President . – The next item is the Commission statement on the European economic and social model.

  Dimas, Commission. (EL) Madam President, ladies and gentlemen, I too wish to express my joy that enlargement is now a reality. I am happy that, at this unique historic moment for the European Union, I am being given an opportunity to debate with you, the representatives of 450 million people and of a union of markets, economies, peoples and societies, the two basic foundations on which the European Union is based: the economic and the social model.

The European economic model concerns the unification of markets and economies and the coordination of economic policies. The European social model is designed to secure a high level of social protection, education and social dialogue, based on good economic performance. These two models are two sides of the same coin. They represent the two characteristics which distinguish the European Union from other areas in the world. In addition, they have helped not only to secure entire decades of increased prosperity for all citizens, but also to consolidate peace and friendship between the peoples of Europe.

As far as the European economic model is concerned, the Treaty makes provision for the application of an economic policy based on close coordination of the economic policies of the Member States. Economies with a great degree of unification and interdependence which share a common market and have a common currency need efficient coordination of economic policy if they are to benefit from them. That is why the European Union has drawn up a detailed framework for economic policy. Within this framework, the expression 'coordination of economic policy' is used as a general term, which covers an entire spectrum of interactions between policy-making factors, at both national level and European Union level. The methods used include exchanging information, discussing best practices, engaging in policy-making dialogue, drafting jointly agreed rules and policy objectives and taking jointly decided action.

The uniqueness of the coordinating framework in Economic and Monetary Union lies in the fact that an independent, supranational European Central Bank has undertaken to exercise a single monetary policy, while responsibility for economic, financial and structural policies remains decentralised in the hands of the national authorities, but subject to joint rules.

The European Central Bank decides monetary policy on the basis of developments noted in the eurozone as a whole and therefore has the facility to deal in the best possible way with any important crises which may affect the common currency zone. By contrast, the national governments each have the facility to apply their own economic policy based on the specific problems and crises which each individual country faces within, of course, the limits of joint rules.

Many of the constituent components of the economic coordinating framework are closely linked to the general Lisbon strategy, a strategy of structural reforms with economic, social and environmental dimensions. The framework of economic policy gives the national policy of each country a noteworthy degree of autonomy in important sectors and reflects the application of the principle of subsidiarity, which is based on strong economic and political logic.

In certain specific sectors, such as the single market, competition policy and financial deficits, the application of joint rules and provision for reliable measures to ensure they are adhered to are required. In other sectors, such as the size and composition of government spending, structural policies and social welfare benefits, there are no strong arguments for requiring that competence for exercising policy be transferred to supranational level. The decentralisation of policy-making procedures gives the national authorities the necessary room for manoeuvre, allowing them both to apply policies in keeping with national economic structures and preferences and to adapt to the economic developments noted in each individual country. It also provides the facility to safeguard the beneficial results of competition policy.

Macroeconomic coordination in the eurozone is generally based on dialogue and agreement. It aims to maintain a healthy and stable macroeconomic framework and to optimise the policy mix at short-term level to address cyclical developments. Its main objective is to ensure that economic growth comes up to its real potential. The results of structural policies in the partner countries and the joint benefits provided by Economic and Monetary Union may not be perceived quite as easily as the consequences of macroeconomic policies. Nonetheless, it is clear that the existence of efficient and flexible markets is of decisive importance to increasing the potential for growth and to safeguarding the smooth functioning of Economic and Monetary Union. In order to avoid distortions and safeguard the smooth functioning of the internal market, structural policies which have a direct impact on the functioning of the internal market and competition are subject to stronger forms of coordination.

Now, what constitutes the European social model? The conclusions of the European Council in Barcelona describe it as a model based on good economic performance, a high level of social protection and education and social dialogue. Thus, the European social model supports the parallel development of economic and social prosperity and is based on the interdependence between economic efficiency and social progress. Despite the differences which exist between our individual national systems, this particular European social model, which European social policies strengthen in a bid to consolidate the economic power of Europe, really does exist. The European social model, in the various forms in which it appears in the Union, has played a vital role, contributing to the constant increase in productivity and uninterrupted improvement in the social level in the whole of the Union, while at the same time ensuring that the benefits are as widespread as possible. Nonetheless, in order to improve its efficiency, this model needs to be updated. The social partners play a very important role from this point of view. The reform is also facilitated by cooperation at European level, which is happening today with issues such as employment, social integration and the reform of pension systems.

The Social Policy Agenda plays a most important role in the updating of the European social model. It has as its reference point the strategic objective of Lisbon, according to which Europe needs to seek to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. This clearly reflects the perception that the Lisbon objective was a single strategic objective and not three juxtaposed aims. Thus, it is clear that securing more and better jobs or promoting social cohesion are elements which can support competitiveness and improve economic performance. The inclusion of competitiveness at the World Economic Forum, at which European countries such as Finland, Sweden and Denmark clearly have leading positions, clearly emphasises the vital importance of this interaction. The success of the Social Policy Agenda depends on numerous factors and this constitutes an important advantage, because it broadens the range of agencies involved in implementing the Agenda and, in this way, strengthens the commitment to update the European social model. The social partners play a crucial role from this point of view.

Social policies are not therefore simply the only result of good economic performance; they are, at the same time, a factor which makes an essential contribution to economic growth. Updating the social model means developing and adapting it, so that account is taken of the fast changes taking place in the social economy.

Finally, I should like to point out that economic prosperity depends on efficient competition between businesses and social progress depends on solidarity between citizens. Both these factors have contributed to the success of Europe. Competition without solidarity would result in the law of the jungle. Solidarity without competition would lead to stagnation. That is why the European model is based on the market economy, which recognises the rights of workers and social dialogue. In conjunction, therefore, with highly developed social systems, it provides the possibility to carry out the necessary structural changes in the economies of our societies in such a way as to avoid conflict and safeguard social stability.

  Grossetête (PPE-DE). – (FR) Madam President, Commissioner, ladies and gentlemen, enlargement has been a turning-point in Europe’s history, and we have experienced it at first hand. Enlargement took place against a backdrop of uncertainties about the international situation, security problems, and problems with the preservation of social and environmental models common to us all. All of these are urgent issues that we must address.

Although enlargement has a political vocation, it must also be a source of impetus and growth. We all want the EU to prosper for the sake of its 450 million consumers; we all want a dynamic EU, one founded upon solidarity. If we are to have one, we must do everything possible to encourage sustainable growth through performance and competitiveness, which presupposes action on several different fronts. It presupposes that we sustain and promote our successful businesses, our centres of excellence and develop our high-tech industries. It presupposes that we step up our investment effort, for when the European Union has a euro in hand, that euro must not merely be spent; it must be invested in order to encourage innovation, develop research, maintain our SMEs, and encourage businesses to be handed on. It presupposes that the euro should be accompanied by better coordination of economic and social policies, for there is a real need in Europe for economic governance in permanent dialogue with the Central Bank, and also that we review the Stability and Growth Pact, which must be tougher than 3% in periods of growth, but also slightly more flexible when the economy slows down.

The Europe that we want must not be guided by economic interests alone, but also by values of social progress and full employment. If we are to restore Europe’s credibility in the eyes of our fellow citizens, we have to make it a social Europe with more of a dimension of solidarity. The European model that we want to build is founded upon values of humanism, liberty and solidarity, which solidarity is the result of economic growth, ensuring a satisfactory level of pensions, the protection of the weakest, promotion of the rights of workers and of the family. If asked to sum up in one word my view of the social Europe, I would say it was the Europe of employment.

(Applause)

  Goebbels (PSE). – (FR) Madam President, there is no single European social model. The social security systems of our twenty-five states were forged at different stages of history, and resulted from very different social struggles involving trade unionists and politicians.

There is, however, a sort of European social exception: the general awareness among our peoples that the economy must serve the well-being of society and of the environment. The market, although indispensable, deals only with supply and demand at one given time. It cannot predict the future or prepare strategic choices for balanced development. That is still the noblest task of politics.

It was on our continent that social policy and the Welfare State were invented. Having shaped our respective lifestyles, social policy will determine our future. This Europe of ours must be social or it will perish. The citizens of our twenty-five countries will identify themselves with Europe only when, and in so far as, the EU manages to demonstrate in practical ways its ability to improve living conditions for every citizen. Future enlargements will be possible only if Europe makes every individual more prosperous. At present, the public have doubts about the future; let me quote what Jacques Delors had to say on the subject: ‘When times are hard (...) there is a tangible decline in confidence in the European project’.

Europe’s ambitions cannot be bounded by the great market or by free trade alone. The siren song of the liberals promises us more freedom and more material comfort by way of deregulation or liberalisation in which no holds are barred. Yes, it is sometimes necessary to break companies’ shackles, to break up monopolies and secure incomes, but the end-product of deregulation – if it does not give way to better rules – is the law of the jungle. New freedoms must go hand in hand with equal opportunities, and be rounded off by unfailing solidarity with the weakest members of our societies.

European and economic policy cannot be limited to prudent monetary policy and the monitoring of Budget deficits. Let me forcibly reiterate that we Socialists regard stability as a public good, one that must be defended in the interests of the poorest in society. Without growth, however, stability leads to a social desert.

