Index 
Verbatim report of proceedings
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Monday, 13 November 2006 - Strasbourg OJ edition
1. Resumption of the session
 2. Approval of Minutes of previous sitting
 3. Transfers of appropriations: see Minutes
 4. Petitions: see Minutes
 5. Texts of agreements forwarded by the Council: see Minutes
 6. Written statements (Rule 116): see Minutes
 7. Written statements and Oral Questions (tabling): see Minutes
 8. Documents received: see Minutes
 9. Decisions concerning certain documents: see Minutes
 10. Membership of Parliament
 11. Membership of committees and delegations: see Minutes
 12. Signature of acts adopted under codecision: see Minutes
 13. Draft general budget for the 2007 financial year (deadline for tabling draft amendments): see Minutes
 14. Order of business
 15. One-minute speeches on matters of political importance
 16. 2006 annual report on the Euro Area (debate)
 17. Community action in the field of marine environmental policy – Thematic strategy on the marine environment (debate)
 18. European electricity network breakdown (debate)
 19. Milk quotas (debate)
 20. Support for rural development by the EAFRD – Voluntary modulation of direct payments under the CAP (debate)
 21. Agenda for next sitting: see Minutes
 22. Closure of sitting


  

IN THE CHAIR: MR BORRELL FONTELLES
President

(The sitting was opened at 5.05 p.m.)

 
1. Resumption of the session
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  President. I declare resumed the session of the European Parliament adjourned on Thursday 26 October 2006.

 

2. Approval of Minutes of previous sitting
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  President. The Minutes of the sitting of 26 October 2006 have been distributed. Does anyone wish to comment on them?

 
  
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  Françoise Grossetête (PPE-DE).(FR) Mr President, I would just like to point out that on Thursday I forgot to sign the attendance sheet However, I participated in all the roll-call votes at noon on Thursday and on Thursday evening.

 
  
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  President. Appropriate steps will be taken to make the necessary correction.

(The Minutes of the previous sitting were approved)

 

3. Transfers of appropriations: see Minutes

4. Petitions: see Minutes

5. Texts of agreements forwarded by the Council: see Minutes

6. Written statements (Rule 116): see Minutes

7. Written statements and Oral Questions (tabling): see Minutes

8. Documents received: see Minutes

9. Decisions concerning certain documents: see Minutes

10. Membership of Parliament
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  Francesco Enrico Speroni (NI).(IT) Mr President, ladies and gentlemen, I should just like to make an observation to be included in the Minutes. Since the decisions of the Italian authorities in relation to changing the representatives of Members elected in Italy refer to the 2004 elections, I do not believe it is appropriate for it all to take effect from 8 November. It is likely that the change should be backdated and I believe that this should be examined by the competent committee of this House.

 
  
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  President. We take note of your observation. I do not know what its legal implications are, but the Secretariat will look into it and, if necessary, pass it on to the most appropriate committee to examine how well-founded your observation is.

 

11. Membership of committees and delegations: see Minutes

12. Signature of acts adopted under codecision: see Minutes

13. Draft general budget for the 2007 financial year (deadline for tabling draft amendments): see Minutes

14. Order of business
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  President. The final version of the draft agenda as drawn up by the Conference of Presidents at its meeting of 9 November 2006 pursuant to Rules 130 and 131 of the Rules of Procedure has been distributed. The following amendments have been proposed.

Monday:

I have received a request from the Socialist Group in the European Parliament to postpone the debate on the report by Mrs Bachelot-Narquin on the proposal for a regulation of the European Parliament and of the Council establishing the European Globalisation Adjustment Fund.

Who would like to move this request on behalf of the Socialist Group in the European Parliament?

 
  
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  Jean Louis Cottigny (PSE).(FR) Mr President, the Socialist Group in the European Parliament requests that the debate and the vote on Mrs Bachelot’s report on the European Globalisation Adjustment Fund be postponed.

In fact, because COREPER and the Finnish Presidency only finalised their version of the regulation on Friday 10 November, the document did not reach us until the end of the afternoon. As a result, although we worked with the rapporteur all last week in informal meetings with the Council and the Commission, we were not able to have an initial discussion amongst ourselves between Friday evening and today. We therefore ask that both the debate and the votes be postponed to the second November session in order to enable us to carry out our examination of the proposals made to us by the Council.

 
  
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  Roselyne Bachelot-Narquin (PPE-DE), rapporteur.(FR) Mr President, I also take the floor with the agreement of the Group of the European People's Party (Christian Democrats) and European Democrats to support the position of my fellow Member, Mr Cottigny, and to request that the vote and the debate be postponed.

In fact, as my fellow Member has just said, the latest information concerning the Council’s positions reached us only a few hours ago. Our discussions thus far indicate that the positions of the Council and Parliament, expressed by the two competent committees, the Committee on Employment and Social Affairs and the Committee on Budgets, have come much closer together. It is not guaranteed, but on this basis we could perhaps reach an agreement at first reading, which would enable us to make this fund operational from the beginning of next year, as hoped for, I believe, by almost all the Members of this House. That is why I support Mr Cottigny’s position.

 
  
  

(Parliament accepted the proposal)

(The order of business was adopted)

 
  
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  Jens-Peter Bonde (IND/DEM). – Mr President, the proposed Constitution was approved by 500 votes to 137, and confirmed by 382 to 125 votes; so the opponents now have one in four votes in this House, but when we are represented at meetings abroad with the national parliaments, it is only 1 to 14. The ‘no’ side was not allowed to be present at Berlin, London or Paris. Parliament has now sent a total of 58 representatives, 54 from the ‘yes’ side, only 4 from the ‘no’ side. In 7 of the 11 meetings the ‘no’ side was not present.

Last Thursday the Conference of Presidents approved this discrimination against those of us who oppose the Constitution. That is a very good example of how badly our D’Hondt system works in relation to minorities in the big groups. Some of us have established a Fair Chair reform programme. We call for a Fair Chair instead of a coronation, and fair representation instead of discrimination against small groups and minorities.

We will present our platform at a press conference tomorrow at 2 p.m. in the press room. Mr President, you are welcome to come.

 
  
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  President. Mr Bonde, as you are aware, the Conference of Presidents has already taken your position into consideration and has confirmed that the composition of each committee’s delegations is the responsibility of the committee members, and therefore it is the committee that must decide on what representation is appropriate.

You made your speech today – and all Members need to be aware of this – after the Conference of Presidents had already examined your concern and reached a decision on it.

 

15. One-minute speeches on matters of political importance
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  President. The next item is the one-minute speeches on matters of political importance.

 
  
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  József Szájer (PPE-DE).(HU) Mr President, while we were gathered here on Monday for our last plenary session, events were taking place in Budapest that merit the attention of all Europe. That is, the 50th anniversary of the 1956 uprising was being celebrated in Hungary. That celebration, however, took quite an odd turn because the people were not allowed to participate. One of the high-ranking guests present, an Italian deputy prime minister, said that these celebrations left the people out.

Meanwhile the people on the street who wanted to celebrate peacefully were brutally attacked and beaten up. The police caused serious injuries by shooting rubber bullets at head level, and they pushed people off the streets. Peaceable passers-by, who wanted to celebrate 1956 peacefully, were not allowed to do so. What a shame, what a shame this was in the middle of Europe. I call upon everyone who strives for human and civic liberties not to support this policy.

 
  
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  Catherine Guy-Quint (PSE).(FR) Mr President, I would take the liberty of speaking once again on the subject of the Bulgarian nurses and the Palestinian doctor. They are still in Tripoli, in the prisons of the Libyan State.

You know, as I do, that they are imprisoned under false accusations. The review of their trial was supposed to conclude at the end of October. However, in October, the court again postponed its decision, this time until 19 December. The court says that it is beginning to take into consideration the opinion of international experts, who tirelessly bring evidence of the innocence of the accused.

Mr President, could we not demonstrate again the great interest that we take in the fate of these prisoners who have been tortured and have been absent from their homes for eight years for having treated young Libyans? This situation cannot be tolerated, as, month after month, they are promised a trial. This new trial, the third, is inequitable and unjust and leaves them in the throes of a death sentence.

 
  
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  Magda Kósáné Kovács (PSE).(HU) Mr President, it is sad enough that the countries of Europe are witnessing ever more frequent acts of violence and destruction, events that signal turmoil and inner tensions. Stones being hurled, cars set on fire elicit a forceful response from the police forces, and these events show up on the newspaper headlines and television screens. All this causes damage to Europe, to the protesters, to the forces of law and order, in a word: to democracy.

It is even more detrimental, however, when certain politicians, certain political parties feel justified in pronouncing judgment prior to the inquiry undertaken by the appointed independent judicial body. The Hungarian socialist delegation read with profound shock the statement by the President of the European People’s Party about the events surrounding the 50th anniversary. What József Szájer said does not surprise us. The grave allegations by the European People’s Party made prior to the conclusion of the inquiry are to be qualified as prejudicial, and as such, on behalf of the Hungarian socialist delegation, we reject them most emphatically.

 
  
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  Danutė Budreikaitė (ALDE). (LT) Mr President, ladies and gentlemen, it has already been sixteen years since Lithuania regained its independence from the Soviet Union. The same time has passed since Lithuania failed to get back its embassy building in Rome, known as Villa Lituania, which was owned by Lithuania until 1937. Today, the Russian flag continues to fly on this building.

After Russia occupied and annexed Lithuania in 1940, the then Lithuanian ambassador Stasys Lozoraitis presented a note to the Italian Government emphasising the illegitimate nature of the incorporation of Lithuania into the Soviet Union and the fact that Lithuanian diplomatic missions in foreign countries should not change their status. Despite this, Soviet officials occupied Villa Lituania in the presence of the representatives of the Italian Ministry of Foreign Affairs and the police.

After the restoration of Lithuania’s independence, Italy avoided any responsibility and suggested negotiating with Russia concerning the building. Even though the Italian Government appears to have changed its position now, this matter remains unresolved. Why would the Italian Government make no attempt to reconsider its past history?

 
  
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  Manolis Mavrommatis (PPE-DE).(EL) Mr President, ladies and gentlemen, despite the reassuring messages and replies from the Central European Bank and the Commission on the cases of forgery of the euro, this phenomenon continues to preoccupy the administrative authorities and Europol.

Just last week we had two particularly worrying cases. The first concerns the gang of Colombian counterfeiters brought down. A total of EUR 6 million was seized in forged 50 and 100 euro notes destined for Spain and other countries of the European Union.

The same week in Germany, hundreds of thousands of 5 and 20 euro notes were dissolved in water, with the result that the German authorities were questioned as to the causes, while the citizens of this country hanker after the strong and independent Deutschmark.

What is going on with the euro? How secure are citizens when they themselves are at risk – even though victims – of being referred for investigation, as we have seen in several countries, on suspicion of counterfeiting or moving forged notes?

How long will the Central European Bank turn a blind eye? Or is it only interested in when interest rates will rise again and start throttling consumers?

 
  
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  Jean Lambert (Verts/ALE). – Mr President, I rise to ask you and others in this House to use their best offices to intervene in the case of ten Iranian Ahwazi Arab rights activists who, according to the Iranian media, face the death penalty this week.

The men stand accused of bombing oil installations, but the evidence is unconvincing. All ten men made confessions under torture. According to Amnesty International and Human Rights Watch none of them had a fair trial. Their lawyers were not allowed to see them before their trial and were only briefed on the prosecution case a few hours before the start of court proceedings, which were held in secret. The lawyers for the condemned men have themselves been arrested for complaining about the illegal and unjust nature of these trials, and have been charged with threatening national security.

I therefore hope that many Members will make contact with the Iranian authorities to make clear their views on these tragic cases.

 
  
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  Stanisław Jałowiecki (PPE-DE). – (PL) Mr President, one week has passed since the introduction of new baggage restrictions on airline passengers. However, I am still constantly asked what the matter is, if just days after Great Britain has eased these restrictions they have been implemented Europe-wide? I still have not received an explanation for this situation even though I am a representative of the Committee for Transport and Tourism.

Another issue is the lack of clarity over the new regulations, which are totally confusing to passengers. It appears that they have a different interpretation in just about every airport. At Wrocław Airport, for example, which is the one I use, I was told to throw away a stick deodorant, even though it was not in liquid form, as a penalty for not having declared it.

In such a simple matter, would it not be possible to harmonise these rules so that they are interpreted in a uniform way, and that it is not up to the goodwill or otherwise of individual officials? I hope to receive a reply to these questions.

 
  
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  Kinga Gál (PPE-DE).(HU) Mr President, in 1989-90 Hungary created the foundations for democracy and the rule of law without any violence. Now, 16 years later, the spirit of coercion has nevertheless been unleashed, because the current government unfortunately saw fit to use intimidation in order to attain its goals, thereby suppressing democratic opposition. The use of force is to be condemned, let there be no mistake. Rioting by violent groups is unacceptable, but even in problematic situations respect for the tools of the rule of law is indispensable.

Defenders of Hungarian democracy must seize every legal means to ensure that the violent events of 23 October will never be repeated, when the police violently broke up the crowds and failed to observe the most basic demands of human rights, precisely when people were commemorating the 50th anniversary of the 1956 Revolution. We Hungarians believe in democratic freedom, which we have struggled so hard to achieve, and wish to make use of our human rights.

 
  
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  Glyn Ford (PSE). – Mr President, I would like to raise the issue of incitement to racial and religious hatred in Europe.

Over the past two weeks in the United Kingdom we have had two trials. One concerned a young Muslim who, during a demonstration regarding, I believe, the infamous Danish cartoons, called for the beheading of those who insult Islam. He was rightly convicted and imprisoned. Yet, in contrast, Nick Griffin, the leader of Britain’s neo-fascist British National Party, who was caught by the BBC declaring Islam a vile and wicked religion, was found not guilty of the same. I would ask that the relevant Commissioner considers whether or not at European level we need new and stronger legislation in this area. This is not an issue of freedom of speech, but freedom from fear. Comments like those of the BNP leader put the Muslim and minority communities at risk. The evidence is that, when BNP councillors are elected, racist violence in the relevant area doubles or triples, leading to problems for the whole area.

 
  
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  Avril Doyle (PPE-DE). – Mr President, I rise to ask for your support for efforts at EU level to counter discrimination in the workplace, and in particular for the EU-funded ‘Work It Out’ Programme, which is a project that produces tools to help people with intellectual disabilities, those who support them and European legal experts in this area. This programme provides information on the framework Employment Directive, which seeks to combat discrimination and unequal treatment at work. That directive has recently been transposed by Member States and provides vital protection to people with intellectual disabilities who face discrimination at work.

Mr President, I would ask you to ensure that the definition of ‘worker’ in this directive includes people in sheltered employment. We must be watchful and ensure that the directive is being implemented correctly in each Member State. Intellectual disability covers a large range of people with very different capabilities: some people with intellectual disabilities work and live independently in the community, while others have complex or profound needs and require constant support. However, it is important not to make assumptions about what intellectual disability means, since with appropriate support and preparation many people with intellectual disabilities can be a valuable part of the workforce.

Mr President, I would ask that you devote personal attention to this matter.

 
  
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  Zbigniew Zaleski (PPE-DE).(ES) Mr President, to begin with, I should like to thank you in your own language for what you said to President Putin, that we will not trade human rights for energy.

(PL) I would also like to see the ban imposed by Russia on the import of meat from Poland discussed at this meeting. Russia’s accusations are groundless, and the matter has become too long and drawn-out. I believe that it is not just a matter between Poland and Russia, but between Russia and the entire European Union. I would like this house to put some pressure on the European Commission to take steps to resolve this abnormal situation.

 
  
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  Françoise Castex (PSE).(FR) Mr President, an unprecedented power cut hit Western Europe on the night of 4/5 November. It revealed the fragility of the European energy system and the inadequate capacity for producing and transporting electricity, the result of a poor investment policy.

Despite the risk of blackouts, for the last six years European operators have been reducing the level of their investments, which has fallen from 16% to 10% of their turnover. At the same time, electricity consumption has continued to rise by 1.8% per year. This fall in investments is the direct consequence of liberalising the energy market. Rather than investing in the development of new production capacity, operators are concentrating their efforts on profits and on buying out their competitors.

On the one hand, the public has seen electricity prices soar while, on the other hand, security has decreased. Only a European energy policy could guarantee successful cooperation between Member States and the implementation of necessary investments to the tune of EUR 700 billion between now and 2030.

Electricity is a public good: this should be reflected in the European Union’s political initiatives.

 
  
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  Zdzisław Zbigniew Podkański (UEN).(PL) Mr President, despite numerous interventions, discussions and measures by Poland to comply with Russia’s conditions, Russia continues to maintain its embargo on Polish foodstuffs, including meat. Poland has not, and will not be able to resolve this situation until the European Union applies equal market protection rules for all Member States.

It is intolerable that Poland should be facing problems selling its products both on the external market and on the internal European market due to the impact of goods from third countries being dumped on its market. Poland, like the other Member States, cannot deal with Russia on her own. The partner that Russia should be dealing with is the European Union as a whole.

For this reason I am raising the fundamental question of whether at the European Union-Russia summit planned for 24 November this year, Poland’s problems will be treated as problems which affect the European Union as a whole.

 
  
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  President. This is certainly an important issue. I cannot give you an answer because, as you know, we have not been invited to take part in this summit, but I am sure that both the Commission and the Council will bear Poland’s problems in mind when dealing with EU-Russian relations.

 
  
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  Hanna Foltyn-Kubicka (UEN).(PL) Mr President, I would also like to raise the matter of the European Commission’s hand luggage regulations. I do not know whether the President and the Commission are aware of the fact that the food and cosmetics industry is unable to keep up with these regulations, and the majority of cosmetics do not come in 100 ml packaging. This means that shampoos, lotions and other cosmetics in liquid form have to be poured down the sink and the remainder poured into 100 ml containers because 200 ml containers are not allowed on board the aircraft.

Of course, you can have your baggage checked in, although 5 million pieces of baggage go missing each year worldwide. Often total chaos and confusion prevails at airports, and the officials responsible are unable to cope.

So it appears that the terrorists are one step ahead of us again, and have got us in a corner. The way things are going, it will not be long before they have us all flying in strait-jackets and disposable hospital slippers.

 
  
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  Lidia Joanna Geringer de Oedenberg (PSE).(PL) Mr President, ‘JEREMY’, a joint and extremely valuable initiative of DG REGI and the European Investment Bank for 2007- 2013, is currently being negotiated with individual Member States. The aim of the initiative is to facilitate access to European Regional Development Fund cash for small and medium-sized enterprises.

The aim of JEREMY is to help regional business start-ups and development through all kinds of non-grant based instruments such as microcredits or guarantees. Unfortunately there is resistance on the part of some Member States – for the decision depends on them – to re-allocating part of their structural funds towards this new initiative. Some refuse outright to include them in their programmes, even though it is clear that they will be unable to utilise all of their funds and will have problems with uptake.

This means running the risk that JEREMY, a superb instrument capable of supporting business initiative in the regions, will remain unused. We as the European Parliament have the obligation to encourage Member States to make use of the opportunities offered by JEREMY, because in addition to major investments from the structural funds, it is the development of small business and the generation of business activity that are the powerhouse of regional development, and therefore they deserve particular support.

 
  
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  Jörg Leichtfried (PSE).(DE) Mr President, ladies and gentlemen, this year, and for the tenth time, the Europa Centre in Graz organised a European youth meeting with participants drawn from all over Europe, devoted to the theme of ‘European future objectives’ and with the participants giving their attention to the future development of the European Union. Following an information session on the European Union and its institutions, the participants – over sixty of them – moved to a role-play exercise in which they imagined themselves as representatives of these institutions and worked through a large number of items, producing a twenty-point resolution to the effect that, inter alia, the powers of the Union should be extended, that the budget should be topped up and that there should be no further enlargement before the treaty on a constitution for Europe has entered into force. Young people are Europe’s future, and we should be very strong advocates for their education and further education, for that, too, is where our future lies.

 
  
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  Georgios Karatzaferis (IND/DEM).(EL) Mr President, one of the achievements of democracy is university asylum which, of course, does not develop in the same way in every country. In Greece, suddenly, university asylum means the anarchists, the pockets of terrorism which we pursue hotly in this Chamber, are creating cells and using universities as sites to manufacture Molotov cocktails and attack shops and neighbours.

It is a terrible problem faced by my country, which is unable to find a solution. It is unable to take them on and that is where the main problem lies. Can we legislate uniformly in all the countries of Europe for equal respect for asylum, because this situation is spiralling out of control, and not just in Greece? In other capitals of countries of Europe we have the same problem: the anarchists in asylum are a state within a state. There should be respect for asylum, but this should not become cells, pockets of anarchy, of all those going around in hoods violating, extorting and plundering the life of the citizens. Let us at long last legislate for the good of universities, for the good of students, and not for the good of the extremists or certain extremists fighting against the state.

 
  
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  Csaba Sándor Tabajdi (PSE). – (HU) Mr President, it might become one of the signs of discrimination against the new Member States if administrative costs for 2007 were to be reduced at their expense. Paring down bureaucracy is a worthy aim, but it puts at risk the filling of eight hundred positions for the new Member States. These civil servants ought already to have been hired in the first half of 2006. I call upon the Commission to fulfil its obligations and to continue hiring new civil servants at the agreed pace.

I hope that the European Commission will not listen to the Fidesz party. I would not wish to see the new Member States suffer from the smear campaign that party has launched, claiming that the new Member States do not deserve to be treated as equals because they are run by post-communists who trample human rights underfoot. Whatever Kinga Gál and József Szájer may say in this Chamber, to my mind, it is the interview given today by Elmar Brok, chairman of the Committee on Foreign Affairs, which holds true: Hungarian democracy and the rule of law are not in danger.

 
  
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  András Gyürk (PPE-DE).(HU) Mr President, a few days ago, as a result of an energy network breakdown, millions of Europeans were left without power, if only for an hour. This blackout, unprecedented since the 1970’s, has once again shed light on the fact that it is increasingly difficult to bring energy regulation, which is largely within national jurisdictions, into line with the demands of energy security in the 21st century.

At the same time, the dangers with regard to gas supply are becoming increasingly evident. The conflict over gas prices that has been developing in recent weeks between Russia and Georgia makes it clear that Russia is prepared, in a completely overt fashion, to use its energy resources for political purposes. This is the reason – one that is all the more frightening for the EU – why Russia, which plays a key role in our gas supply, does not wish to sign the European Energy Charter.

Having thus experienced our dependency on two occasions in recent days, our response can only be a common EU energy policy based on solidarity that speaks with one voice at the international level. The Energy Green Paper currently being debated in Parliament should serve as a suitable starting point for formulating such a policy.

 
  
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  Marios Matsakis (ALDE). – Mr President, a study carried out by the highly renowned Johns Hopkins Hospital Medical School in the USA in collaboration with the Baghdad Medical School, published last month in the internationally prestigious medical journal The Lancet, showed that approximately 655 000 civilians have died as a result of the violent hostilities in Iraq between March 2003 and July 2006. Of these, many thousands have been children whose deaths were deemed by vicious criminal terrorists in Iraq and seemingly heartless politicians in Washington and London to be acceptable collateral damage.

Mr Bush’s and Mr Blair’s invasion and occupation of Iraq has turned into a bloodbath of innocent people, worse than during satanic Saddam’s rule of terror. We can no longer look on passively. I call upon you to recommend to the Conference of Presidents an urgent debate on the carnage involving civilians in Iraq, in the hope that we might help convert the madness of war into the logic of peace.

 
  
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  Jim Higgins (PPE-DE). – Kyoto was and is a blueprint for sane and sensible environmental policies, by way of the reduction of damaging greenhouse gas emissions. Unfortunately, the reasonable targets set and agreed by Member States have been, and continue to be, ignored in many cases.

In the case of Ireland, for example, we have a tradition of signing up to international agreements and protocols and then walking away from them. The big offender, however, is the United States of America. I welcome the results of the United States congressional elections. The fact that the American people have turned their backs on George Bush because of Iraq may also be an indication that his stubborn refusal to embrace Kyoto is not shared by the vast majority of the American population. Could it be that the tornadoes and the hurricanes and the natural disasters in the United States caused by global warming are a result of the reckless dependence on and usage of fossil fuels? As a former British chief economist with the World Bank, Dr Nicholas Stern, put it very succinctly: good environmental practice does not simply make environmental sense, it also makes good economic sense.

 
  
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  Mairead McGuinness (PPE-DE). – Mr President, last week a group of Irish MEPs met in Brussels with a group of mercy sisters who are working very closely with poor and marginalised members of the asylum and refugee communities. The stories we heard from those religious sisters were very alarming, especially as they came from a country that says it is civilised and treats people properly, though I dare say Ireland is not the only country not to treat refugee and asylum seekers correctly and humanely.

We intend, as a group, to pursue this issue within Ireland. It would appear that the Dublin II Regulation – evaluation of which we currently await – is not working. Very often we hear from people working in this area that the theory and the practice do not match. We need to do something about that. Of particular concern, however, is the phenomenon of children lost to the system. Such children are in Ireland but nobody knows where exactly or who can account for them. That is an appalling prospect in a Member State of the European Union.

We need to look very carefully at how we treat the poor and marginalised in our Community. We need an independent evaluation of the process and a long-term solution to the issue of why those people should need our support.

 
  
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  Georgios Toussas (GUE/NGL).(EL) Mr President, I think that developments in universities in connection with the basic issue of education are a cause for concern for millions of workers and students in the Member States. We therefore need to be extremely careful when we refer to university asylum, which is a fundamental achievement of the student movement in our country.

