IN THE CHAIR: MR WIEBENGA
Vice-President

(The sitting was opened at 9 a.m.)

  President. – The Minutes of yesterday’s sitting have been distributed.

Are there any comments?

  Μarinos (PPE-DE) . – (EL) Mr President, I see from the Minutes that the question and answer exchange during question time with Minister Moscovici has been wrongly recorded.

The Minutes state, on page 14, in the Greek version at least: "Question 16 by Mr Μarinos: Violations of Cypriot airspace by Turkish fighter-planes. Mr Moscovici replied to the question and to Mr Marino's supplementary question and Mr Zacharakis then intervened”.

I should like to point out that in the morning the President of the French Republic, Mr Chirac, gave the impression, by appearing here in person and from what he said in his speech, that under the French presidency there would be closer, more systematic cooperation between the European Parliament and the presidency; however, in the afternoon, the first minister of the presidency to appear and work with us, the former MEP Mr Moscovici, did exactly the opposite. Apart from the fact that he was curt with us, he gave I think almost all my fellow members more or less one-word replies or claimed that he had replied, although he did indeed reply to the written question which I had submitted. But when I then submitted a second question as a result of yesterday morning's debate on the incursion of the Turkish occupying army into another part of Cyprus, instead of replying on the issue which I had put to him, he said “I have already replied”. Mr Zacharakis then intervened with two questions and Mr Moscovici barely bothered to stand up and did not bother to reply.

I should like to ask, first, if a minister or commissioner questioned here is able not only to refuse to reply but to do so in a completely disdainful manner and if we are supposed to take “I have already replied” as an answer, when they have not done so. The same happened to other fellow members who, if they are present here, can confirm this. I should like a reply on this and I should like the Minutes to be corrected.

  President. – Mr Marinos, we have taken note of your view here and it will also be included in the Minutes. It is true that it would be opportune to review the Question Time procedures from time to time. I shall look into this.

  Ζacharakis (PPE-DE). – (EL) I too should like to request that the Minutes be corrected because, as they stand, they are not an accurate record of what happened during the sitting.

I should like the Minutes to record that I submitted two specific questions to Mr Moscovici and that he did not reply. Of course, following on from what Mr Μarinos said and over and above the disdainful manner adopted by Mr Moscovici, who failed to honour traditional French courtesy, even though Parliament is sitting on French territory, what I note and conclude from his silence, and it would be a good idea to bring this to the attention of the Greek Government, is that the French Government secretly intends to oppose the accession of Cyprus to the European Union and to promote the accession of Turkey, even if it does violate human rights and the basic principles of international law.

  President. – Mr Zacharakis, we will not be holding the political debate on this issue here. Mr Moscovici took the floor yesterday and we will check whether this was included correctly in the Minutes.

  Miller (PSE). – Mr President, I wish to raise once again the point I raised on Monday and again yesterday with regard to Mr Helmer's comments in this House. Can I say that I am surprised that on two occasions now I have asked Mr Helmer to comment on the item about the Queen of the United Kingdom supporting the euro, and so far he has failed to do. Can I say to this House that I understand this must be the first time that Mr Helmer has been speechless.

(The Minutes were approved)

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  Swoboda (PSE). – (DE) Mr President, according to our information, Mrs Stauner withdrew the explanatory statement in the relevant committee yesterday, but despite that, it has been distributed today. I would just like to ask you, Mr President, to establish if this statement was withdrawn by the rapporteur or not. If it was, then it should not be distributed as an official document.

  President. – I shall enquire at the services into the exact course of events.

  Theato (PPE-DE). – (DE) The fact of the matter is that yesterday evening, in accordance with the Rules of Procedure, I withdrew this explanatory statement. I asked the secretariat of the Committee on Budgetary Control to draft a letter to that effect. Because we were sitting in the evening, that was no longer possible. I assume that if I go to my office now, I will find the letter there and can sign it so that we can proceed accordingly.

  McKenna (Verts/ALE). – Mr President, I wanted to bring up an issue which should be of great concern to this Parliament, and in particular to Members of the Committee on Economic and Monetary Affairs and the Committee on Budgetary Control.

A serious abuse of European law and the Statute of the European Investment Bank is taking place in my own country. Member States are not authorised under EC law to propose or nominate their own nationals directly to the Board of Governors for the position of Vice-President of the EIB, and to do so is a clear violation of the Statute of the European Investment Bank. The task of making the nominations and appointment is reserved exclusively to a Board of Directors of the Bank, which is a quite separate body.

The situation in Ireland is quite contrary to this principle. The Irish government have, in contravention of the law, nominated a person who not only has no experience of economic or financial affairs, but is furthermore a disgraced supreme court judge who was forced to resign before he was impeached by the Irish parliament. This issue is now before the courts in Ireland.

This is an extremely important matter for this Parliament, which is concerned because the European Union provides Guarantee Funds to the EIB. Parliament must take notice of this, because if we allow Member States to contravene the law in this way it has serious implications for the European Union as a whole. I would ask the President if he could instruct the Committee on Economic and Monetary Affairs and the Committee on Budgetary Control to look into this issue, because it should be dealt with very quickly. It could set a very bad precedent for the future for other Member States and for nominations to this body.

  President. – Mrs McKenna, I agree that it would be beneficial if you, should you so wish, instructed the relevant Committee.

  Tajani (PPE-DE). – (IT) Mr President, I would like to put a question to Parliament. Yesterday, further hundreds of acres of forest were destroyed by fire in Italy, endangering the outskirts of Rome and the lives of European citizens as well. A similar incident occurred a few days ago in France, on the Italian border. These acts of arson, which endanger and destroy hundreds upon hundreds of acres of European forest, occur frequently during the summer in the Mediterranean European countries, with harmful repercussions for the economy and the tourist industry.

It is vital that Parliament intervenes, but a decisive intervention on the part of the Commission and the Council is also essential when we consider that the possibility of setting up a European civil protection service was even discussed at the Feira Council. These fires represent a considerable hazard, damaging the forest stand and the environment throughout the European Union, but, most importantly, the economic effect on our endeavours to boost employment in the tourism industry in all the countries of the Mediterranean area will be extremely serious.

  President. – Mr Tajani, these are indeed recurring themes unfortunately, and are a constant concern within Parliament. They are very sad happenings indeed.

  President. – The next item is the report by Mr Radwan (A5-0169/2000), on behalf of the Committee on Economic and Monetary Affairs, on the 1999 Annual Report of the European Central Bank [C5-0195/2000 - 2000/2118(COS)].

  Duisenberg, President of the European Central Bank. – Mr President, one and a half years have passed since the euro came into existence and the ECB took over the responsibility for the conduct of monetary policy. During this period the euro system, that is the 11 national central banks and the ECB, had to prove its ability to implement the conceptual framework that had been thoroughly prepared during the previous years. It has also had to prove its ability to achieve the goals conferred upon it by the Treaty establishing the European Community.

Looking back, these challenges have been met from both a policy and an operational point of view. Therefore I have great pleasure today in presenting the Second Annual Report of the ECB. It gives an account of the activities of the euro system during 1999 and at the beginning of this year. I consider today's presentation to be an important demonstration of the ECB's accountability vis-à-vis the European Parliament, supplementing the exchanges of views held in your Committee on Economic and Monetary Affairs, in which I participate on a quarterly basis. In addition to this regular dialogue, other members of the Executive Board of the ECB have attended committee meetings on several occasions in order to present a report drawn up under the responsibility of the ECB and to participate in exchanges of views on various issues.

In view of the large range of topics included in the Annual Report it will clearly be impossible to address all of them at our meeting today. Therefore I shall concentrate on some of the most pertinent issues, which have also been raised in the resolution drafted by your Committee on Economic and Monetary Affairs.

Reviewing the first year of the existence of the single currency, I should like to start by reporting that the primary objective of the ECB, that is the maintenance of price stability, has been achieved. Indeed, with consumer prices in the euro area increasing by just 1.1% in 1999, inflation has reached one of the lowest levels in the past 50 years. In line with its mandate, the ECB remains vigilant regarding risks to price stability, as evidenced by its monetary policy decisions in order to nip inflationary pressures in the bud before they materialise rather than to react once price stability is already in jeopardy.

The euro system will continue to pursue this forward-looking strategy in order to maintain an environment of stable prices, which is also conducive to sustained economic growth and job creation in the euro area. I share the analysis of your motion for a resolution that governments should take advantage of the favourable economic environment in order to step up the efforts directed towards consolidating budgets and reducing public debt and go beyond the objectives laid down in the stability programmes. At the same time, structural reforms in the labour product and capital markets should be pursued vigorously. The comprehensive implementation of this policy agenda will contribute to subduing inflationary pressures and thereby support the ECB in accomplishing its tasks.

In your motion for a resolution, you also briefly address the potential implications of a ‘new economy’. I should therefore like to comment on the possible emergence of a new economy in the euro area. Let me start by noting that there are various definitions of the new economy. In my view, the most useful definition is that which characterises the new economy as a phenomenon which increases the growth rate of productivity over an extended period of time. There is some evidence, although this is not uncontroversial, that a new economy is emerging in the United States. By contrast, it is difficult as yet to find clear evidence of a new economy in the euro area.

Of course, there is a need to monitor developments further, with the emphasis on identifying new economic trends and potential structural breaks in traditional economic relationships as early as possible. In any case it is important to stress that for the euro area the achievement of more flexible markets is a prerequisite if the potential gains from new technologies are to be realised in the form of substantially higher productivity growth.

We recognise that a crucial feature of the potential emergence of a new economy is increased uncertainty, particularly as regards the evolution of the production potential and the reliability of indicators which are derived from it, such as estimates of the output gap. In this respect, the euro systems monetary policy framework is well equipped to cope with such uncertainties. It provides the flexibility necessary to address changes in the economic structure with the aim of maintaining price stability over the medium term. By relying on two pillars, the ECB strategy explicitly acknowledges uncertainty regarding the structure of the economy and the transmission of monetary policy within the economy.

In the context of this discussion, some observers have urged the ECB to keep interest rates low in view of the new economy. In response, let me emphasise the following point: the new economy is primarily a supply side story. An inappropriately lax monetary policy would not create better conditions for the emergence of a new economy. On the contrary, by jeopardising the maintenance of price stability, such a policy could seriously endanger the current ability of the ECB. It would thereby undermine confidence, raise risk premia in interest rates and damage the prospects for economic growth and job creation. It is for precisely this reason that the ECB will, in line with its mandate, continue to preserve price stability in the euro area. This ensures that monetary policy makes its full contribution to overall economic welfare while also providing an environment in which the new economy, should one emerge, will be able to flourish.

I should now like to turn to another issue, which has been frequently discussed within the framework of our regular dialogue, namely the issue of transparency. I have already referred to the regular dialogue between European Parliament and the ECB, the transcripts of which are published on the websites of our institutions. Moreover, at the press conferences held after the first meeting of the governing council every month, I present the ECB's assessment of the economic environment underpinning our monetary policy decisions.

You will also be aware of the broad variety of ECB publications, in particular our monthly bulletin, and numerous press releases issued and speeches made by members of the executive board of the ECB. These are also as a rule made available to the public via the ECB's website. This wide range of communication tools, in which the arguments both for and against a decision are presented, is in substance similar to summary minutes. It should also be borne in mind that through regular press conferences and the rapid publication of the transcripts of the questions and answers on the ECB website detailed information about the governing council's reasoning is made available very shortly after the meetings. We therefore avoid the delays that are inherent in the publication of all forms of official minutes.

We always take our decisions from a euro area-wide perspective. This is fundamental to the conduct of a truly single monetary policy. The publication of ECB reports on the economic developments of individual euro area Member States, as is suggested in your motion for a resolution, has to be considered against this background. We clearly do not want to blur the ECB's focus on the euro area as a whole.

The resolution also calls for the publication of macroeconomic forecasts by the ECB. Let me reassure you that preparations for publication continue in earnest. I still envisage that publication of forecasts will commence towards the end of 2000, in line with the statement I made last September at the European Parliament's plenary session on the previous ECB annual report.

I should like, however, to sound a note of caution. Forecasts are only one input into the decisions of the governing council. Forecast publication by the ECB should not be viewed as a panacea which will meet all the communication challenges faced by the ECB as a new institution in a testing multilingual and multinational environment. Forecasts themselves have important shortcomings. For example they are surrounded by considerable uncertainty and they may quickly become outdated if the external environment changes. We are aware of these shortcomings. Therefore, as is made clear in the ECB's monetary policy strategy, monetary policy decisions cannot be made only on the basis of a central inflation forecast. It is the comprehensive analysis of the monetary and macroeconomic situation and the economic disturbances affecting the euro area economy which is the relevant input to forward-looking policy decisions.

The ECB's approach to communication has always placed a premium on honesty. To continue in this vein it is my view that we must publish forecasts in a manner which accurately reflects their limited role in policy decisions and their inherent uncertainties. Any other approach would not be transparent and would therefore be potentially misleading.

I now turn to a related issue, namely the publication of the ECB's economic and econometric models. I should make it clear that the ECB does not rely on a single econometric model but uses an extensive set of models. The results obtained from the models are critically evaluated, using expert judgement. Policy-makers use analysis undertaken using models developed by the ECB staff, in some cases with input from staff of national central banks, as one input among others into their policy assessments and decisions.

The ECB has established a working paper series where technical economic research, produced inter alia under the responsibility of ECB staff, can be reviewed and assessed by the public and external professional experts. The respective authors are responsible for the content of these papers. Therefore they do not necessarily reflect the view of the ECB or of the Eurosystem. Through this and other channels there is a professional dialogue and exchange of views between ECB staff and many outside experts, which is of mutual benefit. Several econometric models have already been published in the working paper series of the ECB. For example, an econometric study of the demand for M3 in the euro area, conducted by ECB staff, was published in September 1999. Other models will be published in the near future. An area-wide model used at the ECB, which models the aggregate behaviour of the euro area economy, will be published in this working paper series by ECB staff, probably at the end of this year or early next year.

I should now like to turn to the contribution of the ESCB, the European System of Central Banks, to the maintenance of financial stability and to prudential supervision. In this regard I should like to mention the Banking Supervision Committee which is promoting cooperation between the ECB, the national central banks and the supervisory authorities of the 15 Member States. The main focus of activity of the Banking Supervision Committee is the analysis of structural developments and the monitoring of potential vulnerabilities in the banking sector.

The Banking Supervision Committee also provides the forum for the exchange of relevant information between the euro system and the supervisory authorities.

Finally, this committee may also act as a forum for supervisory cooperation not related to the tasks of the Eurosystem. The need for multilateral cooperation amongst banking supervisors has increased since the establishment of Economic and Monetary Union, for two reasons. Firstly, EMU has introduced an unprecedented geographical separation between the area of jurisdiction of monetary policy and that of prudential supervision. Secondly, the introduction of the euro itself has fostered further integration of the banking and financial sector. Against this background I perceive the Banking Supervision Committee as the main forum in which multilateral cooperation amongst banking supervisors can be enhanced.

Regarding the issue of cross-border retail payments, which has been raised by the European Parliament on various occasions, I recall that in September 1999 the ECB published a report entitled Improving Retail Cross-border Payment Systems – the Eurosystem's View. The report called on the banking sector to provide substantially improved services by 2002. Since the publication of that report the banking sector has subscribed to the Eurosystem's objectives in principle. It has begun to cooperate closely with the Eurosystem in order to identify the practical impediments to the achievement of these objectives and in order to investigate and, where possible, agree on effective solutions.

I fully share the European Parliament's concern that very little progress has been visible to customers. However, there are strong indications that banks are making considerable efforts to prepare the ground for a more efficient handling of cross-border credit transfers. In particular, progress is under way in the areas of standardisation and simplification of the balance of payments reporting requirements.

The ECB will prepare a further progress report by this autumn in which it will update its assessment. The Eurosystem would prefer to maintain its present stance of cooperation but will if necessary step up the pressure on the banking sector. However, it would be unrealistic to expect the service level for cross-border payments to reach that of domestic payments in all respects by 2002.

I emphasise again that the introduction of the euro has indeed been a milestone in the ongoing process of European integration. The ECB, as the guardian of the single currency, will continue to pursue its stability-oriented monetary policy in order to fulfil its mandate and to deliver the policy results that European citizens rightly expect.

(Applause)

  Radwan (PPE-DE), rapporteur. – Mr President, Mr Duisenberg, ladies and gentlemen, the 1999 report before us from the ECB is both the first ECB report for a full year and also the first report since the introduction of the euro. As has already been mentioned, the stage we are now at is that the euro has already been introduced, but the public will only have the bank notes in their hands on 1 January 2002. Mr Karas will be dealing with that point in detail later on.

However, it is important for us to win the confidence of the public by the time the euro notes are introduced. The increase in consumer prices over the last year of just over 1%, that is well within the ECB target of 2%, provides a good foundation for this. Mr Duisenberg, I would like to sincerely congratulate both the ECB and you personally on that. Because of your stability-oriented policy, the countries in the euro area can boast a historically low level of price inflation.

If the policies of the ECB are to be successful, it must be politically independent. This does not mean that there is no accountability, but rather that a high level of information and transparency is required. I would like to sound a positive note by mentioning the European Central Bank’s regular reports to Parliament’s Committee on Economic and Monetary Affairs, as well as the information published on the Internet, which you have already been referred to.

But a young institution like the ECB has to win the confidence not only of the financial markets but also of the public. I therefore very much welcomed the fact that you addressed the public direct in May, and I think that should happen more regularly. The public is being flooded with information about the euro and I think that the information is not always eye-catching and informative. We need to counter that trend here today. The policy needs to be presented so it can be easily understood, and that would help to win people over to the euro.

At the same time, a low inflation rate is a policy for the economically disadvantaged in our society. That is why it is important for the ECB to tailor its decisions to primary objectives. For example, as I see it, we cannot accept an inflation rate of over 3.3% simply because it makes it easier to achieve secondary objectives such as economic growth and employment policy. Those who are disadvantaged suffer particularly from creeping inflation, which I therefore regard as being socially unacceptable.

The areas of economic growth and employment are primarily a matter for the Member States. This is exactly the reason for part of the weak external value of the euro. We need to make greater progress with reforms such as flexible labour markets, restructuring social security systems and liberalising financial markets if we are also to make the euro area more attractive as a financial centre and as a centre for investment. Mere declarations that we want to become number one in the world economy, like the one made at the Lisbon Summit, are not enough. The Member States have got to take action themselves here. That is why the objective of debt reduction and balanced budgets needs to be achieved as quickly as possible.

But it is also important for the European Central Bank not to completely forget about the external value of the euro. On the one hand there is a risk of higher prices, of importing inflation, which is at present being aggravated by higher oil prices of course. On the other hand, and this brings me back to the subject of ‘information and the citizen’, many people see the external value of the euro as an indicator of how stable it is. With this in mind we must make sure that this factor alone, external value, does not weaken confidence in the euro.

I accordingly welcome the most recent correction in interest rates, that is the increase by 50 base points, as a step towards a medium-term monetary policy with a view to creating confidence and calm both in the financial markets and amongst the public.

Another sign in the eyes of the public that the euro is a good thing would be a marked reduction in charges for cross-border payment transactions, which you have already mentioned. In this case I believe it is important for the banks to set their sights far higher and make more rapid progress. For banks simply to refer to the standardisation of systems is not enough here. The introduction of the euro did not come overnight and it was not a surprise. I myself come from the world of information and communications technology. I know that if you put a subject right at the top of your agenda and really put some pressure on, you can get something done more quickly. I therefore call on you to get the European Central Bank to add to this pressure, so that our banks make greater efforts in this field.

Lastly, I would like to talk about the imminent eastward enlargement of the European Union. First, I would like to make it clear that I am not talking about a treaty amendment, as was now and again suggested during the debate. What I have in mind is to examine the process ahead of us. No one is disputing that there is a three-stage process, from EU membership, to participation in the exchange-rate mechanism, and finally to full membership. However, a minimum level of economic convergence is needed to achieve this, and also to create a level playing field for the applicant countries and the present EU Member States.

It is important not only to observe the criteria, but also to allow some leeway with regard to this compliance with the criteria. We cannot allow decisions that we have made in the past to keep tying our hands when it comes to the present and future process, over a period of five to ten years. We must maintain this process – this scope for interpretation.

In conclusion, I would like to thank all my colleagues and the committee secretariat very sincerely for their support with this report.

  von Wogau (PPE-DE). – (DE) Mr President, Mr Duisenberg, ladies and gentlemen, first of all I would like to congratulate our rapporteur, Mr Radwan, on the excellent report he has presented here. And I would like to thank you, Mr Duisenberg, very sincerely for your report as President of the European Central Bank.

The thing that has particularly agitated the public during the first 18 months of the euro’s existence has been the exchange rate against the dollar. The ECB itself eventually had to pay some attention to this question, because there started to be a risk that imported inflation would become a reality here in Europe. What caused this initial drop in the exchange rate? We have to recognise that the international financial markets noticed that we in Europe have been slow in tackling some of the structural reforms needed.

Secondly, the euro is a new currency. A new currency has to win the confidence that other currencies already enjoy. Thirdly, there was a not inconsiderable gap between our interest rates and those in the United States, which meant that investors felt more inclined to invest in the United States than in Europe.

It also has to be recognised that the ECB’s policy has very consistently been different from that of the US Federal Reserve Bank. In this case, the guidelines Mr Duisenberg has been operating under are not the same as Mr Greenspan’s. For example, in the United States the inflation rate has topped 3% in recent months, without the Federal Reserve Bank taking any special countermeasures. Over here, the upper limit is set at 2%, and for very good reasons. I would like to congratulate you, Mr Duisenberg, on having pursued a very consistent stability policy, and on having given a very clear signal when the ECB made its most recent decision on interest rates. You spoke just now about new technology, about the new economy. The objective of the European Central Bank will remain the same, even with the new economy, and that is to maintain price stability.

(Applause)

  Goebbels (PSE). – (FR) Mr President, Commissioner Solbes Mira, President Duisenberg, ladies and gentlemen, I should like, if I may, to deal swiftly with various questions in relation to the work of the European Central Bank.

First, the 1999 annual report. I think we need to acknowledge that the Central Bank did a good job in 1999: inflation remained very low, providing the euro with a high degree of stability, and our citizens' purchasing power remained the same.

We should also, I think, congratulate President Duisenberg and his team for the smooth introduction of the euro as bank money. I think that was an achievement which deserves to be highlighted.

As far as the current year is concerned, the figures are not quite as pleasing. Inflation has risen again, driven by the increase in oil prices. The Central Bank has responded by tightening credit terms, not that rates are currently overly high in Europe. Nonetheless, the Central Bank's strategy has not always been completely clear or highly legible.

In fact, there have been a lot of copycat decisions between the European Central Bank and its big sister, the Federal Reserve in the United States. When the Federal Reserve hikes its base rate by 25 points, the European Central Bank follows suit; when the Federal Reserve adds 50 points, the Central Bank does likewise a few weeks later. But the situation in the United States is quite different from the situation in Europe and sometimes I get the impression that the European Central Bank is giving in slightly to market expectations and appeasing the markets with increases of 25 or 50 points and I worry somewhat when I read reports by financial analysts predicting increases of over 100 points by the end of the year.

Inflation is there, sure enough, Mr Duisenberg! But I note that it is falling and I do not therefore think that waiting for the markets is the right approach. You are there, Mr Duisenberg, to serve the entire European economy, not to serve the financial markets, and I must say that the European Central Bank has been most discreet so far on the subject of the blatant irrationality and permanent casino atmosphere of the financial markets. I have just listened to a statement by Mr Issing, criticising the sheep-like behaviour of the financial markets, especially in connection with the relative weakness of the euro. I think that this weakness is, indeed, completely relative and that we should not read too much into these fluctuations, even if they do relate to our economy.

I hope to see better coordination between European policies. I want a stronger European economy, not in opposition to, but in cooperation with the Monetary Fund, on the understanding that each of them retains its freedom of decision and action.

Mr President, unfortunately I have run out of time and I would like to have said a great deal more, especially on enlargement. Allow me to say just two words on Mr Radwan's comments. Every country which is to join the European Union should be a member of the Economic and Monetary Union. We want to apply the Treaty, but the whole Treaty and nothing but the Treaty.

My final word, Mr President, is this: if I had to write a report for Mr Duisenberg, it would say ‘good, but could do better’.

  Huhne (ELDR). – Mr President, I would like to congratulate Mr Duisenberg on a successful year in running euro monetary policy. Clearly what matters is internal price stability, and the external value of the euro is of much less significance. Indeed that was one of the reasons for creating the euro in the first place: it was precisely to protect the European economy from the volatility of the foreign exchanges to which Mr Goebbels has just referred.

I am particularly pleased, too, that Mr Duisenberg has reiterated his promise to publish forecasts and econometric models, and I entirely understand his caveats. I hope that when he publishes the macroeconometric model he will do so in a form which makes it available and easily usable by outside researchers, perhaps on CD-ROM.

However, in connection with Parliament's view of last year I would urge Mr Duisenberg to reconsider a formal framework for the publication of summary minutes. As he said, much of the debate which happens within the Council is filtering out in the form of discussion within the monthly bulletin, but this is not the same as a regular report with a formal framework in which it is discussed. That would help anchor expectations within the market, as well as fulfilling the important accountability mandate of the ECB.

It is also clearly crucial the ECB should look only at the euro zone as a whole in terms of its inflation and price stability objective. It is essential to point out that different growth trends exist within the different national components of the euro zone economy, and that this implies different sustainable wage growth rates over time. That is why it is important that there should be an overall discussion of what potential sustainable growth rates of wages are in each of the component parts of the euro zone economy, and why this will actually help deliver low inflation combined with low unemployment.

Those are the main points I would like to make. I would also very much like to back Mr Goebbels' remarks about the importance of enlargement, namely that we should not have two standards – one for us and one for them. I very much hope that we will continue to apply the criteria of the Treaty, no more and no less.

  Lipietz (Verts/ALE). – (FR) Mr President, ladies and gentlemen, I do not intend to re-open with Mr Duisenberg the debate which we held in committee a while back.

The Group of the Greens totally disagrees with the policy of raising interest rates, which has been applied since the end of 1999. We are as displeased by the second period of management by the Bank, starting in the last quarter of 1999, as we were satisfied with the first, not because the Bank overestimates the importance of variations in exchange rates against the dollar – it does in our view, but that is by the by – but because the debate on exchange rates obviously masks the Central Bank's aversion to growth and its serious underestimation of the potential rate of growth of the European Union. Yes, there are difficulties with a rate of growth of 3% but these difficulties imply that there should be more, not less investment and, hence, lower not higher interest rates.

What I would like to stress today is the scandal that is the second part of paragraph 11 of the Radwan report. To dare to say that the French 35-hour law is responsible for the fall in the euro because it has weakened European competitiveness overall is an intellectual lie, pure and simple.

It was after this law was announced that the Toyota factory – and many others – decided to open in France. If the MEPs consider that the Toyota factory does not know what it is doing, that is their right; that these MEPs claim to suggest such absurd rules to national governments and European social policy, frankly, seems to us...

(The President cut the speaker off)

  Theonas (GUE/NGL). – (EL) Mr President, the European Central Bank report under discussion covers 1999, its first year in operation following the start of the third stage of EMU and, for this very reason, the European Parliament's criticism of the European Central Bank's annual report should be even stricter and even more demanding. The European Parliament is the only institution in the Community which is entitled to exercise any, albeit ex-post, control over the European Central Bank and its policy. From this point of view, the report by the Committee on Economic and Monetary Affairs does not meet the expectations of the citizens of Europe, in that it fully supports the policy of the European System of Central Banks and, on several counts, is going beyond that policy by calling for even greater liberalisation. The claim that the international standing of the euro and its weakness against the dollar are due to delays in making the necessary structural changes at the expense of the job, goods and services markets and to delays in advancing on the public sector of the economy, dismantling employment relations and abolishing the labour, social and insurance rights of workers has caused a public outrage.

In its quest for much-vaunted monetary stability, which I consider to be its only duty, the policy of the European Central Bank has been highly contradictory; in pursuing a single objective, i.e. to control inflationary pressures, it has swung like a pendulum from one extreme to the other, with successive reductions and increases in the interest rate which, in the final analysis, have had acutely negative repercussions on growth in productivity and employment.

The workers paying the price for this seriously negative neo-liberal policy have no confidence in it, nor do they share the European Central Bank's ambition or the support given to its policy by the European Parliament, the other institutions of the European Union and the governments of the Member States. The much-vaunted new economy will certainly not serve the interests of the workers. In this sense, we oppose both the policy of the Bank and the support given to it by the European Parliament.

  Abitbol (UEN). – (FR) Mr President, I should like to thank Mr Radwan for the quality of his report on the first financial year of the Central Bank since the introduction of the euro. His efforts are commendable. One senses a diffuse anxiety seeping through his report which contrasts happily with the steadfast optimism of the various advocates of the euro, together with reaffirmation – somewhat timid but reaffirmation nonetheless – of a few basic principles, all of which are superfluous. Mr Radwan will go down in history for having reminded us that the independence of the Central Bank is not to be equated with accountability but, on the contrary, implies maximum transparency, mainly in order to make up, he should have added, for its lack of legitimacy.

Alas, Mr Radwan, you see all the symptoms, but you cannot bring yourself to name the genetic disease afflicting the euro and provoking the scepticism of the markets, which have devalued it by 20%, indifference on the part of the economic players, who have yet to adopt it, the distrust of the citizens: in the last survey, 41% of Europeans already thought that the euro was a bad thing for them and, admit it, there were signs of panic among the euro supervisory authorities, 18 months before the planned withdrawal of the national currencies. Add to that the increasing hostility of the British and the persistent distrust of the Danes, which I hope to see confirmed on 28 September.

The initial cause of the punishment currently being inflicted on the European currency stems, of course, from the conditions in which it was born. Conceived in haste by France and Germany following German reunification, followed by nine other countries, the so-called single currency was immediately put out for adoption by the political authorities to an independent bank, poor little Cosette sent to the Ténardiers in Frankfurt! One can understand why the child is sickly, under the circumstances.

According to the Cardinal of Retz, in politics, you often end up with the opposite of what you were seeking. It is the independence of the ECB, advocated in order to reassure the markets, which is worrying them. The Federal Reserve was born when the United States was over a century old and after the American Civil War and it acts not totally, but relatively independently within what I would call a single pool of feelings, i.e. within a single country. With no such foundation, the Central Bank is not independent, it is isolated. Its message is doomed to failure. It can only speak the language of the markets, what one French journalist calls eurodosh, not the language of the people, as a result of which the euro is merely a currency of loans which has become the toy of the markets instead of being the business of the Europeans.

Perhaps your euro will rally, Mr Duisenberg, but it will not be thanks to you. It will be because the dollar has fallen. So, for pity's sake, between now and then, do not out of wounded pride throttle a European economy which has already paid a heavy price in the chase for the euro in terms of growth and employment throughout the 1990s and which does not want to pay a second, equally heavy price in the chase for a strong euro. If you do, then do not complain if governments come running back and fight you for your premature independence and illusory sovereignty or, in other words, if Jean Valjean finally comes and takes Cosette away from you.

  Della Vedova (TDI). – (IT) Mr President, President of the European Central Bank, Commissioner Solbes, on behalf of the Italian Radicals of the Technical Group of Independent Members, I believe that the objective which the European Central Bank set itself – which is the objective enshrined in the Treaty and in the best economic doctrine, that is to curb inflation – has in actual fact been achieved. This can only be reason to applaud the activity of the Central Bank itself as well. However, we cannot allow this result to distract us from the many storm clouds gathering overhead.

The first issue is public finances: improvement in the relationship between public deficit and GDP, which, in the space of a few years, has fallen to below 2% in the euro area, disguises the fact that, in many countries, in many instances, this result is due purely to favourable interest rates and to the fact that taxation has risen instead of fallen.

The long-term structural reductions in public spending are of secondary importance and, moreover, the national budgets of many countries remain at around 50%, which is too high a level to control without risk of adding to the deficit in the event of crises or shocks.

In particular, the question of the hidden debt must be raised urgently – and in this regard the Central Bank could and should make a far greater contribution than it does at the moment. This debt arises from the public pension systems in many countries, particularly but not exclusively in Italy. The demagogic generosity of these systems has a very high cost which someone is going to have to pay very soon, and its effects will soon make themselves felt on the stability of the euro.

There is the problem of transparency in European Central Bank decisions: something has been done about it but not enough, in my opinion, and on this matter I refer to the words of Mr Huhne, with whom I am in complete agreement.

President Duisenberg stated – and I agree with him – that the problem of the new economy, the late arrival of the new economy in Europe and of the productivity of labour in Europe is not, cannot and must not be treated as an interest rates issue. It is a question of structural reforms and must be dealt with as such.

There is a problem of privatisation and liberalisation in many sectors. There are countries such as France – large countries therefore – which have put the brakes on with regard to the liberalisation and privatisation chiefly – but not exclusively – of the telecommunications sector.

There is the problem of the flexibility of the labour market. Mandel, one of the forces behind the euro, when speaking of Europe a few months ago, said that the governments are making the market too rigid. Hiring and firing must be liberalised, for the simple reason that controlling dismissals only serves to limit the possibility of hiring new staff.

Instead of expecting Central Bank policy or taxation policy to resolve some of the problems of the European economy, European policy should resolve the issues it is able to, such as the issue of restructuring and flexibility in the economy and in the labour market, immediately.

