedophile websites for the purposes of buying pornographic material involving children. Everyone will recognise that a threat such as this is already in itself a signal designed to strongly discourage this type of criminal.
Alexander Stubb
I am asking my question as the father of Emily, who turns five on Friday, and Oliver, who will be two and a half. Oliver is not yet surfing the net, but Emily already is.
I fully share the views put forward by the Commissioner and the previous speakers about protecting youth, but can the Commissioner guarantee that we are not starting to impose restrictions on our general use of the internet, because the last thing we want is a headline to the effect that the European Union is preventing us from using the internet freely?
Franco Frattini
Mr President, ladies and gentlemen, obviously, no one is thinking about restricting people's use of the Internet, which is one of the most extraordinary means of communication, insofar as it puts children and young people throughout the world in touch with each other.
However, it is quite clear that we must make sure that we root out and clamp down on criminals who use the Internet in order to establish closer contact with young people, who must obviously be protected. It is therefore not by restricting Internet use, but by doing more in terms of prevention and control, that we can help children to use the Internet in complete safety.
President

Subject: Stoning of seven women in Iran
According to Amnesty International news release MDE 13/111/2006, seven Iranian women, Parisa Akbari, Iran Eskandari, Khayrieh Valania, Shamameh Ghorbani, Kobra Najjar, Soghra Mola'i and Fatemeh, face imminent stoning in Iran.
Despite repeated assurances from the Iranian regime frequently transmitted by the Community authorities promising moratoria or the suspension of this barbaric practice, reports of the sentencing and execution of women have continued to mount since the European Union embarked on its 'human rights dialogue' with the regime.
Can the Commission explain the reasons for the total failure of the human rights objectives that it outlined for its policy of dialogue with the Iranian regime? Can it say what specific action it has taken to prevent the murder of these Iranian women?
Peter Mandelson
Member of the Commission. The Commission remains deeply concerned by the human rights situation in Iran and views the practice of execution by lapidation as particularly abhorrent. It is fully aware of the reports by Amnesty International covering sentences of stoning, referred to by the honourable Members. Stoning is a cruel, inhuman and degrading form of punishment, which the Commission finds totally unacceptable. The EU has repeatedly called on Iran progressively to restrict the use of the death penalty and insisted that it be carried out according to UN minimum standards, including the requirement that capital punishment may be imposed only for the most serious crimes.
In December 2002, the EU started a human rights dialogue with the Iranian authorities, with the participation of civil society representatives. One of the practical results at the time was confirmation by the Iranian side of a moratorium on stoning. Regrettably that dialogue has not taken place since the summer of 2004 because of the reluctance of the Iranian authorities. However, tentative dates for a new round of human rights discussions have been fixed for mid-December.
Paulo Casaca
- (PT) Mr President, so the Iranian authorities have promised a moratorium and have failed to keep to it; no surprise there.
What I should like to ask you, Commissioner, is why the Commission insists on talking with a fanatical clique that is tyrannising Iran, rather than with the vast majority of Iranians, who think differently. I should like to recommend a book to you, written in your language, entitled We are Iran, a collection of writings by a large number of Iranians who think differently and with whom the Commission ought to speak.
Peter Mandelson
Member of the Commission. We talk to all elements of civil society in Iran. It is difficult for the honourable Member on the one hand to ask us to make representations; to make a case to the Iranian authorities; to make a stand for human rights and against this abhorrent practice; and, at the same time, to criticise us for engaging in a dialogue. If you do not have a dialogue, then it is harder, if not impossible, to communicate your view.
In my view, the European approach is right. In close collaboration with EU embassies in Tehran, the Commission monitors the situation on the ground very closely, in particular as far as the death penalty is concerned. Whenever it learns of a death sentence passed on juveniles or on women at risk of stoning, the EU undertakes immediate démarches with the judiciary and other competent authorities. So the EU is not relying on dialogue alone. It makes its views very directly and clearly known whenever such a case arises, and will continue to do so.
Piia-Noora Kauppi
Commissioner, when you say that the European Commission takes the human rights situation in Iran seriously, when is this issue discussed in other dialogues with Iran? We now have a dialogue about the nuclear programme in Iran. Is this issue addressed in those negotiations, or in the negotiations on trade issues? This is a serious matter and I do not think it is enough to say that we are trying to get back to the negotiating table on human rights. This has to be put on the agenda in all dialogues with Iran. When do you intend to do that?
Peter Mandelson
Member of the Commission. The Commission follows up human rights cases through several channels. It does not simply rely on the dialogue, the last session of which was held in June 2004, and another session of which is due to take place shortly. We make diplomatic representations through a variety of different channels, in addition to the set-piece dialogue that is in place, and we shall continue to do so.
Edite Estrela
(PT) Following the remarks of previous speakers, I should like to know the Commission's position on the rape of pregnant women and young children, as a means of silencing the opposition in Iran. This is a violation of women's rights and human rights, and I should like to know if the Commission is aware that this occurs and what its position is on the matter.
Peter Mandelson
We follow individual cases. We know of a number of women who are at risk of execution by stoning. Our views are very well known and frequently expressed; nobody is in any doubt at all about our opposition. In particular cases, individual by individual, you can be assured that all possible means will be used to express our view and that maximum pressure will be exercised.
Part Two
Subject: Commission proposal for a European Parliament and Council regulation on roaming on public mobile networks in the Community
Following the publication by the Commission of its proposal for a regulation on roaming on public mobile networks final), it has become apparent that the Commission proposal does not contain much information about the impact of the specific situation of residents and businesses at the internal borders of the EU Member States as regards roaming costs.
Does the Commission have any information about the costs which will be incurred in internal border regions?
What will the Commission do to ensure that mobile operators cater for the specific needs of residents and economic activities in the EU's internal border regions?
Viviane Reding
I am grateful to the honourable Member for asking the question. This gives me the opportunity to give an answer which I know is very important to Parliament, because Parliament has given much prominence to the topic of international roaming in recent years.
As you know, for citizens there are two problems: first, the high prices they have to pay for crossing the borders; and then the problem of inadvertent roaming on a foreign network when they have not yet crossed the border but are living in a border area. In competitive markets one expects to see convergence of prices and costs, but when it comes to roaming there has been for many years now no evidence of a real relationship between prices and underlying costs. This point was also made very clearly in the impact assessment which accompanied the regulation which I have put on the table.