The student uprising at the Polytechnic is – thirty-three years on – a shining example of the right of the peoples for democracy within universities and of the need for radical changes to be made at this level. These opinions being voiced in the European Parliament on restricting these basic democratic freedoms are dangerous.

 
  
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  Ryszard Czarnecki (NI).(PL) Mr President, I am shocked by the latest session of the diplomatic heads of the Member States, where the majority of foreign ministers asked for a European Union mandate to negotiate a new agreement between the EU and Russia before Russia lifts the trade restrictions it is imposing on Poland in the form of an embargo on Polish meat and agricultural produce. In other words, instead of European solidarity, what we have is an agreement with Moscow made over Poland’s head, leaving my country to fend for itself. However,Warsaw is rightly demanding that the negotiating mandate include a ban on trade barriers in relations between Russia and individual EU Member states. Instead of a few words of support from Commissioner Ferrero-Waldner, relations between the European Union and Russia should be based on the slogan of the Three Musketeers, ‘one for all and all for one’. Failure to do this would make European solidarity nothing more than a meaningless phrase, and I say this forcefully in the country of the Three Musketeers.

 
  
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  Willy Meyer Pleite (GUE/NGL).(ES) Mr President, last week Volkswagen unfortunately announced job cuts at its European factories, which may affect the plants at Pamplona in Spain, Brussels in Belgium and Palmela in Portugal.

In Germany too, 20 000 of the 100 000 workers at the plant may be laid off. That will mean the loss of one in five workers, and 2 400 jobs may go at the other plants.

If we add to that the problems that we have had with Opel and General Motors in Portugal, it is quite clear that we are facing a very serious problem, an industrial crisis that demands a response. In my view, we can no longer put off establishing a framework agreement with the entire European car industry and a code of conduct with the multinational companies, basically so as to guarantee jobs.

I think the time has come for the Commission and Europe’s institutions to take a very strong stand on this.

 
  
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  Kyriacos Triantaphyllides (GUE/NGL).(EL) Mr President, the former leader of Iraq, Saddam Hussein, has been sentenced to death by hanging for crimes against humanity, because he was found guilty of the death of 148 Shiites following an assassination attempt against him in 1982.

I believe that, as repulsive as the crime is, the death penalty is not a solution and is not in keeping with the European acquis. However, I noted with regret that the British Foreign Secretary, Margaret Becket, expressed her satisfaction with this verdict and stated that those accused of crimes against the Iraqis should be brought to justice. I therefore ask you, as the death penalty has been abolished in all the countries of the European Union – because it is an insult to human dignity and simply encourages violence, while doing absolutely nothing to prevent crime – how can a Member State of the Union welcome such a verdict? How can the death penalty uphold the justice cited by Mrs Becket?

 
  
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  Bogusław Rogalski (IND/DEM). – (PL) Mr President, the 16th October saw yet another German violation of Poland’s territorial sovereignty. On that day a German vessel was bound for the Polish port of Świnoujście. On entering Polish territorial waters she was boarded by Polish customs officials who discovered contraband alcohol. When the vessel was a few metres from shore, she suddenly turned about and headed for the German side. Despite orders from the harbourmaster for the vessel to remain in port, and despite being pursued and ordered to stop by two pursuit vessels of the Polish Border Guard, the Germen vessel left Polish waters with the Polish customs officials aboard. They were then arrested in Germany on charges of unlawful activity. The whole affair is an outrage!

I would also like to point out that in August the German Navy conducted manoeuvres in Polish waters without informing the Polish authorities, and causing problems to passenger ferries trying to get to Polish ports.

This is the latest German provocation which ignores the Polish-German border. It is in breach of international law and jeopardises internal relations within the European Union. I call upon German politicians to come to their senses and finally acknowledge their country’s borders with their neighbours.

 
  
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  Janusz Wojciechowski (UEN).(PL) Mr President, we as MEPs have been receiving correspondence from individuals and organisations about the problem of the savage treatment of stray dogs in Romania.

The reason I draw attention to this is that in the European Union we have adopted certain standards: recently, when debating an action plan for animal protection, we accepted the principle that the protection and humane treatment of animals is a challenge for European culture and civilisation in the 21st century.

Romania is about to join the European Union in a few weeks’ time and we cannot accept standards that are at odds with European standards. It is an issue I would like to draw your attention to, and I ask the European Commission also to address this issue and to intervene appropriately.

 
  
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  Marie Panayotopoulos-Cassiotou (PPE-DE).(EL) Mr President, I should like to draw the Members' attention to the abuse of and negative references made to periods of history, especially the Middle Ages. We often hear talk of 'mediaeval employment' which is, apparently, being imposed in the resolution on the directive on services or with the promotion of the revised directive on working times.

The Middle Ages were a long period in history during which the foundations were laid in Europe of its present form and work was carried out to combine the Greco-Roman civilisation with Christianity. Of course, during the Middle Ages, employment relations were typified by an uninterrupted connection with the 'master', the employer, and the place of work, and were organised in the form of professional guilds, which were impenetrable regimes which safeguarded monopolies. Today, liberal united Europe, on the contrary, has safeguarded free movement and mobility and is proceeding to liberalise services and abolish the practices which plagued the inhabitants of Europe during various periods in history, such as the Middle Ages.

 
  
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  President. That concludes this item.

 

16. 2006 annual report on the Euro Area (debate)
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  President. The next item is the report by José Manuel García-Margallo y Marfil, on behalf of the Committee on Economic and Monetary Affairs, on the 2006 annual report on the euro area (2006/2239 (INI)) (A6-0381/2006).

 
  
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  José Manuel García-Margallo y Marfil (PPE-DE), rapporteur. – (ES) Mr President, this is the first time that Parliament has debated a report on the economic situation in the euro zone and I therefore regard this report as being of unique importance, particularly as this debate – this analysis that we are conducting jointly for the first time – is taking place at a time when the situation is both politically complex and economically uncertain.

I say it is politically complex because, as we are dealing with institutional issues here, I cannot ignore the fact that the debate on what to do with the Constitutional Treaty is still ongoing. Another point that I cannot ignore, either, is that this report is being debated within a ‘new era’ in terms of monetary policy – with interest rates that have been rising for some time and threaten to keep on rising – and at a stage when we are embarking on the new Stability and Growth Pact as revised by the Commission, and when the Member States are for the first time coming before the European institutions to account for what they have done regarding the Lisbon Strategy in their national reform plans.

I say that the situation is economically confused because, while I agree with the Commission’s view that the economic situation is good, or at least much better than it was previously, I must emphasise that our potential 2% growth is not enough to absorb Europe’s unemployed, to keep pace with our competitors or to maintain our standard of living.

As is customary in this House, this report is divided into several sections: macroeconomic policy; reforms, with special emphasis on the internal market; and institutional issues, focusing on economic policy coordination and external representation.

In the area of macroeconomic policy, there is nothing really new other than what we said in the debate on the broad economic guidelines. What the doctor prescribes for our macroeconomic policy is more stability, more stability and more stability.

On monetary policy, the point that we highlight – and I repeat that we are highlighting institutional issues – is that we would like to see greater transparency and openness in the European Central Bank. We would like to know why it does what it does, and how it manages and takes into account the two pillars on which it bases its decisions. That is why we are asking for short minutes to be published showing the arguments for and against a particular decision.

On the subject of budgetary policy, this report’s first finding is that monetary policy may be losing the momentum that it has shown so far, and budgetary policy must take up the torch. That, as I have highlighted before, leads us to call on the Commission to adhere to a strict interpretation of the Stability and Growth Pact, and on the Member States to work harder at cutting their deficits, especially in good times. Something new that we are calling for is greater coordination of Member States’ fiscal calendars and of the economic forecasts that they use in making their budgetary projections.

It does not make sense for countries taking part in the European Economic Union to use different forecasts of oil prices or of interest or exchange rate trends; in our dialogue with the national parliaments, we should like everyone to know what we are talking about.

On the matter of public debt, we also call on the Member States, as usual, to make a greater effort to cut public debt in order to free up resources and to address the Lisbon Strategy and the budgetary challenges that will result from the ageing of our population. The last point – which has been repeated already – is to review our fiscal systems in order to enhance the competitiveness of Europe’s economy.

With regard to reforms, we prescribe Lisbon and more Lisbon. We want the public to see how well each Member State is performing. We therefore call for a code of conduct that will enable us to put greater pressure on the slowest countries and, through the dissemination of good practice, enable them to see how countries at the top of the class operate.

Regarding the internal market, we need freedom and more freedom, in contrast to the protectionist temptations that we have seen in recent years, as well as development of the services market. In short, we want consolidation of fundamental freedoms.

As regards institutional issues – I want to focus on improving the way the Union operates – we call for a trialogue between the Council, the Commission and Parliament to take place quarterly, in parallel with the dialogue that we have with the European Central Bank, although I am aware that the Commissioner is not enamoured with the idea.

To facilitate this trialogue, we ask that the Eurogroup draw up a roadmap showing which way the euro zone will be heading in the next two years. We call on the Commission to provide us, in subsequent reports, with a more specific toolbox in order to promote such talks, and we invite the Commissioner and the Council to meet with us every three months.

On the matter of external representation, we find that it is not consistent with the international weight of the euro. We are pleased that the Member States spoke with one voice at the meetings of the international institutions in Singapore, and we call for greater coordination and imagination to ensure that the Member States are represented as a single entity in the International Monetary Fund, the World Bank and other international bodies.

I am grateful to all the shadow rapporteurs and all my fellow Members for the efforts that they have made.

 
  
  

IN THE CHAIR: MR ONYSZKIEWICZ
Vice-President

 
  
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  Joaquín Almunia, Member of the Commission. (ES) Mr President, ladies and gentlemen, I would first like to thank Mr García-Margallo and the European Parliament Committee on Economic and Monetary Affairs for the interest that it has shown in analysing this first Commission Annual Report on the Euro Area, whose main objective is to promote dialogue and debate between our two institutions with a view to identifying the priority measures that will improve the way that the whole area operates.

Since I had the opportunity to present this report to the Committee on Economic and Monetary Affairs in July, the predictions for growth in the euro zone for this year and the following two years have significantly improved. Last week I presented our autumn predictions, which can be summarised by saying that all of the economic indicators are pointing in the right direction: rising economic growth, which is the highest in the euro zone since the start of the decade, falling unemployment, stable inflation and clear reduction in public deficits.

The factors that have contributed to this positive picture include external factors, such as the sustained strength of the global economy, but also internal factors, which contradict the image of stagnation and paralysis that has been used to portray European economies, and in particular the economy of the euro zone. Among these internal factors are the reforms in several countries in the euro zone in recent years, the budgetary consolidation efforts and the response of European economies to the significant increase in oil prices, which is more efficient than many expected.

The existence of the euro zone has also significantly contributed to this favourable climate, thanks to the good finance conditions for families and businesses provided by the current level of interest rates and also thanks to the protection the euro has provided against the turbulence of the financial markets, as occurred in the spring.

However, all of these positive factors do not invalidate the main conclusions of the Commission report on measures that should enable us to improve the operation of the area, which the majority of you agree with, according to Mr García-Margallo’s report.

I am talking about the need to go further with structural reforms, to consolidate the single market and to ensure more effective and integrated external representation of the euro zone than there has been so far.

These three priorities, which are set out in the report, will also be included in the Annual Economic Report that I will present to the Commission on 22 November, which this year focuses on the operation of Economic and Monetary Union and, in particular, of the euro zone, in the light of the eight years of experience that have been accumulated.

Having examined these three priorities and in relation to economic reforms I agree with the statement made in the report regarding the importance of carrying out the reforms promised by the Member States in the national reform plans as part of the Lisbon Strategy.

Once monetary policy has been unified and budgetary policy has been made part of the Stability and Growth Pact, the economic policies of each of the national governments should make the necessary adjustments in terms of productivity, competitiveness and the operation of markets in order to ensure a high degree of convergence within the area.

In December, based on the reports submitted by the Member States, the Commission will adopt the report on the first year of application of the national reform plans. Our report will include an explicit evaluation of the degree to which each of the Member States has put these reforms into practice and, if we consider it to be necessary, we will give recommendations for each of the countries.

We will also include an evaluation in the report of what we the European institutions have done in application of the reforms required for the Lisbon Community programme.

We agree, as I said before, on the need to go further with the internal market, which, along with the single currency, is one of the two essential instruments for promoting more efficient allocation of resources and offering greater opportunities to businesses and more choice to consumers.

The integration of the financial system is also a top priority for the proper functioning of Economic and Monetary Union. In this sector, the roadmap is set out in the Commission White Paper on financial services covering the 2005-2010 period.

With regard to external representation of the euro zone, I can confirm that the European Parliament agrees on the need for coherent external representation. As I had the opportunity to explain in one of my recent speeches to the Committee on Economic and Monetary Affairs, the European Union spoke with once voice in Singapore, as Mr García-Margallo has just reiterated. In October, after this meeting, both in the Eurogroup and in Ecofin, we debated this matter again and arrived at some additional agreements that are moving in the right direction.

Mr García-Margallo’s report also contains comments on monetary policy and on the application of the Treaty criteria for expanding the euro zone. The European Central Bank is one of the most transparent central banks in the world and this perception is highly valued by the markets, which appreciate the Bank’s communication policy.

With regard to the application of the inflation criteria for the enlargement of the euro zone, which we have debated many times in this House recently, I refer to what has been said so far.

Finally, I do not know what doubts Mr García-Margallo has perceived. I am entirely in favour of dialogue with this House on the operation of the euro zone. The Chair of the Committee on Economic and Monetary Affairs is well aware of this, as just a few days ago I had the opportunity to discuss with her how we can put it into practice.

 
  
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  Othmar Karas, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, ladies and gentlemen, the Group of the European People’s Party (Christian Democrats) and European Democrats welcomes this report; not only is there no dispute about that, but we also say ‘yes’ to its demands, its analysis and its substance.

By way of elaboration, I would like to say something about six fundamentals. The first is that the euro is the EU’s most potent response to globalisation.

The second is that it may be the most important instrument for a successful internal market, but it is not the only one; it must go hand-in-hand with the accelerated implementation of the four freedoms in the internal market by means of pro-active innovation, the removal of structural weaknesses and the stabilisation of the social security, pensions and health systems.

Thirdly, all EU Member States need to join the euro zone. Any EU Member State that resists the euro and sets itself in opposition to the euro zone, that fails to make every effort to become part of the European currency area, weakens the internal market and lessens the European Union’s resistance to the effects of globalisation.

Fourthly, the Maastricht criteria are the entry ticket, and I am glad that the Commission, in its decisions over recent months, has held fast to them.

Fifthly, the Stability and Growth Pact is the necessary framework for budget policy. We demand that cyclical increases in revenue be used to reduce deficits and states’ debts.

Sixthly, according to today’s newspapers, the French interior minister, Mr Sarkozy, is calling for the euro zone to be under European economic government. Those who want to strengthen the European economy need to ratify the constitution and endow the Commission with the necessary powers; that is why we favour a strong euro on world markets and a single voice in the IMF, along with a European foreign minister to enable the European Union to carry some global clout.

 
  
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  Pervenche Berès, on behalf of the PSE Group.(FR) Mr President, Commissioner, I welcome the opportunity presented to us by this debate in plenary to review together the operation of the euro zone at a time when, as you have said, the outlook in certain areas is improving, yet when all agree that the potential for growth is not fully realised and when our economies are handicapped by an exchange rate that makes euro zone exports difficult and leads some of our businesses to contemplate relocation in order to produce their goods in the dollar zone.

This report presents an opportunity for review at a time when the Stability Pact has been revised and all agree that the commitments made by the Member States of the euro zone perhaps need to be better differentiated from the commitments made outside of the zone. From this point of view, the report is valuable, and I believe that we must also congratulate our fellow Member Mr García-Margallo on the spirit in which he approached it.

We need to go further than reforming the Stability Pact in order to better coordinate timeframes and data and to ensure that, essentially, the Commission and the Central Bank do not evaluate the performances of the Member States of the euro zone solely from the point of view of their deficits, but also in the light of their strengths and weaknesses in a wider context. You mentioned this in your speech, Commissioner, and I am grateful for your having done so. I invite you, moreover, to continue along these lines.

There is also a need to link macro-economic analysis more closely with developments on the financial markets. Furthermore, the way in which rating agencies have been able to be involved in the Italian question and to assess that country’s debt must prompt us to be more vigilant, since, if rating agencies had to take a high-level role in the assessment of the debts of the Member States, there would be a very serious risk with regard to the leadership of the euro zone.

One final word, Commissioner, to reinforce what has been said by several others on the subject of exchange rates: we need more economic policies and economic leadership in this area.

 
  
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  Danutė Budreikaitė, on behalf of the ALDE Group. – (LT) Mr President, ladies and gentlemen, the Economic and Monetary Union, with a common currency, is the highest level of economic integration the European Union has thus far reached. The euro zone has already been operating for six years, and its first enlargement revealed that the Maastricht criteria established more than a decade ago no longer correspond to the reality of the enlarging EU and the developing global economy. The euro zone countries are unable to implement the indicators that are important for the operation of the euro zone, especially the requirement for price stability.

The European Commission (according to the EC Treaty) and the European Central Bank are both applying different criteria of price stability to the euro zone. According to the European Central Bank, price stability ensures lower inflation, which is still close to 2%. Based on the methods of the European Commission, the stability of prices in the euro zone is established by considering more than just the rate of inflation of the euro zone countries and, therefore, it is impossible to eliminate uncharacteristic inflation factors.

I call on the Commission and the European Central Bank to work together on improvement of the concept of euro zone price stability and methods for its establishment in order to avoid misapprehensions in the process of euro zone enlargement and implementation of indicators in the euro zone itself. I invite euro zone Member States to properly implement the euro zone membership criteria that were adopted by the Member States themselves for better economic integration. Furthermore, I would like to emphasise that structural reforms are necessary for the successful competition of both the European Union and the euro zone in the global economy, and especially in further implementation of a domestic market with free movement of services, which has contributed to the competitiveness of the European Union.

 
  
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  Jens Holm, on behalf of the GUE/NGL Group. (SV) Mr President, Commission, fellow Members, ladies and gentlemen, I wish to begin by thanking Mr García-Margallo y Marfil for this report on the situation in the euro zone. The rapporteur observes that the prognoses for the euro zone look better than they have done for a long time. That depends, of course, on what economic policy it is intended to conduct. The policy pursued so far has not exactly been a success. Large parts of Europe are in social and economic crisis. According to the latest statistics, seven million people are living in poverty in Europe’s largest economy, Germany. One of the causes of this is, specifically, economic and monetary union. EMU is presided over by the world’s most conservative central bank when it comes to inflation, and its Stability Pact stymies economic policy. As the European Trade Union Confederation (ETUC) recently observed in a report, it is not more of this inflexible policy that we need. Instead, the peoples of Europe need an active financial policy and a reorganisation of EMU.

As you know, my own country, Sweden, is not a member of EMU. In 2003, a clear majority voted against participating in it. That is why I am rather disturbed to read the report, which notes that, as from 2007, the euro zone will comprise 13 Member States but that – and I quote – ‘macro-economic policy coordination and the internal market will involve all 27 Member States’. What does that mean? Does it mean that Sweden, which has voted against EMU, will have to participate in it sooner or later? I should be grateful for an answer from the Commission and also from the rapporteur, if he is given the floor at the end of the debate.

 
  
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  Zbigniew Krzysztof Kuźmiuk, on behalf of the UEN Group. – (PL) Mr President, in our discussion of the 2006 annual report on the situation in the euro zone there are two points I would like to make. The first is the much lower economic growth rate and higher unemployment in the countries of the European Union, and in the euro zone in particular, than in the USA and in the emerging markets such as China and India. Economic growth in the euro zone will in 2005-2007 be almost half of that of the USA, while unemployment will be almost twice as high.

The second point is the higher economic growth rate and the lower unemployment rates in three of the fifteen countries which did not join the euro zone compared with countries inside the zone. No wonder that those countries are not rushing to join the single currency. The new Member States now have even greater reservations about joining the euro zone, even though they are continuing to work hard to meet the Maastricht convergence criteria.

 
  
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  Dariusz Maciej Grabowski, on behalf of the IND/DEM Group. – (PL) Mr President, growth in the euro zone has been the lowest in the world for many years, as it was in 2006 as well. But instead of looking for the causes at home, in the monetary policy of the European Central Bank, attempts are being made to impose the so-called harmonisation of budgetary and tax policies in the Member States.

This is an attempt to hobble the initiative of Member States, a kind of diktat imposed by the stronger on the weaker. If the point of creating a common currency was firstly, to simplify the system and thereby to reduce costs, secondly to attract foreign investment, and thirdly, to make use of the privilege of issuing currency and creating a new world currency, then in the latter two cases the desired effect has not been achieved.

Foreign investment continues to focus on the United States and Asia. Demand for the euro as a world currency is comparatively weak. The opposite effect has been achieved: keeping interest rates high and artificially bolstering the euro has undermined the competitiveness of European manufacturers and reduced export earnings. The common currency and the policy of the ECB appear to be serving the interests of finance capital at the cost of businessmen, consumers and the Member States’ national budgets.

The single currency has had an indirect impact on the exports of the new Member States by slowing their development and holding them back. We therefore take the view that there needs to be a radical review of EU monetary doctrine towards restoring authority over currency issue and interest rates to the monetary authorities of the Member States.

 
  
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  Hans-Peter Martin (NI).(DE) Mr President, we can all, in fact, take pride in the euro. Much of what was predicted before its introduction has not come to pass, but there are three things that need constant emphasis. One is that the tax revenues that are now coming in must actually be used to reduce deficits, and we demand this in paragraph 5 of the report. Another is the urgent demand that the Maastricht criteria be rigorously applied. Relaxing them again, in the way they have been in the past, will surely get us nowhere. Thirdly, there is transparency. The ECB lags a long way behind global standards. The ongoing failure to produce anything like adequate minutes of decisions – or indeed any at all – defies comprehension, and this state of affairs is in urgent need of improvement.

 
  
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  Gunnar Hökmark (PPE-DE). – Mr President, firstly I should like to thank the rapporteur for his report. It underlines the need for cooperation in strengthening the European economy. It is fair to say that the euro has provided Europe with stability that we have never seen before.

When I listened earlier to my Swedish colleague, it sounded as though it was a problem for the European economy to have low interest rates. However, the truth is that we have lower interest rates than ever before. Does anyone think that the European economy would have been better if we had the interest rates of the 1970s or 1980s, or if we had the budget deficits of those years when Europe was losing out in the European economy? Let us stop dreaming and look at the reality. Today we have a common currency that places the emphasis on and encourages competition, trade and investment and focuses on the need for structural reforms, as well as the need for fiscal discipline. That is good. That provides us with opportunities, because the problem of the European economy is not the interest rates, it is the lack of deregulation, it is the lack of more trade and of more of the internal market. We can see that we are more efficient and more successful since we opened up the markets.

I believe that the euro will never be stronger than the European economy and the discipline of the countries participating in the euro. That also underlines the need for the European Central Bank to be independent, as underlined in the report. That is very important, because otherwise we will lose credibility.

From a Swedish perspective, we will soon have the euro in a number of new countries around the Baltic Sea. I hope we will have a debate in my country that will make it possible for us to join them and other euro countries in the years to come.

 
  
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  Udo Bullmann (PSE).(DE) Mr President, I am glad that the Commission has produced this report and that it is committed to observing what happens to the euro zone, but equally glad to be able to say that Mr Juncker’s presence here today means that there will be a contribution to our debate from the person who has the responsibility of speaking on behalf of the euro zone’s members.

So, then, where do we stand? For the first time, we have got closer to the growth target that we set ourselves in Lisbon; growth in the euro zone now stands at 2.8%, which is almost the 3% that we took as a base figure at Lisbon.

In this situation, what is the challenge for the euro zone? What is the essential thing that is at stake? Will we be content with this being nothing more than a little gust of air, no more than an upturn in the cycle that will be gone by tomorrow, or do we want to put something structural in place to ensure that we can draw a deep breath and get the chance to generate a long-term upturn that will last and will – since it is not merely data that make the economy, but people – foster popular confidence?

That is why I believe that we have to make the effort to do what is now needed, namely to make smart investments in the euro zone. Yes, consolidating budgets is a good thing to do, but we cannot simply chant that as a mantra when what we need to be doing is making use of the upturn we are experiencing now in order to embark on a policy of intelligent modernisation that gives us a chance of seriously reducing unemployment, and that, too, is in the report.

Finally, I would like to thank our co-rapporteur and shadow rapporteur Mr Rosati, who contributed to our discussions on behalf of the Socialist Group in the European Parliament, and I do not want to omit Mr García-Margallo y Marfil, to whom thanks are due for having – and not for the first time – made an essential and seminal contribution to macro-economic debate in this House.

 
  
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  Jeffrey Titford (IND/DEM). – Mr President, events seem to have overtaken this report. In spite of Commissioner Almunia’s comments, its upbeat projections for growth in the euro zone contrast sharply with the economic data released at the end of last week, which put growth in the French economy at zero. There are also signs of faltering growth across the euro zone, which will not be helped by the austere taxation regimes being introduced in Germany and Italy next year to meet the euro zone’s stability requirements.

What this report does not tell us is that the Government of Italy is on the brink of collapse because of Mr Prodi’s determination to introduce tax increases and budget cuts demanded by the European Commissioner for Economic Affairs to bring Italy into line with the Maastricht Treaty. It also does not mention the riots in Hungary following the Hungarian Prime Minister’s revelations that he had lied morning, noon and night about the tax increases and public spending that he had secretly promised that same Commissioner.