I will end by thanking Mr Radwan for this excellent report and say that I agree with the greater part of its content.

  Brunetta (PPE-DE). – (IT) Mr President, Mr Duisenberg, Mr Solbes, I share the satisfaction Mr Radwan expressed in his report regarding the importance of the objective of maintaining price stability, which the Central Bank achieved by bringing the rate of inflation in the euro area down to minimal levels.

Furthermore, I share the rapporteur’s satisfaction in noting that the ECB has stood by its commitment to publish information regularly on the financial variables in its possession, the economic forecasts and the econometric models used as the theoretical basis for the monetary policy it has implemented. It is important that the principle of transparency is affirmed and it is a good thing that the ECB has set communication standards which could be an excellent point of reference for the activity of the central banks of the individual countries.

However, let us guard against interpreting the principle expressed in Article 105 of the Treaty too freely, for Article 108 reads: “When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, … or from any other body.”

The monetary policy is certainly a lever which is capable of determining a country’s economic performance, for better or for worse, but it is for this very reason that we must not give the ECB responsibilities which cannot fall within its remit, either under the Treaty or in the light of the basic rules of economic policy.

The poor development of the macroeconomic variables in some of the countries of the euro area has been linked, very superficially but incorrectly, to the creation of the single currency: imbalances and unfavourable trends in some countries cannot be blamed upon the euro and still less upon the Central Bank’s monetary policy, but they can be attributed to the absence of an unambiguous economic policy in Euroland and the lack of structural reforms at the level of the individual national systems.

(Applause)

  Randzio-Plath (PSE) , chair of the Committee on Economic and Monetary Affairs. – Mr President, Mr Duisenberg, Commissioner, ladies and gentlemen, it is ten years now since the inception of monetary union. Today we are reviewing an annual report based on a successful monetary policy. In institutional, organisational and monetary policy terms, the European Central Bank has acted prudently while showing the way forward, even if not everyone would agree with all the decisions made by the ECB.

However, more could be done to improve the transparency of monetary policy. This is not just a question of improving communication, it is also a matter of providing clearer explanations. That is why I am pleased, Mr Duisenberg, that you have today promised once again that we will get inflation forecasts and that progress will be made with publishing the econometric models. And of course I would still like us to see the summary minutes of meetings, so that we can follow all the arguments.

The annual report states very clearly that the euro has made its mark at international level and is already the second most important currency in the world. The report also clearly emphasises that the European Central Bank has achieved its priority objective of ensuring price stability.

However, it seems to me that the ECB’s secondary objective is not yet totally clear to everyone. After all, the rate of inflation is low and under control despite the increase in oil prices. This is very different to the situation prevailing at the time of the oil crisis in the 1970s. The ECB must therefore finally make it clear how and subject to what conditions it intends to support the Union’s economic policy and the objectives of achieving economic growth and employment. After all, money exists to serve people, and not the other way round. For that reason support is needed for the macroeconomic framework, and the ECB has a role to play here.

As yet, the ECB has still not provided an explanation as to why price stability is more strictly defined in the euro area than in the US, and why it does not provide greater protection for the fledgling European growth process. Europe needs a sustained period of high growth if we are to successfully combat unemployment. After all, full employment is once again a possibility at last. An ECB stability-oriented monetary policy has every chance of giving an impulse to investment and growth, and thus making a real contribution to achieving an appropriate and properly balanced policy mix.

What contribution can the ECB make, and does it intend to make? Why does it not follow the example set by the US Federal Reserve Bank in supporting the upturn in the economy? Or could it be – and I would like an answer to this – that the European Central Bank is opposed to growth rates of over 3% because it thinks they could jeopardise its stability policy?

  Riis-Jørgensen (ELDR). – (DA) Mr President, Mr President, Commissioner, ladies and gentlemen, first of all, I should like to thank Mr Radwan for a splendid report. Pages 60 and 61 of the ECB’s annual report contain a discussion of the situation in Denmark in 1999. It is pointed out that, in 1999, the Danish krone was stable and marginally stronger than the central rate in ERM 2. This situation has, unfortunately, changed because there has been pressure on the Danish krone in recent months. Speculation against the Danish krone is occurring primarily because Danish opinion polls suggest that there may be a ‘no’ vote in the forthcoming referendum on 28 September. If there is, in fact, a ‘no’ vote in this referendum – and I very much disagree with my French colleague who has just spoken and who, if I understood him correctly, is hoping for just such a vote – then speculation against the krone may be expected to increase, in which case Denmark will have need of that ECB support in defence of the krone which is provided for in the ERM 2 agreement. I would therefore ask you, Mr Duisenberg, to clarify what the limits will be for the Danish ERM 2 agreement and to answer the following questions. Firstly, what conditions must Denmark fulfil before the ECB will intervene in support of the krone? Secondly, how much in the way of foreign reserves will the ECB, in practice, spend on buying up kroner in order to support and defend the Danish currency? Thirdly, for how long a period will the ECB be prepared to support the krone? And fourthly and finally, can you tell us whether the ERM 2 agreement is to be in force for an unlimited period of time?

  Brie (GUE/NGL). – (DE) Mr President, no one denies, Mr Duisenberg, that you and the European Central Bank are operating a very competent and successful monetary policy. Nevertheless, people’s concerns about the euro’s low exchange rate need to be taken far more seriously, because it is one of the root causes of inflationary trends and higher interest rates. However, the real and very fundamental criticisms I want to make relate to other areas. The report welcomes the improvement in the ECB’s information policy. Yet we are refused the information we really need – publication of the minutes of meetings – on the grounds of the ECB’s independence. But the ECB is not privately owned. It should be fully accountable to the people who own it, the citizens of the European Union. It is one of the European Union’s most powerful institutions and this complete surrender of policy and democracy to the ECB cannot continue.

There is a second problem that worries me.

(Heckling)

Yes, and why not? There is a second problem that worries me. This narrowing of monetary and financial policy down to price stability is reflected in paragraph 9 of your report, Mr Radwan, where the rather revealing wording states that developments in labour markets and social security systems should support the ECB’s stability policy, rather than the reverse, which would be more appropriate in view of the dramatic problems in these fields.

Lastly, I wish to raise a third question, which I will at least touch upon. There is not a word in the report about the unparalleled over-expansion of international speculative financial markets. In my view, this will result in inflationary trends in the medium term, and at present it is the cause of a totally unacceptable shift away from companies dependent on labour and real economic factors and towards speculative profit making. I hope that it will at last be possible to have a serious and essential debate with you about this trend and about instruments capable of influencing it, such as the Tobin Tax.

(Applause)

  Karas (PPE-DE). – (DE) Mr President, Mr Duisenberg, ladies and gentlemen, I think that the Radwan report is particularly important, because it cannot be read in isolation from the next item about the euro information campaign. I am glad that 11 of my 12 amendments were accepted in committee. I had three principal aims in mind with those amendments.

Firstly, to enhance and underscore the independence of the European Central Bank. To my mind, this independence also implies freedom from instructions, and this is justified because the ECB has a clear remit, which is to maintain price stability. My second aim is to call on the ECB, through this House, to continue to pursue its stability policy so as to ward off the increasing risk of inflation. My third aim is to give a signal to all the applicant countries that membership of EMU is conditional not on political concessions, but on meeting the convergence criteria.

So this report is also important as regards the information campaign, as I have already said, because the media’s overemphasis on the euro’s external value, which has a psychological impact on public confidence in the single currency, needs to be countered to a greater extent by the demonstrable success of economic and monetary union, to which everyone must give greater prominence.

We must not allow information on the technical changeover to be overshadowed by information about the political objectives and the successes achieved so far.

By way of conclusion, I would therefore like to say that the euro, as this report demonstrates, is a project for growth and employment, for a successful single market and for enhancing Europe’s identity. The euro is a project for price stability and lower inflation rates, for increasing competitiveness and improving public finances, so that we finally put a stop to the process of selling out our future for budget policy reasons.

  Κatiforis (PSE). – (EL) Mr President, the first annual report by the European Central Bank gives us a chance to thank the executive board of the European Central Bank for its hard work and to congratulate it on its successful administration in connection with the introduction of the euro. Theirs was no easy task. These people worked extremely hard to attain our common objectives and we should acknowledge that, even if we disagree with them on certain crucial points of the monetary policy which they have applied over the year in question.

The points on which we disagree, and which the rapporteur has glossed over or failed to mention in his report, do not, in my book, include the criticism which has been voiced on account of the fall in the exchange rate of the euro. The rapporteur quite rightly reminds us here that the fluctuations in the euro's predecessor currencies were far greater than those recorded so far for the euro, so there has been no deterioration there. The rapporteur ascribes the fall in the exchange rate to a lack of dynamism within the European economy and he is probably right. However, his comment raises the question of the extent to which the monetary policy applied for a year or more is the right policy for restoring the dynamism which we all agree the economy needs.

Unlike the rapporteur, who fully endorses the arguments of the Central Bank, many of us believe that its monetary policy has been dogmatic, excessively conservative and prone to inflationary risks. We could even forgive it all that, because conservatism and perhaps even a little dogmatism go with the job of central banking. But the Central Bank has no right to publicly present the fight against inflation, which is its obligation under the Treaty, when it itself is free to define inflation as it pleases. The Bank cannot tell us, ‘We have put an end to inflation and inflation is what we say it is, what we judge it to be, and we judge it in a subjective and arbitrary manner, in isolation from the rest of the economy and, more importantly, in isolation from support for employment, which is also the obligation of the European Central Bank’.

This attitude towards economic policy verges on the dangerous, especially nowadays. Economic recovery in Europe has mopped up all our spare productive potential and needs new investments if it is to continue. Is the recent increase in interest rates on the pretext of the risk of inflation the most suitable policy for encouraging investment? Can the inflation target of 0% to 2% be reconciled with the need to extend the investment economy or should the twelve countries in the euro zone be considering a political revision of the inflation target, in which case the Bank will be able to pursue a target independently, but the target will be set by and will be the political responsibility of the European governments?

  Boudjenah (GUE/NGL). – (FR) Mr President, whatever the value of the euro, the primary objective of the European Central Bank, as you have reminded us, Mr Duisenberg, is to maintain price stability without worrying about the economic and social consequences which come in the wake of these decisions.

That is why the ECB can increase its interest rates, at the risk of slowing down investment and dampening growth. This hike follows on from the increase in American rates. The persistent weakness of the euro against the dollar is also the result of the huge drain on capital leaving the European Union. According to experts, nearly 950 billion French francs net poured out of the euro zone in 1999 in the form of direct investments abroad, i.e. 43% more than in 1998.

In short, the euro is used mainly for borrowing in order to finance speculative projects, even as far away as the United States. The decision to compete with the United States by promoting the financial markets leads up a blind alley. It needs a boom in employment, training, research and salaries to enable us to develop a resolutely modern European social model.

To do so, social and monetary sides must join forces. But the ECB is the only master on board when it comes to monetary policy. In the name of the fight against inflation and strict compliance with the Stability Pact, it even goes so far as to call the governments of the Member States to order, but never has a word to say in criticism of the speculation sweeping the financial markets. It advocates wage restraint, flexibility and job insecurity. It fans the flames of privatisation in order to boost competitiveness and the return on capital. It also advocates ‘modernising’ social protection and reducing unemployment costs, thus applying the same logic as the agreement in France between employers and two trades union, an agreement which punishes the unemployed and makes them feel guilty.

We must re-open the debate on the remit of the European Central Bank in order to find a new credit policy which takes account of employment criteria. We cannot merely tack a social chapter on to neo-liberal economic policy. The alternative in a truly social Europe would be to substitute a growth, employment and training pact for the stability pact. And if we are to implement this approach, it is vital that we strengthen control of the ECB by the European Parliament and the national parliaments.

  Lulling (PPE-DE). – (DE) Mr President, when it adopted the Radwan report, the majority of the Committee on Economic and Monetary Affairs missed a rare and valuable opportunity to draw attention to reasons for the weakness of the euro that cannot be laid at the door of the European Central Bank. The sheer nonsense that we have heard here demonstrates how important the ECB’s independence is. The argument that the euro’s weakness is also a consequence of Euroland’s enormous bureaucracy, which – in the words of acknowledged experts – has a Socialist tendency and limits individuals’ freedoms, was rejected by a majority of the Committee on Economic and Monetary Affairs for clearly ideological reasons. The same fate was suffered by other amendments to the effect that the euro area is totally overloaded with heavy taxes, thus penalising entrepreneurialism.

Rigid structures, the slow pace of liberalisation in important sectors of the economy and differences between inflation rates in individual euro Member States, which are already a cause for concern, are the reason why the improvement in public finances in many Member States is not the result of a sustained reduction in public expenditure and structural reforms, but rather a consequence of low interest rates and a heavier tax burden, which represent a threat to the Stability Pact. I would like to have seen all these points included in the report. It would also have been a good thing for this Parliament if it had had the courage to recognise in this particular report that the present weakness in the single European currency is chiefly due to a lack of economic flexibility. Nevertheless, I am glad that at least some reservations have been voiced about certain decisions taken recently in the euro countries, for example on working hours, which instead of making the labour market flexible have made it rigid, and are also contributing to the euro’s weakness. I do not mind saying this, even if Mr Brie, the chief ideologist of Germany’s old communists, whose party wrecked a whole state and who would do better to keep quiet here, does not like it.

This is an unequivocal signal to voters in the euro area to give the all too numerous Red-Green governments their marching orders, if they…

(The President cut the speaker off)

  Berès (PSE). – (FR) Mr President, Mr President of the Central Bank, Commissioner, ladies and gentlemen, I cannot resist the temptation of replying to Astrid Lulling. Independence, yes, but independence in relation to what? If you think that the reduction in working hours might explain the fall in the euro, then that is your business, but it seems to be the result of ideological prejudice rather than objective observation of the state of the French economy.

(Applause)

Mr President of the European Central Bank, as you know, the recent 50-point increase in the base rate which you introduced, following hard on the heels of the increase at the end of April, has incited widespread debate in numerous Member States in which growth has resumed; it is feared that this increase in the base rate will upset this trend, which is essential if we want to resolve the problems facing our fellow citizens.

However, we are delighted at the prospect of a revision in the reference value which allows growth in the money supply to be evaluated. This revision would appear to be overdue. As for the deterioration in the exchange rate between the euro and the dollar, not everyone sees it as a drawback, but many wonder as to the causes. Allow me to share my conviction with you. The lack of any real coordination between our economic policies is the main cause. If we want to rectify this situation, we need greater coordination between our economic policies and we will not achieve it unless we strengthen euro 11, or rather euro 12. It is within this framework that you will manage to strengthen the mutual confidence between governments which is needed if progress is to be made in this direction. I hope that the French presidency will succeed in pushing this issue forward. I also hope that the Central Bank will help it to do so in a positive spirit.

Progress has been made as regards transparency and we are delighted about that. You know that this Parliament imagines that we can go further still. And then, Mr President, allow me to question you on one final point. You have called on the trade unions for wage restraint, as is your right. But should you not also question the inflationary trends triggered by the huge profits made on the share markets? We think that there is also a global vision of the economy which you would do well to take into account.

Finally, as far as Mr Radwan's report is concerned, I cannot concur with the idea that speeding up structural reforms would bring about a fall in the euro when it comes to reducing working time. Once again, the figures speak for themselves: as a result of the reduction in working hours, there has been an increase in growth and jobs in the French economy.

(Applause)

  Bordes (GUE/NGL). – (FR) Mr President, the European Central Bank is just a cog, albeit a highly symbolic cog, in the wheel of policy of all the Member States of the Union, a policy which promotes the profits of big business, while at the same time imposing what the report euphemistically refers to as a moderate wage policy.

The Central Bank, which has set itself up as the supreme guardian of this policy, claims to be acting to prevent budgetary deficit and indebtedness in the Member States. But what it does not mention, any more than the Member States themselves, is the fact that those responsible for and those who benefit from the deficit are not those who are required to make sacrifices in order to reduce it. It is the subsidies, tax relief and various forms of aid granted to big business which empty state coffers everywhere. But it is to labour and public-sector wages that every government runs when it comes to reducing its deficit.

The elected members of Lutte Ouvrière will be voting against this report. We affirm the need for a policy to put an end to all direct or indirect subsidies to employers and a consequent increase in taxes on profits, private wealth and high incomes.

We affirm the need to force Member States to use the funds that are recouped in order to create jobs, which are cruelly lacking today in health, education and public transport, and to lift the public services out of their present state of disrepair.

IN THE CHAIR: MR IMBENI
Vice-President

  Kauppi (PPE-DE). – (FI) Mr President, having listened to Mrs Berès and Mrs Bordes I am more worried than ever that the fine talk at Lisbon is actually being realised. There does not seem to be any understanding among the communists and socialists of the concern Mrs Lulling and the EPP Group have regarding how European competitiveness and dynamism can be realised. I wish that France and the French Members of Parliament were as active, for example, in the implementation of the action programme relating to financial services, as they are in promoting the Social Agenda. President Chirac yesterday emphasised with eloquence the importance of finding the right balance between these two objectives, and I wish you would listen to your President.

Mr Duisenberg, I remember last year’s discussion on the 1998 annual report very clearly. Then I pointed out Parliament’s wish to see a strong and independent European Central Bank in the future, one that was well established and had gained the confidence of the market. The report we are now dealing with also shows that progress was clearly made in this direction last year. It is to be welcomed that the ECB is committed to regularly releasing its economic forecasts and details of its econometric models of the Euroland economy. There has to be more transparency, however. Mr Duisenberg, the fact that there are many econometric models does not prevent their all being published and made known to Parliament also. It is important that these models, on which we try to decide money policy in a new economy, with all the circumstances of a new economy, are published openly in order for economists and politicians to discuss them.

I agree with Mrs Riis-Jørgensen that the ECB should explain its policy of intervention. This morning on the CNN news channel they presented some results of research regarding various intervention policies by the ECB, and the ECB came across as a good intervention-focused bank. Could you comment on that later on in your reply?

  Tannock (PPE-DE). – Mr President, the Radwan report has addressed honestly many of the issues which relate to the functioning of the Central Bank, ranging from prudential banking supervision and the cost of international money transfers on the one hand, to convergence requirements for applicant countries and the role of this Parliament in providing the framework for the accountability of the ECB on the other.

I welcome the calls for greater transparency which I consider is the bank's best defence against calls to amend the Treaty to reduce its operational independence, and Mr Duisenberg has undertaken to publish the econometric models, for which he should be congratulated. I would also urge publishing the minutes and the voting patterns of the Governing Council, as winning the trust and the confidence of the markets is vital, especially for such a young institution.

The report welcomes the fact the ECB does not interpret its responsibility for stability policy one-sidedly, but that, in addition to inflation, it also monitors deflationary tendencies. This is also important. We all value economic and price stability, and the new paradigm in the United States gives us hope that such stability, including a balanced budget over the economic cycle, is consistent with growth and the steady reduction in unemployment.

The report, however, does not examine the markets' lack of confidence in the euro and the huge capital outflows from Europe over the past year. I believe this is due to the lack of faith in the core Euroland countries' ability to govern and deliver fundamental structural reforms under their current governments, which Otmar Issing, the bank's chief economist, has referred to as the serious structural rigidities in Europe's labour markets and pensions systems.

Lastly, as a British member, I do not think it is fair that candidate countries should be subject to any stricter application of the Maastricht convergence criteria for joining EMU than the existing members and, as an out-country member, I urge the Commission to consider the flexible European model that we British Conservatives have adopted, allowing these countries to opt out of EMU in future if they so wish after joining.

  Agag Longo (PPE-DE). – (ES) Mr President, Mr President of the European Central Bank, good work! I believe that you have achieved the main objective of the European Central Bank: to maintain price stability. I will go further. If necessary, if you believe it appropriate to raise interest rates, if the objective is price stability, if the inflation objective is in jeopardy, do not be nervous, raise interest rates.

However, I would like to add something. It is not in this area that the European Central Bank deserves most credit, but rather it is in the debate on the external value of the euro that the European Central Bank has remained steadfast, has endured and resisted attacks and pressure from different fronts. The real reason for the external value of our currency is not, from any point of view, the policy of the European Central Bank. It is the attitude and resistance of certain governments – such as, for example, the one which has been mentioned here several times over the last 35 hours –, which are ideologically allergic to the economic reforms needed for the European Union to follow the path marked out at the Lisbon Summit.

I would also like to congratulate you on the change of method of adjudication, since the new variable rate system allows more direct control of the monetary aggregate as a result of greater knowledge of the market’s demand curve and, furthermore, allows for certain signals to be sent to the markets on monetary policy. For all of these reasons, Mr President of the European Central Bank, I would like to congratulate you and show you my support.

  Villiers (PPE-DE). – Mr President, in many ways it has been a rather grim year for the euro. I take a rather more pessimistic view than the previous speaker. We have seen the external value of the euro plummet.

The interesting issue is to look at why that fall has happened. There are many reasons which have been explored today, but a big reason is that the markets do not believe in a currency without a country. They do not believe in a currency which is not backed by a political institution or a government. This is a very good illustration of the inherent link between economic and monetary union and political union. The one follows almost inevitably from the other. That is one of the many reasons why the United Kingdom should stay out of the euro.

But what is vital is that the people across Europe have a debate about the future, a debate about political union. Too often in the past they have been told that changes in Europe are technical. Particularly the idea that a move to the euro was merely an economic choice is, quite frankly, a lie. Every time Mr Blair and Mr Brown say that it is a matter of economics whether the UK joins or not, they are deceiving the British public or they are deeply deluded about the future of Europe.

It is only right that in Denmark we are seeing a debate on political union at the moment, as the Danes decide whether to join the euro or not. That is the decision that they are making and that is the decision that is faced by the United Kingdom. I trust that both of those countries will say no to political union and consequently no to economic union as well. It is about time that the European Union stopped intervening and spending taxpayers' money on one side of this type of political debate. It is unacceptable, in my view, for taxpayers' money – for public funds – to be spent promoting the euro in the ‘out’ countries, because they are engaged in a very important political process. To use government funding on one side of the debate would be an interference in this democratic process. I trust that we will vote in accordance with that in the Karas report at noon today.

  Gallagher (UEN). – Mr President, the introduction of a single currency in Europe was never going to be a simple task, but with 11 countries within the Union covering a population of 300 million, I fully support the single currency.

There has been much debate in recent months about the strength or otherwise of the currency and I would like to pose a very simple question to the detractors of EMU. If the single currency is not working, why are so many countries seeking to join the new structure? I welcome the decision to allow Greece full participation within the single currency. In the Scandinavian countries support for the single currency is rising. Of course we are waiting anxiously for the decision of the Danish people. In the longer term, Eastern and Central European countries seeking to join the European Union will want to participate in the single European currency system. 1 January 2002, which is not far away, is the key date for the circulation of euro notes and coins within the territories of all the EMU participating countries. Business and retailers must gear up their preparation for this date to ensure that the changeover goes smoothly.

From an Irish perspective, I believe that our cash changeover plan is moving very well. Fortunately we can draw on our experience of a change of currency in 1972, when we broke with sterling. We want to ensure that the mistakes that were made then are not made again.

  Duisenberg, President of the European Central Bank. – Mr President. I have had so many congratulations and compliments that I would simply say I thank the European Parliament for the way in which they have received our annual report and I can see the debate here expresses great support for continuation of the policies that we have pursued so far.

There are a few points I would like to comment on. The question raised by Mrs Randzio-Plath, Mr Katiforis and Mr Goebbels all boils down to whether the ECB has too high a growth rate, which has the effect of increasing interest rates. Mrs Berès has asked a very precise question, about which I would like to say the following. I do not understand the pessimism which permeates this aspect of the debate. In the past twenty-five years the average growth rate for real GDP in the euro area has been between 2 and 2.5% per year. This year and next year growth in the euro area will be in excess, even considerably in excess, of 3% per year and we expect inflation to be close to 2%. Due to the volatility of oil prices it might even be more than 2% in some months but the average will be 2%. There will be upside risks, but what we do about this depends on how the situation develops.

In reply to Mrs Randzio-Plath's question if the ECB is against growth rates of over 3%, my unequivocal answer is that we are certainly not against growth rates of 3%, which we expect now. We would be against increased inflation, but that is not yet on the cards although, as I say, the risks will be upside. We are now entering the best period that Europe has had in a long time, in decades, I might say. Unemployment will fall over the next two years. Not by very much, admittedly – there is nothing monetary policy can do to accelerate the process – but unemployment is coming down very gradually and will continue to do so.

If, as well all expect and hope, Greece joins EMU on 1 January next year, only Denmark will be a member of the ERM.

The question was asked what will the ECB do if that creates problems for Denmark? The ECB will do everything in its power to keep Denmark in the ERM and there is no date scheduled for the exchange rate mechanism ending so it will be for an indefinite period. So far Denmark has been remarkably successful as a member of the ERM with smaller exchange rate margins than were permitted within the ERM, and I expect it to remain that way, although I would hope that Denmark will decide to join EMU. But I can assure Mrs Riis-Jørgensen that the cooperation between the European Central Bank and the Danish National Bank is exemplary.

I have already alluded in my introduction to the question of transparency and the summary minutes asked for in the motion for a resolution. The introduction to the monthly press conference refers to the debate in the governing council that has just taken place. The statement is carefully prepared by the whole governing council; it is not a spur of the moment statement. A week later the entire statement is produced again in a more final form. The editorial in the monthly bulletin gives all the information that could be found in summary minutes of the meeting.

  President. – Thank you, Mr Duisenberg.

The debate is closed.

The vote will take place at 11.30 a.m.

  President. – The next item is the report (A5-0170/2000) by Mr Karas, on behalf of the Committee on Economic and Monetary Affairs, on the Commission communication on communications strategy in the last phases of the completion of EMU.

  Karas (PPE-DE), rapporteur. – (DE) Mr President, Commissioner, ladies and gentlemen, 500 days from now euro banknotes and coins will come into circulation. This will be the final stage of the first currency changeover on this scale in the history of our continent. EMU citizens, every citizen of the Member States of the European Union and of the applicant countries and beyond will be indirectly or directly affected. Every single consumer, including both our own citizens and tourists visiting Europe, and the whole world economy will have to learn to recognise the new money, to become familiar with prices and values in euros and to handle the new money. Both large and small companies will have to adapt and change over their accounts and computer systems to the new currency, which will involve substantial preparatory work.

We have talked a lot about the advantages of the euro and of economic and monetary union. But there still remains a very great deal to be done. According to opinion polls, not enough companies or private individuals are using the euro, and awareness of it is still too low. 30% of companies do not yet see any need to make preparations well in advance and in some cases even think that they do not need to complete the changeover until 2002. Most members of the public do not have a euro account and rarely carry out financial transactions in euros.

There is an enormous need for information and awareness-raising measures going beyond merely technical information on the changeover. The Committee on Economic and Monetary Affairs has not simply commented on the Commission report – we welcome the priorities and measures put forward in it. We have attempted to put the report in concrete terms, to strengthen in it, and, where we thought it was necessary, to supplement it. Considering that around EUR 80 million will be spent on this information campaign in the three years 1999-2002, plus a further EUR 80 million from the ECB, it is absolutely vital for us to have the closest possible coordination between all the institutions, associations and states affected, for us to identify priorities and to encourage agreement on key messages, for us to monitor the process, and in that case I would suggest using the European Parliament and European Commission interinstitutional working group. It is also important for us to implement the political guidelines, also in the context of contracts with Member States, and for us to demonstrate a high degree of professionalism in doing all this.

I would like to use my last one and a half minutes to say something about priorities. Over half of all SMEs do not yet have an action plan for the changeover. SMEs need to tackle their technical changeover as quickly as possible, and in doing so also to give some thought to the strategic consequences of a market notable for price transparency and increased competition. So SMEs are the priority for autumn 2000.

Secondly, there is the public at large, which includes all the target groups and more besides. The public needs to be made to feel secure about this. In this area, public administration needs to act as a role model, just as NGOs and foundations need to be involved in the information campaign and act as intermediaries.

Thirdly, we have schools, schoolchildren and other young people. We have a very specific proposal, which is not only to change over all school books as soon as possible, but also to organise painting, drawing, essay-writing and public speaking competitions on the subject of ‘Changing to the euro’, which is a defining topic for Europe’s identity. The third area is this: the banks have run world savings week throughout Europe, and in this context we should also introduce ‘euro savings days’, to encourage more people to open a euro savings account before the changeover stage. We need to increase the involvement of elected representatives, by which I mean not just Members of the European Parliament, but also all representatives elected by the public from municipal level to European level.

In addition to the need to have sufficient staff in the Commission’s directorates-general to cope with the change, coordination is also a key area if we are to send a clear message to the public through a wide-ranging communications strategy with adequate financial resources and an appropriate time frame. We are therefore proposing that the campaign should be extended to 2002. In that case, the success story of the euro will not come to an end at that point, but, with the support of the public, it will go on to greater things.

  Haug (PSE), draftsperson of the opinion of the Committee on Budgets. – (DE) Mr President, ladies and gentlemen, we all know that the European public’s need for information is still very great, although monetary union is already in place and euro banknotes and coins will come into circulation before too very long. There are less than 75 weeks to go in fact. The Committee on Budgets, in common with all Members of this House, is very much in agreement with the objectives described in the Commission communication on the communication strategy covering the final stages of the completion of EMU. We also believe that there should be incentives and support for companies, especially SMEs, to enable them to carry out the work needed to change over to the euro.

Furthermore, enhanced preparation is just as desirable and important for all our citizens and for all consumers. We all need to change over to the euro in our daily lives. It was not of course for the Committee on Budgets to assess the content of the Commission communication in detail: we limited ourselves to budgetary aspects. We wish to point out once again that in the interinstitutional agreement it was stipulated that information policy is an autonomous action which does not require a separate legal basis. For the reason mentioned, this particularly needs to be brought to the attention of the Council again.

However, I would particularly like to remind you that the Prince programme was initiated by Parliament through budgetary intervention in 1996 with the clear aim of financing information campaigns on priority issues for the EU. This was to take place at interinstitutional level, as at that time we were convinced, as we are now, that this would ensure that the available funding would be spent as effectively as possible. We therefore wish to stress once again that the decision on the breakdown of appropriations and the guidelines for implementation, including joint actions, is taken on the basis of the opinion given by the interinstitutional working group. This working group was specifically referred to in the budgetary remarks, and that is how it should stay – and that comment is particularly for the ears of the Commission! For that reason we wish to reinsert the relevant remark on budget headings B3-300 and B3-306, which the Commission evidently ‘forgot’ to include in its preliminary draft budget for 2001.

I would like to thank the rapporteur and the committee responsible for including our remarks on this in the conclusions.

(Applause)

  Myller (PSE), draftsman of the opinion of the Committee on the Environment, Public health and Consumer Policy. – (FI) Mr President, information on the euro is for the public and is meant to satisfy their need for information in particular. The information must come in cooperation with the Member States, but what, in my opinion, is of most importance is that NGOs are kept fully aware of what is happening. We have to reach grassroots level as swiftly as we can, in a language that is perfectly clear. The so-called two-stage information strategy, where peer groups keep each other’s members informed, has turned out to be the best of all options, and this should be put to good use too in dealing with this information issue. I fear those information campaigns that are led by the Commission. They are often sweet as candy and very beautifully contrived. The fact that this information campaign is being made with the support of NGOs and via them will hopefully prevent a repeat of that.

The arrival of the euro will also entail a lot of practical questions for consumers. Above all we have to take care that prices do not trail upwards when the currencies are finally changed over. In this the consumer organisations have a very big and important job, and women’s organisations must also be taken into account, as women need information on this. It is absolutely essential that cross-border giros and payment transactions are in accordance with the principles of the Internal Market. I am glad that the President of the European Central Bank, Mr Duisenberg, also paid attention to this and promised that the ECB would produce a report on the subject. I genuinely hope that these practical matters, which are a thorny subject for consumers, are attended to before the euro comes into proper circulation.

  von Wogau (PPE-DE). – (DE) Mr President, ladies and gentlemen, I would first like to congratulate Mr Karas on his excellent report, but at the same time to say that we are not at present satisfied with the European Commission’s information policy. We wish to remind the House that the euro information programme is also, as defined in the budget, a joint European Commission and European Parliament programme. During the last parliamentary term there was a committee led by Mr Anastassopoulos which laid down the essential features of information policy in this area. It was very successful at that point. We also managed at that time to secure a full and key role for Members of the European Parliament in this information campaign, via the political foundations. This has not happened during this new parliamentary term. This body, which consisted of the Commissioner responsible and the relevant committee chairs, has not yet been convened. Some of the procedures dating from the last parliamentary term have still not been discharged to this day. We therefore have to ask in the clearest possible terms what should happen next. For this reason, my first request is that a meeting of this body should be called as quickly as possible. That is my first point.

The second point that I would briefly like to touch upon relates to an observation regarding the substance of the information campaign. If you compare prices in the Eleven, that is in Euroland, with prices in other countries which have remained outside the Eleven, including the United Kingdom but also Switzerland and Norway, where this is particularly apparent, you will see that price levels in Euroland, even in the ‘rich’ countries, are generally speaking lower than in the other countries. This means that the European single currency is already leading to greater competition in this area, and that in turn this competition is leading to the public getting goods and services on more favourable terms. A study should be carried out on this, something which is also called for in the Karas report.

