Mr President, Mr President of the Commission, Mr President-in-Office of the Council, ladies and gentlemen, this debate is starting much later than planned, and I would like to apologise because as soon as I finish speaking I will leave to attend another important engagement. This is something I have never done before. I know we all have other commitments, and I was engaged to be elsewhere at 5 p.m. I hope that there will be no repetition of today’s delays. The summit of Heads of State or Government in the spring of 2002 did expressly set itself a very ambitious objective, namely to create the most competitive economy in the world. This claim always reminds me of Nikita Khrushchev in the 1950s and 1960s, when the Soviet Union wanted to outdo the US. We know how that ended. Slightly more moderate language would make our present situation – namely the lack of progress – a little easier. At the same time, we have to ensure that Europe’s economy becomes more competitive. In order for that to happen, two key conditions must first be met. One is the reform of our social system, and the other is greater flexibility in labour markets. Happily, people are living longer, but this also presents a massive challenge to our social system. Our group feels very strongly that we have to introduce more independence and self-sufficiency into our social systems. We need to make the labour market more flexible, because if the labour market stays as it is, if we maintain the status quo, people out of work will be hit particularly hard, and these are the very people we want to see return to work. Our group would therefore like to encourage governments which are undertaking a tough reform process to address this issue to keep going, in order to provide us with answers for the future that offer genuine, viable solutions for today’s younger generation. The best policy approach for jobs, companies, and particularly for medium-sized companies, is a moderate taxation policy. The less taxes companies have to pay, the more they will be willing to invest in Europe. Today, we know that it is because our current economic system is so bureaucratic and often has very high taxation, that our companies invest outside the European Union. We can therefore only encourage policies which offer the best for medium-sized companies, with maximum transparency in taxation, to show that investment within the European Union is worthwhile, rather than forcing companies, as is increasingly the case, to invest outside the European Union. My colleague Mr Karas, our economic policy coordinator, whom I see here, spoke, about Basel II a few weeks ago. We also have to ensure that Basel II does not make it harder for medium-sized companies to invest. Instead we need to conclude worldwide agreements and organise Basel II in such a way that it is possible for medium-sized companies to take out loans and pay them back under reasonable conditions. Then there is the question of European bureaucracy and the self-inflicted tangles of red tape. Here I am addressing the President of the Commission. We are eagerly awaiting the Commission proposals for chemicals legislation. But if this legislation on chemicals results in European companies again investing outside the European Union because of the thousands of regulations imposed upon them and leaving the European market, then it will lead to further job losses and consequently a less competitive Europe. We would therefore caution against tying the European economy up in more red tape through national or European legislation. Let me comment briefly on the question of the stability of the euro. There are some people who believe we now ought to go well beyond the 3% figure established under Maastricht for new borrowings. I can only advise against such a step. If we enter into new borrowings now, those loans will have to be repaid, and the money used to make the repayments will then not be available for investment. It is investment that creates jobs. For this reason the Group of the European People’s Party recognises the need to uphold the stability criteria, although obviously we do acknowledge the difficulties that national governments are facing. The President of the Commission and, I believe, the President-in-Office of the Council, have talked about how important it is to do something for education and research. We cannot continue to allow ever more young scientists to go to the United States and thus be lost to us. This represents a loss not only of human potential, but also of the future potential of Europe. The issue must therefore be addressed more directly. To close, I would like to make a couple of brief remarks about Europe’s borders and the protection of them. It is a very important topic, but I wonder whether it is necessary to create a new border management agency, as set out in the European Council paper. Can we not tackle the problems using existing structures? I am just airing the question now. Let me also encourage the Presidency not to limit discussions at the conference on the Mediterranean dialogue in December to the very important question of borders. Rather, I would ask the President-in-Office of the Council to also consider how we can help countries to help themselves, particularly those Mediterranean countries which are not members of the European Union, in order to prevent people climbing into boats in order to reach the borders of the European Union, resulting in the tragedies that we keep seeing in the Mediterranean. My last words are a request to the President-in-Office of the Council, and one I think he will follow up. I would like to encourage the President-in-Office to do his utmost to ensure that the Intergovernmental Conference comes to agreement by the end of the year. Please do not allow every page of the Convention’s proposals to be completely renegotiated. Concentrate on the three or four key points. We will support you in your efforts to achieve a result, because we need a European constitution. A European constitution is the basis on which this European Union, which will soon comprise twenty-five Member States and 450 million people, will be able to make the decisions it needs to make, will be able to act, to be democratic, and to uphold parliamentary principles. So let me encourage you to concentrate your efforts during the presidency on the constitution. It is the top priority for these six months. (Applause) IN THE CHAIR: MR POSTÀVice-President

Political group: PPE-DE