President. – The next item is Question Time (B6-0676/2005).

The following questions are addressed to the Commission.

Question No 21 by Bill Newton Dunn (H-1146/05)

Subject: Interpol's Databases

Interpol, which is an admirable and valuable organisation, and which is situated on European Union territory, has a number of databases – on stolen documents, on stolen works of art, on wanted criminals, on fingerprints, etc. These databases are available to the law enforcement forces of the world.

Is the Commission satisfied that the operation of these databases is fully in accord with the data privacy laws of the Union?

  Franco Frattini, Vice-President of the Commission. The Commission supports cooperation between Interpol and European Member States as well as EU bodies such as Europol. At the same time, as pointed out in the 2004 Commission proposal for a Council common position on the transfer of certain data to Interpol, applicable data protection rules must be respected.

This was confirmed by the Council common position of 24 January 2005 on exchanging certain data with Interpol. It notably concerns lost or stolen passports. It underlined that the conditions of the exchange shall be agreed with Interpol in order to ensure – and I would like to stress the following – that the data exchanged will respect the data protection principles that lie at the heart of data exchange within the Union, particularly with regard to the exchange and automatic processing of such data.

I should add that the control of personal data by Interpol shall be ensured by the rules on the control of information and access to Interpol’s files. In particular these rules establish a commission for the control of Interpol’s files and govern the composition, role and functions of that commission. The current chairman of the commission is Mr Hustinx, who is currently also the EU data protection supervisor.

  Bill Newton Dunn (ALDE). – I wish to ask a supplementary question. I want to thank the Commissioner for his very careful reply and, although I am taking Italian lessons, I appreciate the fact that he gave it in his very good English.

It is a complicated reply, and therefore difficult to take on board. However, I noted that he referred to the Council position of January 2005 covering stolen passports. That is clearly in order. However, I wonder whether he could assure me that the other databases I mentioned – on works of art, wanted criminals and fingerprints – are also satisfactorily covered by the Council position?

  Franco Frattini, Vice-President of the Commission. – (IT) Mr President, ladies and gentlemen, I thank the honourable Member for his supplementary question as well. The Council has laid down very clear guidelines and the Commission will monitor compliance with these rules, which will apply to all the databases on which Interpol works. I refer in particular to certain key principles regarding data protection: who is entitled to access the data; for what specific and predetermined purposes; how long can data be retained; and, above all, who will be entitled to use them and in what circumstances?

As you know, we have recently put forward a draft framework decision on data protection under the third pillar. This is the very first proposal of this kind, and it further expands the field of data protection in the context of police cooperation.

  President. – Question No 20 by Rodi Kratsa-Tsagaropoulou (H-1144/05)

Subject: Risk of water shortage in the Mediterranean

The conclusions of the last meeting (November 2005) of the Mediterranean countries' Environment Ministers portray an extremely alarming situation as regards the availability and management of water resources in the region. In particular, 50% of the wetlands have disappeared, adversely affecting the flora and fauna throughout the region, while it is estimated that only 60% of the rural areas along the southern coast of the Mediterranean have access to safe drinking water.

In the light of this data and scientists' estimates that, in the future, 38% of the population of the Mediterranean will live in areas where water is in short supply, will the Commission take practical initiatives in the context of Euro-Mediterranean cooperation to deal with this phenomenon jointly with the partnership countries, taking as a model Directive 2000/60/EC⁽¹⁾ establishing a framework for Community action in the field of water policy? Given that under the SMAP (Short and Medium Priority Environmental Action Programme), water and waste management is a priority field, does the Commission have an assessment of the measures and programmes implemented in that field? Does the Commission intend to implement new measures and initiatives under this programme?

  Stavros Dimas, Μember of the Commission. (EL) Mr President, the management of water resources in the area of the Mediterranean is a challenge for us all from the point of view both of the quality and the availability of water. The problem of water shortages in the Mediterranean is intensifying due, on the one hand, to the increased demand for water in certain sectors and areas and, on the other hand, to the repercussions of climate change.

As regards climate change, I would like to comment that, from a scientific point of view, it is difficult to maintain that isolated cases of droughts are directly connected to climate change; nonetheless, we know that climate change contributes to more severe phenomena which are manifesting more and more regularly and over larger geographical areas.

We requested and have received a report from the EU Joint Research Centre on the links between climate change and water, water shortages and droughts.

In general, protection of our water resources is one of the priorities of the environmental policy of the European Union. In fact, the European Union has radically restructured its policy in the water sector with the relevant framework directive. In this way it sent a political message well beyond its territory.

One of the basic principles of the European Union's policy in the water sector is cooperation between the regions in various Member States which share common water resources. For this purpose, the so-called EU Water Initiative was adopted, within the framework of which the European Union and its Member States have undertaken to achieve the Millennium Goals as regards the water sector.

Following this, the Commission launched a joint procedure between the framework directive and the EU Water Initiative, a procedure which Greece headed for the part of the initiative concerning the Mediterranean. The aim of this cooperation is to facilitate the application of policies of proper administration of water resources in the Mediterranean countries, by adhering to the principles of the Community Water Framework Directive.

Consequently, with the Member States of the European Union and third Mediterranean countries working together, working groups have been set up, one of which will address the issue of water shortages, and guidelines will be drafted by the end of this year, which will be addressed both to the countries of the European Union and to the other Mediterranean countries. Measures will also be proposed to prevent and manage water shortages and droughts.

Water is one of the priorities of the short-term environmental action plan, known as SΜΑΡ, which is being applied at regional level. Monitoring SMAP actions forms part of the programme and there are reports available for most of these actions. A detailed evaluation of the programme will be scheduled this year and the results will be at your disposal.

So far, evidence from the application of SΜΑΡ is positive and is contributing to the promotion and exchange of experiences and best practices, especially in the water sector. Under the SΜΑΡ 2 programme between 2000 and 2005, two of the eight projects – with a Community contribution of EUR 6.2 million – directly concerned water management.

The next generation of the SΜΑΡ programme, SΜΑΡ 3, will focus on the preparation of overall coastal zone management plans and will make provision for technical assistance to be provided to the Member States' governments. Already various relevant plans are at the signature stage and are expected to last three years from January 2006.

  Rodi Kratsa-Tsagaropoulou (PPE-DE). – (EL) Commissioner, thank you very much for the information you have given me in your reply as regards EU policy within the framework of the 25 countries and its cooperation with third countries in order to achieve the Millennium Development Goals, especially within the framework of the Mediterranean basin.