  Randzio-Plath (PSE). – Mr President, on behalf of my Group I would like to congratulate the rapporteur and to say that we support the report, just as we welcome the positive tone of the Commission’s communication. It is high time that we had a more efficient communications strategy and that cooperation between the Commission, the European Parliament and the Member States was improved in this new parliamentary term. The European public not only feels inadequately prepared for the euro, it also genuinely is inadequately prepared for it, both objectively and subjectively speaking. The fact is that the long transitional period has not led to more intensive and careful preparations being made for the introduction of the euro, quite the contrary – it has led to more disinformation and also to preparations being postponed, in some people’s minds even to June 2002.

Unfortunately, this seems to apply not only to the public, but also to business. Although 80% of businesses say that they are preparing for the euro and its introduction, objectively speaking at most 25% are making concrete preparations. A sign of this is of course that only 1% of banknotes within the European Union have been converted to date. If we do not tackle this now, fears that we will end up with the dreaded ‘big bang’, which none of the governments wanted, will be totally justified.

The governments themselves really must do some advance work, however, and demonstrate greater commitment. I believe that you cannot shift all the responsibility to the European institutions. After all, it is the EU Member States that have a duty to provide political information and education according to the principle of subsidiarity. We really must call on the Member States of the European Union to invest money, time and human resources in ensuring that the euro is a success. It is a matter of regret that up to now public administrations have not led the way as they should have done.

I think it is also important, and the rapporteur has quite rightly drawn attention to this, for schools, teachers and places of education to prepare people for the euro. The euro must become part of education across the board. It is not enough to have a few successful but extremely modest Socrates projects about the euro in Europe’s schools. No, this is really a job that needs to be successfully handled at local level. I think it would be wonderful if the schools, Europe’s young people, welcomed the euro as a tangible sign of Europe, and if everyone used their own preparations to communicate with others. This is also something that the older generation, who are generally so sceptical about the euro, could do. Why should older people in the European Union not use their experience, their knowledge and also the time that they have available in order to make the euro a success? Maybe this is an area where we could have a kind of new pact between the generations that would help the euro project to succeed.

The Commission certainly needs to work even more closely with us and to step up the pace of its involvement. But we should not forget that the resources for the information campaign are extremely slight and have to be shared out between the Member States. No company introducing an important product would rely on such modest resources to ensure that a product was a success. A powerful argument in favour of the euro is the initial positive experience with monetary union, which has in fact provided protection against turbulent currency markets in recent times. But it is also a matter of turning information into education, because at the end of the day we need to acquire a totally new way of looking at prices, making calculations and judging values. We should not be deceived by the painless transition on 1 January 1999. Nor should we be deceived by the almost automatic transition to the new millennium. We also need to prepare for the euro psychologically. We must all do this together, at all levels of the European Union!

  Gasòliba i Böhm (ELDR). – (ES) Firstly, I would like to say that our Group, as it did in committee, supports the Karas report. We believe that it is a very good report and it makes a very positive contribution to an issue of fundamental importance in the process of introducing the euro into the lives of our citizens.

It is clear that the euro is not purely a macroeconomic and financial issue. It is an issue which will reach every European citizen, it is a European distinguishing mark and, therefore, it is of the greatest importance in the process of European construction. To this end, it is very important that a campaign be implemented – and a very good campaign – so that in 2002 the euro may enjoy the degree of confidence and acceptance which we all want. Furthermore, as has been said, there is a great delay in terms of the number of countries and companies prepared for its use and in terms of our citizens’ level of knowledge.

In this respect I would like very briefly to highlight three dimensions. The first is decentralisation. The participation of regional and local authorities is very important. Many of them have very significant responsibilities and are better prepared than the Member States themselves to reach the citizen. This is an aspect that the European Central Bank and the Commission should bear in mind. I would like to know Commissioner Solbes’ opinion with regard to participation at this level, which Mr von Wogau has also requested. We must ensure that these administrations play a significant role. It falls to them to do so, since they are best prepared to reach the citizens.

Secondly, this decentralisation must also take place at company and industry level and not be limited to the headquarters of managerial or union organisations.

Thirdly, I recommend that you read the conclusions of the Committee on Culture, Youth, Education, the Media and Sport, which introduce a cultural dimension, which is very important to the success of this information campaign.

  Hudghton (Verts/ALE). – Mr President, I welcome this opportunity to give a view from the outside, from Scotland, for the time being part of the UK, where our diet of information about the euro is dominated by a rather lukewarm and unconvincing approach on the part of the Labour government and an almost hysterically anti-euro rhetoric on the part of the Conservatives.

In contrast my party – the Scottish National Party – recently reaffirmed our position of support in principle for entry to the euro currency and we are not afraid to promote that view. Scotland's traders, from fish processors to farmers, from manufacturers to the tourism sector, are being forced to compete with one hand tied behind their backs.

Mr Karas acknowledges a high level of support for the euro but also some shortcomings in the provision of information within the euro zone and I support his ideas for addressing that problem. But in particular I welcome the fact that this strategy also addresses those Member States not yet taking part in monetary union, since of course we will be affected whether we join in or remain out. I call on the UK and Scottish governments to play a full part in that campaign.

  Schmid, Herman (GUE/NGL). – (SV) Mr President, there are three countries outside EMU. In these countries, referenda will be held before the governments concerned make the decision concerning the introduction of the euro. Two of these countries, England and Denmark, have had the good sense not to take part in the euro information campaign. They have said no in view of the fact that the discussion is not yet concluded and with the forthcoming referenda in mind.

The third country that remains outside EMU, Sweden, has, however, decided to take part in the campaign, despite the fact that it will take place before the referendum and before it is decided whether Sweden will introduce the euro. This means that the euro information campaign will not be a normal information campaign as it is in other countries, but a sort of persuasion campaign and the beginning of the fight between those that are for and those that are against in the referendum. It is, of course, difficult to imagine that the euro information campaign would produce any particularly critical information on the euro, as the object of the campaign is to increase confidence in the euro and the euro reform. This means, in actual fact, that the euro information campaign will serve the political purpose of the Swedish government, which is, of course, to persuade the Swedish people to vote in favour of the euro in the referendum.

Fifty percent of the euro information campaign is financed from EU funds and is to be conducted throughout society, even in schools where it is not usual to carry on one-sided political campaigns, which is what this is. I think that it would be disgraceful if the Swedish government were allowed to exploit the euro information campaign in this way. It would be both compromising and embarrassing for the EU if the campaign were allowed to be carried out as planned. Therefore, I want to appeal to the Commission to take steps to ensure that the agreement concerning the Swedish euro information campaign is torn up or amended in such a way that it may only be implemented once the Swedish people have expressed their opinion in a referendum.

I also want to appeal to my fellow MEPs here in the House to support Amendments 7 and 12 in the vote tomorrow, as the text of these amendments recommends that the campaign not be conducted in countries that have not decided if they are to be a part of EMU.

  Krarup (EDD). – (DA) Mr President, I should like to continue where the previous speaker left off. I am glad that no money from the campaign is formally being used for propaganda in the Danish debate. This report is one of the most interesting documents I have read for a long time. It could form part of a handbook for democrats or perhaps, rather, be used as an object lesson in anti-democratic manipulation. I read here that the euro is an ‘essential, identity-building factor in the process of European integration’. It is also noted that there is no overwhelming support for the euro in the euro area and certainly not in the countries surrounding this area. As the opinion of the Committee on Culture, Youth, Education, the Media and Sport very clearly puts it, the Commission is therefore urged, “when carrying out the advertising and information campaign, to take account of the fact that large parts of the population continue to be sceptical about the common currency”. Or, to put it another way: the objective, as stated in the report itself, is that “the right means of communication can be used to respond to the European public’s national and cultural features”. Or, in a nutshell, manipulation. The situation is that, in this programme, more than EUR 100 million has been used to influence the people of Europe. That is to say, the Commission is using Europeans’ money to manipulate Europeans. As I see it, that is the very opposite of how we really visualise this project. Democracy depends upon decision-making by the people, not upon manipulation by the institutional machine. If I say this, it is because, as is well known, we are holding a referendum in Denmark on 28 September on joining the euro, and it goes without saying that it is the public debate which forms the basis for this. We will not be manipulated. Such tellingly described manipulation has not been seen since the totalitarian regimes collapsed years ago. This is a most deplorable report.

  Ilgenfritz (NI). – (DE) Mr President, I would like to congratulate the rapporteur on this highly informative report. One positive point is that small and medium-sized enterprises have been identified as a very important target group, as this group is one where there could be considerable problems at the changeover stage. What is more, we should also support any initiative and also call upon the Commission in the clearest terms to introduce measures without delay to counter excessive bank charges for intra-Community money transactions.

We must demonstrate to the European public that the euro will cut administrative costs, to their advantage. We should not just talk about the euro and provide information about it, but the information we provide must also convince the public that the euro will bring tangible advantages for them. The excessive bank charges in force at present are giving precisely the opposite signal.

  Thyssen (PPE-DE). – (NL) Mr President, for most Europeans, the era of the euro will not actually begin until they are required to use euro coins and notes in the shops. Out of respect for all our European citizens, it is important not to underestimate the political significance of the changeover, and for this changeover to occur without any hitches. With this in mind, it is necessary to organise the practical dimension of the changeover well as a matter of priority. It is, in this context, extremely useful that, after extended pleas, also on the part of this House, frontloading has become possible. In addition, people need to have faith in the process as a whole. In order to instil this feeling, we must provide them with information as a matter of priority. We endorse the plans of the Commission, which set out to achieve this for each target group and by mobilising the organised midfield. After all, the hallmark of sound information is that it is tailored to the specific circumstances of those involved, and people and companies have a great deal more faith in their own associations and organisations than they do in public institutions. But not until we manage to reduce the costs of cross-border payments and exchange rates within the euro-zone will people and companies have a sufficient level of confidence, and this confidence is crucial. It is a prerequisite for motivating people to make the necessary efforts, efforts which are needed to adapt to the new situation. Let us not delude people into thinking they will not need to make any sacrifices. The changeover will require an effort. Everyone will need to adjust, everyone will need to make an effort. If we can help them in this and guide them in the right direction from the outset, we will have succeeded in our task of providing information.

Mr President, Mr Karas’ report was approved by a large majority within the Committee on Economic and Monetary Affairs. This is only right, because it is a sound report, on which I would like to congratulate him.

  Torres Marques (PSE). – (PT) Mr President, it seems that since the launch of the euro in January 1999, the European public, far from becoming more interested in it, has in fact been losing interest, as if the extremely long period of three years without notes and coins has turned the euro into a kind of virtual reality.

Although we have repeatedly stated that the euro has, since January 1999, been the official currency of 11 EU Member States, which Greece and possibly Denmark will join at the start of next year, and that the national currencies are just multiples and fractions of the euro, the fact of the matter is that the majority of Europeans do not believe that escudos, pesetas, francs and marks are not still their official currency, because that is what they have in their pockets.

While water, electricity, telephone and supermarket bills are also shown in euros, I regard that as a mathematical exercise of limited usefulness. Yet in 18 months’ time our national notes and coins will disappear and it is high time that we were totally familiar with the new money, developed a sense of its value and recognised its implications for our lives and for the development of our economies and societies.

As I see it, information campaigns on the euro need to focus on precisely these two aspects: first, the value of the euro, its appearance and the way we use it as a currency, and, second, its potential and effectiveness in terms of monetary stability in the European Union, the level of growth achieved – the highest in recent decades – and in terms of controlling inflation and creating employment.

If these campaigns are to deliver the desired results, however, it is vital for the various actions to be coordinated. It is no good having one campaign by the European Central Bank and another one by the Commission or by Parliament, not to mention all the other campaigns organised by the Members States involved. It is essential to effectively coordinate the resources available so as to reach the target groups, and for us to be certain that there are no errors of the kind already identified in documents which the Commission has widely distributed in Portuguese schools.

Schools are nerve centres for information and have a multiplier effect, so they must be used in the most appropriate, simple and effective way possible. This means that the key words in these campaigns have to be coordination of effort, involvement, and human, technical and financial resources. Whereas it seems that up to now the right hand has not known what the left is doing, and vice versa, and it is important to get past this stage as soon as possible.

2001 should be the year in which the euro takes over the key role of national currencies in setting prices, in company accounting and in cross-border transactions. We need to call a halt to the scandalous cross-border costs within the euro area, which do not involve any risk for the banks. The practice of charging a percentage on credit card transactions and on bank debits and transfers is one of the causes of the poor light in which the European public views the euro, and only action by the Commission to outlaw the real cartels that have been created can put an end to this and help to restore confidence. And this is what the citizens of Europe are waiting for.

  Blokland (EDD). – (NL) Mr President, on behalf of my Group, I should like to express our surprise at the fact that a particularly extensive and sometimes even extremely complex resolution should have ensued from a relatively simple matter.

The European Parliament is bringing many problems on itself in this respect. This is mainly due to the fact that, in this resolution, the concept of government information has been taken to mean government propaganda. During a previous debate on the information strategy to be pursued, I was already bound to make some critical observations with regard to the highly peculiar wishes of some of my fellow delegates. Unfortunately, I cannot escape this here, either. Anyone who uses the euro as a vehicle to sell the so-called European idea is committing a very grave logical error. It is extremely regrettable that this enormous political error is detected to a far lesser extent by this House than the errors of liability on the part of commercial banks in the course of foreign exchange transactions. If the cap fits, wear it.

  Evans, Jonathan (PPE-DE). – Mr President, the question troubling me over Mr Karas' report is whether we are actually asked to endorse an information campaign on the practical implications of the introduction of the euro, or a propaganda campaign in favour of it. Surely no-one could challenge the need for information. True, some British newspapers declare that we already know all the facts, but the recent announcement of the merger between the Frankfurt and London stock exchanges left many British newspaper editors spectacularly exposed on the simple issue of which currency would be used for the exchange denomination.

More than two-thirds of UK businesses are unaware of the practical implications of the introduction of the euro, even for those countries outside the euro zone. If there is funding available for the many seminars and conferences which UK trade associations, lawyers and accountants are holding, then as a UK lawyer let me declare my interest in ensuring that we get our share of it.

But there is reason to believe that this campaign goes well beyond the provision of practical information. After all, the European Central Bank is holding its own information campaign, so why should we be duplicating the effort? Perhaps we see the answer in the evangelical tone of Mr Karas' report and his remarkable declaration that the euro information campaign must help to perpetuate the successful history of the euro. I certainly wish the euro well. Currency instability is bad for all of us, whether we are in or out of the euro zone. But I personally fail to recognise this historic success over the last six months, and the astonishing suggestion that the euro has proved a stabilising factor in the face of international monetary crises.

Whether in or out of the euro zone it should be: information, ‘yes’, but propaganda, ‘no’.

  President. – The debate is suspended. We shall now proceed to the votes.

The debate will be resumed this afternoon.

IN THE CHAIR: MRS FONTAINE
President

Simplified procedure – procedure without report

- Council common position with a view to adopting the European Parliament and Council directive on energy efficiency requirements for ballasts for fluorescent lighting, together with two draft joint declarations by the European Parliament, the Council and the Commission (7034/1/2000 - C5-0268/2000 - 1999/0127(COD)) (Committee on Industry, External Trade, Research and Energy)

(The President declared the common position approved)

⁂

- Proposal for a Council decision on the Community contribution to the International Fund “Clearance of the fairway of the Danube” (COM(2000) 317 - C5-0297/2000 - 2000/0125(CNS)) (Committee on Budgets)

  Färm (PSE) , rapporteur. – (SV) Mr President, at the Commission's suggestion, in this hastily inserted item, the Committee on Budgets is now recommending that Parliament approve a donation of EUR 22 million to a fund within the Danube Commission. The reason for this is that the Danube river at Novi Sad is blocked by the remains of bridges destroyed by NATO's bombing last year. This, as well as the fact that the river bed is now lined with unexploded mines and bombs, is threatening both economic and humanitarian development in the Balkans.

The task is to clear the river of three collapsed bridges and unexploded mines and bombs along a five kilometre stretch of Serbian territory. The help of the EU is required for this. It is important for this clearing work to be started before the summer. We should have preferred it if it had been possible for this to be a part of the Supplementary and Amending Budget that we have just debated, but for reasons of time this has not been possible. Therefore, the Committee on Budgets is nevertheless lending its support for funds to be freed up so that the Danube Commission can begin its work as soon as possible. One problem is that part of the work will be carried out on Serbian territory, once we have satisfied ourselves that the sanctions against Yugoslavia will be respected.

As far as carrying out the work, the legal basis and the financing of the project are concerned, we have been in contact with the Commission and our queries have been resolved. As regards the provision of this EUR 22 million, the Commission has suggested that 7.5 million be taken from Phare, 7.5 million from ISPA and 7 million from Obnova. I should just like the Commission to confirm the following, and that is that the Commission will contact the Committee on Budgets if any problems should arise with the financing of this project.

  Liikanen, Commission. – If there is any change to the amount or distribution proposed in the proposal for a Council decision, both the Council and Parliament will be reconsulted. So my reply is ‘yes’.

(Parliament approved the Commission proposal)

⁂

- Proposal for a Council decision concerning the conclusion of an agreement between the Community and Cyprus establishing cooperation in the field of small and medium-sized enterprises within the framework of the third multiannual programme for small and medium-sized enterprises (SME) in the European Union (1997-2000) (COM(2000) 242 - C5-0324/2000 - 2000/0099(CNS)) (Committee on Industry, External Trade, Research and Energy)

  Langen (PPE-DE). – (DE) Madam President, ladies and gentlemen, the proposal presented by the Council here is one which has our support, although it has one serious flaw. According to Article 14 of this proposal, and this was also discussed in the committee responsible, the documents are to be available in all 11 official languages of the European Union, but not the second official language of the Republic of Cyprus, that is Turkish. We request that this agreement should also be translated into Turkish, as an official language of the Republic of Cyprus – not only into Finnish, Swedish, Danish, German and so forth, but also into Turkish. The Council should take this into account in future in negotiations of this kind, if it wants to secure our agreement under a simplified procedure!

  Liikanen, Commission. – (FI) Madam President, my reply is that these sorts of agreements are always translated into the languages of the Community. This has also been the case this time. I also have a longer version of the declaration if the President would like to see it.

  Swoboda (PSE). – (DE) Madam President, I just wanted to ask Commissioner Liikanen whether Cyprus will be treated in exactly the same way as all the other applicant countries. Yes or no? As I see it, that is the vital question.

  Liikanen, Commission. – (FR) My answer is yes.

(Parliament approved the Commission proposal)

⁂

Procedure without debate

- Second report (A5-0176/2000) by Mr Gerhard Schmid, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a Council framework decision on combating fraud and counterfeiting of non-cash means of payment (SN 3040/2000 - C5-0265/2000 - 1999/0190(CNS))

(Parliament adopted the legislative resolution)

⁂

Report (A5-0172/2000) by Mrs Lienemann, on behalf of the European Parliament delegation to the Conciliation Committee on the joint text approved by the Conciliation Committee for a European Parliament and Council regulation concerning a financial instrument for the environment (LIFE) (C5-0221/2000 - 1998/0336(COD))

(Parliament approved the joint text)

⁂

Recommendation for second reading (A5-0173/2000), on behalf of the Committee on Regional Policy, Transport and Tourism, on the Council common position with a view to adopting European Parliament and Council directive 2000/…/EC amending Council Directive 91/440/EEC on the development of the Community's railways (5386/1/2000 - C5-0178/2000 - 1998/0265(COD)) (rapporteur: Mr Jarzembowski)

Before the vote:

  Liikanen, Commission. – Referring to the report prepared by Mr Jarzembowski on the draft directive modifying Directive 91/440, I should like to state that the Commission cannot accept Amendments Nos 1, 2, 4, 5, 7, 10, 12, 15, 16, 18, 19, 22, 23, 25, 26, and 27, while it welcomes Amendments Nos 3, 6, 8, 9, 11, 13, 14, 17, 20, 21, and 24.

(The President declared the common position approved as amended)

⁂

Recommendation for second reading (A5-0171/2000), on behalf of the Committee on Regional Policy, Transport and Tourism, on

I. the Council common position with a view to adopting the European Parliament and Council directive amending Directive 95/18/EC on the licensing of railway undertakings (5387/1/2000 - C5-0176/2000 - 1998/0266(COD))

II. the Council common position with a view to adopting the European Parliament and Council directive relating to the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification (5388/1/2000 - C5-0177/2000 - 1998/0267(COD)) (Rapporteur: Mr Swoboda)

(The President declared the two common positions approved as amended)

⁂

Recommendation for second reading (A5-0174/2000), on behalf of the Committee on Legal Affairs and the Internal Market, on the Council common position with a view to adopting the European Parliament and Council directive amending Council directives 89/48/EEC and 92/51/EEC on the general system for the recognition of professional qualifications and Council Directives 77/452/EEC, 77/453/EEC, 78/686/EEC, 78/687/EEC, 78/1026/EEC, 78/1027/EEC, 80/154/EEC, 80/155/EEC, 85/384/EEC, 85/432/EEC, 85/433/EEC and 93/16/EEC concerning the professions of nurse responsible for general care, dental practitioner, veterinary surgeon, midwife, architect, pharmacist and doctor (5103/3/2000 - C5-0162/2000 - 1997/0345(COD)) (Rapporteur: Mr Wieland)

(The President declared the common position approved as amended)

⁂

Framework agreement (C5-0349/2000) on relations between the European Parliament and the Commission

Before the vote:

  Bonde (EDD). – (DA) Madam President, the framework agreement constitutes a degree of progress, but it is also in danger of being a clear retrograde step when it comes to MEPs’ access to information from the Commission. My political Group and the intergroup SOS Democracy therefore recommend that we postpone the vote and give the agreement a proper reading in all committees, especially in the Committee on Constitutional Affairs, the Committee on Legal Affairs and the Internal Market and the Committee on Budgetary Control. We agree with the criticism from the chairperson of the Committee on Budgetary Control, Mrs Theato, that the agreement directly contravenes Article 276 of the Treaty, which guarantees us access to information as part of the discharge procedure. Now, the Commission is being given the opportunity to decide what it will hand over for inspection. It is the same procedure as applies in connection with the ombudsman. The framework agreement also contravenes our own rules of procedure. Article 64 requires express equality between the Council and Parliament in the legislative procedure when the Commission transfers documents. Now, it is only the President of the Parliament and the committee chairmen who are entitled to see different types of non-public documents. The rapporteurs cannot demand them, and MEPs certainly cannot. As MEPs, we ought to be legally entitled to have documents made available to us whenever they have been issued to others by the Commission. That was something all the group chairmen agreed about when we began negotiations with the Commission. Now, a compromise is being proposed whereby those who are to be inspected can decided what they will have inspected. This compromise does not correspond with Mr Prodi’s pledges. I would therefore urge that we reject the proposal today and arrange for it to be improved so that we can vote for an improved version next time.

  President. – Mr Bonde is asking for the vote to be postponed.

  Hautala (Verts/ALE). – (FI) Madam President, my Group supports Mr Bonde’s proposal for deferment, although this agreement undeniably contains some very worthwhile improvements to Parliament’s rights regarding, for example, talks on international agreements and its participation in the intergovernmental conference. However, we cannot accept the way in which the Council has interfered in relations between the Commission and Parliament now that the talks are over. The Council asked, pressed, and actually forced the Commission to remove from the agreement the text that would have required that Member States, the institutions and international organisations would, under this agreement, have had to explain their unwillingness to release some confidential information. In our opinion, this is absolutely intolerable.

Madam President, I have reason to suspect that this is the direct consequence of the Feira summit. There it was decided that NATO would release secret information for the purpose of making joint military plans, which would appear to be a clear attempt to exclude both the Commission and Parliament from a common security and defence policy. We thus need a clear explanation from the Council as to why this is happening. In addition, Madam President, we have to improve the rights of rapporteurs to acquire confidential information, and perhaps a deferment would also provide the opportunity to establish this aspect of the matter. We thus do not support this text such as it is now since the last changes were made to it, and it would be wisest if we were to take a little extra time over the issue.

(Applause)

  Cox (ELDR). – Madam President, I will have the opportunity later to speak on behalf of my Group.

I will allude to a number of my Group's concerns and criticisms about this project, but in substance, taking the totality of the work that has been done, the significant progress that has been made, and the prospect that in my view we are unlikely through a delay to significantly enhance the document, I would commend to the House that we should vote to proceed with our discussion and the adoption or rejection of the document, because that choice is there, and we have to hear the debate on it. At any rate, now is the moment to seize our opportunity to try to draw this prolonged matter to a close, to move on, and to build on our interinstitutional relations in a positive way.

(Parliament rejected the request to postpone the vote)

President. – As requested, each group will now have two minutes to explain its position briefly.

  Poettering (PPE-DE). – (DE) Madam President, Mr President of the Commission, ladies and gentlemen, this framework agreement between the European Parliament and the European Commission represents a great step forward in relations between our two institutions. My Group called for this framework agreement, and it is very much committed to it. Relations between the Commission and the European Parliament will be put on a very firm and clear footing, and it is our common goal to support the building of Europe.

The Commission is the executive, we together with the Council are the legislative, and this framework agreement will create means for the European Parliament to exercise its parliamentary control function more effectively. It goes without saying that future regulations which become Community law in the European Union will not be affected by this framework agreement. As legislators we are of course free to set these in train.

This framework agreement is based on the principles of parliamentarism, democracy and transparency. The Commission has once again incorporated in this agreement, in a legally binding way, the concessions that it made to the European Parliament last September before it was elected – the ‘five points’. These items relate to the annexes on the legislative procedure, and the involvement of and provision of information to Parliament regarding agreements and on enlargement issues. They also concern the passing on of confidential information. Of course not everyone’s requirements have been met, including some of our own, but it is not always possible to achieve everything. However, taken as a whole, this agreement does represent progress, and I would sincerely like to thank everyone involved in it – you, Madam President, Vice-President Loyola de Palacio, the President of the Commission, Mr Prodi, and also the political group leaders, who showed great commitment in their work on it. The Group of the European People's Party (Christian Democrats) and the European Democrats will be unanimously voting for this agreement.

  Barón Crespo (PSE). – (ES) Madam President, Mr President of the Commission, ladies and gentlemen, I would like to express, on behalf of the Group of the Party of European Socialists, our favourable view of the approval of this framework agreement, on the basis of the principles debated this very week – yesterday, in fact – when we took the view that we were carrying out European construction amongst all of us and fundamentally, as far as we are concerned, with the Commission, based on the principles of democracy, transparency and responsibility. This is the justification for the fact that the code of conduct – whose negotiation it fell to me to initiate in 1990, when Parliament was much weaker, which President Hänsch continued and which was concluded under his presidency – has been given a greater dimension, since the correlation of forces has changed. Parliament is more powerful and must therefore act more responsibly. In this respect, we believe that we have taken an important step. The negotiation has been very long. It was expected that the framework agreement would be concluded in December of last year. There has been a very intense tug-of-war with the Commission, which led us to urge two of Parliament’s committee chairpersons, whose work I am grateful for, Mr Napolitano, of the Committee on Constitutional Affairs, and Mrs Theato, of the Committee on Budgetary Control, to make progress in the negotiation, especially in relation to the third Annex. Madam President, it falls to you to conclude. I believe that thanks are due firstly to you, Madam President, and to the chairpersons of the committees I mentioned, to President Prodi and the Vice-President, Mrs De Palacio, for the fact that today we have this code of conduct.

What we now have to do is adapt our internal regulations to this new reality. I would like to end by making a last observation to the Council, which has not taken part in this negotiation. It would perhaps be a good thing if the Council were also in a position and willing to adopt a standard of good conduct with Parliament in the budgetary field and in the political field. Madam President, that would be a step forward.

  Cox (ELDR). – Madam President, I believe the document that is before us today is a very significant document. I have taken steps to try to inform myself as to the equivalence that exists among governments and among national parliaments. Exceptionally, there may be one state of the 15 where more things that are conceded by way of openness to its parliament than in other states. But in the large majority of cases, there is no near equivalent and that is a significant element in this document.

Secondly, we had a major debate in this House last year that centred among other things on the question of commissioners accepting individual and personal responsibility for the exercise of their high office. In this document there are significant clauses interpreting the mutual relationship between our institutions that also constitute significant progress.

There are two points of criticism that my colleagues and my Group have asked to seek clarification on today. Article 1.4 in annex 3 regulates which persons or bodies within this House may request of the Commission access to confidential documents. Many of my colleagues are upset that no explicit reference is made to the rights of rapporteurs. We have brought the document as far as we can with the Commission, but I would say that, if we vote for it today, you must immediately instruct our Committee on Constitutional Affairs to take up the question of delineating the rules in the House that will make it easier for rapporteurs to make requests either of their chairmen or of the other bodies named in this document. If we include this, then many of my colleagues who have reservations, will vote yes.

One final comment: this House has now begun its work on the question of transparency and the regulation on access to documents. Many of my colleagues have said to me – without anticipating the outcome of that work – that, should we ultimately need to review our framework in the light of any emerging trends in this regulation, the Commission President, Mr Prodi, should declare on the record, before the vote, that the Commission will be open to the idea of reviewing the document in the light of any evolving policy on transparency.

(Applause)

  Hautala (Verts/ALE). – (FI) Madam President, I would like to thank the President of the Commission, Mr Prodi, and Commission Vice-President Loyola de Palacio, for having genuinely embarked on closer cooperation with Parliament in many respects. This spirit of co-operation is depicted very well in the agreement in those points which concern, for example, the right of Parliament to be involved when international agreements are being discussed, not only with regard to the end result, but at every stage of such talks. This we regard as a genuine step forward, and the same is true of the fact that the Commission is promising to do its best to keep the European Parliament informed on the intergovernmental conference. This symbolises the new spirit we are now creating with the Commission, and it is very important that the Commission and Parliament have mutual agreement.

Unfortunately, however, Madam President, the Council has not approved of the process whereby these relations have come closer. My Group is very concerned about the developments that are under way in the Council. We hope and demand that the Council gives a public and open explanation about whether in future it intends to respect relations between Parliament and the Commission, or whether it intends to interfere in them in the future. The Council particularly seems to be aiming for secrecy in the matter of security and defence policy, and it would appear that not just the European Parliament – and via it, the public – will suffer from this attempt at secrecy, which entered the arena after these talks on agreements, when there was a call to amend the text, but also the European Commission will suffer as a result. We must support a strong Commission, and we must support the idea that in future the Commission will have a fixed role to play in the development of a common security and defence dimension, as these days no one area can remain exempt from the demand for transparency, and that includes a security and defence policy.

  Kaufmann (GUE/NGL). – (DE) Madam President, a majority of my Group will be voting for the framework agreement before us, even, and I would like to make this very clear, if we are not satisfied with all the points in this agreement. However, we assume that this agreement will serve to strengthen the relationship between the Commission and the Parliament, a relationship based on trust. You may be sure that if this House approves the framework agreement, Members in my Group will watch very closely to ensure that it is actually adhered to.

I would like to make two critical comments and I am in agreement with the other members of my Group here. Firstly, the issue of openness and transparency as regards documents and information is extremely important for my Group. We assume that the agreement stipulated in point 13 will be strictly adhered to, in accordance with which the Members of this House will, as the only institution which has democratic legitimacy, be the first to be provided with information – and I mean all information – as only in that way can we exercise our mandate as the public expects of us.

I therefore hope that this point 18, which relates to the exceptional provision of point 13, will never need to be applied.

Secondly, we too have a comment for the Council. We were astonished by the Council’s intervention. I think that this really amounted to a very dubious form of interference in an agreement between the Commission and the Parliament, and, at that, by an institution that has quite rightly attracted criticism itself for meeting behind closed doors. Furthermore, given that the common security and defence policy is referred to here, at a time when we are aware that Europe is involved in establishing emergency armed forces for military intervention, this really does not bode well.

One final comment: we all heard President Chirac address this House yesterday. He promised that the Council’s modus operandi would change in future. I believe that we will all be paying very close attention to what happens during the French Presidency and to whether the Council operates in a more transparent and democratic way in future.

  Collins (UEN). – President, it is appropriate to reflect for a moment on how this interinstitutional agreement comes to be before us today for debate.

It is very important that all the EU institutions operate effectively and efficiently and the 370 million citizens of the European Union must support and have confidence in the Union's internal legislative processes.

One of the key legislative organs is the European Commission, which has the power to initiate the enactment of directives and regulations. The European Council represents the interests of the fifteen governments of the Union and has very strong legislative powers.

Parliament is a democratically elected legislative body which has the overriding power of supervision over other key institutions. If the European Union is to operate more effectively then it is very important that the relationship between the Commission and Parliament is well defined and that is why the framework agreement between the Commission and Parliament is being put in place.

The negotiations for this framework agreement have been tortuous. It may not be a perfect document but it is certainly a step forward. It is more exacting than the agreement that has existed between the two institutions over the past five years.

I would now like to turn to some of the key provisions of the agreement. The two institutions will now agree to extend constructive dialogue and political cooperation, to improve the flow of information and to consult and inform Parliament on administrative reform within the Commission. There is also agreement, albeit not very extensive, on the EU legislative process, international agreements and the enlargement negotiations and procedures are put in place for the transmission of confidential Commission documents and information.

