Mr President, the Commission Communication on public finances is now, some time after its publication, particularly topical. The economy is slowing down, partly of its own accord, partly through laxity on the part of major Member States, and on top of this there are the after-effects of the tragic events of 11 September. These things have again, for the first time in a while, put pressure on the public finances of the Member States. History has taught us that considerable public expenditure can lead to major inefficiency, to too high a claim on the capital market and to excessive taxation, and very rarely to higher employment. All these aspects can seriously hinder the healthy development of the private sector and consequently hamper growth in employment grounded in supply and demand. Almost ten years ago, the European Heads of State and Government acknowledged this development, and agreed in Maastricht to work on a sustainable budgetary position. If Member States join together in a large monetary zone, albeit with coordination of economic policy, but without real political union, they must adhere to their agreements. Thanks to instruments made available to the ECB, the latter can influence the stability of prices and, along with this, the living conditions of people in the Euro area. Further to a discussion in the Preparatory Committee, I would once again like to underline that price stability, along with controlled inflation, contributes to a sustained purchasing power at the bottom of the wage structure and to an incentive to return to work. Price stability prevents the purchasing power of those of pensionable age from being eroded. It also ensures that wage increases within the labour market actually translate into more financial scope for families in Europe, and do not merely enable people to keep up with price increases, as is the case in my own country. Some countries give tax cuts with one hand and take them back, in the form of VAT hikes and higher local taxes, with the other. This instils in the public a sense of distrust in politics. And the instruction to the Central Bank to monitor prices is the most effective social measure I can remember for a good few years. In addition to the Central Bank’s pursuit of stability, the Member States’ investment and budgetary policy is critical to the living and working conditions of Europeans and to confidence in the single currency. According to President Duisenberg, the watering down of the budgetary objectives is of huge concern. You yourself, Commissioner, called key countries including Germany, France, Italy and Portugal to account and reminded them of their duties. And in those same countries, the idea of extending the Stability Pact is being mooted. Let one thing be clear, however: the financial markets are closely watching the Member States in terms of how they are dealing with their budgets in a declining economy. The countries which did nothing when it was economically possible, are now, of course, struggling the most to observe the Stability Pact. Needless to say, it is unrealistic to expect that they will now increase taxes or curb spending, but I consider an increase in spending to be an irresponsible burden in the face of an uncertain future. Our generation must pay for its own bills, rather than pass them on to the next. The current situation is a test of how sound the euro system actually is, and it is patently clear to the financial market that the public budgets are the weak link in the entire euro cycle. Governments must not be allowed to think that the euro belongs to all of us but that their budgets are purely a national matter. Furthermore, nobody has managed to explain to me what the use is of a Stability Pact which only applies to buoyant times. It is precisely in an economy that is slowing down that it is important to translate agreements into practice. The European Commission devotes an important proportion of its communication to future demographic developments. It is a crucial component, because an ageing population will have a great impact on future budgetary positions. And an ageing population is another reason to look after the Stability Pact. It will also mean that we will be obliged to work much more on lifelong learning in order to sustain our own professional profile. What is more, people will probably need to work well beyond the age of fifty-seven and a half, as is now mostly the case, for example in the Netherlands. In my report, I am asking for an individual path to be sketched for every Member State, so that the political tendency to indulge in short-term thinking will not prejudice the just pension and care expectations of people. Mr President, in my report, it is certainly not my intention to create the impression that public investments should not be allowed, but in the Stability Pact, 60% of the GDP has already been earmarked to meet the needs for public investments. That offers ample scope for in-depth investment in education, R[amp]D and healthcare. Finally, I would like to note that I am pleased that constructive consultation with the Group of the was possible in order to come to an acceptable compromise. Tomorrow, I will ask you whether it is possible to table an oral compromise amendment during the vote.

Political group: PPE-DE