Europe must back up its ambitions with Budget resources, giving priority to future expenditure. Investment in human capital, in research, and in infrastructure, will create the conditions for the public’s aspirations to be met, with the right to work, to health, to housing, to be comfortably off and to enjoy a decent retirement.

Let me remind you of Jacques Delors’ celebrated three-pronged approach: ‘Competition to stimulate, cooperation to strengthen, and solidarity to unite’!

‘Solidarność’ was the keyword that at last demolished the Iron Curtain and made the political unification of Europe possible.

Solidarity should still be the guiding principle for this our Europe; solidarity at home in order to promote a social Europe, but also solidarity with those beyond our borders. Europe must be in the front line fighting for true globalisation, which is socially, environmentally and economically inclusive, in that it does not leave by the wayside billions of people living across two-thirds of the planet.

(Applause)

  Jensen (ELDR). – (DA) Madam President, Commissioner Dimas, how do we turn enlargement into an economic and social success? We shall do so by equipping the new Europe for international competition in the way you talked about, Mr Dimas. We shall do so by releasing initiative and energy, by continuing the work on creating an internal market involving free competition, by guaranteeing an internal market for financial services so that businesses have adequate and cheap capital to work with and by guaranteeing that, through free competition, consumers and taxpayers are supplied with a diverse range of products and services of high quality at reasonable prices.

The lesson to be learned from the bitter experience of Communism’s command economy was, of course, that economic and political freedom belong together. Those of us in the new Europe must not, therefore, be afraid of economic freedom. We must not be afraid of private enterprise and free competition. These concepts are not a threat, but the key to economic prosperity.

My experience is that those in our new Member States have felt rather offended at the unwillingness to give the labour force from the new countries freedom of movement from the beginning. Indeed, even those countries that, like my own, are, from day one, opening the borders to workers from the new Member States have introduced monitoring of the labour market and restrictions on access to social benefits.

My Baltic and Polish friends wonder what kind of opinion we have of them. I have to admit, moreover, that delight at the fall of the Berlin Wall and EU enlargement has turned too quickly into anxiety about the changes that may follow in their wake. We have forgotten too quickly that many people from the new Member States did in fact leave behind rich and secure lives in the West in order to travel back to economic uncertainty and develop their countries. Too often, we forget our experience of previous enlargements involving poorer countries, which have of course produced good results. Moreover, we attach too little importance to the many advantages we may derive from sharing the workload among us.

Rapid economic growth and the dynamic in the new Member States will act as a breath of fresh air for the economies of the old Member States. We must help to create that growth, partly through grants from the regional funds for developing the countries’ internal structures. EU aid of up to four per cent of gross domestic product per year is a large amount for the new Member States, but a modest amount for the existing ones. There is some justification for putting a question mark over whether it will be at all possible to use the large transfers at the rate we should like to do. These are matters we shall work on: simpler administration and greater opportunities for having the money used as intended.

We must be ambitious and pin more of our hopes on training and research so that we develop the new Europe in accordance with the guidelines and objectives laid down in the Lisbon process. As the Commissioner pointed out, we must also do a lot of work on developing the social dialogue. It will be a difficult task, but I believe that, if we support, for example, the work being done through the agencies in Bilbao, Thessaloniki and Dublin, we shall have a good opportunity to take this process forward.

  Ainardi (GUE/NGL). – (FR) Madam President, we all rejoice in welcoming the peoples of the ten new Member States of the European Union. Enlargement brings the hope of peace, cooperation and valuable exchanges between peoples.

Nevertheless, we must not deceive ourselves about the problems that confront us. In the countries that have just joined us, average gross domestic product per capita is equal to only 45% of the average in the Fifteen. In order to be considered, these countries have had to drastically restructure their economies. They were required to implement the liberal model, introducing market mechanisms with competition as their sole model, which was to the detriment of a social policy founded on solidarity and economic cooperation. At no time was the Commission willing to take into account the grave economic and social consequences of this headlong rush.

The Europe that these countries have joined is, however, beset by crises. The Lisbon strategy, launched in 2000 with the aim of securing full employment and a very high level of competitiveness, has failed to achieve that. For the first time in ten years, the Commission has admitted that employment is falling and, like the Council, is worrying about how serious the movement towards de-industrialisation is. It has enacted one directive after another, opening up postal services, energy and air and rail transport to competition, while refusing to carry out any sort of serious review of how this might affect jobs, the environment and prices.

At the Barcelona European Council, the Heads of State or Government decided by common agreement to defer the retirement age, but there is, all the same, an unsustainable contradiction between trumpeting the priority to be given to jobs and speeding up the introduction of more flexible working practices, cutting wage costs while allowing gigantic industrial mergers and restructuring to go ahead. Imprisoned by the thinking of the Maastricht Treaty and the Stability Pact, the Council and the Commission are refusing to face up to their consequences. This adds up to a heavy burden for the peoples. We are a long way from the objectives of the Treaty of Rome and its avowed intention to promote improved living and working conditions for the workforce, enabling them to have equal access to progress.

The struggle for jobs and against social exclusion, for better purchasing power and working conditions, to maintain and extend the rights of businesses’ workers, must become the European Union’s first practical priority, although defence and the improvement of public services must not be forgotten. This will require a profound change in the EU’s economic and monetary policies, which are guided solely by the demands of the financial markets and rules of competition that stifle any industrial strategy. The objectives of the European Central Bank must be redrafted to include job-creating investments and industrial projects.

Giving the European project a new direction will mean abandoning dogmatism and accepting the need to reflect on other options and discuss them. No employment strategy can be crowned with success unless workers really are given the power to intervene to suspend planned redundancies, and to halt the mergers in progress. Any merger agreement must include social clauses. There must be penalties for failure to abide by directives on the consultation of workers.

Finally, Madam President, Europe, as a source of hope, calls out for that which is best in each people to be shared and pooled. The intervention of workers and citizens will be indispensable in building tomorrow’s Europe. That is the Europe we are to build. What my group has done over the past five years has been a demanding labour, and many of the fields are still open.

  Messner (Verts/ALE). – (DE) Madam President, ladies and gentlemen, the euphoria that has erupted in this House, which I also detect among the leading European politicians, is understandable, but I do, of course, ask myself if the people feel such enthusiasm too.

Without a doubt, Europe is an unprecedented success story, and I will just mention the key words ‘peacekeeping’ and a ‘place of trade’. Europe evolved as an economic area and, above all, in the hope of creating peaceful cooperation in Europe after 50 years of war. Today we face what may be our next major challenge, in that we are in a position where we are too small as individual nations to be able to position ourselves in a globalised world, but we become strong enough when we come together. All that will, however, only count if we are capable of creating an awareness of Europe in the minds of 450 million Europeans, and this Parliament, too, is called upon to do so. I doubt that it is there at the moment and we will see how big the turnout is in the European elections.

We need a constitution, we need a common foreign policy, but the Europe of the regions too must not be lost as a value. As a Community of shared values we must, of course, export values as well as goods. Only when we, in Europe, are capable of winning back the leading role in the fields in which we were strong, above all, in the area of knowledge, will we have the credibility to also export values such as overall quality of life, peacekeeping and sustainability as a basis for responsible policies. During recent decades, though, we have encouraged people to be aware of what they are entitled to, and this will not help Europe grow; at best, it will increase unemployment, poverty and corruption. This is why I believe that we as individuals, the regions, the Member States and the EU as a whole, must have higher expectations of ourselves; not of the Community, the State or the EU, but rather each part should have higher expectations of itself. This is because what matters is not just stressing what we have achieved, but instead focusing, above all, on what we intend to do, which is a good deal more. That alone that will make us strong.

  Krasts (UEN). – (LV) Looking at the half empty benches one can conclude that many of us are still under the influence of the exciting events of enlargement, but work must continue.

The greatest round of enlargement to have taken place in the European Union’s history has provoked extensive debates about the need to reform the European Union, with the most significant manifestation of these efforts being the preparation and discussion of the draft European Union Constitution. There is less thought and talk as to how the socio-economic effects of European Union enlargement can be turned into a success for the fifteen-member European Union, as well as the New States. The European Union has been joined by countries with fundamentally different levels of economic, and consequently also social, development. This means that enlargement demands a new understanding of ways to ensure the socio-economic growth of the European Union.

I will remind you that the common market of the European Union was created with the aim of promoting the competitiveness of its members and is based on four fundamental freedoms. Almost all the 15 Member States of the European Union, excepting the United Kingdom, Ireland and Sweden, the latter with an admirable parliamentary vote against what the government was offering, have introduced a transitional period for the free movement of workers from the new Member States. Shortly before the time when the basis for the remaining three came into force, there were ever more forceful voices talking about tax dumping, unfair tax competition, speaking about the need for tax harmonisation, even though the European Convention had recently rejected this idea. There are fears about the possible movement of capital towards the new Member States, to be followed by a possible transfer of jobs in an eastward direction. Economists will never cease debating the right level of taxation.