One could argue that much of this framework agreement only clarifies existing provisions under the present EU Treaties. For example, I know that the Commission is required to keep Parliament informed of the enlargement negotiations to enable it to express its views in good time through appropriate parliamentary procedures. That is right and proper, in view of the fact that the European Parliament has to approve the right of any Member State to accede to the Union as a new and full Member. The Parliament also has the final say as to whether or not international agreements such as the WTO talks are approved. Parliament cannot be expected to make important decisions on such matters unless the necessary and appropriate information has been forwarded to the Members for their consideration.

That is why the Commission must set in train open procedures to transmit up-to-date information on the whole range of regulations, directives and international accords being discussed and enacted by the Union.

Finally, I am satisfied there is always a need to clarify the procedures for the transmission of confidential information.

  Dell'Alba (TDI). – (IT) Madam President, on behalf of the Italian Radical Members, I would like to stress that the framework agreement strikes an important balance in relations between our two institutions. It was difficult to achieve this compromise, and the Council’s last minute attempts to water down the agreement are evidence of how ambitious it is and of the way it places Parliament and the Commission in a relationship of cooperation, where Parliament performs a monitoring function in line with its prerogatives while the Commission has a range of tasks to add to its primary role of guardian of the Treaties and proposer of initiatives.

I am certain that the right balance has been found. In my opinion, which, I know, differs from that of the Members who criticised the agreement, this was the best agreement that could have been achieved, including in terms of the transmission of documents, and I regret the fact that a slight excess on the part of some Members may well have prevented us from taking the mechanism regulating the transmission of documents further. However, I feel that this is a great step forward, and we look forward to the adoption and signing of this framework agreement in a few minutes’ time.

  Bonde (EDD). – (DA) Madam President, my Group is to vote against the framework agreement. We are certain that a proper reading in the committees and further negotiation with Mr Prodi himself will produce a better result which we shall be able to vote in favour of. I should like to begin by correcting a misunderstanding. We do not want to prevent the Commission from being able to deliberate in confidence. It is important for every authority to have an internal phase of its proceedings in which any ideas may be discussed and any proposals appear on the table, without its being obliged to make them public. The Commission should also be entitled to have confidential drafts on the table throughout the preparative phase. Our demand to exercise supervision applies from the time when the Commission sends documents out or in the case of their being leaked, as happens not infrequently. If a proposal is no longer within the confines of the Commission, then the latter ought not to be able to refuse to let us see it. In that way, there would be equality for all, and that is not the case with the framework agreement. There are two humiliating situations in particular which we should like to avoid. In the legislation process, we sit, as we all know, in committees and debate draft bills. Behind us sit students, interns and people from the Permanent Representations with the confidential drafts marked ‘restrained’, while we MEPs cannot obtain them. The lobbyists, who sit behind, also have them, but we elected representatives cannot obtain them. It also often happens that we read in the newspaper about a leaked Commission proposal. We are asked to comment on it, but we cannot obtain a copy. It is a humiliating situation which is completely unacceptable. When he took up his post, Mr Prodi promised to bring this situation to an end. We should be legally entitled to obtain documents when they are no longer within the confines of the Commission. And it is as individual MEPs and rapporteurs that we should have this legal entitlement and not by going down on our knees before the President. What is more, a President might come along to whom one preferred not to kowtow.

  Prodi, Commission. – (IT) Madam President, ladies and gentlemen, we have come a long way since last September, when I made a direct, personal commitment to building a close, transparent relationship between our institutions.

A great deal of progress has been made since we agreed to work together to draw up a new interinstitutional agreement. We have worked extremely hard in order to produce a high quality agreement, and I would like to express my heartfelt appreciation of the constructive way in which you led the negotiations, Madam President, with the support of the Conference of Presidents and Mrs De Palacio from the Commission.

In my opinion, the framework opinion before us today represents a practical, balanced approach to the relationship between our institutions. It includes a number of things which you as Members of Parliament consider to be important, such as the presence of representatives of the Commission at your meetings, the crucial issue of the exchange of information and the need for Parliament to be involved in trade and enlargement negotiations.

The concept of close cooperation between the institutions is clear and prominent in the agreement but this does not affect the balance between the institutions at all, for that is based on the current regulations, such as the regulation on access to confidential documents. In fact, I would like to make my intention today clear and stress that any future amendments to these regulations will be duly included in our agreements.

Madam President, the agreement has been recommended to the respective institutions, and, earlier this morning, the College authorised Mrs Palacio and myself to adopt and sign it on behalf the Commission. If you vote for the motion this morning, we will proceed together to the signing of the agreement and so enter a new stage in our relationship.

As I stressed yesterday, we have a number of major deadlines before us and it is essential to ensure that our respective institutions focus on issues which are now crucial for the future of Europe. This agreement will consolidate each institution’s role in the construction of Europe and, what is most important, increase the efficiency of our joint action.

(Applause)

(Parliament adopted the framework agreement)

President. – The framework agreement will be annexed to the Rules of Procedure.

(The President of the European Parliament and the President of the Commission signed the framework agreement)

(Applause)

⁂

Proposal for a decision (B5-0594/2000), by the Conference of Presidents, on the decision by the Conference of Presidents not to propose the setting up of a temporary committee of inquiry into the ‘Echelon’ interception system

  Kirkhope (PPE-DE). – Madam President, on a point of order, I am very concerned indeed about the reports that have appeared in the press, both in France and elsewhere, in the last few days about the opening of an investigation in France by the public prosecutor's office in relation to Echelon as well as, apparently, a parallel investigation into Echelon by the French secret service, the DST.

The European Parliament is an important body. I am therefore very concerned that these two different inquiries, which may proceed as a result of any votes taken here today, will cause confusion, difficulty and may indeed prejudice the position of the European Parliament. We shall certainly support the Conference of Presidents' proposal, but in view of my earlier remarks we should now reconsider this position, or at least be given some assurances about the French authorities' actions on this matter.

  Lannoye (Verts/ALE). – (FR) Madam President, we have just spoken at length about transparency in relations between the Commission and Parliament. I think that we also need transparency in our debates. Consequently, before an important vote such as that which are about to take, we must not be under any illusions as to what is at stake.

I should like, if you will allow me, to make two basic comments. First, the Echelon system was treated somewhat tritely in a number of parallel discussions, including at the Conference of Presidents. It was said that surveillance took place anyway, it was even added, some even said that it was important to have surveillance systems in order to track down serious criminals. This is undoubtedly true, but surveillance must take place within a legal framework first of all, which is not the case with Echelon.

Finally, an important distinction needs to be made: Echelon is, in fact, a surveillance system which targets not specific communications but all communications and data transfers. Consequently, all communications are intercepted and then analysed by super-computers and classified on the basis of a lexicon of key words. This global bugging strategy clearly infringes the confidentiality of private communications and, as such, violates the Treaty and directives …

  President. – Mr Lannoye, we cannot open a debate now.

  Lannoye (Verts/ALE). – (FR) My second comment, Madam President, I am sorry, but we have not had a debate in this House. I think that we also need to make a clear distinction …

(The President cut the speaker off)

  President. – Everyone in this House is well aware of the difference between a committee of inquiry and a temporary committee.

  Watson (ELDR). – Madam President, my motion is that we hold a vote on this matter. The committee which I have the honour to chair examined the STOA report. We know quite clearly what the position of the different Members of the House is on this, and the Conference of Presidents has quite rightly presented proposals to us.

There is only one question which arises: whether we should look at one particular system which might be an invasion of privacy, or at all potential systems that might be an invasion of privacy. There are clear amendments on our order paper today which deal with that point. I move that we now hold a vote on this matter.

  Wurtz (GUE/NGL). – (FR) Madam President, I have no intention of opening a debate. It is just that a new point raised responds to the main objection lodged against the proposal for a committee of inquiry, i.e. that we cannot investigate the activities of the secret services.

Today a Member State, France, is in fact launching an official investigation into what the Echelon system was, is and may yet be. I therefore think that the main objection to a committee of inquiry has been removed and this is a new point which needs to be taken into account when we vote.

(Parliament adopted the decision)

⁂

Proposal for a decision (B5-0593/2000), by the Conference of Presidents, setting up a temporary committee on the ‘Echelon’ interception system

(Parliament adopted the decision)

⁂

Report (A5-0175/2000) by Mr Lehne, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a European Parliament and Council directive amending Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (COM(1999) 352 - C5-0065/1999 - 1999/0152(COD))

Before the vote on Amendment No 26:

Lehne (PPE-DE). – (DE) Madam President, this is exactly the point I am seeking to have corrected. I had already brought this to the attention of the Committee on Civil Liberties and Internal Affairs. This amendment relates to Article 6(3) of the 1991 directive which is to be amended and to Article 1(5) of the present directive, which is to amend the old directive. In the middle of the second subparagraph, the German version correctly reads: “... for the purposes of representation in legal proceedings or in the context of legal advice”. The German version is the authoritative version as far as our consultation is concerned, as German is the rapporteur’s language. The English version is incorrect and simply reads “in order to be able to represent him in legal proceedings”. The “legal advice” aspect is missing from the English version. I pointed this out during the discussions in the Committee on Civil Liberties and Internal Affairs, but for some reason this error of translation has still not been rectified. This is of particularly critical importance, because the Council conducts its proceedings on the basis of the English text. I would ask you to instruct the officials to rectify this and to correct the English text by basing it on an accurate translation of the German text.

(Parliament adopted the legislative resolution)

⁂

Report (A5-0179/2000) by Mr Lehne, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the proposal for a Council regulation listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement (COM(2000) 27 - C5-0166/2000 - 2000/0030(CNS))

(Parliament adopted the legislative resolution)

⁂

Report (A5-0184/2000) by Mrs Haug, on behalf of the Committee on Budgets, on the 2001 budget in view of the conciliation procedure before the Council's first reading

(Parliament adopted the resolution)

⁂

Report (A5-0177/2000) by Mrs Paciotti, on behalf of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs, on the draft Commission decision on the adequacy of the protection provided by the Safe Harbour Privacy Principles

(Parliament adopted the resolution)

IN THE CHAIR: MR ONESTA
Vice-President

EXPLANATIONS OF VOTE
- Clearance of the fairway of the Danube (C5-0268/2000)

  Laguiller (GUE/NGL). – (FR) Mr President, we voted in favour of this proposal solely so that the people of Yugoslavia, who have paid dearly for the crimes committed by its dictator, Milosevic, by suffering the NATO bombings and the subsequent boycott imposed on them, do not keep paying.

However, we reaffirm that it should be up to the powers responsible for destroying the bridges and, consequently, obstructing the Danube, to pay the costs.

- Agreement between the European Union and Cyprus (C5-0324/2000)

  Αlyssandrakis (GUE/NGL). – (EL) According to the agreement between the European Union and Cyprus, the cost of participation in the programme by Cypriot undertakings will be covered in full by the Republic of Cyprus. However, the equivalent cost for candidate countries in central Europe is covered out of Community funds. Although the sum provided for in the agreement is small, this is not a question of quantity but of principle. In addition, Cyprus also covers the cost of its participation in other programmes. The people of Cyprus are clearly being wronged here. I should also like to point out that the total cost of adapting Cyprus to Community acquis is put at between 500 and 900 million Cyprus pounds, i.e. between EUR 1 and 1.8 billion, while the funding received by the Republic of Cyprus from the European Union is minute.

Obviously economic relations between Cyprus and the European Union are unfairly stacked against the Republic of Cyprus and the people of Cyprus have nothing to gain from accession, which is why the members of the Communist Party of Greece abstained rather than vote in favour.

  Αlavanos (GUE/NGL), in writing. – (EL) I should like to use the vote on the agreement between the European Union and the Republic of Cyprus on small and medium-sized enterprises to raise the issue of the new provocative action by the Denktash regime in Strovilia, where the occupying forces have advanced their position on the green line in an arbitrary act of aggression just a few days before proximity talks are due to start in Geneva.

The Council of Ministers, and the French presidency in particular, must react, especially in the direction of Turkey, whose forces now occupy almost half the Republic of Cyprus. At the same time, the European Union should raise the issue of when the occupying forces are due to start withdrawing during the debate on partnership between the European Union and Turkey as a condition for continuing negotiations between the EU and Turkey.

- Schmid report (A5-0176/2000)

  Fatuzzo (PPE-DE). – (IT) Mr President, I voted for the Schmid report, which is intended to prevent forgery of credit cards and other means of payment which do not involve filthy lucre. I voted for the motion partly because pensioners and the elderly are among the most frequent victims of this type of forgery – as always the prime targets – in the hope that, when we return to the issue, a decision will, at last, be taken to acknowledge that when a citizen is the victim of a crime the State is liable, albeit indirectly, in the same way as it is at football matches. I therefore hope that a decision will soon be taken to oblige the State to pay compensation to victims of common crimes, and therefore also to provide compensation for citizens who have been the victims of fraud.

- Lienemann report (A5-0172/2000)

  Fatuzzo (PPE-DE). – (IT) Mr President, of course I voted for the motion. Article 3 of this measure sets aside EUR 300 million to be spent between 2000 and 2004 on the protection of birds in general and certain important species of bird in particular.

Of course I am in favour of this measure, for I love birds. Before I set off for Parliament, I saw Lulù, my pussycat, carrying a bird in her mouth. I distracted her with some cat food – we all love cats – I distracted her, picked up the bird and took it into the house, where it was lovingly looked after.

I am thus in favour of protecting birds, but I would like the Greens, who are the most prominent party in the field, to attend to the poor old pensioners and elderly people who have nothing to eat as well, and all to come straight over – the Greens I mean – and join the Pensioners’ Party.

  Figueiredo (GUE/NGL), in writing. – (PT) I welcome the fact that the conciliation procedure on the proposal for a regulation on the financial instrument for the third stage of the LIFE Programme (2000-2004) has been completed, thus allowing further projects to be financed under the new programme in the second half of this year.

I also welcome the fact that the amendments relating to the objectives of the programme have been approved, as has the compromise proposal for a new programme.

Nevertheless, given that LIFE is the only instrument for directly promoting the European Union’s environmental policy, and has achieved substantial results, it is bound to be a matter for regret that the reference budget for LIFE-III has been set at EUR 640 million, that is only EUR 27 million more than in the common position of the Commission and the Council. This is a long way from the EUR 850 million proposed by the European Parliament at first and second reading.

  Isler Béguin (Verts/ALE), in writing. – (FR) Here we are, engaged in a trial of strength with the Council, to defend the budgetary line for the environment within the European Union.

It is with regret that we have supported the compromise reached during the conciliation procedure with the Council. I say with regret, because Parliament was expected to be satisfied with the few crumbs thrown at us by the Council.

The bonus granted out of the EUR 850 million demanded is roughly the equivalent of about twenty kilometres of motorway in France!

I only hope that the size of this budgetary line is not a pale reflection of the Union's environmental policy, not that I am questioning the considerable work carried out by the directorate-general for the environment or the Commissioner, who do the best they can with the means at their disposal.

But we shall continue to repeat until we are blue in the face that a real European environmental policy can only be applied, or even constructed, with the necessary funds.

The environment will never be taken seriously with a budgetary line of this size, compared with the budgets for agriculture or the Structural Funds which still often have an adverse impact on the environment. LIFE is just a drop in the ocean of European policy.

That aside, is the environment not the only European sector to have shown no real improvement? With the explosion in road transport within the Union, we are also seeing an explosion of all sorts of pollution and emissions, especially of greenhouse gases.

How much longer will we need to repeat this point before anything is done?

When the Council and the Commission start taking environmental policy seriously, the budgetary line which they propose in the general budget will be commensurate with the challenges we have to face.

This applies both to environmental policy projects and to the human resources which the DG for the environment needs in order to implement them.

- Jarzembowski report (A5-0173/2000)

  Meijer (GUE/NGL). – (NL) Mr President, the three key factors which typify the transport of people and goods in terms of competition are price, reliability and speed. It is possible that the railway industry has not been quite up to scratch because, for the time being, it has largely lost the competitive battle to road transport and aviation. This is why it is sensible to find out how the railway industry could function better and how its market share in Europe can grow.

I can think of different ways to achieve this. French rail is currently expanding considerably, with growing employment, by doing the exact opposite of what Mr Jarzembowski proposes in his report.

Accordingly, the root of the problem is different from how the rapporteur sees it. The real problem is that politicians have for years neglected the railway industry, mainly because they considered it to be a crumbling vestige of the 19th century which would not make it into the 21st century anyway. All new investments were poured into a dense network of motorways and increasingly large airports.

Only when the environmental consequences of this policy became apparent did attention shift back to the railways. But at that time, the concept that freedom for the economy was more important than democratic input in politics had already taken hold. Politicians no longer wanted that input in public enterprises and, with it, shirked the responsibility of acting as inspector on behalf of the consumer and as guardian of employment.

Public enterprises started to shape up as private companies, increasingly so, where growth, profit and market value were considered more important than the social consequences of their actions.

Taking care of public transport and the environment should be of concern to all of us, including therefore our democratically elected government. Whether or not it is judicious to separate infrastructure from the operation of the railway industry is to be decided by the national or regional governments and is not a task of the European Union. And it is certainly not up to the European Union to implement forced privatisation of urban or regional transport companies, as is in danger of happening in the short term.

For my Group, these considerations are sufficient to reject Mr Jarzembowski’s proposals out of hand and to express the hope that they could never be translated into policy.

  Fatuzzo (PPE-DE). – (IT) I voted for Mr Jarzembowski’s excellent report with pleasure, for there is nothing more relevant to Europe and to bringing together its citizens than the railways.

Free competition in the railway sector can only improve the condition of both goods and passenger railway transport, and, in my mind’s eye, I can already see pensioners and elderly people who are, at last, able to spend their time travelling around Europe in sleeper and restaurant cars – comfortable carriages which are absolutely essential for them precisely because of their age. I look forward to the day when, thanks to this and future measures, it will be possible to travel here to Strasbourg by rail to visit the European Parliament from anywhere in Europe.

  Raschhofer (NI). – (DE) Mr President, complete liberalisation would lead to an increase in competition in the rail sector and enhance the competitiveness of railways as compared with road transport. There is no point in talking about projects to extend the European rail network until complete liberalisation has taken place. This is therefore a matter of urgency. Projects such as the Brenner base tunnel can only compete if freight transport can be offered at competitive rates. Adopting this directive would give a clear signal about liberalising rail transport. If a clear split is not made between the trains operated by the railway companies on the one hand and the management of railway infrastructure on the other, the objective of this directive will be seriously undermined. I have therefore rejected the solution opted for in Article 6(4) of the common position.

  Goebbels (PSE). – (FR) Mr President, as we were at second reading, I was unable to register my opposition to the Swoboda and, more importantly, the Jarzembowski report.

The Council and the Commission had struck a certain balance by taking account of the specific situation of small networks and remote islands. Parliament, in its perennial quest to go one step further and faster than the Commission and the Council, has wheeled out its regulating steamroller and wants to put all the networks in one basket.

We have been told that liberalising rail transport will give us far more services. Everyone knows this will only apply to main lines with a heavy volume of traffic and that competition for public services will concentrate on profitable lines; the rest will have to provide public services under conditions which are sometimes less than favourable.

I am against this ultra-liberal logic and was anxious to register my opposition.

  Caudron (PSE), in writing. – (FR) There is no point in beating about the bush; I refuse to subscribe to the ultra-liberal vision set before us in the Jarzembowski report. He goes far beyond what is proposed in the common position presented by the Council. He advocates radical liberalisation of the Community's railways and refuses to grant any derogations, despite the fact that they are essential if we are to adapt gradually to new regulations.

He proposes a transitional period of 5 years for the liberalisation of international freight services, adding that the Member States must have liberalised the entire national and international network for freight 5 years after the entry into force of the directive. And to crown it all, by 2010, he hopes that the entire network will have been liberalised for both freight and passenger services!

At no point does Mr Jarzembowski worry about public service obligations, which continue to be of prime importance in this sector. At no point does he refer to the risks which radical liberalisation might have in terms of safety.

That is why I have not voted in favour of any of his proposed amendments.

  Lulling (PPE-DE), in writing. – (DE) The completion of the internal market in rail transport is certainly every bit as desirable as it is essential. However, I believe that this objective can be achieved after a reasonable transitional period, in accordance with the principle of gradual liberalisation, without it necessarily requiring a statutory split between the provision of transport services by train operators on the one hand and infrastructure management on the other.

I cannot therefore support the recommendation for second reading as presented by a majority of the Committee on Regional Policy, Transport and Tourism. In my own small country of Luxembourg, splitting up the railway company in this way would, for many good reasons, but not least safety, transport quality and railwaymen’s working conditions, be inappropriate to the point of absurdity.

We find the Council's common position much more acceptable, because it does more to take into consideration the specific geopolitical and geographical circumstances of individual Member States, yet without undermining the unity of the single market.

It is also impossible for me to accept the deletion here at second reading of the provision under which Luxembourg, as a Member State with a relatively small rail network, does not need to apply the requirement to award the functions determining equitable and non-discriminatory access to infrastructure to an independent body until 31 August 2004. Article 6 of the directive in fact obliges Member States to establish independent bodies performing these tasks.

For the above-mentioned reasons I was unable to vote for the substantial amendments to the Council’s common position. I believe that the compromise negotiated in the Council of Ministers on 28 March 2000 is better and much more realistic.

  Vachetta (GUE/NGL), in writing. – (FR) Rail transport today stands at the heart of the public service deregulation and liberalisation projects being implemented by the European Union.

According to the conclusions of the Jarzembowski report, the revision of Directive 91/440 throws the door to privatisation wide open by proposing that infrastructure management and the provision of transport services be separated and that every undertaking be given access to infrastructure in the medium term, the objective being to open up all freight and passenger transport to the markets and to competition.

The approach taken in the Jarzembowski report is to bring the management of railway undertakings into line with private sector management as much as possible and to introduce the pressure of competition. It uses shortcomings in the operation of the public service as a pretext and highlights the superior performance of the private sector on the basis of imperfect comparisons which fail to take account of all the factors and all the missions that have been accomplished.

The logic behind the Jarzembowski report will inevitably lead to a deterioration in safety standards, poorer quality services, a reduction in services to customers and a loss of social rights for employees. This report turns its back on what the European public really needs: a public service that is coordinated and harmonised at European level, which could guarantee a high standard of efficiency, safety and equity for employees and users alike, right away. This is why, unable as I am to accept either the status quo or the forward march of liberalisation, however progressive and well-planned, I have voted against the Jarzembowski report.

  Whitehead (PSE), in writing. – We all applaud the coming of the second age of railways, and acknowledge that market liberalisation can continue with economic opportunity and public service needs to bring it about. The UK invented railways, developed them and was the first to privatise them. As a member of the Rail Maritime and Transport Union in Britain my view is guided by the balance we strike in railway development. We should have acknowledged here that European railway systems are all different, and their diversity merits the derogations proposed. We should have placed greater emphasis on the introduction of rail regulators, as the UK now has, and less on the ideology of physical separation of infrastructure and operating services. And we need to be absolutely certain that we have licensing systems which carry obligations, and network benefits for passengers. No one should have ignored these issues in the vote we cast today.

- Swoboda report (A5-0171/2000)

  Meijer (GUE/NGL). – (NL) Mr President, everyone is agreed that something needs to change within the railway industry. It needs to operate within a large-scale European network instead of just within the individual Member State borders.

Long waiting and transfer times at borders and the fact that direct international connections have ceased to exist are a cause of frustration.

We would all like to see ineffective, conservative and bureaucratic procedures brought to an end. Indeed, they cause frustration amongst users and unnecessarily drive freight and passengers onto other types of transport.

I indicated yesterday as well as during previous debates that cooperation between the railway companies of the different Member States should be stepped up, so as to offer joint solutions for cross-border traffic. This cooperation should have been sought a long time ago.

If this had been the case, there would have been fewer opportunities for those intending to elbow out existing railway companies by introducing newcomers onto the market which offer price reductions to the detriment of the working environment, working conditions and the environment in general.

Mr Swoboda is right in stating that years of lack of investment in capacity, infrastructure and technology must now be rectified. He entertains the possibility of authorities offering financial compensation in order to make the use of railways safe for public transport and does not rule out a role for public companies in future.

On the other hand, however, his statement that, in this line of industry, rights must be available to all to an equal extent, makes him a hostage to liberal ideas. This is borne out in his ideas that we should aim for full recovery of costs rather than expect extra charges for each additional train.

One unintended consequence could be that passengers and freight are forced to use alternatives which, can, on this basis, compete structurally at lower prices. These are cheaper for the consumer, but cost society as a whole more dearly because these alternatives cannot afford to care as much about workers and the environment.

In addition, Mr Swoboda has deleted the exemption rules for islands and Member States which do not have cross-border railway connections, as formulated in the Council’s common position. In his opinion, everyone should be affected by liberalisation to the same degree. In our view, this deletion does not constitute an improvement on the Council’s position.

  Fatuzzo (PPE-DE). – (IT) Mr President, I voted for the Swoboda report as well. I totally disagree with the previous speaker, for I consider that the liberalisation of public services may work to the advantage of the citizens, particularly in that the Swoboda report provides for an appropriate public-benefit transport service eligible for State compensation.

In voting for the motion, I call upon the States to decide to allow the least well-off citizens, those who have nothing, and that includes pensioners and the elderly, whose pensions are not even sufficient to allow them to live properly, to travel free of charge.

The States of Europe must assist the least well-off citizens by providing them with free services.

  Poli Bortone (UEN), in writing. – (IT) We welcome the liberalisation process taking place in the sector, for we are convinced that the creation of an extensive European market will lead to significant growth and improvement.

We support the Council’s common position because it represents a balance which marks a new stage in the opening-up of the rail market, pending the adoption of provisions ensuring balanced competition between and within modes of transport.

The railways are the product of a permanent and technically efficient combination of activities carried out by different operators – infrastructure managers, railway undertakings, station managers etc – with many different functions. These operators can perform the roles of both infrastructure manager and railway undertaking if this is economically more efficient. There is nothing to indicate that completely separating these functions improves the openness, efficiency or safety of the system.

Complete separation is not a necessary condition for opening up the European single market railway market. The existence of firms which perform the functions of both infrastructure management and railway undertakings at the same time is not a barrier to the opening-up of the market, in that transparent, non-discriminatory procedures are established and monitored by an independent regulator.

What is more, an integrated company is generally in a better position to develop new technologies relating to both the infrastructure management and the railway undertaking.

A railway company whose decisions are oriented towards achieving the best possible technical and economic situation is in a position to implement the necessary innovations rapidly and to assume the responsibility of the investment risks.

The railway system is a technically diversified system which, in any case, whatever the organisational solution adopted, requires substantial coordination. There is a greater guarantee of safety when the management of the railway system is entrusted to an integrated company for the following reasons:

- the company controls all the elements of the system and their interaction;

- it receives quicker and more detailed feedback regarding events affecting the system;

- it gives the authorities the security of there being a single body responsible for the safety of the system.

Respect for the principles of fairness and transparency in the allocation of capacity or in pricing is essential, but it cannot just be assumed that the separation system is the best way of ensuring that these principles are respected. In effect, an integrated company system, a railway authority, as provided for in the common position adopted in March, would be perfectly capable of guaranteeing non-discriminatory network access and guaranteeing fair line prices.

In addition to the contribution of the State supervisory organs which already exist to some extent, more effective and extensive supervision of competition in the European railway transport sector would thus be provided by the railway authority envisaged in the Council’s common position.

Finally, with regard to the derogation, I fully support Mr Collins’ view.

- With reference to the Swoboda and Jarzembowski reports

  Collins (UEN), in writing. – The Railway Infrastructure Package agreed by the Transport Council last December was the result of some very difficult negotiations. The common position represents a delicate balance which supports the principles of liberalisation of the industry while giving due consideration to the particularities of individual Member States.

Part of this common position includes a complex derogation in respect of Ireland, Northern Ireland and Greece as well as further considerations for Luxembourg. In the case of Greece and of both parts of the island of Ireland there are obvious geographical obstacles to full participation in a single rail market.

In these circumstances, full implementation of the Rail Package would result in a considerable burden on the administrations of these Member States without any of the benefits to consumers that the Package is designed to bring about.

The amendments which I tabled to Mr Jarzembowski’s and Mr Swoboda’s reports aimed at restoring the equilibrium established by the common position. The Council position is, I believe, in the best interests of both the rail industry and the consumer.

I would further like to point out that the derogation for Ireland, Northern Ireland, Greece and Luxembourg only covers those elements of the package where implementation would serve no real and practical purpose. Furthermore, there are even in-built safeguard clauses in this derogation which would cause the whole derogation to lapse should any new entrant to the rail markets of Ireland or Greece appear.

In summary, colleagues, as a member of the Committee on Regional Policy, Transport and Tourism I recognise the desirability of developing a single market in rail-service provision and the potential benefits for the consumer. The granting of a derogation to the geographically-separated rail networks of Ireland, Northern Ireland and Greece does not in any way undermine this principle.

On the other hand, removal of the derogation would impose unnecessary administrative burdens and costs in these Member States without bringing any visible benefits to anyone concerned.

  De Rossa (PSE), in writing. – I wish to place on record my serious concern at the decision of the EP to seek the deletion of the Irish (including Northern Ireland and Greece) derogation from the full effects of this directive. The European Parliament's position is based on the mistaken view that it is possible to have a ‘one size fits all’ approach to Europe's railways. There are clearly circumstances relating to the island of Ireland and the isolated position of Greece as far as railways are concerned which require to be taken into account.

  Esclopé (EDD), in writing. – (FR) Mr Jarzembowski feels that the European Union should do the impossible in order to complete the internal market in the railway sector by 2005, with a view to giving railway undertakings a chance to regain part of the road transport market. We can only welcome such an objective, which is doubly desirable, both from the economic and the ecological point of view.

However, we are against total liberalisation of the railways in the form recommended. We do not want to have a single model imposed on us!

Railway transport in France is a precious public service, a real tool for regional planning in the broad sense of the term, above all, from the rural point of view. The model of the French railways is also a factor in social cohesion. In fact, it is perfectly normal to maintain services to unprofitable stations by funding them from much more profitable stations. That is why, as a French member of the EDD Group, I feel it is important to defend the notion of a public service in this procedure.

Furthermore, absolute and compulsory liberalisation of the railway infrastructure might hamper the development of the Community railways as a result, for example, of the instability and uncertainty which it would introduce into a market which needs a high level of technical expertise and investment both for the railway undertakings and the local authorities.

To conclude, I would remind you that, as a Member for the EDD Group, I support maintaining employment and social cohesion, especially in rural areas, in order to safeguard activities. It is even more important to ensure that the public services provided in our villages do not disappear. If the railways are liberalised, we can kiss rural life goodbye, which is why we are opposed to this blind liberalisation and its consequences.

  Hedkvist Petersen (PSE), in writing. – (SV) The present increase in haulage in Europe is untenable in the long term. The heavy goods traffic on the roads creates problems in the form of congestion, noise and emissions of environmentally harmful substances. In order to curb this development, goods transported by road ought to be transferred to the railways. However, the system that we have in Europe today with fifteen separate railway systems makes it impossible for railway traffic to compete on the same terms as road traffic. Therefore, the railways in the EU need to be liberalised and the market for the transportation of goods by rail needs to be opened up.

The members of the Swedish Social Democratic Party, Pierre Schori, Anneli Hulthén, Jan Andersson, Maj-Britt Theorin, Göran Färm and Ewa Hedkvist Petersen would like to stress the following points of view in connection with the consideration of Mr Jarzembowski's and Mr Swoboda's draft recommendations for second reading.

One of the most important measures for reducing the competitive disadvantages faced by the railways is to separate those responsible for the infrastructure from the transport firms. Such a separation must be effected as quickly as possible, as it is a prerequisite for different transport firms being able to compete with each other on the same terms as apply within other forms of transport.

Fair competition also requires rail fees to be based on the principal of marginal costs. The fees must be based on the traffic-related costs arising during transportation in connection with, for example, noise, effects on the environment, risks of accidents etc. The aim is to create a system of fees that is neutral with regard to competition and does not discriminate against any form of transport.

- Wieland report (A5-0174/2000)

  Fatuzzo (PPE-DE). – (IT) Mr President, I voted for the Wieland report because there needs to be an increase in professional requirements in the European Union. I am referring in particular to the skills of nurses and doctors. This report rightly increases the minimum length of training required to become a general practitioner from two to three years and I support this step. However, in voting for the motion, I am also expressing a desire for further measures. Although it is a good thing to have skilled doctors to treat patients, it is also a good thing if citizens who are ill in the European Union are able to treat themselves. Sadly, the poor, the elderly and a great many pensioners hardly have enough money to live on and can only afford one meal a day. These people cannot afford to buy medicine.

In voting for the motion, I therefore call for medical assistance to be provided for the citizens who are least well-off as well.

  Bordes, Cauquil and Laguiller (GUE/NGL), in writing. – (FR) We have voted in favour of all the amendments which foster recognition throughout the European Union of diplomas and qualifications obtained in one state.

We support anything which helps unify the conditions of workers and facilitate an awareness of their identity and interests beyond frontiers.

We have also voted in favour of all the amendments that aim to foster the wider recognition of qualifications as well as exchanges of information between countries, despite the fact that many of these amendments are somewhat vague.

But we have noted a degree of hypocrisy as regards doctors from third countries, whose qualifications and diplomas are not recognised. The report states that there are no reliable studies of the problem. But in numerous countries, and in France at least, hundreds of foreign doctors working in hospitals are underpaid because their diplomas are not recognised. We therefore need to take action quickly so that their qualifications are recognised.

