European Parliament legislative resolution on the proposal for a Council regulation on the harmonisation of Gross National Income at market prices (COM(2002) 558 – C5&nbhy;0515/2002 – 2002/0245(CNS))

P5_TA(2003)0083 A5-0040/2003

(Consultation procedure)

The European Parliament,

–   having regard to the Commission proposal to the Council (COM(2002) 558)(1),

–   having regard to Articles 269 of the EC Treaty and 173 of the Euratom Treaty, pursuant to which the Council consulted Parliament (C5&nbhy;0515/2002),

–   having regard to Rule 67 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs (A5-0040/2003),

1.  Approves the Commission proposal;

2.  Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3.  Asks the Council to consult Parliament again if it intends to amend the Commission proposal substantially;

4.  Instructs its President to forward its position to the Council and Commission.

(1) OJ C 45 E, 25.2.2003, p. 61.

European Parliament resolution on the Commission's Green Paper on alternative dispute resolution in civil and commercial law (COM(2002) 196 – C5&nbhy;0284/2002 – 2002/2144(COS))

P5_TA(2003)0084 A5-0058/2003

The European Parliament,

–   having regard to the Commission's Green Paper on alternative dispute resolution in civil and commercial law (hereinafter referred to as "ADR") of 19 April 2002 (COM(2002) 196 – C5-0284/2002),

–   having regard, in particular, to Articles 65 and 155 of the Treaty,

–   having regard to the Vienna Action Plan of the Council and the Commission on how best to implement the provisions of the Treaty of Amsterdam on an area of freedom, security and justice, adopted by the Justice and Home Affairs Council on 3 December 1998(1), in particular paragraph 41(b) thereof,

–   having regard to the conclusions of the Tampere European Council calling for the creation of alternative extrajudicial procedures(2);

–   having regard to the conclusions of the Lisbon European Council of 23 and 24 March 2000, in particular paragraph 11 thereof,

–   having regard to the conclusions of the Santa María da Feira European Council of 19 and 20 June 2000, in particular paragraph 22 thereof, endorsing the "eEurope 2002 Action Plan",

–   having regard to the conclusions of the Laeken European Council of 14 and 15 December 2001, in particular paragraph 25 thereof,

–   having regard to the Commission's recommendations of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes(3) and of 4 April 2001 on the principles for out-of-court bodies involved in the consensual resolution of consumer disputes(4),

–   having regard to its resolution of 21 September 2000(5) on the proposal subsequently adopted as Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(6),

–   having regard to European Extra-Judicial Network (EEJ-Net) launched on 16 October 2001,

–   having regard to Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market(7), in particular Article 17 thereof,

–   having regard to the Communication from the Commission to the Council and the European Parliament on the biannual update of the scoreboard to review progress on the creation of an area of "freedom, security and justice" in the European Union, in particular chapter 3.1 thereof, of 16 December 2002 (COM(2002) 738),

–   having regard to the Opinion of the European Economic and Social Committee,

–   having regard to Rule 47(1) of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs and the Internal Market and the opinion of the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs (A5-0058/2003),

A.   whereas access to justice is a fundamental right enshrined in Article 6 of the European Convention on Human Rights and Fundamental Freedoms and proclaimed in Article 47 of the Charter of Fundamental Rights of the European Union,

B.   whereas the Union should guarantee that its citizens may enjoy the right of freedom of movement throughout the Union in conditions of safety and justice accessible to all,

C.   whereas a true European area of justice must enable European citizens and businesses access to the courts and to the authorities of all the Member States as easily as in their own country, without the incompatibility or complexity of the legal and administrative systems of the Member States preventing or discouraging them from exercising their rights,

D.   whereas European citizens in certain Member States find it difficult to gain access to justice, since disputes before the courts have increased in number and procedures have tended to become longer and, in consequence, more expensive,

E.   whereas European citizens are increasingly faced with a growing volume of legislative texts, the complexity and technical nature of which make it difficult for them to have access to justice,

F.   whereas ADR (particularly on-line) forms part of the whole access-to-justice agenda, especially in the context of cross-border disputes and e-commerce, where it is seen as having the potential to cut through difficult issues of differing law and jurisdiction,

G.   whereas, however, "justice" as delivered by the traditional, formal court system is normally regarded as a public good which is an inherent part of the order, values and culture of each society and hence covered by the principle of subsidiarity,

H.   whereas, although cross-border disputes are increasing in importance, ADR should not be seen as detracting from the traditional judicial system or from the sacrosanct principle of access to justice as enshrined especially in Article 6 of the European Convention on Human Rights, and must not constitute a means of depriving citizens of access to the traditional judicial system,

I.   whereas, notwithstanding this caveat, as far as cross-border disputes are concerned ADR affords the same advantages as it does for the settlement of disputes arising within a single Member State, inasmuch as it is a potentially cheaper option than traditional legal services and takes some cases out of the mainstream system, thereby reducing waiting time in courts and affording earlier access to other litigants and, as far as litigants are concerned, it is potentially cheaper, quicker and less stressful and may also afford them a remedy in that the cost and anxiety of proceedings brought in the judicial system may dissuade consumers from asserting claims,

J.   whereas ADR is going through a phase of expansion, experimentation and innovation across Europe and this should not be needlessly hampered by the imposition of burdensome legislation,

K.   whereas, however, in keeping with the principle of legal certainty, the enforceability of ADR decisions should either depend on approval by the courts or be established in a notarial act,

L.   whereas the advantage of ADR lies in its flexibility, and this should not be compromised by regulation; whereas, nonetheless, there is a need for coherence, common procedural guarantees and common quality standards in order to protect consumers and avoid a proliferation of differing systems as between the Member States, and this could be secured through soft-law solutions, including the issuance of guidelines and codes of conduct, and through the promotion of best practice,

M.   whereas dispute settlement in the public courts based on laws enacted by parliaments is one of the contributions to civilisation made by a society based on the rule of law, and ADR serves only to complement this process,

1.  Welcomes the fact that the Commission, exercising its right of initiative, has submitted a Green Paper on alternative dispute resolution in civil and commercial law;

2.  Notes that the Member States of the Union do not have detailed framework legislation on ADR, and that their legal systems differ greatly in this area;

3.  Takes the view that ADR should be permitted as a non-binding option to be encouraged, on the basis, however, that Member States may propose ADR to both parties as a preliminary option to access to the courts, whilst not undermining the parties" rights to take action through the courts if necessary;

4.  Advises the Commission that, whilst some degree of coherence and coordination in the provision of cross-border ADR is desirable, it should adopt a cautious approach and undertake in-depth studies and wide-ranging consultations before proposing any legislative initiatives; it should promote self-regulatory initiatives and avoid any approach which would reduce the flexibility and autonomy of the parties or create new trade barriers vis-à-vis third countries; however, the Commission might consider the further development of the principles applicable to extrajudicial bodies involved in the consensual resolution of consumer disputes in the light of the follow-up given to the present recommendation; in the first instance the Commission should prepare a follow-up Green Paper concentrating on the goal of building up capacity in the field of ADR, developing standards for ADR, improving quality and benchmarking, so as to achieve both coherence and consumer confidence in the use of ADR;

5.  Considers that there is a need for a common definition of terms and that differing approaches and principles will have to be adopted in respect of ADR, depending on the area of law concerned (commercial law, family law, labour law), those having recourse thereto and the context in which they do so (business/consumer transactions, business to business transactions), whether it is court-induced or takes place by agreement between the parties, whether it is conducted on-line or off-line and whether it is appropriate and relevant in the light of, inter alia, national practices and procedures;

6.  Proposes that a follow-up Green Paper should consider a future Europe-wide model code encompassing at least the following minimum procedural guarantees:

7.  Calls on the Commission to encourage the development of a pan-European network of practitioners, professional bodies and other interested parties, involving meetings and the exchange of best practice;

8.  Urges the Commission and the Member States to raise public awareness and promote the use of ADR through information campaigns and by involving consumer organisations;

9.  Recommends the Commission to improve and reinforce the EEJ Net so as to encourage Member States to make proper provision for good quality ADR and fill the gaps currently existing in this field;

10.  Believes that the Union's approach to ADR should be globally oriented and take account of solutions such as the model law proposed by UNCITRAL (United Nationas Commission on International Trade Law);

11.  Calls on the Commission to keep the whole sector under review and envisage launching an action programme involving funding for research, the monitoring of pilot projects and the organisation of conferences;

12.  Instructs its President to forward this resolution to the Council and Commission and the parliaments of the Member States.

(1) OJ C 19, 23.1.1999, p.1. (2) Conclusions, point 30. (3) OJ L 115, 17.4.1998, p. 31. (4) OJ L 109, 19.4.2001, p. 56. (5) OJ C 146, 17.5.2001, p. 94. (6) OJ L 12, 16.1.2001, p. 1. (7) OJ L 178, 17.7.2000, p. 1.

European Parliament legislative resolution on the Council common position for adopting a European Parliament and Council directive on the promotion of the use of biofuels for transport (12695/1/2002 – C5&nbhy;0585/2002 – 2001/0265(COD))

P5_TA(2003)0085 A5-0057/2003

(Codecision procedure: second reading)

The European Parliament,

–   having regard to the Council common position (12695/1/2002 – C5&nbhy;0585/2002(1)),

–   having regard to its position at first reading(2) on the Commission proposal to Parliament and the Council (COM(2001) 547(3)),

–   having regard to the Commission's amended proposal (COM(2002) 508(4)),

–   having regard to Article 251(2) of the EC Treaty,

–   having regard to Rule 80 of its Rules of Procedure,

–   having regard to the recommendation for second reading of the Committee on Industry, External Trade, Research and Energy (A5&nbhy;0057/2003),

1.  Amends the common position as follows;

2.  Instructs its President to forward its position to the Council and Commission.

Position of the European Parliament adopted at second reading on 12 March 2003 with a view to the adoption of European Parliament and Council Directive 2003/…/EC on the promotion of the use of biofuels or other renewable fuels for transport

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission(5),

Having regard to the opinion of the Economic and Social Committee(6),

Having regard to the opinion of the Committee of the Regions(7),

Acting in accordance with the procedure laid down in Article 251 of the Treaty(8),

Whereas:

(1)  The European Council meeting at Gothenburg on 15 and 16 June 2001 agreed on a Community strategy for sustainable development consisting of a set of measures, which include the development of biofuels.

(2)  Natural resources, and their prudent and rational utilisation as referred to in Article 174(1) of the Treaty, include oil, natural gas and solid fuels, which are essential sources of energy but also the leading sources of carbon dioxide emissions.

(3)  However, there is a wide range of biomass that could be used to produce biofuels, deriving from agricultural and forestry products, as well as from residues and waste from forestry and the forestry and agrifoodstuffs industry.

(4)  The transport sector accounts for more than 30% of final energy consumption in the Community and is expanding, a trend which is bound to increase, along with carbon dioxide emissions. This expansion will be greater in percentage terms in the candidate countries following their accession to the European Union.

(5)  The Commission White Paper "European transport policy for 2010: time to decide"(9) expects CO2 emissions from transport to rise by 50% between 1990 and 2010, to around 1 113 million tonnes, the main responsibility resting with road transport, which accounts for 84% of transport-related CO2 emissions. From an ecological point of view, the White Paper therefore calls for dependence on oil (currently 98%) in the transport sector to be reduced by using alternative fuels such as biofuels.

(6)  Greater use of biofuels for transport forms a part of the package of measures needed to comply with the Kyoto Protocol, and of any policy package to meet further commitments in this respect.

(7)  Increased use of biofuels for transport, without ruling out other possible alternative fuels, including automotive LPG and CNG, is one of the tools by which the Community can reduce its dependence on imported energy and influence the fuel market for transport and hence the security of energy supply in the medium and long term. However, this consideration should not detract in any way from the importance of compliance with Community legislation on fuel quality, vehicle emissions and air quality.

(8)  As a result of technological advances, most vehicles currently in circulation in the European Union are capable of using a low biofuel blend without any problem. The most recent technological developments make it possible to use higher percentages of biofuel in the blend. Some countries are already using biofuel blends of 10% and higher.

(9)  Captive fleets offer the potential of using a higher concentration of biofuels. In some cities captive fleets are already operating on pure biofuels and, in some cases, this has helped to improve air quality in urban areas. Member States could therefore further promote the use of biofuels in public transport.

(10)  Promoting the use of biofuels in transport constitutes a step towards a wider application of biomass which will enable biofuel to be more extensively developed in the future, whilst not excluding other options and, in particular, the hydrogen option.