The question is very simple. Why should a French customer who just crosses the border to Italy and makes a local call be charged from 50 cents to over EUR 1 per minute, when an Italian customer who is doing exactly the same will be charged between 10 and 13 cents per minute? All right, there are some additional costs if you take your phone into a neighbouring country, but there is very little justification for such high differences in price.
In every other area of telecoms - fixed and broadband - European consumers are seeing significant improvements in price, choice and quality; only for international roaming has this not been the case. There are millions of citizens who have been very frustrated at these high prices for many years. We estimate that there are roughly 99 million European citizens living in regions located within 50 km of the borders and 11 million citizens within 5 km of the borders. They are those most affected by the extraordinarily high roaming prices.
The regulation I have proposed, which is under discussion in Parliament and the Council, proposes substantial reductions in the roaming charges for all Europeans, consumers and business travellers. It is clear that when that is put in place, those living and roaming in internal border regions will be among the biggest beneficiaries of the regulation.
From a technical point of view, because of the nature of mobile networks, consumers who live in such areas will have to pay some roaming charges, but there will be guarantees, if the regulation is passed, that the prices will be far more reasonable than they are today.
There is also the question of inadvertent roaming, which is a possibility wherever mobile services are available and national borders exist. That is also why it is very important for those people that the charges will be closer to the cost.
I very often criticise the operators for charging high prices. On the other hand, I must also say that when operators make the right moves in the right direction, I have to give credit where it is due. I am pleased to note, for example, that operators in Ireland and the United Kingdom have started to offer all-island rates. That means, for instance, that citizens in Ireland and in Northern Ireland now pay only one single rate, irrespective of where they are. That is a good example of best practice. I would like to see such initiatives encouraged and followed in other areas across Europe.
Lambert van Nistelrooij
(NL) Mr President, roaming costs, particularly those in border regions, account for some EUR 5 billion annually in unacceptable and, in fact, unnecessary expense for businesses and residents alike. I am therefore indebted to Commissioner Reding for her very emphatic intervention in recent months and also today, but a voluntary solution between businesses in the border regions for this problem of roaming, of which one is hardly aware, where one is moved from one network to another several times a day, is a major problem; I therefore fear that things will not get solved sufficiently promptly if they are done on a voluntary basis. So I would ask the Commissioner, and the whole of the Commission, whether it is prepared to draft progress report on this subject. I think that we need to step up our efforts, for I know that the border regions would like to have a say too.
Viviane Reding
Unfortunately the national regulators do not have explicit powers to prevent or reduce the possibility of inadvertent roaming. As the international roaming problem has shown, we do not yet have an internal market in this area. That is why we have to follow this very closely in order to find good examples and underline them. In Ireland, for instance, Comreg and Ofcom have agreed to set up a joint working group to investigate the extent of the problem of inadvertent roaming by mobile users and we welcome and encourage that approach. But it is not yet possible to address the problem on a wider scale through the normal regulatory process.
Andreas Mölzer
(DE) Commissioner, the foreign surcharges on the new UMTS technology are even more pricey than on conventional mobiles; if you surf abroad, even if only over a partner network, you lose a lot of money fast, and the bill does not generally show whether it has been calculated by the minute or by volume.
Is the Commission planning to ensure greater transparency in this area by way of the Roaming Regulation?
Viviane Reding
Member of the Commission. I was asked specifically by Parliament, among others, to address the question of international roaming charges for mobile phones. At the time I examined this matter, there was no specific demand for action on data services, such as SMS, and when the national regulatory authorities called on the Commission to do something, they were only concerned about the high level of international roaming charges for voice telephony. I know from the many discussions I have held, particularly with Members of Parliament and with citizens, that there is also a problem with data. Parliament, which is examining the regulation, now has the opportunity to go a step further than the Commission did. Let me also appeal to businesses, since industry is always complaining that we intervene in price regulation. Operators now have a chance to show that they themselves are capable of bringing prices down, so that the regulators or politicians do not need to intervene.
Justas Vincas Paleckis
Commissioner, you have given convincing examples of the absurd situation as regards roaming prices in different countries, but you did not mention the new Member States of the EU, where the situation is even worse. Will the Commission pay special attention to the new Member States of the European Union with a view to eliminating the very big differences in general mobile telephone and roaming charges?
Viviane Reding
Member of the Commission. The proposed regulation on international roaming costs applies to all European Member States, including the new Member States. In October 2005, the Commission created a website where all the prices were published, in the interests of transparency, including those in the new Member States. These prices are to be reviewed one year on, in order to see how they have evolved in the different Member States. As I have said, I am going to regulate with the help of the European Parliament and the Council, which are the legislators. In a few weeks' time, then, the website will have been updated and you will be able to see whether overall prices in the different countries have gone down and what the trends have been during the last year.
Subject: Broadband Internet access
According to recent information published by the Commission's Directorate-General for the Information Society and the Media, only 13% of schools in Greece have broadband Internet access. Greece is thus ranked last of 27 EU countries. As Commissioner Viviane Reding, the Commissioner responsible, said on 29 September 2006, computer know-how skills are now essential, and broadband Internet access may constitute a basic tool for development and competitiveness.
What does the Commission intend to do to encourage Member States such as Greece to introduce computers with broadband Internet access in schools? How does it intend to support measures to introduce IT instruments in schools and bodies and organisations located in remote regions, in particular island and mountain regions?
Viviane Reding
Member of the Commission. The honourable Member is correct: the Greek electronic communications market has unfortunately suffered from a very long delay in the transposition of the regulatory framework. It should have been in force in 2003. It was only completed in Greece in June 2006. We have seen very clearly that where the framework is not in place there is no competition. Where there is no competition there is less investment. That is one of the problems in Greece.
On a more positive note, EU structural assistance in Greece provides substantial co-funding for investments aimed at promoting speedier adoption of ICT in Greece and, in particular, for broadband internet in schools and public organisations in remote, island or mountainous areas. Cohesion funds in Greece also permit projects for the acquisition of informatics equipment in schools or public organisations in the regions, including remote, island or mountainous areas.