Shortcomings in the health sector, unequal access to quality care from competent professionals, inequalities between regions and, more importantly, between social classes, do not result from the inadequate harmonisation of regulations. They result from the lack of funds provided to public health services. More generally, they result from the fact that a society marked by inequality inevitably ends up with multiple track medical services.

  Caudron (PSE), in writing. – (FR) I welcome this initiative to simplify and clarify the directives on the general system for the recognition of professional qualifications.

In fact, having been contacted regularly by students who have come up against the recognition system introduced in the 1989 and 1992 directives, I would say without exaggeration that the situation is desperate.

We do not realise just how obscure the mechanisms are. Total legal insecurity is the overriding feature in this area.

Too many students come up against a brick wall when they apply to administrations in the Member States to obtain validation, precious validation, of their qualifications. This is mainly because it is difficult to identify which department they need to address, but it is also because the staff in these departments have insufficient training to meet their demands. As a result, they are sent from one department to another, which of course slows down the whole procedure.

All too often they meet unsubstantiated refusal, putting them in an absolutely intolerable situation which prevents them from accessing the job market in another Member State. As a matter of principle, this is a flagrant violation of their freedom of movement. In human terms, these people are denied the right to exercise their profession, thereby negating all the effort which they have put into obtaining their professional qualifications in the first place.

Then there is the problem of the cost of the recognition procedure, which appears to me to be far too high.

I am therefore delighted that steps are finally being taken which will allow the theoretical freedom of movement of persons to be translated into practice, albeit still far from perfect practice!

Specifically, the proposal for a directive contains a number of welcome provisions clarifying existing legislation.

For example, provision is made for host states to take account of experience acquired by interested parties after they obtained their diploma and they can no longer demand compensatory measures (aptitude test) as a matter of course. A new provision also allows the required two years professional experience to be avoided. What is also needed is to provide legal security with regard to the recognition of training obtained by Community nationals in third countries.

The European Parliament proposed numerous other provisions at first reading, mainly seeking to extend the information requirements of the Member States. The Council rejected all our proposed amendments. That demonstrates and says a lot about the lack of political will in this area.

  De Rossa (PSE), in writing. – I wish to place on record my satisfaction that current directives governing architects' qualifications are adequate to enable those who are not currently registered as architects in Ireland to become registered as such. This obviously requires negotiation and agreement between various architects' representative bodies in Ireland on a registration process.

- Framework agreement on relations between the European Parliament and the Commission (C5-0349/2000)

  Meijer (GUE/NGL). – (NL) Mr President, the framework agreement between Parliament and the Commission, as has been presented to us today, is diametrically opposed to the prospect held out by President Prodi of making European documents as widely available to the public as they are in those Member States which have moved furthest in the direction of transparency. The agreement bears out existing practice and even limits public access to a certain extent.

A right which all MEPs still have at present would, on the basis of this decision, soon be limited to a chosen few, whilst at the same time, the list of documents which can only be supplied with the permission of third parties would be extended to include international organisations such as the WTO and the World Bank.

Parliament has not even had the opportunity to discuss or amend this agreement. A government which keeps information from its citizens is unreliable but a government which does not even take its own parliamentarians seriously is not ready for democracy yet.

Fortunately, a number of Member States, including the Netherlands, have enjoyed better practices for many years now.

This framework agreement illustrates how backward the European Union still is, and this promises little in the way of the possibility of involving the electorate in a democratic way. This is why I have naturally voted against.

  Breyer (Verts/ALE). – (DE) Mr President, I have both spoken and voted against the framework agreement, because I think it is an insult both to freely elected Members of this House and to the electorate. I cannot understand why we are being given a two-class system of rights, why ordinary Members and even rapporteurs are not being trusted to see confidential information. This is a fundamental requirement if we are really to take our job of scrutinising the Commission’s actions seriously. I fear that this framework agreement will basically perpetuate the policy of inadequate transparency that we have seen in recent years, instead of seizing a genuine opportunity and finally attempting to do justice to our remit by ensuring greater transparency and preventing the Commission from continuing to take refuge behind confidential documents. I would have liked to have seen all Members being treated equally and no one having more or less rights – that should have been the starting point!

  Berthu (UEN), in writing. – (FR) The framework agreement on relations between the European Parliament and the Commission contains numerous useful clarifications, especially on the flow of information. Nevertheless, like 145 other Members, especially those who are members of the SOS Democracy intergroup, I did not vote, for two reasons.

First, Annex 3, which restricts the transmission of confidential information to the European Parliament, represents a step backwards in comparison with the current situation. It is true that the European Parliament cannot always be relied on when it comes to questions of confidentiality. But, conversely, the Commission may use these provisions to cloud delicate questions relating to it.

Secondly, and more importantly, the framework agreement makes absolutely no mention of the fundamental issue of the policy governing relations between the Commission and journalists of its liking. Documents should not normally be given to the press before being sent to the Council and Parliament. But this is a far cry from what actually happens. We frequently read in the newspapers about Commission proposals which, officially, are still confidential. This puts Members in the ridiculous position of having to comment on texts which they know nothing about.

These incidents are no accident. This is a deliberate policy on the part of the Commission to win journalists’ favour by leaking texts to those who qualify as friends, so that they can benefit from them. Anyone not on the list of friends goes to press a week later and therefore appears not to be at the cutting edge, which is obviously very bad for them. So, logically, everyone tries to please the Commission in order to get on its list of friends. This is one of the ways in which the Commission keeps everyone under control.

Consequently, a framework agreement which wanted a minimum code of conduct would have needed to clearly prohibit the Commission from leaking documents to journalists before sending them to members and would have needed to make provision for officials guilty of infringing this rule to be punished. With no such provisions, we feel that the Commission's good resolutions on transparency are seriously misleading.

  Blak, Lund and Thorning-Schmidt (PSE), in writing. – (DA) The Danish Social Democrats have voted against the framework agreement because it does not, in its current form, fulfil the conditions for an open and transparent exchange of information between Parliament and the Commission. Article 276 of the Treaty states that the Commission should submit all the necessary information to Parliament in connection with the discharge procedure. The framework agreement restricts this provision. According to the framework agreement, it is only the Conference of Presidents, Parliament’s President and the chairman of the Committee on Budgetary Control who can ask the Commission for information. Rapporteurs and ‘ordinary’ MEPs can therefore be denied access to information.

From a political point of view, it is unacceptable that the chairman of the Committee should be able to decide which information can be passed on. It is also problematic from a legal point of view because, according to Parliament’s Rules of Procedure, liability is delegated to the rapporteur. From a practical point of view, it will lengthen the discharge procedure. According to the framework agreement, Parliament and the Commission are to come to an agreement as to which documents are to be handed over. It is unreasonable, however, that the Commission (which is to be supervised) should be involved in deciding which information is to be made available. Moreover, the procedures governing confidential documents are very protracted and may be misused by the Commission to avoid making information available. We hope that a better agreement will successfully be reached regarding the provision of information as an integral part of the discharge procedure. In its present form, the agreement constitutes a restriction on Parliament’s right to information, as guaranteed under the Treaty.

  Gahrton and Schörling (PSE), in writing. – (SV) Parliament is responsible for granting discharge from liability and for monitoring how the Commission has utilised the Union's funds. In order to be able to make a well-founded decision, Parliament needs the information that it considers to be necessary. The way the framework agreement, and in particular Annex 3, is worded, it gives the Commission the final decision in any dispute as to whether a document shall be handed over to Parliament or not. It is completely unacceptable that the body that is to be inspected should make its own decision as to what information the inspector is to have.

We consider this agreement to contravene Article 276 of the Treaty which clearly stipulates that Parliament shall have access to the information it requires. The agreement also applies to other areas of cooperation with the Commission, and in these areas, too, there are retrograde steps in relation to promises that were previously made.

As regards information on international agreements, there had been a step forward in this area before the governments of the Member States intervened and changed the text for the worse. Even the Nordic governments have supported a change for the worse that has now resulted in Member States not even needing to give reasons why they do not want the Commission to pass on documents that they themselves have given to the Commission.

  Sacrédeus (PPE-DE), in writing. – (SV) On 8 June 2000, the Conference of Presidents of Parliament adopted the framework agreement between Parliament and the Commission. The vote on this issue will be held during the July part-session, but Members of Parliament will not be given the opportunity to discuss it or to table any amendments.

Without any more detailed examination or discussion within the groups, the group chairmen have adopted this framework agreement which transfers the power of decision over which documents Parliament shall have access to the Commission. This means that the elected representatives will not obtain any real insight into the legislative proceedings, but will be left in the background or on the sidelines.

The group chairmen unanimously requested the Commission to grant the Members of Parliament the legal right of access to the documents which are issued in other connections. On 8 June, however, they accepted that Mr Prodi would not fulfil all the promises he made when he took office.

As Members of Parliament, we ought to have the legal right to complete information.

Of course, there may be justifiable exceptions that must be respected. There is no doubt that the Commission, as an executive body, is fully within its rights to investigate different points of view and prepare drafts in the form of internal working documents without the obligation to publish them. However, it ought to be beyond all doubt that, at the same time as a document is given to someone outside the Commission, Parliament should have the right to the same information.

If a newspaper publishes material from documents that have been leaked, Members of Parliament cannot get access to the documents in question. Trainees at the Council of Ministers or at the offices of the Permanent Representations of the Member States have access to documents which Members of Parliament have no opportunity to consult, not even the committee and group chairmen or the rapporteurs.

When Romano Prodi visited Parliament last spring to introduce himself before the present Commission was installed in office, he promised that Members of Parliament would have access to documents if they were passed on to authorities or organisations outside the Commission or leaked to the media.

Because the framework agreement involves certain improvements upon current practice, it should not be rejected in its entirety. It should, however, at least contain the promises Mr Prodi made on behalf of the Commission.

The closed door policy is unacceptable to the public, the elected representatives and journalists alike. Members of Parliament must fight for their rights as elected representatives.

  Van Lancker (PSE), in writing. – (NL) The framework agreement undeniably contains a number of interesting ideas for increased transparency in the relations between the Commission and the European Parliament.

But I cannot endorse the proposed regulation with regard to confidential documents. The fact that an application to peruse confidential documents has to go through committee chairmen or the President of the European Parliament is unacceptable to me. Furthermore, it is not up to one institution to decide on what is confidential and what is not.

This is why I have abstained from the vote.

- The ‘Echelon’ System (B5-0593 and 0594/2000)

  Berthu (UEN). – (FR) Mr President, the European Parliament has brought disgrace upon itself today and seriously undermined its own credibility. It has just refused to set up a committee of inquiry into the ‘Echelon’ surveillance system set up by the United States, a worldwide system which violates civil liberties, distorts economic competition and attacks the basic interests of the countries of Europe.

In return, Parliament has appeased its conscience by adopting a greatly watered down procedure, a temporary committee which, under the terms of our Rules of Procedure, will have far fewer investigative powers than a committee of inquiry. And, in order to be really sure that it will be ineffectual, Parliament has drowned its mandate in vast questions such as risks from secret services in general to individual rights or the value of the protection offered by coding to the private lives of our citizens.

And yet, 172 Members – including us – took the initiative and called for a vote in favour of a committee of inquiry; however, the Conference of Presidents, under the influence of the Socialists and Christian Democrats, is taking its orders from someone – I certainly do not know who – who has managed to run this procedure off the pitch. This attitude contrasts with that of the French public prosecutor, who recently and courageously instructed our security service to investigate the Echelon network. For us, this illustrates the fact that, despite its proclamations, the European Parliament, cut off as it is from the people, is the weak link in the chain of civil protection and bends too easily under pressure from foreign interests.

To close, I should like to reiterate what I called for in my intervention on 30 March, i.e. that the ‘Echelon’ network should be neutralised or, if it is felt that it has a part to play in the fight against organised crime, its remit should be divided between the countries or entrusted to a properly controlled international organisation.

  Αlavanos (GUE/NGL), in writing. – (EL) According to the hearing of the parliamentary Committee on Citizens’ Freedoms and Rights, Justice and Home Affairs, the Echelon system has been upgraded by the USA. and the United Kingdom to a global telecommunications spy system, the victims of which include the countries of the European Union. The presence of Echelon bases in the Republic of Cyprus, i.e. the British bases, are particular important and are tied into Anglo-American attempts to obstruct the independence of Cyprus.

The issue has huge implications for the democracy and freedom of communications. The European Parliament should set up a full committee of inquiry pursuant to Rule 151 of the Rules of Procedure, just as it did with extremely positive results during the mad cow crisis. Setting up a simple temporary committee pursuant to Rule 150 will not, I fear, allow Parliament to throw any light on Echelon and will be tantamount to bowing to pressure from the USA. and Great Britain.

  Martinez (TDI), in writing. – (FR) The United States is spying on us, using a network of satellites, aerials and super-computers, via ‘Anglo-Saxon’ relay states such as Australia, New Zealand and even Great Britain, one of the Fifteen, one of the Member States of the European Union, which allows its territory and Gibraltar to be used so that the 14 other Member States can be spied on, despite the principle of Community loyalty.

It has been established from and confirmed by numerous sources that this wholesale bugging of all telephone signals has had considerable economic and commercial repercussions, to the detriment of European companies such as Alcatel or Airbus, which have lost huge contracts to American multinationals privy to privileged information obtained fraudulently and illegally.

Conditions of fair international commerce, with fair competition, have therefore been damaged, while within the WTO, on agricultural procedures, for example, the United States continually accuses Europe of undermining healthy international competition by granting aid, income support, export subsidies and certain production subsidies.

This state of affairs cannot simply be ignored by the Commission, by the Council of Ministers or by Parliament, which is always anxious to apply the principle of precaution which, in this case, would allow us to protect Europe's economic health and its financial interests.

How are we to explain this curious conduct, with 15 States agreeing to be spied on, 20 Commissioners agreeing to be spied on and a huge majority of the 626 members of the European Parliament, who are always calling for more transparency from the Council, still agreeing to cloud the issue of this American Echelon network which is spying on us?

How is it that all the European institutions and the people in them agree to what, under the laws of the 15 Member States, constitutes a serious criminal offence, in the narrow sense of the word, and is liable to punishment as such?

Instead of which, what threats and what pressure have persuaded several hundred European decision-makers, ministers, Commissioners and Members of Parliament to become accessories to the crime of espionage and undermine state security?

This question is fundamental because it conditions the very raison d'être of the European structure. Why, in fact, are we constructing Europe? To be stronger, more independent, richer?

Obviously, the answer is yes. Then why accept the Echelon system, which makes us dependent and poorer as the result of lost contracts? Anyone can see that this is where the ambiguity of the European construction lies. And we, the French members of the Front National, the Flemish members of the Vlaams Blok and the Italian members of the MSE, are alone in defending the need for a committee of inquiry into this global spy system. We must defend the true Europe, the truly European Europe!

  Schröder, Ilka (Verts/ALE), in writing. – (DE) I am in favour of setting up a genuine committee of inquiry to investigate an infringement of fundamental rights by the Echelon interception system.

However, I am voting against setting up a temporary committee, which, without a remit for its inquiry, I regard as a sop.

If we only set up a temporary committee, the European Parliament will just be viewed as a paper tiger in its endeavours to cast some light on the activities of Echelon.

The caution displayed by the major political groups in the EP about investigating Echelon demonstrates that there is no great interest in focusing on secret service activities, as the European public would then be quite justified in asking what the national secret services and so-called ‘defenders of the state’ actually do.

Yet this would be even more important because not only are industrial secrets being monitored, but also the private and political activities of people in the EU.

  Souchet (UEN), in writing. – (FR) The European Parliament has just shown, by refusing to grant itself the power to investigate the ‘Echelon’ global spy system, that it in fact has little interest in protecting European interests and that the majority of the House is obeying other, higher priority considerations.

Luckily, we still have sovereign states in Europe to defend European interests, states with sovereign justice which can unilaterally open an investigation into the activities of this network, a leftover from the Cold War which has now been turned into an industrial spy tool at the expense of certain companies and certain Member States in the European Union. Clearly, for the majority in this House, transparency and the fight against distortion of competition are the stuff of words, not deeds. I hope that other Member States will follow France's example.

It is a crying shame that the Conference of Presidents has decided, at the instigation of its Socialist and Christian Democrat majority, to put the lid on an important debate. It is likewise a crying shame that the President of our Parliament, Mrs Nicole Fontaine, felt compelled to prevent the chairman of the Group of the Greens, Mr Paul Lannoye, from reminding the House of the huge difference between a temporary committee of inquiry and a temporary committee before the vote: the first is a serious investigative tool, as the parliamentary committee of enquiry into the mad cow crisis demonstrated; the second is merely a smokescreen and will not brook any investigation into the Echelon installations located in several Anglo-Saxon Member States, including Great Britain and Germany.

If ever we needed a clear illustration of the fact that real European interests are best defended by fully sovereign, resolute Member States, rather than by an assembly which is cut off from the people and indifferent to the threats to which they are exposed, then the European Parliament's dodging of the debate on the Echelon global spy system is it.

- Lehne report (A5-0175/2000)

  Sörensen (Verts/ALE). – (NL) Mr President, the Lehne report on money laundering. First of all, I would like to congratulate Mr Lehne and the entire group for the work they have done. The document is very sound and strikes a fine balance. The Green Group as well as the regionalists have voted in favour of this report because it is an instrument for fighting laundering practices, and fighting money laundering is the best way to tackle organised crime.

The 1991 directive confined itself to examining money laundering practices with regard to drugs money. But organised crime embraces a great deal more. Hopefully, the proposals submitted by the rapporteur will open up the possibility of adopting a forceful approach in the fight against organised crime, such as trafficking in people and smuggling, but also fraud and corruption in the art trade. It is important that the exchange of information should be compulsory and we also set great store by the fact that a standard set of rules will be imposed on Member States and candidate countries in the fight against money laundering, thus guaranteeing minimum measures. The rapporteur also states, by way of justification, that the new directive provides for the possibility of requiring proof of identity from estate agents, notaries, external accountants and legal consultants, unless they represent their clients in legal proceedings or provide legal advice. This report can be used as a basis for further action. Our Group welcomes it with open arms, and I do not think that organised crime will receive this report with too much enthusiasm.

  Fatuzzo (PPE-DE). – (IT) Mr President, I abstained from the vote on Mr Lehne’s report, not because I am against the measures it lays down – it is right to employ all possible means to combat crime and the fact that we are combating the laundering of the proceeds of criminal activities is important, useful and right – but because I consider that the European Union is not doing enough to fight financial crime. Financial crime is a drain on energy, resources, means and therefore money which could be used by our governments in activities which are more important for society such as meeting the needs of the less well-off part of the population such as pensioners and the elderly.

This is why I abstained from the vote.

  Bordes, Cauquil and Laguiller (GUE/NGL), in writing. – (FR) You claim to be fighting financial crime and dirty money and yet even your report recognises the absence of any political will on the part of the Member States. The reasons are not technical, they are political – social even – in an economy whose sole purpose is to generate maximum profits.

So where, in your economy, is the dividing line between dirty money and allegedly clean money? Are the profits from the arms trade clean money? Are the huge sums spent bribing officials in order to land public procurement contracts clean money? Are the profits amassed by western companies by making children under ten work in poor countries for a pittance clean money?

In order to eradicate financial crime, we need to start by abolishing banking secrecy and business secrecy and grant any civil group the right to inspect the accounts of companies and their owners and shareholders. You, however, do not even seem able to contemplate measures such as this. You prefer to remain ineffectual against traffickers and the mafia rather than making people realise that there are plenty of other ways of making money which are criminal from a humane point of view, from the point of view of the general good, starting with companies that throw employees on to the street, condemning them to a life of poverty, in order to increase their share price and their shareholders’ wealth.

  Caudron (PSE), in writing. – (FR) I am delighted that Parliament has had to debate the amendments to the 1991 directive on money laundering. This directive was in serious need of revision in order to adapt it to the new international economic and financial climate.

France, which is a key figure in the fight against this scourge, has clearly indicated that it intends to make this issue a priority item on the European Union's working agenda.

Just a few figures suffice to substantiate this position. Money laundering accounts for between 2% and 5% of the world's GDP each year. This phenomenon is now a threat of the first order. Financial crime has adapted to the globalisation of the international economy and now has two overriding features: more and more complex techniques are being used to launder dirty money and criminal financial flows are being internationalised.

Discussions have been reopened at international level with a view to proposing effective new measures to fight this scourge. As a result, a United Nations seminar on the prevention of crime and criminal justice was held in France in April last year in order to discuss the fight against international financial corruption circuits. This seminar culminated in the ‘Bercy recommendations’. This action is being relayed through work undertaken in the Financial Action Task Force on Money Laundering (FATF) and the financial stability forum.

At European level, the European Parliament has been calling for the 1991 directive to be updated since 1996. The European Commission's proposals follow on directly from the proposals made at international level.

First, the list of offences needs to be extended. Money laundering as defined in the directive should no longer apply solely to the proceeds from drug trafficking, it should also apply to activities linked with organised crime, such as fraud, corruption and any other illegal activity which affects the financial interests of the European Communities.

Secondly, the obligations imposed by the directive have been extended unreservedly to various non-financial activities and professions, such as auditors and accountants, estate agents, traders in precious stones and metals, money carriers, managers, owners and directors of casinos. They also apply to notaries and other independent members of the legal profession engaged in activities which involve a high risk of money laundering.

The idea is to ensure that the parties concerned identify new clients and store documents and evidence. Credit institutions and financial institutions are required to cooperate with the authorities; in other words, banking secrecy is lifted where there is any suspicion of money laundering.

I have therefore voted in favour of this directive, which forms part of the general action plan to fight organised crime.

Allow me to close by stressing the need for the debate on tax havens to culminate quickly in specific measures to dismantle them.

  Coelho (PPE-DE), in writing. – (PT) I voted in favour of the Lehne report, which improves on the original initiative to widen the scope of the directive on money laundering.

The great advantage of this directive was that its adoption led to all the Member States declaring money laundering an offence subject to criminal prosecution. By virtue of its overall preventive effect, it has helped to protect the financial system by discouraging those who might be interested in money laundering from exploiting the financial system to that end, by obliging credit and financial institutions to inform the relevant authorities of anything which might indicate money laundering.

The aim of widening the directive’s scope in this way is to reinforce efforts to combat potential money laundering outside the traditional financial sector. The directive, which applied to various financial sectors, including banks, insurance companies, and so forth, is to be extended to other non-financial activities and professions which are nevertheless extremely vulnerable to money laundering. In the case of lawyers, there are to be clear safeguards, particularly as regards maintaining the right of confidentiality. The fact of the matter is that although there is an awareness of the enormous impact of money laundering and other forms of corruption, it is necessary to safeguard our citizens’ right to legal advice and assistance.

Furthermore, it is also intended to extend the list of defined offences. In addition to income from drug trafficking, it is also necessary to include activities associated with organised crime, and we need to find a uniform definition of organised crime not just at European level but also at international level.

Efforts to approve definitions, types of crime and common sanctions with a view to harmonising criminal law are intended first and foremost to apply to particularly important areas such as money laundering. Because the world is becoming ever more sophisticated, many organised crime syndicates can take advantage of legal loopholes and differences between legislation in the Member States to exploit anomalies between the various systems.

  Crowley (UEN), in writing. – At the outset, I would like to place on the record my thanks and appreciation to the rapporteur Mr Lehne on the way he had dealt with this difficult brief.

Each of us I am sure would wish to see action being taken to tackle the proceeds of cross-border crime and money laundering. This directive will go some way to linking cooperation and exchanges of information, as well as extending the scope and range of the offences.

In Ireland, where there is already existing legislation, the Criminal Justice Act 1994 is presently being updated to take into account some of the proposals contained in this directive.

Whilst I voted in favour of the report, I must confess to having some disquiet with regard to two aspects contained within it.

Firstly, the continuing attempt to create a European Public Prosecutor's office, is something which I am resolutely opposed to. We already have at our disposal many agencies at a national level, which are most efficient and which are able to deal with the vast majority of cases – and also the Court of Auditors, OLAF and other departments to deal with these issues at a European level.

Secondly, the new disclosures requirements on lawyers, I believe, would seriously undermine the long established precedent of lawyer/client confidentiality. We must not interfere with the rights of individuals to a fair defence, trial, or prejudice the doctrine of presumed innocence.

However, in spite of these concerns, which I hope to alter by amendment later via the legislative process, I vote in favour.

  Figueiredo (GUE/NGL), in writing. – (PT) It is a good thing that there is a desire to step up measures against money laundering, not just in relation to crime associated with drug trafficking, as in the previous directive, but also as regards money laundering linked with organised crime and a wider range of defined offences, that is to say fraud, corruption and other illegal activities damaging the Community’s financial interests.

However, the proposal for a directive is not without its controversial aspects, particularly in so far as it undermines professional secrecy in certain sectors, notably the legal profession, whilst failing to impose a corresponding obligation to declare suspicious activities relating to high-value business transactions on professionals such as those selling luxury items, auctioneers, customs officials and so on. The rapporteur of this European Parliament report accordingly puts forward certain approaches which are slightly different to those contained in the proposal for a directive, but he basically supports it.

In any case, one important and central issue, that is the growing liberalisation of financial markets and movements of capital, is not addressed, which means that the practical effects of this liberalisation will continue to be weakened. That is why I am abstaining.

  Lulling (PPE-DE), in writing. – (FR) We have a whole arsenal of international weapons with which to fight money laundering including, most importantly, the 1991 Community directive, together with the United Nations Convention against illicit traffic in narcotic drugs and psychotropic substances, adopted in Vienna on 19 December 1988, the Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds from crime and the forty recommendations by the FATF (Financial Action Task Force on Money Laundering), which is the main international body specialising in the fight against money with criminal origins.

We all agree on the need – and Parliament has called on several occasions – for a review of the 1991 directive, which already goes much further than the 40 recommendations made by the FATF in 1996 and which has been applied successfully by the Member States. But those responsible for money laundering are highly ingenious when it comes to finding ways of disguising the criminal origins of their money, which is why it has been proposed not just to update the directive but also to extend its scope.

I should like to point out the following so that we avoid using a sledgehammer to crack a nut by succumbing to the risk of making the scope of the directive so vast that it becomes ineffectual. That is why the criminal activities associated with the concept of money laundering need to be very clearly defined, in order to prevent the requirements of the directive from being extended to fraudulent activities in general in relation to money circulating legitimately in the financial system. We must not forget that the Member States have their own national laws for dealing with such offences. Subsidiarité oblige!

As for extending the obligations imposed by the directive to certain non-financial activities and professions, especially to members of the legal profession, we must not infringe the right of clients to professional confidentiality, the right of clients to access the justice system and the right not to incriminate themselves and, finally, the confidential role of lawyers in preventing crime.

As several French Socialist Members have claimed the right during the debate on the fight against money laundering to put certain countries in the hot seat, including mine, on the basis of an erroneous, approximate and aberrant appraisal of the practices of Luxembourg as a financial centre and the Luxembourg political powers, I am anxious to refute here in the House, and as vigorously as our Prime Minister and the chairmen of the finance, budget and legal committees of the Chamber of Deputies of the Grand Duchy have done, the allegations which the French Socialist Members have become guilty of during their so-called ‘assault course’ against dirty money.

Those who feel the urge to denounce the black sheep in the fight against money laundering and put pressure on tax havens should go right ahead; but they should at least exert pressure on those who really baulk at helping in the fight against money laundering and, more importantly, they should refrain from automatically classifying countries which respect banking secrecy as ‘turntables for dirty money’.

You do not need banking secrecy in order to become a turntable for dirty money. The proof is that the Russian mafia tried to invest its dirty money in several European financial centres before deciding on New York, which does not recognise banking secrecy. This proves that abolishing banking secrecy is no guarantee of protection against the ravages of drug trafficking, organised crime and corruption and we would do well to remember that!

  Malmström, Paulsen and Olle Schmidt (ELDR), in writing. – (SV) We have abstained from voting on Amendments 8, 16, 26 and 45, as we do not think that these amendments sufficiently reflect a good balance between, on the one hand, an effective reporting obligation to combat money laundering and, on the other hand, an advocate’s/lawyer's duty of confidentiality to his/her client and the obligations that this entails.

It is important that an advocate/lawyer should not be covered by the reporting obligation when he/she represents a client in a case. However, it is more difficult to determine in which situations a lawyer/advocate shall be subject to the reporting obligation when he/she has access to relevant information in relation to so-called legal advice. We think that lawyers/advocates should, to a certain extent, be exempt from the reporting obligation, but the proposals from both the Commission and Parliament are not sufficiently balanced or precise in this respect for us to be able to support them.

Finally, we would like to point out that the proposal has certain deficiencies with respect to definitions that could lead to confusion. In the proposal, the words advocate, independent lawyer and lawyer are used without it being clear what the distinction between these terms is intended to be. It is important to emphasise that lawyers must be considered equal to advocates in those countries that do not have the compulsory employment of counsel.

- Lehne report (A5-0179/2000)

  Fatuzzo (PPE-DE). – (IT) Mr President, I also abstained from the vote on this document on the list of States into which it is permitted to enter with or without a visa, for this is certainly a barrier to the free movement in the European Union of citizens resident in other States. I abstained because I would like us to focus more on the free movement in our Union of citizens who are severely disabled, blind or partially sighted, deaf or totally disabled and in need of full time care, who, if they move and go to live in another country – if they move from England to Italy, for example – are no longer entitled, under a regulation which is still in force, to the disability allowance or to the attendance allowance for their carer.

We must take steps to amend this regulation.

  Αlavanos (GUE/NGL), in writing. – (EL) I have two points to make in connection with the proposal for a Council regulation listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement:

1. I am pleased that the list of countries whose nationals are exempt includes Bulgaria and Romania, which have both made specific commitments concerning security on their external borders. As chairman of the Joint Parliamentary Committee of the European Parliament and Bulgaria, I should like to call on the Council to apply this position. The abolition of visas is one of the positions covered by the proposals of the Joint Parliamentary Committee of the European Parliament and Bulgaria which starts sitting today in Strasbourg.

2. The Council of Ministers and the Commission should make representations to the authorities in the USA, which insist on visas for Greek nationals. If – and rightly so – American citizens have free access to the entire territory of the European Union, then the opposite should apply, on the basis of reciprocity, and they should stop this unacceptable discrimination against Greek citizens.

  Blak, Lund and Thorning-Schmidt (PSE), in writing. – (DA) The Danish Social Democrats in the European Parliament have today voted in favour of Mr Lehne’s report about the proposal for a Council regulation listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement. We note that, in its proposal, the Commission considers that this proposal is not covered by the Danish reserve, in spite of the fact that this matter concerns a positive list which, as we understand it, is in fact covered. When we vote in favour of the report, this should be seen in the light of our view that a solution should be found which satisfies all countries and respects the Danish reserve.

  Bordes, Cauquil and Laguiller (GUE/NGL), in writing. – (FR) The concerns which have inspired this report clearly illustrate that the European Union is designed for money, and not for people. No visa is needed for money to enter, irrespective of its origin, but nationals from numerous countries require a visa, even if they are staying for less than three months.

What is more, there are no respectable grounds for segregating a minority of countries, whose nationals are exempt from the visa requirement, from the majority, whose nationals are not. Why refuse a Moroccan, Senegalese or Ukrainian national a right which is granted to a national of New Zealand, Israel or the Sultanate of Brunei.

We abstained rather than voting against this report, despite disapproving of the spirit of the report as a whole, solely because, compared with the current situation, it does slightly extend the list of countries with no visa obligation.

For our part, we are in favour of people being given at least the same rights which you grant to money, i.e. we are in favour of the free movement of people and the abolition of all visa requirements.

  Malmström (ELDR), in writing. – (SV) The EU’s strict visa policy constitutes a major barrier for people coming to Europe. The tightening up of the visa requirements that has been carried out over the last few years has unavoidably led to more cases of people smuggling and to an increase in so-called illegal immigration to the Member States of the EU. The people who have been smuggled in, or have found their way into the European Union in some other way, have often suffered terrible tragedies on the way here. Once they have arrived in the EU, they are completely lacking in rights and social protection.

The list of countries whose citizens require a visa for entry into the EU contains more than 130 countries. There are not even as many as 50 countries among the states whose citizens are exempt from the requirement for a visa. This practice, i.e. of having the requirement for a visa as the rule rather than the exception, is not worthy of a democratic Europe. The basic rule must be that people have the right to enter the EU freely, not the opposite.

Europe needs to change its attitude to immigration. Within the next few years there will be an acute labour shortage in the EU. It is therefore important that we recognise and welcome people who are seeking a better future in the EU’s Member States. A more generous visa policy is also a prerequisite for pursuing a common and humane refugee and asylum policy. By means of a policy that affirms the value of immigration, we can put a stop to the organised crime and the human tragedies that people smuggling is to blame for.

- Haug report (A5-0184/2000)

  Kauppi (PPE-DE). – (FI) Mr President, firstly I wish to express my satisfaction with the fact that the entire budget has been tightened up and the increase in appropriations amounts to 1.07% of total GNP for the Member States, while the corresponding figure in the budget for 2000 was 1.11%. In addition, I am pleased with the increase in the appropriation for youth organisations to EUR 1.5 million. However, I would particularly like to explain why I supported the proposals for amendments tabled by Mr Virrankoski and Mr Mulder. I base my opinion in the notion that strict budgetary discipline should be continued and that the prevailing financial frameworks should be respected. Regarding funds for the Western Balkans, we must take account of the real needs of the regions, the prevailing political situation and the possibility of obtaining funds from other quarters. For this reason, I do not support an amendment to the financial perspectives in the area of appropriations under External Action.