(11)  The research policy pursued by the Member States relating to increased use of biofuels should incorporate the hydrogen sector to a significant degree and promote this option, taking into account the relevant Community Framework Programmes.

(12)  Pure vegetable oil from oil plants produced through pressing, extraction or comparable processes, crude or refined but chemically unmodified, can also be used as biofuel in specific cases where its use is compatible with the type of engines involved and the corresponding emission requirements.

(13)  New types of fuel should conform to recognised technical standards if they are to be accepted to a greater extent by customers and vehicle manufacturers and hence penetrate the market. Technical standards also form the basis for requirements concerning emissions and the monitoring of emissions. New types of fuel may find it difficult to meet current technical standards, which, to a large extent, have been developed for conventional fossil fuels. The Commission and standardisation bodies should monitor developments and actively adapt and develop standards, particularly in relation to volatility aspects, so that new types of fuel can be introduced, whilst maintaining environmental performance requirements.

(14)  Bioethanol and biodiesel, when used for vehicles in pure form or as a blend, should comply with the quality standards laid down to ensure optimum engine performance. In the case of biodiesel for diesel engines, where the processing option is esterification, the standard prEN 14214 of the European Committee for Standardisation (CEN) on fatty acid methyl esters (FAME) could be applied. Accordingly, the CEN should establish appropriate standards for other transport biofuel products in the European Union.

(15)  Promoting the use of biofuels in keeping with sustainable farming and forestry practices laid down in the rules governing the Common Agricultural Policy could create new opportunities for sustainable rural development in a more market-orientated Common Agricultural Policy geared more to the European market and to respect for flourishing country life and multifunctional agriculture, and could open a new market for innovative agricultural products with regard to present and future Member States.

(16)  In its Resolution of 8 June 1998(10), the Council endorsed the Commission's Strategy and Action Plan for Renewable Sources of Energy(11) and requested specific measures in the biofuels sector.

(17)  The Commission Green Paper "Towards a European Strategy for the Security of Energy Supply"(12) sets the objective of 20% substitution of conventional fuels by alternative fuels in the road transport sector by the year 2020.

(18)  Alternative fuels will only be able to achieve market penetration if they are widely available and competitive.

(19)  In its Resolution of 18 June 1998(13) on the Commission's Strategy and Action Plan for Renewable Sources of Energy, the European Parliament called for an increase in the market share of biofuels to 2% over five years through a package of measures, including tax exemption, financial assistance for the processing industry and the establishment of a compulsory rate of biofuels for oil companies.

(20)  The optimum method for increasing the share of biofuels in the national and Community markets depends on the availability of resources and raw materials, on national and Community policies to promote biofuels and on tax arrangements, and on the appropriate involvement of all stakeholders/parties.

(21)  National policies to promote the use of biofuels should not lead to prohibition of the free movement of fuels that meet the harmonised environmental specifications as laid down in Community legislation.

(22)  Promotion of the production and use of biofuels could contribute to a reduction in energy import dependency and in emissions of greenhouse gases. In addition, biofuels, in pure form or as a blend, may in principle be used in existing motor vehicles and use the current motor vehicle fuel distribution system. The blending of biofuel with fossil fuels could facilitate a potential cost reduction in the distribution system in the Community.

(23)  Since the objective of the proposed action, namely the introduction of general principles promoting the marketing and distribution of a minimum percentage of biofuels, cannot be sufficiently achieved by the Member States by reason of the scale of the action, and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.

(24)  Research and technological development in the field of the sustainability of biofuels should be promoted.

(25)  An increase in the use of biofuels should be accompanied by a detailed analysis of the environmental, economic and social impact in order to decide whether it is advisable to increase the proportion of biofuels in relation to conventional fuels.

(26)  Provision should be made for the possibility of rapidly adapting the list of biofuels, the percentage of renewable contents, and the schedule for introducing biofuels in the transport fuel market, to technical progress and to the results of an environmental impact assessment of the first phase of introduction.

(27)  Measures should be introduced for rapidly developing the quality standards for the biofuels to be used in the automotive sector, both as pure biofuels and as a blending component in the conventional fuels. Although the biodegradable fraction of waste is a potentially useful source for producing biofuels, the quality standard has to take into account the possible contamination present in the waste to avoid special components damaging the vehicle or causing emissions to deteriorate.

(28)  Encouragement of the promotion of biofuels should be consistent with security of supply and environmental objectives and related policy objectives and measures within each Member State. In this context, Member States may consider cost-effective ways of publicising the possibilities of using biofuels.

(29)  The measures necessary for the implementation of this Directive should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (14),

HAVE ADOPTED THIS DIRECTIVE:

Article 1

This Directive aims at promoting the use of biofuels or other renewable fuels to replace diesel or petrol for transport purposes in each Member State, with a view to contributing to meeting climate change commitments, achieving environment-friendly security of supply and promoting renewable energy sources.

Article 2

1.  For the purpose of this Directive, the following definitions shall apply:

2.  At least those products listed below shall be considered biofuels:

Article 3

1. (a)  Member States should ensure that a minimum proportion of biofuels and other renewable fuels is placed on their markets, and, to that end, shall set national indicative targets.

(b) (i)  A reference value for these targets shall be 2%, calculated on the basis of energy content, of all petrol and diesel for transport purposes placed on their markets by 31 December 2005.

(ii)  A reference value for these targets shall be 5,75%, calculated on the basis of energy content, of all petrol and diesel for transport purposes placed on their markets by 31 December 2010.

2.  Biofuels may be made available in any of the following forms:

3.  Member States shall monitor the effect of the use of biofuels in diesel blends above 5% by non&nbhy;adapted vehicles and shall, where appropriate, take measures to ensure compliance with the relevant Community legislation on emission standards.

4.  In the measures that they take, the Member States should consider the overall climate and environmental balance of the various types of biofuels and other renewable fuels and may give priority to the promotion of those fuels showing a very good cost-effective environmental balance, while also taking into account competitiveness and security of supply.

5.  Member States shall ensure that information is given to the public on the availability of biofuels and other renewable fuels. For percentages of biofuels, blended in mineral oil derivatives, exceeding the limit value of 5% of fatty acid methyl ester (FAME) or of 5% of bioethanol, a specific labelling at the sales points shall be imposed.

Article 4

1.  Member States shall report to the Commission, before 1 July each year, on

In their first report following the entry into force of this Directive, Member States shall indicate the level of their national indicative targets for the first phase. In the report covering the year 2006, Member States shall indicate their national indicative targets for the second phase.

2.  By 31 December 2006 at the latest, and every two years thereafter, the Commission shall draw up an evaluation report for the European Parliament and for the Council on the progress made in the use of biofuels and other renewable fuels in the Member States.

On the basis of this report, the Commission shall submit, where appropriate, proposals to the European Parliament and the Council on the adaptation of the system of targets, as laid down in Article 3(1). If this report concludes that the indicative targets are not likely to be achieved for reasons that are unjustified and/or do not relate to new scientific evidence, these proposals shall address national targets, including possible mandatory targets, in the appropriate form.

Article 5

The list contained in Article 2(2) may be adapted to technical progress in accordance with the procedure referred to in Article 6(2). When adapting this list, the environmental impact of biofuels shall be taken into account.

Article 6

1.  The Commission shall be assisted by a Committee.

2.  Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.

3.  The Committee shall adopt its rules of procedure.

Article 7

1.  Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 December 2004 at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such reference on the occasion of their official publication. The methods of making such a reference shall be laid down by the Member States.

2.  Member States shall communicate to the Commission the provisions of national law which they adopt in the field covered by this Directive.

Article 8

This Directive shall enter into force on the day of its publication in the Official Journal of the European Union.

Article 9

This Directive is addressed to the Member States.

Done at

For the European Parliament For the Council

The President The President

(1) OJ C 32 E, 11.2.2003, p. 1. (2) P5_TA(2002)0361. (3) OJ C 103 E, 30.4.2002, p. 205. (4) OJ C 331 E, 31.12.2002, p. 291. (5) OJ C 103 E, 30.4.2002, p. 205 and OJ C 331 E, 31.12.2002, p. 291. (6) OJ C 149, 21.6.2002, p. 7. (7) OJ C 278, 14.11.2002, p.29. (8) Position of the European Parliament of 4 July 2002 (not yet published in the Official Journal), Council Common Position of 18 November 2002 (OJ C 32 E, 11.2.2003, p. 1) and Position of the European Parliament of 12 March 2003 (not yet published in the Official Journal). (9) COM(2001) 370. (10) OJ C 198, 24.6.1998, p. 1. (11) COM (1997) 599. (12) COM(2000) 769. (13) OJ C 210, 6.7.1998, p. 215. (14) OJ L 184, 17.7.1999, p. 23. (15) Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market (OJ L 283, 27.10.2001, p. 33).

European Parliament legislative resolution on the Council common position for adopting a European Parliament and Council directive on the activities and supervision of institutions for occupational retirement provision (11212/4/2002 – C5&nbhy;0534/2002 – 2000/0260(COD))

P5_TA(2003)0086 A5-0042/2003

(Codecision procedure: second reading)

The European Parliament,

–   having regard to the Council common position (11212/4/2002 – C5&nbhy;0534/2002)(1),

–   having regard to its position at first reading(2) on the Commission proposal to Parliament and the Council (COM(2000) 507)(3),

–   having regard to Article 251(2) of the EC Treaty,

–   having regard to Rule 80 of its Rules of Procedure,

–   having regard to the draft Commission and Council report on the future of pension systems which was presented on 17 December 2002 in plenary by Commissioner Diamantopoulou,

–   having regard to the recommendation for second reading of the Committee on Economic and Monetary Affairs (A5&nbhy;0042/2003),

1.  Amends the common position as follows;

2.  Instructs its President to forward its position to the Council and the Commission.

Position of the European Parliament adopted at second reading on 12 March 2003 with a view to the adoption of European Parliament and Council Directive 2003/…/EC on the activities and supervision of institutions for occupational retirement provision

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 47(2), 55 and 95(1) thereof,

Having regard to the proposal from the Commission(4),

Having regard to the Opinion of the Economic and Social Committee(5),

Acting in accordance with the procedure laid down in Article 251 of the Treaty(6),

Whereas:

(1)  A genuine single market for financial services is crucial for economic growth and job creation in the Community.

(2)  Major achievements have already been made in the establishment of this internal market, allowing financial institutions to operate in other Member States and ensuring a high level of protection for consumers of financial services.

(3)  The Commission communication of 11 May 1999 entitled "Implementing the framework for financial markets: action plan" identifies a series of actions that are needed in order to complete the internal market for financial services, and the European Council, at its meeting in Lisbon on 23 and 24 March 2000, called for the implementation of this Action Plan by 2005.

(4)  The Action Plan for Financial Services stresses as an urgent priority the need to draw up a directive on the prudential supervision of institutions for occupational retirement provision, as these are major financial institutions which have a key role to play in ensuring the integration, efficiency and liquidity of the financial markets, but are not subject to a coherent Community legislative framework allowing them to benefit fully from the advantages of the internal market.

(5)  Since social security systems are coming under increasing pressure, occupational retirement pensions will increasingly be relied on as a complement in future. Occupational retirement pensions should therefore be developed, without however calling into question the importance of social security pension systems in terms of secure, durable and effective social protection which should guarantee a decent standard of living in old age and must therefore be at the centre of the objective of strengthening the European social model.

(6)  This Directive represents a first step towards the creation of an internal market for occupational retirement provision organised on a European scale. By setting "the prudent person rule" as the underlying principle for capital investment and making it possible for institutions to operate across borders, the redirection of savings into the sector of occupational retirement provision is encouraged, thus contributing to economic and social progress.

(7)  The prudential rules laid down in this Directive are intended both to guarantee a high degree of security for future pensioners, through the imposition of stringent supervisory standards, and to clear the way for the efficient management of occupational pension schemes.

(8)  Institutions which are completely separate from any sponsoring undertaking and which operate on a funded basis for the sole purpose of providing retirement benefits should have freedom to provide services and freedom of investment subject only to coordinated prudential requirements, regardless of whether these institutions are considered as legal entities.

(9)  In accordance with the principle of subsidiarity, Member States should retain full responsibility for the organisation of their pension systems as well as for the decision on the role of each of the three "pillars" of the retirement system in individual Member States. In the context of the second pillar, they should also retain full responsibility for the role and functions of the various institutions providing occupational retirement benefits, such as industry-wide pension funds, company pension funds and life-assurance companies. This Directive is not intended to call this prerogative into question.