As you also know, Greece has started the implementation of a major project aimed at extending broadband access to those Greek regions outside Athens and Thessaloniki which do not yet have that connection and, under normal commercial circumstances, would not get it.
The Greek Government has also launched the DIODOS project, which established a high-capacity Greek internet educational network through which a number of internet providers are offering advanced internet services to research, academic and education communities at prices that are expected to be 50% below current retail prices.
You will also be aware that the Commission is working very hard on bridging the digital divide. That is why the Commission recently published a communication on bridging the broadband gap, which gives a strong commitment to achieve broadband for all Europeans through policy, budget aid and regulatory instruments. Included in that are the structural funds, but also - and this is new - the rural funds, in full respect of state aid rules. The communication proposes action that aims at strengthening current policies, national broadband strategies and reinforcing the exchange of best practices through a website. We believe it is very important for the regions to understand what other regions have done and to see what they might be able to copy or adapt to their specific needs. In that sense we hope that the many problems that persist in some regions, and especially in Greece, can gradually be overcome.
Stavros Arnaoutakis
(EL) Mr President, I should like to thank the Commissioner for her reply, which fully satisfied me. I should also like to extend my special thanks to her for visiting Cyprus and for visiting the ENISA, thereby helping to resolve numerous problems for the benefit of this organisation. We extend our special thanks to you, both Greece and Cyprus, for your visit to Heraklion.
Viviane Reding
Member of the Commission. Besides being a beautiful island, Crete is also a region striving to overcome the broadband gap it faces and I know that the honourable Member is helping to pursue that goal in his capacity as a representative of Crete. Any help we can give, of course, must come through the Greek Government, because, in the case of structural or rural development funds, it is the government which must take the initiative. The Commission is willing to provide help, so that the large gap which still exists in the non-urban areas of Greece can be narrowed.
Mairead McGuinness
I should like to thank the Commissioner. In Ireland the schools fare better and students are fine while they are at school. When they are at home, however, the situation is very poor; 25% of the population cannot get broadband. Has the Commission given serious consideration to filling the gap by new technologies, such as WiMAX, although these need spectrum and frequency access? Have you considered this and do you have a response to it? Many of my constituents cannot get access to broadband and students are deprived of the technology when they go home.
Viviane Reding
Member of the Commission. It is clear that there are many techniques and technologies that can bridge the broadband gap. The Commission has always been very consistent in saying that we need technological neutrality. We cannot favour one technology over another and sometimes a mix of technologies is the right approach. Fibre is not always the answer; sometimes satellites can be more efficient. In the Nordic states, for example, where there are a lot of geographical problems and problems of distance, this mix of technologies has provided a solution. I know from the statistics for schools with broadband internet access that Ireland is not doing wonderfully well. That is astonishing, because I know that education on the new technologies in Ireland is very advanced. I therefore hope that the broadband gap in Ireland can be filled and that in future all schools will be able to reach the world through the new technologies.
Malcolm Harbour
I was glad that the Commissioner, in her first answer, reinforced the importance of sustaining competition and the access obligations in the framework of broadband delivery. I wonder if she would like to confirm to the House that she will be resisting the calls from certain operators and even regulators for a regulatory holiday for certain levels of investment in broadband? Secondly, bearing in mind that she and I will be at the global forum on internet governance next week, can she confirm that she will be joining us in promoting the virtues of competition on a global scale, in order to raise the level of broadband connection globally and reduce costs?
Viviane Reding
Member of the Commission. I can give a positive answer to both questions. The first answer is very clear. I will not permit regulatory holidays, not even in big countries, because regulatory holidays are against the interests of our citizens who only have access to a single provider and no competition, which will lead to high prices and is not in the interest of the industry in general. So I will fight regulatory holidays.
The second answer is also yes. I will be in Athens next week at the world internet governance conference. I will meet there with parliamentarians, and I applaud the fact that the European Parliament is sending a delegation to that very important conference, because the voice of the people of Europe has to be heard there.
Subject: European Registry of Internet Domain Names
Can the Commission confirm how many applications for .eu domain names were submitted to EURid up to the start of the Sun-Rise 2 period? Of the total applications what is the average EU rejection rate (%) and specifically, the rate of rejection for Irish applicants? Can the Commission offer an opinion explaining the reason for discrepancies between the figures for the EU average and the figures for Irish applicants? Is the Commission aware that the registrar did not service Irish registries with the necessary means to fully comply with the application process? If it agrees that information was unavailable is the ADR a fair method of remedying the problems encountered by the Irish applicants? Finally, is the Commission satisfied that all necessary information is now available from the registrar to the registries?
Viviane Reding
Member of the Commission. My answer to the honourable Member is that, according to information from the registry, the number of applications submitted during the sunrise period was 346 218, of which 181 306 were filed during the first phase and 164 912 during the second.
The current rate of rejection for applications from Ireland is 46%, compared to an overall EU rejection rate of 34%. The complete table with a breakdown of all applications per prior right and country of applicant can be found on the registry's website.
The kind of documentary evidence to be provided by an applicant depends on the national law of the Member State in which the prior right is established. There are huge differences between the legal systems of the Member States, which are reflected in the more or less complicated means needed to prove the existence of a prior right. This results in a higher or lower rate of rejection of applications in certain countries, such as Ireland.
As to the question of whether the registry provided Irish registrars with the necessary means to comply fully with the application process, the Commission is not aware of any specific discrimination in this respect. From October 2005 - that is, two months before the launch of the sunrise period - the registry published on its website and in all the official languages a detailed description of all technical and administrative measures concerning the registration procedures. This information, by the way, is still available online to any interested party. During that same period, the registry also set up a call centre, where applicants could obtain quick responses to their questions in 20 official languages.
As to the alternative dispute resolution procedure, its purpose is promptly to resolve disputes between domain name holders on matters such as cyber-squatting or intellectual property rights, as well as in relation to individual decisions by the registry. Should an Irish applicant consider that he or she falls within either of these two categories, the Commission is of the opinion that the alternative dispute resolution procedure is indeed a fair method for remedying the problem.
In conclusion, the Commission considers that the information made available by the public registry is sufficient for applicants and for registrars to proceed with the registration of domain names during the registration period and afterwards.