Forcing many of our new members of the EU to abide by deflationary policies designed for the more developed economies of the euro zone is generating weak demand, weak growth and mass unemployment. This report also fails to mention that the Maastricht Treaty has turned the Eastern Europeans into second-class citizens: they have no chance of joining the euro zone in the foreseeable future, while having to manage their economies in line with its requirements. Sooner or later the people of Europe are going to get restless with a system that keeps them permanently in the economic slow lane, while denying them any democratic say in how it should be run.

 
  
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  Sergej Kozlík (NI).(SK) I would like to welcome and support the proposal by the opposition in the European Parliament concerning the 2006 declaration on the anniversary of the euro zone. In particular, I would like to highlight the passage calling for a thorough examination of the mechanism of the three Member States that are the best performers in terms of price stability, and the methods for calculating the reference inflation rates.

The point is that the varying rates of inflation among the euro zone Member States do not reflect different approaches to macroeconomic policy, but are rather the result of structural factors. This premise, I believe, applies especially to the new Member States of the European Union. The relative share of energy-intensive and raw material-intensive output in many of these countries is greater than in the euro zone. A major portion of this output is then transported to the euro zone either directly or as part of finished products, for instance in respect of the sheet metal used to manufacture car bodies.

Because of these structural reasons, the new Member States are more susceptible to fluctuations in the price of energy and raw materials; by the same token, they serve as a buffer that absorbs the impact of price changes on the euro zone. This problem particularly affects the Slovak Republic.

The current approach to assessing inflation criteria is, therefore, inappropriate and may in the long run diminish the chances of new Member States gaining entry to the euro zone, even if they comply with all other requirements.

 
  
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  Zsolt László Becsey (PPE-DE).(HU) Mr President, first of all, I congratulate the Commission and the rapporteur for their consideration of this difficult subject. I am particularly pleased with the remarks concerning the flexibility of the labour market and the goal-oriented approach to education. I believe that our conclusions point in a single direction. As someone from one of the eastern European countries waiting to join the euro zone, I would like to make only four brief remarks:

First: with respect to the enlargement of the euro zone, no other standard for admission should be applied than the political standard that applies to those who are already inside.

Second: it is important that the new Member States join as soon as possible, and therefore there can be no interpretation, above all in the matter of inflation, sustainability and the reference level, which would in practice postpone for a long time the accession of the new Member States, which are still lagging behind the EU economic average, and are thus still in the process of catching up in terms of wage and price levels. This is a point on which Mr Kozlík has given a very good explanation.

Third: I agree that the statistics of the Member States have to be closely monitored, and that the Commission must respond with political tools, if nothing else, such as informing a European Summit, if a Member State is particularly undisciplined and heading in the wrong direction. In the long run, turning a blind eye is unacceptable. The Commission has a political responsibility as well in this regard.

Fourth: deepening the internal market is essential, and it is important that everyone observes the criteria. The new Member States are doing this. However, there is a contradiction: on the one hand, the labour market, the Schengen zone, remains closed to the new Member States, and the Labour-Intensive Services and the Posting of Workers directives are very restrictive. On the other hand, however, we are obliged to open up the market in financial services to everyone. This imbalance does not make the integration of Member States any easier from the perspective of deepening the internal market.

 
  
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  Benoît Hamon (PSE). – (FR) Mr President, Commissioner, ladies and gentlemen, this report contains several interesting and welcome recommendations for which I would like to thank the rapporteur.

Thus, instead of simply calling for public spending cuts, the report recommends freeing up resources to make what are presumably necessary public investments in education, training, infrastructure and research.

Furthermore, instead of recommending wage cuts, the European Parliament admits - that is in fact the term that is used - that, in the long term, real wages and productivity should grow simultaneously. I would thank the rapporteur for his efforts at moderation and conciliation.

However, the subject of this debate is the economic performance of the euro zone. In fact, I believe that, despite the recent and even unexpected improvement of growth indicators, the economic situation remains fragile and unsatisfactory. After all, the Commission’s macroeconomic policy affects the daily lives of millions of Europeans whose purchasing power, I would point out, is threatened by stagnating salaries and by an increase in the cost of living and whose working conditions continue to decline, while social protection is also dwindling.

The practical response offered by the Commission and the European Central Bank is always the same: to fight inflation through budgetary austerity and wage cuts, while increasing competition in the services, capital, products and labour markets.

Perhaps the time has come to evaluate the results of this policy and to consider whether dismantling public services, deregulating the labour market and cutting public expenditure really is a sustainable way of driving growth in the euro zone and in the European Union. Unfortunately, no period of reflection is on the agenda. In two days, we shall have to give our opinion on a ‘services’ directive that is admittedly improved, but that remains true to Fritz Bolkestein’s deregulatory model.

In a few months’ time, we will have on our agenda a directive proposing the end of the public postal service. As for energy, despite the chronic instability of the oil-producing zones, despite the gas blackmail exercised by a neighbouring country, despite global warming and despite power cuts extending across half of Europe, it is all to no avail and the response remains the same: to complete the liberalised and deregulated internal energy market in Europe. The euro zone’s economic report is perhaps a little better this year, but its social and political performance remains, in my eyes, as bad as ever.

 
  
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  Georgios Karatzaferis (IND/DEM).(EL) Mr President, I have been listening to the speakers all this time, especially the competent Commissioner, Mr Almunia, arguing in favour of the canonisation of the euro. But is that really the case? Perhaps, what we are tying to canonise, here in this Chamber, is the bad demon of the citizens of Europe which we represent?

The value of the euro rises and we are all delighted. However, at the same time, the number of citizens living below the poverty line also rises. Of the 500 million people in Europe of 27, 100 million people are living below the poverty line. In other words, people who can only afford meat once a fortnight, who cannot buy clothes for their children, who cannot change their car until they have had it for 15 years. What does the euro mean to these people?

I would remind you that it started with an imperium. We do not want one and two euro notes and yet 75% of daily transactions are below the 5 euro line. We are delighted that the euro is rising. It has risen from 0.87 cents to the dollar to 1.30. What does that mean? No country which does not have proprietary products can sell to the United States of America or other countries. Of course Germany can sell Mercedes because it is a Mercedes, but how can my country, which has no proprietary products, sell to America – the big market – when it can find the same product in a neighbouring country outside EMU for a third of the price? How will tourists come to Greece or, Mr Almunia, how will American tourists go to Spain when it is impossible to monitor the value of the euro.

Can we not look at all this? Can we not address all this? It is a huge problem and you have a huge responsibility in the Commission, especially you personally, Mr Almunia.

 
  
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  Andreas Mölzer (NI). – (DE) Mr President, ladies and gentlemen, while we who live in the euro zone must, of course, make it our concern to leave our children in as little debt as possible, not under any circumstances must we, in our striving for a more vigorous economy, dispense with social standards. Whenever we are invited to compare our growth rate with that of the USA, the lack of virtually any kind of social system in the United States must not be left out of the equation.

I do not think that we are going to catch them up by forcing masses of public sector workers into retirement and privatising their jobs, or by means of jobs paying EUR 1 an hour combined with the forcing of more and more staff into what appears to be self-employment. We have, in the past, seen more and more of the family silver being sold off in order to gain membership of the euro club, and that must come to an end; we must instead make the effort to get on top of the explosive growth of black-market work, to cut down the bureaucratic hurdles that face small and medium-sized businesses, some of which are becoming harder to surmount, and make it easier for such businesses to get access to grants. Only then will the euro zone have a future characterised by growth.

 
  
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  Dariusz Rosati (PSE).(PL) Mr President, Commissioner, it gives me great satisfaction to announce my support for the European Commission’s presentation of the first annual report on the situation in the euro zone.

The report provides a good basis for discussing the main challenges facing the euro zone now and in the coming years. There is plenty to discuss. The average growth rate in the euro zone in 2001-2005 was a mere 1.9%. Unemployment rose to 13 million, and the situation with public finances got worse, rather than improving.

Last year did bring a slight improvement in the situation, as you were kind enough to confirm, but this does not change the fact that Europe is falling further behind not just the United States and Japan, but also the Asian boom countries. Unresolved structural problems lie at the root of European stagnation. The high cost of setting up and running a business, high overheads on labour costs, reluctance to innovate, and the maintenance of harmful barriers to the labour market and the services market all reduce the competitiveness of European firms, holding back growth and increasing pressure on public finances. It prevents us from making full use of the opportunities offered by a common currency and a uniform monetary policy.

I therefore call upon the European Commission to put pressure on the Member States to speed up implementation of the necessary reforms. The need for this has been demonstrated in numerous reports and studies, including the Shapiro report and the high-level report made under the chairmanship of Wim Kok.

Macroeconomic policy in the euro zone needs to be improved. What is missing above all is proper coordination of fiscal policy among the Member States. At the same time, the common currency requires fiscal discipline which needs to be observed jointly by all Member States. This will make it possible to balance macroeconomic policy and to restore a proper policy mix.

Monetary policy needs to be based on clear, transparent rules, and must be more forward-looking in character. Excessive secrecy in decision-making, lack of clear regulations on the role played by the ‘two pillars’ of monetary policy, particularly the M3 monetary supply, which create serious doubts regarding the rules for appointing members of the board of the European Central Bank, all restrict the effectiveness and transparency of the common monetary policy, and may undermine the position of the common currency.

A substantial element in strengthening the euro zone is expanding it and taking on new members. In this process we must observe the rule that candidates are bound by the treaty, the whole treaty and nothing but the treaty. This means that they must meet the criteria set out in the treaty, but also that additional requirements cannot be imposed upon them. I am convinced that the accession of new euro zone members, whose deficit and public debt levels are often much lower than those of the other Member States, will help to strengthen the euro zone.

In conclusion, I would like to thank Mr Juncker, the president of the Euro Group, for taking part in our debate, and hope that it will inspire him and help him to manage the Euro Group even better. I would also like to thank Mr García—Margallo y Marfil for preparing this excellent report, and give my full agreement to the majority of the proposals made in it.

 
  
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  Joaquín Almunia, Member of the Commission. (ES) Mr President, thank you very much to all of the Members for their contributions. I think that the debate shows that it is useful to have a report like this every year on the operation of the euro zone and its results, this being the first time that it has been adopted by the Commission and is being debated in Parliament.

As a conclusion to today’s debate, I can make an optimistic observation: the euro zone is growing again, despite the fact that some said that it was a zone of very low growth. The euro zone is growing by 2.6% this year, perhaps even more at the end of the financial year. The euro zone is creating jobs and reducing unemployment. According to our predictions, between now and 2008, five million jobs are going to be created in the euro zone. It is not said very often, but it is true that since the beginning of this decade, despite low growth, in the euro zone and of course also in the whole of the European Union, significantly more jobs have been created than in the United States, which always establish themselves as the reference point to be imitated in policies and strategies for job creation.

I therefore think that, if we analyse the operation of the area and the results that we are achieving through monetary integration, there are elements that could justify a moderately optimistic assessment. However, it is also true that there are elements that should continue to attract our attention, as there is still a great deal to do.

There is still a great deal to do, as many of you have said, in order to increase potential growth and continue to reduce unemployment, so that greater growth and a higher level of employment can improve the lives of our citizens, reduce inequalities and offer more solid bases for our social protection systems and for our social services system. This firstly requires, as many of you have said, that we continue to comply and comply better with the stability and budgetary discipline criteria laid down in the Treaty and implemented through the application of the Stability and Growth Pact, which is being applied in a reasonably positive way on which there is a consensus. We also need to continue with the reforms and go further with the Lisbon Strategy, because this plan of eliminating barriers and facilitating the four freedoms has proven to be a solid basis for creating better conditions in which to face the future.

It also requires, according to the analysis and many of its conclusions, better governance in the euro zone. I think that the efficiency of the operation of the Eurogroup, since it has had a stable presidency, led by Mr Juncker, who is with us today, has improved. It is enabling us to make better progress in analysis, mutual understanding and coordinating decisions that affect the Member States, but which cannot be imposed on them from above, and need to be adopted by consensus, with their full conviction, and in accordance with their competences. We also need to strengthen dialogue.

If any of you still have any doubts, ladies and gentlemen, in the opinion of the Commission, and in my opinion, as the Commissioner for Economic and Monetary Affairs, we need to enhance bilateral dialogue between the Commission and Parliament on these matters. I think that we need to move forward in a tripartite dialogue between the Presidency of the Eurogroup, the Commission and Parliament, on the following matters: the operation of the Eurogroup, on any subjects that draw our attention and, if you agree, I also think that we need to move forward with a dialogue including, while fully respecting its independence, the European Central Bank and why not? which has a monetary dialogue with you but also has a monthly dialogue with us. I think that Parliament can and should, every now and again, be part of this exchange of views between all of the institutions, whose common goal is for the euro zone to operate correctly and for the euro, our common currency, to produce the best possible results for all the citizens of Europe.

 
  
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  Juncker, President of Eurogroup. (FR) Mr President, I should like first of all to apologise for being late. The Luxembourg-Strasbourg route is terribly congested at the entrance to Strasbourg, and traffic jams prevented me from arriving on time. Being conscious not to disturb the peace and quiet of the people of Strasbourg, I did not want to ‘go all out’; I scrupulously adhered to the highway code, and I was the first to suffer, since I have arrived late for this debate. Nevertheless, I should like to tell you that I attach importance to this debate because Parliament’s thoughts are not only important in themselves, but they also sustain the debates within Eurogroup, which I chair, assisted, inspired, driven and spurred on by the Commissioner for Monetary Affairs, my friend, Mr Almunia.

I should like to begin by saying, Mr President, that I believe that we have strong growth: it is expanding and it is not under threat, despite the attempts to dampen it down, particularly on the part of France. The employment rate is rising and unemployment is going down, although it has not attained acceptable levels. As regards growth, if we look at it in perspective, it is probably stronger than we think at present and is, at any rate, stronger than we thought six months ago.

In 2007, we shall have to see to what extent the cyclical slowdown in the United States affects the economic performance of the euro zone. At Eurogroup, we believe that the impact of the US slowdown on the euro zone economies will be less marked than in 2000-2001. We see that the US cyclical slowdown is primarily hitting the building sector and that it is not going to spread to other sectors of the US economy. Thus the impact on growth in the euro zone will be less marked than before, even though the country-by-country results will reveal some big differences.

Why have we attained a level of growth that seems more acceptable to us today than it did a few years ago? Firstly, because the euro has protected us to a huge extent over the past few years. It is never said enough, when the introduction of the euro is reviewed: the euro has protected us, is protecting us and will continue to protect us! Imagine the state of the European economy and the state of the European monetary systems if the euro had not existed during times of crisis! During this period, when preliminary work was being done on the euro, we witnessed the Latin American, Russian and South East Asian financial crises. Imagine how out of control our system would have let things get before the European system was implemented, at the time of the war in Iraq and of 11 September 2001! Imagine what the performance of the European currencies would be if they still existed, while the geostrategic dramas being played out are a constant cause for concern! Imagine how certain national currencies would have performed after the French and Dutch ‘No’ votes! The euro has protected us, and it has even protected countries that expressed some misgivings about Europe when it came to their approving the Constitutional Treaty.

The budgetary situation improved when, in all wisdom and with the agreement and often even the active support of Parliament, we amended and reformed the Stability and Growth Pact. Some people felt they were entitled to express their grave concerns following the adoption of the reformed pact. We see today that the mechanisms of the reformed pact are holding up well and that all the governments are making every effort to implement the main rules and guiding principles contained therein. The budget deficits are decreasing, and a general consensus is emerging, which is aimed at all of the Member States taking the prevention aspect of the Stability and Growth Pact seriously: they have all decided to allocate as a priority the fiscal surpluses resulting from the cyclical upturn to the reduction in the deficit and to the reduction in the level of public debt. I welcome that decision.

We, at Eurogroup, are giving more thought to stepping up budgetary controls and we are doing so together with the Commission, whose cordial manner of assisting Eurogroup’s presidency is proving to be very effective. We will see during our next meeting – which will be held towards the end of November, and thus after my visit to the Committee on Economic and Monetary Affairs, which you, Mrs Berès, expertly chair – how we can step up these budgetary controls. We will do so, from now on, on the basis of a Commission horizontal report, which will not fail to emphasise the real political problems that exist, including the political-economic ones, or to draft specific recommendations – the form of which we have yet to decide on – to the various Member States, and even to the entire euro zone.

With regard to the currency area as a whole, I should like us to take what is, by now, a long-standing invitation from the Commission seriously this year, and that is to devote a specific chapter of the European Council’s conclusions – when it examines the progress made by the Lisbon Strategy – to the euro zone, a chapter that includes the structural reforms that we will have to implement within the various member states of the euro zone.

As regards the structural reform problem, I would quite simply say, Mr President, that we underestimate the value that these structural reforms have already added to the coherence of the euro zone. I do not agree with all – or in general, some – of the structural reforms that have been implemented within all the Member States, but the fact is that, contrary to the idea, to the image that we very often present of the euro zone, an important raft of structural reforms is underway, and we are now already reaping the rewards of this far-reaching structural reform that we have implemented with regard to the euro zone.

When you look closely at the national reform programmes that the various Member States have introduced, you will see that there are many structural solutions, that they are generally in line with each other and that we must proceed further with this raft of reforms, without for all that lapsing into unsavoury neoliberalism and into a boundless, shameless form of frenetic deregulation, to which I am opposed because I still believe that the euro and the euro zone and the consistency of the policies that we will be implementing would gain in credibility if we supplemented our work on structural reforms with the implementation of a set of minimum social rights. This would guarantee all workers, throughout the euro zone, a number of minimum rights, which the Member States, in trying to enhance their national fighting spirits, could not undermine.

Workers in Europe have a right to know where they stand. We must stop giving the impression that the monetary Union is a business that is run by the ministers of finance, the bankers and the big investors and big businesses and that it actually works against the most basic rights of workers, who do, after all, make up the majority of the population in Europe.

I should like to say a word about the enlargement of the euro zone. I disagree with all those who imply that we, in the euro zone, have become stricter than before towards the new Member States which want to join the zone. The criteria that we are applying are those laid down in the Treaty of Maastricht. There has been no demand to change the criteria that we adopted when the Treaty was signed in Maastricht, on 7 February 1992. There is no question of abandoning the nominal convergence policy so as to replace it with a criterion that would omit the application of certain criteria, which the first members of the euro zone had to meet. As for those who call into question the nominal convergence criteria, in non-theoretical terms, I would guard them against the genuine risks of seeing the nominal convergence criteria replaced by real convergence criteria. The application of real convergence criteria would make the new Member States’ accession to the euro zone a very distant prospect. I therefore think that we would be wise to confine ourselves to the criteria that are currently ours, and this policy will enhance the credibility of the euro zone.

The way in which the euro zone is represented outside Europe does, in fact, warrant a lengthy explanation, but a brief explanation may suffice. The euro zone must be represented by a man, by a voice and by a seat within every international institution, and particularly within the international financial organisations. I am convinced that we will not have reached that stage when my term in office comes to an end on 1 January 2009. Nevertheless, I firmly believe that the day will come when even the most reticent of Europeans will realise that we are constantly making fools of ourselves in aspiring to co-manage the world’s monetary affairs if we continue to appear in international forums without a common plan of action. There you have a few comments that I felt it my right to make, while I apologise for not having been able to reply to all of the speakers, as I usually do; I had to reply briefly because I was not present when the speakers, with the commitment that characterises this Parliament, took the floor.

 
  
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  President. The debate is closed.

The vote will take place on Tuesday at 11.30.

Written statement (Rule 142 of the Rules of Procedure)

 
  
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  Jean-Pierre Audy (PPE-DE).(FR) Even though the report by my excellent colleague, Mr Garcia-Margallo y Marfil, puts forward some very interesting analyses and proposals on the euro zone, I regret the fact that it does not raise the issue straightaway of the development of the euro from a technical currency to a political tool benefiting growth and employment. The monetary policy conducted by the European Central Bank (ECB) seems to be at odds with reality: the exchange rate should normally be strong when there is strong economic growth and should depreciate when there is weak growth. The fact is that, in Europe, the opposite has been true since the start of the 1990s. While the Member States are undergoing reforms, the quest for zero inflation through an inappropriate monetary policy is leading Europe to record mediocre results in terms of economic growth.

If this state of affairs continues, at a time when the price of raw materials and of energy is rocketing worldwide, we will have zero inflation and zero growth, and manufacturers will end up setting up their businesses in the dollar zone. With everything that is happening, it is as though the ECB is disregarding economic policy, while its US counterpart is thinking of nothing else.

 

17. Community action in the field of marine environmental policy – Thematic strategy on the marine environment (debate)
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  President. The next items on the agenda are

- the joint debate on the report by Marie-Noëlle Lienemann on behalf of the Committee on the Environment, Public Health and Food Safety on the proposed Directive of the European Parliament and of the Council on community action in the field of marine environmental policy – Thematic strategy on the marine environment (Marine Strategy Directive) (COM(2005)0505 – C6 - 0346/2005 – 2005/0211(COD)) (A6-0373/2006)

- the report by Aldis Kušķis on behalf of the Committee on the Environment, Public Health and Food Safety on the thematic strategy for protection and preservation of the marine environment (2006/2174(INI)) (A6-0364/2006)

 
  
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  Vladimír Špidla, Member of the Commission. (CS) Mr President, ladies and gentlemen, I am delighted to be able to launch this joint debate on the thematic strategy for protecting and preserving the marine environment and on the proposed Marine Strategy Directive.

I should like to thank both rapporteurs – Mrs Lienemann for the proposed Marine Strategy Directive and Mr Kuskis for the thematic strategy. I also wish to thank the Committee on the Environment, Public Health and Food Safety for their efforts. Furthermore I should like to thank the Committee on Fisheries and in particular Mr Gklavakis for his highly constructive approach to this important issue.

Seas and oceans cover 71% of the Earth’s surface and contain 90% of the biosphere. Europe’s marine waters extend across 3 million square kilometres, the same area as mainland Europe; in other words, 50% of Europe’s territory is covered by sea. Marine ecosystems play a key role in climate and weather patterns.

The status of Europe’s marine environment is rapidly deteriorating, however. In some areas, we may have gone past the point of no return. Nutrient supply has a major influence on the Baltic Sea’s marine environment. Fish populations are in a poor state throughout Europe. The Northeast Atlantic has one of the highest shipping levels in the world, with all of the risks and consequences that that implies. The Mediterranean is under serious threat from uncontrolled development of its coastline.

If we are to reverse these trends, however, the existing measures and efforts – be they at international, national or EU level – are clearly inadequate. Most measures drawn up at EU level were not geared towards protecting the marine environment as such and they therefore have a limited impact. It has been demonstrated that measures adopted at international level are very difficult to implement or promote because they are not binding.

A healthy marine environment is crucially important both for life as a whole, and for the quality of our lives. It is also an essential prerequisite for fulfilling the economic potential of the oceans and seas. A dynamic marine economy can flourish only where there is a healthy marine environment. The Marine Strategy will therefore make a significant contribution to the growth and employment goals enshrined in the Lisbon Strategy.

For the reasons outlined above, it is clear that the protection of the marine environment cannot and must not simply be a by-product of other policies. At EU level what is needed is an integrated strategy that takes into account all of the pressures and influences on the marine environment.

This is precisely what the thematic strategy on the marine environment seeks to achieve. It consists of the proposed Marine Strategy Directive and a report detailing the current state of affairs. On a broader level, it covers the EU’s environmental record on the marine environment and explains why the EU needs to take action.

Marine strategy must be viewed within the broader context of a new marine policy for the EU. According to the Commission's Green Paper drawn up in June, the objective of the new policy is a dynamic European marine economy, operating in harmony with the marine environment. The marine strategy is, within the area of the environment, one of the pillars of the future marine policy. It will be based on the specific activities needed to protect marine ecosystems, which provide the sustainable wealth, productivity and employment opportunities and, from a broader perspective, people’s livelihood from the oceans and seas.

The purpose of this Marine Strategy Directive is to achieve ‘good environmental status’ in the EU marine environment by 2021, in other words to restore the environmental health of our seas over the next 15 years. This date will coincide with the first review of River Basin Management Plans under the EU Water Framework Directive, allowing for synergies on the further implementation of both directives. The joint implementation of the EU Water Framework Directive and the Marine Strategy Directive thus brings together the protection of both marine and freshwater environments.

The directive establishes European Marine Regions on the basis of geographical and environmental criteria, and defines sub-regions as management units for implementation.

At an EU level no management-related measures will be adopted. In the first phase, the Member States will be tasked with developing a marine strategy for the seas in each of their regions, and proposing practical solutions to address the specific needs of those seas. Marine strategy should firstly include taking stock of the marine environment and the threats and pressures it faces, setting further environmental goals and indicators, and establishing monitoring programmes. In the second phase, the Member States will be required to draw up and implement measures aimed at achieving good environmental status.

Cooperation is of vital importance between Member States and with the third countries with which Member States share saltwater bodies. In order to achieve this objective, Member States will need to work within the framework of the regional marine conventions. Regional conventions are invaluable partners when it comes to strategy implementation, as is evidenced by their long track record of scientific and technical competence, and the fact that they are able to work effectively at a regional level.

To conclude, I should like to stress the importance and sensitivity of marine ecosystems. A high level of protection for the marine environment is a vital prerequisite for deriving the maximum economic benefit from the oceans and seas. The marine environment is clearly the foundation of our marine economy.

The marine environment is under threat. Consequently the EU must act effectively proactive. I hope that the proposed strategy will contribute towards achieving that aim.