As far as I know, up to now only Austria has reacted appropriately to the possible flight of jobs, by planning to lower its corporate tax level. Ireland's taxation policy has made it especially attractive to investment from multinational companies (as an example). In my opinion the decisions by Sweden, the United Kingdom, Ireland and Austria show a healthy approach to the challenges presented by European Union enlargement. Only in this way will the expansion of the European Union unleash unique opportunities for the unification of Europe and more quickly resolve the stresses of domestic policy in the Member States.

We must look at things realistically – the support for the New States from the European Union's common funds, which I value very highly, no matter how well targeted and endowed with no matter how much of a multiplying effect, is insufficient to rapidly overcome the existing socio-economic differences between the existing Member States. The enlargement of the European Union ...

(The President cut off the speaker)

  Blokland (EDD). – (NL) Madam President, when, between 10 and 13 June, European Parliament elections are held in the 25 Member States, a dream will come true. According to the opinion-formers, these elections will pass judgment on the policies of governments in office, rather than on those of the European Parliament. It is evident that no direct connection is made between the situation in the Member States and the policies we adopt here.

In the run-up to the elections, there is a website in the Netherlands entitled ‘geenwoorden.nl’. Rather than words, after all, the voter wants to see action and find out whether the parties and MEPs have delivered on their election promises. The citizen is entitled to a government which honours its promises and which translates good intentions into proper policy. If I extend this parallel to the Commission, it appears that today's declaration is once again full of good intentions and wishes, and once again I cannot shake off the impression that these will not be taken any further.

Over the past months, I have, at various times during debates on economic policy, drawn attention to the stranded Lisbon process. This process is well and truly stuck because the Member States are waiting for each other to implement the measures. The Member States are themselves responsible for implementation, and you will appreciate that with 25 Member States, a few countries should take the lead. We in this House do not need to sit back and watch passively; we can define the Lisbon objectives in our resolutions more effectively. We will then attain achievable objectives, and you will see that achievable objectives can be implemented.

It is high time we focused on European socio-economic policy. The Member States should implement that policy and we must monitor the implementation of the agreements reached. In that way, the elections may not be about settling scores, but instead about giving a mandate.

  Lepper, Andrzej (NI). (PL) Madam President, Members of this House have been entrusted with a great responsibility. We are responsible for the citizens of the European Union, for their prosperity and their welfare. Entry into the European Union on equal terms is an expression of historical justice. These were the words of the Holy Father John Paul II, the supreme authority in this world. Robert Schuman, a great statesman and patriot, shared these views. They inspired the creation of the European Coal and Steel Community and the EEC. The aim was to create peace in Europe and in the world, as well as prosperity for the people.

What, though, is the reality? There exists a bipolar Europe: a Europe of the rich, and a Europe of the poor. A different outlook on the economy is required. We must immediately move away from the worst versions of neoliberal policy and globalisation. The solution is not a free-market economy, but a social market economy in keeping with the social teachings of various religious groupings. It is wrong for a country’s population to be divided into a small group of rich citizens and a large group of poor ones. We are opposed to wealth creation at the expense of the poor. We advocate involving the rich in assisting the poor. We must commit to the economic development of all of Europe through the development of small and medium-sized enterprises and job creation. Only then shall we effectively eradicate poverty and unemployment, the plagues of the twentieth century. Only then shall we take the economic lead over the USA and Asian countries such as China and Japan. We should have no reservations about working jointly with Russia and Ukraine.

Poland entered the Union on demeaning, unequal terms. The Polish negotiators are to blame for this. They proclaimed a great success, while the truth is different. Production is decreasing. Production quotas and production limits are putting us back by 24 years in the production of tobacco, for example. The figure for sheep farming is 35 years. For milk production it is 52 years, and for steel production 34. We shall call those responsible to account in the future and make them take responsibility for their actions. From a country exporting foodstuffs and steel, Poland has become an importer. Self-Defence is calling for renegotiation of the Association Agreement. The only way to eradicate poverty and unemployment is to exploit the productive capacity of our industry and agriculture to the full. The European Union must return to the highest values. It must put the individual, the family, work, and a dignified life first

(The President interrupts the speaker)

in order not to lead to social revolution. The alter anti-globalists are right. Having first dealt with extremism, we must work together to find a way out of this situation. The European Union and Poland both need Self-Defence.

(The President cut off the speaker)

  President. – Mr Lepper, I have to cut off your microphone. I very much regret that. Let me remind you that speakers who do not have the speaking time that they would wish may submit in writing the speech they would have liked to give. This document will be made available to them to publicise as a speech made in the plenary session of the European Parliament.

  Laar (PPE-DE). – (ET) Madam President, ladies and gentlemen, fellow Europeans, a little more than 20 years ago, the European Parliament passed a declaration that condemned the occupation of the Baltic States by the Soviet Union and demanded our freedom. Today, we are at last all together in this room as free nations and free European citizens, to decide jointly the future of our continent. I am deeply moved that, in this historic session of the European Parliament, the first plenary session since enlargement, I have the opportunity to speak to you in my mother tongue.

Enforced divisions are thus at an end; Europe is one again. Presumably it is this historical perspective that enables new Member States to see the European Union, not just as a common market, but as something more: a common home based on common values and perceptions. Today there is no longer an old Europe and a new Europe; just one Europe – our common home. It is for this reason that here and today we must ask, not, ‘What can Europe do for us?’ but, ‘What can we do for Europe?’

This is even more important in the light of the fact that Europe’s economic and social situation cannot be considered to be rosy. We must face up to facts. Europe’s development has slowed significantly during the last decade. Although the objectives of the Lisbon Strategy are in every way correct, we have to admit that, following its adoption, the gap in competitiveness between Europe and the United States has widened rather than narrowed. With this in mind, some have mockingly alluded to the Soviet leader Nikita Khrushchev’s promise to overtake America in ten years, which ended in his country falling even further behind.

I do not want the same fate to befall the Lisbon Strategy. To ensure this, the new European Commission, together with the Parliament, must act decisively to find the means to force the governments of the Member States that have reacted coolly to the reforms to implement them. I very much hope that the European Union’s enlargement will also add impetus to this process. Yes, the GDP of the new Member States is lower than that of the older ones. Nevertheless, contrary to the view of the earlier speaker, I do not believe that we have joined the European Union in order to live comfortably for the next century from the support coming from wealthier Member States. Such an attitude would be immoral and ruinous for both Europe and ourselves. Estonia cannot look only to financial gain in Europe.

Our aim must be clear: to achieve as rapidly as possible – in the case of my homeland, Estonia, I believe that time to be at least 15 years – a standard of living such that we no longer need assistance from wealthier European countries.

In order to achieve that goal, we have to maintain our high growth rate and liberal economy and not take the route of tax harmonisation, which would be disastrous for Europe. I also hope that the accusations levelled at new Member States will not be repeated, since only by growing rapidly and by developing tax competition throughout Europe can we make the whole of Europe more competitive.

IN THE CHAIR: MR FRIEDRICH
Vice-President

  Ciemniak (PSE). (PL) Mr President, I am delighted to have the honour of taking the floor for the first time during a plenary session of the European Parliament now that Poland is a member of the European Union. Being among the best is ennobling.

At the present, Poland has an economic growth rate of 6%. Membership of the European Community gives us the chance to consolidate this growth and to accelerate development. Pursuant to the Lisbon Strategy, the European Union, is aiming to become the strongest and most competitive economy in the world by 2010. I believe the Union will achieve this aim. Nonetheless, economic competitiveness and the laws of the free market are not sufficient to ensure social progress.

What is necessary is sustainable development combining economic effectiveness with the principles of social justice and environmental protection. The individual should be the subject of all economic processes, and the markets must serve the people, not vice-versa. This approach will ensure all citizens benefit from the results of European integration. It will lead to the creation of a society without barriers or divisions. Sustainable development of the countries of the European Union also involves the development of its regions and the consolidation of local government. Priority must be given to the allocation of funds from the Structural Funds and the Cohesion Fund to investments creating new jobs, and to investment in education, science and new technologies. I believe that promoting economic competitiveness while respecting the principles of sustainable development will help to improve quality of life for all Europeans. This is, after all, the goal of our common endeavour. We can achieve far more if we work together.

  Rousseaux (ELDR). – (FR) Mr President, the fact that we are able to talk today in terms of a European economic and social model is something we owe above all to the self-employed and to microfirms. Six years ago, in 1997, Eurostat’s figures told us that the Europe of the Fifteen was home to 18 802 423 businesses, 18 million of which were microfirms. Of these 18 million, half consisted of one person working alone, whilst the other half – some 8.5-9 million – consisted of businesses employing between one and nine persons.

It follows that the importance of these microfirms must be borne in mind by those who will be legislating for the Europe of the future, and all the more so on a day when we are celebrating enlargement by the accession of new Member States. Legislation must be adapted to them, must take account of their specific characteristics, of the small size of such microfirms and we must, each and every one of us, consider these self-employed workers, these members of the liberal professions, these traders, these artisans, artists, and farmers as all being brave people, who maintain Europe’s human face through the personal services that they provide, and that is important in an increasingly globalised and ever more high-tech Europe.

I also invite all those who will be sharing in the drafting of future European legislation to adapt it to the specific needs of small enterprises whose energies must be devoted to productivity. Let every one of them bear in mind that no business started out big and that today’s start-ups are destined to be the medium-sized and big businesses of tomorrow. It is economic wealth that makes it possible for this Europe that is so dear to us to provide a high standard of social protection.