  Kuntz (UEN), in writing. – (FR) The French delegation of the UEN Group is for several reasons unable to approve the report by the Committee on Budgets currently being debated.

First, we feel that it fails to make a distinction between the debate on the 2001 budget and the debate on the revision of the financial perspectives, which we refuse to revise. Who could forget the circumstances under which the financial perspectives were drawn up at the Berlin summit. No French delegation from the European Parliament could possibly question the compromise which resulted from the difficult negotiations in March 1999.

A revision appears to be even less in order now that the European Union has opted, having itself bombed Serbia, to cut off any Community aid to it. We therefore need to subtract EUR 2.3 billion from the 5.5 billion announced by Mr Prodi for the reconstruction of the Balkans from 2000-2006. The situation then appears to be quite manageable: there is enough money, the financial perspectives do not need to be revised and nor does the ceiling on the agricultural line need to be lowered. As far as the figures announced by Romano Prodi last November are concerned, the Commission may take them back today, it knows full well that these sums are not, alas, based on an accurate analysis of the region's needs and, in its own words, it is a ‘political’ sum which, by the way, has never been approved either by Parliament or, more importantly, by the Council.

It is therefore possible to find a substantial sum of money for the Balkans without revising the financial perspectives. The fact that we have seen a chronic surplus of over EUR 3 billion at the end of the year demonstrates that the sum of appropriations voted for does not correspond to real needs, whilst it is possible to make substantial savings as the result of the patent under-implementation of certain programmes. This surplus also shows that it is better for efforts in the Balkans to be funded in part by redeploying appropriations.

We also reject Mrs Haug's report for its proposals on the Union's special envoys. This is, in fact, tantamount to a reduction of what still comes under the intergovernmental conference for the benefit of Community integration. The Amsterdam Treaty, which we fought against, states that, as of this year, the administrative costs of the CSFP will come under the Council, while operational expenditure will be financed from chapter B8 under heading 4.

Finally, we refuse the differentiated appropriations for rural development which the resolution appears to recommend because this would inevitably create difficulties in settling payments. We would simply remind the House that the agricultural guideline still applies, the ceiling decided at Berlin notwithstanding.

Although the ceiling is reached if you add market expenditure (1A), rural development (1B) and pre-accession agricultural expenditure, to accept differentiated appropriations for rural development is to run the risk of having the Commission propose substantial commitment appropriations and far fewer payment appropriations, to the detriment of our farmers yet again, and this we cannot accept.

  Malmström (ELDR), in writing. – We have voted against point 9 in the Haug report, concerning the transfer of funds from the budget for Agricultural Policy to the reconstruction programme for the Western Balkans.

Estimates show that a significant surplus will be available in the agricultural budget under heading 1a. As a great part of the programme for reconstruction of the Western Balkans is still not financed, we believe that it would be wise to transfer part of this surplus to heading 4 in the budget, should a revision of the financial perspectives become necessary.

The reconstruction of the Western Balkans is on top of our political agenda. It is also one of the most important tasks for the European Union in the coming years. We agree with the intention of the Haug report that the financing problem cannot be solved only by redeployment in the Union's existing priorities in external policy. Funds must be found elsewhere, but this does not necessarily create a need for ‘fresh money’ from the Member States. Since a significant surplus will be available in the budget for agriculture, a reduction of the ceiling in heading 1a in favour of an increase of the budget for external policy would be a reasonable solution.

  Miranda (GUE/NGL), in writing. – (PT) Faced with the task of setting new objectives for the European Union, we consider it essential to carry out a wide-ranging revision of the financial perspectives with special emphasis on Heading 3, “Internal Policies” and Heading 4, “External Actions”. We believe that the new priorities need to be matched to the ‘fresh money’ available.

In view of this we fundamentally and above all reject the prospect of cuts in the cooperation policy, as implied in the Commission’s preliminary draft. The same applies to the cuts they propose in the areas of employment and the environment. In the same way, we reject the cut of EUR 300 million for agriculture. Indeed, as regards agriculture, we believe that it is vital to set up a fund to tackle the enormous problems in the primary sector.

Accordingly, we agree with some of the rapporteur’s proposals. However, although she does suggest some improvements, they fall well short of what is absolutely necessary. Furthermore, some of the amendments made in the final vote limited and even changed its scope. And that is without even looking at the position on defence policy.

For these reasons, we voted against the final version of the report.

- Paciotti report (A5-0177/2000)

  Fatuzzo (PPE-DE). – (IT) Mr President, I voted for the Paciotti report because I feel that it is right for the European Union to take an interest in anything to do with the protection of personal data. Sadly, personal data is all too often used by criminals to exploit confidential data for their own gain. As I have already said on a previous occasion, pensioners and the elderly are certainly among the victims. However, in voting for the motion I would also like to stress that, in addition to having our personal data protected, it would also be nice to be able to know what are own personal data are.

In Italy, for example, workers are still unable to discover the size of the pensions they will receive and how much money they have paid in contributions. They are therefore ignorant of some of their personal data.

In voting for the report, I therefore hope that, in the future, not only will our personal data be protected, but, as well as our name, surname and date of birth, we will all know how great our pension will be when we retire.

  Kauppi (PPE-DE). – Mr President, I hope that Mrs Palacio Vallelersundi will give a written explanation of vote on behalf of our political Group, but I want to say a couple of things.

First of all, I wanted to vote against Amendment No 11. It was purely a mistake that I voted in favour of that amendment, since any amendments to the Commission proposal were very bad and endanger the whole procedure of getting the safe harbour agreement enforced.

We have negotiated with our US counterparts for over two years. We had a very good compromise but now the work here in the European Parliament means that European consumers and citizens have to wait until the new compromise proposal is made. It is not certain that the new compromise proposal will be as good as this was. We are now going backwards. I voted against the committee proposal along with other members of my Group. We are all very sorry that we have to wait for this agreement to come into force.

  Coelho (PPE-DE), in writing. – (PT) I was unable to make the speech I had prepared during the sitting itself for lack of time. I am therefore summing up the key points during the explanations of vote.

I share the rapporteur’s concerns that this proposal does not provide Europe’s citizens with an appropriate level of protection as regards transferring and processing personal data relating to them, especially if we take into account the protection they are guaranteed under the European directive on data protection.

However, we all know that at present data is already being circulated in practice, but in an unregulated way. So while the safe harbour principle may not be an ideal solution to this problem, it will at least impose a certain number of rules and will be a way of preventing abuse.

Work has progressed on attempting to reconcile two differing approaches, namely our own legislation-based system, in which compliance with legal restrictions on obtaining and using personal data is ensured by the public authorities, and the Americans’ preference for self-regulation.

The agreement reached represents a limited step forward as far as the guarantees involved are concerned, but it is positive in terms of what it offers for the future by way of security. We accordingly support the position adopted in the Paciotti report with the amendments tabled by Mrs Palacio Vallelersundi.

  Schröder, Ilka (Verts/ALE), in writing. – (DE) The Paciotti report on the ‘safe harbour’ agreement has my approval, although it will not solve the problems attending transatlantic data protection for the following reasons:

- It will still be possible, even with the ‘safe harbour’ agreement in place, to find ways of getting round it and selling clients’ data to third parties without having to obtain the client’s consent.

- Even if the agreement succeeds in defining vague data protection standards, it is not clear precisely what action will be taken when companies violate these standards. Will it be possible to take them to court? Will they have to pay compensation?

- The question as to how far EU citizens will actually be able to assert the rights laid down for their benefit in the ‘safe harbour’ agreement remains unanswered, particularly as the court of jurisdiction for the US companies is in the USA and so they have a natural advantage over individual EU citizens.

That said, I still subscribe to the report because, as matters stand, there are no provisions whatsoever for guaranteeing EU data protection standards in the exchange of data with other continents. The ‘safe harbour’ scheme does at least represent an attempt to guarantee data protection beyond EU borders.

  Theonas (GUE/NGL), in writing. – (EL) Neither the letter, i.e. the legal basis, nor, more importantly, the spirit of the way in which the burgeoning e-commerce industry is developing and the speed with which it is spreading augur well for the protection of citizens' personal data and privacy; on the contrary, they give cause for serious, widespread concern as regards both the decimation and restructuring of commerce and the market itself and the intensification of efforts to abolish civil rights, make citizens slaves to technology and the savage laws of the capitalist market and turn their personal lives and their very existence into cheap, malleable raw materials to generate profits.

The application of technological innovations, especially the innovations made during the impressive and rapid development of the information society, will cut right through the fabric of society. The dangers of misuse which lie in ambush behind the huge potential which is developing should encourage and oblige us to be vigilant when it comes to ensuring that the human factor and respect for citizens' fundamental rights and freedoms come first.

New applications and technology cannot be stopped, but nor should they be allowed to develop with no regard for man and his needs, and under no circumstances should they be used to undermine political values and human dignity or to attack basic and inalienable rights such as the sanctity of privacy and personal data.

The proposals and policies for electronic commerce and the measures being promoted to support it are coloured by the totally one-dimensional perception of profit and competitiveness. This policy is being driven by the huge and constantly inflating sums of money being invested in and thrown at e-commerce in order to serve the needs of the big multinationals in the sector and remove any obstacles which prevent them from adapting as quickly as possible to the rapid developments on this market and acquiring huge, fast profits and influence.

The proposed Community model behind the EU's texts and proposals is supported by and vigorously supports unadulterated competition and unbridled, excessive profit. This perception is not a guarantee for, it is a blatant threat to the future of society and mankind: uncertainty, insecurity, a breach with man's own needs, categorisation of citizens and workers who will no longer shape their environment but will be shaped by it in order to serve those who define it in the best, fastest and cheapest way possible.

As far as we can see, the term “adequate protection” as used in the report means the continuous and arbitrary definition and distortion of the concept of the protection of personal data, given that sanctions and compensation for breaching doors which are already wide open are advocated as deterrents and safety valves. Personal data on EU citizens is already circulating in third countries, without any fundamental control; in fact we barely even know the extent of the arbitrary acts already committed. Knowing as we do from the Echelon interception system that every form of democratic control is being flagrantly violated from without or from a distance, knowing that American multinationals are engaged in wholesale monitoring and spying at the expense of European undertakings and the economic, social, political and cultural activities of the Member States and the private life of the Union citizens as a whole, it is slightly hypocritical of us to approach this huge issue in stockinged feet with our prayer-book in hand.

The current protective framework and the proposed standard contractual clauses are inadequate in the extreme, riddled with holes and inefficient. You cannot appeal to good intentions for doleful competition and a profit monocracy. We would only dare call the snake pit of unaccountable monopolies which find it easy to spring up, spread and act with impunity in cyberspace ‘safe harbours’ euphemistically.

  President. – That concludes the explanations of vote.

(The sitting was suspended at 1.40 p.m. and resumed at 3 p.m.)

IN THE CHAIR: MR PODESTÀ
Vice-President

  President. – The next item is the debate on the report (A-170/2000) by Mr Karas, on behalf of the Committee on Economic and Monetary Affairs, on the Commission communication on communications strategy in the last phases of the completion of EMU.

  Van Brempt (PSE). – (NL) Mr President, ladies and gentlemen, although the euro has been around for a while now, it is still an abstract concept. It is something which is not tangible in our day-to-day life, and there is still no so-called ‘euroreflex’ on the part of the population. The present currencies are not yet being converted into the euro. That is why I cannot stress enough the importance of this information and awareness campaign for the euro. It is not yet too late, but we must all realise that 2001 will be crucial in our efforts to involve the entire European population in this giant operation. By means of the amendments which I have tabled and which have also been included in the report, I wanted to underline a number of aspects of this campaign.

In the first instance – and I will not labour the point as it was sufficiently highlighted this morning – the campaign must devote special attention to making young people aware and involve education in the information campaign. Secondly, an information campaign must obviously be tailored to specific target groups, such as the weaker members of society. I would also ask for special attention to be paid to people on extremely low incomes. As you know, there are two groups of people who spend a great deal of their time thinking about money: those who are extremely rich and have a great deal of money and those who have very little money or who need to budget every day to make sure they can make ends meet for the rest of the month. Well, the euro will have a great impact on them and it is they who deserve our special attention. For this reason, and for other reasons, but especially for this reason, it is important that consumers should not be cheated when they convert their money into euros. The switch to the euro should not lead to improper price increases. I have therefore called for the setting up of local hotlines within every local community to ensure that citizens can report improper price increases in a way which is simple and easy. I have also asked the Commission to submit proposals in this respect and to present best practices to the Member States.

  Fatuzzo (PPE-DE). – (IT) Mr President, not being used to speaking for two consecutive minutes, I am a little worried that I will not manage to fill the time available to me, but I will do my best.

Commissioner Solbes, I must express my approval of this report for I feel that the introduction of the euro is one of the most important, key results of the formation of the European Union out of our 15 States. Therefore, preparing the population for practical use of the euro is certainly a positive move.

I would like to thank Mr Karas for incorporating a request I made to remove a point from the original measure which stated that adolescents and children must receive good teaching so that they can in turn teach their grandparents. I would hope that, also on this occasion, it will be the grandparents, the elderly, the pensioners – who elected me here to the European Parliament to represent the Pensioner’s Party, no less – who will teach the adolescents. This is quite possible, for I am sure that pensioners – who fill all the markets of the European Union every morning – will be among the first to understand the relationship between the euro and their national currency.

I believe I can make a small contribution to this effort: I will have posters put up in the areas in Italy in which I was a candidate for the elections, calling upon the Italian Government to raise the minimum pension to EUR 500. The poster will not specify exactly what this amount corresponds to in Italian lire, and this will force all the citizens to find out the value of EUR 500 in lire. It is a shame that the Government will not accept this proposal, but, at least it will serve to teach the Italian pensioner citizens the value of the euro.

  Helmer (PPE-DE). – Mr President, as I and many colleagues have argued for some time, the monetary union project is profoundly dangerous. It is economically naive and will do huge macroeconomic damage. Politically it is clearly intended to undermine the nation state, and thus it threatens democracy in Europe.

The proposal before us talks of information on the euro, but we already have all the information we need. Every newspaper I open has stories about the euro. Banks and accountancy firms are running seminars and briefing clients. This is not about information, this is about propaganda. I do not trust the Commission to provide unbiased information. The very idea is absurd. I was particularly horrified by the idea of Mrs Randzio-Plath that we should actually enrol schoolchildren as the stormtroopers of this euro propaganda blitz.

Now, if the 12 euro countries wish to undertake a propaganda campaign, that is no business of mine. But in three countries, Denmark, Sweden and Great Britain, the euro decision is not yet made. It would be a gross abuse of the democratic process for the Commission to undertake a euro propaganda campaign in those countries before referenda on the currency take place. It would be outrageous to take money from the taxpayer and to use it to influence the voters' decision.

In Britain, 70% of people are opposed to joining the euro. We do not want our money spent on promoting it either in the UK or elsewhere. I therefore have two demands to make of the Commission. Firstly, please tell us today that no such campaign will be undertaken in Great Britain, Denmark or Sweden. Secondly, please assure us that the share of funding which might have been spent on those countries is returned to their national exchequers so that people can see clearly and transparently that their money has not been squandered on objectives they do not support. Better still, cancel the whole project and put all the funds into a special account to help defray the enormous costs that will be incurred when the euro is eventually dismantled.

  Solbes, Commission. – (ES) Mr President, I would firstly like to thank the rapporteur, Mr Karas, for his report, and all of you for participating in the debate.

Mr Karas’s report contains many interesting elements, including 38 proposals, which in many cases coincide with the proposal in the Commission’s communication in February and, in other cases – as he has explained very well in his initial statement –, are proposals which fine-tune, improve and even extend some of the initiatives.

Having made this initial comment, I would like to clarify certain points which I consider to be essential. Firstly, the communication is part of a very complex operation, that is, the introduction of the euro, in the form of coins and notes, on 1 January 2002. Secondly, in the application of this process of introducing the coins and notes, the principle of subsidiarity plays a fundamental role. This means that the Member States, through their governments and central banks, are fundamental to the whole process and also to the operation of providing information.

Our role as Commission consists, in some cases, of persuading, in others, of acting and, in the majority of cases, of communicating to the Member States ideas which they can or cannot apply, and, in some other cases, of proposing specific actions.

The main concern at the moment is to determine the level of preparation of Member States, companies and citizens. With regard to the Member States, I can tell you that next week I will present the Commission with a report on the practical application of the euro. This will contain a summary of the situation of the national plans for the introduction of the euro in each of the Member States.

Companies are the special objective of the information campaign at the moment. According to the latest information available, regarding September, approximately 88% of small and medium-sized businesses assure us that they are prepared for the euro or, at least, are aware of the need to prepare themselves now.

Nevertheless, this figure would be deceptive if I were not to give two additional figures, or make two additional comments. Firstly, of this 88%, only 22% have already implemented the plans necessary for the introduction of the euro. As for the rest, there is a certain contradiction between this position, which in theory is so favourable to the companies, and the lack of use of the euro in normal operations at the moment. To put it another way, we have the impression that companies view the operation with relative optimism, in the belief that it will be easier than it may turn out to be. This is the reason why we believe that we must pay special attention to companies during this period, as well as to citizens.

The Commission intends to implement certain specific actions, apart from the July communication, regular reports to ECOFIN, a proposal on counterfeiting, which will be presented before the end of the year, and also a series of measures necessary for coordination.

I would like to make some comments relating to the various points mentioned in the debate. On the whole, the proposals in the communication coincide with the proposals which have been made here. Nevertheless, there are certain points which deserve additional comment. Firstly, what action must we take in the ‘pre-in’ countries or in third countries? The countries which are not currently members of the Monetary Union have the right, like other Member States, to information campaigns. This will clearly happen, as long as those countries want it to happen. Two of them, for the moment, Denmark and the United Kingdom, have not shown any interest in implementing these information campaigns.

Your recommendations include many of the actions which, in our opinion, must be asked of the Member States and, to this end, we will send a communication to the different countries so that they may take account of them.

I would like to highlight certain very interesting aspects which have been mentioned such as paying special attention to training, schools, women, specific sectors, such as tourism, or the tremendously interesting initiative of the distribution of price tables, or the initial or additional obligations of public administrations.

We will communicate to the banking sector your proposals on the possibility of using some of the ‘savings days’ for information purposes, and we will move forward on all aspects relating to charges on the exchange rate. The Commission is favourable to the idea that there should not be a differential between the charges made for cross-border operations and for national operations.

Two additional comments. The Commission is absolutely prepared to work with Parliament, with the European Central Bank and with the Member States in order to implement a programme which is more efficient, bearing in mind however that, in accordance with the current model, approximately two thirds of the total expenditure of the programme will be met by the Member States, according to their specific programmes.

With regard to the possibility of providing more resources or extending the information process, as proposed in the Karas report, the Commission is in favour of both options. Of course, we will have to debate them in the future, when we discuss the budgets for the coming years.

  President. – Thank you, Commissioner.

The debate is closed.

The vote will take place tomorrow at 12 noon.

  President. – The next item is the report (A5-0149/2000) by Mr Arvidsson, on behalf of the Committee on the Environment, Public Health and Consumer Policy, on the proposal for a European Parliament and Council directive amending for the 22nd time Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (phthalates) and amending Council Directive 88/378/EEC on the approximation of the laws of the Member States concerning the safety of toys [COM(1999) 577 - C5-0276/1999 - 1999/0238 (COD)]

  Arvidsson (PPE-DE), rapporteur. – (SV) Mr President, there are two reasons for this report on phthalates in toys: firstly, these substances are a health risk to young children, and secondly several Member States have already adopted their own laws in this area, which is why this report is aimed at reestablishing the common market for toys. When we deal with issues relating to the health of young children, the commitment is often strong, wholehearted and sincere.

According to experts in the World Health Organisation, it is not possible to prove that phthalates are carcinogens. However, the WHO thinks that phthalates may cause reproductive damage and hormonal disturbances, mainly amongst young children who are exposed to large amounts of phthalates.

For scientific reasons, phthalates have, in common with other toxic substances, been assigned limit values which give the highest recommended exposure level based on calculated risk levels. I want to emphasise that this handling of phthalates does not deviate from toxicological routine.

The Commission’s Scientific Committee on Toxicity, Ecotoxicity and the Environment has evaluated the risks posed by a number of phthalates and has thereby unanimously established that the two phthalates that are far and away the most common in toys and articles used in childcare are in danger of causing the limit values to be exceeded in the case of young children and of causing health problems. In this scientific assessment, it is a concern for young children’s health that is being expressed. These are children who are at the teething stage, which is a time when they often bite and suck on all sorts of objects. I would like to caution Parliament against making decisions that go far beyond what is justified by the scientific basis for this standpoint.

I am all in favour of information and informed consumers who can make their own choices, but the labelling that has been proposed by the Commission does not provide information but, rather, a sharp warning. People who read this warning will not buy these toys for their children or grandchildren. In this way, the warning will constitute an indirect ban. In addition, the process of labelling toys is expensive and difficult to carry out in practice. Tradesmen and tradesmen's organisations have informed me that staff in shops have neither the time nor the knowledge to answer all the questions that customers are going to ask. Introducing this warning system on toys designed for older children is likely to be tantamount to an extended ban.

The Scientific Committee has identified two phthalates used in toys that may be hazardous to young children’s health. A decision in favour of a limited ban on these grounds would not primarily be based on the precautionary principle, but on the routine procedure for dealing with toxic chemical substances. To ban all of the 350 or so currently known phthalates is to proceed on the assumption that all phthalates are associated with more or less the same risks. However, there is no scientific basis for this assumption. Once these phthalates are no longer used in toys, further risk assessments and the proposed review of this directive in two years’ time ought to be sufficient.

In this short presentation of the document, I wanted to stress the fact that decisions ought to be based on scientific grounds and should cover the high-risk group that has been identified, i.e. young children, as well as the fact that the labelling of toys is very difficult to implement. There is still no scientifically approved method for migration tests which could partly replace the proposed legislation, and no such method should therefore be alluded to in the legislative text. Speakers will also put forward their own assessments of the scientific basis. Allow me to anticipate these and state that politicians ought to listen to scientific assessments and conclusions and not try to make their own assessments of the scientific research material.

It is my hope that this report and tomorrow's decision will make the world a safer place for young children.

  McCarthy (PSE), draftsman of the opinion of the Committee on Legal Affairs and the Internal Market. – Mr President, on behalf of the Committee on Legal Affairs let me state in very clear and simple terms the position of the committee as we voted; (a) to ban all phthalates and (b) as a consequence to delete all labelling, since if you prohibit all phthalates you do not need labelling.

As the rapporteur, I share the concerns of the Members of Parliament in my committee. As elected politicians we clearly cannot afford to play fast and loose with children's health. We must ensure that they are not exposed to unnecessary and unacceptable health risks and acknowledge the public concern on this issue.

In the interests of the single market we must achieve the highest common standards for product safety. We also need legislation which cannot be undermined or discredited by legal challenges. This debate has unfortunately been clouded by confusion and uncertainty fuelled by comments in Parliament from Scientific Committee members who doubted the need for any ban on phthalates and questioned whether the health risks are serious or immediate enough to warrant a ban.

As politicians we need clear advice from scientific committees if we are to make rational judgements, take the necessary risk management measures and produce good legislation. In this case we have not been able to do that effectively because of the gaps in our knowledge, and so my committee understandably decided to go for a blanket ban. Nor do we have any information on substitutes to plasticisers which might have toxic or chronic effects.

I believe that this legislation shows us that we need action on a number of areas: (a) we urgently need to continue work on migration testing and research into chronic toxicity and the behaviour of children; (b) we need to review and update this legislation periodically and as gaps in knowledge are filled, where necessary add new substances to the ban in the Commission's legislation. We need to formalise and accept the permanent ban which the Commission is proposing now and we need stringent health warnings and labelling to inform our consumers of the risks.

We have to answer to the public on the legislation that we produce in Parliament, and we cannot afford to be complacent about risks to children's health.

  Oomen-Ruijten (PPE-DE). – (NL) Mr President, the discussion on the harmfulness of phthalates, or plastic softeners, has been dragging on for a long time. Today, we in Parliament need to speak out regarding the desirability of a total ban on these substances.

Let it be clear that no one in our Group disputes the many useful applications that phthalates have, such as cable casings, and also uses in medical equipment. The snag is that phthalates are also used to soften children’s toys, many of which end up in their mouths, even if they are not intended for that purpose.

When, in 1998, reports emerged about the possible harmful effects on children’s health, the European Commission proposed – or tried to propose at any rate – a ban on the application of certain phthalates. Intense consultation with industry to establish a ban from within and to introduce self-regulation in the processing of these substances, came to nothing. In my opinion, and I say this on behalf of the Group, that was very much a missed opportunity.

It strikes me as rather odd, though, that the harmfulness of the substances has not been established beyond question. Accordingly, in response to the Commission’s action, we have met with a barrage of contradictory research studies. Consumer organisations pointed out the harmful potential, while industry tried to demonstrate that things were not all that bad. The chairman of the scientific committee too was dragged into the debate, which was certainly not an ideal situation.

It is now up to us to assess the proposals. I have not seen a proposal as ridiculous and complex as this one for a long time. I do not know how harmful these phthalates are, but if I do not know, then I need to at least ban a number of these phthalates in line with the precautionary principle, because, in my view, this is also what the internal market wants.

Consequently, I hope that the plenary opts in favour of safety, in line with the precautionary principle. Research, however, should not grind to a halt, but rather come up with alternatives to these softeners.

  Müller, Rosemarie (PSE). – (DE) Mr President, ladies and gentlemen, I regard the proposal for a directive we have here as an inadequate attempt to ban the use of six phthalates in toys for infants under three years old on the basis of the opinion of the Scientific Committee. As I see it, this goes no further than accepting the inevitable, and the proposal does not comply with the precautionary principle, which it is particularly important to apply when it comes to small children.

Until it has been proved that all phthalates are harmless, there is no place for plasticisers in toys for children under three. Children in this age group will put any toy in their mouths. They learn about the shape of toys and the materials used to make them by putting toys in their mouths, and these children should be able to suck toys like this without any risk to their health.

This can only be achieved by a ban on all phthalates in toys. We also need labelling for the three to six age group. This is not only because there are smaller children who play with toys produced for older children, but also because there are also children in this age group who still suck things.

In addition, we want to help parents in deciding what to buy and in sorting out what toys are unsuitable for their children. The amendments before us, which call for a review after two years, for the evaluation of new test methods and for scientific studies on the dangers of PVC products, are helpful in maximising health protection for us all in the long term, not just for small children.

To sum up then, it is for us to decide whether to opt for the precautionary principle and a high degree of protection, or whether we intend to hide behind scientific reports, which can, however, never relieve us of the responsibility of taking the necessary political decisions.

  Maaten (ELDR). – (NL) Mr President, I cannot deny that this issue is extremely tricky for the Liberal Group. The problem of phthalates in children’s toys is receiving wide public attention and the campaign which focuses on this problem, largely in the hands of Greenpeace, can be termed extremely successful. This is only natural and right, of course, because children are helpless and are entitled to protection.

We know that phthalates in animal trials – in itself not a very pleasant thought – proved harmful, and we can therefore assume that they will be harmful to people, too. But we do not know to what extent they would be harmful, or in what dosage. Neither do we know for which application they are harmful or whether there are alternatives, and how harmful these would be and in what form.

As there is no usable test, the question arises as to the basis on which we pursue our policy? As far as this is concerned, we cannot shake off the impression that this decision is premature in a way. But anyway, it is now before us. Phthalates are intended to soften PVC toys, but the substances leach out, certainly if the toys are chewed, as they in fact are by small children, of course. As far as we know, not many alternatives appear viable either.

We value the assertive course which our rapporteur has taken and we therefore back the thrust of his proposal, that is to say we endorse a ban on this type of toy for children under the age of three, provided it is extensive. If we go for this option, then we should at least be consistent. In our view, therefore, this ban should apply to all toys, not just those intended for sucking and chewing.

We also believe that we should look into toys for older children, although we should still have this option available once the test methods are there. I am interested to see what the European Commission’s opinion would be on this. What do you think of these test methods and what is your view on revising these regulations once they are there?

We are in favour of a ban on the six tested phthalates, but are as yet unable to ban all the other phthalates and softeners, which may indeed be harmful. This may well be possible at the time when we have more data available that demonstrates that they are actually harmful. We have insufficient data available at this stage to establish this.

On a final note, how far do we take the precautionary principle at the end of the day? As far as we are concerned, the principle should not mean that we simply reject everything we are not completely sure about at the moment.

  Breyer (Verts/ALE). – (DE) Mr President, ladies and gentlemen, tomorrow’s vote will be the acid test of whether the European Parliament takes protecting children’s health and the precautionary principle seriously, or whether we are willing to play fast and loose with our children’s health. The facts are before us: plasticisers in children’s toys represent a massive risk for children’s health and can even be carcinogenic.

Despite all these alarming facts, the Commission has unfortunately only dared to take one teetering step forward. The proposal covers only six plasticisers and only in teething rings. This really is totally inadequate and takes no account at all of the possible risks. It is high time that all plasticisers were banned from all baby toys. These phthalates are totally unnecessary, and many toy manufacturers have been managing without them for years. I therefore totally fail to comprehend the whole lobbying campaign being mounted by the chemical industry.

I regard the argument put forward by the chemical industry, and unfortunately also by many Members of this House, as absolutely cynical. They say that we still need proof. Excuse me, just what proof do we need? One dead child, two dead children or 100 dead children? That is what I call cynical! The precautionary principle means that we have a duty to ensure protection from the outset. Of all people, children are the most sensitive section of our population, and they are not in a position to protect their own interests. We are faced here with a highly urgent task, that of eliminating all risks in this area.

We know that many Member States have long since forged ahead with a total ban on phthalates. We must support this and there is no way that the European Parliament should act as a braking force. Quite the contrary, we should be the driving force behind this initiative to finally ban plasticisers from all toys.

Just one last sentence by way of conclusion: I hope that banning a chemical from a consumer product for the first time will give a signal that we are perhaps finally considering abandoning PVC and will have the courage to drop this dangerous technology.

  Sjöstedt (GUE/NGL). – (SV) Mr President, we in the Confederal Group of the European United Left / Nordic Green Left think that this is a very good, clear and precise example of a situation in which the precautionary principal should be applied. There are very clear warning signs with regard to the risks associated with phthalates. Experiments on animals show that phthalates cause damage to the liver, kidneys and testicles. With this in mind, it would be totally absurd to allow these substances to be used in toys, which children can put in their mouths – something children very often do. These substances, phthalates, are a very large constituent of the toys concerned –and quite large percentages may be present in them. It is clear that these substances will leak out and that children will then ingest them via their mouths.

It is also completely absurd to believe that a warning label would be sufficient when it comes to young children. It is obvious that children who are only a few years old cannot assimilate a warning text. Once they have the toy in their hands, it is, as it were, too late. Therefore, the only sensible thing to do is to implement as extensive a ban as is possible in this case. The Commission's proposal is also completely insufficient for this.

A ban is already in place in several Member States, as several speakers have already mentioned. If the legislation is now too weak in this area, there is a risk that the Member States that have taken steps forward in this area will have legislation forced on them that is worse than what they already have – according to the bizarre logic that exists with regard to the single market, i.e. that the market is always put before considerations relating to health or the environment. I consider that this would be extremely unfortunate.

The rapporteur for this report is a member of the Swedish Moderate Party. We are usually clear political opponents – I am a member of the Swedish Left Party. Our opinions differ also in this case, but I also know that Mr Arvidsson has been subjected to quite a lot of pressure and harsh criticism from sections of his own Group because he has not been sufficiently industry-friendly. I think it says something about him that he has resisted some of this criticism.

  Hyland (UEN). – Mr President, this debate again confirms Parliament's commitment to public health and indeed to environmental issues as well, and I welcome the opportunity to make a brief intervention.

It is well known that PVC may present a risk when used in toys for young children. The proposal to amend the original directive on this matter will ban the marketing of toys and childcare articles containing PVC which are designed to be placed in the mouths of children under the age of three. I welcome the fact that in future health warnings will have to apply in relation to the manufacture of these products. Every time the European Parliament has debated this issue there have been increasing doubts as to the safety of these toys which derive from PVC.

Another problem is clearly the fact that much of the scientific evidence on these matters is conflicting. We know that when there is doubt about a particular measure, the European Parliament must apply the precautionary principle. This principle in essence means that safety and health must be put before any conflicting scientific evidence, and I fully support the previous speakers who again referred to the importance of applying the precautionary principle.

  Blokland (EDD). – (NL) Mr President, last month, we held a debate on tobacco. The risks to public health when using tobacco are clear and scientifically proven. This is not so for the use of phthalates in toys. Although a ban on the use of tobacco was not even entertained as a serious option, a large majority within the Committee on the Environment, Public Health and Consumer Protection did go along with a ban on phthalates (softeners) in toys. Although after 40 years of use, no cases of damage to health are known, the seed of suspicion has nonetheless been sown that softeners are harmful. In accordance with the precautionary principle, this possible harmfulness has to be underpinned scientifically. The studies included tests on animals, which is common practice with regard to suspected substances. These tests resulted in a so-called ‘acceptable daily intake’ for animals. For humans, a further safety margin of a factor of 100 was added on. By testing toys, it can be indicated whether or not this ‘acceptable daily intake’ is exceeded in the case of humans. On this basis, toys can be approved or rejected. In short, this is a method based on an acceptable margin, taking a generous safety margin into consideration.