 
  
  

IN THE CHAIR: MR DOS SANTOS
Vice-President

 
  
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  Marie-Noëlle Lienemann (PSE), rapporteur. – (FR) Mr President, Commissioner, ladies and gentlemen, allow me first of all, as rapporteur, to thank my fellow shadow rapporteurs from the various groups and the Committee on the Environment, Public Health and Food Safety for supporting a joint piece of work aimed at enhancing the Commission proposal.

As you said, Commissioner, the seas and oceans of our planet are in a worrying state: a crisis point has been reached. Moreover, a recent study published in the Science review sounded the alarm bell by highlighting the risks of fishery resources disappearing from our seas and oceans.

The quality of the marine ecosystem plays a fundamental role in the planet's global environment and, in particular, plays a very important role in regulating the climate. Our seas also play a decisive role in people’s lives in every part of the globe. As you pointed out, they play a major economic role when it comes to fishing, transport, tourism, sources of raw materials or even activities carried out along the coastlines that border them. Yet, our seas and oceans are subjected to growing pressure and worrying pollution.

Let us first address this figure: 80% of maritime pollution comes from the land, and, as you said, Commissioner, there is clearly a direct link between the framework directive on water and the directive that you have presented and that our Parliament wishes to enhance.

However, if pollution comes from the earth via water, then it also comes via the atmosphere. Recent studies show a significant interaction between atmospheric movements, air pollution and the sea and oceans, such that urbanisation and human activities taking place far away from the coasts may have a direct impact on the quality of water. Pollution is also caused by activities linked to the exploitation of the oceans and seas, such as transport and aquaculture. A few years ago, waste produced by fishing and oil industry activity reached altogether excessive and dangerous levels in certain sectors.

We are also at a time when we can see new threats looming, which the directive must anticipate. In particular, we are seeing a large increase in the number of projects aimed at desalinating seawater. We have to be certain that these activities are not going to affect the quality of water in the future. Major international debates are taking place on the storage of carbon dioxide. Thus, we can see that the threats are, indeed, real.

The aim of the directive has been to implement a structure enabling us finally to have access to a strategy that goes beyond international agreements, the results of which have mostly not lived up to our hopes thus far.

Our directive is based on a fundamental point: restoring the good ecological status of seas. Parliament would like, Commissioner, the requirement for results to be far more present and far stronger than the text in its current state provides for.

Secondly, our Parliament would like the good ecological status of seas and oceans to be defined with a great deal more precision so that this is not some sort of pious hope and so that we come closer to doing what can be done to restore the life and balance of the ecosystem.

Thirdly, our Parliament would like the deadlines to be shorter and, at any rate, we would like there to be a good balance between the deadlines, the level of the demands regarding good ecological status and the requirement for results.

Finally, we advocate the creation of marine protected areas, because the experiences of the Americans and the New Zealanders have shown that these protected areas – indeed, in some cases, these genuine marine reserves – were such as to enable fish stocks to be built up again.

Finally, we would like territorial cohesion to be enhanced by an effective piece of work carried out at marine and submarine regional level, without, however, the Member States being exempted from their responsibilities in view of the objectives set by the management plans and the plans for measures aimed at restoring good ecological status.

We are anxious to include the Black Sea in the document. We would like to sound the alarm bell concerning the Arctic: we need to think about the future of this part of the world. It is directly linked to us and its development has a considerable impact on the future of the planet, which may be endangered as a result. We would like the outermost regions of the Union, which do not yet feature in the document, gradually to become at least the subject of an appropriate strategy.

I shall conclude by mentioning the democratic issues. We see everyday, whether we are talking about fishing or transport, that sea users, ecologists and scientists feel the need to exchange their points of view so that the decisions that are taken are taken on the basis of a shared diagnosis and of a rational analysis of the problems. In any case, that is the spirit of the amendments that we have tabled.

 
  
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  Aldis Kušķis (PPE-DE), rapporteur. (LV) Mr President, ladies and gentlemen, I would like to take this opportunity to thank you all for your cooperation so far and the valuable proposals that you have submitted, so that together we may improve the Commission’s proposal on the thematic strategy for the protection and preservation of the marine environment. I very much hope that this report will foster real changes that will preserve and improve the marine ecological environment. I am happy that the report also touches on as sensitive an issue as the problems of the Baltic sea environment. In the Baltic sea, which is also known as Europe’s internal lake, it is particularly important to preserve the balance of the ecosystem, by not allowing it to be further threatened, and by taking special account of the specific low water exchange indicator. I would like to emphasise, on this point, that the European Parliament ought also to scrupulously assess and join in monitoring the design and construction of a gas pipeline which is hazardous for the Baltic sea environment. In my view, it is important for the people of Europe, and particularly those whose countries border the sea, to be able to personally see positive changes — the fact that water quality and cleanness is increasing, that a renewal of biological diversity is taking place in the seas and, finally, that there is considered, balanced and sustainable administration and development of the marine region following the adoption of this legislation and similar pieces of legislation. I would like to stress that this report is the product of collaboration with non-governmental organisations and representatives of this field in industry, with whom wide-ranging debates took place even before the expiry of the deadline for submitting proposals, and that many of their ideas were included in the report. Finally, ladies and gentlemen, I would like to urge the European Commission and also ourselves to talk less but to work more and achieve concrete results, so that we may all live without fear beside our seas.

From this point I shall switch to English and, speaking also for my colleague Mrs Korhola, who cannot be here today for this debate, share some comments and messages.

The thematic strategy is decided on under the Sixth Environmental Action Programme. That is very necessary. As the Commissioner has rightly said, for some time we have needed a strong, integrated EU policy on marine protection. The EU marine strategy directive will be an important new instrument in integrating the existing approaches. Great things have already been achieved with the various policies – legislation, programmes, action plans and various international conventions – but still the state of the marine environment has been deteriorating at an alarming pace. We need more overall joint action.

There are big challenges, such as the role of third countries, which might raise some questions. But if third countries turn out to be the biggest polluters and if they think of this as only a European Union matter, how do we ensure that actions and efforts put in place by the Member States produce good results when, for one reason or another, third countries do not cooperate? We have tried to address the issues in committee, but we shall only find out later how this actually works.

The rapporteur, Mrs Lienemann, has done some excellent work, influenced strongly by the NGOs, and she has been very environmentally ambitious. She has made some radical changes and integrated ideas into the report that were widely requested by the stakeholders. In general, the rapporteur has made the directive stronger and more concrete, more ambitious and effective. She has added the much needed guidelines and criteria and has tightened up the time limits.

Building on the rapporteur’s approach, we have a solid chance to make this a real environmental pillar for marine policy as planned. Here are a few key elements of the draft report. The time limits and schedules for achieving good environmental status have been tightened up, from 2021 to 2017. General definitions of measures which Member States are to take in order to achieve good environmental status are added and a detailed list of GES criteria is provided.

There is no clear definition of European marine waters. The Black Sea has been added as one marine region in the directive. Preparation timetables are tighter, as are programmes of measures. Marine-protected areas are added, something that was not mentioned before. More emphasis is given to cooperation by Member States in the same marine region in monitoring programmes, etc. More emphasis is laid on third countries in broadening responsibilities and deciding who should be involved.

All in all, this report is making a strong point, from the European Parliament side, that we need effective measures to tackle this important issue.

 
  
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  Ioannis Gklavakis (PPE-DE), draftsman of the opinion of the Committee on Fisheries.(EL) Mr President, the main objective of the proposed directive is to achieve a good marine environmental status.

This strategy is more urgent today than at any other time, because the marine ecosystem has deteriorated significantly. However, in order for this strategy to be effective, we must pay attention to two or three things.

First, we have a saying in my country, that you cannot make an omelette without breaking eggs. The money budgeted for this action is very, very little. Provision has been made, for administrative expenses alone, for approximately EUR 90 million per annum for the first two years and for EUR 70 million per annum thereafter. I think this sum is inadequate. Saving our seas is such a serious issue that it merits our spending more money.

Secondly, we need coordinated actions. First of all, we must make fishermen our partners in this endeavour. We must come to an agreement with them; they must be persuaded that, first of all, they need to protect the environment, but that is not all; all of us involved in transport, tourism, industry, health, nutrition, agriculture and, above all, fisheries, must sit at the same table, so that we can agree and proceed.

The third thing I wanted to say was touched on by Commissioners Borg and Dimas and that is that we must agree on certain common indicators so that we can measure the environmental status at the moment, so that – and this is very important – when we speak of a good marine environmental status, we are referring to the same thing. In other words, we must agree on common measurements.

To close, I wish to say and to emphasise that the directive on the marine strategy must give fisheries its proper place and must be at the heart of the endeavour.

 
  
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  Ville Itälä, on behalf of the PPE-DE Group. – (FI) Mr President, first I would like to thank the rapporteur for her work, and at the same time I want to thank the Commission, which has embarked on this important project. The Commissioner with responsibility for Fisheries and Maritime Affairs, Mr Borg, himself in fact organised a conference on maritime transport safety in July in my home town of Turku, at which these important matters were discussed. This is just the sort of proper work which we in the EU should be doing together.

I would in particular like to raise the matter of the Baltic Sea, as the Baltic is an important EU sea, though at present it is a blot on the landscape. The Baltic Sea is seriously ill. Let me give you an example of this. Last summer, blue-green algae took over the entire sea, aided by the warm weather. It is hard to explain to your little children, who want to go and swim, that they cannot go in the sea because not only is it dirty, it is actually toxic. There are toxic algae in the sea, and that can cause various diseases in children if they go and swim in the sea in warm weather.

Now the Commission and all of us are being urged to take swift and determined action and provide the resources needed to rescue the Baltic Sea. That will of course mean that much action will have to be taken. One excellent project now under way is the financing of the St Petersburg sewage plant. This is one of the most important examples. We also need dialogue with Russia, for example, in the area of safety regulations for shipping. We will not succeed if we do not work closely with Russia.

Saving the Baltic Sea is no longer just an environmental issue. It is above all a political one.

 
  
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  Riitta Myller, on behalf of the PSE Group. – (FI) Mr President, it is no exaggeration to say that Europe’s marine regions are in a crisis and there is an urgent need to take action to protect the seas. Over the next 50 years, for example, fish stocks are threatened with collapse. The Commission proposal for a directive in the field of Marine Environmental Policy and a Marine Strategy is a way to seek a pan-European integrated approach to saving marine ecosystems. Although all our seas are in a poor state, it is only reasonable to examine the question of their protection from a regional perspective. Marine regions vary in terms of their characteristics, and at least some of the problems are essentially local. What they all have in common, however, is that they should all be capable of achieving good ecological status within a specific period of time. Hopefully that will be before the year 2021.

The Socialist Group in the European Parliament supports the rapporteur’s endeavour to define what we mean by good environmental status in the marine environment. To achieve good status, as defined, we need to establish sufficiently stringent conservation objectives to prevent deterioration and for measures for the recovery of the seas and restoring them to a sustainable level. These measures may be quite tough, but I hope that the Group of the European People’s Party (Christian Democrats) and European Democrats will support them in the vote. It is important that the measures are properly binding and not merely recommendations.

The protection of the seas is about cooperation, not just among the Member States of the EU, but also with third countries with links to marine regions. For example, effective protection of the Baltic Sea region cannot succeed without Russia’s commitment to cooperation. For years now, there has been cooperation in the context of HELCOM, or the Helsinki Commission. HELCOM is presently overseeing a Baltic Sea Action Plan. Conservation action under the strategy should start within the framework of the HELCOM Action Plan so that practical measures can be taken as swiftly as possible in the Baltic Sea region. I would like to thank both the rapporteurs for having adopted this view within the context both of the strategy and of the directive.

 
  
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  Chris Davies, on behalf of the ALDE Group. – Mr President, having a marine strategy that does not concentrate on fish is like filling a goldfish bowl with clean water after the cat has already taken and eaten the goldfish!

Having said that, there is strong support in this House for the principles behind this strategy and for the legislation, and that is hardly surprising given the catastrophic picture the Commission has painted of the state of our seas. We need to introduce protective measures that are enforceable through the courts in order to ensure that Member States apply them.

The Commissioner used strong words, which we welcome, but the proposals originally submitted to Parliament highlighted some of the weaknesses and divisions within the Commission itself. One thing we are most pleased about is the fact that the whole idea of good environmental status has been reinserted into the proposals and given a clear definition, and we are united on there being powers to create marine protected zones. However, why were those ideas not in the Commission’s original document? When it came out of DG Environment they were, but by the time it emerged from the College some of these crucial matters had been deleted. The time has come for the Commission to back up its fine words on sustainability with some united action from the Commissioners of each department.

We hear that there are divergent views in the Council – so be it. But the message to the Commission and the Council from this Parliament should be that there is strong cross-party support for a significant improvement and strengthening of the measures being proposed. The Commission was right to draft these proposals, but let us now ensure that the warm sentiments can be transformed into practical action.

 
  
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  Carl Schlyter, on behalf of the Verts/ALE Group. (SV) Mr President, I wish to thank the rapporteurs for their exemplary work and their excellent reports. They improve the Commission’s proposal by demanding that good environmental status be achieved by 2017 instead of 2021. Moreover, the targets are made binding, and the importance of marine reserves is emphasised.

Climate change, waste, unsustainable fishing, noise, eutrophication and the extraction of raw materials threaten our seas. If the mass destruction and the natural disaster taking place in the depths of the oceans were instead to be taking place - visibly - on land, the debate on the protection of the marine environment would dominate everyday discourse. Species of fish, birds and mammals are threatened by extinction. The Marine Strategy can, in fact, be a small step in trying to get to grips with the problems, but only if it is as ambitious as the Committee on the Environment, Public Health and Food Safety proposes.

The Member States must assume their responsibility for setting up significantly more marine reserves. We have national parks in all the Member States, but marine reserves are conspicuous by their absence where they are most needed. There is overwhelming statistical evidence that marine reserves provide protection that increases both the fish population and biological diversity in the immediate surroundings of the reserves. When fish are protected and are thus able to increase in numbers, the older fish disperse and make for better catches. The Baltic Sea, in particular, is an extremely sensitive sea with brackish water. The countries around the Baltic Sea must always be entitled to introduce more stringent water protection requirements if they think it necessary to do so without, as a consequence, being constantly threatened by protracted legal proceedings because the internal market has to take precedence over protection of our seas.

I wish to point out the importance of the committee’s call for no support to be given to agricultural activity involving large-scale nutrient leakage into the seas. My Amendments 81 and 82 are designed to introduce responsible regulation of discharges from waste disposal sites. The original proposal is too weak on this point. I am opposed to Amendment 90 about removing the reference to radioactive substances, because doing so would be contrary to the original objective from 2002. Finally, the Maritime Strategy’s call for utilisation of the seas must be adjusted and altered so that it falls within the framework of the Marine Strategy.

 
  
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  Adamos Αdamou, on behalf of the GUE/NGL Group.(EL) Mr President, Commissioner, I should like to congratulate Mrs Lienemann on the excellent work she has done in the report and to stress that she has managed, with a great deal of success, to include in her report the views of all the members and of non-governmental organisations, and as a result she has improved the Commission's original paper significantly.

The marine environment, which is a basic and valuable source of life, is under daily threat. Maritime pollution, climate change, shipping and coastal developments continue to threaten the marine environment and to have an adverse impact on human health.

The directive in question, which is designed to plug the gaps in environmental policy, is an important step towards improving health and restoring the seas.

It is important for us to support amendments requiring the Member States to achieve a good environmental status, amendments which recognise the threats to the marine environment and which aim for the shortest possible timeframe for the implementation of the directive. I refer to Amendments 24, 27, 73 and 78, which I urge you to support.

Furthermore, actions by the Member States must be based on the principle of prevention, on an approach based on the ecosystem while, at the same time, account must be taken of accurate evaluations carried out on the basis of current European legislation, as referred to in Amendments 23, 49, 45, 51 and 60.

Finally, I call on you to support Amendments 81 and 82 banning any systematic or deliberate dumping of any liquid, gaseous or solid body in the water or on the sea bed, in keeping with the provisions laid down for carbon dioxide, except where the relevant approval is granted in accordance with international law and a prior environmental impact study is carried out in accordance with the directive.

 
  
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  Sebastiano (Nello) Musumeci, on behalf of the UEN Group.(IT) Mr President, ladies and gentlemen, the two reports under discussion could not have come at a better time, since they examine the notorious construction of the Baltic pipeline, a project that, in the absence of a serious environmental impact assessment, risks causing an ecological disaster in a sea already suffering, moreover, from a worrying level of pollution. Not only that: the northern and southern shores of the Mediterranean, where fish stocks are becoming ever more scarce, also suffer in some areas from a high level of pollution, caused, among other things, by oil extraction and, above all, by oil refining. I refer, in particular, to the industrial triangle of Syracuse in Sicily, which is the largest petrochemical complex in Europe.

In this industrial zone, not only is there an extremely high level of air pollution, causing the tragedy of birth defects and the indefensible death rate due to tumours – over 57% higher, in fact, than the Italian average – but there is also the problem of marine pollution. The consequences are obvious: the poor-quality fish stocks are down to critical levels; fishermen, often small operators, either cover more miles to find better fishing waters, or are forced to give up their traditional livelihoods. As if that were not enough, plans are underway to construct a regasifier in this industrial zone, a project I have condemned several times before this House.

The proposal for a Marine Strategy Directive and the appropriate amendments that, in our opinion, improve it, are therefore very welcome, Mr President. Above all, I hope that it will shorten the timescale for achieving the objectives of a healthy ecology and environment. We need to make up for the severe delays that Europe has accumulated in this sector, and, as we all know, political timing does not always coincide with the needs of the environment. From this evening, we can afford to be a little more optimistic.

 
  
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  Urszula Krupa, on behalf of the IND/DEM Group. – (PL) Mr President, the marine environment has faced various threats for a long time now, which is why a far-reaching marine strategy is a necessity. The European Union has territorial waters greater than its entire territory, with 1 200 ports, and 90% of its exports are transported by sea. We consider it crucial to emphasise the interdependence of a common fisheries policy and the proposed marine environment strategy. It is logical and advisable to allow a hazardous vessel that has been penalised to sail to the nearest shelter, and then to the nearest available shipyard provided that it does not pose a health or environmental threat.

Another proposal worthy of attention is that of declaring the Arctic a nature reserve dedicated to peace and science.

 
  
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  John Purvis (PPE-DE). – I have the privilege of representing Scotland in this Parliament and that means I also represent a large share of the EU’s indigenous resources of oil and gas. As I understand it, we are committed to maximising the potential of our indigenous energy resources. Surely this is only sensible for economic and logistical reasons and for security of supply. It is also the case that the extraction of hydrocarbons in the North Sea is already well regulated in all its environmental and ecological aspects. Yet certain amendments adopted by the Committee on the Environment, Public Health and Food Safety will effectively stop exploitation of these resources. That is just plain absurd. Indeed these amendments will even, I understand, cause suspension of a major offshore wind project in the Moray Firth. Much of the research funding for this came from the European Union.

Do we want to look ridiculous? Do we want to hobble our few indigenous energy resources and become even more dependent on one or two dominant, and often domineering, external suppliers? The North Sea’s ecology must be considered holistically in North Sea terms. The North Sea is not the Mediterranean.

I appeal to the rapporteur and other sensible groups to support the PPE-DE amendments, which will make this proposal ambitious – yes – but also responsible and practical.

 
  
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  Åsa Westlund (PSE). – (SV) Mr President, I wish to thank Mrs Lienemann and Mr Kušķis who, I think, have done a very good job indeed on these directives.

I myself live by the Baltic Sea and have therefore, unfortunately, been able to see at extremely close quarters the significance, not only for individual people but also for employment and growth, of the seas’ ecosystems being out of balance. I also know that people expect us in this House to make a vigorous effort and do something about the problems they experience every day. I therefore hope that, tomorrow, Parliament will not listen to the previous speakers but will instead give broad support to the changes backed by the Committee on the Environment, Public Health and Food Safety.

Firstly, it should support a considerably accelerated process, whereby the measures are implemented earlier, together with a timetable significantly more ambitious than the one proposed by the Commission, specifying precisely when the objective of good environmental status in our seas is to be achieved. Secondly, it should support more clearly defined objectives that, just as Mrs Lienemann said, are a guarantee of our in actual fact achieving something and are not, in the end, just so much empty talk. Thirdly, it should support making what is perhaps the sea in the worst situation, namely the Baltic, into a pilot area for this strategy - an area in which the measures are implemented particularly early and are preferably based on the Helsinki Convention. These measures are needed if the Baltic Sea is to be saved.

 
  
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  Henrik Lax (ALDE). – (SV) Mr President, two weeks ago, Nicholas Stern, a former World Bank employee, published, on behalf of the British Government, a shocking report on the consequences of climate change. The message was plain. We must no longer think of nature as being something without value as, if we do so, the consequences may be incalculable. The same also applies to the state of the sea.

We in the Group of the Alliance of Liberals and Democrats for Europe have prepared a number of amendments in the Committee on the Environment, Public Health and Food Safety. They are all aimed at increasing the level of ambition, bringing stricter timetables about, strengthening cooperation with third countries such as Russia and plugging loopholes in the legislation. One serious loophole, for example, is in relation to the international waters that begin 12 nautical miles off the coast. In the vulnerable Baltic Sea, mainly cargo ships – but also passenger vessels – continue to dump latrine waste straight into the sea. That is something that they are able to do legally in international waters. Out in the Baltic, 1 800 vessels are dumping in more ways than one all the time. The mind boggles. We are pleased that the rapporteur and shadow rapporteurs with whom we have worked are taking on board our amendment about plugging this loophole in the law. The amendment needs to be implemented quickly, without the decision getting caught up for years in the International Maritime Organisation’s decision-making machinery.

We must have a high level of ambition. The EU must support Russia in its efforts to cleanse St Petersburg of all waste water. It will be expensive, but not to take action would be still more expensive. Drilling for oil and the laying of gas pipelines must not, out of economic considerations, take precedence over the environmental risks presented by such activities. The harmful effects of traffic too must be reduced.

I believe that our populations wish to see the EU genuinely able to take action on these issues pertaining to the fate of humanity. Only in that way can we increase confidence in the EU. The objective must be to protect Europe’s seas and restore them to their former state and to ensure that human activities are conducted in a sustainable way.

 
  
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  Ian Hudghton (Verts/ALE). – Mr President, the European Union has 68 000 kilometres of coastline; Scotland has 11 000 kilometres. Almost 50% of the EU population live within 50 kilometres of the sea; in Scotland 70% live within 10 kilometres of the sea. Clearly it is in Scotland’s long-term interests to protect the marine environment and to conserve its wealth of marine resources for the long term.

Scotland has oil and gas reserves for at least another 30 years. I will be supporting various amendments that will ensure that oil and gas extraction can continue to benefit the Scottish and EU economies.

I cannot support committee Amendment 8 in the Lienemann report, as drafted, because it seeks to link the marine strategy to ‘the principles of the common fisheries policy’. The CFP has been a miserable failure and the last thing I want to see is a new marine strategy linked to such a flawed set of principles.

The idea that Member States should determine what good environmental status is in waters under their jurisdiction, and work with their neighbours in logical marine regions, makes a lot of sense. Fisheries management should be brought into that common sense situation, and jurisdiction should be returned to the Member States so that, for example, countries around the North Sea can work together with those who have most to gain from conservation being encouraged, giving the incentive to make a marine strategy succeed.

 
  
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  Georgios Toussas (GUE/NGL).(EL) Mr President, systems to protect the marine environment are covered in a fragmentary manner by various sectoral policies of the European Union, with the result, however, that there is a compilation of policies, legislative acts, programmes and action plans, without any overall integrated policy for protecting the marine environment.

The aim pursued in the two combined legislative arrangements on the thematic strategy on the protection and conservation of the environment and the marine strategy directive is to achieve a good environmental status of the marine environment in the European Union by 2021. However, if we take account, firstly, of the more general nature of the two arrangements and, secondly, of the pillars on which they are based, it is certain that in 2021, not only will there not be a good marine environmental status, but there will hardly have been any improvement to the present poor status, which is directly acknowledged in the explanatory statement to the proposal for a directive, which points out that overall there has been a fundamental deterioration in the marine environment over recent decades.

The substantiated scientific data of the United Nations Organisation concerning the causes of the deterioration and pollution of the marine environment are incontrovertible: they are shore industries and shipping and the non-existent or under-developed infrastructures for storing and processing residues.

More importantly, the pillars on which both the thematic strategy and the proposal for a directive are based are the common fisheries policy and the Green Paper on the European Union's shipping policy, all – of course – within the framework of the 6th Environment Action Programme for the period from 2002-2012, which we have acutely condemned.

In our opinion, these are in essence numerous, insubstantial interventions on the same wavelength as the Commission proposal, the most daring and ambitious aim of which is to bring the deadline forward from 2021 to 2017.

(The President cut off the speaker)

 
  
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  Cristina Gutiérrez-Cortines (PPE-DE).(ES) Mr President, I would like warmly to congratulate Mrs Lienemann, and I am not doing so in a superficial way or because protocol requires it. I think that this Directive has achieved something important. Thanks to her extensive experience, she has an extraordinary knowledge of philosophy and of European legislative formulas and has achieved a succinct, short Directive. Despite the number of amendments, it does not have too much in it and her own amendments are very generic ideas that are typical of a framework directive. I know for a fact that she worked with experts and was open to many suggestions; amendments were not even needed in order for some of them to be incorporated.

I would like to say that it is an extraordinary and wonderful thing that finally Europe is discussing the sea. Its time has come. I would, however, also like to say that this Directive should be the start of a subsequent development of legislation, as precisely because it is a framework directive, there are still many aspects that need to be developed in the future, which is what I want to talk about.