(10)  National rules concerning the participation of self-employed persons in institutions for occupational retirement provision differ. In some Member States, institutions for occupational retirement provision can operate on the basis of agreements with sectors or trade groups whose members act in a self-employed capacity or directly with self-employed and employed persons. In some Member States a self-employed person can also become a member of an institution when the self-employed person acts as employer or provides his professional services to an undertaking. In some Member States self-employed persons cannot join an institution for occupational retirement provision unless certain requirements, including those imposed by social and labour law, are met.

(11)  Institutions managing social security schemes which are already coordinated at Community level should be excluded from the scope of this Directive. Account should nevertheless be taken of the specific characteristics of institutions which, in a single Member State, manage both social security schemes and occupational pension schemes.

(12)  Financial institutions which already benefit from a Community legislative framework should in general be excluded from the scope of this Directive. However, as these institutions may also in some cases offer occupational pension services, it is important to ensure that this Directive does not lead to distortions of competition. Such distortions may be avoided by applying the prudential requirements of this Directive to the occupational pension business of life-assurance companies. The Commission will also carefully monitor the situation in the occupational pensions market and assess the possibility of extending the optional application of this Directive to other regulated financial institutions.

(13)  When aiming at ensuring financial security in retirement, the benefits paid by institutions for occupational retirement provision should generally provide for the payment of a lifelong pension. Payments for a temporary period or a lump sum should also be possible.

(14)  It is important to ensure that older and disabled people are not placed at risk of poverty and can enjoy a decent standard of living. Appropriate cover for biometrical risks in occupational pension arrangements is an important aspect of the fight against poverty and insecurity among elderly people. When setting up a pension scheme, employers and employees, or their respective representatives, should consider the possibility of the pension scheme including provisions for the coverage of the longevity risk and occupational disability risks as well as provision for surviving dependants.

(15)  Giving Member States the possibility of excluding from the scope of national implementing legislation institutions managing schemes which together have fewer than 100 members in total can facilitate supervision in some Member States without undermining the proper functioning of the internal market in this field. However, this should not undermine the right of such institutions to appoint for the management of their investment portfolio and the custody of their assets investment managers and custodians established in another Member State and duly authorised.

(16)  Institutions such as "Unterstützungskassen" in Germany, where the members have no legal rights to benefits of a certain amount and where their interests are protected by a compulsory statutory insolvency insurance, should be excluded from the scope of this Directive.

(17)  In order to protect members and beneficiaries, institutions for occupational retirement provision should limit their activities to the activities, and those arising therefrom, referred to in this Directive.

(18)  In the event of the bankruptcy of a sponsoring undertaking, a member faces the risk of losing both his/her job and his/her acquired pension rights. This makes it necessary to ensure that there is a clear separation between that undertaking and the institution and that minimum prudential standards are laid down to protect members.

(19)  Institutions for occupational retirement provision operate and are supervised with significant differences in Member States. In some Member States, supervision can be exercised not only over the institution itself but also over the entities or companies which are authorised to manage such institutions. Member States should be able to take such specific circumstances into account as long as all the requirements laid down in this Directive are effectively met. Member States should also be able to allow insurance entities and other financial entities to manage institutions for occupational retirement provision.

(20)  Institutions for occupational retirement provision are financial service providers which bear a heavy responsibility for the provision of occupational retirement benefits and should therefore meet certain minimum prudential standards with respect to their activities and conditions of operation.

(21)  The huge number of institutions in certain Member States means a pragmatic solution is necessary as regards prior authorisation of institutions. However, if an institution wishes to manage a scheme in another Member State, a prior authorisation granted by the competent authority of the home Member State should be required.

(22)  Each Member State should require every institution located in its territory to draw up annual accounts and annual reports taking into account each pension scheme operated by the institution and, as the case may be, annual accounts and annual reports for each pension scheme. The annual accounts and annual reports, reflecting a true and fair view of the institution's assets, liabilities and financial position, taking into account each pension scheme operated by that institution, and duly approved by an authorised person, are an essential source of information for members and beneficiaries of a scheme and the competent authorities. In particular, they enable the competent authorities to monitor the financial soundness of an institution and assess whether the institution is able to meet all its contractual obligations.

(23)  Proper informationfor members and beneficiaries of a pension scheme is crucial. This is of particular relevance as regards requests for information concerning the financial soundness of the institution, the contractual rules, the benefits and the actual financing of accrued pension entitlements, the investment policy and the management of risks and costs.

(24)  The investment policy of an institution is a decisive factor for both security and affordability of occupational pensions. The institutions should therefore draw up and, at least every three years, review a statement of investment principles. It should be made available to the competent authorities and on request also to members and beneficiaries of each pension scheme.

(25)  To fulfil their statutory function, the competent authorities should be vested with adequate rights to information and powers of intervention with respect to institutions and the persons who effectively run them. Where an institution for occupational retirement provision has transferred functions of material importance such as investment management, information technology or accounting to other companies (outsourcing), it should be possible for the rights to information and powers of intervention to be extended to cover these outsourced functions in order to check whether those activities are carried out in accordance with the supervisory rules.

(26)  Prudent calculation of technical provisions is essential in order to ensure that obligations to pay retirement benefits can be met. Technical provisions should be calculated on the basis of recognised actuarial methods and certified by qualified persons. The maximum interest rates should be chosen prudently according to any relevant national rules. The minimum amount of technical provisions should both be sufficient to enable benefits already being paid to beneficiaries to continue to be paid and reflect the commitments that arise out of members' accrued pension rights.

(27)  Risks covered by institutions vary significantly from one Member State to another. Home Member States should therefore have the possibility of making the calculation of technical provisions subject to additional and more detailed rules than those laid down in this Directive.

(28)  Sufficient and appropriate assets to cover the technical provisions protect the interests of members and beneficiaries of the pension scheme in the event that the sponsoring undertaking becomes insolvent. In particular in cases of cross-border activity, the mutual recognition of supervisory principles applied in Member States requires that the technical provisions be fully funded at all times.

(29)  If the institution does not operate on a cross-border basis, Member States should be able to permit underfunding provided that a proper plan is established to restore full funding and without prejudice to the requirements of Council Directive 80/987/EEC of 20 October 1980 on the approximation of the laws of the Member States relating to the protection of employees in the event of the insolvency of their employer(7).

(30)  In many cases, it may be the sponsoring undertaking and not the institution itself that either covers any biometrical risk or guarantees certain benefits or investment performance. However, in some cases, it is the institution itself which provides such cover or guarantees and the sponsor's obligations are generally exhausted by paying the necessary contributions. In these circumstances, the products offered are similar to those of life-assurance companies and the institutions concerned should hold at least the same additional own funds as life&nbhy;assurance companies.

(31)  Institutions are very long-term investors. The assets held by these institutions cannot, in general, be redeemed for any purpose other than providing retirement benefits. Furthermore, in order adequately to protect the rights of members and beneficiaries, institutions should be able to opt for an asset allocation that suits the precise nature and duration of their liabilities. These aspects call for efficient supervision and an approach towards investment rules which allows institutions sufficient flexibility to decide on the most secure and efficient investment policy and obliges them to act prudently. Compliance with the "prudent person rule" therefore requires an investment policy geared to the membership structure of the individual institution for occupational retirement provision.

(32)  Supervisory methods and practices vary among Member States. Therefore, Member States should be given some discretion on the precise investment rules that they wish to impose on the institutions located in their territories. However, these rules must not restrict the free movement of capital, unless justified on prudential grounds.

(33)  As very long-term investors with low liquidity risks, institutions for occupational retirement provision are in a position to invest in non-liquid assets such as shares as well as in risk capital markets within prudent limits. They can also benefit from the advantages of international diversification. Investments in shares, risk capital markets and currencies other than those of the liabilities should therefore not be restricted except on prudential grounds.

(34)  However, if the institution operates on a cross-border basis, it may be asked by the competent authorities of the host Member State to apply limits for investment in shares and similar assets not admitted to trading on a regulated market, in shares and other instruments issued by the same undertaking or in assets denominated in non-matching currencies provided such rules also apply to institutions located in the host Member State.

(35)  Restrictions on the freedom of insitutions to choose approved asset managers and custodians limit competition in the internal market and should therefore be eliminated.

(36)  Without prejudice to national social and labour legislation on the organisation of pension systems, including compulsory membership and the outcomes of collective bargaining agreements, institutions should be free to provide their services in other Member States. They should be allowed to accept sponsorship from undertakings located in other Member States and to operate pension schemes with members in more than one Member State. This would potentially lead to significant economies of scale for these institutions, improve the competitiveness of the Community industry and facilitate labour mobility. This requires mutual recognition of prudential standards. Proper enforcement of these prudential standards should be supervised by the competent authorities of the home Member State, unless specified otherwise.

(37)  The exercise of the right of an institution in one Member State to manage an occupational pension scheme contracted in another Member State should fully respect the provisions of the social and labour legislation in force in the host Member State insofar as it is relevant to occupational pensions, for example the definition and payment of retirement benefits and the conditions for transferability of pension rights.

(38)  Where a scheme is ring&nbhy;fenced the provisions of this Directive apply individually to that scheme.

(39)  It is important to make provision for cooperation between the competent authorities of the Member States for supervisory purposes and between those authorities and the Commission for other purposes.

(40)  For the purposes of carrying out their duties and of contributing to the consistent and timely implementation of this Directive, competent authorities should provide each other with the necessary information to apply the provisions of the Directive. The Commission has indicated its intention to set up a committee of supervisors in order to encourage cooperation, coordination and exchanges of views between national competent authorities and to promote the consistent implementation of this Directive.

(41)  Since the objective of the proposed action, namely to create a Community legal framework covering institutions for occupational retirement provision, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of the action, be better achieved by the Community, the Community may adopt measures, in accordance with the principle of subsidiarity as laid down in Article 5 of the Treaty. In accordance with the principle of proportionality enshrined in that Article, this Directive does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THE FOLLOWING DIRECTIVE:

Article 1

Subject-matter

This Directive lays down rules for the taking up and pursuit of activities carried out by institutions for occupational retirement provision.

Article 2

Scope

1.  This Directive shall apply to institutions for occupational retirement provision. Where in accordance with national law institutions for occupational retirement provision do not have legal personality, Member States shall apply this Directive either to those institutions or, subject to paragraph 2, to those authorised entities which are responsible for managing them and acting on their behalf.

2.  This Directive shall not apply to:

Article 3

Application to institutions operating social security schemes

Institutions for occupational retirement provision which also operate compulsory employment&nbhy;related pension schemes which are considered to be social security schemes covered by Regulations (EEC) No 1408/71 and (EEC) No 574/72 shall be covered by this Directive in respect of their non-compulsory occupational retirement provision business. In that case, the liabilities and the corresponding assets shall be ring-fenced and it shall not be possible to transfer them to the compulsory pension schemes which are considered as social security schemes or vice versa.

Article 4

Optional application to institutions covered by Directive 2002/83/EC

Home Member States may choose to apply the provisions of Articles 9 to 16 and Articles 18 to 20 of this Directive to the occupational retirement provision business of insurance undertakings which are covered by Directive 2002/83/EC. In that case, all assets and liabilities corresponding to the said business shall be ring-fenced, managed and organised separately from the other activities of the insurance undertakings, without any possibility of transfer.

In such case, and only as far as their occupational retirement provision business is concerned, insurance undertakings shall not be subject to Articles 20 to 26, 31 and 36 of Directive 2002/83/EC.

The home Member State shall ensure that either the competent authorities, or the authorities responsible for supervision of insurance undertakings covered by Directive 2002/83/EC, as part of their supervisory work, verify the strict separation of the relevant occupational retirement provision business.

Article 5

Small pension institutions and statutory schemes

With the exception of Article 19, Member States may choose not to apply this Directive, in whole or in part, to any institution located in their territories which operates pension schemes which together have fewer than 100 members in total. Subject to Article 2(2), such institutions should nevertheless be given the right to apply this Directive on a voluntary basis. Article 20 may be applied only if all the other provisions of this Directive apply.

Member States may choose not to apply Articles 9 to 17 to institutions where occupational retirement provision is made under statute, pursuant to legislation, and is guaranteed by a public authority. Article 20 may be applied only if all the other provisions of this Directive apply.

Article 6

Definitions

Article 7

Activities of an institution

Each Member State shall require institutions located within its territory to limit their activities to retirement benefit-related operations and activities arising therefrom.

Where, in accordance with Article 4, an insurance undertaking manages its occupational retirement provision business by ring-fencing its assets and liabilities, the ring-fenced assets and liabilities shall be restricted to retirement benefit-related operations and activities directly arising therefrom.