It is thus that we will have successful businesses and also be able to guarantee the social Europe.

  Nogueira Román (Verts/ALE). – (PT) Mr President, those of us in Parliament, and in European society, who want a political Europe and who welcome the new Member States, those who want a Constitution that will take the EU forward as a political entity that is united in its diversity are in the vast majority. Let us learn from this historic experience, which is unique in the world today, on a continent that, as recently as last century, suffered unspeakably tragic events.

Stateless nations, such as mine, Galicia, are still not recognised as such in the draft Constitution. Given that what we want is a political Europe, a Europe of the peoples and the citizens, we shall continue to struggle for such recognition and for self-determination within the EU. Whilst we want a political Europe, Mr President, it must be said that this will not exist without a social Europe, which must be made a reality as a matter of urgency, by integrating our fellow peoples that have a per capita income of less than 40% of that in the Union of the Fifteen.

Against this backdrop, it is paradoxical and irresponsible that the richest States, which claim that they want a political Europe, are attempting to impose a reduced European Union budget as low as 1% of Gross National Income. This is despite the fact that, with enlargement, the number of inhabitants of regions eligible for Objective 1 (whose income is less than 75% of the average per capita) is set to double; to put it more clearly, this figure is set to jump from 63 million people at present to 153 million in the coming years. Similarly, nothing will be resolved if the budget is limited to the 1.14% proposed by the Commission. If we continue this way, we will not be moving towards a social Europe. Funding per capita for Objective 1 regions will be halved, thereby blocking a cohesion policy that has benefited and defined the entire Union. This will have a negative effect on both the Union of the Fifteen and on the enlarged Union of Twenty-Seven.

  Bielan (UEN). (PL) Mr President, enlargement of the European Union finally took place a few days ago. Enlargement poses new challenges with respect to how the Union should operate and how joint decisions on its future should be taken. Speaking as a representative of the Union for Europe of the Nations Group, and also as a Pole, I would like to make it quite clear that I am a strong advocate of the concept of a Europe of the nations. Such a Europe would draw strength from the diversity and richness of all its regions. It would be a Europe of solidarity.

There is no doubt that one of the most urgent challenges facing the Community is work on eradication of the economic differences that arose within our continent as a result of the settlements at the Yalta conference. These settlements were imposed on Poland by force. We therefore now have every moral right to demand substantial support for development. Currently, the standard of living in all the Polish voivodships falls below 75% of the European Union average. Some of them barely reach 35% of the Union average. The Swietokrzyskie voivodship is one such example. This means the Union’s policy of aid for poorer regions must be one of the most important issues in the coming years.

In the course of the debate on the European Union’s budget it should become clear whether the old Member States are prepared to give priority to the principle of solidarity over and above their immediate local economic interests. I have the honour to address the European Parliament today on behalf of the Malopolskie and Swietokrzyskie District. I am delighted to be instrumental in ensuring that its voice can be heard in this House, where all the nations of Europe are represented. The south of Poland is famous for being thrifty and hard-working. I am therefore convinced that the people of our region will cope and succeed in the new European Union. Our success, however, the success of these two areas, will require solidarity from you, the representatives of the richer part of Europe. We need help to develop our infrastructure. The south of Poland must have better communication links with the rest of Europe. We need support for the sound and painless restructuring of our agriculture. Finally, we need programmes enabling the young people of the Malopolskie and Swietokrzyskie voivodships to take full advantage of educational opportunities in the enlarged European Union.

Finally, ladies and gentlemen, I would like to invite you to Krakow, one of the most beautiful cities of Europe and the capital of our region. Its glorious history, architecture, and the remarkable character of its people create a unique atmosphere. Millions of foreign visitors come and enjoy it every year.

  Kozlík (NI). (SK) Mr President, it is a joy and an honour for me to appear in the European Parliament as one of the representatives of the Slovak Republic and also to thank all of you who have been instrumental in enlarging the European Union. From an economic point of view, however, the new Member States became part of the European Union long before 1 May 2004.

In 1990, shortly after the fall of the Iron Curtain and the end of the Cold War, the countries of the ‘Eastern bloc’ had a balance of trade surplus with the advanced Western countries of some USD 10 billion. Over the subsequent years, this indicator was turned totally upside down and, in 2002, the countries of the former Eastern bloc had a balance of trade deficit with the advanced Western countries of around USD 40 billion.

This occurred because the advanced Western countries took advantage of their superior competitive position to break into the markets opening up in the eastern countries with an annual increase in their economic potential of about USD 50 billion. This factor was one of the sources for economic growth in the advanced Western countries in the 1990s.

Today, we are witnessing the enlargement of the European Union. The existing Member States are on the one hand putting on a friendly face towards the new Member States, but on the other hand several Member States have imposed restrictions on the free movement of workers with respect to the new Member States.

I also consider, given these circumstances, discussion on reducing Member States’ contributions to the European Union budget to be not altogether appropriate. If there are doubts about the destination of these resources or the way in which they are expended and used, it is time to look for a more effective model for the operation of the entire mechanism for the distribution of EU resources and not to weaken financially the system of regional and structural solidarity, which could be one of the sources for future economic growth in the EU.

And so, ladies and gentlemen, I should like quietly but insistently to urge you to make sensible decisions which will not disappoint the fragile expectations of the citizens of the new Member States following accession to the EU.

(Applause)

  Thyssen (PPE-DE). – (NL) Mr President, we must safeguard the European economic and social model. We hear this from all quarters more than ever, certainly now that Europe is reunified and many people still feel somewhat ill at ease in our big House. The public appreciates the socio-ecologically corrected free-market economy. They know that competitiveness and solidarity are key concepts in this connection, and realise that the Lisbon process must be perpetuated and strengthened.

I should like to make a plea for the little ones not to be overlooked in our future socio-economic policy. We must continue to work on a better entrepreneurial climate, in which more people feel inclined to set up a business and also have the opportunities to do so. We should in any case pay more attention to SMEs, because two-thirds of employment and added value are created by them. Why not, Commissioner, include a specific SME Commissioner in the next Commission with a horizontal competence and who, on that basis, would work with the different Commissioners in a matrix model in each of the vertical fields of competence?

Finally, I think we should closely examine the proposal for the internal market directive and fine-tune it where necessary, to avoid having to throw away the baby with the bath water in the social sphere.

I should like to say the following by way of conclusion. We are now reunited; there are 25 of us and together we will keep going. The ten new countries that have joined us have demonstrated to us that it is possible to make structural changes and that it is necessary to dare stick to one's guns in order to achieve the long-term goals of peace, prosperity and a good social climate. Let the journey they have travelled serve as an example to us and let us continue focusing on keeping the balance in Europe between the needs of a smoothly-running market and the wishes of the public.

  Katiforis (PSE). – (EL) Mr President, Commissioner, ladies and gentlemen, today is the right time to look at our economic policy from a broader viewpoint, to look squarely at the past of the Europe of the fifteen and at the future of the Europe of the twenty-five.

The first basic point which needs to be made is that the European Union does not have a legal basis for a common – truly common – economic policy, because the Union does not have the competence to make, it only has the competence to coordinate the economic policy of the Member States. This fragmentation of economic policy is not something which can yield results under the conditions of globalisation in which we live today. The second point is that we need a bigger strategic initiative, capable of activating the powers of the European economy. The third point is that, apart from a bigger strategic initiative, the European economy also needs a bigger strategic objective.

The accession of the ten new Member States gives us the opportunity for a bigger initiative, capable of inspiring our efforts. The economies of eastern Europe can become the dynamo of the new European economy; all it needs is for us, old Europe, to find the courage and the inspiration to imitate the United States of America and mark the end of the cold war with a sort of Marshall plan for eastern Europe, as the USA did at the end of the Second World War.

As regards the big objective, it was given to us in the draft of the new European Constitution, which, for the first time in the history of the Treaties, included full employment in the basic Article 3 as one of the objective aims of the Union, at the same time rejecting the call by the European Central Bank for equal treatment of the objective of price stability. This latter point is important and we must keep to it, but it is not more important, it is never more important than the objective of full employment, which was an essential element in the old European model and, unfortunately Commissioner, I did not, despite listening to you carefully, hear you mention full employment in your review of the European model. We must restore this model if we are to bring Europe back to the path of its reconstruction.

  Reiljan, Janno (UEN). – (ET) Mr President, ladies and gentlemen, this enlargement of the European Union is made historic by the attempt to get countries at very different levels of economic development to work together smoothly and effectively. Successful completion of that task requires the creation of a sustainable globalisation model that would stop the growth of tensions, disagreements and conflicts that has accompanied the dismantling of former boundaries. Within the next five years, all of the European Union institutions, including Parliament, will have to face historic economic policy challenges.

First, a balanced solution must be found concerning the problem of harmonising competitive conditions for enterprises in countries at different levels of economic development. It is evident that countries with lower income levels will not be able to invest as much in social insurance, healthcare, environmental protection and other societal activities as the wealthier countries. Lower social taxation, however, gives enterprises a competitive advantage in the short term, and this leads to discontentment among enterprises in countries with higher taxation levels. The movement of enterprises to regions with a lower tax burden destabilises developed societies. Finding a balance that takes the interests of all the parties equally into account will, even with an in-depth grasp of economic policy and fine political sense, require great efforts in the coming years on the part of the Members of the European Parliament.