Jim Higgins
Thank you for your reply, Commissioner. Despite our performance on broadband, it is nice to hear the Commission acknowledge what has happened in Northern Ireland and Ireland as regards roaming, which I hope will serve as a model for other countries.
In her answer, the Commissioner firmly placed the blame on national governments for their inadequate legislation. This is true not only of Ireland but also of the United Kingdom. Mr Patrik Lindén, the communications manager of EURid, has put it very bluntly indeed. I will take your message back and will certainly point out that at national and local level much of the responsibility for the fact that we are way behind the rest of Europe effectively rests with our own government and our own legislation.
Viviane Reding
Member of the Commission. According to the legal framework established for the Dot.EU Registry, the Commission is not responsible for deciding on the interpretation of national law in connection with the validation of prior rights. That mission has been assigned to the validation agent selected by the Registry, PriceWaterhouse Coopers. That is one point.
The second point is that the decision was also taken, in collaboration with the European Parliament, to be respectful of national law in that sense; and because there are huge differences between national laws, I would not like to say that one law is better than the other. National law is linked to national habits, to the cultural diversity of our countries, so it is up to the national governments to change this law or to leave it as it is.
Subject: Fair Trade
In your response to the European Parliament's report on Fair Trade and Development in July, you stressed that the EU needed a coherent and collective policy framework on Fair Trade and undertook to look at how the Commission could support the various certification and assurance schemes and help consumers obtain accurate and transparent information. What further conclusions have you drawn on an EU policy in support of Fair Trade?
In particular, while Fair Trade distribution and labelling schemes are well developed for food and drink products, this is not the case for garments. It is claimed, for instance, that Bangladeshi women can work 80-hour weeks in textile factories for just 10 euros a month, producing clothes to be sold cheaply on EU high streets. How will the Commission work with NGOs to assist the development of international Fair Trade standards and certification for the production of garments?
Peter Mandelson
Fair Trade has made enormous progress in getting labelled products onto supermarket shelves and into mainstream buying habits and practices. The same cannot yet be claimed for crafts and garments. The Commission will consider, as part of the follow-up to Parliament's report, whether there is scope for action in this area.
When I said in Parliament in July that 'what is required to tackle poverty and to enhance development is a fair and coherent policy framework', this was not limited to Fair Trade - though I acknowledged the helpful role that the report on Fair Trade and development would play. So whilst the Commission is considering how to capitalise further on the role of the Fair Trade movement, there are a number of other wider actions that it can undertake.
In cooperation with developing countries, we can promote decent work and international labour standards, as well as the interaction between decent work and other policies. The new thematic programme on investing in people, which comprises awareness-raising, training, information-sharing and the development of a set of indicators to monitor progress, will be an important tool.
The close link between decent work and poverty reduction is increasingly well understood in the EU. In the 'European Consensus on Development' - a document published in 2005 - employment and social cohesion are recognised as one of the nine areas of Community action. Employment, decent work and social cohesion are also central in the EU-Africa strategy.
In May 2006, the Commission adopted a communication on decent work for all, which will be presented at the Commission Conference on Decent Work and Globalisation in December, where the issues will be tackled in a comprehensive framework.
We are also contributing to the adoption of international norms and standards for all products, including textiles, through ongoing trade-related activities at bilateral and regional level. One example is a quality support programme in Bangladesh, which focuses on the improvement of the quality standards, metrology and accreditation systems in the country to help national laboratories ensure regional and multilateral recognition and acceptability of the conformity assessment certificates. The Bangladesh Standards and Testing Institute will also be strengthened in its basic capacity as a standards-setting body and in the area of metrology.
The programme will help to enable Bangladesh to address multilateral requirements, as well as to increase the competitiveness of its export industry. The project aims to create public-private partnerships and promote in particular awareness of quality and environmental managements systems and social standards - ISO 14000 and SA 8000 certified companies have increased in number - as well as strengthening the Consumer Association, through which pressure for change and control will be built up.
Sarah Ludford
Thank you for that answer, Commissioner. I entirely accept that there are wider issues in trade and development than Fair Trade alone. However, I should still like to hear from the Commission that you will give specific support to developing clear criteria for assessing Fair Trade assurance schemes. I should also like you to reflect on ways to boost transparency in pricing, so that consumers can see if the Fair Trade premium is passed back by supermarkets, as well as seeing that if they buy their ten-pound or fifteen-euro dress, their bargain may be at the expense of a decent living for textile workers.
Peter Mandelson
Member of the Commission. I sympathise with what the honourable Member is suggesting. I think that consumer information, consumer power in this context, is indeed the key. Fair Trade relies on consumers who have heard about the difficulties faced by poor producers and want to do something about it. We can help mainly by helping consumers to be clear about what is on offer, but we are looking for opportunities to support the Fair Trade movement when it comes up with targeted requests. I look forward to considering those as we reflect on what further action to take to support the Fair Trade movement in the weeks and months ahead.
Paul Rübig
(DE) Mr President, fair trade is an issue not only in textiles, but also in energy. Russia's energy-intensive industries are currently being supplied with oil at 8 dollars per barrel, and gas is available at a very competitive price. With this in mind, how do you rate the chances for survival of our own energy-intensive industries, and what effect do you think this will have on Russia's accession to the WTO?
Peter Mandelson
Member of the Commission. That is an intriguing question, one which certainly goes far wider than, and indeed probably almost entirely steps outside, the scope of the original question put to me. Nonetheless it is fascinating.
I believe that the best way of improving, strengthening, deepening, making more satisfactory the energy demand and supply relationship between Europe and Russia is, first of all, to press Russia to adopt other, more transparent policies of free transit that are governed by global trade rules. I see no reason why energy goods should not be subject to global trade rules like any other good. But I also believe that the best way to strengthen the energy relationship between Russia and the EU is by anchoring that energy relationship in a wider set of trade negotiations and agreements, the object of which would be to bring about integration of the Russian and European economies governed by fair and transparent market rules and agreed norms and standards.
It is in that context that I look forward to pursuing this subject as part of the wider trade negotiations that I hope will open up following Russia's accession to the WTO.
Philip Bushill-Matthews
Commissioner, one of the many obstacles to the development of Fair Trade is the occasional attempt by other countries to dump products within Europe on a below-cost basis, of which shoes was but the latest example. My question is not about how right or wrong the shoes decision is; it is about the process by which that decision is taken. I understand that 12 countries voted against, 9 voted in favour and there were 4 abstentions. Could you please comment on the logic of that process, Commissioner?