For example, Amendment 27, which is practically the same as Amendment 86 tabled by my group, suggests several aspects that should be developed: among other things, activities at sea, many industrial activities, many of which are new, such as desalination, which I am not against, but it has not yet been studied, and the methodologies for studying the marine environmental impact, which are practically in their infancy, that is, they have not yet been done.

I also think that the indicators should be developed more and that digital marine charts should be drawn up, which should also be used for cultural purposes.

I think that one of the great treasures of world and European history are archaeological charts. This is something that needs to be developed in order to preserve our heritage and I think that it will be one of the most stimulating discoveries for all of us.

 
  
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  Evangelia Tzampazi (PSE).(EL) Mr President, Commissioner, ladies and gentlemen, allow me to congratulate my honourable friend Mrs Lienemann on her complete and detailed work.

It is now essential that the European Union acquire an integrated policy for the protection of the marine environment, because the fragmentary legislation which has applied to date has not managed to reverse the reduction in biodiversity and the loss of habitats. It is our duty, therefore, towards future generations to achieve a very high level of protection of the marine environment, so that our strategy on sustainable development can be combined with the objectives of the Lisbon Strategy, not forgetting that, in many countries in Europe and for a substantial section of the populace, the sea is a large pole of economic development.

At the same time, this directive offers the Member States an historic opportunity to collaborate in a field which, until recently, was a field of conflict and antagonism, such as sea fishing areas and fishing quotas.

The basic objective must be to clearly define the term good environmental status of marine ecosystems, so as to achieve a cohesive and effective marine policy at European Union level.

I believe that adopting protected marine areas, as a tool for protecting ecosystems and combating the reduction in biodiversity, will also help considerably in achieving this objective. At the same time, we are calling for the deadlines for attaining the targets of the proposed directive to be brought forward to 2017.

 
  
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  Marios Matsakis (ALDE). – Mr President, I wish to congratulate Mrs Lienemann and Mr Kušķis on their excellent reports which, despite the view of some Scottish colleagues, have been wisely strengthened by the Committee on The Environment, Public Health and Food Safety.

European marine waters, as indeed international waters, have often become the dustbin for waste of varying quantities and levels of toxicity. This practice has been carried out for many years by individuals, companies and governments, who have shown little knowledge of or regard for the enormous diversity and importance of marine ecosystems. In many instances that has resulted in unprecedented environmental damage. In other cases, the survival of certain species is now balanced on a knife edge.

It is high time for the EU to intervene decisively in order to protect our marine environment. Therefore, we should all fully support these two welcome reports in the hope that the implementation of the necessary strategies and directives will be forthcoming unhindered, as well as extended to third countries, and that further, complementary measures will be introduced in the near future. After all, the protection of our marine environment is an essential element in safeguarding our own survival on this planet.

 
  
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  Dorette Corbey (PSE). – (NL) Mr President, first of all, my heartfelt compliments to Mrs Lienemann, who really has written an excellent report. Ladies and gentlemen, it is not easy for fish to survive in the seas and oceans surrounding the European Union; overfishing and pollution have taken their toll, and when the fish are gone, they are gone, so we must take drastic measures now in order to prevent the situation arising around 2040 of there being no fish left. Let this prediction by scientists serve as an important warning.

Whilst the marine strategy is a sound initiative, the directive is not specific enough for my liking. First of all, fish reserves need to be set up. By setting up reserves at spawning locations, fish are given the opportunity of reproducing at their leisure. This has proved effective in New Zealand and Australia. If, alongside reserves, sustainable fishing methods are introduced, then we can safeguard the future of fish in the waters surrounding the European Union.

In addition, something needs to be done about exotic species and the problem of ballast water. The Japanese oyster has found a pleasant living climate in the North Sea without natural enemies, but this oyster is actually thriving too well. The purification of ballast water is a simple procedure that must be undertaken across the board. The marine directive requires Member States to think about how the marine environment can be improved and how we can cooperate better, which is in the interest of us all. I warmly support Mrs Lienemann’s report, and I hope you will all do the same.

 
  
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  Olle Schmidt (ALDE). – (SV) Mr President, Commissioner, it feels good to be back again, and I have been able to begin work by reading two constructive reports.

We are all of us responsible for ensuring that our seas can survive the stresses to which the marine environment is exposed. An additionally large responsibility lies with this Assembly and the European Union to find the right forms of coordinated and vigorous cross-border cooperation. As many speakers have pointed out, time is extremely short.

In my own part of Europe, the Baltic is the most important sea and the one that has been, and still is, exposed to the greatest threats. That is why we view the planned gas pipeline from Russia to Germany with great concern. Tomorrow, more detailed plans are to be presented. A gas pipeline in the sensitive Baltic Sea constitutes a considerable threat to the environment. The gas pipeline may be damaged by ships or old unrecovered mines and be exposed to terrorist attack. The gas pipeline would constitute a threat to the environment and to fishing, both when it was being constructed and during the period that it was in operation. In my opinion, the risks are manifestly greater than the advantages. Certainly, Europe needs energy supplies, but this natural gas pipeline must not be laid on the bed of the Baltic Sea. If the pipeline is to be constructed, it must be so on land – for the sake of the marine environment and of the Baltic.

 
  
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  Vladimír Špidla, Member of the Commission. (CS) Ladies and gentlemen, I have followed your debate with interest and I am pleased to note that in principle you have endorsed the holistic approach favoured by the Commission. On the other hand, it is clear that this issue is a complex one, requiring urgent action in many areas. It is also clear that a range of different opinions has emerged and that further analysis and clarification are required.

I should like to refer to some of the main amendments in more detail.

In the timetable for implementation (Amendments 20, 24, 31, 32, 35 and 69), the Commission chose the year 2021 as the date by which the Member States have to achieve 'good environmental status' of their marine environments. The Committee on the Environment, Public Health and Food Safety proposed an earlier date.

Although the Commission would like ‘good environmental status’ to be achieved quickly, the committee’s date is not in my view a realistic one. The Commission's proposal addresses firstly the need to improve our understanding of the marine environment and the threats it faces, and secondly the need for action. In order that we may find the most appropriate, and cost-effective, measures to protect the marine environment, we must equip ourselves with the essential knowledge and skills. Under these conditions, to bring the deadlines forward would be counter-productive.

This is clear, especially in view of the parallels with the current Water Framework Directive, to which this directive is closely related. In the Water Framework Directive, successfully adopted in 2000 due to the fact that Mrs Lienemann was the rapporteur, ‘good environmental status’ is called for by 2015, that is to say, 15 years after the adoption of the directive. The Marine Directive should operate in the same way.

In view of the extent of the sea area addressed by the Marine Strategy Directive, and in view of the size of the task, no one should be in any doubt that our proposed timetable is highly ambitious. The date proposed by the Commission in the directive, 2021, will moreover coincide with the first review of the River Basin Management Plans under the EU Water Framework Directive, allowing synergies on the further implementation of both directives.

Apart from this, the Commission believes that it would not be practical to call on the Member States to ‘achieve good environmental status by 2021’ as the Committee on the Environment is proposing in the Directive. Nor would it be realistic. The measures that must be taken as part of the Marine Strategy will be up and running by 2018 according to the proposed timetable. Some measures will not deliver immediate results because it will take time for some of the ecosystems to react to the measures. Overall progress towards good environmental status must be shown, however, which is why the Commission has proposed the idea of 'achieving good environmental status'.

The Commission is prepared to support the insertion of an article stressing the importance of marine protected areas (Amendments 27, 39, 62 and 72). Such an article should ideally be based on Article 6 of the Water Framework Directive on protected areas.

The Commission is also prepared to back the idea that in order to meet the objectives of the Directive it may be necessary to create further protected areas or even closed nature reserves. It cannot accept, however, the proposal from the Committee on the Environment for the mandatory creation of marine protected areas as part of the implementation of the proposed Directive. Protected marine areas should be created only when they can contribute directly towards achieving a ‘good environmental status’. They should not simply be created as an end in themselves, but should be viewed as a means rather than an end.

The Commission agrees with the committee's wish to integrate the fundamental definition of ‘good environmental status’ (Amendment 80) directly into the Directive.

The Commission nevertheless has definite problems with the list of definitions proposed by the Committee on the Environment. Many of these definitions are based on the factors influencing the marine environment and the threats to it, rather than the quality of the ecosystem. This is a dangerous approach because some potential risks and threats may be omitted or, on the other side of the coin, unduly emphasised. Even more importantly, if we monitor only the influencing factors, the EU will not be able to move away from the current fragmented approach on managing the marine environment towards a more integrated approach, which would cover all of the factors as well as their mutual impact on the marine environment.

Lastly, with regard to financial matters, (Amendments 19 and 74), there are a number of EU funding mechanisms from which the Member States can benefit, for example the Structural Funds, LIFE+ and the Seventh Framework Programme for Research. Consequently, it is not necessary to create any special funding mechanisms.

Honourable Members, the debate has touched on the complexity of this whole issue, including the fact that the marine environment receives pollution from the atmosphere, and that the quality of the marine environment depends to a large extent on tackling climate change. It has also been mentioned that some seas have not been included, as in the case of the Black Sea, and naturally the approach adopted by Romania and Bulgaria will fundamentally change the situation and open up fresh possibilities. As regards the Arctic Ocean, owing to its geographical situation it is not possible to change the Commission’s position significantly and nor is it possible to create an independent strategy for what is an exceptionally sensitive and important environment here, albeit in no way connected directly to EU territory.

Mr President, honourable Members, I shall pass on the list of Commission opinions on the Amendments to Parliament’s Services.

 
  
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  President. The debate is closed.

The vote will take place tomorrow at 11.30 a.m.

Written Statements (Rule 142)

 
  
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  Hélène Goudin (IND/DEM). – (SV) It is very gratifying that attention is being devoted to issues concerning the marine environment because there is a great need to ensure that our seas do not suffer still more pollution or destruction. The amendments by the Committee on the Environment, Public Health and Food Safety are, for the most part, positive and will hopefully improve the condition of the marine environment, especially as a result of good environmental status being defined.

The Commission’s proposal does, however, contain an article that gives rise to a certain amount of concern. Article 13, on special areas, opens up opportunities for, to some extent, disregarding the environmental objectives if the alterations in a particular area have taken place as a result of actions taken for reasons of great public interest. One can imagine this article being invoked very extensively. It is therefore extremely important that the Commission impose significant restrictions if and when this happens, because the future environment we are all to live in is also of great public interest.

 
  
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  Francesco Musotto (PPE-DE).(IT) Europe is surrounded by four seas and two oceans, containing different types of ecosystems and different biogeographical regions. The European coast extends over 100 000 km, and is where 16% of Europeans live, many of whom are strongly tied to the sea for their work, leisure, or sport, or because of the natural resources and energy it provides. In the case of enclosed or partly enclosed seas, such as the Black Sea, the Baltic and the Mediterranean, the risk of pollution is particularly high.

The proposal for a Marine Strategy Directive, which seems desirable and long-awaited, must enable the current political framework for the protection of the marine environment in Europe to be expanded and strengthened. Its effectiveness will determine the future health of European seas, and has the necessary potential to guarantee the environmental basis needed for the sustainable use of the resources and functions of the sea, both within and outside of Europe.

 
  
  

IN THE CHAIR: MR COCILOVO
Vice-President

 

18. European electricity network breakdown (debate)
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  President. The next item is the Commission statement on the European electricity network breakdown.

 
  
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  Andris Piebalgs, Member of the Commission. Mr President, the serious incident on the continental European electricity network on Saturday, 4 November led to blackouts over most of the system. We know from E.ON that the fault originated in northern Germany, where switching off an extra high-voltage line in Lower Saxony later led to the switching off of lines across Europe.

E.ON had carried out a planned deactivation of an overhead line and this operation had also been done with a previous line. The incident led to the splitting of the Union for the Coordination of Transmission of Electricity Network into three zones: west, east and south-east. The western zone was short of power and the eastern zone had too much power. To cope with the lack of power in the western zone, automatic devices had to switch customers off in the countries affected.

The worst affected countries were France, where five million customers were reported to have been cut off. In Germany, millions of customers were affected, as in Belgium, the Netherlands, Italy and Spain, where some hundreds of thousands of customers were without electricity. Affected countries also included Austria, Slovenia, Portugal and Switzerland.

The incident was resolved after an hour and the power supply was re-established. The incident could have had much greater consequences but the cooperation between transmission system operators and the size of the network made it possible to supply customers very quickly.

The precise cause of the failure is not yet known. I have asked the European regulators to provide a report on what actually caused this blackout. That involves analysing a huge amount of information before the blackout and after the blackout, so at this stage I cannot report to you on what actually triggered it. The UCTE investigation committee will also provide a report, as will the European transmission system operators, who are investigating the incident.

As soon as we have a full report and a full-scale investigation has been held into this incident, I will report to Parliament in an appropriate form on what actually triggered it; but as far as I can see three lessons should be learned from it. In 2003 a huge-scale blackout had already occurred in Italy and it is clear that the measures taken afterwards were not sufficient, in particular in three areas.

One proposal, therefore, is that we should set up a formal European grouping of transmission system operators which will have the task of putting forward common positions on issues identified by the Commission and in particular network security standards. We should also institute a mechanism to ensure that these standards are formally binding on network operators. It is also clear that much more investment is needed in transmission system networks to provide for an adequate response when such incidents happen, but most importantly to ensure that lines are not overcharged.

I am very pleased that you put this question on the agenda of this House, as it is a very important issue. This was not a natural disaster but a system failure, and we should analyse it and draw the necessary lessons from it. As soon as the report is ready, the Commission will not hesitate to draw the necessary conclusions and take the necessary action.

 
  
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  Herbert Reul, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, first of all, many thanks for that level-headed report: the problem lasted an hour, and then it was sorted out. That, too, is an argument worth mentioning.

Secondly, like you, I take the view that a full report needs to be produced first in order that we do not arrive at premature answers about all the things that might have gone wrong.

Thirdly, we politicians must face up to the question as to whether the approach we take might be somewhat contradictory: on the one hand, we call for more investment in electricity grids, while, on the other, we threaten the grid operators with the unbundling of their property. Nobody can be expected to invest in networks when they are, at the same time, facing the threat of those same networks being taken off them; that can hardly be regarded as logical.

Fourthly, at the same time as we call for more and more renewable energy, we know that wind power contributes to the reliability of the grids being a very real problem. I have nothing against wind power, but nobody should be surprised when problems of this sort occur.

Fifthly, we demand – and rightly too – more connection points, because we want electricity to be transmitted from one country to another. Right though it is that we should want that, we are, perhaps, paying too little attention to the need to ensure that, at the same time or as a prior requirement, the grids before and after the connection points are adequately prepared.

One consequence I would like to see resulting from this occurrence is our handling energy policy issues in a more realistic and down-to-earth way, without making contradictory demands that can never be met. Perhaps that is a contribution that we will be able to make; whether or not we do so, I look forward to a precise evaluation once the facts are before us, and then we will be able to consider what the political consequences must be – if any. Much of what was said in the days following the power failure was precipitate and resulted not so much from in-depth analysis of the event but rather more from a momentary snapshot of what happened. I am much obliged to you, Commissioner Piebalgs, for what you are doing.

 
  
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  Reino Paasilinna, on behalf of the PSE Group. – (FI) Mr President, Commissioner, ladies and gentlemen, the blackout in Europe affected 10 million people from Germany to Spain. The power cut was a salutary reminder of how closely we are connected to each other via the electricity network and how vulnerable we are at the same time. We still do not know why it happened.

In practice Europe has a common electricity network, but not a common energy policy that would secure supply. No viable internal market for electricity has been established. It is paradoxical that the more our networks are connected, the more vulnerable we are to power cuts. Although connecting up the networks is an attempt to improve the security of supply of electricity everywhere in the Union, an adverse effect is that any problems that arise will affect us all. That is why we need above all to ensure that our common networks function properly, that there are emergency systems that operate nationally, and that the system is monitored by one authority. We need security standards, as the Commissioner said.

The likelihood of other energy crises was heightened when the energy production plants were privatised. The state used to own these companies and invested in the long term. Now we have reached the quarterly investment stage where cash has to be recouped fast, and that is why there is no long-term perspective.

The Commission has taken prompt action, and we are grateful for that. The national transmission system operators must in future cooperate more comprehensively and more transparently. In addition, the strategic review on energy out in January needs to examine the possibility of setting up a common regulatory authority. Moreover, companies need to take responsibility and invest more than they do now in transmission and emergency capacity. If that does not happen, governments will have to intervene and do what they had been doing up until the current phase.

 
  
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  Anne Laperrouze, on behalf of the ALDE Group. – (FR) Thank you for your communication, Commissioner. It is imperative that an extensive and rigorous investigation be carried out into the causes of the power cut that affected a number of EU countries. Should this breakdown be attributed to a lack of information? To a failure to comply with procedures? To a network fault? To a shortage of investment? To a fault in the maintenance of the network or to a commercial cause? Some Europeans view this breakdown as a disastrous consequence of the liberalisation of energy; others view it as the product of inadequate interconnections and of an inadequate trans-European energy network.

As you pointed out, one might also take the view that the management of this breakdown demonstrated the Member States’ solidarity towards Germany, deprived as it was of electricity, and that the power cut procedures were implemented in order to prevent far more serious consequences resulting from a European black out.

If the breakdown was a commercial one, the Member States' regulators must together define and review the applicable rules in order more effectively to control the electricity market. If the breakdown was due to technical problems, or to a procedural fault, then the power distribution network managers need to be coordinated more effectively, as they are the operational links in the chain of free flowing and secure energy exchanges. The creation of a European Centre for Energy Networks would enable us to implement a European code of networks aimed at harmonising the standards and procedures of the Member States’ networks.

To conclude, I am delighted that the Commission has launched this investigation and I hope – allow me to emphasise this point – that it communicates the results with all due transparency so that we might make progress in preventing any incidents of this kind.

 
  
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  Claude Turmes, on behalf of the Verts/ALE Group. – (DE) Mr President, since Mr Reul, two or three days after the electricity blackout, went on German radio to attack wind energy in much the same way that Mr Glos and E.ON had done, I am glad to hear him, ten days on from the event, declaring that he has nothing against it. It has since become clear that German wind energy did absolutely nothing to help bring this calamity to pass, since the wind on that day was quite normal. ‘Day ahead’ was delivered, and it did indeed turn out that the wind farms in Germany had made a vital contribution to getting the grid up and running again, in other words, in those situations in which it is possible to define a good interface between the grid operators, the regulators and the providers of wind energy, wind energy did in fact, have positive effects on the grid.

In Spain, by contrast, many wind farms were taken out of the grid during a moment of low frequency, which makes no sense whatever, as wind farms are less vulnerable to low frequency than other generation facilities, and they could have helped to stabilise the Spanish network.

What can this breakdown teach us? The first thing it can teach us is that we have to prepare the networks for long-term investments in energy; electricity generation will migrate to the coasts, and I am talking here not just about wind energy, but also about condensing power plants, which will find it impossible to cool themselves down further inland by reason of the warmer climate and warmer rivers. We will also have to invest much more in decentralised energy provision, in the shape of biomass, biogas, combined heat and power, as well as gas power stations, which can be sited close to the centres of consumption in industry or in towns, which will, to some degree, compensate for this migration and enable us, by means of these decentralised investments, to make more room on the networks for business.

Secondly, what is needed is an EU regulator – not one who will abolish the national regulatory authorities, but an EU regulator with quite specific functions in the sphere of trans-European electricity trading, improving not only transparency but also the interfaces between the national networks. We need this authority right now, but with a clearly defined and narrower spectrum.

Thirdly, the networks are in need of long-term investment, and that cannot be maintained on the basis of high yields in the short term. It is precisely because E.ON and RWE want returns of 30% that we need ownership unbundling, for such high yields are not necessary in a monopoly sector, where no more than a return of between 6% and 8% on the investment to be made is needed. A clear separation of the grid’s interests and the production and trading interests will improve security of supply and also the European network’s capacity to act.

 
  
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  Esko Seppänen, on behalf of the GUE/NGL Group.(FI) Mr President, Commissioner, energy is produced heterogeneously among the Member States. In some countries, cheap hydro-electric energy is of key importance; in others, cheap nuclear energy. In other countries, electricity is produced by burning ever more expensive fossil fuels or by means of expensive wind power. The picture of the market is further muddled by the EU’s emissions rights trading scheme, and we do not know what the future holds for that in 2008, let alone 2013.

Connecting the EU’s electricity networks does not solve all the problems. Harmonisation of the market will produce winners and losers. There are many countries that will not agree to invest in interconnecting networks or pay a high price for electricity just so that it might be cheaper in another country. I am glad that the Commission’s standard answer this time has not been that the harmonisation of markets solves everything, but that instead it is actually trying to find out what this was all about.

 
  
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  Alejo Vidal-Quadras (PPE-DE). (ES) Mr President, the power cut that was experienced on 4 November once again demonstrated the high level of interdependence between the electrical networks of the Member States. The fact that ten million citizens and about a dozen countries were affected gives us an idea of the gravity and scope of this incident.

There is undoubtedly a positive side to this, which is the swiftness and efficiency of the reaction by the operators, who, by taking the appropriate measures, managed to solve the problem in just under an hour. However, although we should be pleased with this, what we should not do is tempt fate.

Commissioner, you said that a detailed investigation is going to be conducted into the causes of this incident and there is no doubt that this needs to be done, because from every crisis like this we learn very valuable lessons. I am sure that when you have all the necessary information, you will pass it on to this House so that we can also analyse it.

Commissioner, I fully agree with you that there is a need, as you recently mentioned, to create a formal group, at European level, of transmission system operators that can make technical proposals on safety standards for the networks and other issues that are relevant to what we are dealing with.

A few years ago I proposed a similar initiative in relation to the report on security of supply and I must say that, on the part of the regulators and many colleagues in this House, the initiative was not very successful. I hope that after this latest crisis, this proposal will be re-examined with more realism.

Finally, Mr President, Commissioner, I would like to take this opportunity to make a comment to the Council: it is now time that, in a Europe in which there is free movement of services, goods, capital and people, in which twelve of the Member States have the same monetary policy, in which we all share an international trade policy, we stop pretending that the decisions that we take about energy only affect us. This latest incident made this very clear.

It is not about taking sovereignty away from any Member State, but about acting together on all those things in which joint action benefits everyone.

 
  
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  Vincenzo Lavarra (PSE).(IT) Mr President, Commissioner, ladies and gentlemen, the blackout of electricity networks on 4 November is a sign that should highlight the urgency with which we must provide common responses to the energy problem. The episode has shown clearly how closely networks are interconnected, and the lack of appropriate management to support this.

Commissioner, the guidelines presented by the Commission on 9 November to rationalise the cross-border transport of electricity in Europe, which are aimed at improving the management system, are welcome. However, it is important to enforce greater cooperation among regulators: we must speed up the implementation of a single European regulatory authority, a European centre for energy networks, as proposed by the Commission’s Green Paper. It is also necessary, in my opinion, to have network administrators that are independent of commercial operators, as well as greater computerisation, enabling transmission networks and distribution networks to communicate.

The internal market is a key aspect of common energy policy. Today, more than ever, this policy is essential and must be regarded as a priority. We must continue down this road with greater courage. Together with the Member States, we must speed up this process, overcoming national protectionist self-interest that slows down liberalisation and competition on the market, so that episodes like that of 4 November will no longer happen, and, above all, so that Europe, as a single actor, can negotiate the delicate international geopolitical balances, securing for itself a protected, sustainable and unified energy supply.

 
  
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  Paul Rübig (PPE-DE).(DE) Mr President, Commissioner, ladies and gentlemen, what we must first do is ensure that the grid is well divided up between large and smaller suppliers, between strong central units and regional ones that will enable us to build up a strong structure. For that, of course, trans-European networks are needed, as is a regulator or coordinator to handle these matters, but what is needed above all is the fiscal incentives that will get the profits that will be made used for investment allowances or shorter-term rates of depreciation.

The most important thing, as I see it, is to draw up emergency plans that will give us a chance of shutting down the network quickly and efficiently in the event of a crisis and then restabilising it and restoring the power supply as quickly as possible. We also have to introduce a qualitative dimension into the security of energy supply, meaning that those who are willing to have themselves removed from the network at short notice should also be able to benefit from price reductions, or, conversely, that those who want to remain on the grid as long as possible and be put back on it with the minimum possible delay, should also pay higher charges.

Where energy is concerned, we must get away from debating it only in terms of quantity; there is a need, in energy supply, for qualitative factors that will make it possible for the price schedules to demand that a user who wants absolute security of supply would also pay more. If, though, a user is flexible by reason – for example – of being able to draw on the energy for his warm water requirements either by night or by day, then he should be charged at a correspondingly more favourable rate.

Everyone should be able to choose their own energy supplier, and everyone should be able to get their electricity from the generator of their choice; if they could do that, it would give us a real chance of reshaping the European market.

 
  
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  Giles Chichester (PPE-DE). – Mr President, this was an example of the law of unintended consequences, not a disaster.

We must await the outcome of the inquiry you have launched and avoid kneejerk reactions. We have learned once again that people’s behaviour is not always predictable. I submit that it is not possible to legislate against every eventuality. This was primarily a technical problem and not necessarily one about policy.

I would remind the Commissioner and the House that we already have legislation in place in the shape of the security of electricity supply and infrastructure directive, for which I was Parliament’s rapporteur. We should wait for that piece of legislation to bed down and be seen to be properly transposed and implemented in Member States before we move on to enact more legislation. Let us learn from this, but let us also remember that the network operators – the transmission system operators – have a remarkable record of maintaining supply. As my colleague, Mr Rübig, has said, a 100% supply is a difficult target to achieve. I believe they do a pretty good job.