I wanted to ask if you currently have more detailed and more specific information available on the question of the guidelines which the European Commission will issue as regards public and private investment within the framework of Barcelona II, because the water sector is a very important sector for the quality of life and equal development which we want to achieve in the Mediterranean basin.

  Stavros Dimas, Μember of the Commission. (EL) To be specific, I should like to say first of all that we have various means of financing available both for the countries of the European Union and for neighbouring countries. Basically, they are: the Cohesion Fund, the Regional Development Fund, the Rural Development Fund and so forth. However, there is also money for neighbouring countries.

Of course, all this depends on progress with the adoption by the European Parliament and the Council of the financial perspectives for 2007 to 2013.

We also have a series of measures available both to European and to neighbouring Mediterranean countries from the EU Water Initiative, especially the initiative for water in the Mediterranean and, also, a series of directives for best practices which, of course, will have the relevant financial support.

  Josu Ortuondo Larrea (ALDE). – (ES) Commissioner, in its 2004 report, the European Environment Agency stated that the temperature in Europe had increased by one degree above the average for the rest of the world. Has the Commission looked into the establishment of a European Drought Monitoring Centre?

Another consequence of the drought is the devastating fires. Has the Commission looked into any financial aid for preventing fires and alleviating their effects in the rural areas in question?

  Stavros Dimas, Μember of the Commission. (EL) Indeed, the European Environment Agency, in a report which it filed two months ago, noted and emphasised that environmental priorities for the Mediterranean area include drought and the prevention and management of drought situations and water shortages, which hit countries such as Portugal and Spain in particular this year.

As regards the drought in Portugal and Spain, the European Union Cohesion Fund provided funds to adapt and support measures already financed some time ago in order to deal with similar weather phenomena.

As regards long-term measures, the European Union will fund Spain with more than EUR 1 300 million to support the new Spanish plan on the management and use of water. In future, special attention will be paid to measures to prevent and manage droughts and water shortages.

I must also stress that the Environment Agency emphasised in its report the importance of other emergent threats in the area of the Mediterranean, especially for ecosystems, from changes in temperatures and rainfall in the area, which have various consequences.

  Paul Rübig (PPE-DE). – (DE) Mr President, Commissioner, ladies and gentlemen, this afternoon, we discussed the security of energy supply with Commissioner Piebalgs. What role does the Commissioner see in this Water Framework Directive for renewable energy, which, of course, represents a quite fundamental future strategy for the security of our energy supply?

  Stavros Dimas, Member of the Commission. Renewable energy is one of our priorities at the moment. We have a green paper on renewable energy, which we are trying to promote by various means. We also have targets for the European Union for 2002 and 2020. We have not succeeded yet, but we hope to achieve those targets through the various means and measures we are proposing. To this effect, we have the second phase of the European climate change programme, which promotes renewable energy sources, and we are proposing a series of measures in support of such energy sources.

At the same time, the Commission is currently discussing a strategy for biofuels, which provide a means not only of securing energy resources within the European Union, but also of answering the problems that will be created for farmers by the new agricultural policy, as well as limiting greenhouse gases and dealing with other environmental problems.

  President. – Question No 22 by Proinsias De Rossa (H-1173/05)

Subject: Posting of Workers Directive

Could the Commission outline what action it has taken in response to the resolution adopted by the European Parliament on 15 January 2004 on the implementation of Directive 96/71/EC⁽²⁾ concerning the Posting of Workers in connection with the provision of services (P5_TA(2004)0030) which noted that the implementation, as intended by the Directive, of core labour standards in the free movement of services and the prevention of social dumping often fails to be achieved in practice, and, in particular, to point 10, which called on it to submit proposals to simplify and improve the existing Directive with a view to obtaining better implementation and application of the Directive in practice as well as better achieving the goals of the Directive, and point 14, which called on it to submit a second report to the Council and the European Parliament on the implementation of the Directive no later than by the end of 2004?

  Vladimír Špidla, Member of the Commission.  (CS) Mr President, ladies and gentlemen, the Commission attaches a great deal of importance to Parliament’s resolution on the Member States’ implementation of Directive 96/71/EC on the posting of workers in the framework of the provision of services. Social partners from all sectors were involved in discussions on the resolution, and asked to provide further information in the form of an extensive questionnaire. The latter was also forwarded to the administrative bodies of the Member States, which is the follow-up procedure for all Parliament resolutions. The Commission lent its support to a research project carried out by the European Federation of Building and Woodworkers on the practical impact of the Posting of Workers Directive, which was followed up by a conference. The end result was a draft second report on the implementation of Directive 96/71/EC, which covers the same issues as Parliament’s resolution. The Commission services are currently in the process of finalising this draft report, and it will be adopted in the near future. The Commission has played an active role in both implementing the Directive in practice and improving cooperation in the field of information provision by working together with a group of specialists from the Member States.

One of the outcomes of this group’s work has been a code of conduct, along with guidelines for cooperation and multilingual documents for informal exchanges of information. The aim of these latter is to facilitate communication between contact points and monitoring bodies. In addition, a dedicated website has been launched on the posting of workers, which contains key information in three languages on the legal framework governing the posting of workers and links to related documents and websites set up by the Member States that cover problems relating to the posting of workers. The website also provides the public with access to a list of contact points and monitoring bodies, which means that official bodies and individuals can find out about the appropriate contact points in the various Member States.

I have been informed that the Committee on Employment and Social Affairs has decided to draft an own-initiative report on the impact of Directive 96/71/EC on the posting of workers in the framework of the provision of services. A hearing on this report will be held on 26 January 2006. I will be very interested to learn the outcome of this hearing, and I would welcome the opportunity to cooperate with Parliament on this key issue.

  Proinsias De Rossa (PSE). – Thank you for your reply, Commissioner Špidla. I should like some clarification on whether the report, which you indicate as being finalised, is the report dated 15 November 2005 that has already been circulated in draft form to the social partners. If so, would you undertake to circulate this report to the Members of the European Parliament, in particular to the Committee on Employment and Social Affairs?

Would you not agree that the experience to date of the Posting of Workers Directive indicates that amendments are required in order to clarify the application of that directive to the delivery of services from third countries, such as Turkey, and also from some other Member States? I am thinking in particular of the Vaxholm-Laval case, which is clearly a challenge in my view to the operation of the directive.