Peter Mandelson
Member of the Commission. I think the honourable Member has now volunteered to return to this Chamber and take part in our debate, at about midnight or some time after midnight, on the Muscardini report of this Parliament, which concerns trade defence instruments. I certainly look forward to seeing him early tomorrow morning during the course of that debate. Unfortunately he is not on the list, so he will no doubt want to be there to listen and follow the debate so that he can take the issues forward in other ways.
My short answer to his question is that our job in the Commission is to uphold the rules, whether they be the rules of the WTO or our own EU laws. We should do so objectively, transparently; but, as I have said on previous occasions, it is my strong view that those of us who believe in free trade should, wherever necessary, stand up for fair trade; and that approach will be reflected in the Green Paper which will review the use of trade defence instruments in the Community and which will be published in the next few months. I look forward to engaging with him and hearing his views and contribution to the debate surrounding that Green Paper.
Subject: World Trade talks
Can the European Commission make a full and comprehensive statement concerning the present state of play of the World Trade negotiations?
Peter Mandelson
Member of the Commission. On 5 September 2006, I gave a full and comprehensive statement to Parliament on the state of play of the Doha Development Agenda. I am sorry to say that no major progress has been achieved since then; the negotiations remain suspended.
However, it is important to note that since then, be it at the G-20 meeting in Rio, which I attended, or the Cairns Group meeting in Australia, where I was represented - both in September - all key players in the talks have reiterated their commitment to the Round and their willingness to resume negotiations as soon as the political circumstances allow. However, it will take more than that to get the DDA back on track. All sides will have to show flexibility and realism and make offers that represent real efforts in all areas of the negotiations.
There is a narrow window of opportunity for resuming the talks between the United States mid-term elections on 7 November and early in the spring of 2007, when the US Congress starts working on a new farm bill.
I visited Washington at the end of September to explore the US position on the DDA, to probe US congressional politics on the subject and to explain our position. I met with policymakers in the Administration, with a number of key law-makers on the Hill, and with constituencies like the National Farm Bureau and the National Association of Manufacturers.
The political situation in the United States is difficult. However, I was encouraged by my contacts with the Administration, where I sensed a genuine willingness to conclude the Round during President Bush's tenure, although this will require the use of considerable political capital, even to get Congressional extension of the President's Trade Promotion Authority.
So in the coming weeks our strategy must be to clarify the political conditions for renewing the talks and prepare the ground for movement - short of new offers. Our sights also remain firmly set on preserving the development issues, at this stage in the context of the Single Undertaking.
If the DDA fails, or if the suspension is extended for too long a period of time, my firm judgement is that we run serious economic and political risks. There remains a lot on offer in the DDA in terms of agricultural subsidy reduction, tariff reductions for agricultural and industrial products, improved rules and development; and hence a great deal to lose if the talks fail. We should not underestimate the broader systemic implications of failure for the multilateral system at large. The DDA should therefore remain our main focus of attention - as it will - and the EU is willing and prepared to go back to the WTO negotiating table as soon as realistically possible.
Seán Ó Neachtain
I have often said to you in this House that 5% of world trade is agricultural trade and the 95% is being blocked by the 5% at fair trade talks. Is it not time to remove the blockage? Is it not time, Commissioner, to get on with the vast bulk of world trade and deal with agriculture on a separate level?
If you concede more on European agriculture, you will have broken the agreement that the Member States have made on agricultural subsidies and agricultural support. So is it not time to deal with the vast bulk of world trade and leave agriculture aside?
Peter Mandelson
Member of the Commission. I do not accept that point of view, because I believe that we have a clear obligation, for objective reasons and because it was in the original Doha mandate, to bring about a negotiated and agreed restructuring of agricultural trade.
We are obliged to do that because reform of agriculture has lagged behind the progressive changes that have swept through the rest of the international trading system, with that benign and beneficial impact on industrial tariffs. But in the case of agriculture you have, exceptionally, a system of agricultural support and in some cases export subsidies which has been very trade-distorting.
As a result of our reforms in Europe we are curing ourselves of the trade-distorting impact of our agricultural support mechanisms. That is not the case, notably, in the United States. I believe it is important that we do not say goodbye to this round without exhausting every possibility of bringing about the progressive reform in agricultural support and trade that will be of great benefit to developing countries.
David Martin
Commissioner, are you concerned that the plethora of bilateral trade agreements - and I do not just mean EU bilateral trade agreements - that is growing up at the moment is a threat to getting the WTO talks back on track?
Peter Mandelson
Member of the Commission. I do not think it is a threat, but I acknowledge the risk of a diversion of energy and negotiating capacity. There are always choices to be made by different countries and negotiators as to what form of negotiation they prioritise - the multilateral or the bilateral. But I am entirely satisfied that, given the long-term nature of the negotiations we are entering into and the clear sequencing of the initiatives we intend to take, there are no circumstances in which I would permit our own negotiating effort and commitment to the WTO to be diminished or jeopardised by any pursuit of bilateral free trade agreements.
Georgios Papastamkos
(EL) Mr President, I should like to make a comment and ask a question.
The insistence of third trading partners on agricultural negotiations continues to cause surprise, given the small volume of agricultural products traded globally.
Does the Commissioner think that the emerging economies are truly prepared to contribute to this round of negotiations with fundamental commitments to industrial products and services or do they simply envisage unilateral disarmament on the part of the developed countries?
Peter Mandelson
I think that economically the emerging economies can certainly take on the sort of requests we are making, not only because they are obliged to reciprocate proportionately and commensurately, because that is the principle on which the world trade system and its negotiations are based, but also because they would benefit from it. They would benefit from the progressive opening-up of their industrial sectors by a reasonable lowering of their applied industrial tariffs. I say 'applied' because the bound duties will come down. They are already being reduced autonomously in many cases amongst the emerging economies. I do not underestimate the benefit to the global economy as a whole, as well as to us in Europe, of those autonomous reductions in tariffs being consolidated by means of a ratchet so that the liberalisation cannot be reversed.