I invite the Commissioner to come and join my colleagues on the Committee on Industry, Research and Energy. We are going back to our committee meeting after this discussion. One of the matters we will be discussing is Mrs Morgan’s report on the Green Paper. It is good to see the Commissioner here and if he does not have to rush away he will be very welcome to join us.

 
  
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  Andris Piebalgs, Member of the Commission. Mr President, firstly, I am very grateful for the invitation and I will definitely come, but I shall only listen to the debate and not intervene in the proceedings of the committee.

Secondly, it is important to have all the results of the investigation before we reach a conclusion. That is why I want to launch all these inquiries, because we really need a factual basis. It was a planned action and not a natural disaster. We really need to know why it happened.

Thirdly, today’s debate has been very valuable. In a way it has been a prelude to the debate to be held in the committee, because it has examined how best to ensure that the necessary investments are made in power and in the energy sector in general, and which are the best ways to guarantee that investments are made and the system functions properly.

I should like to praise the transmission system operators, who really cooperated on a voluntary basis. Their quick response prevented an even worse blackout.

I should like to inform Parliament that during the summer the European transmission system operators always pay close attention to demand and supply on the electricity market. As you know, summers are becoming hotter and the consumption of electricity at that time increases tremendously, so every year there is more and more demand for electricity and the networks are overloaded.

It is very important also to mention that network security standards must always be observed. Therefore, we definitely need a binding standard to which all network operators have to adhere. We have already seen the example of the Swiss blackout, which caused the blackout in Italy. It was clear the operator had not complied with the network security requirements and that resulted in a large-scale blackout. We should ensure that such a situation never occurs again and, at the same time, establish a system that is very reliable, where the size of the European network and the size of the UCTE system help to prevent blackouts, rather than causing blackouts or making them more widespread.

I thank you for the debate. As I promised, as soon as the results of the inquiry are available, I will be ready to come to Parliament.

 
  
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  President. The debate is closed.

 

19. Milk quotas (debate)
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  President. The next item is the oral question to the Commission on milk quotas by Duarte Freitas, Carmen Fraga Estévez, Salvador Garriga Polledo, Esther Herranz García, Elisabeth Jeggle, Albert Jan Maat, Mairead McGuinness, Francisco José Millán Mon, James Nicholson, Neil Parish and Daniel Varela Suanzes-Carpegna, on behalf of the PPE-DE Group (O-0122/2006 – B6-0444/2006).

 
  
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  Duarte Freitas (PPE-DE) , author.(PT) Mr President, Commissioner, I should first like to thank the political group and the other groups for the interest that they have shown in this subject and that made it possible for this oral question to be put quickly onto the agenda. This level of interest is indicative of the importance and sensitivity of the issue of milk quotas.

Commissioner, you suggested at the informal Council meeting that the system of milk quotas appears increasingly outdated and that it should be questioned and examined in such a way that farmers can plan their lives over the long term. On 3 October, at the last meeting of the Committee on Agriculture and Rural Development, Mr Rasmussen, representing the Commission, confirmed that we would see changes following the CAP 2008-2009 health check, most probably a phasing out of the milk quota system before 2015, when the 2003 Agreement is due to expire. It was not Parliament that raised this issue now, but it is in Parliament that the issue must be clarified, because our voters are most concerned and are anxious to know what is going on.

The truth of the matter is that the market reacted to these statements immediately, and various organisations and political agents appeared in public to have their say on the future of milk quotas. Although the CAP health check cannot be viewed as a mid-term review, we are aware of the internal and external pressures to make changes that go beyond merely simplifying the processes. In the dairy sector, planning is done over the long term. As regards, on the one hand, quota acquisition and, on the other hand, genetic improvement, environmental obligations and investment in determining the quality of the milk fat and protein content produced by each cow per lactation, analysis is required every six to eight years. Accordingly, what politicians are saying today will have repercussions until 2014-2015.

As I come from a region in the Azores which accounts for 30% of Portuguese milk production, where milk is the main source of income and where there are no medium-term alternatives, I am particularly sensitive to these changes. It is therefore essential that we know whether or not the agreement must be complied with and whether any stringent mechanisms are to be put in place before or after 2015.

On the other hand, it is also crucial to state for political purposes that the EU will take into account the social and economic impact that changes of this nature could have on regions that depend on milk and, in particular, on regions in which there are no production alternatives. What we really need to know now, Commissioner, is whether the milk quota system will be maintained in its current form until 2015, so that the market and the producers can be kept fully informed.

 
  
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  Mariann Fischer Boel, Member of the Commission. Mr President, for the time being the quota system provides some kind of stability for the European market, allowing successful full implementation of the 2003 reform without undue disturbances. However, if the milk sector is to meet the challenge of competitiveness in the future and prosper in a more liberal world, the milk quota system will gradually become a less adequate instrument for achieving our goals. I have therefore decided that a debate on the future of the quota system should take place within the health check process in 2008.

The most promising long-term scenario for the European dairy sector is one without quotas. This would allow the more efficient producers to benefit from growing markets while avoiding the huge cost, especially for young farmers, of obtaining production rights. The value of the quota system varies tremendously between the Member States. Quota levels per Member State are fixed until 31 March 2015, as Mr Freitas rightly said. After that date, in the absence of a proposal from the Commission and a decision taken in the Council, the system of milk quotas will end. That is important. If no decision is taken, the system will expire on 31 March 2015. Were the Council to take a decision to continue the quota system after 2015, this should allow for a gradual transition from the current rules to a scenario without production limits.

It is in everybody’s interest to have a soft landing in order to avoid disturbances to the sector. When I travel around the Member States and talk to farmers, they ask for predictability. We owe it to the farming sector to give them a clear signal, and not a last-minute one on 1 January 2015, as to whether the quota system is to continue or not. We need to provide this predictability, and in this scenario specific measures should perhaps be introduced during a transitional period in order to make the milk quota system much more flexible than it is today.

However, it is still too early to take the appropriate measures. We will all have a much clearer idea of the situation, and of the different options for change, once the dairy market outlook report is completed at the end of next year. That report will be presented to Parliament and the Council and will look at the overall objectives and results of the 2003 reform, namely market orientation, competitiveness and the sustainability of the CAP in political, environmental and economic and budgetary terms.

I hope we can have a solid discussion on the future and on how to provide this predictability, which I consider so important, not just for the younger generation but also for those already in business.

 
  
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  Elisabeth Jeggle, on behalf of the PPE-DE Group. – (DE) Mr President, Commissioner, many thanks to you for what you have said, but I also want to extend warm thanks to my colleague Mr Freitas for taking the initiative and putting this oral question. As you have already, and repeatedly, pointed out, Commissioner, the current state of affairs – that is to say, the decision to retain the quota until 31 March 2015 – and the question as to what will succeed it, is a cause of vigorous debate, particularly in certain regions that are, or believe themselves to be, dependent on milk and on the quotas.

It is good to hear a clear statement from you – as we indeed just have done – in which you give us the facts – namely, that the quota has been agreed on up to this point – and also tell us that we should have a debate in good time on what we propose to do about the situation. If we want to carry on having a quota, then the farmers must be aware of that and supportive of it, exactly in the same way as they have to be of the decision to abandon the system, as is in fact currently being envisaged.

The question then arises as to what instruments might be feasible in the current financial situation as a means of preparing for its abandonment; it may well be, for example, that an increase in the milk quota is under discussion, but I would venture to express doubt as to whether this is the right way of going about it. How are we dealing with the option for young farmers who need the security to plan ahead and who very probably ought not to be investing a great deal more money in quotas, but rather in restructuring for the sake of their own competitiveness?

How, too, are we to deal with areas that are nothing more than green spaces and need dairy farming if they are to be maintained as such? These are, in the main, areas with very beautiful and very interesting landscape, in which there are, as a rule, very few other ways available of earning a living, and so we must support them in this way.

 
  
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  Katerina Batzeli, on behalf of the PSE Group.(EL) Mr President, I should like on behalf of my political group to thank the Group of the European Peoples Party (Christian Democrats) and European Democrats and Mr Freitas for his reflections on the question of the Commission statements on milk quotas.

Commissioner, I shall not refer to what we all know to be the importance of the milk sector in Europe at the level of production, employment, investments, foreign trade or food security. However, I would point out that any proposal to abolish or keep milk quotas must be studied promptly and carefully and an analysis must be made of its repercussions, firstly on rural incomes and the other sectors acutely affected, and on rural development itself. This analysis should include all the regions of the Union, as well as the peculiarities of milk production in some of them.

Commissioner, we cannot be in favour of controlling milk production after 2015 under the current preconditions, which often create oligopolies in the sector. It is a production model of the previous common agricultural policy philosophy. On the other hand, however, we cannot accept the liberalisation of milk production quotas from one day to the next before 2015. In this transitional period which we are going through, it is necessary to strengthen measures of transparency, efficacy and competitiveness of the sector in certain regions of the Community. Nor can we announce any review of any product within the framework of the health check in 2008-2009. If we want to believe that it is a health check, what we have is a simplification of the common agricultural policy.

I would like to put one question to you: is there any possibility of unbundling subsidies in 2007? How can this be combined with the liberalisation or maintenance of the quota system?

Commissioner, I know that you will submit an honest proposal as regards the limits, so as not to give rise to any insecurity among producers. I think that you have this political commitment, but above all it is the question of timely consultation with the European Parliament that will give competitiveness and a clear orientation to the sector.

 
  
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  Jan Mulder, on behalf of the ALDE Group. (NL) Mr President, I too should like to start by thanking Mr Freitas for taking the initiative and raising this important topic this evening.

When talking about the milk quota, it is important to note that the situation when this quota was introduced back in 1984 was completely different from now. In 1984, there were large surpluses that could not be sold, and that is clearly no longer the case. The difference between the global market prices in 1984 and the price in the European Union was enormous, but it is now considerably less pronounced.

If EU prices approximate to those on the global market, there is far less reason to have a quota system than there was in 1984. I am in complete agreement with the Commissioner’s statement a moment ago to the effect that it is important for farmers to know where they stand. I do not know when the Commission will be able to indicate the proposals or direction in detail, but it would be ideal, in the framework of the health check, to also address all other components of agricultural policy and also to hear the Commission’s view on the quota system.

The situation in the European Union is not – as somebody has already mentioned – the same everywhere. When the Commission presents this analysis, it is important that this is done on a country-by-country, and perhaps even region-by-region basis. For some regions, it is important that a quota system remains in place. Would the Commission address this aspect during the analysis? Whatever the outcome, on the basis of current knowledge, I think it would be preferable to phase out the quota system over a period of time. After all, if we compare the EU’s presence in terms of dairy products within the global market today to that in 1984, the situation is now considerably worse, and that is much to be regretted.

 
  
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  Ilda Figueiredo, on behalf of the GUE/NGL Group.(PT) Mr President, the Commissioner’s position on the milk quota system is most worrying, in that she is suggesting that they might be dismantled by 2015.

Although she says that it is too early to take substantive measures, the path to liberalisation to which she refers overlooks the importance of milk production in various disadvantaged farming areas. For example, in Portugal, both in the North and Central Regions of the mainland and in the Autonomous Region of the Azores, any dismantling of the milk quota system would hinder rural development and would impoverish vast areas in which the production of milk and other dairy production is the main activity.

We therefore emphasise the need to protect the specific characteristics of farming in various Member States and, in particular, in Portugal.

 
  
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  Janusz Wojciechowski, on behalf of the UEN Group. – (PL) Mr President, I would like to thank the author of the question for initiating this greatly needed debate on dairy quotas. The problems associated with these quotas are a concern for farmers throughout Europe. I would like to make the point that if these quotas are to be maintained for a longer period, it raises the obvious question of how high they should be, because the sizes of milk quotas are blatantly unjust: I can cite many examples of how they do not conform to market demand in particular Member States. There are countries which are greatly damaged by quotas not being in line with their demand as consumers. Examples are Italy and Spain, while Poland, a new Member State, is definitely another one. For that reason, if the quotas need to be retained, then the size of these quotas must be reviewed for the sake of fairness and European solidarity.

 
  
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  Kathy Sinnott, on behalf of the IND/DEM Group. – Mr President, since we are on the subject of milk quotas, I want to bring a serious situation to the Commissioner’s attention. The Irish milk quota sellers’ group, whose members are all older farmers, all hold milk quotas which they wish to sell. Their decision to sell the quotas is based on illness, infirmity or old age.

The Irish Minister for Agriculture has stipulated that she will prioritise in favour of young farmers. European law prohibits discrimination on the grounds of age, yet our Minister is openly discriminating against older quota owners in favour of young farmers to whom she wishes to give quota – and this is the key – at below market value. She proposes to take the cost out of present quota owners’ pockets. This is interfering with the market. Many of these older farmers are at present subject to scaremongering, with inaccurate information from their cooperatives.

The Minister intends to confiscate quotas not offered for sale on two bases: if the quota owner does not produce for two consecutive years or if the quota owner has a leasing arrangement which expires in March one year and he does not sell his quota by the end of March the following year.

Minister Coughlan appears to want to divide the traditionally cohesive farming community by the exploitation of one group by another. The threat to confiscate quota is an attempt to pressure farmers into poor arrangements and to sell against their will. I ask the Commissioner to clarify this situation.

 
  
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  Albert Jan Maat (PPE-DE).(NL) Mr President, I should like to thank Mr Freitas for the way in which he has presented the European Christian Democrats’ initiative, and the Commissioner for opening the debate on the future of dairy products. Let us be honest: the situation has changed over the years; high quota costs have caused the cost of milking to soar, while European dairy policy is increasingly becoming snarled up. We have now lost 60% of our exports within the global market, and the European Union and the European dairy sector have lost 4% of world production.

Since current demand for dairy products by far outstrips production globally, Europe would do well to face the facts and ponder the question what to do after 2015. On the one hand there are the entrepreneurs who would like to grow but are crippled by the high quota costs. On the other hand there are areas in Europe where the quotas are currently no longer being achieved, the United Kingdom being a case in point. There is therefore every reason to look at how we can come up with a good timetable after 2015 in order to attain a better and effective system. I should like to make a few suggestions in this respect.

First of all, milk quotas must become tradable internationally. The superlevy must be lowered when the quota is being used but when sales are done with virtually no support to the European Union. We could also consider levelling the milk quota at European level. When one country does not manage to fill the entire quota and another country could do with some more, we could quite simply even the matter out afterwards. A gradual quota increase for dairy farmers and cooperatives who sell their products without European support is also conceivable.

Finally, we advocate an effective use of European funds for rural development in those areas where small dairy farmers face problems in terms of employment and conversion. In that way, the Commissioner may well be able to use a good timetable that leads to a more market-oriented focus and, as a member of the Dutch Christian Democratic party, the CDA, I would very much welcome it if the Commissioner were to adopt this line. I have to congratulate her, also because a number of these proposals have already been expressed by Mr Rasmussen, Head of Section for Milk and Animal Products in DG Agriculture. This bodes well for the future in terms of a timely debate on dairy products.

 
  
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  Rosa Miguélez Ramos (PSE).(ES) Mr President, Commissioner, the mid-term reform of the CAP was announced as simply an intermediary review, but despite this it has been one of the most significant reforms that the policy has undergone since it began.

Given this history and the public statements that you have been making regarding the quota system in recent months that have generated a significant amount of alarm and uncertainty in the sector, I would like you to make it perfectly clear that the check-up planned for 2008 will assure us that the reform is working and that under no circumstances does the Commission intend to go further, or move forward to the date with regard to which Parliament gave its opinion in the debates on the last reform. I would like to remind you that it was in favour of extending the current rules to the 2014-2015 financial year, in accordance with the Commission’s proposal. Other colleagues have said the same thing.

This prospect of stability, Commissioner, which the Commission proposed at that time, remains essential for an economic activity which, like any other, needs to make plans, make investments, pay and prepare for what the future may bring, with a previously established regulatory framework.

In my region, Galicia, as in others that have been mentioned, such as the Autonomous Region of the Azores or Northern Portugal (and I would like to thank Mr Freitas whose question made this debate possible), farms play a decisive role both in social and environmental terms and also in restoring territorial balance.

Agricultural unions maintain that it is the Galician model, based on family farms, that is the clearest demonstration of the multifunctional role of these types of farm and their capacity to tie people to the region.

If the Commission wants to change the rules of the game, it should first explain what it plans to do, when and how it is going to do it. This should all be done with maximum transparency, because uncertainty, Commissioner, is the worst scenario for those working in the sector.

The sector needs stability and not shocks, time to adapt itself and to plan, and I therefore think that we should finish applying the current reform before thinking about the next one.

 
  
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  Kyösti Virrankoski (ALDE). – (FI) Mr President, milk production is a typical feature of the worst off farming regions. It has provided a livelihood and has been a vital force in regions where other areas of agricultural production would be difficult or impossible. It has been able to make use of good levels of coarse fodder productivity in areas that are infertile, for example.

Milk production is capital-intensive. The investment needed is massive. The modern production structure can cost up to a million euros. It only normally creates jobs, however, for family farms.

Milk production is subject to quotas. Many young farmers have made huge investments in acquiring additional production rights. It is not uncommon for production quotas to be bought for EUR 150 000 or more. Milk production therefore needs a long-term protected framework. That cannot be seen as an eight-year goal. What is a sound system has resulted in a balanced framework for the farmer in which to engage in production. Price fluctuations have been small and the market stable.

Abolishing milk quotas would alter the situation immediately. The large industrial concerns in Europe’s best regions would be in a strong competitive position. Agricultural diversity would be all the poorer. Massive investments in milk quotas by family farms would immediately lose their value. The milk markets would lose their stability. All this would make the enterprise a very risky one and would have an adverse effect in particular on farming regions that are worse off in terms of their prevailing natural conditions.

 
  
  

IN THE CHAIR: MR SARYUSZ-WOLSKI
Vice-President

 
  
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  Zdzisław Zbigniew Podkański (UEN). – (PL) Mr President, the common agricultural policy has raised many doubts and will continue to do so. It will always have its supporters and its opponents.

The European Commission’s intention to review the common agricultural policy, and with it milk quotas, has raised concerns as well as hope, especially in the countries that suffer from it, including Poland. The quota allocated to Poland was insultingly low. A case in point is Germany, which has 80 million inhabitants, and has a quota of around 28 million tonnes, while Poland, which has half the population, is only allowed some 9 million tonnes of milk. In practical terms that means Poland has a quota four and a half million tonnes less than the thirteen to thirteen and a half million tonnes it should be allowed.

The question we would therefore like to ask is what would happen if milk quotas were abolished, particularly in countries such as Poland, where family-owned farmsteads rather than big farms predominate? Would the change to the rules of the common agricultural policy not force these farms into bankruptcy?

 
  
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  Jan Tadeusz Masiel (NI). – (PL) Mr President, Commissioner, to me it is highly regrettable that the new Member States benefit the least from the common agricultural policy. They are participating in this ‘Marshall Plan’ for agriculture, whose great virtue used to be its long-term focus and vision. Well, we joined the European Union late. This is not the Commissioner’s fault: such is the history of Europe. But unfortunately Polish farmers are still grappling with the milk quotas, which are several million tonnes too low, and in the meantime we pay fines for over-production of milk, when they are to be lifted in 2015. Unfortunately during that time many Polish milk producers will disappear from the market.

 
  
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  Carmen Fraga Estévez (PPE-DE).(ES) Mr President, Commissioner, as a representative of Galicia, a milk-producing region par excellence, I think that this oral question put to the European Commission today is very opportune.

Commissioner, producers are quite disconcerted by information that has been circulated, from which it can be deduced that there will be changes to the system established in 2003 for the milk sector and specifically concerning the quota system.

You were not very specific today, Commissioner, but I think that you made a series of things clear: that you are going to launch a debate, that there is going to be a transition period prior to the removal of quotas in 2015, from which I deduce that there is going to be a phasing out period prior to 2015 when quotas are permanently removed.

Commissioner, we are talking about an economic sector that needs legal security and medium- and long-term guarantees that will enable a minimum degree of planning, and any further change or uncertainty could, at least in my country, have serious social and economic consequences.

Quotas are a very important asset to farmers. In a region like Galicia, in which there is a need to continue with the restructuring process, it is essential, in order to complete it, that the current quota system is maintained as planned. If not, the consequences could be catastrophic, as removing quotas would have drastic repercussions for the price of milk, and consequently for profits in the dairy sector.

I therefore ask, Commissioner, that any transitions be made and ideas proposed from 2015 onwards.

Finally, I would like to take this opportunity to highlight the fact that the policies of the Member States need to cooperate in the whole of this process and that therefore any restriction on exchanges of quotas in a Member State should be considered as a serious obstacle to the capitalisation, competitiveness and development of the sector, as is unfortunately the case with the national plan proposed by the Spanish Government.

 
  
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  Luis Manuel Capoulas Santos (PSE).(PT) I should once again like to thank you for being in the Chamber, Commissioner. Your frequent attendance in Strasbourg is ample demonstration of the continued importance of farming in Europe.

We have been considering the common agricultural policy. My group, the Socialist Group in the European Parliament, held an important seminar just last week in Brussels on the theme of the CAP as it is and of the CAP as we would like it to be. Reflection on the future does not necessarily mean introducing any element of instability. Farmers work with nature and value nature’s cycles, and markets, as we know, react to all elements of instability. That being said, instability does at least rule out inertia, and we must not therefore fall into the old trap of defending the status quo simply for the sake of it.

Commissioner, the latest statements coming from some quarters have, then, given rise to extraordinary alarm in the sector, to which an appropriate political response needs to be given so that the instability felt by the sector on this matter is not in some cases exploited in the service of untoward political objectives. Instability and insecurity can only be tackled by providing regular, transparent information that is as clear as possible.

I would therefore call on you to adopt as effective as possible a strategy of clarification for the sector and also to make it clear to the sector that the Commission honours its agreements and the arrangements fixed until 2014. These arrangements must naturally be fulfilled without prejudice to the debate and without prejudice to the examination of alternative arrangements that may prove appropriate.

 
  
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  James Nicholson (PPE-DE). – Mr President, Commissioner, the ability to have a clear and certain future is very important for any business, none more so than for dairy farmers and for the dairy industry. Quotas are in place until 2015 and this I believe was a good decision during the mid-term review. But to now cast doubt on this on the part of the Commission sends the wrong message and I am pleased that the Commissioner went some way tonight to assure us of what the Commission’s position is.

Commissioner, you said that quotas have outlived their usefulness. Well, OK, you may be right, but I have to say to you that 2015 is a long time away and it is very difficult to crystal-ball gaze and see what conditions will be like at that time. In 2015, you rightly say, we should have a soft landing and when the time comes for quotas to disappear I think that soft landing should come into place. What I question is the timing. So far from the date, by all means let us have an exchange of views on what may or may not happen, but how do we encourage our young people to go into the industry? How do we take young farmers into the industry? How do they plan for the future if the future is being questioned at this moment in time?

The dairy sector, as you know only too well, is the backbone of the agricultural industry throughout the European Union. We must work together to achieve a sound future for that industry. Only by working together can we achieve that sound future. I hope that you will take the opportunity to engage with us in the Committee on Agriculture and positively and actively be involved in ensuring that there is a future for the dairy sector, for dairy farmers and for the dairy industry. It is not only the people who are employed on the farms who are important; the people who are employed in the processing industries and off the farms are equally important.

 
  
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  Salvador Garriga Polledo (PPE-DE). - (ES) Mr President, Commissioner, we all agree that the European countryside and European farmers and livestock breeders need some certainty. The Brussels Agreement in 2002 provided that certainty, and in exchange for it, the Member States tolerated a reform of the CAP that required serious sacrifices for the rural world, especially for the ‘cohesion countries’.

This certainty meant, among other things, that the system of milk quotas would remain in force until 2015, allowing farmers sufficient time to reorganise their farms in order to make them more competitive and, if necessary, to leave the sector.

But we want the certainties to be maintained, and you know that quotas are the only guarantee for farmers in a market in which prices are falling. And quotas are an asset for farmers, who need to have the freedom to transfer and sell them when they want to cease production. What uncertainty does, Commissioner, is reduce the value of quotas.

In my region, Asturias, 94 000 tonnes have been lost in two years due to farmers giving up. Between 1996 and 2006 the number of farms has dropped from 30 000 to just 3 200. Young farmers, who we all talk about so much, including young farmers with high milk quotas and profitable farms, are leaving the sector. The Government has also forbidden transfers of quotas between individuals.

Our problem, Commissioner, is rural development. You are going to do a health check on the common agricultural policy next year. We hope that you will be acting as a doctor and not as a forensic scientist.

Do you think it is right to talk about transitional measures when there is not even sufficient funding secured for rural development? I would like to remind you that, for example, my country is going to lose 50% of rural development funds in the next few years. Are you planning to report this situation during the review that you carry out next year?

 
  
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  Czesław Adam Siekierski (PPE-DE). – (PL) Mr President, the debate in this House on dairy quotas is intensifying. We are all wondering what will happen if we end the quota system for milk production. There has been a great deal of criticism which focuses on the fact that the current system is an archaic one which inhibits the development of the dairy sector and makes it less competitive on the world market.

Ending the system is opposed by the countries which have unfavourable natural conditions for dairy production. To them, ending the system will mean that production will shift to other regions, leading to loss of livelihoods and stable incomes for many farmers. This may also affect the least developed regions in the east of Poland, Poland being one of the countries that was allocated an unfair, extremely low milk quota. We may soon become net importers.