Article 8

Legal separation between sponsoring undertakings

and institutions for occupational retirement provision

Each Member State shall ensure that there is a legal separation between a sponsoring undertaking and an institution for occupational retirement provision in order that the assets of the institution are safeguarded in the interests of members and beneficiaries in the event of insolvency of the sponsoring undertaking.

Article 9

Conditions of operation

1.  Each Member State shall, in respect of every institution located in its territory, ensure that:

2.  In accordance with the principle of subsidiarity and taking due account of the scale of pension benefits offered by the social security regimes, Member States may provide that the option of longevity and disability cover, provision for surviving dependants and a guarantee of repayment of contributions as additional benefits be offered to members if employers and employees, or their respective representatives, so agree.

3.  A Member State may make the conditions of operation of an institution located in its territory subject to other requirements, with a view to ensuring that the interests of members and beneficiaries are adequately protected.

4.  A Member State may permit or require institutions located in its territory to entrust management of these institutions, in whole or in part, to other entities operating on behalf of those institutions.

5.  In the case of cross-border activity as referred to in Article 20, the conditions of operation of the institution shall be subject to a prior authorisation by the competent authorities of the home Member State.

Article 10

Annual accounts and annual reports

Each Member State shall require every institution located in its territory to draw up annual accounts and annual reports taking into account each pension scheme operated by the institution and, as the case may be, annual accounts and annual reports for each pension scheme. The annual accounts and the annual reports shall give a true and fair view of the institution's assets, liabilities and financial position. The annual accounts and information in the reports shall be consistent, comprehensive, fairly presented and duly approved by authorised persons, in accordance with national law.

Article 11

Information to be given to the members and beneficiaries

1.  Depending on the nature of the pension scheme established, each Member State shall ensure that every institution located in its territory provides at least the information set out in this Article.

2.  Members and beneficiaries and/or, where applicable, their representatives shall receive:

3.  The statement of investment policy principles, referred to in Article 12, shall be made available to members and beneficiaries and/or, where applicable, to their representatives on request.

4.  Each member shall also receive, on request, detailed and substantial information on:

Members shall receive every year brief particulars concerning the situation of the institution and the current level of financing of their accrued individual entitlements.

5.  Each beneficiary shall receive, on retirement or when other benefits become due, the appropriate information on the benefits which are due and the corresponding payment options.

Article 12

Statement of investment policy principles

Each Member State shall ensure that every institution located in its territory prepares, and at least every three years reviews, a written statement of investment policy principles. This statement is to be revised without delay after any significant change in the investment policy. Member States shall provide that this statement contains, at least, information on such matters as the investment risk measurement methods used, the risk management processes implemented and the strategic asset allocation with respect to the nature and duration of pension liabilities.

Article 13

Information to be provided to the competent authorities

Article 14

Powers of intervention and duties of the competent authorities

1.  The competent authorities shall require every institution located in their territories to have sound administrative and accounting procedures and adequate internal control mechanisms.

2.  The competent authorities shall have the power to take any measures including, where appropriate, those of an administrative or financial nature, either with regard to any institution located in their territories or against the persons running the institution, which are appropriate and necessary to prevent or remedy any irregularities prejudicial to the interests of the members and beneficiaries.

3.  In order to safeguard the interests of members and beneficiaries, the competent authorities may transfer the powers which the persons running an institution located in their territories hold pursuant to the legislation of the home Member State wholly or partly to a special representative who is fit to exercise these powers.

4.  The competent authorities may prohibit or restrict the activities of an institution located in their territories in particular if:

Any decision to prohibit the activities of an institution shall be supported by precise reasons and notified to the institution in question.

5.  Member States shall ensure that decisions taken in respect of an institution under laws, regulations and administrative provisions adopted in accordance with this Directive are subject to the right to apply to the courts.

Article 15

Technical provisions

1.  The home Member State shall ensure that institutions operating occupational pension schemes establish at all times in respect of the total range of their pension schemes an adequate amount of liabilities corresponding to the financial commitments which arise out of their portfolio of existing pension contracts.

2.  The home Member State shall ensure that institutions operating occupational pension schemes, where they provide cover against biometrical risks and/or guarantee either an investment performance or a given level of benefits, establish sufficient technical provisions in respect of the total range of these schemes.

3.  The calculation of technical provisions shall take place every year. However, the home Member State may allow a calculation once every three years if the institution provides members and/or the competent authorities with a certification or a report of adjustments for the intervening years. The certification or the report shall reflect the adjusted development of the technical provisions and changes in risks covered.

4.  The calculation of the technical provisions shall be carried out and certified by an actuary or, if not by an actuary, by another specialist in this field, including an auditor, according to national legislation, on the basis of actuarial methods recognised by the competent authorities of the home Member State, in conformity with the following principles:

5.  The home Member State may make the calculation of technical provisions subject to additional and more detailed requirements, with a view to ensuring that the interests of members and beneficiaries are adequately protected.

6.  With a view to further harmonisation of the rules for the calculation of technical provisions which may be justified – particularly as regards interest rates and other assumptions influencing the level of technical provisions – the Commission shall, every two years or at the request of a Member State, issue a report on the situation concerning developments in cross-border activities.

The Commission shall propose any necessary measures to prevent possible distortions caused by different levels of interest rates and to protect the interests of beneficiaries and members of any scheme.

Article 16

Funding of technical provisions

1.  The home Member State shall require every institution to have at all times sufficient and appropriate assets to cover the technical provisions in respect of the total range of pension schemes operated.

2.  The home Member State may allow an institution, for a limited period of time, to have insufficient assets to cover the technical provisions. In this case the competent authorities shall require the institution to adopt a concrete and realisable recovery plan in order to ensure that the requirements of paragraph 1 are met once again. The plan shall be subject to the following conditions:

3.  In the event of cross-border activity as referred to in Article 20, the technical provisions shall at all times be fully funded in respect of the total range of pension schemes operated. If these conditions are not met, the competent authorities of the home Member State shall intervene in accordance with Article 14. To comply with this requirement the home Member State may require ring-fencing of the assets and liabilities.

Article 17

Regulatory own funds

1.  The home Member State shall ensure, in the case of institutions operating pension schemes, that where the institution itself, and not the sponsoring undertaking, underwrites the liability to cover against biometrical risks, or guarantees a given investment performance or a given level of benefits, it holds on a permanent basis additional assets over and above the technical provisions to serve as a buffer. The amount thereof shall reflect the type of risk and asset base in respect of the total range of schemes operated. These assets shall be free of all foreseeable liabilities and serve as a safety capital to absorb discrepancies between the anticipated and the actual expenses and profits.

2.  For the purposes of calculating the minimum amount of the additional assets, the rules laid down in Articles 27 and 28 of Directive 2002/83/EC shall apply.

3.  Paragraph 1 shall, however, not prevent Member States from requiring institutions located in their territory to hold prescribed own funds or from laying down more detailed rules provided that they are prudentially justified.

Article 18

Investment rules

1.  Member States shall require institutions located in their territories to invest in accordance with the "prudent person" principle and in particular in accordance with the following rules:

Where the institution is sponsored by a number of undertakings, investment in these sponsoring undertakings shall be made prudently, taking into account the need for proper diversification.

Member States may decide not to apply the requirements referred to in points (e) and (f) to investment in government bonds.

2.  The home Member State shall prohibit the institution from borrowing or acting as a guarantor on behalf of third parties. However, Member States may authorise institutions to carry out some borrowing only for liquidity purposes and on a temporary basis.

3.  Member States shall not require institutions located in their territory to invest in particular categories of assets.

4.  Without prejudice to Article 12, Member States shall not subject the investment decisions of an institution located in their territory or its investment manager to any kind of prior approval or systematic notification requirements.

5.  In accordance with the provisions of paragraphs 1 to 4, Member States may, for the institutions located in their territories, lay down more detailed rules, including quantitative rules, provided they are prudentially justified to reflect the total range of pension schemes operated by these institutions.

In particular, Member States may apply investment provisions similar to those of Directive 2002/83/EC.

6.  Paragraph 5 shall not preclude the right for Member States to require the application to institutions located in their territory of more stringent investment rules also on an individual basis provided they are prudentially justified, in particular in the light of the liabilities entered into by the institution.

7.  In the event of cross-border activity as referred in Article 20, the competent authorities of each host Member State may require that the rules set out in the second subparagraph apply to the institution in the home Member State. In such case, these rules shall apply only to the part of the assets of the institution that corresponds to the activities carried out in the particular host Member State. Furthermore, they shall only be applied if the same or stricter rules also apply to institutions located in the host Member State.

To comply with these requirements, the home Member State may require ring-fencing of the assets.

Article 19

Management and custody

1.  Member States shall not restrict the freedom of institutions to appoint, for the management of the investment portfolio, investment managers established in another Member State and duly authorised for this activity, in accordance with Directives 85/611/EEC, 93/22/EEC, 2000/12/EC and 2002/83/EC, as well as those referred to in Article 2(1) of this Directive.

2.  Member States shall not restrict the freedom of institutions to appoint, for the custody of their assets, custodians established in another Member State and duly authorised in accordance with Directive 93/22/EEC or Directive 2000/12/EC, or accepted as a depositary for the purposes of Directive 85/611/EEC.

The provisions of this paragraph shall not prevent the home Member State from making the appointment of a depositary or a custodian compulsory.

3.  Each Member State shall take the necessary steps to enable it under its national law to prohibit, in accordance with Article 14, the free disposal of assets held by a depositary or custodian located within its territory at the request of the institution's home Member State.

Article 20

Cross-border activities

1.  Without prejudice to national social and labour legislation on the organisation of pension systems, including compulsory membership and the outcomes of collective bargaining agreements, Member States shall allow undertakings located within their territories to sponsor institutions for occupational retirement provision authorised in other Member States. They shall also allow institutions for occupational retirement provision authorised in their territories to accept sponsorship by undertakings located within the territories of other Member States.

2.  An institution wishing to accept sponsorship from a sponsoring undertaking located within the territory of another Member State shall be subject to prior authorisation by the competent authorities of its home Member State, as referred to in Article 9(5). It shall notify its intention to accept sponsorship from a sponsoring undertaking located within the territory of another Member State to the competent authorities of the home Member State where it is authorised.

3.  Member States shall require institutions located within their territories and proposing to be sponsored by an undertaking located in the territory of another Member State to provide the following information when effecting a notification under paragraph 2:

4.  Where a competent authority of the home Member State is notified under paragraph 2, and unless it has reason to doubt that the administrative structure or the financial situation of the institution or the good repute and professional qualifications or experience of the persons running the institution are compatible with the operations proposed in the host Member State, it shall within three months of receiving all the information referred to in paragraph 3 communicate that information to the competent authorities of the host Member State and inform the institution accordingly.

5.  Before the institution starts to operate a pension scheme for a sponsoring undertaking in another Member State, the competent authorities of the host Member State shall, within two months of receiving the information referred to in paragraph 3, inform the competent authorities of the home Member State, if appropriate, of the requirements of social and labour law relevant to the field of occupational pensions under which the pension scheme sponsored by an undertaking in the host Member State must be operated and any rules that are to be applied in accordance with Article 18(7) and with paragraph 7 of this Article. The competent authorities of the home Member State shall communicate this information to the institution.

6.  On receiving the communication referred to in paragraph 5, or if no communication is received from the competent authorities of the home Member State on expiry of the period provided for in paragraph 5, the institution may start to operate the pension scheme sponsored by an undertaking in the host Member State in accordance with the host Member State's requirements of social and labour law relevant to the field of occupational pensions, and any rules that are to be applied in accordance with Article 18(7) and with paragraph 7 of this Article.

7.  In particular, an institution sponsored by an undertaking located in another Member State shall also be subject, in respect of the corresponding members, to any information requirements imposed by the competent authorities of the host Member State on institutions located in that Member State, in accordance with Article 11.

8.  The competent authorities of the host Member State shall inform the competent authorities of the home Member State of any significant change in the host Member State's requirements of social and labour law relevant to the field of occupational pension schemes which may affect the characteristics of the pension scheme insofar as it concerns the operation of the pension scheme sponsored by an undertaking in the host Member State and in any rules that are to be applied in accordance with Article 18(7) and with paragraph 7 of this Article.

9.  The institution shall be subject to ongoing supervision by the competent authorities of the host Member State as to the compliance of its activities with the host Member State's requirements of labour and social law relevant to the field of occupational pension schemes referred to in paragraph 5 and with the information requirements referred to in paragraph 7. Should this supervision bring irregularities to light, the competent authorities of the host Member State shall inform the competent authorities of the home Member State immediately. The competent authorities of the home Member State shall, in coordination with the competent authorities of the host Member State, take the necessary measures to ensure that the institution puts a stop to the detected breach of social and labour law.