Finally, could you indicate what statistics you have with regard to the number of posted workers and labour inspectorates in the various Member States and the effectiveness of those inspectors?

  Vladimír Špidla, Member of the Commission.  (CS) Mr President, ladies and gentlemen, the document to which Mr De Rossa referred is indeed the report I mentioned. The document that has been distributed to the social partners is the original text, which we are still working on, and our assumption is that it will be discussed with Parliament.

I shall now move on to the subject of statistics. Statistical information will be included in the report, although some of the details still need to be finalised, since interpreting statistical data is always an extremely complex task. For the time being, the Commission does not believe that any legislative amendments to the Directive are needed. What is needed, however, is better enforcement of the Directive’s implementation in practice, and I have outlined some of the measures that the Commission has already taken to this end.

  Andreas Schwab (PPE-DE). – (DE) Mr President, I am much obliged to the Commissioner for his clear statements. Am I right in assuming that he does not consider the setting of quotas for third-country workers to be the right course of action for the European internal market; and that, when he works on the proposals for the revision of the Posting of Workers Directive, he will actively take into account the French study that concludes that the existing system provided for in the directive is not working in the Member States?

  Vladimír Špidla, Member of the Commission.  (CS) Mr President, ladies and gentlemen, I have to admit that I was not able to identify the report to which Mr Schwab was referring from the quote he used. I will be able to provide a more accurate answer after I have checked the quote for myself.

Access for workers from third countries is a policy which is embodied in EU legislation, and which applies to all the Member States. If the honourable Member wishes to discuss amendments to the rules on third-country workers in more detail, I would of course be more than happy to do so.

  Jan Andersson (PSE). – (SV) I would thank the Commissioner for his answer and am pleased to see that the Commission will cooperate with the Committee on Employment and Social Affairs now that we are dealing with the issue in an own-initiative report introduced in connection with the Posting of Workers Directive. The fact is that it has become apparent – especially from the messages that have come from the Commission concerning various signals pertaining to the Vaxholm case – that the Posting of Workers Directive is not nearly so crystal clear as might be wished.

The intention, of course, is that posted workers should be allowed to work under roughly the same conditions as people in the country to which they have been posted. My question is as follows: is this directive adapted to all labour market models within the EU or only to those governed by legislation and collective agreements declared to be universally applicable? Do you think it is adapted to the Scandinavian model, which involves collective agreements that are not declared to be universally applicable and under which each company is negotiated with separately? Or is a change needed whereby that particular labour market model would also be included?

  Vladimír Špidla, Member of the Commission.  (CS) No opt-outs were provided for any of the Member States’ systems when the directive was debated and adopted, and it therefore applies universally. I can well imagine that interpretation of the directive is far from simple at times, since it incorporates a global concept of the European Union and covers all the different forms of labour relations.

As far as the Commission’s basic approach to this matter is concerned, you will be aware that the Laval case is pending before the European Court of Justice, and so I have no choice but to say that it would be wrong for me to adopt a specific position. Generally speaking, I can say that in principle the Commission’s comments should not call any Member State’s social model per se into question. They should, however, unfailingly uphold the principle that the economic freedoms enshrined in the Treaty can be combined with the various social models. In other words, the directive was intended from the outset to provide protection to posted workers at a level that is appropriate for the given Member State. Interpretation may be problematic in certain cases, as I said before, but this is the principle which underpins the Directive, and which applies to all the Member States.

  Proinsias De Rossa (PSE). – Commissioner, could you just clarify for me, in your comments regarding the Vaxholm case, that you are not in a position to comment? Is the Commission not, in fact, permitted and indeed obliged to make a submission to the European Court of Justice with regard to its view on the issues at stake in that case? Has it not in fact been asked by the Court to make such a submission?

  President. Mr De Rossa, although this is not strictly speaking a point of order, if Mr Špidla is able to answer this question in 15 seconds, I shall give him the floor.

  Vladimír Špidla, Member of the Commission. (CS) As you will be aware, and as I said a few minutes ago, the Laval case is currently pending before the European Court of Justice, and the Commission services are at present preparing the Commission’s comments. In principle, these latter should not call any Member State’s social model per se into question They should, however, unfailingly uphold the principle that the economic freedoms enshrined in the Treaty can be combined with the various social models.

As previous speakers have already noted, there need be no contradiction between the two goals of supporting fair economic competition and guaranteeing protection for workers. It is self-evident that any social model that is implemented must comply fully with the goals and fundamental principles of Community legislation and that it must observe these latter, in particular when it comes to such principles as legitimacy of aim, objective justification and proportionality.

Ladies and gentlemen, the Commission is in the process of preparing an opinion that will form part of proceedings before the European Court of Justice. As I have already said, it is impossible for me to go into details at this point in time, and indeed it would be wrong for me to do so.

  President. – Question No 23 by Marie Panayotopoulos-Cassiotou (H-1131/05)

Subject: Proposed harmonisation of direct company tax

In the Commission’s view, what will be the impact of the proposed harmonisation of direct company tax in terms of the stability of economic growth and employment, especially in vulnerable areas of sparsely-populated Member States?

  László Kovács, Member of the Commission. Thank you for the question, in response to which I can state that the Commission has absolutely no plans to harmonise direct company taxation.

As is outlined in the Commission communication of 25 October 2005 on the contribution of taxation and customs policies to the Lisbon Strategy, the Commission intends to carry out the necessary preparatory work towards a common consolidated tax base over the next three years, with a view to presenting a Community legislative measure by 2008. The Commission does not intend to propose a harmonised corporate tax rate, which is just part of the overall area we would like to harmonise.

As regards vulnerable areas of less populous Member States, it should be borne in mind that, under Community state aid rules, Member States have to respect strict conditions when providing for preferential tax regimes in favour of companies undertaking investments in assisted areas, under national regional state aid guidelines for promoting the economic development of certain disadvantaged areas of the European Union. State aid rules remain applicable to any state measures which may be enacted in the context of a common consolidated tax base initiative. The preparatory work by the Commission has not yet reached the stage of examining the impact of a common consolidated tax base on different regions within Member States. Any legislative proposal submitted by the Commission after this work has been carried out will, in any case, be accompanied by an appropriate impact assessment.

On the other hand, I should point out that the common consolidated tax base has been identified as an important tool for helping the Community achieve the Lisbon goals. It will help to reduce compliance costs and to encourage cross-border activities, which will lead to a higher rate of economic growth and employment and a higher level of competitiveness across the whole of the European Union.