As a second challenge, I would highlight the integration of countries with different levels of development of public infrastructure with the conditions of the European economic and monetary union. The new Members who have shrugged off the former planned economy now need to make enormous investments to modernise the infrastructure of education, science, health care, environmental protection, internal security and legal protection. The funding of these investments would be possible at the expense of raising the level of taxes without contravening the basic conditions of the Stability and Growth Pact, but this would endanger the already low competitive ability of enterprises that are still in the build-up phase. Infrastructure investments could be funded by loans, increasing the country’s budget deficit and the national debt, but this would be at odds with the main conditions for the adoption of the single currency. This means that if the single currency membership conditions as well as the need for retaining the competitiveness of enterprises are both strictly observed, the necessary development investments cannot be made. This in turn would jeopardise the sustainability of development and would equate to living at the expense of the nation's future. Strengthening the unity of the European Union …

(The President cut off the speaker)

  Podobnik (PPE-DE). – (SL) Mr President, there are many important rooms in our collective European home. There are political, economic, cultural, spiritual rooms and also social rooms. I am convinced that both the European social and economic model are extremely important, if not crucial, for the cohesion of the European Union. The essence of this model could be boiled down to the simple statement that you have brought together both competition and solidarity.

According to data from research carried out by Pew Global Survey, the views held by both Eastern and Western Europeans, with regard to the market and the social system that should be guaranteed by the state, have a large number of points in common. This is why today the citizens of ten new countries, including my country, Slovenia, tend to ask two main questions. Are the days of the previous European social and economic model numbered, and will the European social market model survive in the EU of 25 States? My reply is that it will. It must survive. Of course it will have to respond to numerous changes, for example negative demographic trends, rising healthcare and pension costs and also a more balanced representation of both sexes in the labour market.

I would like to mention the contents of a report prepared for the European Commission by a group of experts led by Jacques Sapir, which clearly calls for European Cohesion Funds to be redirected to the accession States. In this way they will be available to the people that need them most. I am convinced that the EU must offer the accession States the same conditions that were offered to the new members in each previous round of enlargement. Up to now, to be frank, the founder members of the European Union have had priority in the distribution of funds.

  Szabó (PSE). – (HU) Ladies and gentlemen, the European workforce is expensive. Sometimes this is referred to as a negative aspect, as a factor that hinders competitiveness, yet this is a good thing. This provides a decent standard of living for the workforce, for those who are no longer or not yet employed, and for those also who have to be absent from work temporarily. Price is, of course, an important factor in competitiveness, but it is only one of the factors, the other one being quality. This is why we were happy to see the Lisbon Strategy in 2000 state that the future of the European economic and social system will stand or fall on success or failure in making Europe the most competitive, knowledge-based economy by 2010. The key to this, however, is education, training, life-long learning and furthermore, research and development.

We are now in the year 2004. In the research and development race the gap in favour of the United States has opened even wider. The harmonisation of the education and training policies of the European states is at a very low level, and the life-long learning concept is not spreading at the speed it should. As a result of all this it looks as if the US is coming out of recession, in the Far East the dynamic growth of the economy based on cheap labour is continuing, whilst Europe continues to stagnate. The European social system is, therefore, a value that we must maintain, yet the European economy is less and less able to produce the financial resources for this. It would not be good for us to remain helpless in the face of this situation, without knowing what to do, but it would be even worse if, despite being able to see the way out, we did very little of what was needed.

Ladies and gentlemen, the Hungarian nation had a poet with fire in his heart, Sándor Petőfi, who roused the nation to action during the days of the 1848 revolution with these words: ‘Today is the right time, but tomorrow may be too late’. In the next five years it will certainly not be the right time for Europe, but perhaps it will not be too late either. Let us leave this as a legacy to our successors convening on 19 July: it will depend on their wisdom, determination and ability to cooperate whether the unfavourable processes can be reversed or the European social system will remain just a congenial experiment that is doomed to end in failure because of lack of economic support.

  Libicki (UEN). (PL) Mr President, I have the honour of speaking in the European Parliament as one of the first Polish Members and as the first Member representing the Wielkopolska voivodship. My fellow Members and I are setting fundamental goals for ourselves in the European Union.

Our first goal is a sovereign Poland. We believe Poland’s sovereignty will be better secured within the European Union than outside it. We want a strong and sovereign Poland in a strong Europe.

Our second goal concerns the economy. We are convinced that membership of the European Union gives us an opportunity for economic development that was not available to us outside the Community. This is why it is important for the European Union’s economic policy to promote free competition. Further, economic policy must be based on solidarity, which is a key principle of the European Union. This will give the poorer new Member States an opportunity to develop. It is also the reason why we are insisting that the Union’s budget be maintained at the existing level and not be reduced, and it is why we are calling for structural investment in the new Member States.

I am addressing you as a Pole and as a resident of the Wielkopolska voivodship. It was in this area, in Gniezno, that Emperor Otto III and Cardinal Robert, representing Pope Sylvester II, met with the ruler of Poland, Boleslaw the Brave, in the year 1000. At the turn of the tenth century they discussed the affairs of Europe in this very area near the grave of St Wojciech. Inspired by them we believe that today a happy and peaceful Europe can also only be built in the name of God and Christian tradition.

The people of Wielkopolska, where I live, have always been renowned for their great enterprise and thrift. The citizens of Poznan, Kalisz, Leszno, Pila, Konin, Gniezno, Wrzesnia, Gostyn, Koscian, Rawicz, Ostrow, Kolo, and many other Wielkopolska cities, towns, and villages will do everything in their power to ensure that Poland achieves success. We aspire to success for ourselves as well as for the extremely large number of young people in Poland. My country has recently recorded the greatest increase in student numbers in Europe. Their number has grown six-fold in the last few years. It is for the sake of these young Poles that we are striving for a strong Poland in a strong Europe.

  Őry (PPE-DE). – (HU) Mr President, ladies and gentlemen, the free movement of workers is one of the most important fundamental European rights. The possibility for workers to move freely is important for both the employees and businesses alike. The free movement of workers ensures competitiveness and the constant growth of the Union at the same time, yet it cannot be detached from the question of social security. In terms of the social security network the acquis communautaire does not permit discrimination between employees on the basis of their nationality.

One of the most important objectives of the Union that has now been enlarged to 25 Members is to significantly increase its competitiveness, and by doing so, to keep abreast with its most important challengers, the US and Japan. The Lisbon Strategy that was created in 2000 covers this, and this objective must play a key role in the near future in national legislation and also in the European Parliament. However, we can only implement the Lisbon Strategy successfully if we significantly increase both the rate of employment and the mobility of the workforce. Unfortunately, during the last few months, this quite promising process has run aground, and the voices of those who, on the basis of some irrational fear, want to delay the free movement of workers have become louder.

We have all seen the labour market surveys that deal with the expected movement of workers from the ten new Member States. These data show that barely one per cent of those in active employment expect to find employment in other Member States during the next few years. The panic is, therefore, completely unfounded, the new member countries, including Hungary, will of course comply with the provisions of the accession agreement, but rightfully expect that the limitations of the labour market will not be born out of crass prejudice and fear.

Provisions made in respect of the stability of individual countries must always be based on specific surveys, and the question of the expected migration of workers from the new Member States must be addressed on an individual basis. We object on principle to the approach that does not differentiate between the new Member States. It is in Europe’s mutual interest to make optimum use of the trained workforce and the strategic advantages offered by the flexibility of the labour market, and on this basis to become the fastest growing region in the world.

  Berès (PSE). – (FR) And now, Mr President, for the social Europe! It is my belief that, if we want this enlargement to still be a real cause for celebration in the years to come, we have to meet our fellow-citizens’ expectations. What they ask of us is a social Europe, an economic and social model to be the continuing backbone of our European Union, and jobs for all.

For that, then, there are three great guiding principles. The first is this: where are we going, tomorrow, to create added value in the European Union? The EU will have to reflect on this and on what tomorrow’s jobs will be. They will be local jobs. They will be jobs that do not exist today, connected with the quality of life, associated with personal services. We will also need to be able to gain control of our sources of finance and investment. In those Member States that were until very recently called ‘old Europe’ and are now part of the new Europe of twenty-five, there are great fears about relocations. As we now know, there is similar fear among the ten countries that have just joined us about the prospect of a brain drain to the West, and even more so, of businesses taking flight, whether westwards or to India or China. So this issue of relocations is one that we have to discuss together, as we gain control of our research efforts and denounce national policies aimed at reducing it.

We also have to put in place real strategies for industrial policy. In the 1990s, we were able to do it in the car industry – and it is thus that the European Union still has today six car manufacturers – at a time when everyone thought the industry was doomed by Japanese expansion. We have to regain our capacity for strength through unity, or for strength in the Union.