I think it is understood by our negotiating partners that, quite apart from the economics, the politics dictate that there must be reciprocity, flexibility and moves in the area of industrial tariffs and services if we are going to be able to demonstrate clearly to our constituents that there really is a worthwhile return for the enormous payments we are making into this round in order to bring the negotiations to a successful conclusion.
Subject: Introduction of the euro in Sweden
What is the Commission planning to do to induce Sweden, in line with its Treaty obligations, finally to introduce the euro?
What effect is Sweden's negative example having on the debates on the euro in Poland and the Czech Republic?
Joaquín Almunia
Member of the Commission. (ES) Sweden is currently one of the eleven Member States with derogations in relation to adopting the single currency. The Member States with derogations are obliged to adopt the euro as their currency, and to that end they must work towards meeting the convergence criteria laid down in the Treaty. Nevertheless, the Treaty does not set explicit time limits for the Member States to comply with that obligation.
In the 2004 convergence report, the Commission concluded that Sweden met the price stability criterion, the criterion relating to the public budget situation and the criterion on the convergence of long-term interest rates. Nevertheless, in that same convergence report, the Commission concluded that Sweden did not meet the exchange rate criterion, which requires the country in question to have remained within the normal margins of fluctuation laid down in the exchange rate mechanism of the European Monetary System without any serious tensions and for at least two years prior to the assessment.
Furthermore, in the 2004 convergence report, the Commission pointed out that the Swedish legislation was not fully compatible with Articles 108 and 109 of the Treaty. In view of this assessment, the Commission concluded that there was no need to modify Sweden's status as a Member State with a derogation in this area.
In accordance with the Treaty, the Commission and the European Central Bank will publish the next convergence report before the end of this year. The new Member States have committed themselves to adopting the euro as soon as they comply with the criteria laid down in the Treaty. In this regard, Slovenia will enter the euro zone on 1 January 2007. Cyprus and Malta wish to join on 1 January 2008 and Slovakia on 1 January 2009, and other Member States, which had previously set specific targets, are in the process of revising them.
In any event, as I said again at the beginning of my reply, with the exception of the two States with an opt-out clause - the United Kingdom and Denmark - the other Members of the European Union that have yet to adopt the single currency, and for which the derogation is in place, are obliged to adopt it and to work towards complying with the criteria, but there is no date by which they are obliged to have complied with them.
Bernd Posselt
(DE) Mr President, there are two more, and quite specific, items of information that I would welcome.
The first is that I should like to know whether the Commission, when a Member State such as Sweden, without any arrangement being made for it in the Treaties, fails, for a period of years, to introduce the euro, will take legal action against it by, for example, taking it to the ECJ, or whether it will let the matter rest for another twenty years.
Secondly, I would like to know what is happening about Poland, the Czech Republic, and Hungary. Is there any sign of any of them - Hungary in particular - actually doing anything?
Joaquín Almunia
Member of the Commission. (ES) Mr Posselt, we must not confuse the Member States' obligation to prepare for adoption of the single currency with the actions that the Commission and the Council may take - and are taking in fact - in relation to Member States that are not complying with the provisions of the Treaty, in the field of budgetary discipline, for example, as in the case of Hungary and other Member States.
Preparations for adoption of the single currency relate to budgetary discipline, but also the stability of exchange rates and the development of interest rates, which is something decided upon by the markets according to the economic situation of the Member States. They also involve legal reforms, bringing the status of the Central Bank of the Member State in question into line with the rules laid down in the Treaty for the European System of Central Banks, and they also relate to the development of inflation.
The factors for complying with the criteria for adoption of the single currency therefore depend partly on political decisions to be directly adopted by the governments or parliaments of the Member States, and partly on factors that are not always under the Member States' control. Consequently, although it will theoretically be possible in the future to apply infringement procedures to States that are not making preparations, we do not currently believe it to be necessary or even desirable.
DanutBudreikait
- (LT) Commissioner, if a wealthy and economically stable nation such as Sweden is unable to introduce the euro, I cannot but question the future of the euro zone project. It is evident that most of the current euro zone members are failing to meet one or more of the Maastricht criteria. For example, Lithuania has failed to meet the inflation criterion by 0.07%.
How do you think the euro zone will develop in the future? According to some forecasts, the euro will disappear in 15 years. What preventive measures should be taken?
Joaquín Almunia
Member of the Commission. (ES) Mrs Budreikaitė, I do not believe that the future of the euro is in question. Not at all. A few years after its launch, in 1999, and five years after more than 300 million were able to carry it in their pockets for the first time in the form of coins and notes, the euro is now a reality which those who use it consider to be a success.
In my view, therefore, the issue is not whether the euro has a future; the question is whether the countries that are not preparing properly for the adoption of the euro are going to suffer the consequences in the future. That is the real question. Each time I have contact with the authorities of the countries that are to adopt the euro in the future but which do not yet comply with the criteria laid down in the Treaty, I urge them to adopt a credible and effective strategy for complying with those criteria and adopting the single currency.
For some years we have been enjoying abundant liquidity in the financial markets, interest rates are low and memories of monetary crises and volatile exchange rates are fading in Europe. There is no guarantee, however, that those situations that we saw in the past, before the existence of the euro, are not going to re-emerge in the future. Let us pray that they do not, but it could happen. We have seen 311 million Europeans enjoy the advantages of having a common currency, and we have also seen all of the Member States of the European Union enjoy the advantages of the fact that twelve of them have adopted the single currency.
There are therefore more than enough reasons for the Member States that have yet to adopt the euro to be convinced that they must prepare and adopt economic policy decisions aimed at fulfilling these criteria and strengthening a currency which, seven years after its birth, is already the world's second largest currency.
Hélène Goudin
(SV) In a referendum, the people of Sweden rejected participation in economic and monetary union by a broad majority. Mr Posselt wants to ride roughshod over the result of a referendum. To do so is incompatible with a democratic view of the world. The Swedish economy has not been harmed by the fact that we are outside the single currency.
I call on the Commissioner to state that he fully supports the result of the Swedish referendum and to distance himself from Mr Posselt's deplorable and undemocratic view of the world.
