Opening this morning's debate on three proposals designed to open up Europe's energy markets, especially in electricity and gas, Claude TURMES (Greens/EFA, L) explained that this process was designed to remove barriers to new entrants to the market and introduce a form of regulated access. The proposals, he said, were very much a test case in measuring how successful the EU would be in introducing a liberalised market in electricity. Separating access or unbundling formed a key element of the proposal, in the sense of removing cross-subsidies and introducing a fair system. He did not underestimate the challenge of taking on powerful electricity companies such as EDF in France. Similarly, he added, there was at present little competition in other countries, such as Spain and Germany, which were dominated by large suppliers. The situation varied considerably across the different national markets with considerable liberalisation in countries such as the UK. But Mr Turmes warned that if the present conditions prevailed much longer, then there would be little prospect of genuine competition since the large companies operating in protected domestic markets would be able to carry on buying out other companies in liberalised markets. His other concern was to see full disclosure of information as happened in countries such as the USA and Australia. Turning to French colleagues, he acknowledged the need for a commitment to maintaining a universal public service, but added that this should be without discrimination at European level.

It was then the turn of Bernhard RAPKAY (PES, D), the joint reporter on this Commission proposal, to emphasise that the aim of increased liberalisation was to bring about increased efficiency in the gas and electricity markets with benefits for SMEs. There should be fair access for new participants to the market operating under the same rules and greater transparency. For this to come about, there was a need for a single legal framework, although he acknowledged there were different structures in the Member States with, on the one hand, as many as 700 companies operating in one national market against another dominated by one large company. Nevertheless, bearing in mind the need to take account of these different national situations, he did feel there was a need for binding regulations, closely monitored with strict penalties applying for infringements. He did, however, point out that it was necessary to take into account the different conditions applying to gas, where the EU relied heavily on imports.

Dealing with the related issue of conditions of access for cross-border electricity networks, Peter Michael MOMBAUR (EPP-ED, D) emphasised the need to set up a uniform system for transit across the EU enforced through a European regulation. Furthermore, he added, there was a need to set up a compensation fund for operators providing supplies to the networks, to be operated in a simple and transparent way and reflecting true costs. This should be fair to producers and consumers. As to the amendments, the important question was to introduce an effective procedure for implementing measures. While he was not in favour of challenging the Commission over comitology procedure on this proposal, he did feel there would need to be a review after four years to see whether the regulatory process was working. Turning to the question of access to the gas and electricity markets, as far as he was concerned, there was no doubt that countries restricting access to their own domestic markets were in breach of European treaties.

Speaking on behalf of the Economic Committee, Ioanis MARINOS (EPP-ED, GR) endorsed the moves to open up the markets, adding that monopolies could just be found in France. The present situation, he said, was an obstacle to true competition and price reductions for energy bills. Governments subsidising prices could achieve the same social goals through tax cuts, he argued.

Eduard BEYSEN (ELDR, B), presenting the views of the Legal Committee on cross-border electricity networks, while supporting the need for a new regulatory framework, did underline the fact that this approach would involve collecting sensitive information from electricity companies, hence the need for respecting confidentiality.

Looking to the future, Hans KRONBERGER (IND, A) was concerned to take account of renewable energy and the full costs of nuclear and fossil energy, when formulating policy.

It was then the turn of W.G. VAN VELZEN (EPP-ED, NL) to endorse the principle of what he felt was this second stage of opening up the energy markets and he appealed for support from EU leaders meeting at the Barcelona Summit. It was, he said, vital to create a level playing field and the role of national regulators would be a key factor in ensuring this. As he put it, the present situation and reciprocity had just not worked. While he could generally agree with the approach favoured by Mr Turmes, he did feel that some of the proposed amendments were too bureaucratic.