The second great guiding principle is that of rights. There will be no cohesion in Europe, nor will there be a consolidated social and economic model, if goods simply circulate without there being, as we have defined in the Charter, rights for all, which are a matter for the social responsibility of businesses or of an occupational social security scheme. Finally, we will need real solidarity around a Budget that it will not be possible to confine, as some would have us do, within the meagre envelope of 1% of GNP. There can, however, be no Budget solidarity without fiscal solidarity.

(The President cut off the speaker)

  Siekierski (PPE-DE). (PL) Mr President, enlargement of the European Union from 15 to 25 Member States is resulting in inevitable changes to its economic, administrative, and social structure. The average gross national product per capita is lower. Unemployment has risen, and society is becoming more divided. The number of poorer persons has increased significantly. There is a greater number of less developed regions, and these regions require support from the Union’s budget.

At the same time, however, there have been some very positive developments. Our common market has grown. Internal competitiveness has increased, which will strengthen our external competitiveness. Structural and economic changes in the ten new Member States are opening up great opportunities for development. A so-called baby-boom generation is starting productive adult life in Poland. For the most part, these young people are, well educated citizens, prepared for the challenges of a modern economy. A younger generation of Europeans, open to innovation and progress, is our greatest asset. Social Europe imposes restrictions on economic Europe. It reduces the competitiveness of the economy. This does not mean, however, that we must dispense with Europe’s social heritage, which is so important for our citizens. It need not hamper the search for new tools for development.

Recently I was asked what associations the European Union has for me, what buildings, monuments, historical events, achievements, it brought to mind. I answered that Europe does indeed have great buildings, magnificent monuments, and beautiful chapters of history. I said that Europe has wonderful traditions and achievements, but that for me Europe is associated with the values it developed and offers to the world. These values are democracy, human rights, and security for the individual, including economic and social security. They have to be the fundamental prerequisites and guidelines for the philosophy and development of the European Union.

  Falbr (PSE). (CS) As a former trade unionist I would like to say how happy we are that the Social Charter has been incorporated into the draft European Constitution, given that this was something that I fought for when I was a member of the European Trade Union Confederation executive. I think the fifteen countries should not worry that the ten new countries will prove a financial drain. The majority of accession countries know they will have to look after themselves, as the Czech Republic has done. If we take the Eastern part of Germany, into which billions of German marks have been poured, and compare it with the Czech Republic, we cannot see a great deal of difference.

Mr President, I can speak in Spanish.

As a former union leader, I would like to say that we are pleased that the Social Charter appears in the draft Constitution.

I believe that the fifteen countries must not be afraid of a lot of money going to the countries that have now become Members, because the majority of the countries will have to help themselves, just as the Czech Republic did. If we compare the situation in the eastern part of Germany, which received huge cash injections involving billions of marks, with the situation in our Republic, we will see that they are not so different.

What should make the fifteen States nervous is the possibility of a social and fiscal dumping zone being created in that area. According to many of our liberal policies, our countries will flourish if we turn them into areas of this nature.

They say that we must maintain the comparative advantages for as long as possible. We do not agree. We are against dismantling the social State in Europe, because that is what most attracts us to it.

I would like our fellow Members from the fifteen existing Member States to monitor closely the attacks on unions in recent times, the attacks in Slovakia, where they want to repeal the law on tri-partyism.

I also believe it will be necessary to ensure that what so often happens does not happen in our countries: the law is included in the Statutes, but is not applied.

(Applause)

  Marini (PPE-DE). – (IT) Mr President, I welcomed the urgency today with which, as this parliamentary term draws to a close, the Commissioner returned to the need, which the last speaker mentioned, for defence of the European way of life to be among our prime objectives.

A liberalist wind, a single school of thought appeared to be attempting to destroy the idea of justice which brings dignity to politics in Europe and in our countries. I am pleased that the Commissioner reaffirmed this point. In Italy there is a booklet, ‘The Dream and the Choices’, a fine discussion by President Prodi available in bookshops. It points out, with regard to this way of life, what the major social democracies, the Christian school of thought in the social doctrine of the Church, have built in our countries, with different political experiences, since the early twentieth century; and indeed today we are different. In my opinion, this has to be a prime objective, and in 20 years’ time we will be remembered not just for our history, our Christian roots and the beauty of our cities but also for having created a model of relations between people which is among the most advanced in our history.

I will end, today in particular, at the end of this parliamentary term, by expressing a concern: the diffusion, precisely with regard to this issue, of a lack of rules, of the insecurity of young peoples’ jobs. Of course, we must defend change, but we must be careful not to destroy young peoples’ security. I would like to extend my best wishes to the incoming MEPs for their work.

  Myller (PSE). – (FI) Mr President, Commissioner, in your speech you mentioned Finland, Sweden and Denmark as examples of this European economic and social model. The excellent levels of social welfare in these countries are due very largely to high taxation, and that includes business tax, taxation on capital and income tax. This is the way to create viable public services.

Our common task now is to prevent tax competition, which would mean among other things the erosion of the foundation of these European welfare states. This kind of European prosperity is also based on tripartite agreements – we heard here how there are problems with this in some countries – as well as good labour relations and the fact that issues are discussed and lasting agreements are reached, with balanced growth achieved as a result. We also have to ensure that this forthcoming services directive, which, after the elections in June, the elected Parliament will be debating, does nothing to promote dumping, something that was spoken of here, but adopts the laws and decrees of the country in which the services are being produced.

Environmental protection also creates growth and stability. We really have to ensure that we achieve sustainable growth which also allows us to look to the future. We will not build a European Union with short-term profits. We have to have sustainable growth, with the environment playing an absolutely key role.

  Bonnici (PPE-DE). – Mr President, after spending the past year as an observer in the European Parliament it is indeed an honour that I can, for the first time, address this assembly following the formal accession of my country, Malta.

Over the past year I have participated in a number of committees, primarily the Committee on Economic and Monetary Affairs and the Committee on Regional Policy, Transport and Tourism. I have followed many debates and also contributed to various topics, including tabling an amendment that was formally introduced by a fellow MEP. This amendment to the third cohesion report was adopted in committee and then in plenary. It is a vibrant example of the opportunity that was given to the accession countries to participate in and influence decisions even prior to membership. This is also a clear instance of the welcoming attitude of Members of this House towards an observer.

I mentioned earlier the cohesion report. What better way is there to highlight the economic and social model of Europe, the subject of this debate? The concept of providing a helping hand to regions and countries that are lagging behind other areas of the Union is an excellent example of solidarity in practice, which forms such an essential part of the European Union. If one were to ask what the essential characteristics of the European economic and social model are, one would definitely have to include this aspect of support for cohesion and sustainable development, with due consideration given to the quality of life of EU citizens. It is important to stimulate the economic growth of the EU so as to provide better jobs and a higher standard of living. However, it also important to focus on a distribution of income that is just and equitable.

This is the first and probably last speech I will make in this Parliament, as I have been nominated to the European Court of Auditors. I will not vote on this item tomorrow as I believe that one should not participate in decisions when one is directly involved in that same decision.

I will end with a few words in Maltese.

(MT) Today we can really say that we have taken our place in Europe. Maltese citizens are now also part of this much wider project that will increase benefits for all of Europe.

  Vella (PSE). – Mr President, the current European economic and social model has unfortunately not brought about the desired results. The added impact of enlargement may also put further strain on the system and create new imbalances and unexpected changes in employment patterns and social cohesion. The scourge of unemployment and job instability within the European Union still defies the many action plans and initiatives for economic and social reforms launched in the past. Poverty is still with us and the traditional social security systems are threatened. Add to this certain negative aspects of the impact of globalisation and the picture gets bleaker.

There is no social stability and no real prosperity where there is unemployment, where there are imminent threats to existing jobs and competitiveness is gradually eroded due to macro-economic policies, fiscal measures and constraints that are not adapted to the existing situation on the ground.

It must be said a priori that any corrective measures that have to be taken should in no way have any negative impact on existing levels of social protection. Ideally in the future the European economic and social model needs to be more flexible in its application. The same applies to the European monetary and fiscal policies. Ways have to be found of establishing how flexibility and fair competition can co-exist and how the social market economy will have less of the free market component and more of the social component.

The enlarged European Union presents a whole range of regional and subregional social economic scenarios. Each has its own specificities and each is in need of its own tailor-made action plan to help attract investment, create jobs, maintain its competitive edge and attract new growth sectors, while ensuring social stability and sustainable growth levels.

Coming as I do from the smallest Member State, which is an island state, I am very conscious that EU-wide economic and social policies applied indiscriminately on a 'one-size-fits-all' basis do not invariably bring about the desired results either in job creation or in a better quality of life for our citizens. This is why I strongly believe that, to be successful, the future EU economic and social model should have ingrained within it the possibility to be flexible and be applied in a tailor-made fashion to specific sites and situations, as well as being endowed with the necessary flexibility in its application to be effective under different socio-economic scenarios. Only in this way can we really hope to see further job creation, better quality of life, more prosperity, better social cohesion and more stability within the future enlarged European Union.

  Manninger (PPE-DE). – (HU) Mr President, ladies and gentlemen, I should like to express my joy at being able to address you now as a full Member of this House from Hungary. Even 20 years ago, the representatives of the Hungarian National Party regarded the achievement of close union with the countries of the western half of Europe as their main objective. During the last fifteen years, however, we have been able to learn quite a lot. The not yet completely finalised political, economic and social changes are quite interesting.