  Marie Panayotopoulos-Cassiotou (PPE-DE). – (EL) Commissioner, your reply satisfies me completely. I should like to ask you to comment on the question of small and medium-sized enterprises, by which I mean whether they will be taken into account by the Commission as a special group within European enterprises as a whole.

  László Kovács, Member of the Commission. My answer is a definite ‘yes’. The Commission considers the SMEs to be a special group which is to be supported as it provides a large number of jobs. According to my judgement, the common consolidated corporate tax base will give a special advantage to the SMEs, which are in a less favourable position than the multinationals. So, if there is one group which will profit from the common consolidated tax base, it will be the SMEs.

  President. – Question No 24 by Dimitrios Papadimoulis (H-1153/05)

Subject: ECJ judgment concerning Marks & Spencer

The recent judgment of the Court of Justice of the European Communities in favour of the Marks & Spencer company, which had asked the UK authorities for tax relief to offset losses suffered by subsidiaries of the group in other European countries, creates a new set of conditions and will have a significant impact on government revenue from corporation tax.

Although the judgment recognises that Member States may prohibit the parent company from deducting tax so that national governments do not suffer losses through the actions of multinational companies endeavouring to exploit the loopholes in tax legislation in order to maximise their profits, I believe that a new area of competition has been opened up between Member States to attract investment. What view does the Commission take of the Court's judgment? Does it propose to take any legislative initiative?

  László Kovács, Member of the Commission. On 13 December 2005 the Commission welcomed the ruling of the Court of Justice in the Marks & Spencer case on cross-border loss relief. The Court has interpreted the principle of freedom of establishment for cross-border loss relief in a way that is in compliance with the logic and philosophy of the single market and in a way that is supported by the Commission.

The Commission has to continue its efforts to eliminate all obstacles preventing companies from reaping the full benefits of the internal market. The Commission therefore intends to come forward with a communication in the near future in which it will outline its views on cross-border loss relief. This communication will go beyond the specific case of Marks & Spencer and focus on the economic aspects.

The Commission knows that this is a difficult subject as Member States are rightly concerned about the need to protect their tax revenues, but at the same time it is clear that it cannot accept that obstacles to the internal market continue to hamper companies from making investments and creating growth and employment in line with the objectives which it has set itself as part of the Lisbon Strategy.

  Dimitrios Papadimoulis (GUE/NGL). – (EL) Commissioner, you have not answered my question. The Marks & Spencer case highlights double tax dumping. We have different rates and different approaches between the Member States to the taxation of multinational companies with parent companies and subsidiaries within the framework of the European Union.

The ruling by the Court of Justice perhaps highlights rather than deals with the problem. I ask you again: what does the Commission intend to do in order to limit tax evasion by large multinational groups and stem the loss of public revenue to the Member States?

Does it intend to take any legislative initiative? Otherwise, why do you talk of Economic and Monetary Union?

  László Kovács, Member of the Commission. The Commission’s interpretation of the ruling of the ECJ on the Marks & Spencer case is fully in compliance with the ECJ’s ruling. The problem in that case was that while United Kingdom law permits loss relief inside the United Kingdom market, the same is not permitted in the case of other companies or branches of Marks & Spencer in different Member States – one in Germany and one in Belgium. The ECJ ruling, in compliance with the philosophy of the internal market, was in favour of Marks & Spencer and the Commission fully supported that.

The Commission wants to study carefully the budgetary consequences of such rulings and try to take the initiative to have better coordination within the tax policy of the Member States: if not harmonisation, at least coordination is needed in order to avoid such problems.

To conclude, I want to refer to the first question concerning the common consolidated corporate tax base, which would solve the problem. The difficulty is that, as I have already said, in the best case, if everything goes smoothly and well, we will come up with the legislative proposal no earlier than 2008, so we still have two years in which to provide some temporary solution.

  President. – Question No 25 by Helène Goudin (H-1133/05)

Subject: Deregulation of postal services in the EU

The independent consultancy firm Wik has been tasked by the Commission with evaluating the deregulation of postal services in the EU. It has been reported in articles in the Swedish media that the consultancy firm has among other things proposed the following:

No EU country is to be allowed to impose a requirement on any postal operator to charge a standard rate for postage. Pricing must be free and market-based and not publicly regulated. This means that it may become cheaper to send a letter within a city than between two towns in the same country that are far away from one another. In addition, the rules stating how often mail must be delivered are to be curtailed to a minimum of one day per week instead of five days per week, which is the case at present.

How does the Commission view the above proposals? Does it believe that the abolition of a standard postage rate can have adverse consequences for inhabitants of remote localities in sparsely populated countries like Sweden and Finland?

  Charlie McCreevy, Member of the Commission. The sector study referred to by the honourable Member was commissioned by the Commission in 2004 from Wik Consult in order to assist ongoing work on the gradual opening-up to competition of the European postal market.

The views expressed in the study are those of the consultant. The study is merely one of several elements that the Commission is considering in looking at various options and their possible consequences. In addition to the regular consultation with stakeholders and notably an online public consultation currently under way, the study actually serves as a platform to engage in a transparent and open debate on the conditions for enabling the further phasing-in of competition in the postal market.

It is the understanding of the Commission that the approach taken by the consultancy on the issue of the uniform tariff and the frequency of delivery was an attempt to give more flexibility to the public postal operator in order to sustain a viable and efficient universal service in the long term.

The current Postal Directive 97/67/EC, as amended by Directive 2002/39/EC, does not impose a uniform tariff but requires a minimum frequency of delivery of five days a week.

The Commission can assure the honourable Member that on all aspects of the postal reform in the European Union, including both the issues mentioned, it will try its best to strike the right balance between the necessary degree of harmonisation at EU level and those conditions to be fixed at Member State level, which would reflect the very different characteristics of each national postal market.

  Hélène Goudin (IND/DEM). – (SV) Thank you, Commissioner. I should like to be given an answer to my final question: that about whether thought had been given to what the consequences might be for inhabitants of sparsely populated regions. This perhaps mainly affects ourselves up in the Nordic countries where there are many miles between different households and villages.

  Charlie McCreevy, Member of the Commission. As I said in my reply, this consultancy study will form only part of the Commission’s thinking. The purpose of this particular consultant’s report is to inform the Commission on its thinking and it does not prejudge the Commission’s final decision on these matters. The honourable Member may rest assured that this forms only part of our overall deliberative process and does not in any way commit the Commission to making a proposal one way or the other.