For the PES, Rolf LINKOHR (D), pointed to the fact that opening up the energy market was not one of the original aims of the internal market and explained that this was on account of the fact that policy makers did not doubt the number of complications to be overcome. Nevertheless, he added, if moves towards liberalisation were not undertaken, then the European Court of Justice would do the job of legislators. He was, as he put it, in favour of a regulated approach to liberalisation with the conditions for access clearly laid down. And he added, this new approach would enable the EU to fulfil its environmental commitments entered into at Kyoto.

For the GUE/NGL, Philippe HERZOG (F), on the other hand, felt that the balance was now swinging too far in the direction of the free market to the detriment of public service commitments and guarantees over security of supply. He was, therefore, opposed to the Commission's proposals, adding that he supported amendments designed to bring about, what he felt, would be a fairer solution. He did, however, support transparency but warned that complete liberalisation could lead to price increases.

For the UEN, Pat the Cope GALLAGHER (Connacht/Ulster), in supporting liberalisation, said that Ireland was well on the way to introducing its own model for achieving this aim through a separation of ownership from production. This approach, he contended, worked well for a small state.

While expressing some concern that too hasty a timetable could lead to unsatisfactory legislation, Giles Bryan CHICHESTER (EPP-ED, South West) expressed his strong support for liberalisation and deplored the fact that French companies such as the EDF could buy up energy operators in the UK without there being reciprocal access. He supported a step by step approach but did feel that some of the amendments being proposed were too detailed and unnecessary.
Gordon ADAM (PES, North East) too strongly deplored the present situation that allowed a French company to sell energy to the UK without there being similar reciprocity. He recognised the need for the regulated approach to ensure stability and guarantee fair access for third parties.

For the Liberals, Nick CLEGG (East Midlands) deplored the absence from today's debate of government leaders or representatives from Council since, as he put it, a mere rubber stamp of Barcelona would not be an indication of how the eventual legislation would be framed. This would take two readings involving Parliament and it was vital to get the details right. He appealed for support from the EPP for amendments relating to such issues as nuclear decommissioning.

Eryl McNALLY (PES, Eastern) in supporting liberalisation emphasised that this should not result in a free for all but 'a controlled competitive market bringing about benefits for consumers through lower prices'. It was also necessary to introduce choice for consumers through the provision of more information She emphasised the importance of a public service obligation, which should include research and development, before looking to the future and underlining the importance of related proposals in the energy field dealing with such issues as renewables, energy efficiency and combined heat and power.

Replying to the debate, Commissioner Loyola de PALACIO underlined the importance of this issue for EU leaders meeting in Barcelona in being able to show their commitment to a liberalisation process which would bring benefits to the economy and, at the same time, ensure basic social rights for citizens. Commission studies had shown that there were distortions of competition in the different national energy markets and the goal now was to achieve steady progress in opening up the markets by 2005. She said the Commission would be coming up with further proposals to improve environmental protection, energy efficiency and to take account of renewables. While she welcomed Parliament's support, she could not go along with all the amendments, including for legal reasons those relating to comitology or implementing measures. She was, however, prepared to give a commitment to ensure transparency and reporting to Parliament.

Vote

The proposal for a Council regulation on a European judicial area in civil matters was approved with two amendments.

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Vote

The full House adopted the common position without amendments.

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Vote

The proposal was approved.

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Vote

In a vote of 492 for and 5 against, with 29 abstentions, Parliament broadly endorsed the Commission’s proposal that all EU companies listed on a regulated market should, from 2005 onwards at the latest, prepare and publish their consolidated accounts in accordance with a single set of accounting standards, to be selected in the near future by the Commission from among the models of International Accounting Standards (IAS) issued by the International Accounting Standards Board, an independent accounting standard setting body.

A single set of accounting reporting standards is regarded as essential to ensure a high degree of transparency and comparability of financial statements and hence the efficient functioning of the EU capital market and the Internal Market. This proposal therefore constitutes a priority measure under the Financial Services Action Plan agreed at Lisbon.

The Commission will identify and adopt the latest by the end of 2002, with the assistance of an accounting regulatory committee, the precise IAS model(s) it deems best suited to the EU's needs. Adopted international accounting standards shall then be published in full in each of the official languages of the Community, as a Commission regulation, in the Official Journal.