10.  If, despite the measures taken by the competent authorities of the home Member State or because appropriate measures are lacking in the home Member State, the institution persists in breaching the applicable provisions of the host Member State's requirements of social and labour law relevant to the field of occupational pension schemes, the competent authorities of the host Member State may, after informing the competent authorities of the home Member State, take appropriate measures to prevent or penalise further irregularities, including, insofar as is strictly necessary, measures to prevent the institution from operating in the host Member State for the sponsoring undertaking.

Article 21

Cooperation between Member States and the Commission

1.  Member States shall ensure, in an appropriate manner, the uniform application of this Directive through regular exchanges of information and experience with a view to developing best practices in this sphere and closer cooperation, and by so doing, preventing distortions of competition and creating the conditions required for unproblematic cross-border membership.

2.  The Commission and the competent authorities of the Member States shall collaborate closely with a view to facilitating supervision of the operations of institutions for occupational retirement provision.

3.  Each Member State shall inform the Commission of any major difficulties to which the application of this Directive gives rise.

The Commission and the competent authorities of the Member States concerned shall examine such difficulties as quickly as possible in order to find an appropriate solution.

4.  Four years after the entry into force of this Directive, the Commission shall issue a report reviewing:

5.  The competent authorities of the host Member State may ask the competent authorities of the home Member State to decide on the ring-fencing of the institution's assets and liabilities, as provided for in Articles 16(3) and 18(7).

Article 22

Implementation

1.  Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive before …… (15). They shall forthwith inform the Commission thereof.

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2.  Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field governed by this Directive.

3.  Member States may postpone until ….. (16)* the application of Article 17(1) and (2) to institutions located in their territory which at the date specified in paragraph 1 of this Article do not have the minimum level of prescribed own funds required pursuant to Article 17(1) and (2). However, institutions wishing to operate pension schemes on a cross-border basis, within the meaning of Article 20, may not do so until they comply with the rules of this Directive.

4.  Member States may postpone until ….. ** the application of Article 18(1)(f) to institutions located in their territory. However, institutions wishing to operate pension schemes on a cross-border basis, within the meaning of Article 20, may not do so until they comply with the rules of this Directive.

Article 23

Entry in force

This Directive shall enter into force on the day of its publication in the Official Journal of the European Union.

Article 24

Addressees

This Directive is addressed to the Member States.

Done at ,

For the European Parliament For the Council

The President The President

(1) OJ C 299 E, 3.12.2002, p. 16. (2) OJ C 65 E, 14.3.2002, p. 116. (3) OJ C 96 E, 27.3.2001, p. 136. (4) OJ C 96 E, 27.3.2001, p. 136. (5) OJ C 155, 29.5.2001, p. 26. (6) Position of the European Parliament of 4 July 2001 (OJ C 65 E, 14.3.2002, p. 116), Council Common Position of 5 November 2002 (OJ C 299 E, 3.12.2002, p. 16) and Position of the European Parliament of 12 March 2003 (not yet published in the Official Journal). (7) OJ L 283, 28.10.1980, p. 23. Directive as last amended by European Parliament and Council Directive 2002/74/EC (OJ L 270, 8.10.2002, p. 10). (8) Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ, English Special Edition 1971 (II), p. 416). Regulation as last amended by Regulation (EC) No 1386/2001 of the European Parliament and of the Council (OJ L 187, 10.7.2001, p. 1). (9) Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ, English Special Edition 1972 (I), p. 159). Regulation as last amended by Commission Regulation (EC) No 410/2002 (OJ L 62, 5.3.2002, p. 17). (10) First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life assurance (OJ L 228, 16.8.1973, p. 3). Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1). (11) Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 375, 31.12.1985, p. 3). Directive as last amended by Directive 2001/108/EC of the European Parliament and of the Council (OJ L 41, 13.2.2002, p. 35). (12) Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ L 141, 11.6.1993, p. 27). Directive as last amended by Directive 2002/87/EC. (13) Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (OJ L 126, 26.5.2000, p. 1). Directive as amended by Directive 2002/87/EC. (14) Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (OJ L 345, 19.12.2002, p. 1). (15) * 24 months from the date of the entry into force of this Directive. (16) ** 5 years from the date referred to in paragraph 1.

European Parliament resolution on the General Agreement on Trade in Services (GATS) within the WTO, including cultural diversity

P5_TA(2003)0087 RC-B5-0159/2003

The European Parliament,

–   having regard to the Fourth WTO Ministerial Conference Declaration, adopted on 14 November 2001 in Doha,

–   having regard to its resolution of 18 November 1999 on the Commission's communication to the Council and the European Parliament on the EU's approach to the WTO Millennium Round(1),

–   having regard to its resolution of 25 October 2001 on the Fourth WTO Ministerial Conference(2),

–   having regard to its resolution of 25 October 2001 on openness and democracy in international trade(3),

–   having regard to Article 22 of the EU Charter of Fundamental Rights, which states that "the Union shall respect cultural, religious and linguistic diversity",

–   having regard to the UNESCO Universal Declaration on Cultural Diversity, which stresses "the specificity of cultural goods and services which, as vectors of identity, values and meaning, must not be treated as mere commodities or consumer goods" (Article 8) and states that "market forces alone cannot guarantee the preservation and promotion of cultural diversity, which is the key to sustainable human development" (Article 11),

A.   whereas the EU is the world leader in the services sector, due, in part, to its openness to competition; and whereas open service markets can, in principle, be advantageous for all countries, as they lower prices for consumers and business,

B.   whereas the services sector is extremely diverse, ranging from health and education to retailing and financial services,

C.   whereas the WTO Doha Round is to focus on a development agenda, and concrete results must therefore be achieved in order to convince the poorest nations that the success of the WTO is critical to the economies of all countries, both rich and poor,

D.   whereas, however, the GATS agreement has given rise to widespread concern regarding lack of transparency in the negotiating process and in relation to its possible impact on public services and the regulation of services in general,

Political scrutiny and transparency

1.  Recalls that the liberalisation of services is a matter of great public debate and that the offer must therefore be subject to effective parliamentary scrutiny; consequently, welcomes the efforts made by the Commission to provide some Members of the European Parliament with the GATS EU offers; calls, however, for further transparency, including full access to EU negotiating documents for all Members of the European Parliament, subject to the European Parliament's rules on confidentiality;

2.  Welcomes the efforts made by the Commission to improve transparency and to involve interest groups from all relevant service sectors, including social partners, as well as civil society groups, but believes that further improvements are essential, making available the extensive information on the EU requests and offers, so as to allow for an informed public debate before any offer is made to the WTO; calls on the Commission to suggest to the WTO that requests and offers by all Member States should be made public;

The EU offer

3.  Welcomes the Commission's initial offer on GATS as an important part of the Doha negotiations and a positive signal to the WTO members that the EU is open to businesses and supports a non-discriminatory, regulated system; supports the commitments to enhance market access for EU service providers by reducing or eliminating barriers to trade in services;

4.  Recalls that the negotiations on trade in services are to be conducted with a view to promoting the economic growth of all trading partners and the development of the developing and least developed countries, and that the GATS negotiations should be measured against this overriding goal;

5.  Recalls that the GATS is a voluntary agreement and that its principles do not impose either privatisation or deregulation, nor do they prescribe a particular degree of liberalisation, as such; insists, however, that developing and least developed countries should not be pressured to liberalise services, in particular public services;

6.  Welcomes, in addition, the Commission's announcement that no offers of liberalisation are proposed in the health, education and audiovisual sectors, and calls on the Commission to maintain this position throughout the GATS negotiations and to ensure that no circumvention of this right can take place;

7.  Supports the right of each WTO member to regulate public services and services of general interest, and to uphold the principle of universal service obligations; wishes to see a clarification of the right to regulate, with a view to ensuring that it cannot be undermined by the application of trade-related criteria such as the necessity test or the requirement to be as "least trade-restrictive" as possible;

8.  Supports a further opening up of markets in the financial services and telecom sector, and in other areas such as computer services, professional services, business services, construction and engineering, distribution, tourism and maritime transport; believes that the European experience shows that the abolition of monopolistic structures can lead to more customer-oriented services at a reduced price, whilst at the same time creating skilled employment;

9.  Supports the inclusion of environmental services insofar as they are classified in the proposal; at the same time, agrees to exclude access to, and management of, water resources, as well as the allocation thereof;

10.  Welcomes the offer to grant developing countries, in particular, better opportunities to supply services to the EU market through temporary cross-border movement of qualified personnel, but insists that negotiations must ensure protection of cross-border workers against all forms of discrimination; recalls that in all these cases, EU and national working conditions, minimum wage requirements and any collective wage agreements must continue to apply, regardless of whether or not the employer is registered within the EU;

11.  Stresses that "commercial presence" (investment) must continue to be governed by domestic tax, social and other regulatory measures; insists on the right to make foreign commercial presence conditional on respect for the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the revised OECD Guidelines for Multinational Enterprises;

Cultural services

12.  Stresses the importance of cultural diversity, the need to respect national and regional diversity and to bring the common cultural heritage to the fore; each Member State should have the legal flexibility to take all necessary measures in the areas of cultural and audiovisual policy so as to preserve and promote cultural diversity;

13.  Recalls that cultural services are not to be compared to most other services and are therefore treated differently in existing agreements; recognises the European audiovisual sector's special role in sustaining cultural pluralism, economic performance and freedom of expression; reaffirms its commitment to the freedom of action in the sphere of audiovisual policy obtained at the Uruguay Round; takes the view that the GATS rules on cultural services, in particular in the audiovisual sector, should not jeopardise the cultural diversity and autonomy of the WTO contracting parties;

14.  Supports the Commission in maintaining the possibility for the Community, its Member States and its regions to preserve and develop their capacity to define and implement policies in the cultural and audiovisual sectors, in order to preserve their cultural diversity;

Impact on developing countries

15.  Recognises that the ability of some developing and least developed countries to regulate service sectors which were previously under public control or ownership may be limited or non-existent, and calls on the Commission to act sensitively in areas in which the developing country concerned has genuine development-based objections; insists that certain service sectors, such as water and sanitation, have a special status in developing and least developed countries, as they have a direct and dramatic impact on people's daily lives, and therefore require special treatment;

16.  Calls on the Commission to press, in conformity with Article XIX of the GATS, for a full assessment of trade in services in parallel with the Doha Development Agenda negotiations;

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17.  Instructs its President to forward this resolution to the Council, the Commission and the governments of the Member States and of the candidate countries.

(1) OJ C 189, 7.7.2000, p.213. (2) OJ C 112 E, 9.5.2002, p.321. (3) OJ C 112 E, 9.5.2002, p. 326.

European Parliament resolution on the socio-economic crisis in the whitefish sector

P5_TA(2003)0088 B5-0156/2003

The European Parliament,

A.   whereas the adoption of measures to manage fisheries resources shall take into account previous studies on the socio-economic consequences for the fishing industry,

B.   whereas its resolution of 5 December 2002 on the cod crisis(1) warned of the massive socio-economic consequences of stringent cod conservation measures,

C.   whereas scientists from the International Council for the Exploration of the Sea consider several stocks of cod in EU waters to be at critically low levels,

D.   whereas the abovementioned resolution pointed out that insufficient funds are available in the Financial Instrument for Fisheries Guidance (FIFG) as currently programmed in the EU budget to compensate communities devastated by such measures,

E.   whereas the Council of Agriculture Ministers at their meeting in December 2002 decided, nevertheless, to adopt proposals for short-term measures which will have a drastic impact on jobs in the EU whitefish sector,

1.  Calls upon the budgetary authority of the EU and the Commission jointly with the Member States concerned to draw up a plan to compensate for losses incurred by coastal communities as a result of the cod conservation measures, and to allocate up to EUR 150 million of additional EU funding, acknowledging the contributions that Member States are making to tackle the crisis;

2.  Considers that the additional funding requested is compatible with the ceiling of heading 2 of the Financial Perspective, but entails a reprogramming of existing policies to be agreed by the budgetary authority, or recourse to the provisions of the interinstitutional agreement of 6 May 1999(2);

3.  Calls on the Commission to present a proposal to this effect with the appropriate legal basis by 30 June 2003;

4.  Calls upon the Commission and the Council to ensure that any changes made to the current conservation measures for cod are designed to maximise the probability of a recovery of the cod stocks and do not have the effect of furthering their decline;

5.  Calls upon the Commission and the Council to adopt more sophisticated long-term conservation measures which, while offering the prospect of cod recovery, would also secure the maximum number of jobs in the EU whitefish sector;

6.  Calls upon the Commission quickly to establish Regional Management Committees that would optimise stakeholder involvement without undermining European Treaties;

7.  Calls upon the Commission and the Council to bring together scientists and fishermen on a regular basis and increase the breadth and depth of scientific assessment and analysis in EU fisheries;

8.  Calls upon the Council and the Commission to support the extension of co-decision-making powers to the field of fisheries;

9.  Instructs its President to forward this resolution to the Council and the Commission.

(1) P5_TA(2002)0593. (2) OJ C 172, 18.6.1999, p. 1.