  Mairead McGuinness (PPE-DE). – I am happy to say that it is not the only consideration, because lots of us use the post and would like it to be delivered each day rather than just once a week. But there is also uncertainty in terms of the actual post offices that will be distributed throughout rural Ireland as well as rural Europe. Can the Commissioner comment on what the Commission is thinking in relation to those services – other than the post – that are offered, and when a decision might be made by the Commission so that there will be more clarity?

  Charlie McCreevy, Member of the Commission. As the honourable Member may know, the Commission must come forward with a report, before the end of 2006, on the direction which it considers the liberalisation of the postal market should take. All the reports and consultations effected form part of our deliberative process in arriving at such a decision.

As Mrs McGuinness will be aware, the liberalisation of the postal market has been in progress for some time, and it is as part of that process that the Commission must bring forward its report on the direction to be taken.

The question of universal services is a key part of its deliberative process. It is, of course, a matter for Member States to organise their arrangements regarding rural post offices as they see fit and in line with their own requirements. Our specific role as the Commission is to consider that of the opening-up of the postal market.

  James Hugh Allister (NI). – Will the Commissioner pledge that he will not seek to allow a system to be put in place that will bestow a second-class service on rural communities? What specific steps does he have in mind to safeguard against private entrepreneurs creaming off the easy and the profitable aspects of the postal services, whilst leaving rural residents as the poor relations?

With regard to the recently introduced deregulation in the United Kingdom, does the Commissioner have any plans to monitor that, or any comments to make upon it?

  Charlie McCreevy, Member of the Commission. The point raised by the honourable Member will form part of our thinking in whatever proposals are put forward by the end of 2006. And, yes, I am very conscious of the importance of a universal service and particularly the importance of such a service to rural parts of Europe.

  President. – Question No 26 by Zuzana Roithová (H-1140/05)

Subject: Health care services in the proposal for a directive on services in the internal market

There is a risk that health care services will be excluded from the scope of the directive. Patients would not be able to enjoy the same rights as users of other services (right of information on providers, requirement to conclude indemnity insurance). Patients have already obtained the right to have health care costs in another Member State reimbursed thanks to the European Court of Justice, meaning that Article 23 would simply incorporate case law into national legislation, as well as providing patients with a higher level of certainty on account of the definition of hospital care.

What have the Member States done to incorporate the right of patients to have health care from another Member State reimbursed by their own social insurance systems? What does the Commission intend to do to safeguard these rights if Article 23 is not adopted?

  Charlie McCreevy, Member of the Commission. Article 23 of the proposal for a directive on services in the internal market does, as the honourable Member says in her question, codify existing rights to patient mobility. The case law of the Court of Justice has established that, subject to certain conditions, patients have the right to have the cost of healthcare received in other Member States assumed by the social security system in their own Member State. Patients are, without prior authorisation, entitled to get reimbursement for non-hospital care received in other Member States. For hospital care, prior authorisation may be required before a patient can go abroad to receive health care. Authorisations must be granted when the necessary care cannot be given in the patient’s Member State within a medically justifiable time limit.

Before the proposal for a services directive was tabled, the Commission carried out a study on the implementation of the rights of patients in the Member States. The conclusion was that ‘European citizens are encountering unjustified or disproportionate obstacles when they apply for reimbursement, from their Member State of residence, of costs for non-hospital treatment incurred in another Member State, or for authorisation for assumption of the costs in the case of hospital treatment’.

For an individual citizen, the right to receive treatment in other Member States and to have the cost covered by his or her own social security system is probably one of the most important benefits of the internal market. These are the reasons for the Commission to propose the inclusion of health services in the scope of the services directive and for proposing a specific provision on the assumption of health care costs incurred in other Member States.

The Commission has also been actively involved in the work of the high-level group on cross-border healthcare and patient mobility with a view to establishing how best the framework for guaranteeing and promoting patient rights in the single market can be developed.

This work has shown the clear benefits of cooperation between Member States on health and healthcare related issues, of which the reimbursement of costs is just one aspect. A number of Member States are concerned about the effects cross-border care and patient mobility may have on their national health budgets.

In the absence of a clear legal framework, we will continue to be confronted with developing ECJ case law. Pending the vote in this House on the first reading of the proposed services directive, it would be inappropriate to speculate on the position on certain articles, but I can confirm that where Member States impose disproportionate or unjustified restrictions, the Commission will act, including by launching infringement procedures.

  Zuzana Roithová (PPE-DE).  – (CS) I should like to thank the Commissioner for his well thought out answer. He rightly said that legal certainty that health care costs incurred in any Member State will be covered is a key benefit, and one that is of fundamental importance for the free movement of citizens and services within the European market.

There is one question I should like to ask, if I may, as a former minister for health and head of a large teaching hospital. Is the Commission aware of the fact that the Services Directive represents a key opportunity to lay down clear conditions and legal provisions concerning the reimbursement of non-urgent health care costs to citizens of the 25 Member States, without the principle of subsidiarity being violated? Furthermore, is it aware that it has already become untenable for the European Court of Justice to continue acting as the guarantor and interpreter of legislation on this issue, or for it to be possible for such a role to be performed by a high-level group that engages in ongoing discussions, yet has no legislative power and cannot provide any legal certainty?

(The President cut off the speaker)

  Charlie McCreevy, Member of the Commission. As I said in my reply, one of the reasons for the inclusion of health services in the scope of the Services Directive was to deal with some of the issues raised by the honourable Member. However, as the honourable Member will be aware, the debate on the Services Directive in the Committee on the Internal Market and Consumer Protection and in other committees has thrown up a number of other issues, and the Internal Market Committee voted in a particular direction. At next month’s part-session, the first reading of the Services Directive will come before the House and amendments will be debated. Therefore, there are many conflicting viewpoints among parliamentarians on this issue and there are conflicting viewpoints among Member State governments on the scope of the Services Directive to include healthcare costs.

As I have said on this issue and on any others relating to the Services Directive, I remain open to hearing the concerns and opinions of all stakeholders.