According to some experts, the negative impact of a rigid quota system will be worse for Poland than for other Member States, because all the system does is restrict opportunities for modernisation and utilising production potential because of the low level of aid for the milk sector in the European Union. Many people assert that the milk quotas have lost their economic raison d’etre. We are also in negotiations with the WTO, in which we have promised to eliminate export subsidies and greatly reduce the tariffs set up to protect the internal market.

How will this affect the EU milk market? It appears that limiting the restrictiveness of the system, for instance, by combining wholesale and direct quotas and restricting the penalties for exceeding the limits would be fair at this moment. I would like to remind the Commissioner that there are some countries which are not currently using their quotas to the full.

 
  
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  Mairead McGuinness (PPE-DE). – Mr President, in Ireland they speak of little else. I spoke to a large group of dairy farmers in Navan, County Meath on Thursday night and the question they are asking is not so much if quotas will be gone in 2015, but what is going to be done from 2008 to collapse the value of the milk quota.

I am indebted to last Thursday’s edition of the Farmers’ Journal for outlining five key points that the Commission has in mind. It is well worth bringing them to the attention of the House. I believe you are looking at gradually increasing quotas from the health check onwards, reducing super-levy costs to Member States, balancing quotas across the European Union so that an over-quota in one Member State may be taken up by slack in another. Cross-border trading is on the table, as is reducing the value of quotas in Member States. That is already happening, certainly in Ireland.

There is a downside to all of this. Every single study that I have read on the subject says that the abolition of milk quotas will lead to a substantial drop in milk prices in many Member States and there will be a corresponding increase in production. That would happen in Ireland, the Netherlands, Denmark and Luxembourg.

The key to all this is that we are all for abolition if markets are positive in 2015, but none of us knows what the markets will be like at that time. I look forward to your analysis of the dairy market. It will have to take a very close look at the future, because if global markets are not positive I cannot recommend to farmers that they run faster to stand still. It makes no sense.

To those who have concerns about young farmers – and I have many myself, although my little farmers are quite small at the moment! – who would encourage anyone to go into a business where they have to work twice as hard to earn half as much money? It does not make sense. We need to bear that in mind.

The key is the WTO and what happens there. But at least we are having a debate and that is a positive sign. We should discuss these things more in this House, rather than reading about them in our national newspapers.

 
  
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  Neil Parish (PPE-DE). – Mr President, I wish to thank Mr Freitas for bringing this forward and the Commissioner for being here tonight, because this debate is really worthwhile.

We have to face up to the fact that, as milk quotas and set-aside do not fit easily into a decoupled agricultural policy, they will have to be phased out in the future. We must also set a date and stick to it, because ever since I have been here quotas have been about to be phased out, and it has never happened. We must face the reality that one day they actually will go. Everyone in this House accepts the value of dairy production to all our Member States – nowhere more so than in my own region of the UK, the West Country, where dairying is the bread and butter of the whole area but is also under huge pressure. What is interesting about quota and the value of quota is that ten years ago in the United Kingdom the rate was nearly a pound a litre, whereas now it is worth a penny a litre. We must therefore remember that in many ways quota is not a tangible substance, and its value can disappear overnight. We have to be very careful about how we deal with this. In the UK, it is the power of the supermarkets and the driving-down of prices which is now the real problem. We are not even meeting our national quota, which shows there is a problem with price.

At certain points over the last 20 years there has been a world increase in dairy trade, but because in Europe control is exercised over the amounts produced, it has never been able to take advantage of this. We therefore need to have a more flexible regime in the future. I should like to hear the Commissioner’s views on that.

New Zealand – which probably produces milk as effectively as anybody – still has a form of quota, because it has a national cooperative, of which farmers have to be shareholders in order to be able produce extra milk. It is interesting to explore the arrangements beyond 2015, but first we must face up to the reality that quotas need to go.

 
  
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  Duarte Freitas (PPE-DE) , author.(PT) Mr President, thank you very much. As author of the question, I should very quickly like to ask the Commissioner a specific question, so that we can all leave the House with this issue clearer in our minds.

We know, as the Commissioner said, that, if nothing is done, the arrangements will end in 2005. We also know that, in the view of the Commissioner herself, this is an outdated system that must be brought to an end. What we want to know now, and this is the question that I should like to ask you, Commissioner, and that I want you to answer very, very clearly – is whether you accept that phasing out can begin before 2015, as Mr Rasmussen, your representative in Parliament’s Committee on Agriculture, assumed it could, or whether the process will begin from 2015 onwards. This is a crucial question to which I should like you to give me a very clear answer.

 
  
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  Mariann Fischer Boel, Member of the Commission. Mr President, I have listened with great interest to this interesting and very passionate debate. It reflects perfectly the importance of the dairy sector.

As Mr Mulder rightly said, the quota system was introduced in 1984 at a time when we wanted to maintain high prices for our products. At that stage, therefore, the quota system was a good idea. However, things have changed dramatically over the last 20 years and there was therefore a discussion, as part of the 2003 reform, on what to do with the dairy sector. The decision was taken to maintain the quota system until 31 March 2015. It was decided to increase quotas and reduce prices. The phasing-in of these changes will be finalised next year.

Then there was the possibility of this health check. There is not going to be a new reform in 2008/2009. That is important. The health check simply provides an opportunity to streamline and simplify the common agricultural policy, in line with the 2003 CAP reform.

In my dealings with Parliament I always try to play with a very open hand. I do not keep my cards close to my chest. We need to have a discussion, as part of the health check, on what we do with the quota system when it expires in 2015. I have no fixed ideas on phasing-out, but we need to tell the dairy sector whether or not we want to prolong the quota system. I am not proposing any changes, as the quota system will expire in 2015 if we do not do anything, but we must therefore tell the sector whether or not we are sticking to the agreement to abolish the quota system in 2015. If we say nothing, farmers all over Europe will assume that this will not happen. They will keep their quotas on the basis of these still being worth something after 31 March 2015, only for the Council and Parliament to suddenly decide to abolish them, with the value of quotas falling to zero overnight. They will be worth absolutely nothing! That is not predictability, and we must therefore send a clear signal of what the future will be.

As I said in my first contribution, we will have this dairy market outlook report at the end of next year. I have a tradition, Mr Nicholson, of working closely with Parliament, and specifically with the Committee on Agriculture and Rural Development, so at that point we can discuss what is going to happen, in order to provide stability and avoid uncertainty for the dairy sector in the European Union.

 
  
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  President. The debate is closed.

Written statement (Rule 142 of the Rules of Procedure)

 
  
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  Béla Glattfelder (PPE-DE).(HU) In recent times, several reports have been circulating to the effect that the Commission is preparing to reform the organisation of the milk market, an important element of which would be the abolition of milk quotas. The Commission has not denied these reports. This news is unsettling if only because, in recent years, reform has been undertaken primarily in those sectors in which the system would in any case have ceased to be in force. There is no such compelling reason in the case of the milk sector, since the regulations for this sector are in force until 2015 and, moreover, the quota system has been providing the market and producers with adequate stability.

Should the quota system be abolished, the income of dairy producers would fall across Europe, leading to further concentration in the sector. Tens of thousands of farmers producing for the local markets would be obliged to stop production. As a result, those Member States in which conditions are less favourable would see their milk production fall significantly. This would oblige several Member States to supply their dairy needs predominantly from imports.

Although in Hungary milk production is primarily in the hands of large-scale industries and is competitive, nevertheless it would not be in the interests of our country either to abolish the quota system. Because of current economic difficulties, milk consumption is low, and Hungary is not able to take advantage of the quotas allocated to it. At the same time, however, we hope that if the economy picks up then consumption will also rise. Therefore, Hungary would find particularly unacceptable any transformation of the quota system that involved transferring the quotas of Member States that make less use of them to those countries that make greater use of them.

 
  
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  Csaba Sándor Tabajdi (PSE).(HU) The reason for maintaining the strict milk quota system is that the quotas that are presently in effect allow for a greater volume of milk production than what the EU consumes internally.

From 2007 on, direct payments to milk producers have to be kept completely separate from production, that is, payments will be received not by the milk producer but by the one who owns a milk quota during the reference period, in the form of a lump sum based on land area.

Under current rules, the milk quota system will remain in force until 2014-15. Commissioner Fischer Boel stated that in the context of the review, we should look at the question of quotas, but she did not give any concrete details.

Maintaining the quota system is the sole guarantee of market and price stability. Without quotas, production would rise significantly, and the resulting surpluses would bring down prices, which would very easily stifle small producers. At the same time, without support only the most competitive industries would be able to compete with the pressure from imports or to succeed on the export market.

In Hungary, milk production is steadily declining due to problems of efficiency; in spite of the fact that purchase prices are not falling, we are using only around 70% of the Community quota allocated to us. Unfortunately, in contrast to Western European practice, producers here do not own the processing establishments.

If the quota system were abolished, the proportion of imported products would rise, making the problems of competitiveness among Hungarian producers even more evident, and the fall in domestic production would probably accelerate. For all these reasons, I do not support the abolition of the milk quota system.

 

20. Support for rural development by the EAFRD – Voluntary modulation of direct payments under the CAP (debate)
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  President. – The next item on the agenda is the joint debate on

- the report by Jan Mulder on behalf of the Committee for Agriculture and Rural Development regarding a proposal for a Council regulation amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)

(COM(2006)0237 – C6-0237/2006 – 2006/0082(CNS)) (A6-0319/2006)

- the report by Lutz Goepel on behalf of the Committee on Agriculture and Rural Development on the submission relating to the Regulation of the Council establishing the principles for the voluntary modulation of direct payments set out in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing specific support schemes for farmers, and amending Regulation (EC) No 1290/2005

(COM(2006)0241 – C6-0235/2006 – 2006/0083(CNS)) (A6-0315/2006)

 
  
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  Mariann Fischer Boel, Member of the Commission. Mr President, before going into the content of the reports I want to thank the rapporteurs, Lutz Goepel and Jan Mulder, along with the Members of the Committee on Agriculture and Rural Development for their efforts in drafting the two reports.

I should like to start with Mr Goepel’s report. I have carefully taken note of the Committee on Agriculture’s position, which is to reject the proposal concerning voluntary modulation and call on the Commission to withdraw the proposal.

Before addressing some of the report’s points I should like to recall why I presented the proposal and what the guiding principle was for the drafting of it.

The Commission proposal is a response to a request made by the European Council last December to present a proposal on voluntary modulation. Such a modulation was a means to enable Member States to transfer funds from the first pillar of the common agricultural policy into the second pillar in order to reinforce the rural development budget, an objective with which most of you would agree.

I have expressed my concerns about certain aspects of the Council agreement, in particular that it would apply both to direct payments and to market-related expenditure as well as the fact that it derogates significantly from the basic rules of rural development expenditure. The Commission tries to address those concerns to the greatest extent possible and ensure as much coherence as possible with the rules governing compulsory modulation and rural development spending. That is in line with the Commission’s declaration on the interinstitutional agreement on the financial perspectives.

With regard to some arguments in Mr Goepel’s report, it is said that voluntary modulation would lead to a distortion of competition. I do not share that view. Both the single farm payment and rural development expenditure are considered as non-trade distorting under the WTO rules.

It is claimed that there is no proper impact assessment. Firstly, in the short time available during the meeting last December that simply was not feasible. Secondly, it would have encountered methodological difficulties since we have no idea which Member States would apply voluntary modulation, and if they did so, we have no idea of the percentages they would apply. So, the proposal does not go against the principles of rural development, such as national cofinancing. We propose optional cofinancing as a compromise, to meet the expectations of the Council.

Let me now turn to the Mulder report on the proposed amendments to Regulation (EC) No 1698/2005. The text is a legal translation of what was decided last September by the heads of state and government in relation to the so-called ‘capping provision’, which is common to all structural instruments, including the Rural Development Fund, and is also reproduced in the general regulation on the structural funds. Moreover, the text reflects the non-cofinancing requirement for an amount of EUR 320 million as part of the Rural Development Fund allocation to Portugal, which was also agreed at last December’s Council meeting.

I have taken note of the draftsman’s position, in particular on cofinancing. I agree that the exemption of EUR 320 million for Portugal from the requirement of national cofinancing should be an exception in rural development, since cofinancing is a basic rule in rural development. It also means co-responsibility for expenditure and it is an essential element of the subsidiarity that is applied in the policy implemented in the various Member States or regions.

I look forward to a fruitful discussion on this issue. I will respond at the end of the debate.

 
  
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  Lutz Goepel (PPE-DE), rapporteur. – (DE) Mr President, Commissioner, let me take this opportunity to once more express warm thanks to all my fellow Members from all the groups who have supported me in creating a framework worthy of this debate, which is of such great importance to this House and to Europe’s farmers.

You, Mr President, by your wise and astute decision, have ensured that Members from all groups will get the chance to speak, albeit at a rather later hour. Following a decision by the Council – which, as is so often the case with agriculture debates, is notably absent today – the Commission submitted a proposal according to which 20% of agricultural direct payments would be shifted from the first pillar of CAP to the second, from which they could be spent without mandatory co-funding.

That is a concession by the majority on the Council and, whether it wishes to or not, on the part of the Commission, as part of the budget compromise reached in December 2005. The Commissioner has confirmed as much. This House has already expressed strong misgivings about this in the interinstitutional agreement on the Financial Perspective. When I say that the Committee on Agriculture and Rural Development firmly rejected this proposal, I mean that it did so with only three dissenting votes, and its rejection of the draft legislation was indeed unanimous.

This is not just about differences of opinion where specific policies are concerned; it is also about where Parliament, as an institution, should stand in the forthcoming debates on the reorientation of the Community budget. As part of the Budget compromise, all the institutions agreed that all the Community’s outgoings, among them the post-2013 agricultural expenditure in particular, should be subject to review, and that this House will play a full part in this process from an early stage.

Now, though, we see the Council adopting, through the back door, an extensive remodelling of agricultural funding, and this House has no option but to kill it off, for there was no prior consultation with us. Instead, the Council has decided to proceed with such an extensive reallocation of resources that there will be such limited scope for debate in 2008-2009 that serious discussion will scarcely be on the cards. This is something that we in this House cannot tolerate if we are to be taken seriously in future, and the proposal is, moreover, questionable in terms of financial policy.

What is worthy of note on the agricultural policy side is that there is no impact assessment accompanying the proposal. On the contrary, the impression is given that a short-term reduction of 20% in direct payments would not cause farmers any problems. Taken together with the cuts resulting from mandatory modulation and those generally expected after the accession of Bulgaria and Romania, what this means, for those Member States that want to apply this voluntary modulation, is a reduction in payments of something like one-third over against what they were in 2003. Far from supporting structural change in agriculture, that amounts to a flagrant structural violation that would put the viability of many thousands of farms in rural areas at risk. It is generally agreed that what our farmers need is the security to plan ahead.

In the absence of any impact assessment on the part of either the Council or the Commission, we caused evaluations to be carried out, and these confirm, not only that there will be massive distortion of competition and illegal discrimination against the farmers concerned, but also that modulation does nothing to serve the objects of the Community in rural areas, but rather jeopardises them to a considerable degree.

To date, the Council has offered no response whatever to the legitimate concerns of Europe’s farmers, and there has as yet been no discussion of the potential consequences. This sort of behaviour is not at all what we are used to in the European Union and is also quite obviously inappropriate. Since, moreover, the transferred Community funds are not to be spent in accordance with a strategy laid down at Community level, we find ourselves in the paradoxical situation in which the renationalisation of agriculture policy is being paid for entirely from Community funds, particularly when one considers the way the Council is thinking ahead; I would ask you to take a look and see what happens at the next meeting on 14 November, this very week.

We all want to strengthen rural areas. We have put forward proposals for solutions to their financial problems that are worthy of discussion; the Böge report is just one of them. The Council, though, preferred not to give these proposals any closer attention, so let us not reach out a hand to help it after all that we have done already. If there has to be a paradigm shift in agriculture policy, then let that happen only after a transparent and open debate in which Parliament, too, can have a decisive part to play, for this proposal is wide of the mark – legally, in terms of its substance, and as policy – and solves none of the problems that rural areas have.

If we want our contribution to future debates on the valuation of the agricultural budget to be taken at all seriously, then we should firmly and forthrightly reject this proposal. I hope that the Council’s response to the vote in this House will be to embark on a more in-depth discussion of the matters at issue. My colleagues in the committee, and I myself, are willing to join them in this, but the Council must make a move. It has to be said, though, that it probably does not entertain very high hopes at the present time.

 
  
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  Jan Mulder (ALDE), rapporteur. (NL) Mr President, my report has received unanimous approval in this House’s Committee on Agriculture and Rural Development. We considered additional aid for rural development in Portugal to be justifiable; although this was not, of course, ideal, it did form part of a package of measures nodded through by the Council in December, it was not something to which this House, during the negotiations on the financial perspectives, thought it necessary to make any changes. I should like to repeat, though, that it is not ideal and should remain an exception. We have to accept, after all, that something similar has been agreed on for various other countries as well.

I should now like – with your permission, Mr President – to turn to the Goepel report. With regard to the financial perspectives, which were subsequently approved by this House as a whole, the committee made it quite clear that Parliament has suspended its verdict with regard to voluntary modulation. It is therefore surprising that the Commission should come up with a proposal so promptly. It has, actually, only followed the Council's ‘orders’, for want of a better word.

I disagree with the Commissioner that there is no danger of a renationalisation of European agricultural policy; it is something I regard as a very dangerous trend. What matters most of all to the European farmer is the common market of soon to be 500 million consumers who we must try to retain as much as possible. In addition, as Mr Goepel has already indicated, it can hardly be said that there has been any examination of the policy’s effects. It may well be that around 2013, the average farmer in Europe, as a result of all manner of measures, will need to make do with one third less of what he received in 2004. Is that the reliable authority that the European Union wants to be? What are the consequences of this? Can farmers survive this measure in certain regions and suchlike? We have not received an analysis of it, and it would appear to me that the Commission has no choice, when the proposal is submitted, but to analyse its effects.

One of the most important prerogatives of this Parliament, upon which Mr Bösch will undoubtedly elaborate, is the right to enact the Budget. We have approved the financial perspectives, which contain precise figures, with so much being set aside for this, so much for that and, among others, so much for market measures in the framework of European agricultural policy and so much for rural policy. If voluntary modulation were to be implemented, it would have an impact on these figures. Does that not amount to a change to the financial perspectives? I do believe that it does. A change to the financial perspectives requires approval by the budgetary authority, that being the European Parliament, the Commission and the Council. I am not at all certain that Parliament will go along with this. That is why I will be voting against the Commission proposals on voluntary modulation.

 
  
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  Herbert Bösch (PSE), draftsman of the opinion of the Committee on Budgets. – (DE) Mr President, Commissioner, ladies and gentlemen, I have not been in this House long, but I have been here long enough to realise that solid agreement between the Committee on Agriculture and Rural Development and the Committee on Budgets, such as we have here with the rejection of this draft, is not that frequent an occurrence.

The opinion of the Committee on Budgets does, of course, concentrate on the issues of relevance to the budget, and there are with regard to these sufficient arguments available to justify the firm repudiation of the Commission’s proposal. The Member States can, by way of voluntary modulation, unilaterally and without consultation with Parliament, increase non-mandatory expenditure on rural development by many billions of euros, contrary to the wording and spirit of the interinstitutional agreement.

Nor has the Commission adequately thought through the budgetary consequences of a voluntary transfer of this kind. It is irresponsible of the Commissioner to declare herself once more to be taking down dictation from the Council and not to have carried out an impact assessment before the proposal was adopted. What will be this proposal’s effects on the common agricultural policy? We do not know that any more than she does, and yet we are supposed to agree to it; well, we are not going to. Perhaps then exactly the same thing will happen as did with the European aid arrangements for cotton, which the ECJ declared null and void at the beginning of September this year; there, too, the considerable economic effects of the reform had been underestimated or insufficiently examined.

Moreover, the proposal contradicts everything previously laid down concerning modulation, since it makes no provision for cofinancing on the part of the Member States. What our Heads of Government have come up with in order to fill the hole in the rural budget, for which they were responsible, is a cheap solution; if the Council were really interested in topping up the funds for the second pillar, they could quite simply have complied with this House’s demands in respect of the 2007-2013 Financial Perspective.

What we should do with this proposal is reject it, and firmly.

 
  
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  Struan Stevenson, on behalf of the PPE-DE Group. – Mr President, according to Government figures, the average earnings of farmers in my constituency in Scotland in 2005 were GBP 10 000, or EUR 14 000. This is disastrous: it is forcing farmers into bankruptcy! They do not have any room for reinvestment in the industry. Instead of offering practical help, Prime Minister Blair comes up with the startling proposal to slash 20% off farmers’ single-farm payments, on top of the existing 5% compulsory modulation that already exists and, as we have heard from Mr Goepel, a further 8% that will be deducted to pay for Bulgaria and Romania.

In other words, British farmers – as Britain appears to be the only Member State really pushing for this voluntary modulation – will lose roughly 33% of their subsidy, which for many of them is a vital lifeline. But worse, this naked discrimination against UK farmers will place them at a huge competitive disadvantage to all other farmers in every other Member State in Europe. I say to the Commissioner: it may be that in the eyes of the WTO this does not amount to trade distortion, but in the pockets of farmers it certainly amounts to a catastrophe.

I must also protest at the threats being issued by the UK Government, which tells us that if we vote against voluntary modulation it will compromise the future of the popular agri-environment schemes in which many UK farmers have participated. This is tantamount to blackmail and coming from a government that has imposed more than 80 stealth taxes, from a Chancellor – Gordon Brown – who has made taxation in the UK higher than Germany or France and now wants us to believe that he needs to slash 25% off our farmers’ single-farm payments in order to be able to afford agri-environment schemes, it is an absolute joke. I can tell Mr Brown that if he watches the way this House votes on this proposal, he will see what we think of his sense of humour.

 
  
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  Katerina Batzeli, on behalf of the PSE Group. (EL) Mr President, Commissioner, we are being called on today to take a stand on a proposal on rural development policy which we consider to be invalid, contradictory and dangerous to the future of the CAP itself, as well as to our own credibility. This is, of course, a proposal which emerged from a contradictory compromise by the European Council last December.

On the other hand, however, it is worth our emphasising that the Commission proposal tries to improve the outcome of this highhandedness on the part of the European Council towards both the institutions and the Treaty itself.

We agree in principle with the Commission proposals for defining the measure on a multiannual basis at national level and retaining the limits which exist in the Rural Development Fund. However, although these improving proposals could be considered as a good effort by the Commission towards the Council, they cannot be considered adequate.

As the Socialist Group in the European Parliament, we shall vote against the legislative text of the Commission regulation on voluntary modulation at this stage for the following reasons: firstly, in order to strengthen the Commission's negotiating position with the Council, which in essence wants voluntary modulation as a blank cheque for managing Community expenditure under pillars 1 and 2.

Secondly, in order to give the Commission the time needed to present an integrated proposal which responds to the real needs and the real rural development support mechanisms, without renationalising the CAP.

Thirdly, in order to provide a time margin for studying the effective and essential possibility of taking up Community resources transferred from compulsory modulation and from the new additional modulation, in order to avoid the return of significant resources from the Member States due to inadequate application of the programmes.

Commissioner, there is already a timetable for evaluating the new CAP and its priorities. We expect the Commission to examine measures for viable, effective, simple and transparent policies which will contribute towards the objectives of rural convergence and development. You will find my group in agreement with such a policy. A ceiling on payments and an additional single modulation rate are policies with which we can agree in principle. However, they will have to be clarified as to their expediency, their added value and the degree to which they help to achieve the objective of rural convergence.

Commissioner, only under these preconditions will the Commission be able to submit an integrated proposal so that, all together, we can save European aspirations and our credibility in the eyes of the citizens of Europe.

 
  
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  Kyösti Virrankoski, on behalf of the ALDE Group. – (FI) Mr President, first I would like to thank the rapporteurs, Mr Mulder and Mr Goepel, for their excellent reports. Voluntary modulation is a bit of an oddity, something which has never been tried before in the EU’s common agricultural policy. The conclusion adopted by the European Council that a Member State may cut a farmer’s direct aid and marketing payments by a maximum of 20% was both unexpected and very badly formulated. The European Council decided that even export aid could be cut. Luckily, the Commission did not go along with this totally unrealistic proposal.

First of all, the cut would not be based on any objective rules but would merely be the result of high-handedness on the part of a Member State. It would lead to inequality among farmers and would distort competition. It would amount to an arbitrary additional tax on farmers.

Secondly, it needs to be made very clear that the cut would not increase resources for rural development in the countries concerned. This additional funding would not be affected by national cofinancing as contained in the Regulation on rural development. A Member State could use modulated cash in place of its own national funding and thus reduce it. It would then of course be a case of a direct payment of agricultural aid to the Member State’s Ministry of Finance. How could the European Parliament deal with discharge as regards such a transfer of funds?

Voluntary modulation would entail moving funds from the EU budget’s compulsory expenditure to non-compulsory expenditure. That would mean that the interinsitutional agreement would have to be altered. The Council would thus be in violation of that agreement six months after it was concluded. The Council would therefore not be a reliable partner in the agreement. For these reasons I warmly welcomed Mr Goepel’s suggestion that Parliament should reject the proposal.

 
  
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  Friedrich-Wilhelm Graefe zu Baringdorf, on behalf of the Verts/ALE Group. – (DE) Mr President, Commissioner, Mr Mulder, we are, today, discussing the second pillar and rural economic development, something that this House, and – if one is to believe its own utterances – the Commission too, regard as important, and even the members of the Council, in their speeches, keep on emphasising that this is where the future of European agricultural policy lies, yet here we are, rejecting a proposal that is intended, to all outward appearance, to put several billions of euros aside for this purpose.