Joaquín Almunia
Member of the Commission. (ES) Mrs Goudin, I am perfectly aware that a referendum took place in Sweden in 2003. I am perfectly aware of its result. Unfortunately the result was negative, but, like all of the Members of this House, the honourable Member will be aware that the Treaty must be complied with by all of the Member States and, though the existence of a referendum creates obvious political difficulties in terms of conforming to the Treaty, the obligations laid down in it nevertheless remain.
Subject: Euro zone integration
It is common knowledge that all the new Member States that joined the European Union in 2004 made a commitment to participate in European monetary union. Last year it was observed that more and more of the new Member States are postponing entry into the euro zone to a more and more distant date, often not even predicting when they will fulfil the convergence criteria. It is difficult to deny that, given the rapid development of the new Member States' economies, some of the conditions laid down for the convergence criteria (for example, inflation) will not be met for quite some time. In this situation, it is hardly likely that strict artificial conditions, which would only disrupt economic processes, are vital to lowering inflation.
Euro zone candidates greatly appreciate Commission consultations, which help Member States to attain the criteria for monetary union more quickly without harming the economy of the country in question. Besides country consultations, what additional measures does the Commission intend to take given that it is becoming increasingly apparent that, for various reasons, some of the new Member States will not be able to meet the strictly applied conditions for entry into the euro zone for some time to come? How does the Commission view the euro zone's prospects for expansion in terms of time? How would the Commission react if any of the new Member States sought to postpone adoption of the euro until after 2013?
Joaquín Almunia
Member of the Commission. (ES) Mr Paleckis, on signing the Accession Treaty, the ten Member States that joined the Union in May 2004 agreed to adopt the euro as soon as they complied with the necessary conditions. These countries, and Sweden - which we have just discussed - are expected to implement policies in order to ensure compliance with those conditions. Nevertheless, as I said in my previous reply, the Accession Treaty does not set any time limit for achieving this.
Many of the new Member States have adopted target dates and strategies for adopting the euro, thereby giving concrete form to their political commitment through firm convergence policies.
Responsibility for implementing those policies lies with the Member States, for which the application of stability policies contributes to a broader objective than simply compliance with the convergence criteria for adoption of the single currency. Those policies are also necessary in order to guarantee high and sustained growth, as well as medium-term financial stability.
Although the Commission supports the efforts of the Member States with derogations with regard to joining the euro zone, it is not possible to predict the pace at which that enlargement of that zone will take place. The Commission believes that achieving a high degree of sustainable convergence, in accordance with the Treaty, is a necessary condition in order to make the adoption of the euro a success, both for the current members of the zone, and for future members.
Justas Vincas Paleckis
I thank the Commissioner for his comprehensive answer. You have recently been to Lithuania, which had an unhappy experience in its attempt to introduce the euro because its inflation was 0.07% above the target level. In your opinion, would it be better for Lithuania in future to think about joining the euro alone or in the company of the two other Baltic States - Latvia and Estonia?
Joaquín Almunia
Member of the Commission. (ES) Mr Paleckis, when, during the first half of this year, Lithuania, at the same time as Slovenia, asked the Commission and the European Central Bank to issue an opinion on their degree of compliance with the criteria laid down in the Treaty for membership of the Monetary Union, the Commission's response, which was subsequently backed by the Council, was unfortunately negative in the case of Lithuania and positive in the case of Slovenia. It was negative in the case of Lithuania because, at that time, that country did not comply with the inflation criterion.
You have talked about the difference that existed at a particular time between Lithuania's average inflation over the last twelve months and the reference value, calculated in accordance with the Protocol to the Maastricht Treaty, with regard to the maximum inflation permissible for acceptance as a new member of the eurozone. It is true that the difference at that time was very small, less than 0.1%. Now, unfortunately, a few months later, with the latest data available, which has been published by Eurostat for September's inflation, Lithuania's average inflation over the last twelve months differs from the reference value by 0.7%; over just a few months it has multiplied by seven.
As I was able to say to the Italian authorities on my recent visit to that country, the important thing now is not to discuss the small difference in the past; in my view, it is not even important to discuss firstly the date or conditions for entry. The important thing at the moment for Lithuania, and for the other Member States that wish to join the euro as soon as possible, is to decide what economic strategy and what measures, within a coherent economic policy strategy, must be adopted and implemented in order to comply with the Treaty's criteria.
In view of the fact that average inflation in Lithuania has increasingly diverged from the maximum reference value, which currently stands at 2.8%, I urged the Lithuanian authorities to define that strategy and I once again offered the European Commission's cooperation in working jointly with the authorities of that Member State in the search for the best strategy, the most effective strategy, for bringing inflation under control without jeopardising Lithuania's excellent economic growth or the wonderful results that the Lithuanian economy has been achieving in many other respects.
I believe that that is not just the attitude of the European Commission, but also of all of the Member States that want Lithuania to comply with the conditions as soon as possible and become a new member of the euro zone, as Slovenia will on 1 January. If Lithuania is accompanied by other Member States, the other Baltic States, then all the better. We cannot change the conditions for assessing whether or not the Treaty's conditions are met, however, regardless of how much we want our assessment of compliance with those criteria to be positive.
Laima Liucija Andrikien
Commissioner, you mentioned that Slovenia will be joining the eurozone on 1 January 2007, Malta and Cyprus in 2008, and Slovakia in 2009. During your recent visit to Lithuania, did you propose a clear date when Lithuania might join the eurozone? And have you already received an action plan from the Government, including the fight against corruption?
Joaquín Almunia
Member of the Commission. (ES) The only definite date is 1 January 2007 for Slovenia, although it is the case that, in June, the European Council supported the Commission's proposal and the Ecofin Council confirmed that Lithuania complies with almost all of the conditions for joining the euro zone.
I said in my reply that Cyprus and Malta want to be members of the euro zone from 1 January 2008, but the analysis and assessment of compliance with the criteria has yet to be made. I also said in my reply that Slovakia wants to be a member of the euro zone from 1 January 2009, and at the appropriate time we will have to assess whether or not it meets the conditions.
In our next convergence report, which will be adopted by the Commission and presented to this Parliament in December, we shall assess the extent to which, at this precise moment, the derogation countries comply with the conditions. Nevertheless, the Member State in question must comply with the conditions prior to the date on which it wishes to join the euro zone.
The Lithuanian authorities had a target date and they must now set a new date. When I visited Lithuania in September, that date had not been decided upon. As far as I know, they have not set a date since my visit.