European Parliament resolution on the state of the European economy – preparatory report with a view to the Commission recommendation on Broad Economic Policy Guidelines (2002/2287 (INI))

P5_TA(2003)0089 A5-0051/2003

The European Parliament,

–   having regard to the Commission communication on the implementation of the 2002 Broad Economic Policy Guidelines (COM(2003) 4),

–   having regard to the Commission communication on the EU Economy: 2002 Review - Summary and main conclusions (COM(2002) 712),

–   having regard to the Commission's autumn 2002 forecasts for the period 2002-2003(1),

–   having regard to the Commission communication to the Spring European Council in Barcelona on the Lisbon Strategy – Making change happen (COM(2002) 14), and its resolution of 28 February 2002 on the Lisbon process and the way to follow(2),

–   having regard to the Commission communication to the Spring European Council on 21 March 2003 (COM(2003) 5),

–   having regard to the Commission communication on structural indicators (COM(2002) 551),

–   having regard to the Presidency Conclusions of the Lisbon European Council of 23 and 24 March 2000 and of the Göteborg European Council of 15 and 16 June 2001,

–   having regard to the Commission communication to the Council and the European Parliament - eEurope 2002: Impact and Priorities - A communication to the Spring European Council in Stockholm, 23-24 March 2001 (COM(2001) 140),

–   having regard to its resolution of 28 February 2002 on the sustainable development strategy for the Barcelona Summit 2002(3),

–   having regard to the Commission communication on the future of the European Employment Strategy (EES) 'A strategy for full employment and better jobs for all' (COM(2003) 6),

–   having regard to the final draft report of 20 January 2003 submitted by the Trans-European Policy Studies Association panel of experts to its committee responsible on the broad economic guidelines for 2003,

–   having regard to the report from the Commission 'Economic reform: report on the functioning of Community product and capital markets' (COM(2002) 743),

–   having regard to Rule 163 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs (A5-0051/2003),

A.   whereas the ultimate objectives of the economic and social policy framework of the European Union are to reach higher non-inflationary growth and full employment - especially for the sections of the population most susceptible to unemployment (women, young people and older workers), to contribute to sustainable development and to increase social cohesion,

B.   whereas in Europe the recovery from the world economic downturn has been slow, with no clear acceleration of economic growth in 2002 and still uncertain prospects for the near future; whereas the current slowdown poses a new challenge to policy-makers in that it has particular characteristics of its own, combining deceleration of growth with relative price stability, at a time when Europe has just adopted a common currency,

C.   whereas a key cause of the EU's slow recovery is the rigidity of the European economy, which prevents it from reacting swiftly to external shocks; whereas policy-makers should look closer within the EU and focus on common policies, as well as on the individual economies of Member States and on the reasons for the wide disparities in macroeconomic performance between them,

D.   whereas the new international situation has highlighted the importance of the reform agenda adopted in Lisbon and Göteborg in 2000 and 2001; whereas it is disappointing to note that the pace of further reform in 2002 has remained quite slow; whereas levels of public and private investment in the EU, as well as levels of productivity growth, are very low,

E.   whereas the EU's unemployment problem, rather than being cyclical, is more complex and structural in nature, and has been aggravated by the downturn in growth,

F.   whereas though Europe currently enjoys relative price stability, it still has persistently high core inflation, especially as regards the services sector, energy and fresh food prices,

G.   whereas economic policy coordination - aimed at attaining the objectives of the European Union - as defined in Article 2 of the Treaty - is an obligation for Member States (Articles 98 and 99 EC); whereas the current economic and social policy procedures are not sufficient to deal with the challenges facing the European economy; whereas the growing economic interdependence in the eurozone calls for stronger ex-ante economic and employment policy co-ordination; whereas the existence of the euro and its single monetary policy have highlighted the lack of a unified and clear European economic policy,

1.  Calls for European leaders and policy-makers to reinvigorate the economic policy debate on the Broad Economic Policy Guidelines with more creativity and proactive policies which must be compatible with the rules of the Stability and Growth Pact, in order to create a climate of confidence in the European economy; believes this is necessary to boost competitivity and economic growth, which must be geared to the main economic policy objective of job creation, in order to counteract the ever-growing trend in Europe towards lower employment rates and ageing populations; to this end, regards generating new activities and supporting public and private investment as priorities;

2.  Asks European leaders at the upcoming Spring Economic Council to avoid vague and complacent terminology and to call for the speeding up and effective implementation of the Lisbon strategy in Europe, by reaffirming the relevance of the balanced and global strategy established in Lisbon in 2000 and in Göteborg in 2001, and enlarged in Stockholm, including structural reforms, public and private investments, environmental protection and the improvement of the European economic and social model;

3.  Considers that any short-term demand policies aimed at recovering activity (interest rate changes and fiscal adjustments) should: firstly, not call into question macroeconomic stability in order to give economic and social actors renewed confidence, secondly, not erode European competitiveness in a globalised market, thirdly, these policies must be compatible with the reduction of public debt and the increase in public savings in order to finance public investments necessary to accelerate economic growth and address the challenge that ageing populations represent to the European social model;

4.  Welcomes the procedural changes introduced by the Commission to economic and employment policy coordination, by making the Broad Economic Policy Guidelines mid-term oriented, the European Employment Guidelines mutually supportive and integrating the sustainable development strategy; believes this should be further enhanced by aggregating fiscal policies and supply policies, together with pensions reform in a way consistent with monetary policy; believes that all these processes should be integrated and used as a preliminary framework on which to base the adoption of the EU and national budgets; finally, believes that this process must include both social partners and the acceding Member States;

5.  Stresses that the strict vigilance of the European Central Bank (ECB) needs to be maintained in view of persistent high core inflation, especially in the services sector; supports the linkage of wage and productivity increases as a means of controlling inflationary pressures; considers that liberalisation of markets, underpinned by measures to increase transparency of prices, together with structural reforms aimed at enhancing productivity, will decrease inflationary pressures, eventually giving further room for manoeuvre to the ECB, in particular if the exchange rate of the euro damages European exports;

6.  Stresses Parliament's commitment to the Stability and Growth Pact (SGP) and supports its intelligent and flexible application in the ways proposed by the Commission, in particular the stronger emphasis on overall debt levels of individual Member States, taking into account public investment requirements - especially when those investments are considered by the Commission to be coherent with the Lisbon and Stockholm strategy, and, for that reason, of common interest; notes with disappointment that recently several Member States with high structural deficits have not progressed towards budgetary positions of close to balance or in surplus, thus resulting in the malfunctioning of automatic stabilisers; believes that during the years of economic bonanza before the downturn, the Council and the Commission failed in their duty by not warning Member States in time about inappropriate fiscal policies;

7.  Believes that to increase employment rates and productivity, it is necessary to accelerate structural reforms in order to eliminate the rigidities which have been obstructing economic development, and in this context it would be necessary to previously identify these rigidities (as was done in the 1984 White Paper on the Internal Market); in addition, believes that strong political willpower is needed to implement these reforms as they invariably first require sacrifices and only later do they produce benefits; therefore, stresses that social dialogue is one of the keys to the success of the reforms, which must encourage the economic players and the social partners to accept their responsibility to prevent the exacerbation of inequalities, promote positive mobility and combat exclusion;

8.  Believes that high levels of public and private investment are the key to productivity growth and full employment and therefore calls for a rapid implementation of technological developments and new technologies; therefore, considers it necessary to substantially increase the resources in the EU and national budgets for education and training, high-technology industries such as Information and Communications Technologies, environmentally-friendly production and Research and Development, as well as for infrastructure, trans-European network industries and private-public partnerships, in order to achieve quantitative targets in each of these areas; considers, moreover, that tax benefits for expenses and investments in these activities should be increased; highlights the importance of adopting the European Patent;

9.  Highlights the importance of fostering Europe's productive, manufacturing and industrial base and points out that an economic model based exclusively on services should not be the future choice for Europe's economy; emphasises the importance of screening new legislation through impact assessment and asks the Commission to widen the list of pilot measures for which triple evaluation (economic, employment, environmental impacts) is already envisaged in 2003 and include also the coming Commission's proposals on chemical policy and transport infrastructure pricing; underlines also the importance of an integrated approach when implementing different measures in the EU-climate change policy, in order to safeguard the international competitiveness of energy intensive industry in Europe;

10.  Given the considerable vulnerability of Europe's economy to the volatility of petrol prices and the pending question of when reserves will be depleted, Europe should make renewable energy a priority policy and not only invest in renewable energies, but use even more the existing and future results of this research in order to take the lead in the next industrial revolution in this sector, along the lines of what the US did with the IT sector;

11.  Points out that the Lisbon targets will only be reached if a culture of entrepreneurship is fostered in Europe; with this in mind, considers that the importance of small- and medium-sized enterprises (SMEs) is vital to growth and employment; firstly, asks for measures to facilitate the quick setting-up of new companies by using new technologies and allowing tax deferral schemes; secondly, calls for a simplification of the regulatory environment; thirdly, calls for ways to reduce the cost of capital for SMEs and to facilitate access to venture capital; points out that developments regarding capital requirements in the context of the Basle II negotiations should be monitored closely and encourages the European Investment Fund to step up its efforts as far as credit guarantee schemes are concerned; furthermore encourages the Member States to make genuine efforts to implement the promises made in the SME-Charter;

12.  Believes that proper and timely transposition of EU directives is essential to the advancement of the Internal Market and that the current infringement procedures lack enough coercive power; therefore, calls on the Commission to increase pressure on Member States which are failing to fully transpose important directives;

13.  Believes that further progress in achieving a more dynamic and integrated Internal Market is needed; calls on Member States to further liberalise services of general interest and network industries where the market share of incumbents remains high and competition is still insufficient: these include postal services, telecommunications, gas and electricity, rail and air transport, and broadcasting; stresses that the universality, high quality, and reasonable pricing of services of general interest need to be guaranteed by the Community institutions at local, regional and national levels; considers that interconnectivity of networks between Member States is particularly important in view of the enlargement of the EU; welcomes the initiative for a Green Paper on services of general economic interest (SGEI) and hopes that the debate will make it possible to formulate and launch a Community strategy for SGEI, which is essential if the Lisbon objectives are to be achieved;

14.  Calls for the full and timely implementation of both the Financial Services Action Plan and the Risk Capital Action Plan; calls for the development of venture capital markets and asks for the role of the European Investment Fund to be enhanced; believes that in a context of increasing financial market integration in Europe, there is the need for further coordination of national supervisory authorities, which might eventually lead to a single European supervisor;

15.  Stresses that the financial market has, at the same time, serious deficiencies in terms of meeting the funding requirements of SMEs, regional development and network infrastructures; calls, consequently, for the formulation at European level of a financing policy tailored to meet such requirements;

16.  Stresses that the crisis on the stock markets highlights deficiencies in business management which also affect the European Union, and calls for the adoption of an ambitious Community plan on the basis of the Winter report with regard to company law and business management;

17.  Calls for significant efforts to be made to raise employment rates, especially for women, disabled and older workers, by the following actions: firstly, tax incentives for enterprises which hire these targeted groups, such as deductions on income taxes linked to job creation and reduction of taxes on labour (including social contributions), in particular for low income workers - this should be balanced by an increase in indirect taxation if budgetary stability were to be put at risk; secondly, an increase in the effective retirement age through voluntary decisions by workers, supported by an increase of expectations on pension levels and by incentives for enterprises who do not reduce employment of older workers; thirdly, the promotion of all aspects of quality of work including health and safety at work; finally calls for the setting-up of regional and local employment strategies;

18.  Calls for higher labour mobility within the EU, by means of increasing incentives to move from one Member State to another, reducing bureaucracy, facilitating the process of obtaining social security payments across Europe, recognising diplomas, professional experience and qualifications and contributions to pension schemes; believes that special attention should be given to education, on-the-job training, lifelong learning and skills-improvement, in particular language skills;

19.  Asks that the process of removing competition-distorting tax regulations be sped up; stresses the need to implement the recently adopted savings tax package; calls on the Commission and the Council to foster the convergence process for VAT (making the country-of-origin principle possible) and energy taxation; calls for measures to provide companies with a consolidated corporate tax base for their EU-wide activities; finally, calls for agreement on common principles for the taxation of complementary pension funds in Europe;

20.  Believes that in a context of increased flexibility of Europe's market economy, there is a need for an equivalent measure of corporate social responsibility (CSR) on the part of the private sector in order to preserve the European social model; proposes that the Commission set up and develop a CSR "scorecard" system;

21.  Calls for appropriate international representation of the eurozone in international and multilateral institutions; calls for commodities and energy supplies to be invoiced in euro as far as possible in order to give more certainty to commercial transactions and avoid the double volatility of the price of the commodity and the exchange rate;

22.  Calls once again for the European Parliament to be fully involved in the development and implementation of the EU's Broad Economic Policy Guidelines; believes that the positions of the Council and Parliament should carry equal weight in the annual adoption of the Broad Economic Policy Guidelines on the basis of a proposal by the Commission; stresses the need for national parliaments to be more closely involved in the process;

23.  Instructs its President to forward this resolution to the Council and Commission, to the governments and parliaments of the Member States and the social partners.