  Charlotte Cederschiöld (PPE-DE). – (SV) I wish particularly to thank the Commissioner for his excellent answer to Mrs Roithová’s question, and I wonder if the Commission might help bring about some understanding of these issues by producing basic data showing that this is an area in which genuine added value can be obtained. By this I mean that cross-border care could constitute added value for people, that we could obtain better specialist health care and that patients could obtain better care of higher quality, sometimes at lower cost but, above all, in a more efficient way. I am completely convinced that the Commission could come up with data which would help us. I wonder what the Commission thinks about helping bring about a better debate on these issues.

  Charlie McCreevy, Member of the Commission. As usual, Mrs Cederschiöld makes a very compelling argument for her case. However, as I said in reply to Mrs Roithová, there are differing views on this issue. I await the outcome, in the first instance, of the vote in the European Parliament next month and the various amendments that have been proposed in this and other areas.

Certainly Mrs Cederschiöld makes some very compelling points, but there are other views also.

  President. – Question No 27 by Katerina Batzeli (H-1141/05)

Subject: Public defence procurement contracts

The Commission's efforts gradually to create a more transparent and open European defence procurement market are moving in the right direction despite the particular features of this sector.

The procedure followed so far is based partly on Directive 2004/18/EC⁽³⁾ and partly on Article 296 of the Treaty, which provides for derogations. To what extent does the Commission intend, provisionally, to define more clearly the criteria for implementing Article 296 concerning derogations, together with the criteria for the scrutiny and monitoring of the related national procedures?

To what extent can it be considered that derogations whereby government authorities negotiate with suppliers of their choice in respect of the manufacture of goods for the purposes of research, study and experiment and the supply of defence material by legal persons, in which the government holds more than 50% of the capital, are consistent with the conditions governing the application of Article 296?

  Charlie McCreevy, Member of the Commission. The honourable Member’s question can be split into two parts. The first issue is whether the Commission intends to clarify further the criteria governing the use of Article 296 of the Treaty. The second, more specific issue is the Commission assessment on the rules to be applied to research, study and experiment contracts in the field of defence.

On the first issue, we recently outlined our proposals for future initiatives to improve cross-border competition in defence procurement. Our communication of 6 December announced the adoption in 2006 of an interpretative communication on Article 296 in the field of defence procurement and the start of preparatory work on a possible defence procurement directive. Those initiatives are based on the results of the consultation launched with the green paper of 2004. The contribution of Parliament to this debate, voted on 17 November, explicitly supports the Commission in its initiative.

The interpretative communication will give guidance on how to use Article 296 of the Treaty, which allows Member States a derogation from internal market rules and from Directive 2004/18 when their essential security interests are at stake. This provision has to be applied on a case-by-case basis and cannot be interpreted widely. It is for the Member State that seeks to rely on this provision to provide evidence that the derogation is justified and proportionate to the objective pursued.

A possible directive would coordinate procedures for defence procurement in cases where the derogation under Article 296 is not applicable or where a Member State chooses not to take advantage of it. It would provide new, more flexible procurement rules, better suited to the specific nature of the defence sector. The adoption by the Commission of a possible proposal for such a directive is subject to the results of the impact assessment which will be carried out in 2006.

The Commission is not in a position to give an assessment of the facts described by the honourable Member in the second part of the question. Article 296 of the Treaty has to be applied on a case-by-case basis and according to the specific circumstances of each case. However, the principles that should be taken into account when establishing the rules to apply can be briefly outlined.

On the one hand, it is worth noting that public procurement in the field of research, study and experiment benefits, under certain conditions, from specific derogations within the existing directive and within the Government Procurement Agreement of the World Trade Organization. Defence contracts of this kind can also benefit from derogations within the Code of Conduct set up by the European Defence Agency for the Article 296 area.

On the other hand, the question of government ownership of the share capital of potential contractors, and the consequences in terms of the rules to be applied, is not an issue to be addressed on the basis of Article 296: this is linked to the ‘in-house’ derogation, as established by the Court of Justice. However, according to this case law, the derogation only applies in cases of 100% ownership.

  Katerina Batzeli (PSE). – (EL) I should like to start by thanking the Commissioner for his transparency and comprehensive reply to my question.

I think that concern about the question of transparency of public procurement and public defence is an issue which preoccupies the European economy in general, but I shall bear in mind the Commissioner's explanation that he will clarify the derogations from Article 296 of the Treaty on the basis of the relevant decision by the Court of Justice, especially the stage of the procedure during which public arms procurement contracts are awarded.

What we need to know – and urgently – is how the Member States are to intervene with a consultation mechanism in relation to procurement as a result of research and technology.

  Charlie McCreevy, Member of the Commission. The honourable Member, Mrs Batzeli, reminds us of the advantages of having transparency in this particular area of public procurement. However, as she will be aware, Article 296 allows considerable discretion on the part of Member States as to how they organise such activity. Hopefully our recent communication of December 2005 and what we intend to do in cooperation with all stakeholders will open up that area even further.

  Glyn Ford (PSE). – I believe it is important to have a single European market in the defence production and procurement sector, which is vital for the future of the European Union. I believe that the Commission – in the past at least – has given an unreasonably generous and wide interpretation of Article 296. Could you say whether you would narrow that interpretation in future? Most importantly, if you do not have it, will you do an estimate at Commission level of the costs of not having a single market in the defence sector, in terms of the costs of purchases from overseas that might have been purchased in-house and the costs of having a fragmented and divided defence market in Europe with batch production rather than mass production?

  Charlie McCreevy, Member of the Commission. I understand that the sum total of defence budgets in the EU is in the order of EUR 169 billion, of which about EUR 82 billion is for procurement. Therefore, as the honourable Member implies in his question, any opening-up of the market in this area could lead to very substantial savings on the defence budget of many Member States, which would be much to the betterment of the public finances in all those Member States. So there is indeed considerable potential in this area.

On the other hand, if we are to open up this particular market even further, there must be cooperation among the Member States as to how to proceed. I wish to put these facts on this House’s record just to show the amount of money involved in this area.

  President. – Questions Nos 28 to 30 will be answered in writing.

Question No 31 by Bernd Posselt (H-1127/05)

Subject: EU-Ukraine

How does the Commission assess developments in the Ukraine during the past 12 months, and what strategies has it drawn up for 2006 with a view to bringing this important and entirely European country closer to the EU?

  László Kovács, Member of the Commission. Thank you for the question. The European Neighbourhood Policy has brought and will continue to bring Ukraine closer to the European Union. Our cooperation with Ukraine can be seen as most successful. The European Neighbourhood Policy Action Plan adopted in February 2005 has proved to be an essential and efficient tool for encouraging reform through deeper political cooperation and closer economic integration between the EU and Ukraine.