It is not easy to justify this rejection on the basis of the money involved, but the offer being made to us is an improper one. The powers that have caused it to be made are those who are responsible for rural development falling EUR 20 billion short of the budget proposal made by this House and the Commission; it is they who have forced through budget cuts come what may – not least to the detriment of this qualitative line – and are now saying: ‘OK, you can take 20 per cent out of the first pillar, and then use it to top up what we have taken away from you.’

That is what I call improper. These powers are no friends to European agriculture, or, indeed, to Europe’s rural areas; what they are seeking to do instead is to use the agriculture budget as a quarry in the same way as they are trying to do with many other policy areas, but what makes this so very deceitful is that it has the appearance of being a redistribution while not really being one, with the possibility of taking the money out without co-funding, so, in other words, the agriculture budget is, as a whole, more likely to lose something than have anything added to it.

This is in fact not the proposal that the committee made for medium-term financial planning, in which we said that co-funding in the first pillar too would have made it possible for funds to be made available for the second; we would in fact have been able to restrict the co-funding of the second pillar to 25%, thus enabling a better flow of funds, but all these proposals were cast to the winds, and now along they come with this figure of 20%. The only thing is, Commissioner, that this financial plan has been agreed to by the Commission, and also – and this I have to say with bitter regret – by this House, which has gone along with this extortion in order not to put the European Union’s financial future at risk.

Commissioner, that must not be allowed to hamper us, though, and I will ask you just what you propose to do in order that rural development is not starved of funding. What are we in this House to do? How are we, in our groups, to make it clear that rural development can have a future not only through the reallocation of funds, and that this whole budget line must develop its financial arrangements independently, in the same way as the other structural funds have done? It is to that question that I would like to have an answer from you, here and now, in order that the Commission, in our next negotiations on this subject, should show its colours more openly and that we, here in this House might perhaps stand up for ourselves a bit more.

 
  
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  Ilda Figueiredo, on behalf of the GUE/NGL Group.(PT) Mr President, I should firstly like to stress the importance of adopting Mr Mulder’s report, thereby giving assent to the Commission’s proposal to exempt Portugal from the requirement to cofinance the amount of EUR 320 million, in line with the December 2005 Financial Council Agreement.

My country, Portugal, faces known difficulties in meeting the unfair criteria of the Stability and Growth Pact, given the fragility of our economy and the accumulating social problems, especially in rural areas. Hence the importance of adopting this proposal.

As regards the Goepel report, I wish, secondly, to say that we are in favour of compulsory modulation, accompanied by capping and by the fair redistribution of these funds, and in the new Member States too. As previous speakers have said, this is not guaranteed in this Commission proposal. We therefore call on you, Commissioner, to reconsider your proposal.

 
  
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  Janusz Wojciechowski, on behalf of the UEN Group. – (PL) Mr President, I would like to congratulate Mr Goepel on his excellent report, whose views I fully share. Although the proposed modulation directly affects the old Member States, it is also cause for concern among farmers in the new Member States. The modulation impairs the vision of stable agricultural rules until 2013, and will lead to what we fear greatly in the new Member States, that is, a partial re-nationalisation of agricultural policy, which the new, poorer Member States will not be able to afford. That is the reason for our concern.

Let us adhere to the established agricultural policy rules. Keeping them stable until 2013 is the minimum of certainty we owe to our farmers. They have been subjected to too many upheavals in a short time: changes to the support system, liberalisation of agricultural markets, and increasingly stringent norms and standards in various fields. It is all too much, too soon. What agriculture needs is clear and stable rules for at least the coming few years. That is why I support Mr Goepel’s report.

 
  
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  Andrzej Tomasz Zapałowski, on behalf of the IND/DEM Group. (PL) Mr President, today’s debate on the voluntary modulation of direct payments once again highlights the different ways in which the old and the new Member States understand the common agricultural policy. When the old members think of the future of the CAP, they think of the future of agriculture in their own countries, rather than in the enlarged European Union.

Rejecting the Commission’s proposal is the most appropriate course of action. The claim that it is contrary to the rules of competition and solidarity, threatens re-nationalisations and breaks the promises made to the farmers, is correct. The point is, why were these arguments not considered when setting out the terms of accession for the new Member States in 2004? These conditions have blatantly undermined competition and the principles of solidarity. The poorer states, who receive much lower payments, are forced to compete on unequal terms.

Re-nationalisation of the common agricultural policy was introduced in the new Member States, which in 2004 paid as much as 75% to the first pillar, while the old fifteen members benefit from 100% EU support. This is hypocrisy. The terms of accession were not based on objective criteria, but discriminatory production quotas were imposed which took no account of the potential of producers and self-sufficiency in food production for example, the milk sector. Support in the most obvious cases (fruit and vegetable growing) has been neglected, and no consideration has been given to the extremely low income of farmers in the new Member States. This mindset is a threat to farmers, to consumers and to the entire economy of the European Union.

 
  
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  Duarte Freitas (PPE-DE).(PT) Mr President, Commissioner, I should like to begin by congratulating Mr Mulder and Mr Goepel on their excellent reports and by saying that I endorse the proposals contained in their reports. The Council’s decision last December to allow voluntary modulation may lead to distortion of competition between the farmers of different Member States, depending on the percentages of modulation that they choose to adopt.

The fact that there is soon to be a health check on the CAP 2008, in which we shall be able to discuss capping and the increase in compulsory modulation, is a further reason not to press ahead now with measures such as voluntary modulation, which may bring irreversible consequences. If this proposal is pushed through, we shall clearly be taking a further step towards renationalising the CAP and dismantling the communitisation of agricultural policy.

Without wishing to underplay the political importance of rural development, I must say that investment in this policy will not be boosted by this measure. Let me give the example of my country, which returns more second-pillar funding to Brussels than any other country and which, in the EU-15, already had the largest balance between the first and second pillars, 53% and 47% respectively.

Nevertheless, the Minister for Agriculture in my country, Portugal, has already announced the intention to adopt 20% modulation. Taking back money from farmers in order to fund the State budget or so that the money can be given back to Brussels will certainly not be the best solution for farmers, and it represents an approach based solely on economic criteria and aimed at using the money for rural development without cofinancing.

With these practical risks, which are already clearly apparent in countries like Portugal – as evidenced by the example I mentioned – it is abundantly clear that, if we are to defend farmers resolutely and to champion a common agricultural policy, we must do all we can to ensure that voluntary modulation goes no further.

 
  
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  Bogdan Golik (PSE). – (PL) Mr President, like my colleague before me, I would like to express my support for Mr Mulder’s draft report on exempting Portugal from the requirement to cofinance its national quota of EUR 320 million. This is a good decision which shows solidarity, and is particularly important in the light of the drought that has hit that country. I concur fully with Mrs Batzeli’s words on Mr Goepel’s report, but as regards Mr Mulder’s report, and in particular the final section, where the rapporteur criticises the method by which rural development funds are distributed under the current rules, and where he demands that distribution be based on objective criteria, I would like to draw your attention to the following facts.

The new Member States are characterised by significant under-investment in the farming sector and their farmers’ incomes are vastly disproportionate to those in the other Member States. They are also ignored as regards the fundamental principles of non-discrimination, solidarity and proportionality, and by having to cofinance direct payments from their own budgets, which are much smaller, not to mention the huge reduction of around EUR 20 billion in the pool of funds for rural development for 2007-2013 in comparison to what was promised during the accession negotiations.

Here I must also point out that support for rural development as set out in the strategic Community guidelines should make allowance for the differing structural problems in the fifteen and the ten EU member states, including Bulgaria and Romania. Particular attention must be paid to ensuring the necessary funding for the new Member States in respect of their huge need for basic investment and the need to secure wide-ranging support for rural development.

Rural development policy offers a range of mechanisms which make it possible to influence the differing needs of European farmers.

However, we need to search further for effective mechanisms for such a policy in order for it to fulfil its aims and to make it increasingly effective for all countries of the European Union.

 
  
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  Nathalie Griesbeck (ALDE).(FR) Mr President, ladies and gentlemen, firstly, I too should like to thank our rapporteur, Mr Mulder, for his steadfast work, not only on budgetary issues in general, but also on issues concerning the funding of agricultural and rural policies.

If, in my capacity as permanent rapporteur on the Structural Funds within my committee, I asked to take the floor in this debate on the modification of the ceilings on EAFRD development support, it was to express two things: firstly, a ‘democratic’ regret, but also a kind of ‘strategic’ wish. I deeply regret the fact that the European Parliament is being forced to change the ceilings that it has already adopted, and this in order to bring them into line with the decisions taken by the Council.

Furthermore, my ‘strategic’ wish consists in pointing out our attachment to the fundamental principles of rural development policy, and the extent of that attachment, because these principles give Europe transparency. I should like us to remain very cautious when faced with the temptation to make wider use of obligatory cofinancing, which could eventually lead to the renationalisation of expenditure under the first pillar. Such a decision must not be the subject of a ‘go with the flow’ policy, but must be considered as an important issue to be subjected to a clear and democratic debate. As for the necessary – and undoubtedly justifiable – Christmas ‘presents’ given to Portugal, on this subject too I regret that there is no real strategy and I would ask that we define one and that it be the outcome of an in-depth debate.

 
  
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  Zdzisław Zbigniew Podkański (UEN).(PL) Mr President, the proposal for so-called ‘voluntary modulation’ by the Member States as regards direct payments to agriculture will in effect lead to a cut of some 20% in the funds paid out to farmers, which will be in breach of the norms and procedures prevailing in the European Union. Exempting farms receiving less than EUR 5 000 from modulation means that only farms under 40 hectares will be covered.

This system, which is on the face of it logical, cannot be cohesive, merely due to the fact that the new Member States, unlike the old countries, are already cofinancing the common agricultural policy by topping up EU payments from their own budgets.

In my opinion, we should aim to eliminate the existing imbalances and introduce new rules and payments in all Member States as quickly as possible. Otherwise regional inequalities will intensify. I would like to remind this House that it was we Polish MEPs who warned of the consequences of approving an EU budget of just 1% of GNP and cutting rural development funds.

 
  
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  Jan Tadeusz Masiel (NI).(PL) Mr President, direct payments give many poor Polish farming families a chance to make ends meet. They have been a way of buffering the increased cost of production since Poland’s accession to the European Union. Using voluntary modulation to reduce them by as much as one third from 2008, at a time when they are so low in our country anyway, would cause substantial losses to these farms and families.

The important aim of developing rural areas, to which the money thus saved would be directed, should be pursued on the basis of other funds. We could restrict regional payments to recipients with a maximum not of 50, but of 100, 200 or 500 and more hectares.

 
  
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  James Nicholson (PPE-DE). – Mr President, I should like to begin by congratulating Mr Mulder and Mr Goepel on their reports. My first point is that this is an extremely bad proposal. We know how it originated in the Council meeting last December. I would say to the Commissioner that this is a proposal that will only be implemented in the United Kingdom. We all know that. Even the dogs in the street know that. It has been brought in to help Blair and his government try and resolve their problem.

It will place United Kingdom farmers in an impossible position. Financially, they will be in a totally invidious position compared to other farmers in all parts of the other 24 EU Member States. In Northern Ireland it will erode the concept of the family farm, which is the backbone of our industry.

I therefore totally reject this proposal, and will not stand by and allow anyone to hijack farmers’ single farm payments. This was something that was agreed. It was promised and it is depended upon. It is not the fault of our farmers that the UK Government has negotiated such a miserable deal on development of the second pillar in support of the rural economy. I must say to the Commission, the Council and the UK Government that they should not blame us if now they do not have sufficient funds to support some of their proposals for the rural and environmental development of the countryside. I can take no blame for this. It is totally the responsibility of the negotiators.

I must also tell the truth, which is that the so-called negotiators have achieved the worst possible deal, and that they now want to hijack a maximum of 20% or perhaps even 25% of farmers' single farm payments. Such a proposal must not be agreed to, either now or in the future. It will turn farmers and other members of rural society against each other. It is unworkable and will spell the beginning of the renationalisation of the common agricultural policy as we have known it. It must not be accepted.

This dossier will have to be referred back to committee, and I will call on the Commission not to fall into what is a skilful trap that would set farmers and other rural dwellers at each others’ throats. We have a duty to reject this legislation. We must never agree to this covert means of undermining UK farmers and placing them in a position so subservient to the rest of the European Union.

 
  
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  Bernadette Bourzai (PSE).(FR) Mr President, Commissioner, ladies and gentlemen, everyone is familiar with the 2003 CAP reform, which provided for the freezing of the first pillar and the strengthening of the second, namely rural development. The fact is that the agreement on the new financial perspective – which, I might add, I voted against – runs counter to these two commitments.

Indeed, the rural development package has lost EUR 20 billion in comparison with the Commission proposal, a figure that represents, for the 15 old Member States, 35% less than the current period. The proposal for voluntary additional modulation, which is aimed at transferring a maximum of 20% of the sums from the first to the second pillar and which does not meet any of the criteria applicable to rural development policy, is unacceptable.

I recognise that the European Commission has attempted, in its proposal for a regulation, to manage this tool, but I share the rapporteur's concerns and I endorse his proposal that it be rejected: the risk of distorted competition is too great if certain Member States choose to deduct 20% from direct aid and not from other types of aid. It is unacceptable for this voluntary modulation not to have to comply with the same rules as those that normally apply to rural development, and the risk of the CAP being renationalised is too great.

The funding requirements for rural development policy are, however, real, and I fear more people abandoning our rural areas. That is why I am calling on the Commission to propose, instead of voluntary modulation, an identical increase in the rate of compulsory modulation in all of the Member States.

I should also like to stress that compulsory modulation currently applies as soon as a farm receives more than EUR 5 000 in agricultural support per year. The large majority of farms are, indeed, affected.

If we are to have a genuine tool for redistributing aid, we should also take account of other criteria, such as the size of the farm, its dependence on aid, the workforce employed, the standard gross margin, and so on. Furthermore, if we are to guarantee that agricultural support is divided up fairly, we should think about capping direct aid.

 
  
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  Elspeth Attwooll (ALDE). – Mr President, I speak on behalf of the UK delegation in my group. We fully understand the cogency of the arguments in the Goepel report and the reasons for the Committee on Agriculture and Rural Development’s voting indications. However, the approach of successive Westminster governments to EU rural development funding has restricted its availability in the UK. Our allocation for 2007 to 2013 is only a quarter of what fairness would in principle require.

In default of some further degree of modulation, there would be severe constraints on establishing and maintaining effective rural development programmes, particularly in relation to the environment. There is also a risk of delays in making some of the payments of which farmers have a legitimate expectation.

I am grateful to the Commission for its willingness to explore the ways in which it might be possible to overcome such immediate practical problems, but that can only be a stopgap. We need a much longer-term solution. We therefore call on the Commission, as a matter of urgency, to find a way of redressing the current historical imbalances in the allocation of rural development funding.

As a Scot, I ask that, in any further discussions on modulation, both the Commission and colleagues on the Committee on Agriculture take account of the fact that the levels are of concern not only to Member States but to administrations at sub-state level as well.

 
  
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  Mieczysław Edmund Janowski (UEN).(PL) Mr President, in thanking both of our colleagues for their work, I would like to focus more closely on Mr Mulder’s report. We are raising a question that affects the mechanism of funding designated for areas inhabited by some 20% of the population of the European Union, but which are very important as regards secure food supplies for Europe.

We therefore need to do everything to strengthen the position of rural areas and secure the cohesion that we are supposed to provide. The European Agricultural Fund for Rural Regional Development should also serve this purpose. This is essential for all countries, including my own country, Poland. Although today we are debating changes to the regulations affecting Portugal – which I support – we need to stress clearly that this has upset the sequence of things. First of all the procedure should be set out, and only then the specific financial decisions made.

Therefore, let us treat this as an exceptional situation and look for systemic solutions which, based on as objective and non-discriminatory criteria as possible, will really strengthen European farming. Any other course of action may end up by destroying European solidarity in this area.

 
  
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  Czesław Adam Siekierski (PPE-DE).(PL) Mr President, in order to keep European agriculture competitive, we must maintain the current level of direct farm payments in the old Member States, and not introduce the additional modulation of 20%.

The arguments put forward by the European Commission are unconvincing, while the proposition does not conform to the principles of the CAP. The new Member States need more funds for the development of rural areas, for reasons which include reducing the labour-intensity of farming and to speed up the transfer of land from social and small farms to large-scale market farms. This will improve the competitiveness of farming in the new Member States, mainly through economies of scale.

Instead, what has been done? If you remember, the new financial perspective adopted for 2007-2013 cut the rural development funds by 20 billion euro compared to what was proposed by the Commission. We must apply different methods of support, because there is a distinction between the countryside and farming in the European Union. Rural areas in European Union countries, including Poland, are poorer than the cities, and need more jobs, the development of services and better environmental protection. For this reason we need to support farmers and the countryside throughout the European Union for many years to come.

 
  
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  Luis Manuel Capoulas Santos (PSE).(PT) I should like to congratulate Mr Mulder on his admirable report and to thank the members of the committee, who voted unanimously to adopt the report.

The decision to exempt Portugal from cofinancing for the amount of EUR 320 million is a fair one and comes on the back of a number of Council decisions aimed at offsetting the recognised difficulties faced by Portuguese farmers in relation to the CAP as it stands, whereby farmers have been manifestly penalised. This is a way of compensating them.

As for the Goepel report, regrettably I am not able to extend the same congratulations, because this is an eminently political matter and we must use political arguments to discuss it. We all know that the CAP unfairly works against various Member States, various regions and many farmers, and one way of correcting that injustice is to apply modulation mechanisms.

In the case of Portugal, this distortion is utterly scandalous; just 5% of farmers receive more than EUR 5 000 per year. Consequently, given that voluntary modulation is possible and that compulsory modulation is currently impossible, voluntary modulation is preferable to having no modulation at all.

I therefore feel that the positions that have come to light are deeply inappropriate. I should like to reassure the Commissioner that she is not alone in defending this position in Parliament. I believe that, in the interests of justice, it is only right that funds be given to the Member States. I should like to draw Mr Nicholson’s attention to the fact that it is not only the United Kingdom that will apply the measure; the Portuguese Government has already announced that it will do so. I feel, therefore, that not allowing the Member States to use this instrument to do the right thing in relation to many farmers who are unable to receive a single cent under the first pillar of the CAP, or restricting their ability to do so, is a totally inappropriate position for Parliament to take. I say this solely on the basis of political arguments because I have neither the time nor the desire to discuss legal, technical and other aspects of the issue.

 
  
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  Neil Parish (PPE-DE). – Mr President, I should like to thank Mr Goepel and Mr Mulder for these reports.

Commissioner, you know very well that your heart is not in this and that you are having to do the Council’s bidding. This is a complete mess. You have a lot of support here in Parliament. In fact, the Council has managed to unite the whole Parliament against this proposal. When we vote tomorrow we will reject it, it will go back to committee and we will reject it again. So I urge you to come forward with a new proposal.

When I first came to the European Parliament, my farming friends told me the one thing they wanted out of Europe was a level playing field. That may be a forlorn hope, but this proposal makes it less level than it has ever been. I do not need to tell you, Commissioner, that the British Government is about to be fined for not meeting the deadline for the Single Farm Payment Scheme. So what do you do? When it cannot make the payments on time, you give it more rural development money to squander. You can imagine how much confidence farmers have in the Government to deliver that at the moment.

As I look across the House tonight, it is interesting that there is not one member of the Labour Party on the Socialist benches. Who is here to defend Mr Blair’s proposal? No one. So look to us for help.

As Mr Stevenson said, the government is putting enormous pressure on us to say that we are against environmental schemes. Can I put it clearly on record that we are not, and nor is the Commissioner. But we need to move forward with more money going from the first to the second pillar, all across Europe; a compulsory modulation on a level amount. Also, as other speakers have said, there has been no proper impact assessment of this proposal. It cannot possibly go forward.

The cotton regime was scrapped after a ruling by the European Court of Justice.

Please think again and come back with a new proposal.

 
  
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  Gábor Harangozó (PSE).(HU) Mr President, the use of the current Community payments, when placed alongside the decision of the European Council taken in December 2005, according to which Portugal receives special treatment through an exemption from the cofinancing requirement, raises serious questions about the budgetary decision-making process.

In spite of the fact that there is broad agreement on the exceptional exemption of Portugal from the cofinancing requirement, questions and problems of legitimacy may arise in relation to the horse trading methods of negotiation engaged in by the Council.

Although I do not oppose this one-time concession offered to Portugal, I consider it important that in future no Member State be allowed to benefit from special treatment solely in order to persuade it to support a particular agreement. On the contrary, equality and transparency are fundamental criteria that should be observed in all circumstances, and at every level of negotiation with the Council.

In future, not only must we prevent these forms of positive discrimination, but since we have committed ourselves to an egalitarian agricultural policy, then the regulation of rural development should not be permitted to rely on exceptions. We need to put an end to all forms of discrimination.

I agree with the rapporteur that the system should not make any distinctions or exceptions, but that we need a fair, standardised approach that distributes resources on the basis of objective criteria. However, I do not agree with the rapporteur that it would be a good solution to finance the direct payments in the first pillar, because although this would lessen pressure on the European budget, it would cause serious financing problems for the new Member States, which are in a strained budgetary situation because of the convergence programmes necessary for the introduction of the euro. As a result, this would further increase inequalities among Member States.

For the same reason, I do not consider voluntary modulation to be the most appropriate solution. Apart from respecting current agreements, in future we must strive to create a truly united rural policy instead of making further exceptions.

 
  
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  Mairead McGuinness (PPE-DE). – Mr President, I should like to thank both rapporteurs for their reports. When I reread the Presidency Conclusions, these seven lines of text read worse now than they did almost a year ago. It is literally a free-for-all for any Member State that wants to take it up and it has no regard for the rules that this House, and indeed the Council itself, had drawn up in relation to rural development. Voluntary modulation as outlined in this proposal is anything but voluntary, because the farmers certainly do not want it. Therefore we are misusing and abusing words.

Of course this proposal distorts. It has to, because it is allowed in one Member State but it may not be applied in others. We need to look at the impact of this on agriculture generally.

I am also conscious that we are looking towards a health check for the CAP in 2008 and, in parallel with that, a review of the financial perspectives.

I should like to compliment the Commission on trying to make something good out of what is essentially a very bad proposal: the Commission is trying to get rules applied and is insisting that they be implemented; it is excluding market support measures.

I shall conclude by saying that it is very difficult to make something good out of essentially a poor suggestion, or, to use an agricultural term: you cannot make a silk purse out of a sow’s ear. I compliment the Commission for even trying to do so. This is a bad proposal and we will be rejecting it.

 
  
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  Esther Herranz García (PPE-DE).(ES) Mr President, the proposal that we are debating today is unacceptable. It is unacceptable because it is disintegratory, fragmentary, anti-European, selfish and highly hypocritical.

From the point of view of agricultural theory, it involves cutting 20% of direct aid to farmers in order to fund rural development and thus fill in holes. These holes were created because, in the financial perspectives, 1% is not sufficient to fund the agricultural policies, and as the Member States are incapable of giving more money, they have to take it away from those who were receiving it until now.

It also represents the renationalisation of the common agricultural policy: getting rid of the only truly European policy, the only policy that united European producers. And not only does it mean renationalisation, but, if we look at the proposal by the Spanish Government to the Council, it means going much further: not only renationalising, but regionalising. This way everyone will be able to do what they want.

I think that it is part of the disintegratory madness of the socialist Spanish President, who, Mr Parish, also has no one here to defend him, because he, along with all the presidents who signed the financial perspectives and accept this change, do not care at all about the competitiveness of the European agricultural sector and the impact that these measures may have on their economies is of little importance to them.

Therefore, and in defence of European farmers and livestock breeders and of the sector, we will of course reject this proposal.

 
  
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  James Hugh Allister (NI). – Mr President, I apologise for not being in the House when I was first called but my travel arrangements went rather awry today.

Voluntary modulation is but fancy phraseology for a very unpleasant practice, namely government grab of farmers’ money. As Mrs McGuiness has said, there is nothing voluntary about it, certainly in respect of those from whom the money is to be extracted, namely the farmers.

The consequence is a very unbalanced rural development programme right across Europe, both in how it is financed and then in how it is delivered. That, of course, is then discriminatory against the farmers in those Member States that practice this madness of voluntary modulation. In my country we are already seeing the consequences, with delays in the intended LFA payments.

Voluntary modulation is something to be resisted. I welcome the stance of the committee and the stance of this House when it rejects it and I urge the Commission to be robust in forcing a change of policy by the Council on this matter.

 
  
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  Mariann Fischer Boel, Member of the Commission. Mr President, I have listened to the debate carefully and with huge interest. I can only repeat what I said at the outset, i.e. that the Commission proposal is consistent with the European Council’s request.

As Mrs McGuinness rightly said, we have tried to align it as much as possible with the existing rules on obligatory modulation and financing of the rural development policy.

Tomorrow, if – or I should say when – the European Parliament rejects the Commission’s proposal, I intend to raise the issue with my fellow Commissioners in order to consider our position carefully. That is completely in accordance with the framework agreement between our two institutions.

 
  
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  President. Thank you, Commissioner, that was very clear. I thank all those who took part in the debate. I should also like to thank all the interpreters.

That concludes the joint debate.

The vote will be tomorrow.

 

21. Agenda for next sitting: see Minutes

22. Closure of sitting
  

(The sitting was closed at 22.45)

 
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