(1) No 5/2002 European Economy, ISSN 0379-0991. (2) OJ C 293 E, 28.11.2002, p. 75. (3) OJ C 293 E, 28.11.2002, p. 84.

European Parliament resolution on the annual assessment of implementation of stability and convergence programmes (2002/2288(INI))

P5_TA(2003)0090 A5-0047/2003

The European Parliament,

–   having regard to the Commission's Communication on the implementation of the 2002 Broad economic Policy Guidelines (COM(2003) 4),

–   having regard to the final report of 20 January 2003 submitted by the TEPSA panel of experts to the Committee on Economic and Monetary Affairs on the Broad Economic Policy Guidelines for 2003,

–   having regard to the decisions of the Heads of State and Government at the Lisbon (2000), Göteborg (2001) and Barcelona (2002) European Councils,

–   having regard to its resolution of 12 March 2003 on the Commission's Communication to the Council and the European Parliament on Public finances in EMU - 2002(1),

–   having regard to the Commission's Communication to the Council and the European Parliament on strengthening the coordination of budgetary policies (COM(2002) 668),

–   having regard to the Commission's Communication to the European Parliament and the Council on the need and the means to upgrade the quality of budgetary statistics (COM(2002) 670),

–   having regard to the Commission's report 'The EU Economy: 2002 Review', ECFIN/475/02-EN,

–   having regard to the Commission's Communication on the autumn 2002 Economic Forecasts, European Economy No 5/2002,

–   having regard to the Commission's Communication on streamlining the annual economic and employment policy coordination cycles (COM(2002) 487) and to its resolution thereon of 5 December 2002(2),

–   having regard to Article 99 of the EC Treaty, and to Rule 41 of its Rules of Procedure,

–   having regard to the annual updates of the stability and convergence programmes drawn up by the Member States between October 2002 and February 2003 as well as to the opinions of the Ecofin Councils of 21 January 2003 on these programmes,

–   having regard to Article 163 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs (A5-0047/2003),

A.   whereas, in the context of the Stability and Growth Pact, considerable progress has been made in assessing budgetary convergence in the framework of budgetary surveillance by the Member States, and whereas the inclusion in these evaluations of the level and evolution of the public debt, and of a qualified analysis, could bring more flexibility to the application of the Stability and Growth Pact,

B.   whereas monetary policy is in any case homogeneous for all countries in the euro zone, but owing to different national inflation rates and different growth perspectives it is becoming increasingly necessary to introduce structural reforms allowing similar levels to be attained in the lowest nominal interest rates,

C.   whereas the economic and monetary forecasts for 2003 are strongly influenced by wrong estimates found in the forecasts for 2001 and 2002; and whereas these mistakes derived from a passive policy of awaiting the American recovery in spite of the fact that Europe urgently needs structural reforms,

D.   whereas the appreciation of the euro could penalise European exports of less competitive products, and there is an increasing need to favour and stimulate innovation in such a manner that it also leads to growth in domestic demand, supported by a coherent investment policy within the targets of the Lisbon strategy,

E.   whereas, from a legal point of view, coordination of economic policies is not a right but an obligation of the Member States, Article 99(1) of the EC Treaty stipulating that "Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, in accordance with the provisions of Article 98" and specifying the objectives of such coordination, which would contribute to "the achievement of the objectives of the Community, as defined in Article 2",

F.   whereas the economic policy guidelines to be considered at the Spring European Council must be more strongly geared to a medium-term oriented policy; whereas, however, a serious economic slowdown such as that which is currently occurring, underlines the need for an urgent re-think of the national economic policies in several Member States which, when implemented, will show positive results only in the medium and long term,

G.   whereas there is a strong economic interdependence in the internal market, and in order to boost investments and carry out the structural reforms foreseen in the Lisbon process, an efficiently coordinated economic policy, implemented simultaneously throughout the EU, is the most effective way to overcome the growth crisis,

H.   whereas, over the last few years, the euro area labour market has proved to be inflexible enough to become a major cause of unemployment, a fact which should make this market a priority for structural reforms in a number of Member States,

I.   whereas economic growth, which had been carried in the past by the internal market and the strength of exports, has slowed down, and the Commission has nevertheless continued to issue over-optimistic forecasts; whereas, moreover, major uncertainties continue to surround trends in oil prices, the euro-dollar exchange-rate, stock market weakness and the economic consequences of the Iraq crisis,

J.   whereas, in the past, EU growth strategies were always export-oriented, but in recent years growth has been driven by employment growth within the EU, and although the Commission offers optimistic estimates of an increase in euro area exports (about 5% in 2003), major uncertainties remain due to the volatility of oil prices, the appreciation of the euro, doubts about the EU's capacity to conceive and implement structural reforms, the persistent weakness of the stock markets and the economic consequences of a potential war in the Middle East,

1.  Points out that the aim of securing a balanced budget represents an important foundation for lasting economic development; points out, moreover, that financial policy mistakes by some states in an economic and monetary union can result in all participants being penalised in the financial markets;

2.  Welcomes the highly satisfactory implementation of the stability and convergence programmes in most of the Member States and encourages the others to follow this example; praises the above-mentioned communication from the Commission on strengthening the coordination of budgetary policies as a useful step towards clarifying and enforcing the underlying procedure;

3.  Stresses the necessity of improving budgetary surveillance by Member States, and of continuing to apply the Stability and Growth Pact flexibly; points out that this must include, in countries with excessive budget deficits, continuously cutting back on net new indebtedness by 0.5% annually and holding it sustainably below the 3% threshold, as well as pursuing more consistently the overall indebtedness threshold of 60%;

4.  Considers that the multitude of indicators allows the Commission and the Council to come out with recommendations and early warnings which take into account the most severe cases; considers also that there is a need for a clear choice in favour of investments over regular expenditures and for a general reduction of fiscal pressure in favour of an increase in the active population and active ageing where there are negative forecasts for the costs of the pension systems;

5.  Considers that recommendations and early warnings should henceforth be issued on the sole responsibility of the Commission, and that the Council should not have the right to vote on them;

6.  Stresses that although a multilateral surveillance of budgetary policies to reach convergence in the context of the Stability and Growth Pact is easier to implement in phases of national economy growth, it should also be carried out strictly in accordance with the Stability and Growth Pact in downturns, bearing in mind that in its present form the pact allows for substantial flexibility for struggling economies; notes that those Member States which complied best with the Stability and Growth Pact in a favourable economic climate tend to perform better during a general slump;

7.  Proposes that the targets of the Lisbon and Göteborg strategies be placed at the centre of the EU policy mix and of the Member States' economic policy coordination in order to strengthen growth in the coming eight years and to avoid divergences and contradictions in the various documents which will be assessed at the 2003 Spring Council;

8.  Proposes that all instruments of economic and financial coordination (the Broad Economic Policy Guidelines, coordination of budgetary policies, rationalisation of the annual cycles of economic and employment policy coordination) should incorporate in a coherent manner the objectives of the Lisbon strategy with a view to making up for lost time and achieving substantial results from the implementation of this strategy by 2010;

9.  Welcomes the fact that national stability programmes are finalised before policy coordination sets in, guaranteeing a better position when assessing the financial means available for any economic policy, and avoiding an ad hoc re-interpretation of the Stability and Growth Pact with a view to responding to the wishes for greater expenditure which occasionally emerge when policies are coordinated;

10.  Underlines, in this context, that these strategies should lead to the adoption of the priority target to guarantee a policy of public and private investment in sectors such as innovation, life-long learning, the creation of infrastructure and sustainable development within the European Union, in particular where these are recognised by the Commission and where they are deemed to be of common interest;

11.  Shares the Commission's opinion that the most appropriate answers to the economic slowdown are the Lisbon strategy and Member State-level structural reforms; calls upon Member States to proceed to an immediate and simultaneous implementation of the priorities set down at the European Councils of Lisbon (2000) and Göteborg (2001), in particular substantially to reduce disincentives to work in some Member States and to increase public and private investment in education and training, research and innovation for products and processes, and the development and application of new products and services, with emphasis on the application and interconnections made possible by new technologies; recommends that education, vocational training, life-long learning and research be funded, and that SMEs which undertake these measures be supported in particular;

12.  Recalls that the Lisbon strategy is aimed at increasing labour market participation and also at assuring the sustainability of public finance, in particular in view of Europe's ageing population and the financing of pensions; notes that the mid-term objectives which would allow the EU to become the most competitive economy by 2010 are not being met; calls on the Member States to pursue policies enabling the necessary reform path to be rejoined in order to reduce the lead which the US has over the EU in terms of productivity; calls on the Commission to put forward a plan of action to allow the candidate countries to join the Lisbon strategy process;

13.  Given the major uncertainties surrounding a possible increase in euro exports, calls for additional attention to be focused on endogenous growth, which still remains sluggish in the EU; recommends that public spending be redirected from consumption to investment, proceeding to the immediate and coordinated implementation of the Lisbon strategy simultaneously in all Member States in order to obtain maximum benefit from the aggregated economic impacts of the policies, and allowing for an increase in competition between the national economic policies, thus promoting the emergence of an efficient economy capable of sustaining the social needs of citizens;

14.  Calls for the Commission's evaluations and recommendations on the stability and growth programmes to be forwarded to Parliament in good time in order to give Parliament an appropriate say in the economic coordination process in the context of the Stability and Growth Pact;

15.  Calls on Heads of State and Government, at the forthcoming Spring Summit, to step up efforts to push ahead with the necessary structural reforms on the basis of an unvarnished assessment, so as to ensure that more than a mere Utopian ideal comes out of the ambitious Lisbon objectives;

16.  Instructs its President to forward its position to the Council and Commission, to the governments and parliaments of the Member States and to the social partners.

(1) P5_TA-PROV(2003)0092. (2) P5_TA(2002)0583.