Following the Orange Revolution, a renewed willingness on the Ukrainian side to boost EU-Ukraine cooperation could be observed. The implementation of the Action Plan by Ukraine in the course of 2005 can be assessed positively. At the summit with Ukraine in December 2005, President Barroso confirmed progress by Ukraine in political and economic reform. Progress in the EU-Ukraine relationship could be registered on economic integration; granting of market economy status by the EU to Ukraine; cooperation in the key sectors of energy and transport; a memorandum of understanding on energy cooperation; justice and home affairs; the opening of visa facilitation negotiations in parallel to negotiations on a readmission agreement; as well as in the area of foreign and security policy, namely, the launching of the EU border assistance mission on the Transnistrian segment of the Ukraine-Moldova border.

However, important steps remain to be taken by Ukraine in the implementation of the Action Plan, in areas such as the rule of law and in particular on the economic side: the fight against corruption; adopting relevant legislation for WTO accession; and improving the business climate.

The Commission hopes to build on the additional impetus given by the summit – the first with a Ukrainian Government fully committed to reform – to the development of our relationship with Ukraine. In February 2005 the EU committed to initiating early consultations on an enhanced agreement between the EU and Ukraine as soon as the main political priorities of the Action Plan have been addressed. That commitment remains valid; when we are able to do so depends on Ukraine and perseverance in the reform process to tackle outstanding issues. The March 2006 parliamentary elections will be an important test of Ukraine's continued commitment to democracy and will be essential in opening further perspectives in the relationship with Ukraine.

The future relationship will be based on several essential conditions: the success of the political reform, respect for fundamental rights and freedoms, and WTO membership, so as to fully integrate Ukraine into the world market. This will also open up prospects for the establishment of a free trade area between the EU and Ukraine.

The way ahead lies in a close partnership with Ukraine, based on common values and the objective of economic integration, as well as strengthened cooperation in a number of areas. The policy of constant progress and small, continued and common steps in the EU-Ukraine relationship has proved to be successful over the past year since the Orange Revolution and will allow us to tackle the challenges ahead.

  Bernd Posselt (PPE-DE). – (DE) Mr President, on the one hand, I regret the absence of Commissioner Ferrero-Waldner – I do not think that that is right, as her name appears on the agenda – but, on the other, I am glad that the Austro-Hungarian cooperation in the Commission is working so well.

I have two brief questions for the Commissioner. Firstly, what aid, in the form of staff and funding, does he regard as conceivable for the coming year to prevent the reform process in Ukraine failing or toppling once more – as, indeed, certain neighbouring states obviously believe it will?

Secondly, what specific action is the Commission taking to improve the transport links between the European Union and Ukraine, and to develop common infrastructure concepts to strengthen Ukraine’s energy and transport links to the west?

  Laszló Kovács, Member of the Commission. I am afraid it is too early to answer these questions. Perhaps Mrs Ferrero-Waldner has something in mind, but as far as the Commission is concerned, we have not reached the point of being able to answer this question because, first, political and economic reforms are needed to get Ukraine closer to the European Union. Then comes further and deeper cooperation.

  Inger Segelström (PSE). – (SV) I should like to put a question to the Commission. The fact is that, today, the European Parliament has almost unanimously adopted a very powerful report on human trafficking. We have given a very great deal of attention to this issue, and we have also addressed it in the contacts we have had with Ukraine. With today’s decision, Parliament is giving its position a higher profile. I should like the Commission to give particular attention to this issue, which has received an incredible amount of support today here in the European Parliament.

  László Kovács, Member of the Commission. I think that it will take a long time to bring Ukraine closer to the European Union and it will be a long road. Using my personal experience as a former foreign minister of neighbouring Hungary, I can say that Ukraine has come a long way, and since the Orange Revolution there is now no major question that Ukraine wants to get closer, that Ukraine wants to be a democratic country, wants to be a market economy. Nevertheless, it is still has a long way to go before it completely complies with EU norms and principles.

We have two options. Either we can be too demanding and push Ukraine away from the European Union, or we can be more tolerant, more cooperative, and bring Ukraine closer, bearing in mind that the domestic political situation in the country is not that simple. Ukraine is now facing general elections that will be a test of democracy in the country, whatever the outcome. What we have to take into consideration is not the outcome of the election, but the democratic nature of that event, which will be a test for Ukrainian democracy.

  President. – Question No 32 by Sajjad Karim (H-1128/05)

Subject: Sri Lanka: EU's response to Sri Lanka Presidential election result and Pirapaharan statement

On 27 November 2005 Velupillai Pirapaharan, leader of the LTTE, made 'an urgent and final appeal' to the newly elected President of Sri Lanka, Mahinda Rajapaske, to reinvigorate the peace process and 'satisfy the political aspirations of the Tamil people.' Pirapaharan indicated that, if 'a reasonable political solution' was not offered soon, the LTTE would intensify its struggle for self-determination, possibly by violent means. What is the Commission's response to the tone and content of Pirapaharan's Hero's Day speech?

Given the stalemate in the peace process since the LTTE withdrew in 2003, and the seemingly irreconcilable zero-sum perspectives of Rajapaske, (who campaigned with promises not to share power with the LTTE) and Pirapaharan, does the EU not feel it has an overwhelming responsibility, as a Tokyo co-chair and a key donor, to open an urgent dialogue with both parties before they return to violence, to find a solution which realises the Tamil right to self-determination within a united Sri Lanka?

  László Kovács, Member of the Commission. Thank you for the question. There are strong reasons for concern about the situation in Sri Lanka. The year 2005 was a bad one for the peace process. The assassination of Foreign Minister Kadirgamar, the electoral boycott enforced by the LTTE in the north and east, and the numerous killings in the east and in Jaffna have put the ceasefire in jeopardy.

The failure of the post-tsunami operations management structure, the mechanism within which the government, the LTTE and Muslim representatives were to decide jointly about tsunami reconstruction in the north and east, has also been a heavy drawback, creating huge resentment among the Tamils.

What we are seeing now is a dangerous spiral. The Sri Lankan military has now lost more than 60 soldiers in indirect attacks by the LTTE in Jaffna and other parts of the north and east. So far, the government has acted with a remarkable sense of restraint, but this cannot last forever.