We must work towards the objective that more and more people in Hungary – and in the accession countries – think that joining the European Union is not just a necessary solution, but something that really helps to ensure that people have a secure future. We have to create an economy where no elements can surface that would distort competition, but which at the same time allows the accession countries, including Hungary, to catch up.

It is imperative that smaller villages, even the most disadvantaged rural areas, should be able to retain their population. Not only the difficulties associated with the closure of industrial production but also the disadvantages associated with changes in agricultural production, and even in tourism, must be taken into consideration. In Hungary, for example, Lake Balaton and its surrounding area require development, financial support is needed, because in addition to the main European roads the remainder of the road network should also be further developed, by establishing a north-south axis route in the western and central parts of Hungary. We can say that we are ready to join the European Union, but further major economic and social changes are required.

The other political party in Hungary talks about modernisation. I do not think it is fashionable any more to advertise modern socialism, here in the institutions of the European Union, fortunately, nobody talks about it any more. We agree on the development of a knowledge-based economy and IT access possibilities. Emphasis must be placed, however, on managing the disadvantages of globalisation, increasing the number of jobs, and enabling the accession countries to catch up, with retention of the main elements of the social model. Accession will only be successful if the countries catch up with the existing members. Our wish is to be part of this.

  Andersson (PSE). (SV) Mr President, the EU’s economic and social policy is important, and the European model is based upon a balance between growth, union rights, good conditions in the labour market and sustainable development. We must give impetus to this policy. Where growth is concerned, we must pin our hopes on, for example, research and development, the training of the labour force and investment.

It is at least as important that trade unions exert influence upon developments in individual workplaces and so achieve better working environments. It is just as important that we make development sustainable in a long-term perspective. I am optimistic. I believe that enlargement can be a positive thing, not only for the new countries but also for the whole of the EU, including those of us who have been MEPs and EU Members for some time. I believe that it can be a success and a win-win situation.

I myself come from the Baltic area and live in Sweden. I believe that growth can increase through an increase in trade across the Baltic. It is therefore important that we not compete with one other through social dumping, poorer working conditions or tax dumping that undermines our welfare systems, but that we maintain a high level of rights in the labour market and where our welfare systems are concerned.

When we invest, we must do so in new, clean technology that also creates sustainable development and makes for long-term, rather than just short-term, growth. I am optimistic, but such optimism depends upon maintaining the balance in the social model.

  Šlesere (PPE-DE). – (LV) Latvia is proud to be a full member of the European Union's family of nations and that we can work together in a unified way for the good of all of Europe. We have been working toward this goal for fifteen years. Our achievements are significant, creating and developing an economy and a social policy. We have also encountered various problems, however, which are becoming especially relevant in the context of the common European economy and social policy.

One of these problems is the demographic crisis, which affects all of Europe. Statistics show clearly that all over Europe a so called demographic winter has set in and the question naturally follows: for whom, then, are we creating and building this beautiful, unified and prosperous Europe? There is no simple solution to this issue and it is not merely bound up with economic and social policy, because it is also a question of values.

Even the best conceived and most balanced employment policy, thorough social protection and a system of pensions, sexual equality and social benefits will not be perfect unless it is grounded in the basic values of society – on ethical and moral norms. Only a harmonious and sound family is able to ensure that these social values are inculcated in every resident, in every child. Therefore the interests of the family must be taken into account, and they must be the driving force of all economic and social policy initiatives.

Latvia is aware of the threats posed by the demographic crisis and therefore the issues of family and child welfare have now been put forward as the Latvian Government's priorities. We call on Europe to take similar action, because only then will we be able to tackle the social problems that threaten all of Europe, which are related to the demographic crisis and the inevitable ageing of the population and the growth in the economic burden on the working population.

Economic and social welfare is not conceivable without the welfare of families all over Europe, because the welfare of the child is dependent on the welfare of the family and that is the basis of a strong, secure and prosperous Europe. Therefore today I want to call on you, in debating every issue of economic and social policy, to devote particular attention to the basic value and the foundation of society – the family.

IN THE CHAIR: MR PUERTA
Vice-President

  Fico (PSE). (SK) Ladies and gentlemen, today is the first time that Members of Parliament from the new EU Member States have been able to put their opinions forward. It is a pity that these opinions are being delivered in such a private environment. Nevertheless, it is of course an honour for me to appear before the European Parliament.

I come from Slovakia, which, just like the other new EU Member States, has undergone huge changes in the last 15 years, changes which often took decades in the advanced democracies. These changes have been very painful and have brought with them great inequalities and social injustice. We are the living proof that, if the social aspects of the market economy are ignored, along with the effects of experimental reforms on the population, and if the invisible hand of the market is continually overemphasised, it is one hundred per cent certain that the result will be enormous differences in standards of living and enormous differences between regions.

I believe that we have had enough fireworks and receptions celebrating the enlargement of the European Union. It must be borne in mind that the Union now includes countries where average income is about EUR 160 and average earnings are about EUR 360 a month. Full compliance with the European economic and social model may act as an emergency brake for some Member States. We may, of course, have great reservations about this model, but socially fairer and more forward-looking models are very difficult, if not impossible, to devise. We wish to use our experiences from the last 15 years to make as constructive a contribution as possible to the implementation of this model. We do not wish to be the part of Europe which is only attractive because of its low labour costs and weak social protection.

The introduction of restrictions on the free movement of workers has not been the best of contributions to the European economic and social model. It is essential to express the conviction that further such ‘contributions’ will not occur and that equality and solidarity will not be restricted to glossy brochures about the European Union, but will be real European values.

(Applause)

  Ribeiro (GUE/NGL). – (PT) Mr President, while we are all making statements and giving evidence, I should like to use the minutes of my final speech of this legislative term to try to offer some observations of my own on this issue. Time is at a premium, but this is a worthwhile exercise. An even more worthwhile exercise would be to stop the so-called economic and social model from becoming an empty phrase, a hollow shell that has become demagogy, and a mere husk from which we have been extracting the living organisms. These living organisms are principles and values that must be enforced on a practical basis. They are achievements and not gifts, achievements that must be fought for and not gifts that are gratefully received, principles that we want to keep and to ensure that they do not suffer a slow and complete demise.

In order to place this in a historical context, I shall cite the example of Portugal. For decades we were outside the framework of what is referred to as the ‘European model’; thirty years ago, with the ‘April 25th Revolution’, we won social security, reforms, unemployment benefit and a minimum wage; we won the right to health and education and this became enshrined in the Constitution; work – on land, at sea, in manufacturing and in the tertiary sector – was accorded the value that it merits; public services were created; we sought to link the public, cooperative and private sectors; priority was given to the collective interest, with the economy controlled by democratic politics and not vice-versa. Politics was no longer in a position to allow major private financial concerns to be established, with various forms of protection. Thereafter, particularly after 1986, priority was given to nominal convergence, albeit accompanied by actual divergence and an uneven approach at social and regional level. This occurred because the objective of economic and social cohesion did not turn out as it ought to have done. We did not want ridiculous budgetary criteria to be imposed, or accounts of benefactors’ sacrifices and beneficiaries’ gains; what we wanted from the policy was for it to promote cooperation and the transfer of means, with mutual respect and benefits for all.

A profoundly significant enlargement is upon us, which we welcome, with European peoples and cultures coming together. It will not, however, work this way whilst we fail to take account of the experiences – both positive and negative – of the new Member States. These experiences must help us to ensure the continued existence of the values and principles that form part of the ‘European model’. Indeed, because it was not only the Beveridge plan, but also a degree of competition that led to the principles and values that humanised the use of the workforce being enshrined. It was significant that mention was made yesterday of Reagan and Thatcher, characters who symbolised neo-liberalism, which is governed solely by the rules of the market, and which will stop at nothing to destroy those principles and values.

From this side of the House, I welcome the enlarged Europe and the concept of neighbourhood – as a European model for living and not a symbol of window-dressing rhetoric – which will be the path to follow, provided that we maximise the wealth of various situations institutionally, economically, socially, culturally, and not the ideological straitjacket of an omnipotent paradigm, of an omnipotent neo-liberal, federal and militarised Constitution, on the pretext of the spectre of a threat to security.

I shall finish as I began, Mr President, given that three minutes do not last long. The principles and values of a new way forward are, from now on, those of genuine solidarity, of peace, of mutual respect of a democracy, which is not confined to the act of voting, but which extends to the citizens, the workers and the people actually participating.

  Jarzembowski (PPE-DE). – (DE) Mr President, Commissioner Dimas, ladies and gentlemen, I believe that compared to many areas of the earth, the European economic and social model is as successful as it is, because, in the past, we have developed an economically viable and environmentally friendly transport policy, with sensible general conditions for employees. By way of example, I would just like to mention the driving and rest periods for road traffic and working periods in the transport sector. On the one hand, this European transport policy is based on us having already dealt with the different national rules in the transport sector or on us being in the process of dealing with them, and thus creating an integrated market in the transport sector too. As an example from recent years I would mention the opening of the national rail networks to non-discriminatory use for all railway companies in the Union for freight services from 2006 or 2007. I could, alternatively, give another example of the creation of the Single European Sky from 31 December 2004. On the other hand, the European transport policy is based on having come to terms with the thinking and action behind national infrastructure networks and having created and expanded a trans-European transport network within the Union. In this vein, we adopted the largest revision of the trans-European transport network two weeks ago and thereby getting to grips with the Union of Fifteen’s transport infrastructure and adopting 30 priority projects for the Union of Twenty-Five.