However, Parliament does not agree with the Commission’s proposal that companies preparing to be listed on regulated markets should also be required to prepare consolidated accounts in accordance with IAS, as it fears that this might lead to disproportionate financial reporting requirements for small businesses. It therefore adopted an amendment omitting this requirement for such companies. MEPs believe it should be left to Member States to choose whether to require non-traded companies to publish financial statements in accordance with the same set of standards as those for publicly traded companies.

In another amendment Parliament said that Member States should be allowed to exempt certain companies temporarily from the requirement to apply IAS. These would be companies publicly traded both in the EU and on a regulated third country market which are already applying another set of internationally accepted standards, as well as companies which only have publicly traded debt securities. However, this exemption would only be allowed until 2007.

Another amendment seeks to ensure that the international standards can only come into force if they are in line with the basic principles defined in existing EU accounting directives, are conducive to the "EU public good" and provide for a high quality of financial information.

Finally, MEPs said that implementing measures for the new regulation should be adopted with due regard to the declaration made to Parliament by the President of the Commission on 5 February 2002, which acknowledged Parliament's right to be fully involved in the implementation of financial services legislation.

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Vote: 12.03.2002

Vote

After approving the proposal, Parliament deferred its final vote with a view to entering into further negotiations with Council and Commission under the interinstitutional agreement on certain amendments.

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&
Press enquiries:
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Vote

Looking ahead to the 2003 budget, Parliament has adopted a resolution which sees preparations for enlargement and the pressure this will put on the EU’s budget as the top priority. There will also be implications for the administrative expenditure of all the EU institutions, which will not only have to take account of the impact of new staff from the candidate countries, but also future pension needs, a statute for MEPS and paying for new structures, especially in the area of foreign policy, following the entry into force of the Nice Treaty. Parliament is therefore anxious to see the Commission’s administrative reforms put in place as soon as possible and an increase in interinstitutional cooperation with a view to producing savings.

As far as policy is concerned, the resolution emphasises the importance of the long-term commitment to reconstruction in Afghanistan and supports providing some €200m for the country in 2002. Other foreign policy issues include continued help for the Mediterranean region and help for Argentina. The resolution expresses concern about the deteriorating situation affecting Palestinian people and the destruction by Israel of buildings for the Palestinian Authority which were constructed with EU financial help. At an internal level, Parliament wants to see substantial reforms to the CAP and an improvement in the implementation of regional and social fund programmes.

Other policy priorities taken up in the resolution include asylum and immigration, cultural diversity, education and training, e-learning, health and safety at work, the environment, transport and research.

Vote

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Vote

In adopting a resolution on the 2003 budget of the institutions, Parliament emphasised that there will be major implications for administrative expenditure with the EU facing the prospect of absorbing 10 new Member States by 2004. MEPs consider that institutional reform will be a major priority for the 2003 budget but are concerned that so far little progress has been achieved.

Furthermore, existing forecasts suggest the ceiling on administrative expenditure will be breached by some €140m. MEPS are therefore looking for improved budget management and enhanced cooperation between the institutions including the setting-up of an interinstitutional recruitment office. There is also support for a “budget neutral” early retirement scheme for officials. On Parliament's budget, the resolution supports rationalising the interpretation and translation services after enlargement on the basis of "controlled multi-lingualism". MEPs support allowing parliamentarians from candidate countries to come to European Parliament sessions as observers.

The dimension of Parliament’s information policy should be extended to cover the candidate countries and the 2004 elections. The cost of broadcasting plenary sittings and committee meetings on the Internet should be investigated.

On the administrative expenditure of the other institutions, the resolution expresses concern at the expansion of Council’s budget, especially on the second and third pillars, while the other institutions - the Court of Justice, Court of Auditors and the Economic and Social Committee are requested to either look again at their forecasts for the year or in the case of the Economic and Social Committee modernise working methods.

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