The European Union, and the Commission in particular, plays a strong part in the peace process. Sri Lanka is a personal priority of the Commissioner responsible for external relations, Mrs Ferrero-Waldner. She went there last March and fought hard to obtain an agreement on P-TOMS. She still feels this would have made a major difference. The EU passed strong messages to both sides throughout the year. In particular, the EU declaration of September 2005 announcing that high-level delegations of the LTTE would no longer be received in EU capitals was a major signal that, while seeking a balanced approach to the conflict, the EU would not tolerate further violence from the LTTE.

The Commission has also been instrumental in raising the profile of the co-chairs. The Commissioner responsible for external relations personally attended three of the four co-chair meetings held in 2005. Indeed, two of them were held in Brussels.

The Commission continued to support Norway’s facilitation through public, as well as private, messages throughout the year. The Commission also supported the idea that the next co-chair meeting should take place in Sri Lanka close to the fourth anniversary of the ceasefire agreement.

The Commission will intensify its efforts into the next year. Two priorities have been set for the Commission’s action. Firstly, the Commission will work towards an even stronger role for the co-chairs, including direct visits at ministerial level. The Commissioner responsible for external relations herself intends to return there in February, hopefully with all the co-chairs. She wants to be able to speak to Mr Pirapaharan in person and pass him the direct message that Europe will react very soon if the LTTE shows no sign of change.

Secondly, now that P-TOMS have failed, the Commission is working on an alternative base to deliver reconstruction to the north and east. It may seek to work more locally, say in one or two districts, to compensate for the absence of a larger consensus between the key players.

  Sajjad Karim (ALDE). – I thank the Commissioner for his detailed response. I have one issue that I wish to raise, following on from today's mine attack which resulted in the deaths of two civilians and the injury of 12 soldiers. That is the latest in a month of bloodshed. Given that both sides have agreed, in principle, to review the implementation of the ceasefire agreement, is the EU, as co-chair of the peace process, planning on taking this opportunity to push for a human rights declaration signed by both the government and the LTTE in order to put the protection of fundamental human rights at the heart of the peace process?

  László Kovács, Member of the Commission. Thank you for the supplementary question. As I am not the Commissioner responsible I can only give my personal view, and not that of the Commission, on this new development which the Commission has not had time to discuss. However, it would seem to me that an initiative such as the one you suggest as a possible option is fully in line with the Commission’s policy on the situation in Sri Lanka.

  President. – As the subject is covered later in this part-session Question No 33 will not be called.

As the author is not present, Question No 34 lapses.

Question No 35 by Inger Segelström (H-1160/05)

Subject: Colombia

We note with concern that the democratisation process in Colombia is constantly being disrupted by disturbances in the country. We are also concerned about the continuing human rights violations there. The armed conflict is escalating and drug-trafficking is continuing on a large scale. This constitutes a serious obstacle to development and peace in Colombia. A number of Swedish voluntary organisations send personnel to Colombia to work on peace projects and projects to defend the rights of local and indigenous people, including land rights. This should be seen against the background of the fact that, as in many other Latin American countries, large corporations are expanding rapidly, as, particularly, is palm oil production by them. Will the Commission propose any special measures to support the democratisation process in Colombia?

  László Kovács, Member of the Commission. The Commission shares the concern of the honourable Member regarding the continuing human rights violations and the persisting threats to democracy in the regions of Colombia affected by the longstanding internal armed conflict. Therefore the EU strategy for Colombia mainly aims at supporting comprehensive peace initiatives, with the strong involvement of local communities. It is thus the intention to directly contribute to the strengthening of democracy with an integrated set of instruments.

Among these, over the period from 2001 to 2005, more than EUR 16 million was committed for Colombia from the European Initiative for Democracy and Human Rights, for 53 projects supporting human rights and democratisation, and which have been implemented or are still under way.

  Inger Segelström (PSE). – (SV) Thank you, Commissioner. I asked this question precisely because Colombia is in the process of becoming the scene for our second largest refugee disaster. Where Colombia differs from other countries is in the fact that land there is still in the hands of local and regional landowners. That is why there is still an opportunity to help the local population and to ensure that people are allowed to retain their land. This factor will of course be what is important when we try to solve this conflict. Thank you very much for your answer, and I naturally hope that we shall jointly make progress in these peace initiatives being taken by the EU.

  László Kovács, Member of the Commission. I do not wish to take the floor on that, as I am not aware of the problem that the Member raised.

  President. – Question No 36 by Ryszard Czarnecki (H-1169/05)

Subject: ASEAN summit and protection of human rights

What view does the Commission take of the outcome of the ASEAN summit held in December, particularly as regards the protection of human rights in ASEAN countries such as Myanmar (Burma)?

  László Kovács, Member of the Commission. The Commission follows with interest the attempts by institutions and individuals in ASEAN countries to establish a human rights mechanism. The Commission supports those efforts and other human rights issues through various cooperation programmes in several ASEAN countries. An EC-sponsored ASEAN-wide human rights conference will be held in Manila in 2006.

We are encouraged to note that for the first time an ASEAN summit called for the release of political prisoners in Myanmar. ASEAN leaders also agreed to dispatch the foreign minister of Malaysia, the current chair of ASEAN, to assess the democratic process during a visit.

While those initiatives by ASEAN are positive, we should remain cautious about the prospects of immediate changes in Myanmar and especially about the release of Aung San Suu Kyi.

  Ryszard Czarnecki (NI).  – (PL) Commissioner, progress has indeed been made, at least in terms of the call that has been made for human rights to be respected in the country formerly known as Burma. I do, however, have a question, or rather a request and a proposal, for the European Commission. It is my belief that the Commission should monitor the situation on an ongoing basis, naturally with Parliament’s help. Truly international pressure, brought to bear by Europe as well as Asia, is our only hope of achieving any concrete results. I would urge the European Commission to take an ongoing interest in this issue.

  László Kovács, Member of the Commission. Thank you for your proposal, which I will certainly forward to Mrs Ferrero-Waldner. I think that the possibilities available to the European Union, which is not in the region, are more limited than those available to ASEAN, for instance. I think ASEAN could do more, but your proposal is certainly worthy of consideration.

  President. Questions which had not been answered for lack of time would receive written answers (see Annex).

That concludes Question Time.

(The sitting was suspended at 7.05 p.m. and resumed at 9.05 p.m.)

IN THE CHAIR: MR ONYSZKIEWICZ
Vice-President