By launching an extensive campaign, spearheaded by Greenpeace, it was possible to convince many policy-makers and politicians of the need to institute an immediate ban. I can understand that; emotions run high where children are involved. The argument that children are affected, however, is two-sided: children eat and drink all kinds of things which entail a certain health risk. Why are these risks accepted and not others? It is my impression that this issue is being played up in order to use this ban as a weapon in the fight against other substances. I fear that if we now vote in favour of a ban on phthalates, this will unleash a witch-hunt against all kinds of substances, without any scientific basis. Moreover, we do not know what the harmful effects of alternatives will be. These reasons also indicate that a ban on phthalates contravenes the correct application of the precautionary principle.

  García-Orcoyen Tormo (PPE-DE). – (ES) Mr President, Mr Arvidsson, I fully appreciate the work which you have done on this report. I would like to concentrate here on the application of the precautionary principle and on the difficulties in this case of dealing with an issue on which scientific considerations are confused and mixed up with emotional considerations, as well as a long history of disagreements between the industry of PVC and its derivatives and the environmental lobby, which, of course, is also deeply involved with this issue of phthalates.

We are talking about risks to children’s health. This is of interest to all of us, certainly. However, we must not forget that we are also talking, with reasonable certainty, about the harmful effects of six phthalates, and also, with a degree of uncertainty, of the other substances belonging to this group. To ban all of them, as a precaution, may not be a good decision since this may mean abandoning an area of research which is being pursued at the moment, in order to opt for substitutes whose harmful effects we know even less about. In this respect, there is one good example: four years ago, given the opinion that silicon implants may be carcinogenic, several countries adopted an alternative substance for their manufacture based on soya oil. A few days ago the United Kingdom banned these implants and is gratuitously withdrawing existing stocks, having discovered that they are carcinogenic.

The social and health cost of a hasty decision may be medically and economically irreparable. The scientific evidence demanded in Amendments Nos 11, 13 and 24 seem to me to be absolutely necessary in any event, but especially in the case of this type of issue where lives are at stake and where we are likely to punish or benefit certain production sectors.

  Whitehead (PSE). – Mr President, we congratulate Mr Arvidsson for his hard work. He is in the unusual position of producing a report on Commission action which has already been taken and it is the way it has been taken that we are to some extent talking about here.

The ban on a range of identified phthalates was precautionary. It attracted broad support and was also in line with the accepted practices of a number of Member States. If we were simply balancing the health and safety of children against the needs and priorities of industry there would be no contest, but there are related issues which we should address.

The first is how the Commission handles the scientific advice available to it. Was it done in a balanced way? Does it give us confidence that this powerful and sometimes necessary weapon of a product ban was used correctly? I am not sure about this and I want to return to it in an explanation of vote. Secondly, on the wider issue of PVCs in general, how soon will we get the kind of migration testing from which phthalates' safety can be assessed and the review which is called for in one of the amendments? We also need information about when the substitutes which the industry may introduce will be open to equivalent testing. It is no good banning something if you are unsure about what will replace it. On the issue of labelling, I am sorry to see that there are amendments against this. Personally I believe that we have to have it, certainly for children up to the age of six, although some will argue that that leads to another kind de facto ban.

Essentially, the number of plastic objects which could be put in the mouth and swallowed is increasing. This House should be more concerned if it went to bed worried that it had done too much, than if it woke up finding it had done too little. The precautionary principle should rule.

  McKenna (Verts/ALE). – Mr President, the Commission's approach to this whole issue is totally inadequate. The fact is that you have accepted a ban on the substance we are speaking about for certain objects, for example teething rings. We all know that children under three put toys in their mouths. Allowing the sale of objects containing dangerous substances which children will put in their mouths goes completely against the precautionary approach. To justify this by saying that we label them is completely ridiculous. Children under three years of age cannot read and even children up to the age of six are not really capable of reading and even if they are, are they really competent to make decisions on this?

What is happening here is that the Commission and others are bowing to the pressures of industry. When we talk about the precautionary approach, Mr Blokland is wrong. We should be looking for materials and substances for children's toys where there is no doubt about safety whatsoever. In banning some of the objects the Commission recognises that these substances are dangerous. It is just not acceptable to turn a blind eye to the others because of pressure from industry. Which comes first: children's health or the vested interests of industry? We must take the precautionary approach.

  Sandbæk (EDD). – (DA) Mr President, it is high time that a total ban were introduced on phthalates in all toys for children under three years of age, as is already the case in Denmark. It is quite unacceptable that we can get into a situation in which we are going to reduce the level of safety for our children. I know that the Commission is very busy, but is it acceptable never to have time to attend to one’s own children? Now, I see that the Commissioner is not listening. Perhaps he does not have time to do that, either. Anyone who did go to the trouble of observing their children would quickly discover, as has already been said a number of times, that children suck away at anything they get their hands on, and not only on things that are intended to be put into their mouths. In Denmark, investigations have been carried out which show that the quality of the semen of young men appearing before army medical boards is 40% poorer than that of the 50 year-olds. It can no longer be taken for granted that people can have children, and suspicions are mounting where phthalates are concerned. It is only four months since the Commission sent out a communication of just under 30 pages concerning the precautionary principle. Is it not only right to put all the fine words into practice now about protecting health and the environment and to make use of this principle in an area we still know very little about? If the precautionary principle is not to be employed in respect of one of the most vulnerable consumer groups – our children – it is very difficult to imagine when, in fact, it is to be employed. I should like to know why the Commission only wants the six phthalates which have been investigated to be banned, instead of them all. I support Mr Arvidsson’s report which – unlike the Commission’s proposal, which is open to criticism – takes our children’s health seriously. I think still further action needs to be taken and a ban imposed with no restriction on age, but I hope at least that Amendment 20 will be adopted.

  Flemming (PPE-DE). – (DE) Mr President, ladies and gentlemen, it was a great pleasure for me to hear yesterday’s speech by the new President-in-Office of the Council, Jacques Chirac, in which he told us that we should pay more heed to the precautionary principle in environmental matters than we have until now. I do not know if Mr Chirac was familiar with the detail of this report, but in any case he gave us a very clear pointer on how to vote tomorrow.

All phthalates should be banned from plastic toys, not just six. After all, the Scientific Committee on Toxicity, Ecotoxicity and the Environment expressed certain reservations about the most commonly used phthalate, and had serious concerns about another. If we are to take our work at all seriously, then we should invoke the precautionary principle and ban the use of all phthalates as plasticisers.

Several of the 15 Member States – and there are 15 of us, not 14, Mr President – have applied this European precautionary principle concept, and that includes my own country, Austria. We brought in a ban on all plasticisers in the phthalate group in an order published in Federal Law Gazette II No 225 in 1998. I can only recommend this to the other Member States. And I do not mean that in a bilateral sense, but in the framework of the Community of Fifteen.

Let me make a second comment. If we were only to ban things when we had absolute scientific proof, then, my goodness, how ashamed we should all be now. How could we allow these six phthalates to be used as plasticisers in PVC without having scientific proof at that time that they were harmless? When our children’s health was at stake, we did not cry out for scientific proof. Let us try tomorrow to rectify our past mistakes.

  Hulthén (PSE). – (SV) Mr President, some speakers in the House today have said somewhat critically that this discussion is dominated by ‘emotions’. I think that it is a healthy sign in the House if it really is emotions that are setting the agenda for the discussion when children’s health is at stake. It is better for it to be emotions that govern this discussion than for it to be industry!

In our private lives, in our own homes, we take all the safety precautions we can in order to take care of our own children. We put safety locks on the doors, we put barriers in front of ovens etc. because we know that it is dangerous to be a child. I think that we should behave in the same way even when we are in this House. We have enough information to make the necessary decisions. It is not the children who must prove that toys are dangerous but the producers who must prove that they are in fact safe. This is a principle which should apply to all consumer protection, but particularly protection in relation to children.

Several speakers here have said that we know that these substances can be hazardous to health. Several Member States have already imposed a ban on phthalates in toys for children under the age of three. The precautionary principle must be applied! Hopefully, more nations and countries may also realise that this is necessary.

The Commission's proposal is neither sensible nor sufficient. I can only imagine a situation at a play school or a nursery school where the nursery teacher has to try to keep a check on which children are under and which are over three years of age as well as which children are allowed to put what in their mouths in accordance with all the experiments the Commission is trying to include. It is, of course, possible for the Commission to issue a special directive concerning what nursery school staff, or other adults, should do when they have more than one child to take care of. The only sensible solution is a ban, a total ban, when it comes to toys for children under three years of age.

Our aim must be to limit the occasions on which we subject ourselves and our children to dangerous chemicals. In this case it is taking an unnecessary risk to permit the use of chemical substances in toys which affect those that are smallest and most vulnerable in society.

  Bowis (PPE-DE). – Mr President, I congratulate my friend and colleague Mr Arvidsson on attempting to make sense of this draft directive. Of course, if young children are at risk then it is right to take action to remove that risk. The question on PVC softeners in young children's chewing toys is: Who says there is definitely a risk? The answer is no-one. Who says there could remotely be a risk? The answer is Mr Suresh Rastogi, a Danish researcher who used the phthalates he happened to have in his laboratory. His research has never been confirmed by peer review – indeed it was rejected by the Commission's own scientific committee, the CSTEE. Of the six named phthalates to be banned as a result, two are used for flooring and cosmetics but not for children's toys, one is not used at all, one is not made at all, one is not used because of fears it might be carcinogenic (though on 8 February it was totally cleared by the WHO) and that leaves one, DINP that is used to soften PVC in chewing rings and so on.

So, what does the CSTEE say about this? It said that there was no identifiable risk that could lead to a justified ban, that they were safe if they were used according to existing rules. The CSTEE met and decided on 25 November. On 22 November, three days earlier, the Commission had imposed a temporary ban, and we have to ask the Commission why. It is only justified under the general product safety directive if there is 'immediate and serious risk'. If that cannot be shown clearly, then the legality of the temporary ban can and should be questioned in this case. Indeed, the case was to be brought to court but was put on hold when the Commission agreed to work to produce validation systems for the test methods by the end of this year; so we can test these and test the alternatives. Why is the Commission rushing forward now? Why are the CSTEE minutes not published until April, and why has a statement critical of the Commission's misunderstanding or misinterpretation of the research still not been published?

Crying wolf damages the credibility of the precautionary principle. I ask the Commission to answer these questions today, and to get its internal scaremongers under control.

  Lund (PSE). – (DA) Mr President, I think there is every reason to thank both the Commission and Mr Arvidsson: the Commission because, in spite of criticism, it has come up with a proposal in this area, and Mr Arvidsson because I think that, with his report, we are obtaining a responsible framework for the use of phthalates in toys. Phthalates are, of course, a group of chemicals there is every possible reason for being on guard against, not only in connection with toys but also more generally. We know that they are suspected of possibly causing cancer, as well as disturbing the balance of hormones. I am therefore in favour of banning all phthalates in toys designed for the smallest children. If we were not to make use of the precautionary principle in this case, I find it hard to see when the principle might be applied at all. There are some who have argued that banning the use of phthalates in toys would have an adverse effect upon the plastics industry and upon employment in that industry. We also heard this argument in the Committee on the Environment, Public Health and Consumer Policy. I think the argument is completely unacceptable. If it were in fact to be accepted, then any restriction at all upon the use of dangerous chemicals, not merely in toys but also in foodstuffs and other products, would be prevented. I personally should like to see the ban we are now devising extended to cover toys designed for children of between three and six years of age. That would be the ideal situation, but I am inclined to vote in favour of the present proposed compromise whereby, as a first step, there should be a warning label on toys for that group. I also think it would be sensible to review the directive in no more than a couple of years’ time against the background of new scientific knowledge, including knowledge which can tell us for certain whether we should also intervene in the case of phthalates in products other than toys. I think that would be a sensible health policy.

  Jackson (PPE-DE). – As other colleagues have said, this is a thoroughly odd proposal. It is a very bad proposal and I hope that Mr Liikanen when he speaks will agree to suspend it. I do not think it should be withdrawn, I think it should be suspended.

I am concerned about the precedent that this proposal will set. The precautionary principle is very sensibly described in a recent Commission paper. There is an obvious danger of applying it too widely because it brings the European Union approach into disrepute. For example, a thousand people a year – no doubt some of them small children – die in England and Wales while falling downstairs. I do hope that does not mean that we are going to see a European Union regulation restricting us all to living in bungalows.

This proposal suggests that, on emotive subjects, the Commission is prepared to act on the basis of that emotion, without the kind of sensible assessment of risk that we need here, as we do for example on risks in foodstuffs. There has to be, even with the precautionary principle, a substantial link between the assessment of risk and action by the European Union. If not, then surely we do not even need a European Food Agency: we can just legislate on the basis of the precautionary principle.

It is the Commission's task to assess that risk. In this case I am not satisfied, as Mr Bowis has said, that the Commission really heeded the advice of its own advisers. When the chairman of the scientific committee came to us he most certainly did not convey to us any sense of the urgent need for action. The conclusion I draw from this is that in future, to avoid this kind of emotive reaction on an emotive subject, we should have a European Union chemicals agency, which will not be the creature of the Commission, to assess risks.

I am concerned that the science behind this proposal is incomplete. Yes, eight Member States have banned phthalates, but when the Commissioner replies, can he tell us whether those eight Member States have supplied the Commission with the scientific evidence that they based their ban on?

We also lack the evidence on migration limits, and that has been mentioned. That might have enabled the Commission to bring forward a proposal we could all agree with. What we therefore have is a thoroughly unsatisfactory proposal. Six phthalates are identified, and a system of warnings proposed that makes no sense. The Environment Committee has taken the logical step that the Commission avoided. If these are dangerous, then they should all be banned and warnings would then be unnecessary. The only problem with this is that the action is then quite disproportionate to the risk, and sets a thoroughly bad precedent for future European Union action in relation to the chemicals we use.

  Korhola (PPE-DE). – (FI) Mr President, the matter under discussion concerns children, and is therefore highly emotive. I know that very well, as a mother of three. Furthermore, the facts available to us are such that there are very good reasons why people might end up expressing exactly opposite points of view, all of which might be quite valid. The person making the decision should look at the issue calmly. Parliament has even shown a desire to ban all of the nearly 350 phthalates instead of the six proposed by the Commission. However, there is some kind of evidence of the possibility of danger in the case of only two phthalates. In addition, a warning was called for on products designed for 3 – 6 year olds, although the risk is likely to be associated with very small children, who like to put things in their mouths, in their discovery of the world. Reliable migration tests in respect of phthalates are not available, however.

It is excellent that the EU is active in this matter, as seven Member States have already introduced national regulations. What is even better is that the issue is being dealt with in a consistent way. In my opinion, Mr Arvidsson has made a rational and responsible contribution to the issue, and is applying the EU precautionary principle to this problem of toxicity properly.

The precautionary principle is a very important tool in environmental legislation. It should only be used, however, when there is scientific reason to suppose there is a real risk. This therefore concerns the existence of a scientifically demonstrable risk and the reaction to it, not the existence of a fear that might surround the substance. You can cry wolf once too often. Neither is it sufficiently justifiable to resort to the precautionary principle if, for example, some Member States have introduced national legislation in this area.

Parliament’s struggle to ensure the safety of children is very worthwhile in a Union that often just concentrates on hard values. Parliament will be doing the safety of children and everyone else a disservice, however, if it erodes the basis of the precautionary principle, the possibility of a real risk. That is what we are in danger of doing in the case of phthalates. What sort of repercussions will it have, for example, on food safety? It is at least as important today to make sure we preserve the precautionary principle for future needs as it is to take a decision on the banning of phthalates.

Finally, I would like to say that not one lobbyist from the chemical industry has come up to me. My concern relates solely to the vague application of the precautionary principle. If we want to ban PVC, let us do so freely and openly.

  Ayuso González (PPE-DE). – (ES) Mr President, this Commission proposal aims for a long-term ban on the use of phthalates in toys as an emergency measure.

Nevertheless, this emergency measure is already applied in several countries and is renewed every three months. Furthermore, the Commission proposal is the result of two opinions issued by the Scientific Committee on Toxicity, Ecotoxicity and the Environment.

It appears that the Commission has interpreted these opinions according to criteria which are no doubt very well intentioned, but which can at best be described as hasty, in light of the audience which took place in the Environment Committee with the scientists responsible for the opinions.

One of the premises for the application of the precautionary principle must be proportionality, which appears not to be the case here. In fact, DEHP, the phthalate so far considered the most dangerous to human health, has been declared by the international cancer research association not to be classifiable as a carcinogen in humans.

Furthermore, we should bear in mind that, in order to establish the toxicity of any product, the dose and the exposure time of that product must be defined. It is not sufficient that a product is intrinsically toxic. Even water can be fatal if consumed in an enormous enough quantity to cause drowning. A substance as toxic as heparin, a rat poison, turns out to be an effective anticoagulant which has saved many lives. Viruses and bacteria, in minimal doses, become vaccines.

Furthermore, there has been much less research on the substitutes for phthalates than on the phthalates themselves. If this ban is adopted – and we can support it, above all if there is a supposed risk to children – we will also support Amendments Nos 11, 13 and 24 because the Commission should amend this directive in the event that the Scientific Committee approves the use of methods of measurements for practical purposes.

  Matikainen-Kallström (PPE-DE). – (FI) Mr President, I would like to thank my colleague, Mr Arvidsson, for his excellent work. The debate on phthalates can only be fruitful if the arguments are based on scientific evidence, not populist theory. More research is needed so that the long-term effects on health of the different phthalates can be accounted for thoroughly. I would be very pleased if we could ban tobacco, which we have classified as dangerous. As legislators, we cannot use excessive force.

If a good deal of phthalates were banned with no clear justification, the toy industry would seek refuge in other PVC plastic softeners, about whose long-term effects there is even less knowledge than phthalates. Let us now just ban those which have been shown to be dangerous. As it is a matter of the most tender age group of all, the under three-year-olds, precaution is really relevant here. What the toy is used for cannot in itself be a determining factor in deciding which phthalates can be used and which cannot. The labelling of toys alone is not sufficiently safe. Everyone understands that small children put everything that is in reach in their mouths first, including dirt. In families where there are children of different ages, it is utterly impossible to sort toys for them to play with according to how suitable they are. It is best if we simply do not buy these products.

  Tannock (PPE-DE). – Mr President, this report requesting banning the use of phthalates in some soft PVC children's toys is flawed in many ways and rests on a dubious legal basis, given that the Chairman of the Scientific Committee for Toxicity, Eco-toxicity and the Environment, Professor Bridges, when he appeared before this Parliament's Committee on the Environment, Public Health and Consumer Policy on 23 May, stated: “It is hard to see how it” – the ban – “would come under a scientific interpretation of serious and immediate risk”, which is the required criterion for the ban imposed in December.

The Commission seems to have ignored its own scientific committee on the basis that some Member States are imposing their own ban. They are entirely within their rights, of course. Instead I support the development of tests to determine migration limits, and for these to be legislated on in due course, rather than a long-term ban as proposed. It is particularly galling that, of the six named phthalates to be banned, five are not even used for children's toys and only two are suspected on the basis of unreplicated tests on rats.

I too am concerned for the welfare of small children, but based on reasoning and science, not on emotions. This whole business contrasts markedly with my request for restrictions to be placed on the use of mobile phones by young children, in a formal question to the Commission under the same precautionary principle. This was, of course, refused even though it admitted there was no research evidence on the safety of child use of mobiles and there was some data for adult brain damage in the prolonged use of mobile telephones.

A recent UK government report has recommended restrictions to child use of mobiles as a developing brain is more sensitive to electromagnetic radiation. We have to face the fact that here in the West brain tumours have risen dramatically by some 100% over the last ten years for totally unknown reasons.

Therefore I call again on the Commission to use the precautionary principle consistently or admit that the whole thing is a politically motivated exercise with powerful commercial interests at play, undermining the precautionary principle and risking turning it into a farce.

  Helmer (PPE-DE). – Mr President, so much has gone wrong on the phthalates issue that it is difficult to know where to start. The Commission's temporary bans have no legal basis. The Commission may introduce an emergency ban where there is a clear and immediate danger, but no such danger exists with phthalates.

These materials have been in widespread use around the world for forty years, yet there is no evidence of any kind that any damage has ever been done to anyone. There was one test on rats in which massive quantities of phthalates appeared to cause problems, but researchers have been unable to replicate this test. We are dealing here with little more than media hysteria and ignorance. More people have died in Teddy Kennedy's car than have died of phthalates!

Compare and contrast our position on phthalates with our position on tobacco. Phthalates have never done any harm to anyone, yet we are banning them. Tobacco, we are told, kills half a million people each year in the European Union but do we ban it? No, we do not. We subsidise it with millions of euros. If we ban existing products, alternative products may be even more dangerous. As Mrs García-Orcoyen has pointed out, this has already happened, for example, with breast implants, where alternatives to silicon have proved to be more dangerous than the implants they replaced.

In trying to defend an untenable position the Commission has shamelessly sought to gag its own scientific advisers. It has bowdlerised their reports, it has pressured them into changing their positions. Honesty and transparency have been sacrificed to expedience. I and other colleagues wrote to Commission President Prodi on this point two months ago. I understand that his reply has been held for some time ‘awaiting signature’, presumably to ensure we should not see it before today's debate. Neither the temporary bans nor the permanent ban are justified by the evidence. Migration tests for phthalates are currently under development and will probably be available within months. We should wait until these tests are available and then, if we must, impose migration limits.

We hear far too much about the precautionary principle. To be meaningful the precautionary principle should be invoked only when there is a clear and demonstrable risk. If we continue to invoke it when there is no prime facie risk at all, we make both the precautionary principle and ourselves look ridiculous.

  Liikanen, Commission. – Mr President, firstly I would like to express my thanks to Members of Parliament for their keen interest in this file, especially to Mr Arvidsson, the rapporteur, for his continuing and constructive efforts to find a solution acceptable to all. The Commission has also made extensive efforts to find a solution to the phthalates' question.

Following discussions about the risks of PVC toys containing phthalates and the opinions of the Scientific Committee on Toxicology, Ecotoxicology and Environment, the Commission took two decisions simultaneously last autumn. One was a decision providing for an emergency temporary ban, renewable every three months. Second, the Commission decided to propose a directive to restrict the marketing and use of phthalates in soft PVC toys. Any interventions here actually concern the first decision, not necessarily this proposal for a directive.

The Commission's proposed directive consists of two elements. The first element is a ban on the use of six phthalates in toys intended to be put in the mouth of small children. The ban is based on the opinion of the Scientific Committee that toys containing certain phthalates pose a risk to children's health when held in the mouth for extensive periods of time. As it cannot be excluded that children can put other toys in their mouths, although not intended for that purpose, the second element of the proposal is a requirement for a warning label on such other toys that could be put into the mouth. The proposal provides not only for the protection of children's health, it also addresses an internal market issue.

At the present time, the internal market is fragmented, as more than half of the Member States are applying national bans going further than the Commission's emergency ban under the General Product Safety Directive. Mrs Jackson asked whether Member States have supplied scientific evidence to the Commission, the reply is: Not to my knowledge.

The proposed directive would harmonise the rules of Member States. I have noted in the discussions today that the Members of Parliament are divided on the Commission's proposal. Some consider it too strict, while others consider that it is not at all protective enough. The proposal is based on the various opinions of the Scientific Committee, and it is a considered application of the precautionary principle and consequently a proportionate measure. It introduces a ban for the products which potentially pose the highest risks, that is for the toys intended to put be in the mouth, and a less stringent measure – labelling – for the products not intended for mouthing but where a risk cannot be excluded.

The Commission is not able to accept those amendments of Parliament which would widen the scope of the proposed ban to cover plasticisers other than the six named phthalates, or to cover other toys than those intended to be put in the mouth. Nor is the Commission able to accept the amendments which would extend the scope to cover toys destined for older children. We think that these various proposals cannot be justified on the basis of the risks either defined in the opinions of the Scientific Committee or by the application of the precautionary principle.

Furthermore, the Commission cannot at this moment accept amendments which would introduce migration limits, but the Commission accepts the amendments which provide for this to be reviewed when testing methods have been approved. The Commission can accept in principle the amendments which would prohibit the use of perfumes in toys for children under three years containing the six phthalates. It can also accept amendments which would bring forward the review of the directive and widen the scope of that review.

To summarise our point of view, the Commission can accept, at least in principle, Amendment Nos 2, 4, 5, 9, 10, 11, 18, 24 and the Commission rejects Amendment Nos 1, 3, 6, 7, 8, 12, 13, 14, 15, 16, revised 17, 19, 20, 21, 22, 23 and 25. We wish to carry on the dialogue with Parliament and I am convinced that we can agree on a constructive solution.

  President. – Thank you, Commissioner.

The debate is closed.

The vote will take place tomorrow at 12 noon.

  President. – The next item is the recommendation for second reading of the report (A5-0193/2000), on behalf of the Committee on the Environment, Public Health and Consumer Policy, on the Common position adopted by the Council with a view to the adoption of a European Parliament and Council regulation establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Council Regulation (EC) No 820/97 (Rapporteur: Mr Papayannakis).

  Papayannakis (GUE/NGL), rapporteur. – (EL) Mr President, the regulation which we are now examining forms part of a series of interventions designed to rectify the situation inherited from the mad cow crisis and introduce a policy to prevent such situations from arising in the future and restore consumer confidence in beef products.

The regulation therefore introduces a system comprising various techniques for identifying animals in order to guarantee traceability, i.e. the possibility of tracing every piece of meat bought by the consumer to the animal from which it derives. It is already a highly technical and unwieldy system.

Provision is also made for a beef and beef product labelling system. The product label will give the consumer rudimentary but crucial and useful information on the meat being purchased.

This endeavour started four years ago. There has been a long delay, which we have frequently criticised. We all remember the battles with the other institutions of the Union last December when we suspected that they might postpone and delay application of the regulation yet again.

We now have a situation which I shall explain in simplified terms. After the first reading in Parliament, the Council approved a common position. This common position incorporates most of the amendments made by the European Parliament. The wording of the regulation has been simplified and its application made easier. The monitoring system has been strengthened. However, the common position does not include our amendment abolishing the reference on the compulsory label on the meat to the category of animal from which the meat derives. We abolished this information in order to simplify the label, give the consumer clearer information and reduce the cost to meat companies.

The argument for keeping the reference to the category of animal is that this reference responds to consumer needs, habits and preferences, at least in certain countries of the Union. The question, therefore, is do we wish to insist on amending the current wording of the regulation? This may take us into a conciliation procedure, thereby delaying application of the regulation and the European Parliament, let me remind you, is in favour of applying the regulation at the earliest possible date and has blamed and continues to blame the other institutions of the European Union for the intolerable delay. I refer to the amendment concerning the category of animal, not a second amendment referring to minced meat, because I do not think that it meets any particular need. Minced meat is, in any case, already connected to the animal from which it derives with the arrangements which we have in the regulation and the other matters are technical and production matters and we did well not to change the wording of the regulation.

I should now like to address the matter of the Committee on the Environment, for which I have the honour of acting as rapporteur. The Committee on the Environment voted by an adequate majority to insist that the text be amended. It approved this basic amendment abolishing the reference to the category of animal. Your rapporteur is not convinced of the need, usefulness or advisability of amending the text and feels obliged, to his chagrin, to recommend the opposite approach, i.e. that we refrain from adopting any amendments and accept the common position. I trust that the wisdom of the House will find the best and safest way of ensuring that this regulation is applied quickly and solve what I hope is a temporary difference of view between the rapporteur and his committee.

  Jackson (PPE-DE). – Mr President, on a point of order: as chairman of the Environment Committee I would just point out that the rapporteur's job is to present the report of the committee. If Mr Papayannakis wants to express a personal opinion, he should have the freedom to do so. What he cannot do is to confuse the two.

(Applause)

  Papayannakis (GUE/NGL), rapporteur. – (EL) Mr President, I fully concur with what the chairman of our committee has just said. I have presented the entire discussion and the entire dispute surrounding the regulation. In the last two lines I expressed my personal opinion, with a great deal of chagrin, so as not to have to take the floor again as a speaker. For the rest, I should like to assure our chairman that I have a great deal of respect for procedure, perhaps more than many other fellow members, both on this and other matters.

  Goodwill (PPE-DE). – Mr President, this legislation on the labelling of beef has two distinct aspects. Firstly it ensures traceability of beef products. Cases of food poisoning related to beef are rare, and more often than not can be attributed to storage and preparation in the home or catering outlet, rather than to the processors. Occasionally, however, there is a problem such as the E-coli outbreak in Scotland. In this instance labelling can enable the public to be alerted without inducing panic, and facilitate the tracing back of contaminated beef to the shop, slaughterhouse or farm where the problem started.

Secondly, labelling will identify the country or countries of origin of beef. This is not to assist xenophobic consumers who wish to reject all things foreign – although there is nothing wrong with the desire to support one's own farmers who are facing unprecedented economic pressures. The BSE crisis shone a spotlight on the possible health risks associated with beef. Some countries, like France, have a whole-herd slaughter policy which may reassure consumers, despite its lack of scientific basis and a risk of underreporting. The United Kingdom, on the other hand, which has a higher level of BSE incidence at the moment, removes all animals over 30 months from the food chain, as well as adopting a whole raft of other measures.

We could argue all day about which beef is the safest, but the fact is that once labelling is in place the consumer will be able to decide. There can be no justification for the continuation of the illegal French ban on British beef if it is clearly labelled. In fact those in France who have studied the subject in depth may well decide to buy British as the safest and tastiest option.

I will now comment on the amendments. The inclusion of category is unnecessary, costly and potentially confusing to consumers. Most housewives do not know the difference between a heifer and a steer. A bony Holstein steer would be in the same category as a champion Charolais but that prime animal's twin sister would be in a different category solely because of its sex. Clearly this is a ridiculous situation. The listing of category imposes costs on farmers and butchers, and at the same time would give consumers irrelevant or misleading information. It could also devalue some categories such as young bulls, as supermarkets rationalise the categories they stock. If France wants to continue with its scheme alone, then I would not want to stand in its way. This is a subsidiarity issue.

The amendment on Article 14 would prevent the confusing situation where minced beef – marketed for example, in Austria, Mr Fischler – which was derived from Polish animals imported live into Austria, could be labelled ‘prepared in Austria’. I am not sure that Austrian farmers would like that to happen. Without this amendment this potentially misleading suggestion could encourage more live imports, with obvious animal welfare implications.

We are working on a very tight timescale on this legislation, which is due to come into effect on 1 September. It would, therefore, be irresponsible of Parliament to adopt amendments which could not be accepted by the Council. There is no time for conciliation. I do not subscribe to the argument that Parliament should abdicate its constitutional right to improve this proposal because others have failed to initiate the legislative process in time. We now have a new French presidency – I do not know if anyone is there representing them – but I commend to the Council the amendments adopted by the Committee on the Environment with a large majority. Could I ask through you, Mr President, that the Council or, failing that, the Commissioner, makes a statement to Parliament? Do you think that you can secure an agreement, based on the five amendments adopted in committee, which will both respect the views of Parliament and deliver this legislation on time as the first major achievement of the French presidency?

  Whitehead (PSE). – Mr President, this proposal has a long history. I can understand why the rapporteur and Mr Papayannakis are weary of further controversy. However, we are almost at the end. As the rapporteur, he has quite properly had to tell the House that the Environment Committee voted by a substantial majority – I think 33 votes to 13 – in favour of the excision of the provisions relating to category of animal.

We have, on the committee, made a number of compromises, as regards both the timetable and the substance. The Committee has always kept a clear priority and has insisted upon it both to the Council and to the Commission: namely to have the sharpest, best-defined route of traceability on safety grounds that we can get for mince as well as other forms of beef. It was for this reason that it threw out at first reading the superfluous requirements about maturation times, much as chefs might have wanted them, and category of animal, which did nothing for traceability, added cost, and increased the disaffection of many Member States and of those who will have to implement this proposal.

As a result of that, we thought the matter was resolved. Indeed, as Mr Papayannakis has said, there have been counter-concessions from the Commission. Now, to our amazement, category of animal is back, and once again the Environment Committee has voted to remove it. The Commission knows why. It knows we cannot be bullied with threats that our timetable will slip. We have made concessions including a full month’s delay on the implementation of the second phase of this proposal already. We have done that with a good grace.

I urge the House to reaffirm its position at first reading and to exclude a form of compulsory category labelling which is entirely optional for Member States, – a form of labelling we should point out which we do not have in detail. We have to surrender to the secret harmonies of comitology if we are going to leave it to Commission to advance the precise definitions. We are not prepared to do that. We want traceability, we want surveillance, we want this proposal and we want it quickly. We want the best and most economic route to achieve it and Amendments Nos 3 and 5 do that. The various amendments on mince add to surveillance and traceability in the way we propose.

Conciliation, Mr Papayannakis, does not take very long. It consists of two words from the Commissioner this afternoon: ‘We accept.’ Let us hear them.