I am assuming that the new Member States will quickly implement the European regulations in the transport sector, if they have not already done so, in order that the internal market in transport may become a reality in all areas of the European Union. I hope that together we will be able to press ahead with and further develop the European transport policy in the next Committee on Regional Policy, Transport and Tourism.

  Kłopotek (PPE-DE). (PL) Mr President, until recently I was an observer in this House. Today I am a fully-fledged Member of the European Parliament. I have noticed that words like solidarity, assistance, and cooperation are often bandied about in the Chamber. These words do have real meaning. It sometimes happens, however, that a wonderful idea loses out against ruthless interests. Work on reform of the common agricultural policy is an example of this. The Fifteen old Member States used Article 23 of the Treaty of Accession concluded between Poland and the European Union to further their own interests. The conditions applicable to Polish agriculture established in Copenhagen in December 2002 were changed to our disadvantage.

Poland is a country of great opportunities. With some support, it could develop impressively and benefit the whole European Union. In over a thousand years of its history, my nation has demonstrated that it is not afraid of difficult challenges. It has shown itself capable of great deeds for the common good.

It is no exaggeration to state that a Poland with a vibrant economy and enriched by the spirit of its citizens will be an asset to the European Union. I am convinced we shall not be a burden on Europe. We shall prove a tower of strength for it. Poland has never let Europe down, and it never will. I trust Europe will not let Poland down either.

  Daniel Kroupa (PPE-DE). – (CS) Mr President, Commissioner, ladies and gentlemen, twenty years ago Czechoslovakia split. The Czechs and the Slovaks were unable to agree on a joint constitution. Fortunately, we parted on good terms, as friends and in peace. I am happy we are meeting as friends and in peace again in the European Union and in Parliament.

Czechoslovakia’s story can serve as a lesson, particularly for those who are set to negotiate the European Constitution. If no agreement is reached on the European Constitution within an enlarged Europe, this major entity could also break up. Let us hope that they take heed of this warning.

Talking about the future of our economic and social model, I would like to draw your attention to the fact that we will not be the ones who decide the future. The future will be decided by those who will live in this future, by our children and their children’s children. What we can do for them is to create conditions that will enable them to decide freely on their own model, and it is by adopting the European Constitution that we will enable them to make their decisions freely. I mention this, because my ancestors decided to surrender their freedom and democracy on the promise of social security. My generation was, therefore, not free to decide which social and economic system it would like to live under.

I believe that the future social system will be based on solidarity and love for one’s fellow man. Let us not forget this is also a Christian value, which is not mentioned in the preamble of the draft Constitution. I believe that they will be able to decide to go into business. Conditions must be right, however, for small businesses to flourish, given that out of small acorns large oaks trees grow.

I believe that everything will come right. I believe that the future for our descendants will be as happy as things were for my generation.

  Lulling (PPE-DE). – (FR) Mr President, Commissioner, ladies and gentlemen, the European Council is in the habit of producing declarations that may be visionary or even grandiose, but are certainly useful. One of these was produced at Lisbon in 2000, where the Heads of State or Government presented us with a strategy extending over ten years, in which time it aimed to make the European Union the most competitive and most dynamic economy in the world. According to this strategy, a strong economy will stimulate the creation of jobs and will encourage social and environmental policies ensuring sustainable development and social cohesion, which boils down to something that is not the work of a genius and is almost a truism, and, for students of economics and all the acolytes of the social market economy, a post-war concept.

Now that this legislative period is coming to an end, we, the former members, and the new ones whom we have welcomed this week, are quite rightly concerned about the opportunities for implementing the Lisbon strategy. Within this framework, though, the question at issue is whether we can maintain the European social model in the Europe of twenty-five, which will tomorrow be twenty-seven or even more, is the one that bothers me most of all. Can we agree that, if the European social model is to be saved, we must not abandon a certain amount of regulation of the market economy compatible with an adequate standard of social security? This means that certain public services, such as education, health, or culture, would have to escape wholesale privatisation, whilst still being required to enhance their efficiency and keep their costs under control.

If we are to relaunch growth and competitiveness while reducing unemployment, it is not absolutely necessary to dismantle our provident democracy, to abandon redistribution aimed at strengthening cohesion, let alone to abandon our familiar solidarity now that we are in the enlarged EU. Nevertheless, the speeding up of reforms is an essential condition if the European social model is to be saved in the West and extended to the East, for the only thing that engenders solidarity is the awareness of common interests.

Above all, I hope that the new Parliament, to be elected on 13 June, will be able, on the basis of this evidence, to save the European social model as an integral part of the aims and objectives of European integration, even if it means that these have to be redefined by all the political and social actors, among whom this House will have a leading role and primary responsibility.

Mr President, this is not a testament, for I want to carry on working here, but I was keen to share with you my profound convictions on this matter.

  Dimas, Commission. (EL) Mr President, if we could christen this evening's debate and give it a title, we would say it is a debate about solidarity. This was indeed the word which was heard more than any other this evening. Of course, the need to strengthen it was emphasised a great many times and I hope, as Mr Libicki and Mr Kroupa said earlier, that we shall be able to make Europe and our countries better for us and our children and that we shall be able to live with the democracy, security and freedom which the European Union and the common wish of all the peoples of Europe guarantee us, without sacrificing freedoms.

I have followed the debate very closely, from which I can say that it clearly emerged that economic and social policy cannot be divorced from one another. Hence, the approach which we adopted last year, when we decided to update and combine these two policy sectors, was the right one.

Now, in addition to this observation, I should like to make a number of other final comments. The slow economic growth observed during the first years of the application of the Lisbon strategy and, consequently, of the Social Policy Agenda, may create doubts, as Mrs Lulling said earlier, about the deeper logic on which the updating approach adopted in 2000 is based. The fact that several interim objectives will not be achieved in 2005, such as unemployment, as Mrs Ainardi and others pointed out, or the increase in the rate of employment of older workers, which is far lower than the percentage we were aiming for, may feed criticism. Nonetheless, the strategic choice about economic and social prosperity is the right choice. Not only must we remain faithful, as Mr Marini stressed, to the principles on which the economic and social model of Europe is based and which are contained in the Lisbon strategy, but also we must remain faithful to the objectives of the specific strategy. This does not preclude the fact that adjustments may be required as far as the specific policy measures and their methods of implementation are concerned. It is, however, clear that the European Union should make use of the economic recovery and the dynamics of enlargement to give new momentum to the Lisbon strategy, focusing mainly on certain priorities, such as improving investments in networks and technological know-how, as numerous members emphasised, including Mrs Grossetête, Mr Szabó and numerous others, strengthening the competitiveness of industry and services and extending active professional life.

For the new Member States in general, they are undergoing and facing, as far as the implementation of structural reforms is concerned, the same challenges which the older Member States faced. Of course, as numerous members emphasised, including Mr Krasts and Mrs Šlesere, the new Member States do, of course, have greater difficulties in certain cases. Of course, certain countries, such as Poland, as Mrs Ciemniak said, have high rates of growth, 6%, and have achieved faster reforms in the field of structural reforms. In this sector of structural reforms, the new Member States must focus in particular on creating conditions for strengthening the increase in productivity, in that productivity levels are generally very low, and in dealing with the high levels of structural and long-term unemployment, to which Mr Siekierski referred.

I should like at this point to refer also to a matter raised at the beginning of the debate by Mrs Jensen and repeated subsequently: the question of the free movement of workers. As you know, provision has been made for transitional arrangements. This has been translated into various national practices which cover the entire spectrum, from zero to seven years. Irrespective, however, of any graduations in the transitional periods, which I hope will prove not to be necessary and will be abolished as quickly as possible or limited as far as possible, I must stress that freedom of movement and the right to establish and work in another Member State are fundamental freedoms which are safeguarded under Community law. Nor should we forget that they are an integral part of the internal market and European nationality.

Furthermore, I should like to stress once again what I said at the beginning of my speech, that economies with a large degree of unification and interdependence, which share a common market need efficient coordination in making and implementing economic policy, both at national level and at the level of the European Union. All the constituent elements of the economic coordinating framework are closely connected to this overall strategy. I too agree with those who, like Mrs Thyssen, pointed out that the only way to speed up progress is to carry out other reforms. We must extend our coordination beyond financial matters to cover broader questions of economic policy and we need to take account of both the social and the environmental dimension which Mrs Myller spoke of, referring to what I said and emphasised earlier and which I would like to clarify better now, that the countries which provide a high level of social protection, such as Denmark and Sweden, also manage to be extremely competitive.

Mr President, we must find the political will needed to extend our coordination to all sectors covered by the Lisbon strategy, so that we can achieve more growth and greater employment.

  President. The debate is closed.