I have insisted to the Lithuanian authorities, and to the authorities of other States in a similar position, that they have the strategy before the date, because, without a strategy, the dates decided upon will have to be modified over time, since the decision on the date, in itself, is not sufficient to satisfy the criteria that are going to be required.
David Martin
Commissioner, I fully support what you say about candidate countries meeting the convergence criteria. But do you accept that it is very frustrating for them to be struggling to meet those criteria and, at the same time, to see existing Member States of the eurozone systematically breaching their obligations? I know you have raised this issue with the Council. But what efforts will you continue to make to ensure that existing eurozone Member States meet their legal requirements?
Joaquín Almunia
Member of the Commission. (ES) Mr Martin, I understand the frustration of the candidates for adoption of the single currency whose candidature is not being successful because they do not comply with the inflation criterion, for example, when, at the same time, they can see that certain Member States of the euro zone, which have been part of it since 1999 or 2001, are still members despite the fact that they do not comply with, in some cases, the inflation criterion, in others, the deficit criterion and, in others, the debt criterion.
In the case of Member States that do not comply with the budgetary discipline criteria - deficit and debt - the instruments laid down in the Treaty are applied, by means of the Stability and Growth Pact mechanisms. I must say to those people who suggested that the new Stability Pact was going to be ineffective and excessively flexible, that that Pact is now being applied rigorously and fully. Since the new Pact has entered into force, there has not been a single disagreement in the Council about accepting and supporting the Commission's proposals, and amongst the Member States of the euro zone there has not been a single complaint about having to comply with the recommendations adopted by the Council, on the proposal of the Commission, aimed at restoring budgetary discipline. There have been such complaints outside of the euro zone, but not inside it.
Nevertheless, there are certain Member States of the euro zone with inflation above the 2.8% reference value that I mentioned before. There are no instruments for taking action in relation to a Member State of the euro zone when its inflation is greater than the reference value. There is one very powerful instrument, but it is not in the hands of the Commission, nor Parliament, nor the Council. It is a market instrument, because those Member States are losing competitiveness, and their citizens and companies are suffering the consequences of the loss of competitiveness, which can no longer by definition be restored through modifications in exchange rates, because these Member States have adopted the single currency.
Subject: Effect of accession on the Eurozone
How does the Commission expect the Eurozone to be affected by the accession of Bulgaria and Romania to the EU next year?
Joaquín Almunia
Member of the Commission. (ES) Mr Mitchell, the Commission does not expect the accession of Bulgaria and Romania to the European Union to have immediate effects on the composition of the euro zone.
Following their accession, on 1 January, both countries will take part in the Economic and Monetary Union as Member States, with derogations, and they will participate fully in the multilateral supervision of economic policies, as laid down in the Treaty, just like the Member States of the Union that do not belong to the euro zone.
From the date of their accession to the European Union, and since they will not be members of the euro zone and will not have an opt-out clause, Bulgaria and Romania will have to work towards complying with the convergence criteria with a view to being able to adopt the euro in the future. For the other Member States of the euro zone, however, I cannot see any immediate effect whatsoever apart from the very positive fact that the Union will have two new Member States.
Gay Mitchell
Thank you for taking the question. I agree with the Commissioner that the euro has guaranteed transparency in pricing and facilitated travel and above all, having one currency has created a greater unity of purpose for Europeans than anything else we have done together. All that is to be welcomed.
I understand that the European economy seems to be cooling, but is still expected to grow by 2.5% in 2006, its biggest growth since 2000. That is to be applauded, but slowing global growth and increased interest rates mean that European economic growth might be hindered. Can the Commissioner tell the House if he anticipates any more changes in economic growth after the impending enlargement and indicate what effect that will have?
Joaquín Almunia
Member of the Commission. (ES) Mr Mitchell, it is true that the euro zone, and the European Union as a whole, is also showing growth in 2006, and we are seeing the beginning of clear economic recovery. Despite this economic recovery, however, we are still seeing growth figures that are lower than those expected when the economic and monetary union entered the third phase and, to a certain degree, some people are trying to establish a relationship between that low growth, compared to other areas of the world economy, and the existence of the single currency or the existence of the economic and monetary union itself.
I believe that the most rigorous analyses, not just those by the Commission, but also those by other institutions outside of the European Union, come to the conclusion, like us, that the obstacles to growth in Europe and, in particular, in the most significant economies of the eurozone, are basically, fundamentally, of a structural nature. Hence, we must place the emphasis not only on respect for the operating rules and the rules on budgetary discipline or on the independence of the European Central Bank in the shaping of the economic and monetary union, but also on growth policies of a structural nature, which are what we call, in our jargon, the Lisbon Strategy policies. It appears that what our economies need is a combination of healthy macroeconomic policies, geared toward stability, and ambitious structural reform policies.
From that point of view, enlargement, the arrival of ten new Members in May 2004, has been a spur, an incentive and a positive stimulus for the European economies as a whole. A few months ago, in May 2006, coinciding with the second anniversary of the arrival of ten new Member States, the Commission published, under my responsibility, a communication on the economic consequences of enlargement. Our assessment of the economic consequences of enlargement has been very positive; very positive for the new Member States and also for the old ones, for the European Union of fifteen, because, amongst other things, the new Member States are, generally speaking, showing a greater capacity for implementing structural reforms and making the necessary structural changes. It is true that they are starting from a less advanced situation. They have also introduced dynamism, positive pressure, which is also encouraging economies of the former European Union of fifteen to speed up the implementation of structural policies.
In fact, I believe that some of the positive impacts of structural reforms aimed at greater growth may be coming to light during this recovery phase. It is still too soon to judge the extent to which the improvements in productivity being recorded during the first two quarters of this year are exclusively due to factors linked to the economic cycle. The European Central Bank tends to put practically all of the increase in productivity recorded over recent quarters down to the economic cycle, but I believe that there are certain indications that the structural reforms that have been adopted over recent years and whose pace is beginning to speed up as a result of the positive impact of enlargement are also beginning to play a positive role in this improvement in productivity.
President
Questions which had not been answered for lack of time would receive written answers (see Annex).
That concludes questions to the Commission.
(The sitting was suspended at 7.15 p.m. and resumed at 9.00 p.m.)