European Parliament resolution on the Commission report: Convergence Report 2002 - Sweden (COM(2002) 243 – C5&nbhy;0326/2002 – 2002/2170(COS))

P5_TA(2003)0091 A5-0037/2003

The European Parliament,

–   having regard to the Commission report (COM(2002) 243 – C5&nbhy;0326/2002),

–   having regard to the Convergence Report 2002 by the ECB,

–   having regard to its Resolution of 20 November 2002 on the progress made by each of the candidate countries towards accession(1),

–   having regard to its resolution of 30 April 1998 on the Convergence Report of the European Monetary Institute and the document from the Commission entitled 'Euro 1999 - 25 March 1998 - Report on progress towards convergence and its recommendation with a view to the transition to the third stage of Economic and Monetary Union(2),

–   having regard to its position of 18 May 2000 on the proposal for a Council decision in accordance with Article 122(2) of the Treaty for the adoption by Greece of the single currency on 1 January 2001(3),

–   having regard to Rule 47(1) of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs (A5-0037/2003),

A.   whereas on 1 January 1999, 11 Member States entered into the third stage of Economic and Monetary Union, and three years later introduced euro notes and coins in place of their national monies, marking an major step forward in the political and economic integration of Europe,

B.   whereas at that time, two Member States were considered as not fulfilling the convergence criteria, thus becoming Member States with a derogation; whereas the Commission and the ECB are obliged to examine regularly the progress towards meeting the criteria achieved by a Member State with a derogation, and whereas, following such an examination in 2000, there is currently only one Member State with a derogation,

C.   whereas Member States with a derogation are obliged, sooner or later, to introduce the single currency in the absence of a special arrangement,

D.   whereas Sweden will hold a referendum on the introduction of the euro on 14 September 2003,

E.   whereas the Commission and the ECB are likely to be called upon to assess Sweden's convergence soon thereafter,

F.   whereas considerable uncertainty remains as regards the interpretation of some of the criteria, especially the exchange rate criterion,

G.   whereas the assessment of Sweden is likely to have a considerable impact on subsequent countries wishing to introduce the euro,

H.   whereas 10 new Member States are expected to join the EU in 2004, none of which have sought or been granted any special arrangements in the field of Economic and Monetary Union,

I.   whereas the new Member States will thus become Member States with a derogation once the join the EU,

General Observations

1.  Considers that the recent political turmoil surrounding the stability and growth pact has had a negative impact on the public perception of the euro, especially in those countries still outside the euro area;

2.  Considers, however, that the adjustments made by the Commission whereby a budget deficit is recognised to have a structural component and a component related to the business cycle are a step in the right direction because by emphasising the "stability" component of the pact, they likewise strengthen the "growth" component;

3.  Recalls that public support for the euro is crucial as those countries that have not yet introduced the euro will do so only after having consulted their citizens through referenda;

4.  Welcomes, therefore, the decision to implement the stability and growth pact in a more flexible way; reaffirms in this context that it remains open-minded as to possible changes to the pact, but considers that there is a danger of these being seen by the public as solutions to short-term problems rather than a result of a coordinated policy action;

Member States with Derogations

5.  Recalls that the introduction of the euro in some Member States will be subject to a referendum; realises and recognises that the outcome of each such referendum is likely to have a political impact on democratic legitimacy which cannot be overturned nor overruled by reference to the Treaty;

6.  Recalls that the introduction of the euro is part of the Treaty obligations which a Member State with a derogation must respect sooner or later;

7.  Welcomes, therefore, Sweden's decision to hold a referendum on the introduction of the euro this year, and hopes that other Member States outside the eurozone will do so as soon as possible, too;

8.  Agrees with the Commission's assessment that Sweden does not currently fulfil all the convergence criteria;

9.  Recalls in this context that all the legislation relating to the third stage of EMU is part of the aquis that all Member States without special arrangements in this field are obliged to implement, and also that a Member State with a derogation is required to take the necessary steps at the national level to guarantee the independence of the national central bank;

10.  Considers, nonetheless, that given the well-established principle of the supremacy of EC Law, Member States are obliged not to apply rules which are in conflict with EC legislation; stresses therefore that legal convergence in practice can be achieved even before the national legal provisions have been amended;

11.  Considers that there is considerable uncertainty concerning the interpretation and application of the exchange rate criteria and that many different opinions have been offered;

12.  Recalls, in this context, that the exchange rate criteria was interpreted with a considerable flexibility for four of the first wave countries;

13.  Consequently calls on the Commission to make public an authoritative interpretation of the exchange rate criterion, with particular emphasis on how it was interpreted in the past, and what if any changes are needed following the introduction of the euro;

14.  Underlines in that regard the importance of a pragmatic interpretation of the criteria, in particular in view of the fact that many of the new Member States will have achieved a considerable degree of exchange rate stability by other means than ERM II, for example, through currency board arrangements;

15.  Considers that, apart from fulfilling the convergence criteria, Sweden must actively pursue structural reform and take measures to boost competition in order to prepare for eurozone membership; considers that this is especially necessary in the case of Sweden as the changeover to the euro will bring with it complete price transparency to a country where the general price level is higher than in most eurozone countries;

16.  Calls on the Commission to present a study on how the legal framework for the introduction functioned during the changeover process in the twelve countries so that adaptations, should they be necessary, could be made for future changeovers; considers that the Commission in particular should focus on whether the legislation is satisfactorily drafted to prevent the changeover from resulting in price increases, as well as examine whether the current denominations of euro coins and notes are appropriate;

o
o   o

17.  Instructs its President to forward this resolution to the Council, the Commission, the parliaments of the Member States, and the parliaments of the candidate countries.

(1) P5_TA(2002) 536. (2) OJ C 152, 18.5.1998, p. 33. (3) OJ C 59, 23.2.2001, p. 236.

European Parliament resolution on the Commission communication to the Council and the European Parliament on public finances in EMU - 2002 (COM(2002) 209 – C5&nbhy;0324/2002 – 2002/2168(COS))

P5_TA(2003)0092 A5-0018/2003

The European Parliament,

–   having regard to the Commission communication (COM(2002) 209 – C5&nbhy;0324/2002),

–   having regard to the Commission communication to the Council and the European Parliament on strengthening the coordination of budgetary policies (COM(2002) 668),

–   having regard to the Commission communication on structural indicators (COM(2002) 551),

–   having regard to the Commission communication to the European Parliament and the Council on the need and the means to upgrade the quality of budgetary statistics (COM(2002) 670),

–   having regard to the Commission's Autumm Economic Forecasts 2002 - 2004 for the euro area and the European Union (No 5/2002),

–   having regard to the Commission communication on the budgetary challenges in the euro area, presented in September 2002,

–   having regard to the Commission communication, presented in July 2002, on the euro area in the world economy - developments in the first three years (COM(2002) 332),

–   having regard to Council Decision 2002/923/EC of 5 November 2002 on the existence of an excessive deficit in Portugal - Application of Article 104(6) of the Treaty establishing the European Community(1)and to the adoption of a recommendation of necessary measures to combat the deficit,

–   having regard to the Council recommendation of 21 June 2002 on the broad guidelines of the economic policies of the Member States and the Community(2),

–   having regard to the Presidency Conclusions of the European Council adopted in Lisbon on 24 March 2000 and in Gothenburg on 15 and 16 June 2001, with particular reference to the strategy agreed on economic growth, full employment, sustainable development and social cohesion,

–   having regard to the Presidency Conclusions of the European Council in Stockholm on 23 and 24 March 2001 and in Barcelona on 15 and 16 March 2002, with particular reference to the "Stability and Growth Pact" and the budgetary challenges, including the quality of public finance related to the demographic development,

–   having regard to Rule 47(1) of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs (A5&nbhy;0018/2003),

A.   whereas in its communication on strengthening the coordination of budgetary policies, the Commission presented five proposals for improving and tightening up the interpretation of the Stability and Growth Pact (SGP), enabling the economic cycle and debt level as a percentage of GDP to be taken into account when carrying out budgetary surveillance and, at the same time, ensuring a more rigorous adherence to the goal of sound and sustainable public finances,

B.   whereas the economic recovery is much slower than anticipated and the average growth rate is estimated to be 0,8% in 2002 and is forecast at only 1,8% in 2003 and whereas the general government deficit is expected to widen to 2,3% of GDP in 2002 in the euro area,

C.   whereas, at their meeting in October 2002, the economy and finance ministers of the euro area countries agreed on "terms of reference" to ensure that the four Member States that had not yet managed to balance their budget (France, Germany, Italy and Portugal) reduced their structural deficits by at least 0.5% of GDP annually from 2003,

D.   whereas the European Council in Lisbon on 24 March 2000 and in Gothenburg on 16 June 2001 set the strategic goal of making Europe the most competitive and dynamic knowledge-based economy, capable of economic growth with better jobs, full employment, sustainable development and greater social cohesion,

E.   whereas the creation of the conditions for monetary and financial stability, as well as the raising of growth and employment participation rates, are also prerequisites for achieving strong economic and employment development,

F.   whereas public spending on the basic functions of Member States (for example, research, education, health and social care, justice and defence) has been remarkably stable over the past 30 years and remains between 14% and 16% of GDP across Member States,

G.   whereas the achievement of a knowledge-based economy presupposes the development, speedy adoption and intensive use of highly efficient high-speed information networks, research and development, as well as the development of lifelong education and training, and whereas such efforts require the mobilisation of both public and private investment,

1.  Points out that the SGP is an instrument which clarifies and confirms the preventive and commendable nature of the Treaty provisions concerning the surveillance and coordination of Member States" economic policies and underlines the importance of economic stability in order to achieve a strong and sustainable European economy; calls, therefore, for its basic principles to be included in the future constitutional treaty so as to render them stable and fully credible;

2.  Stresses its commitment to the SGP as a major pillar of EMU and supports the necessary adjustments for an intelligent and flexible application of the pact in the manner proposed by the Commission, with stronger emphasis being placed on the overall debt levels of individual Member States, taking into account public investment requirements and quality of expenditure;

3.  Welcomes the compromise on the "terms of reference" of an annual reduction of structural deficits by at least 0,5% of GDP, in particular for four Member States (Germany, France, Italy and Portugal); considers that this will ensure that the ground lost is regained with a view to complying with the undertaking to achieve "close to balance" situations and to strengthening the international credibility of the whole euro area, in particular for the candidate countries;

4.  Calls upon the Commission to take this economic downturn very seriously and to shape policy so as to ensure that the necessary structural reforms can be implemented in the Member States and that, by way of a reduction in the cyclically-adjusted deficit, the automatic stabilisers can come into play in the event of a downturn; stresses that this can be promoted by systematically consolidating the internal market;

5.  Points out that Member States must apply the agreements reached within the Council; considers that the debate on improving the SGP does not justify failure to implement it; believes that applying the agreements will have a positive effect on the public perception of the European Community and will minimise the negative effects which the excessively uneven budget policies of the Member States have on the economies within the euro area;

6.  Calls on the Commission and Member States, in light of the unchanged economic situation, to implement a responsible financial policy so as to support a long-term sustainable and continuous upturn, as well as to continue to promote a knowledge-based and competitive economy with the objective of full employment and social cohesion;

7.  Urges the Member States to take the appropriate steps to tackle the consequences of the ageing of the population; supports, therefore, the systematic assessment of the sustainability of public finances in the light of ageing populations;

8.  Recognises that new prospects for growth in the euro area prompt a debate on the nature of the financial and economic policies to be followed by Member States; recalls, in this context, that economic policy lies fundamentally within the area of Member State competence but that, under Article 99 of the EC Treaty, Member States are required to regard their economic policies as a matter of common concern and to coordinate those policies; supports, in that connection, the stepping-up of efforts to accelerate the attainment of the objectives of the Lisbon strategy, namely the production of growth and job creation, investment, research, regional development, training and labour markets;

9.  Congratulates the Commission on the improvements made on the framework for budgetary surveillance with the revised code of conduct, the development of information and economic analysis concerning the euro area, the improvements of the system of statistics used, the clarification of the principles common to fiscal and structural policies and increasing efficiency of the decision-making system;

10.  Notes, however, that there is a need for additional and improved work on statistical requirements and for a more universal understanding of what constitute good economic and public finance policies, in order to achieve better economic convergence and increased transparency; stresses, in particular, the need to achieve a common understanding of qualitative follow-up of public spending, which would be a positive contribution to the goals of the Lisbon strategy;

11.  Requests, furthermore, a clear method, with a definition of "high quality public expenditure", for quantifying public budgetary positions and their contribution to growth and investment, so that fluctuations in the economic cycle can be accurately quantified and qualified;

12.  Welcomes the fact that the framework for budgetary surveillance, and in particular the SGP, has worked well in ensuring stability by keeping fiscal policies broadly neutral; it has, moreover, provided Member States that have not overstretched their budgets with the necessary margin of manoeuvre to apply measures in crisis periods;

13.  Points out that achieving the objective of stability contributes to higher growth; warns against any attempt, in calculating the deficit, to avoid taking certain expenditure items into account; considers that any such action would represent an insuperable task in principle, as well as appearing incomprehensible to market observers, with an adverse impact on the interest-rate level and on the internal and external stability of the common currency;

14.  Welcomes the priority given to avoiding pro-cyclical budget policies in good times, and proposes extending that politically with a view to avoid, as a general rule, pro-cyclical budget policies at any time;

15.  Underlines, again, the need to promote adequate public and private investment in order to foster an integrated sustainability strategy for the Union, including economic growth with better jobs, full employment, environmental protection, and greater social cohesion in the first decade of the 21st century; calls especially for a reorientation of public expenditure towards investment in capital and human resources which supports the goal of reconciling economic growth with the preservation of natural resources and the environment;

16.  Underlines the major policy challenge of implementing upon accession the EU framework for budgetary surveillance taking into account the specific needs and circumstances of the candidate countries; supports the view that candidate countries should be required to comply with the Copenhagen criteria in order to achieve medium-term macroeconomic stability and growth, which must include a minimum of economic convergence; recommends to candidate countries that they begin to prepare themselves for compliance with the Maastricht criteria, required for membership of the euro area;

17.  Instructs its President to forward this resolution to the Council and Commission and the parliaments of the Member States and candidate countries, as well as to the social partners.

(1) OJ L 322, 27.11.2002, p. 30. (2) OJ L 182, 11.7.2002, p. 1.