IN THE CHAIR: MR PROVAN
Vice-President

  Olsson (ELDR). – (SV) Mr President, there is no need to repeat what my colleagues Mr Goodwill and Mr Whitehead have said regarding the significant agreement that we have reached in the Committee on the Environment, Public Health and Consumer Policy. Allow me nevertheless to say that, after what has happened over the last few days when we have had further cases of BSE in France, it is clear that we still have a long way to go before we have a completely safe market as far as beef is concerned. There is only one way to regain the consumers' trust and that is by guaranteeing the quality of the products.

If we had an ideal world in the EU we would have had a foodstuffs authority which could have checked and ensured that everyone behaved according to the rules. Then the quality of the meat would have been to a large extent the same throughout the Union, and it would at least have maintained the EU standard everywhere. If we had also been able to ensure that everyone followed the rules regarding transportation, we would not need to run the risk of animals suffering during transit. Now, however, we need a system that involves stating where the animals come from, where they were born, where they were reared and where they were slaughtered. In this way the consumer is provided with information regarding how the animal may have fared and whether it may have been subjected to long journeys in transit.

Mr President, in conclusion, the most important thing is that we obtain a system which means that by looking at a label on the meat we can see where it comes from, and that it is then possible to trace back through the complete foodstuffs chain to the original producer. This is where we need to get to.

  Staes (Verts/ALE). – (NL) Mr President, ladies and gentlemen, my Group of the Greens/European Free Alliance are delighted with the Council’s common position. In our opinion, it marks a great step forward and an actual victory for this Parliament.

However, I would still like to point out the difference between traceability on the one hand and consumer confidence on the other. In my opinion, traceability is a technicality which can be identified and demonstrated thanks to the numerical code or bar code, but even consumers cannot possibly decipher or interpret these codes. What matters is that traceability is effective and efficient, not only to protect the consumer, but also the whole meat chain. After all, in the event of a crisis or scandal, traceability allows you to identify the problem straight away. In this way, we can prevent the entire meat industry from going down the drain because of one isolated criminal act or incident of carelessness.

Consumer confidence however, requires more than traceability. In my view, confidence in a product can be instilled by providing the consumer with reliable, but above all comprehensible information on the quality of the product they intend to buy. It seems to me that indicating the animal category can most definitely enhance consumer confidence, provided this is done in an understandable manner. I therefore regret that a large majority of the Committee on the Environment, Public Health and Consumer Protection rejected this component and eventually deleted the category.

At first reading, my Group also called for labelling the breed and region of origin of the animal involved. It saddens me that our request did not survive this hurdle. I would, however, urge the meat industry not to adopt a defensive stance in this dossier, but to be proactive instead. I believe that this will greatly benefit them and can also boost their returns.

  Fiebiger (GUE/NGL). – (DE) Mr President, the rules governing the voluntary labelling system provided for in the 1999 EU regulation expire on 31 August. The Council regulation before us must be adopted to avoid a legal vacuum arising. The agreement reached by the EU Agriculture Ministers on a Europe-wide beef labelling system was not such a major achievement. The work in the Committee on Agriculture and Rural Development was in fact much more demanding than the result before us. The content of all the measures approved is to be modified so that proof of meat’s origin is valid as a guarantee in order to apply environmental control procedures and if necessary impose sanctions.

The Community labelling system quite rightly aims to enhance transparency of production and marketing conditions for beef, and in particular to improve certainty as to its origin. Higher product costs cannot be ruled out, as the cost of applying the system will be passed on to the consumer.

The incalculable risk as regards food quality will not be dramatically reduced in this way, as the information provided is not primarily intended for the consumer. The last 16 years, since the first outbreak of mad cow disease, have demonstrated the importance of production for consumer confidence. The most effective measure is to strengthen production in the region of origin, which is more justifiable both environmentally and economically speaking.

  Souchet (UEN). – (FR) Mr President, we stressed at first reading what a complete anomaly it is that, 14 years after the emergence of BSE, the European Union still has no labelling system giving consumers the information they need.

Luckily, some Member States, including France since 1996, have taken unilateral initiatives and responsibility for designing national systems which have proven to be transparent, efficient and flexible and which should have been authenticated.

Having failed to do the same, the House has, at least, adopted some of their ideas, most of which, we were pleased to see, have been incorporated in the common position. The main thing is that consumers need to be able to make sense of it. Giving consumers information without confusing them means including important references explicitly, with secondary information accessible at the checkout via the barcode. An overloaded label would not promote food safety, it would just represent an additional cost to our SMEs and would really distort competition if there were no equivalent requirement for third country produce.

We also need to move quickly and, in the interest of producers and consumers alike, ensure that there are not any legal gaps. We therefore consider it important not to question the balance which we have reached, as our rapporteur has recommended, unless we want to set off on a long conciliation procedure. But not questioning the balance in the regulation also implies that we must be extremely vigilant when it comes to the implementing regulation; most importantly, the categories and list of products and sectors to which this applies must be clearly defined.

We need to show that we are logical, fair, flexible and that we know where European interests lie. We need to take account of all operators of every size, especially small and medium-sized operators, of whom there is an abundance in this sector, scattered throughout our countries, creating jobs and often using animals or cuts from different origins. We need to take great care not to impose unnecessary additional costs on these companies. For example, the reference to the category makes no sense for prepared products, especially kebabs, and we need to be flexible in our arrangements for meat for the catering trade, otherwise our restaurants will all go out and buy Brazilian meat.

So let us respect the balance in the regulation and introduce the necessary flexibility in the implementing regulation, so that we can preserve the interests of European producers and inform European consumers at one and the same time.

  Martinez (TDI). – (FR) Commissioner, ladies and gentlemen, once again, having done so on 16 December 1999, we are addressing the problem of identifying cattle and the problem of labelling. And all because, for the past 14 years and, officially, for the past 4 years, there has been a zoonosis, i.e. a disease which can be transmitted from cows, in this case British cows, to humans.

Not knowing how to cure this disease and not having had the will to prevent it when we could have done so from 1989 onwards, we are now reduced to bidding to reassure the consumer. Just as the Americans invented happy pills in the 1950s, we have invented consumer sedatives, i.e. labels. As soon as consumers are worried, anxious or afraid, we give them a label. We put labels on tobacco for them, we put labels on chocolate for them, and when they are upset because they no longer have any cocoa, we put labels on GMOs for them, not that this prevents genetically engineered soya, cotton and tomatoes from arriving by the boatload. We put labels on wine for them, not that this prevents bogus port from South Africa from landing in our ports and, finally, we put labels on beef for them!

I must admit, Commissioner Fischler, that you have slammed on all the brakes – if I may put it thus – both skilfully and in bad faith in order to delay labelling. But unable to delay it all the time, you decided to drown it and the draft regulation has overloaded the label to the point at which it is illegible. You have even arranged to add the approval numbers of the slaughterhouse and cutting plant, all of which is incomprehensible to the consumer, of course, who does not have the equipment to read the barcode. And in the case of kebabs, stews, sautés and ready meals, pieces of meat may come from the whole of France or the whole of Europe. So with a calf born in France, fattened in Italy and slaughtered in Ireland, the label will be a real geography lesson!

As a result, the meat wholesalers, the SMEs referred to by Mr Souchet, have denounced the increased costs and, at the same time, compulsory labelling has given us an insight into the curiosities of the meat market: 40% of beef derives from animals which have done the rounds of Europe; when you buy a steak at the butcher's, little do you know that it has travelled 3000 kilometres, taking in 4 countries on the way: the country in which it was born, the country in which it was raised, the country in which it was slaughtered and the country in which it is consumed. In my country, 1.5 million animals a year take a trip via Italy and Spain.

So in that case, what do you put on the label? The whole itinerary? Or just ‘Origin: European Union’? But if we put ‘Origin: European Union’, that conceals the fact that the meat may derive from an English cow, riddled from top to bottom with a prion courtesy of their gracious ultraliberal majesties, Adam Smith and David Ricardo.

So, today, we are offered a compromise. We are told that labels will state the origin of the animal and the category: is it a calf, a heifer, a cow or a bull? But what we want is a compromise which will make life easier for SMEs, for small companies, not that any of this need prevent us, Commissioner, fellow members, from taking brief stock.

It all started with milk quotas back in 1984. In order to increase their yield, the British stuffed their cows with bonemeal. To save money, they lowered the cooking temperature of the bonemeal and the prion survived and contaminated their cattle. Without free movement, it would have stopped there, but with no frontiers, they contaminated Portuguese and French cattle and we have known about it, even here, since 1986.

José Happart, a Socialist, and I have been warning of the risk of a zoonosis since 1989. But the Maastricht Treaty had to be ratified, so nothing was said and the truth was hidden. A committee of inquiry chaired by Mr Böge was set up, but the Amsterdam Treaty had to be ratified and nothing was said. The Commission was not held to account, Mr Fischler, and for 14 years, nothing was done. When five German Länder wanted to protect their consumers, you instituted infringement proceedings against them. The moral of this tale, quite apart from the labelling saga, is that it is the nation states that have protected their consumers. For its part, the Commission has protected free movement. Real subsidiarity means ensuring that consumers, with the help of their country, can each protect themselves.

The label only comes along when the fork is poised; but the best solution would be to label when the pitchfork is poised. The intermediate solution lies between fork and pitchfork, i.e. at the frontier, the only place where animals can be protected against unreasonable transport and consumers can be protected.

  Farage (EDD). – Mr President, yesterday we heard Mr Chirac set out his objectives for the French presidency. In his conclusion he said “Europe will be dynamic if we make it loved by those it serves”. This is the sweeping rhetoric that occupies the high ground but the detail of the debate today occupies the low ground. It is precisely this sort of detailed, petty interference that drives the people served by Europe to distraction. If anything was more calculated to make Europe unloved it is its determination to control every nook and cranny of our lives.

We all, I am sure, have letters saying that these regulations are impracticable, cumbersome, costly and far too complex. Above all, my correspondents tell me that they are fed up with the EU's mania for bombarding the consumer with information. Soon labels will no longer suffice. If we keep going at this rate, shopkeepers will have to issue owners' manuals with every pound of minced beef – not, of course, that we are allowed to use pounds any more.

Perhaps even Macdonald's might be forced to protest. I know from my short experience here that nothing I say and nothing that involves common sense will have the slightest impact because, like a mad elephant out of control, this legislation will crash on regardless.

I will make a prediction. When this legislation finally goes through we will hear paeans of self-congratulation. Everybody involved will tell themselves how jolly hard they worked. Well, they may be pleased but they certainly will not be loved by the people of Europe. Mr Chirac is going to be disappointed. The people are despairing.

  Raschhofer (NI). – (DE) Mr President, ladies and gentlemen, some of the amendments tabled water down the substance and the objective of the Council’s proposal for a regulation on beef labelling. The argument being presented, as we have heard, is that we should not ask too much of consumers. An attempt is being made then to withhold information on the grounds that consumers are ostensibly stupid. To my mind, that is the wrong approach, and we should assume that consumers have a good grasp of things. We should provide consumers with information about the origin of the beef, offer them certainty and take consumer protection seriously.

The implementing provisions for this regulation are being enacted under the committee procedure. That means that tomorrow we will have to vote on a legal text whose precise content is unknown. Even the Commission cannot tell us exactly what form these implementing provisions will take. I regard this as a very unfortunate procedure, which demonstrates the democratic deficit in the Community decision-making process.

  Roth-Behrendt (PSE). – (DE) Mr President, ladies and gentlemen, may I remind you that we have been talking about beef labelling since 1997. At that time, we fought manfully – and womanfully! – against the Council, shoulder to shoulder with the Commission. It could be exactly the same again today. I remember it well – things were just as heated as in the BSE days. But we tried this here in Parliament ten years ago, and that is why I want to clearly remind some of you again that labelling has nothing to do with the safety of a product.

There are two very different issues here. One is the safety of a product, and the only products we should allow on the European market are safe products and those that involve no risk for consumers. The other issue is consumer information and the consumer’s right to choose. You can only exercise your freedom of choice if you are well informed. This applies to the origin of tomatoes just as much as it does to preservatives or colouring agents in food, and it also applies to which beef or meat products in general I would like to buy, because I am sure you will not be surprised to hear that I would of course like to go further. I would like to see labelling of all meat products and not just beef products. I am sure that Mr Fischler will agree with me on this.

I can understand Mr Papayannakis, our rapporteur, when he says that this House has pressed for this legislation to come into force. And when he says that we in this House have brought forward the date it is to come into force. And that now, if we are to maintain our credibility, we must strive to enforce this legislation as quickly as possible. He is quite right! I understand that, but I nevertheless voted for the amendments in committee and will do the same again in this Chamber tomorrow.

One thing is certain: I do not intend to be held hostage by the Council. If the Council, in its infinite wisdom, which is often a mystery to me, believes that it has to amend the common position so that it is not the same as the text debated at first reading and the text Parliament approved with the Commission’s agreement, and if the Council therefore makes a decision at the initiative of one Member State and with the somewhat reluctant agreement of other Member States, than that really is something new for us!

The categories of animal added are also something new for us. I might even have been prepared to say, fine, so be it. But I would like to know just what these categories are. So my attitude towards the Commission, which has otherwise become positively affectionate in recent years, is rather more critical in this respect. I would have liked to know what categories you have in mind, and I might then still have been willing to say ‘OK’. But I am not going to play the dangerous game of saying that I agree to the categories and then find out in about six months’ time that categories have been adopted under the committee procedure that make me shake my head in disbelief.

That is why tomorrow, in common I hope with the majority of this House, I will be voting – as I did in the Committee on the Environment, Public Health and Consumer Protection – to delete these categories. As Mr Whitehead said, it need not take long. We do not need a Conciliation Committee – the Council and the Commission can simply accept Parliament’s amendments, and then the job is done.

  Attwooll (ELDR). – Mr President, Commissioner, in speaking previously to this House I have pointed out that there is a tension in the proposed regulation between ensuring traceability for public health purposes and providing useful consumer information. I am grateful for recent assurances from Commissioner Byrne that the new European Food Agency will consider how such information can best be provided.

Making it compulsory to include the category of animal on the label is not justified on public health grounds, nor is it obvious why it should be obligatory for the consumer to have this information. The Environment Committee's amendment makes it clear that it could be provided under the voluntary scheme where there is a demand. Further, if the labelling scheme in relation to category were to be implemented, as the Commission has earlier suggested, it could add 8 to 10% to production costs. In my own country this would mean GBP 45 – 55 or EUR 70 – 90 per animal without any benefit in return and, as Mr Goodwill has already said, the scheme could have the effect of reducing the market price of certain categories of cattle, particularly of young bulls. I very much hope that Parliament will follow the Environment Committee's lead in removing category from the compulsory scheme and that the Commission and Council too will agree not to impose this additional unnecessary burden on producers and consumers alike.

  Hudghton (Verts/ALE). – In previous debates here I have supported the principle of having a clear set of rules for appropriate labelling information on beef and beef products. My belief is still that our beef production industry, as well as the consumer, has everything to gain from the customer confidence which a sensible compulsory labelling scheme can provide.

Of course, we must have clear information permitting full traceability from farm to plate. There is no doubt or controversy about that, but controversy has surrounded the proposal that category of animal be included. In judging the value of label information, I believe that its relevance to food safety must be foremost in our minds. In a recent exchange of views within our political Group here in Strasbourg, Commissioner Byrne and his cabinet officials stated quite clearly that there was no food safety benefit arising from the categorisation proposal. I cannot support its inclusion.

In relation to country or Member State of origin, could I ask Commissioner Fischler to clarify whether, apart from the compulsory information that we are discussing here, information regarding the area of origin, such as Scotland or the Orkney Islands for example, can be displayed prominently on a voluntary basis?

  Berlato (UEN). – (IT) Mr President, Commissioner Fischler, ladies and gentlemen, in addition to the many negative effects of mad cow disease, one positive effect is the fact that it has induced the European Union and the Member States to adopt more vigilant, detailed legislation to ensure food safety and protect honest producers in the strategically important beef sector.

It is a pity that it takes scandals such as this or the dioxins in chickens issue to speed up safeguard and prevention initiatives, but better late than never!

It has become apparent that the serious difficulties experienced by the entire sector during the periods of greatest crisis caused by mad cow disease were, apart from the direct effects of the disease, primarily due to the lack of confidence between consumers and beef producers and sellers which ensued. The situation was not improved by the dissemination of false information.

We have learned from this experience that it is essential to promote all initiatives which consolidate a stable relationship of confidence between consumers and producers and those who sell food products in general.

Although the protection of consumer health is by far the most important criterion, it cannot be our sole objective in establishing an efficient system for the identification and registration of bovine animals during the production and fattening stage and a labelling system based on objective criteria during the marketing stage. It is important to understand that all initiatives which protect honest European Community producers – and they are without a doubt the great majority of producers – need to be promoted. All the Community producers are calling for well-defined but not oppressive regulations. In other words, we must guard against suffocating the healthy part of our agricultural sector with bureaucracy, which is frequently much more damaging than any disease.

I will conclude by pointing out that there is no point in adopting stringent legislation if it does not provide an efficient supervision system which rewards honest producers and penalises those whose improper conduct jeopardises the future of an entire sector which is of primary importance for the European economy.

  Schnellhardt (PPE-DE). – (DE) Mr President, ladies and gentlemen, beef labelling was actually conceived as a quick way of regaining the public’s confidence in beef after a string of crises and scandals. But it has since turned into an almost unending saga. Whenever the regulation might cease to apply, Parliament is called upon to act quickly to prevent a legal vacuum arising. There have been two deadlines, first December 1999 and now the present deadline of 31 August 2000.

Commissioner, given the time periods involved, you cannot seriously call on Parliament not to adopt any amendments. We want a workable system, and we have always said that. As the proposal before us does not guarantee that, it is not just our right, it is our duty as Members of the European Parliament to adopt amendments.

When I then hear that in Italy, for example, the technical requirements for this system are not even in place yet, and that the same applies in other countries, then I wonder why there is all this rush if the system has not been implemented anyway. I would welcome some comments from the Commissioner on that point.

The Commission’s proposal will lead to our having to deal with the system again before long. The Commission perhaps reacted somewhat hastily in the wake of the BSE crisis, and now we are into brinkmanship again. I cannot help feeling that the 2003 deadline that was thought up in December 1998 is now occupying the Commission’s thought processes again. I believe that you can achieve implementation of this regulation by 1 September if you accept our amendments. You will not achieve it if you still insist on including category of animal, which we have already touched upon several times today. That has nothing to do with information for the public, it is just a quality issue, and does not belong in this regulation. Commissioner, please accept the amendments and we will then have something workable in place by 1 September.

  Kindermann (PSE). – (DE) Mr President, many aspects of the common position we have here reflect Parliament’s position at first reading, and this demonstrates the Council’s willingness to work with Parliament in order to achieve a positive and rapid outcome in this area, which is so important for European consumers. I would have liked to simply approve the common position without further ado. However, I find one point that has already been mentioned several times enormously difficult – category of animal. This comes under compulsory labelling, where it has no place to be. Category of animal really does not assist the regulation’s objective of guaranteeing meat traceability. I therefore support the adoption of Amendments Nos 1, 2, 3 and 5.

The Council will now have to remove the provisions relating to category of animal at its meeting in mid-July if it does not want to risk the regulation not coming into force on 1 September this year. Secondly, there is Amendment No 4 on minced beef, which relates to the last part of Article 14, first paragraph, beginning “and origin”. I am afraid I cannot follow this either. In my view, this amendment lacks precision. How is ‘origin’ to be defined here? Does it refer to where the animal was born or where it was fattened, or both, and who is responsible for labelling here? Exactly how will origin be indicated? None of this is clearly worded and I see a risk that the Council will refuse point blank to accept this amendment, so that we will end up with a conciliation procedure, which will in turn further delay the entry into force of the regulation. This is not in the interests of consumers, and I therefore call on the House to reject Amendments Nos 4 and 6.

  Pesälä (ELDR). – (FI) Mr President, Commissioner, the Council has adopted the European Parliament’s amendments on the labelling of beef products. There has been fruitful interinstitutional cooperation, and the codecision procedure has shown its strength. The result is a victory for consumers, and not just them, but the whole beef sector chain: the producers, the processing industry and the organisations representing the beef trade. This regulation will make it possible to trace the origin of meat, and even according to a reasonable timetable. After EU enlargement this sort of system will be vital for consumers and producers. To tell the truth, we could not have waited any longer for this system to be put into practice. Now it depends on the Member States whether the practice of labelling is adopted in the hoped for manner. I also hope consumer organisations will give their strong support to the implementation of the provisions in practice.

  Hyland (UEN). – Mr President, the introduction of the EU beef labelling is a further step on the road to traceability and in the present climate a prerequisite for consumer protection and public health.

As I have said on many previous occasions in this House, farmers are unfortunately the innocent victims of circumstances beyond their control. I come from a country which exports over 90% of its entire beef production and quality and consumer satisfaction have always been a priority. We must take steps to ensure that labelling does not result in a renationalisation of the food sector. Already there is some evidence that this is happening. I welcome the Commission's assurance that any distortion of trade which might arise as a result of these labelling measures will be dealt with.

Labelling, however, needs to be sensible. Over-description would only lead to confusion and is unnecessary. The consumer must be able to see at a glance the certificate of origin which is the assurance of product safety.

  Oomen-Ruijten (PPE-DE). – (NL) Mr President, that went quicker than I thought. The BSE crisis, and later on the dioxin crisis, focused our attention on the safety of our food. In addition, the European consumer has become more critical and outspoken over the past decades. Politicians need to take this into consideration. After all, there are huge interests at stake: the certainty and safety of our primary products, and hence consumer confidence. In the coming months, too, we should therefore be looking carefully at the White Paper on food safety. Today’s regulations are a direct result of the recommendations of the BSE inquiry at the time, in which integral chain management, i.e. the ‘from-stable-to-stable’ principle, and with it the ultimate traceability of our primary raw materials, was established.

The Commission proposal within the context of labelling beef follows on from temporary legislation dating back to 1997. It aims to introduce reliable and transparent identification and registration regulations for beef, as well as labelling for beef. This should also enhance consumer confidence in the quality of beef and benefit market stability. Meat should remain traceable, whether at the production or sales stage.

An important idea which the Council has adopted from the EP in its common position is to bring forward the date when the labelling regulation comes into effect. The label should contain information on the animal’s region of origin, where it is born, fattened up and slaughtered. What is new is that the Council now also considers it important to mention the animal category from which the meat originates. I admit that making this compulsory could be considered normal from the point of view of the consumer, but this is not yet the case in the Netherlands, where this suggestion is met with a great deal of protest. I do not call for compulsory labelling, but for labelling on a voluntary basis. In this context, I am convinced that butchers can meet all the provisions of this proposal in a very simple manner, for example by placing a sign in their shops.

  Sacconi (PSE). – (IT) Mr President, with tomorrow’s vote, Parliament will take an initial step towards defining a legislative framework intended to win back consumer confidence in the quality of foodstuffs on the market in the European Union. This goal can only be achieved through a wider strategy such as that outlined in the White Paper on food safety, and we too must make every effort to speed up its practical implementation.

This directive will ensure not only that the meat on our tables can be traced back to its origins but also that the consumer is provided with clear, essential information. The mandatory labelling to be affixed to packaging will provide consumers with the all the information they need in order to be able to make an informed decision about what to buy: therefore, a limited amount of clear, effective information needs to be included if we are to help consumers and not make their life more complicated. For this reason and because of the considerable opposition which appears to have arisen to the listing of categories, I have decided to support the amendments put forward by the Committee on the Environment, Public Health and Consumer Policy.

In the context of this debate, I feel that I must stress once again the extremely sensitive nature of this proposal, and call upon all the Community institutions to act responsibly in order to make it operative as soon as possible and avoid legal gaps.

Parliament has done its part and will continue to do so. Let the Commission and the Council do theirs! Mr Whitehead has already pointed them in the right direction.

  Busk (ELDR). – (DA) Mr President, Commissioner, guaranteeing public health is the objective of one of today’s most important areas of legislation. This is something to which this regulation will contribute, making traceability from farm to plate as effective as possible, as well as compulsory. At the same time, European consumers have the right to clear and easily understandable information, so that they know where the meat they are eating comes from. I am certain that the Council and Parliament can reach a good compromise on minced meat, in so far as Parliament adopts Amendments 4 and 6 which guarantee consumers information about where the minced meat comes from and when it was produced. I would ask all colleagues to vote in favour of Amendment 6 which Karl Erik Olsson and I have tabled with a view to making it compulsory for minced meat to bear a label stating the date when it was produced. Minced meat involves a much greater bacteriological risk for consumers than larger pieces of beef, so the production date is a very important piece of information. It is good that categories have been removed. The Council’s common position, together with Parliament’s six amendments, constitute legislation of benefit to agriculture and consumers in the EU.

  Keppelhoff-Wiechert (PPE-DE). – (DE) Mr President, Commissioner, it is not the label that counts. We all understand that expression, but what counts here really is the label – and I am not talking about haute couture! Beef labelling is an important stage in the process of rebuilding consumer confidence. I note that despite the protracted preliminary discussions not all EU Member States have recorded every last animal on their computers. Yet the compulsory labelling system is supposed to take force in all Member States as from 1 September 2000, thus finally replacing the voluntary system.

The question for consumers will be this: what information can we expect? Where was the animal born? In the EU, in a third country, at which farm, in what region? What does country of origin mean, or perhaps even source country? And then there is the debate about categories. Should I buy a sucking calf, a normal calf or a heifer today? As I come from a farming background myself and there is nothing I more earnestly want for farmers than stable prices, I believe that we should create legal bases that are underpinned by consensus. We should not make the legislation unnecessarily complicated. We are all concerned about public health and consumer protection.

So as from 1 September 2000 we will have labelling, and as from 1 January 2002 it will be extremely comprehensive. The beef chain from producer to consumer can be very long, and the supply chains in Member States vary widely. Yet I do not think that cattle headed for the slaughterhouse are really such great tourists. However, strict criteria must also apply to imports from third countries. By way of conclusion, let me say that I once learnt that top athletes’ nutrition programmes should include meat. Our top athletes’ eating habits have a great impact on health and performance. I hope that we can rebuild confidence and that people will once more become great meat-eaters.

  Korhola (PPE-DE). – (FI) Mr President, the report by Mr Papayannakis we are discussing is an important tool to improve consumer protection and increase consumer confidence in food in Europe. The committee took an important decision in rejecting the category of animal labelling proposal. The category of animal – heifer, cow, bull, bullock, young bull, calf – will not provide the consumer with any extra information, as the differences within categories might be greater than those between them. On the other hand, the compulsory labelling of category would increase the production costs of fresh meat products by what could be a large percentage figure, which, of course, would be passed on to the consumer. On this there is agreement between beef producers, the meat processing industry, retailers and consumer organisations. And now the Committee on the Environment, Public Health and Consumer Policy has arrived at the same conclusion. Category labelling must not be compulsory, but this can happen on a national basis, as, for example, has been the wish in France. Perhaps in a country the size of France there is so much beef that it is possible to label products rationally. That is not the case in my country.

Another thorny problem relating to the proposal is labelling showing the origin of the meat. The proposal is for the labelling system to be introduced in two stages. In the first stage there would just be slaughter information. In cases where the animal was bred and reared in another country, the information might be totally misleading for the consumer, and in countries where stage two is now in force the situation as it is could only deteriorate. For example, Finland’s national beef labelling system also now includes information on where the animal was bred and reared. It is therefore to be hoped that, on the basis of the current defining implementation regulation, the beef sector could be flexible enough to come round to establishing the two-stage labelling system.

The basis of this discussion is consumer protection, especially with regard to the BSE crisis we lived through in Europe. The matter being discussed is an important tool, but the compulsory labelling of beef products and the gradual switch to labels showing the origin of the meat do not serve this purpose.

  Klaß (PPE-DE). – Mr President, Commissioner, ladies and gentlemen, I am sure there are still many more questions. You can of course always revisit everything, but I think that we now need labelling of beef and beef products as a matter of urgency, by which I mean as from September this year and not as from January next year. We have discussed this at length in committee. As regards guarantees of origin, great progress has already been made as a result of improved transparency, and it was possible to make a positive impact. There are many regional programmes, for example in my home region of Rheinland-Pfalz, and these demonstrate that this is feasible and have led the way here. It is not so long since farmers and meat-processing plants were threatened with annihilation, and it has only been through a combination of comprehensive information and strategically sound and effective marketing measures that it has been possible to rebuild consumer confidence to some extent. We must not allow this success to be undermined by deferring the introduction of labelling, which would be a step backwards.

Designation of origin is particularly important for consumers. The preparatory work our farmers have done on labelling has been good and clear. We have made good progress with beef labelling in Germany. In this context I would like to ask you, Commissioner, what progress the other Member States have made. We certainly need to keep an eye on products imported from third countries. These should be clearly recognisable as such when they are sold. But what about those sometimes excessively detailed descriptions? They are confusing. For example, how many consumers know what a heifer is, who would be interested in that, and why is it important?

The Commission has not yet clearly presented its proposals on category here, but I think it will have to adopt a simple and clear approach. Descriptions such as ‘veal’ or ‘beef’ are sufficient, and anyone who wants more information should also be able to obtain it.

  Doyle (PPE-DE). – Mr President, I fully subscribe to and take as read what has been said so far in relation to the identification and traceability of beef and all beef products. Yesterday the Committee on the Environment voted by 37 votes to 13 for the five amendments before us today – a clear, decisive vote right across this House from colleagues in all different groups.

I would particularly like to mention the category issue here which I suppose effectively means getting back to the first reading position on this. I was incensed when, as late as yesterday, the Commission could not advise us as to exactly what would be involved in 'category'. We are effectively being asked to buy the bovine equivalent of a pig in a poke. This is not acceptable. I would say to the Commissioner, please accept our amendments in relation to this area. There is no need to confuse and mislead the consumers of Europe on a compulsory basis, because the voluntary labelling system which will be driven by competition, pride in product and consumer demand will add anything that a compulsory category label might otherwise require.

I am still confused about the situation in relation to mince. If we are now going to insist on country of origin for mince, why cannot we have country of origin for the larger pieces of beef from 1 September, or whenever? I am not quite sure where we stand on that but we will be advised.

The French situation is amazing. Only yesterday the services of the French Prime Minister wrote to every French MEP in this House – all 87 of them across the House – telling them to vote against all the amendments. What does that tell us about political interference from the top in France? What is that saying about French beef production and protectionism? What is it saying about the Anglo-French beef issue? If the French want to label beef they can do so voluntarily. At the moment they only label 50% of their beef, yet they want to insist on compulsory labelling under category for all of us. I do not understand the political interference and the real message from France, and we should get to the bottom of it.

  Ayuso González (PPE-DE). – (ES) Mr President, Commissioner, this proposed regulation and derogation of Regulation (EC) No 820/97 has a first heading, which nobody is talking about, which provides for a system of identification and registration for beef based on earmarks, passports and computerised support which guarantee its traceability.

The second heading establishes an obligatory system of labelling of meat and two stages for its implementation.

In the voluntary period for application of Regulation (EC) No 820/97, 36 specifications have been approved in Spain in order to put it into practice, and I can assure you that this has given the consumer confidence and contributed to the recuperation of consumption, which dropped considerably as a result of mad cow disease.

I am therefore pleased that this Regulation has been adopted. However, with regard to the content of the labelling – which let us not forget is directed at the consumer – it must be said that it is frankly excessive and that indications are proposed which provide little in the way of food safety and traceability, since this is guaranteed by the measures proposed in the first heading and, of course, is not what most matters to the consumer.

The indication of categories is not necessary at all. Furthermore, this indication of categories may lead to confusion and problems, with regard to the age of slaughter of animals and the protected geographical indications, registered in accordance with Regulation (EC) No 2081/92, because in this case it is obligatory to introduce categories, and the definitions do not coincide with those which are proposed now. Unless an agreement is reached – a consensus – in the management committee on the 14th.

What matters most to consumers, particularly in the light of the recent food crises, is to know where the animal was born and where and how it has been fed throughout its life. Naturally, the registration number of the slaughterhouse offers them little or nothing in terms of the information they require. Furthermore, this Regulation lays down obligatory minimum requirements and there is always the possibility of voluntary optional labelling.

  Bushill-Matthews (PPE-DE). – Mr President, I would also like to concentrate on this issue of category of animal labelling.

The original proposal called for labelling as steer, heifer or young bull, which would be sexual discrimination. But recently I was staggered when the Commission – just as Mrs Doyle has said – reported it had not finally decided on the precise terminology! This effectively means they are asking Parliament to give them a blank cheque to determine what category of animal means after we have voted on whether or not to include it. This is very sloppy, very amateur and unacceptable as a way to treat this House. It is not even a food safety issue. It is extra bureaucracy and red tape – which is probably why my own government in the UK has supported it. But it is not in the interests of consumers, nor of the industry and, specifically, it is not in the interest of small abattoirs which would have the greatest difficulty in dealing with it.

I therefore ask the House to support the deletion of category of animal as a compulsory labelling requirement, just as it did on the first reading. If countries wish to include it voluntarily that is a matter for them. Assuming we vote for deletion, I would ask the Commission to take note that we shall not be moved on this issue. So they know what they have to do. Finally I ask the Commission and the Council to take note that we welcome the principle of labelling beef by country of origin and that we call on the French presidency to set an example by making an immediate commitment to accept all beef so labelled from all EU countries and let the consumer decide.